What’s the XIC ETF?
The Core S&P/TSX Capped Composite Index ETF (TSX:XIC) invests in the top Canadian firms listed on the Toronto Stock Exchange. It is an all-equity ETF that provides you exposure to a basket of blue-chip Canadian equity assets, with no exposure to fixed-income instruments such as bonds or guaranteed investment certificates (GICs). It essentially tracks the Canadian stock market’s performance.
The XIC ETF is one of the oldest ETFs and has a long track record that you may look at if you want to consider it as part of your long-term investing strategy.
Some Key Facts:
- Inception Date: February 16, 2001
- Net Assets: CAD 8,551,009,512 (as of June 13th)
- MER: 0.06%
- Number of holding: 229
- Distribution Yield: 2.52%
- 12 months Trailing Yield: 2.57%
- Dividend Schedule: Quarterly
- P/E Ratio: 20.91%
- Risk: Medium-rated
- Exchange: Toronto Stock exchange
Pros of XIC:
- Low-cost ETF
- Allows you to own the top Canadian firm on the stock market
- Perfect for as a long-term core investment
Cons of XIC ETF:
- Only invests in equity securities
- No geographic diversity
Top 10 Holdings:
The iShares XIC ETF has invested 99.84% of its assets in stocks. Cash and derivatives account for the remaining 0.16% of the fund’s assets. The XIC ETF holds a wide majority of financial stocks as this sector constitutes a third of its portfolio. The XIC ETF allocates 30.19% of its assets into the financial sector, 12.50% into the materials sector, and 12.05% into the industrial sector. The real estate industry has the lowest sector weighted, at 3.08%.
Royal Bank of Canada is its most significant holding at 6.16%. It is followed closely by Shopify and The Toronto-Dominion Bank, at 5.82% and 5.49%. Some other financial institutions include The Bank of Nova Scotia (4th), the Bank of Montreal (8th), Brookfield Asset Management (7th), and the Canadian Imperial Bank of Commerce (9th).
At 0.06%, the Management Expense Ratio (MER) of iShares XIC is lower than that of numerous other ETFs. As a result, it’s a very low-cost ETF to consider for your investment portfolio.
It is less expensive than many other ETFs with similar financial sector exposure. In terms of investing objectives and asset allocation, it also costs a lot less than some of the closest comparable ETFs.
Performance and Returns
It’s no surprise that iShares XIC has outperformed inflation rates over the long term as it invests primarily in equities assets that represent the whole Canadian stock market. The ETF successfully matches the performance of the TSX, and Canadian equities have enjoyed a two-decade winning streak.
Should you add XIC in your portfolio?
The iShares XIC ETF is a medium-risk investment, but because of its all-equity exposure, it might be a difficult asset to consider adding to your portfolio. The ETF’s performance is based on the performance of equity securities traded on the Toronto Stock Exchange, with no fixed-income assets to help offset market volatility. It might be a risky investment as there is nothing to offset losses if the stock market crashes.