A new breed of ETFs called all-in-one ETFs are quickly gaining popularity, and it’s easy to see why. All-in-one ETFs give you wide market access, automatic rebalancing and excellent diversification. An added bonus of the all-in-one ETF is there are many to choose from, so you’ll be sure to find those that best fit your needs.
If this type of ETF is new to you, let us break it down for you. All-in-one ETFs, like the one we’ll look at in this XEQT review, are made up of four to eight different ETFs. Each ETF in the all-in-one ETF will contain hundreds of stocks and bonds.
This means that with the purchase of a single unit of an all-in-one ETF, you’ll be investing in thousands of companies, all at a low price. It’s impossible to beat the convenience and price tag of that deal with any mutual fund or even robo advisor service. See our article on the Best Canadian Robo Advisors in Canada for more information on this option.
Black Rock’s iShares All Equity Portfolio holds 100% equity, holding stocks from high performing companies across the globe. Read on to find out more about XEQT and why we think it’s a solid investment option for Canadians.
To learn about other popular all-in-one ETFs, check out our article on the Best All-in-One ETFs in Canada 2022.
XEQT ETF Key Facts:
- MER: 0.20%
- Account Eligibility: RRSP, TFSA, RRIF, RESP, DPSP, RDSP, Non-Registered
- Assets Under Management: $1.137 Billion
- Date Created: July 8, 2019
- Number of Stocks: 9,666
- Number of Bonds: 0
- Price/Earnings Ratio: 15.73x
- Price/Book Ratio: 2.34x
- Dividend Yield: 1.36%
What is The iShares All Equity Portfolio ETF?
The iShares All Equity Portfolio ETF is an aggressive all-in-one ETF in that it contains 100% stocks and zero bonds. Although this seems to go against traditional investment advice, because of the wide diversification across industries and geography, this is considered a low to medium risk fund.
XEQT is made up of over 9,500 stocks with the majority of them coming from US and Canadian companies.
Because it is made up of all stocks, no bonds, XEQT is best suited for those with a bit more risk tolerance, who are willing to wait out market swings for the potential to earn higher returns.
XEQT ETF Fees
XEQT has an extremely low Management Expense Ratio of 0.20%. When you compare it to the average mutual fund’s 2.5% MER and even robo advisors such as Wealthsimple which range from 0.40%-0.70% it makes sense to go with a lower fee option.
When it comes to ETFs, the fees are much lower than other actively managed funds, or even robo-advisors. It’s still good investment practice to understand how the fees are calculated.
What that looks like in dollar terms is this:
If you invest $10,000 in XEQT, you will pay $20 per year in management fees. If you take that same $10,000 and invest it in a mutual fund, you’ll pay up to $250 per year.
Over a long period of time, you can save thousands by investing in a fund like XEQT.
XEQT is made up of 4 iShares ETF holdings, which are iShares Core S&P Total US Stock (ITOT), iShares MSCI EAFE IMI Index (XEF), iShares S&P/TSX Capped Composite (XIC), iShares Core MSCI Emerging Markets (IMEG).
Combined, these funds offer investors exposure to 9,691 different stocks from various sectors across the world.
It’s important to note that if you are looking for a socially responsible portfolio, this one might not be for you. XEQT includes assets from nuclear weapons, commercial firearms, tobacco and other potentially controversial companies.
Before diving into any stock or ETF purchase, we advise doing your due diligence to find out exactly how your funds will be allocated. In this section of our XEQT review, we’ll reveal just that.
With XEQT, you’re getting four solid ETFs as well as USD and CAD cash and/or derivatives. Its largest holding is the iShares Core S&P Total U.S. Stock ETF (ITOT), which has a 10-Year return of 13.12%. Not too shabby.
When choosing the right ETF portfolio, it’s also prudent to look into the sectors as well. XEQT’s holdings are too vast for us to list them all here, but below you can find the top 10, and what sector they are from.
Finally, good investors always strive for great geographic diversification as well. It often happens that when one part of the world is in an economic slump, another is experiencing growth. Hedging your bets by making sure your investments span the globe is always a wise move. XEQT asset holdings by geographic location can be seen below:
XEQT ETF Performance
Unfortunately for XEQT the world went all topsy turvy shortly after its debut onto the Toronto Stock Exchange. It doesn’t mean all is lost for this ETF, it just means that if you choose to invest in this fund, you’ll need to be patient in order to realize potential gains.
As of writing, XEQT’s YTD daily total return is -16.09%. However, in 2020 when the markets rallied, it saw 11.70% returns. When it comes to passive index investing, looking at annual return is not the main focus, as this strategy is one for the long haul. Index investing has proven to be an excellent long term investment that generally provides decent returns.
Only time will tell how this one will play out in the long run, but for those with an appetite for risk, now could be the time to get in on the action.
If you do happen to be more of a research-minded active investor, you might want to check out our Ultimate Guide in Investing in Canadian Value Stocks and Best Canadian Dividend Stocks.
XEQT ETF Investment Accounts for Canada
XEQT is an attractive choice for Canadians because of the variety of accounts it offers. XEQT offers investors the choice of the following investment accounts:
- Non-Registered Account
While it’s great that you can purchase XEQT from your registered accounts, you will want to consider the tax implications because of the large number of US holdings. Talk to your tax advisor for the best advice on how to allocate funds in a way to lower your tax liability.
How to Buy XEQT ETF
Hopefully you already have an online brokerage account, and since you are here on MDJ reading up on the latest investment options, we are betting you already do!
You can purchase XEQT from any online brokerage. If you have an account with Qtrade or Wealthsimple Trade, you can purchase it for free. Other brokerages such as Questrade allow you to purchase XEQT for free, but you’ll need to pay to sell.
XEQT ETF Review: FAQ
XEQT ETF Review: Final Thoughts
Blackrock’s iShares have been available in Canada since 2003. It has grown to be a trusted source of solid investment opportunities by many here in the North.
XEQT’s strengths in particular lie in its offering of an enormous basket of over 9,500 stocks from companies across the globe from a variety of industries.
The fact that it’s 100% stocks is definitely something for investors to consider, especially if they are more averse to risk and/or have a shorter investment timeline.
If you are interested in learning more about ETFs, check out our guide to Best ETFs in Canada for 2022. This will give you a better understanding of ETFs in general, as well as let you know our top ETF picks for Canada.
If you’d like to learn about another popular all-in-one ETF, Vanguard’s VEQT, check out our VEQT ETF 2022 Review.
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