When you want to spread your risks/reward across a diversified investment portfolio, then your best buy is an exchange-traded fund (ETF). The iShares XGRO Core Growth ETF is one of the funds Canadian investors love and for good reason.
What is the XGRO ETF
BlackRock Asset Management Canada created the XGRO ETF in 2007 as a Balanced Growth CorePortfolio Index ETF (CBN), but in 2018, the company changed it to iShare Core Growth, an all-in-one ETF.
An all-in-one ETF is a portfolio that mixes different equities and bonds in the same bag. So, you can buy this fund and benefit from diversification waiting for your money to make money since you don’t have to track the performance of individual stocks.
The iShares XGRO Core Growth ETF is one such fund designed to make ETF investing fun and easy. It’s a multi-asset class worth $476 Million, and it’s traded on the Toronto Stock Exchange (TSX).
The XGRO ETF is a fund of funds and equities account for 80% of the ETF while the remaining 20% is in the form of bonds.
How does XGRO ETF work?
When you buy a basket of different equity and fixed-income bonds, you intend to create a long-term capital growth portfolio. That’s the objective of XGRO ETF.
XGRO invests in iShare ETFs that use indexing and hedging strategies to expose you to diversified equity and fixed-income assets, especially in the US market.
BlackRock describes XGRO as a low-medium risk investment because of its performance over the years. BlackRock has a team of experts who manage XGRO ETF, making it different from other asset classes where you operate your investment.
Is XGRO a good investment?
You need to know all the XGRO iShares Core Growth ETF Portfolio features to answer this question correctly.
XGRO top ten funds as of April 2021
| iShares Core S&P Total U.S. Stock Market ETF | 37.1% |
| iShares Core MSCI EAFE IMI Index ETF | 19.6% |
| iShares Core S&P/TSX Capped Composite Index ETF | 19.2% |
| iShares Core Canadian Universe Bond Index ETF | 13.0% |
| iShares Core MSCI Emerging Markets ETF | 3.6% |
| iShares Core Canadian Short Term Corporate + Maple Bond Index ETF | 3.3% |
| iShares Broad USD Investment Grade Corporate Bond ETF | 2.1% |
| iShares U.S. Treasury Bond ETF | 1.9% |
| Cash | 0.2% |
| Total percentage of top 10 investments | 100.0% |
| Total number of investments | 26 |
Asset class
- United States Equities 37.1%
- International Equities ETF 19.6%
- Canadian Equities 19.2%
- Canadian Bonds 16.3%
- Emerging Markets Equities 3.6%
- United States Bonds 2.1%
- International Bonds 1.9%
- Cash 0.2%
XGRO top ten investments as of April 2021
| iShares Core S&P Total U.S. Stock Market ETF | 37.28% |
| iShares Core MSCI EAFE IMI Index ETF | 19.96% |
| iShares Core S&P/TSX Capped Composite Index ETF | 20.31% |
| iShares Core Canadian Universe Bond Index ETF | 11.69% |
| iShares Core MSCI Emerging Markets ETF | 4.05% |
| iShares Core Canadian Short Term Corporate + Maple Bond Index ETF | 2.93% |
| iShares Broad USD Investment Grade Corporate Bond ETF | 1.85% |
| iShares U.S. Treasury Bond ETF | 1.85% |
| USD/CAD Cash | 0.03% |
| CAD Cash | 0.03% |
Asset class
Equity 81.06
Fixed income 18.84
Cash 0.10
XGRO ETF fees
You’ll pay a 0.18% management fee and MER (Management Expense Ratio) of 0.20%. Although the MER is higher than if you create your ETF, it’s lower than the average equity mutual funds and other robo advisors.
Since the company rebalances your portfolio automatically, you might save a lot of money in fees in the end. Besides, Canadian brokerage Weathsimple and Questrade allow you to buy the ETF for free.
XGRO ETF returns/XGRO ETF performance
The annual compounded return of the XGRO ETF is 6.09% in the last ten years. That means if you invested $1000 in 2010, you now have $1806 right now.
The image below, published in October 2020, summarizes XGRO’s ten-year returns.
- 12-month trailing yield: 2.08%
- Distribution yield: 1.48%
- Dividend schedule: Quarterly
XGRO ETF sector weighting as at May 6, 2021
| Sector | Weighting |
| Basic Materials | 6.35% |
| Consumer Cyclical | 10.21% |
| Financial Services | 18.99% |
| Real Estate | 3.55% |
| Consumer Defensive | 6.45% |
| Healthcare | 9.61% |
| Utilities | 3.32% |
| Communication Services | 7.98% |
| Energy | 5.35% |
| Industrials | 11.75% |
| Technology | 16.44% |
XGRO ETF pros and cons
Pros
- It’s self-balancing. That means you don’t have to worry about rebalancing your portfolio.
- Suitable for all kinds of investors (low, medium, and high risk)
- Simple and well-diversified
- Cheaper than mutual funds
- You buy them for free on Weathsimple and Questrade.
- Excellent source of passive income
Cons
- Nothing is permanent in money markets, so past performance is not a guarantee of future results.
- The trading fee may increase.
- You don’t get a chance to customize your portfolio the way you want. You’ll have to settle for what the company offers.
XGRO vs. VGRO
- XGRO ETF is from BlackRock, while the VGRO ETF is from Vanguard (Vanguard Growth ETF Portfolio)
- The MER for XGRO is 0.18 while VGRO is 0.25
- XGRO has a heavier weight of US equities and US and Canadian Bonds. VGRO leans more towards Canadian markets.
- Both give their customers the same investment goals (80/20 diversification for long-term growth)
- Both are worth your time.
XGRO vs. XEGT
- Both ETF portfolios are products of BlackRock
- While XGRO is 80/20 equity and fixed-income assets, XEGT is 100% stocks
- Both have the same objective
XGRO vs. VFV
XGRO is from BlackRock, while VFV is from Vanguard.
VFV is an S&P 500 US Index Fund
That’s all you need to know about XGRO iShares Core Growth ETF portfolio. So, in summary;
Who is XGRO ETF for?
- Investors who want long-term capital growth
- Those who can hold an investment for medium to long term, and want one portfolio with diverse asset classes, especially from the US market
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