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.

XIU against TSX against SP500
Dividend-adjusted diagram according to Stock Rover – Try it.

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.

120095,0005,0005.2505,500Not pursuedNot started
220105,00010,00010,76211,550Not pursuedNot started
320115,00015,00016,55018.205Not pursuedNot started
4th20125,00020,00022,62825,525Not pursuedNot started
520135,50025,50029,53434.128$ 41,742Not started
6th20145,50031,00036,78643,590$ 52,820Not started
7th201510,00041,00049.12558,949$ 56,307Not started
8th20165,50046,50057,35670,984$ 70,200Not started
920175,50052,00065,99984.034$ 78,90013,308 USD
1020185,50057,50075,07498.487$ 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.

Without reinvested dividends
With the dividend reinvested

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.

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