XEQT Review: 4.5/5
Gone are the days of buying several ETFs to build up your portfolio and rebalance them yourself. All-in-One ETFs such as XEQT allow you to put all your eggs in one basket and have them automatically rebalanced by a professional manager.
This is one of the best financial breakthroughs of the 21st century, as I can now sleep assured that my money is working for me through an all-in-one ETF.
I decided to write this comprehensive and unbiased XEQT review on one of the best Canadian ETFs to extend my experience with you. Against the shortcomings of most XEQT reviews, here I provide a complete picture of this ETF.
Hopefully, at the end of this XEQT review, you should be able to take the next step of buying your first ETF – be it XEQT or its alternative.
Let’s get there!
XEQT Overview
Launched on August 7, 2019, the XEQT is an All-in-One ETF managed by Black Rock. The iShares Core ETF Portfolios are easy-to-use one-basket portfolios that assist investors in achieving their long-term investment objectives.
Each ETF portfolio follows a strategic asset allocation strategy to assist investors with varying investment objectives and risk profiles.
Of all the five All-in-One ETFs of iShares, only XEQT has a 100% equity allocation.
iShare ETF | Equity Allocation |
iShares Core Income Balanced ETF Portfolio (XINC) | 20% |
iShares Core Conservative Balanced ETF Portfolio (XCNS) | 40% |
iShares Core Balanced ETF Portfolio (XBAL) | 60% |
iShares Core Growth ETF Portfolio (XGRO) | 80% |
iShares Core Equity ETF Portfolio (XEQT) | 100% |
Source: www.blackrock.com
What is XEQT ETF?
iShares Core Equity ETF Portfolio (XEQT) is an aggressive All-in-One ETF managed by BlackRock that provides long-term capital growth to investors through investing in 100% stocks and zero bonds. It offers extremely low Management Expense Ratio and management fees compared to average mutual funds and robo-advisors.
XEQT aims to hold 100% of stocks and invests in a small amount of cash or cash equivalents. This ETF portfolio also provides investors with diversification across different countries and sectors.
Currently, it is made up of 99.74% equities and 0.26% cash and/or derivatives. XEQT stock is suitable for novice and seasoned investors and can be held in registered and unregistered accounts.
Key Facts about XEQT ETF (As of October 21, 2022)
- Net Assets: CAD 1,251,292,815
- Inception Date: August 7, 2019
- Exchange: Toronto Stock Exchange
- MER: 0.20%
- Management Fee: 0.18%
- Price: 23.11
- Distribution Yield: 1.28%
- Dividend Schedule: Quarterly
- Number of Holdings: 4
- Number of Underlying Holdings: 9632
- Account Eligibility: RRSP, TFSA, RRIF, RESP, DPSP, RDSP, Non-Registered
XEQT ETF Return/Performance
Shortly after its debut on the Toronto Stock Exchange, the world went into a global pandemic that brought all topsy turvy. Even with this, all isn’t lost with XEQT ETF; you only have to be patient to realize potential gains.
Despite its limited historical performance, XEQT has had an attractive performance in less than two years of existence compared to other ETFs.
As of October 21, 2022, the ETF has generated 19.66% cumulative returns since inception (August 7, 2019).
Source: www.blackrock.com
Note: The above performance does not guarantee future performance.
XEQT ETF Holdings
For XEQT to manage its funds effectively, it allocates them into four underlying ETFs and two cash groups.
As of May 21, 2021, XEQT has the following stock holdings:
Source: www.blackrock.com
Also, XEQT ETFs offer investors exposure to 9,632 different stocks from various sectors worldwide. XEQT holdings include assets from commercial firearms, tobacco, nuclear weapon, and other potentially controversial companies. So, if you are looking for a socially responsible portfolio, XEQT is not for you.
As of October 21, 2022, XEQT has the following aggregate underlying holdings:
Source: www.blackrock.com
XEQT ETF Geographic Allocation
As a globally diversified portfolio, XEQT has international exposure across different countries. Savvy investors look for great geographical diversification.
Most times, when one part of the world is experiencing financial downturns, another might be experiencing growth. Making sure your investments span the globe is a wise move.
As of October 21, 2022, XEQT has the following 10 top geographic allocations:
Source: www.blackrock.com
Note: XEQT geographic allocations can change from time to time.
XEQT ETF Fees
One benefit of XEQT that lured me to the bank is its fees. When I compared the fees of XEQT with the fees of mutual funds, I didn’t think twice. When it comes to ETFs, XEQT offers much lower fees than other actively managed funds.
Here’s a picture of what I’m talking about:
- Management Expense Ratio (MER): 0.20%
- Management Fee: 0.18%
XEQT’s 0.18% management fee and 0.20% MER makes it a cost-effective investment platform. For example, if you invest $10,000 in XEQT ETF, you will only pay $20 yearly as management fees. In contrast, you will pay $250 yearly if you invest in a mutual fund.
XEQT ETF has one of the lowest fees in the industry, plus you don’t have to worry about rebalancing your portfolio with XEQT. So the fee is worth it. Over an extended period, you can save thousands by investing in XEQT.
XEQT ETF Asset Allocation
As you already know, XEQT aims to provide long-term capital growth to investors by investing in 100% equities.
However, as of the time of writing this review, XEQT has the following asset allocation:
- Stock: 99.74 %
- Cash and/or Derivatives: 0.26%
My XEQT Review – My 5-Star Rating
When determining whether or not to buy any All-in-One ETF, factors that you must consider include fees, ease of buying and selling, diversification, and dividend yield.
Applying the above factors, I give XEQT 4.5 out of 5 stars based on my personal experience.
Here’s how I determined that:
Feature | Rating |
Management Fee | ***** |
Management Expense Ratio (MER) | ***** |
Asset Allocation | *** |
Dividend Yield | **** (4.5) |
Diversification | **** |
Ease of Use | **** (4.3) |
How to Buy XEQT ETF
Black Rock has no restriction on who can buy XEQT ETF. Everyone can buy this ETF – be they a novice or experienced investor.
However, XEQT is more suitable for investors looking for long-term capital growth, those with low-medium risk tolerance, investors that want 100% exposure to equity securities, and those looking for global diversification.
Are you one of them? Buying XEQT stock doesn’t involve a complicated process. It is as simple as identifying the means you want to use and taking the next step of buying your stock.
When looking for cost-effective means to buy your XEQT in Canada, you have two major options: Wealthsimple Trade and Questrade.
- Wealthsimple Trade is a zero-commission online broker that allows you to buy stocks and bonds without a fee. Create a Wealthsimple Trade account to purchase your XEQT today.
- Questrade is also a zero-commission online broker that allows you to buy an ETF without a fee, except for a small selling fee of $4.95 to $9.95. Create your Questrade account to purchase your XEQT today.
XEQT vs VEQT: Which to Choose?
Vanguard All-Equity ETF Portfolio (VEQT) is one of Vanguard Canada’s All-in-One ETFs that share a similar investment objective with iShares Core Equity Portfolio (XEQT).
Both ETF portfolios were established in 2019, resulting in their limited but appealing historical performance. Just as XEQT has a 100% equity allocation, VEQT has the same.
However, the two ETFs differ in fees. XEQT has a relatively low management fee of 0.18% and a low MER of 0.20%. On the other hand, VEQT has a comparatively higher management fee of 0.22% and a higher MER of 0.25%.
Additionally, XEQT has a low-to-medium risk indicator carrying both novice and seasoned investors along, while VEQT has a medium risk indicator favoring those with above-average risk tolerance.
Overall, these two ETFs are great and stand by what they offer. You can’t make a wrong choice with any of them.
Final Thoughts on XEQT Review
As someone who has used XEQT for about a year, I must be frank that this ETF is ideal for you compared to other ETFs if you’re looking for 100% exposure on equities.
Based on my experience, the diversification of XEQT and the dividend yield attracts both novice and experienced investors. Also, due to the composition of XEQT, it has lower fees compared to the fees of Robo-advisors mutual funds. This is a great plus.
However, while you may be excited by XEQT’s lower fee to the bank, that feeling may not last long. In just a decade, the story may be different. As a result of compounding results, you may be charged higher fees in the future. However, this is common to many All-in-One ETFs.
Additionally, if you are not disciplined enough, your investment behavior will have a negative impact on your return, compounding your management fee. Like every other investment, XEQT is not risk-free. It is entirely dependent on stock fluctuations.
If you can afford this, you can proceed to the following stage and buy your XEQT or invest in one of the major alternatives to XEQT.
Don’t be in a rush to invest your money in a portfolio that’s not aligned with your investment objective, risk tolerance, and time horizon. If XEQT aligns with your needs, take the next step of buying it today. If not, consider VEQT or another All-in-One ETF out there.
All the best.
FAQs on XEQT ETF Review
Is XEQT a good ETF?
XEQT is a good ETF because it is a low-cost alternative to mutual funds and Robo-advisors advisors. Besides having global diversification and growing dividend yield, XEQT is also easy to buy and sell.
How risky is XEQT ETF?
XEQT is not as risky as the other All-in-One ETFs out there. With a low-to-medium risk indicator, it’s suitable for both novice and seasoned investors that are comfortable with significant swings in the value of their portfolios (due to 100% stock allocation).
Does XEQT rebalance?
XEQT doesn’t require you to rebalance your portfolio. That is handled automatically by professional portfolio managers. As a result, you can use your time, effort, and money to focus on other aspects of your life.
Have more questions on XGRO stock? Feel free to drop them in the comment section.
Hi, I'm Adeola Adegoke. I am a licensed Insurance Broker in Manitoba, and I hold a master’s degree in Mathematical Sciences (with a major in Financial Modeling) from the African Institute for Mathematical Sciences (AIMS), Tanzania.
Also, I have a second master's degree in Statistics from the University of Regina, and I am currently pursuing my Ph.D. in Statistics at the University of Manitoba.
The primary purpose of Money Reverie is to help everyday Canadians make better financial decisions by providing up-to-date financial news and information, reports, product reviews, and government programs.
