Blackrock’s XIU ETF or iShares S & P / TSX 60 Index ETF is one of the most liquid ETFs in Canada, offering exposure to top Canadian blue chip companies. XIU is one of the largest and earliest ETFs in Canada.
The fund was established in 1990 with the intent to track the performance of the S & P / TSX 60 index, net of charges.
Benefits of the iShares XIU ETF
- It’s an inexpensive ETF.
- iShares XIU is a diversified fund in 60 large-cap companies and all ten industries.
- It seeks long-term capital growth.
- XIU has more liquidity compared to other Canadian ETFs.
Disadvantages of the iShares XIU ETF
- Heavy weight across the top three industries that make up ~ 60% of the ETF’s total assets.
iShares XDV ETF facts
- Start time: September 28, 1999
- Benchmark: S & P / TSX 60 index
- Net worth: $ 9,908 million
- MER: 0.18%
- 12 months trailing return: 2.72%
- Distribution yield: 2.68%
- Dividend plan: Quarterly
iShares XIU MER – Management Expense Ratio
At 0.18%, XIU has an excellent MER, but you can have a cheaper MER with the Horizon HXT ETF of 0.03%.
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 XIU performance
iShares XIU performs well when compared to the TSX index, but it lags behind the SP500.
The iShares XIU ETF’s annual return since inception is 7.39%. 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 XDV ETF Top 10 Holdings
Below are the holdings of the XDV ETF at the time of writing, sorted by market capitalization. The weight ratio may vary each month at the discretion of the fund manager depending on the fund objective.
At the time of writing, Shopify is the most important part of the XIU ETF.
The top 10 positions make up almost 50% of the fund. So this ETF is also a great way to invest in the Canadian banking sector.
iShares XDV ETF sector allocation
iShares XDV is heavily financed, which is technically in line with the weighting of the TSX. As an ETF with a high dividend yield, you should compare it to other dividend ETFs.
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Why hold iShares XIU ETF?
XIU beats all other Canadian dividend ETFs which makes it the best and you get a decent return too.
If you look at the dividends not reinvested chart, this is your TSX performance.
If you want the dividends, it’s not clear you are getting dividend growth like the best banks and utility stocks will do for you.