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XGRO vs. VFV: Which ETF Has Performed Better In the Last Five Years?

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The iShares XGRO Core Growth ETF or XGRO is an all-in-one ETF (exchange-traded fund) meaning that it has both equity and bonds in its portfolio. The VFV is an S&P 500 Index ETF, which means that its focus is on the S&P 500 companies in the US.

Both ETFs allow Canadian investors to grow their money in low-risk and medium-risk assets. Plus, ETFs are an excellent alternative for Canadians who want to buy diversify their equity holdings.

However, a detailed analysis of the two will show you which ETF has performed better since 2016; so that you know where to put your money.

XGRO ETF vs. VFV ETF (an introduction)

XGRO is the brainchild of BlackRock Asset Management Canada. It carries 80% equity and 20% bonds with low-medium risk. Nevertheless, VFV ETF is a creation of Vanguard Equity Index Group, which is also an asset management company. It is 100% equity.

The main aim of creating an ETF is to provide Canadians with a mixed-asset portfolio that benefits newbies and experienced traders.

The two lean towards the US market though XGRO has some Canadian bonds. Therefore, if you want excellent exposure to the US stock market, buy these two ETFs.

XGRO vs VFV returns (%CAD)

 20162017201820192020
XGRO10.12%11.78%-6.24%17.96%11.42%
VFV8.46%13.61%3.35%24.49%15.58%
  • XGRO daily total return: 4.07%
  • VFV daily total return: 5.67%
  • XGRO daily 1-year total return: 24.17%
  • VFV daily 1-year total return: 26.02%
  • XGRO 3-year total daily return: 8.27%
  • VFV 3-year total daily return:14.71%
  • XGRO annual report expense ratio (net): 0.20
  • VFV annual report expense ratio (net): 0.08
  • XGRO holdings turnover: 5.12%
  • VFV holdings turnover: 15.97%

XGRO vs. FVF growth of 10,000 (CAD)

  XGROVFV
June 2016$10,240.59$10,504.40
December 2016$11,034.41$11,764.12
March 2017$11,432.67$12,325.63
June 2017$11,469.74$12,381.77
December 2017$12,308.63$13,365.62
March 2018$12,078.88$13,569.30
June 2018$12,384.58$14,435.15
December 2018$11,537.93$13,813.71
March 2019$12,605.96$15,531.58
June 201912,796.37$15,657.24
December 2019$13,648.36$17,196.88
March 2020$11,819.89$14,975.97
June 2020$13,417.85$17,363.10
December 2020$15,194.52$19,875.97
March 2021$15,665.17$20,858.09

XGRO vs VFV performance summary

From the data provided above, we can conclude that

  • Although VFV has performed better since 2016, its holdings consist only of stocks making the ETF quite risky for investors with low-risk tolerance.
  • XGRO combines both stock and bonds, and that makes its portfolio quite stable.
  • On average, both ETFs show positive returns since 2016. However, you also know that past performance does not guarantee future success.
  • Both ETFs are long-term passive investments; so, they’re safe for registered accounts.

XGRO vs. VFV Facts

XGRO

  • Ticker symbol-XGRO
  • MER (Management Expense Ratio)-0.20%
  • Management fee-0.18%
  • Net assets-876.69M
  • Distribution frequency- quarterly
  • 12-month trailing yield-2.08%
  • Distribution yield- 1.48%
  • Eligible for registered accounts-yes
  • Units outstanding-36,050,000
  • Assets under management-$876,693,783
  • Number of holdings-8
  • Launch date-2007
  • Currency-CAD
  • CUSIP 46429U109

VFV

  • Ticker symbol-VFV
  • MER-0.08
  • Management fee-0.08
  • Benchmark- S&P 500
  • Distribution frequency-quarterly
  • 12-month trailing yield- 1.28%
  • Distribution yield-1.21%       
  • Eligible for registered accounts-yes
  • Net assets-$4,53B
  • Launch date-2012
  • Currency-CAD
  • CUSIP 92205Y105

XGRO vs. VFV top holdings

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 ETF4.05%  
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%

 Overall portfolio composition as of May 2021

  • Stocks: 81.04%
  • Bonds: 17.25%
  • Price/Earnings: 22.76x
  • Price/Book: 2.54x
  • Price/Sales: 2.02x
  • Price/Cashflow: 12.8x

VFV top ten holdings as of March 2021

Apple Inc.5.64%
Microsoft Corp.5.20%
Amazon3.87%
Facebook Inc.2.07%
Alphabet Class A1.81%
Alphabet Class C1.74
Tesla Inc.1.50
Berkshire Hathaway Inc.1.41%
JP Morgan Chase & Co.1.36%
Johnson & Johnson1.26%

Overall portfolio composition as of May 2021

  • Stocks: 99.99%
  • Bonds: 00.00%
  • Price/Earnings: 27.4x
  • Price/Book: 4.28x
  • Price/Sales: 2.94x
  • Price/Cashflow: 17.23x

XGRO ETF pros and cons

Pros

  • You won’t have sleepless nights worrying about rebalancing since the ETF does that automatically.
  • Suitable for all kinds of investors (low, medium, and high risk)
  • Look at the portfolio again, please. You will notice that it’s cheaper than mutual funds, and it’s simple and well-balanced.
  • You will enjoy a low management fee and MER.
  • You buy them for free on Weathsimple and Questrade.

Cons

  • If you’re a DIY investor, you won’t enjoy customizing your portfolio. You will have to settle for what BlackRock
  • offers.
  • Nothing is permanent in equity markets, so; past performance is not a guarantee of future results.
  • The trading fee may increase.

VFV ETF pros and cons

Pros

  • You get a chance to invest in the largest companies in the U.S. at a low cost. 
  • You make money passively from your couch.
  • It is suitable for both registered and non-registered accounts.
  • Low management fee and MER
  • You might enjoy high returns since the stock market is highly volatile.
  • Income distribution stands at $0.269015 per unit.

Cons

  • High volatility means you could lose your money. Thus, to be on the safe side, kindly buy other assets as well. E.g., VGRO or XGRO
  • If you choose the wrong stockbroker, you might pay a lot in terms of fees.

Are ETFs suitable for millennials in 2021?

Yes, they are. Young investors in Canada ask this question a lot, and the simple answer is that ETFs are a great option for them. You get a chance to own a tiny portion of several blue-chip companies. That would not be possible in traditional investing.

Moreover, you need little capital to start, which you can make within a few months doing ordinary student jobs.

Verdict

Intelligent investors compare the results of different assets before investing. That way, you can pick a suitable portfolio for your objectives. Between XGRO vs. VFV, you now know which has performed better since 2016. However, if you have high capital, kindly include both in your portfolio.


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