The XAW ETF offers exposure to a broadly diversified portfolio of US, international and emerging market stocks. It shows the performance of the MSCI ACWI ex Canada IMI Index minus costs.
The ETF tracks large, medium and small businesses in 22 of 23 developed countries (excluding Canada) and 27 emerging markets by investing primarily in six ETFs.
The XAW ETF invests in securities of one or more ETFs managed by BlackRock or an affiliate.
Benefits of the iShares XAW ETF
- XAW offers global portfolio diversification.
- The aim is to achieve long-term capital growth.
- It offers global diversification – US (~ 60%), international (~ 29%) and emerging markets (~ 12%).
- XAW has a lower MER fee and higher sales return compared to its peer VXC ETF.
- The ETF will rebalance itself without you having to worry.
- More advantageous in terms of fees, taxes and currency risks.
Disadvantages of the iShares XAW ETF
- Except that the SP500 index outperformed it
iShares XAW ETF facts
- Start time: February 10, 2015
- Benchmark: MSCI ACWI of Canada IMI
- Net worth: $ 1,621 million
- MER: 0.22%
- 12 months trailing return: 1.40%
- Distribution yield: 1.39%
- Dividend plan: Half-yearly
iShares XAW MER – Management Expense Ratio
The XAW management fee is 0.20% and the MER 0.22%. Today’s Vanguard’s VXC ETF has a MER of 0.27%.
The MER is what Blackrock needs to manage the fund for you. It’s much cheaper than mutual funds and in some cases cheaper than investing yourself.
Mutual funds can charge over 2% and rob you of your returns. It’s time to ditch your mutual funds and switch to ETFs ASAP. Many brokers like Questrade offer free ETFs.
iShares XAW performance
The annual return for the iShares XAW ETF since inception is 10.26%. The broader S&P500 index underperformed.
The annual return for the iShares XAW ETF since inception is 10.26%. If you compare to my annual ROR of 14.40% there is a big difference. Just take a look at the S&P500 index for a different perspective.
Take your TFSA account as an example. The rules are the same for everyone and I mean everyone. Growth is ultimately a factor in your investment performance, provided you set your TFSA contribution limit each year. The annual performance of an ETF is important as you can see under the growth over 20 years.
|1||2009||5,000||5,000||5.250||5,500||Not pursued||Not started|
|2||2010||5,000||10,000||10,762||11,550||Not pursued||Not started|
|3||2011||5,000||15,000||16,550||18.205||Not pursued||Not started|
|4th||2012||5,000||20,000||22,628||25,525||Not pursued||Not started|
|5||2013||5,500||25,500||29,534||34.128||$ 41,742||Not started|
|6th||2014||5,500||31,000||36,786||43,590||$ 52,820||Not started|
|7th||2015||10,000||41,000||49.125||58,949||$ 56,307||Not started|
|8th||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 USD|
|10||2018||5,500||57,500||75,074||98.487||$ 96,937||$ 58,818|
iShares XAW ETF Holdings
XAW is an ETF build from other ETFs. It consists of 6 ETFs
- IVV ETF – iShares Core S & P.
- XEF ETF – iShares MSCI EAFE IMI Index
- IEMG ETF – iShares Core MSCI Emerging Markets
- IJH ETF – iShares Core S&P Mid-Cap
- IJR ETF – iShares Core S&P Small-Cap
- ITOT ETF – iShares Core S&P US stocks total
iShares XAW ETF sector allocation
iShares XAW is more balanced than others, but it also covers the world, with 60% of the coverage coming from the US.
Why hold iShares XAW ETF?
XAW beats all other Canadian dividend ETFs which makes it the best, but it’s not about dividend income, it’s about total return.
If you want the dividends, it’s not clear you’re getting the same growth, but the best banks and the best utility stocks will bring you more income.