XEQT ETF is a multi-asset ETF that invests in one or more ETFs managed by BlackRock Canada or its affiliates, providing exposure to equity securities.
The ETF offers long-term capital growth to investors. With XEQT you get exposure to over 9,000 individual stocks traded worldwide.
The ETF is part of group of 5 ETFS that can be used to manage a portfolio based on your desired fixed income and equity exposure.
Pros of iShares XEQT ETF
- XEQT provides exposure to ETFs that are diversified across regions.
- It is continuously monitored and also rebalanced.
- Less expensive with an MER of 0.20%.
Cons of iShares XEQT ETF
- Provides exposure to equity ETFs managed only by BlackRock Canada.
- XEQT’s management fee is higher compared to the MER of individual ETFs.
iShares XEQT ETF Facts
- Inception Date: August 7, 2019
- Benchmark: None – 100% Equity ETF from iShares Core ETF Portfolios
- Net Assets: $495M
- MER: 0.20%
- Distribution Yield: 1.55%
- Dividend Schedule: Quarterly
iShares XEQT ETF MER – Management Expense Ratio
XEQT’s management fee stands at 0.18% and MER is 0.20%. Its contemporary Vanguard’s VEQT ETF has an MER of 0.25%.
The MER is what Blackrock takes to manage the fund for you. It’s much cheaper than mutual funds and in some cases cheaper than investing on your own.
Mutual funds can charge over 2% and it robs you of your returns. It’s time to ditch your mutual funds and switch to ETF ASAP. Many brokers such as Questrade offer free ETFs.
iShares XEQT ETF Performance
The annual rate of return for iShares XEQT ETF since inception is 15.99%. While it looks great, it’s not actualy great for the time span it comes. The ETF is only 2 years old and the SP500 has had twice that return.
When it comes to investing 100% in equity, there are many options. A simple SP500 index can do the trick. You know the saying, keep it stupid simple (KISS).
Take your TFSA account as an example. The rules are the same for everyone and I mean everyone. The growth is ultimately a factor of your investment performance provided you make your TFSA contribution limit every year. The annual performance of an ETF matters as you can see below the growth over 20+ years.
| wdt_ID | Year | Yearly Limit | Cumulative | 5% Growth | 10% Growth | Dividend Earner | Spousal |
|---|---|---|---|---|---|---|---|
| 1 | 2009 | 5,000 | 5,000 | 5,250 | 5,500 | Not Tracked | Not Started |
| 2 | 2010 | 5,000 | 10,000 | 10,762 | 11,550 | Not Tracked | Not Started |
| 3 | 2011 | 5,000 | 15,000 | 16,550 | 18,205 | Not Tracked | Not Started |
| 4 | 2012 | 5,000 | 20,000 | 22,628 | 25,525 | Not Tracked | Not Started |
| 5 | 2013 | 5,500 | 25,500 | 29,534 | 34,128 | $41,742 | Not Started |
| 6 | 2014 | 5,500 | 31,000 | 36,786 | 43,590 | $52,820 | Not Started |
| 7 | 2015 | 10,000 | 41,000 | 49,125 | 58,949 | $56,307 | Not Started |
| 8 | 2016 | 5,500 | 46,500 | 57,356 | 70,984 | $70,200 | Not Started |
| 9 | 2017 | 5,500 | 52,000 | 65,999 | 84,034 | $78,900 | $13,308 |
| 10 | 2018 | 5,500 | 57,500 | 75,074 | 98,487 | $96,937 | $58,818 |
| 11 | 2019 | 6,000 | 63,500 | 85,128 | 114,986 | $129,467 | $82,596 |
| 12 | 2020 | 6,000 | 69,500 | 95,684 | 133,030 | $153,993 | $95,906 |
| 13 | 2021 | 6,000 | 75,500 | 106,769 | 152,933 | $181,601 | $113,194 |
| 14 | 2022 | 6,000 | 81,500 | 118,407 | 174,827 | $183,031 | $144,633 |
| 15 | 2023 | 6,500 | 88,000 | 131,152 | 199,459 | $217,738 YTD | $167,963 YTD |
| 16 | 2024 | 7,000 | 95,000 | 145,061 | 227,105 | ||
| 17 | 2025 | 7,000 | 102,000 | 159,664 | 257,516 | ||
| 18 | 2026 | 7,000 | 109,000 | 174,997 | 290,967 | ||
| 19 | 2027 | 7,000 | 116,000 | 191,097 | 327,764 | ||
| 20 | 2028 | 7,500 | 123,500 | 208,526 | 368,791 | ||
| 21 | 2029 | 7,500 | 131,000 | 226,828 | 413,920 | ||
| 22 | 2030 | 7,500 | 138,500 | 246,044 | 463,562 | ||
| 23 | 2031 | 7,500 | 146,000 | 266,221 | 518,168 | ||
| 24 | 2032 | 7,500 | 153,500 | 287,407 | 578,235 | ||
| 25 | 2033 | 7,500 | 161,000 | 309,653 | 644,308 | ||
| 26 | 2034 | 7,500 | 168,500 | 333,011 | 716,989 | ||
| 27 | 2035 | 7,500 | 176,000 | 357,536 | 796,938 | ||
| 28 | 2036 | 7,500 | 183,500 | 383,288 | 884,881 | ||
| 29 | 2037 | 7,500 | 191,000 | 410,327 | 981,620 | ||
| 30 | 2038 | 7,500 | 198,500 | 438,719 | 1,088,032 |
iShares XEQT ETF Holdings
Unlike an S&P500 ETF where your exposure is from US companies, XEQT is diversified across countries and continents.
It holds over 1,200 companies. It’s not worth listing them all here and instead it’s much better to look into the country exposure you are getting from it.
iShares XEQT ETF Geography Exposure
The iShares XEQT Core Equity ETF Portoflio invests in 4 different ETFs to bring the outlined geographical diversification.
- ITOT – (46.80%) ISHARES CORE S&P TOTAL U.S. STOCK
- XIC – (24.70%) ISHARES S&P/TSX CAPPED COMPOSITE
- XEF – (23.25%) ISHARES MSCI EAFE IMI INDEX
- IEMG – (4.90%) ISHARES CORE MSCI EMERGING MARKETS
Why hold iShares XEQT ETF
As a pure play 100% equity, I am not sure why you should not just buy the best 500 companies in the US. All of them operate around the world bringing you exposure to those regions by proxy.
I vote to stick with an S&P500 ETF such as VFV.
If you want the dividends, it’s not clear you will get the same growth but the the best banks and the best utility stocks will give you more income.