XGRO Review For 2022: iShares Core Growth ETF Portfolio

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Since the creation of the world’s first ETF in Canada in 1990, ETFs have become very popular for their low-cost, diversified investment offerings.

With several hundred ETFs in Canada offered by different portfolio managers such as Vanguard, BMO, Horizons, and BlackRock, investors now have an endless option of ETFs that meet their needs.

And in the world of ETFs, all-in-one ETFs, like XGRO, stand out for their unique feature that makes it possible for anyone (irrespective of their investing knowledge) to build a diversified portfolio with only one security.

But with the several asset allocations, ETFs from different ETF providers available to buy these days, choosing the right one for your needs may be confusing.

XGRO ETF is the all-in-one ETF growth portfolio of BlackRock tailored for investors with a low-medium risk profile.

This XGRO review covers everything you need to know about the ETF, including its asset allocation, fees, pros and cons, alternatives and more. 


Overview of XGRO

The following is a highlight of the key facts of XGRO as of the time of writing this review (March 2022): 

Inception dateJune 21, 2007
Portfolio managerBlackRock
Asset allocation80.03% equity, 19.82% fixed income and 0.15% cash and/or derivatives
Risk levelLow to medium
Asset Under Mgt$1.3 Billion
Number of underlying holdings 20,110
Management fee0.18%
Management expense ratio (MER)0.20%
Distribution yield2.23%
Dividend frequencyQuarterly
ExchangeToronto Stock Exchange

What is XGRO?

XGRO is a multi-asset all-in-one ETF growth portfolio introduced in 2007 to provide investors with long-term capital growth with a low-medium risk level. 

The iShares Core Growth ETF Portfolio trades on the Toronto exchange with the ticker symbol XGRO.

Formerly known as the “iShares Balanced Growth Core Portfolio Index ETF”, XGRO was renamed in December 2018 to  “iShares Core Growth ETF Portfolio.”

XGRO is one of the all-in-one ETFs managed by the world’s largest asset manager, BlackRock. This gives you a sense of security knowing that you’re dealing with a well established and reputable portfolio manager and currently the largest in the world.

Like other all-in-one growth ETF portfolios from the other ETF providers in Canada, XGRO targets 80% equity and 20% fixed-income securities in order to achieve its objective. 

What is this objective? Let’s find out below. 


XGRO Investment Objective

The investment objective of XGRO is to offer investors long-term capital growth. To this end, XGRO seeks exposure to equity and/or fixed income securities by investing in one or more ETFs that BlackRock manages.

Accordingly, XGRO targets approximately 80% equity and 20% fixed income asset allocation. As you will learn shortly, the current assets allocation slightly exceeds this target. But this is expected since equities and fixed income investments perform differently over time.

In addition to the 80/20 assets allocation, XGRO’s investments are diversified geographically across the world. That means it holds stocks and bonds outside of Canada with its largest allocation to US-based companies.


XGRO Assets Allocation

In order to achieve the investment objective, XGRO invests funds in a mix of assets from time to time. The following is the current XGRO assets allocation as of the time of writing this review: 

AssetAllocation
Equity80.03%
Fixed income19.82%
Cash and/or derivatives0.15%

This allocation will usually deviate from the 80/20 target over time, but they are rebalanced periodically to keep it close to the target allocation.

XGRO is a fund of funds that invests in other ETFs. Meaning, it does not hold individual stocks directly.

The table below shows the ETFs that XGRO invests in and their current allocation:

NameTicker SymbolWeighing
ISHARES CORE S&P TOTAL U.S. STOCKITOT35.59%
ISHARES S&P/TSX CAPPED COMPOSITEXIC20.4%
ISHARES MSCI EAFE IMI INDEXXEF20.01%
ISHS CORE CAD UNIV BND IDX ETF (CAXBB12.66%
ISHARES CORE MSCI EMERGING MARKETSIEMG4.02%
iShares Core CAD ST Cor Bd IndexXSH3.2%
ISHARES US TREASURY BOND ETFGOVT2%
ISHARES BROAD USD INVESTMENT GUSIG1.96%
CAD CASHCAD0.08%
USD CASHUSD0.07%

Each of these ETFs represents XGRO’s allocation to the different asset/investment types. For example, ITOT and XIC provide exposure to US Equities and Canadian Equities respectively.

As expected, the holdings are subject to change depending on the market volatility. 


XGRO Top Holdings

As of March 3, 2022, XGRO indirectly holds 20,265 underlying individual securities making it one of the most diversified ETFs you can buy in Canada. 

But as a market-cap weighted ETF, it allocates a higher weight to the largest companies in each of the asset classes it invests in. 

The following are the current top 10 XGRO holdings at the time of writing this XGRO review:

Sector Allocation
APPLE INC (AAPL)2.07%
MICROSOFT CORP (MSFT)1.75%
ROYAL BANK OF CANADA (RY)1.35%
TORONTO DOMINION (TD)1.28%
AMAZON COM INC (AMZN)1.05%
BANK OF NOVA SCOTIA (BNS)0.74%
ENBRIDGE INC (EBN)0.72%
BROOKFIELD ASSET MANAGEMENT INC CL (BAM.A)0.66%
ALPHABET INC CLASS A (GOOGL)0.63%
BANK OF MONTREAL (BMO)0.63%

XGRO Sector Allocations

Funds in the XGRO ETF portfolio are also invested across different sectors. However, XGRO does not disclose the sector allocations on the ETF page.

But like similar ETFs and considering its top holdings, you can expect that higher weight is allocated to the Financials and Technology sectors.


XGRO Portfolio Performance

The XGRO ETF portfolio has a history of positive returns that mirror the performance of the underlying investment types.

The following are the historical performance of the portfolio from inception to February 28, 2022

YearPerformance/Return
1-year7.49%
3-year10.27%
5y 7.92%
10-year7.84%
Since inception (2007)4.29%

To put these XGRO returns in perspective, VGRO has a 1-year and 3-year performance of 7.14% and 10.04% respectively. VGRO is the 80/20 growth ETF portfolio from Vanguard.

That means XGRO’s performance is slightly better than VGRO, its larger alternative from Vanguard.


XGRO Fees

Like other ETFs, the XGRO ETF portfolio charges a management fee and management expense ratio (MER). Here is the current fee structure of XGRO:

  • Management fee = 0.18%
  • MER = 0.20%

This is one of the lowest fees you will find among other all-in-one ETFs in Canada. XGRO fee structure not only beats mutual funds, but also some robo-advisors in Canada. 

Besides the management fee and MER, you may pay a commission when buying and selling the XGRO ETF.

However, this depends on the broker you use as some discount brokers such as Wealthsimple Trade charge no commission on ETFs and stocks trading. 

In a subsequent part of this XGRO review, I discuss how you can buy the ETF through a discount broker like Wealthsimple Trade.


Pros and Cons of XGRO

As always, it’s important to know the pros and cons of an ETF before investing your money in it. The following are the pros and cons of XGRO you need to consider to determine if it’s perfect for you:

Pros 

  • Low fees: The portfolio has a low management fee (0.18%) and low MER (0.20%) that beat mutual funds and even some robo-advisors in Canada. With this, you can easily save costs and keep more in your portfolio. 
  • Global diversification: XGRO exposes you to global securities that help diversify your portfolio across different markets, sectors and companies. This will help reduce your portfolio risk in the long run.
  • Security: XGRO is managed by the world’s largest asset manager, BlackRock. BlackRock so you can be sure that your investment is in safe hands. 

Cons

XGRO has very few cons especially for the types of investors it is targeted at – those looking for a globally diversified ETF portfolio.

  • Home-bias: XGRO has a higher allocation to Canadian equities than the size of the Canadian market would dictate.

Its returns are also lower than that of an all-equity portfolio. But this isn’t really a drawback since XGRO is designed to have lower risk and hence lower returns.


XGRO Review Rating Methodology

This review rates XGRO 4.8 stars out of 5 stars based on the following factors:

FeatureRating
Asset allocation⭐⭐⭐⭐
Management fee⭐⭐⭐⭐⭐
Diversification⭐⭐⭐⭐⭐
Minimum investment⭐⭐⭐⭐⭐
Security⭐⭐⭐⭐⭐

As you can see, the XGRO ETF portfolio scores high on most variables with high points for diversification and management fees

Whether you’re an investor with little knowledge or a seasoned pro, XGRO is a great choice for building a low-maintenance balanced portfolio without the high costs.


How to Buy XGRO ETF in Canada

The easiest way to buy XGRO ETF in Canada as a DIY investor is through an online brokerage with a self-directed investing option.

With self-directed investing, you handle all the steps involved in the investing process such as researching and tracking the stock market, deciding on what to buy, investing your funds, rebalancing your portfolio regularly and more.

If you can handle all these yourself, all you need is to open an account with an online discount brokerage. Some of the best online brokerages for ETFs trading in Canada include Questrade and Wealthsimple Trade.

Both platforms are great options for buying ETFs for free in Canada and you can’t go wrong with either one. 

That said, the following are the key differences between Questrade vs Wealthsimple Trade you should consider when narrowing your selection:

FeatureQuestradeWealthsimple Trade
CommissionsFree on buying ETFs only. Starts at $4.95 for other tradesFree on buying and selling ETFs and stocks
Account TypesTFSA, RRSP, RESP, RRIF, Cash and moreTFSA, RRSP and Cash only
USD AccountYesOnly with a premium subscription ($10/month)
Minimum balance$1,000None
Bonus$50 after deposit of $1,000$50 after trading $150
Learn MoreVisit QuestradeVisit Wealthsimple

How to XGRO ETF on Questrade

Questrade is a cost-effective broker of buying XGRO in Canada because of its low management fee and free commission on buying ETFs.

Questrade has a wide range of investing accounts including TFSA, RRSP, RESP, RRIF, Cash, USD account and more.

The drawback is that Questrade has commissions on ETFs selling and stocks trading. Unlike other discount brokerages, it has a minimum investment balance of $1,000.

That said, if you can meet the minimum deposit requirement, Questrade is a full-service brokerage.

Questrade currently offers Wallet Bliss readers a $50 trade rebate when they open a new Questrade account through this link

How on XGRO ETF on Wealthsimple Trade

Unlike Questrade, Wealthsimple Trade allows commission-free ETFs and stocks trading.

Even though this broker has a relatively higher management fee between 0.4-0.5%, the commission-free trading will help you save more in the long run.

In addition, Wealthsimple Trade doesn’t have a minimum investment balance, allowing you to invest according to your budget.

To buy XGRO on this brokerage, you need to open a Wealthsimple Trade and get access to the trading platform.

Wealthsimple Trade offers a $50 bonus to new clients that sign up using this link and trade a minimum of $150.

However, if you want a completely hands-off way to invest, then consider signing up with one of the best robo-advisors in Canada.

More on that below.


XGRO vs Robo-Advisor

If you don’t want to handle your investment yourself due to limited investment knowledge or for whatever reasons, a robo-advisor is a great way to start investing in a balanced diversified portfolio.

All you need is to open an account with one of the best robo advisors in Canada, such as Wealthsimple Invest or Questwealth Portfolios.

As an automated investing solution, the robo-advisor will only require some personal details about you such as your investment objective and risk tolerance. You can then proceed to fund your account and allow the robo-advisor to do its magic.

Unlike with discount brokerage, the robo-advisor will handle the investing and rebalancing automatically on your behalf while you focus on other things. 

Overall, a robo-advisor is a low-cost and hassle-free alternative to buying and selling XGRO in Canada.


XGRO vs. VGRO: Which to Choose?

FeatureXGROVGRO
Asset allocation80.03% equity, 19.82% fixed income and 0.15% cash and/or derivatives 80.12% stocks, 19.87% bonds and 0.01% short-term reserves
Risk levelLow to mediumLow to medium
Number of underlying stocks20,26513,511
Management fee0.18%0.22%
MER0.20%0.24%
Dividend yield2.23%2.5%
Dividend frequencyQuarterlyQuarterly

The Vanguard Growth ETF Portfolio, Traded on Toronto Stock Exchange with the ticker “VGRO”, is Vanguard’s XGRO equivalent. 

The VGRO ETF was launched on January 25, 2018, to provide long-term capital growth through equity and fixed income securities. 

Like XGRO, VGRO also targets approximately 80% equity and 20% fixed income allocation. Both XGRO and VGRO also invest in thousands of underlying stock assets to maximize the value of their allocated assets. 

Despite their similarities, the two growth ETFs differ considerably. For instance, XGRO has a relatively lower management fee and MER compared to VGRO.

Market-wise, both VGRO and XGRO have their highest allocation to US equities but 

For instance, a 1-year investment on XGRO returned 7.49% while VGRO returned 7.14% on the same timeframe.

With this and lots of other differences, XGRO may seem like the better ETF for investors looking for low-cost growth ETF portfolios in Canada. 

Learn more about the Vanguard Growth ETF in this VGRO Review


How to Choose the Best All-in-One ETF Portfolio in Canada?

It may be challenging to determine the best all-in-one ETF portfolio for you even if you know your risk tolerance and investment objective. 

This is because many of the all-in-one ETF portfolios have many things in common. 

However, you should consider the following factors before making a final decision:

1. Asset Allocation 

All-in-one ETFs have a target allocation. This asset allocation determines the portfolio risk level that corresponds to the ETF’s risk profile.

Investors need to consider the risk level of an ETF to decide if it meets their needs. For example, XGRO holds 80% equity with a low-medium risk level. If this matches your risk tolerance, you can invest in XGRO or its alternative (such as VGRO).  

But if you have a higher risk tolerance and are looking for an all equity-weighted ETF portfolio, consider the iShares Core Equity ETF Portfolio (XEQT), a 100% equity ETF portfolio.

2. Management Fee and MER

It goes without saying that the higher the management fees and MER, the higher your investment costs. 

While you can trade ETFs commission-free on discount brokers like Wealthsimple Trade, management fees and MER are the constant fees you will pay for investing in an ETF.

But since ETFs have different fees, it’s important to consider an ETF portfolio with low management fees and MER to make the most of your investment while keeping an eye on the performance compared to its peers.

3. Portfolio Performance

Lower fees are not enough. The performance of an ETF is arguably a more important factor to consider when deciding on the best.

Let’s assume 2 funds with similar risks – would you rather pay a management fee of 2% for Fund A that returns 10% or 0.5% for Fund B that only returns 7%?

While past ETF performance doesn’t guarantee future returns, it provides an insight into the funds’ management and some insight into the possible outcome of your investment.


FAQs on XGRO Review

Is XGRO a good investment?

Yes. XGRO is a good investment due to its low management fees and MER. It is also good if you’re looking for a portfolio with global diversification and a low-medium risk level. 

How risky is XGRO?

XGRO has a low-to-medium risk level because of its 80% equity and 20% fixed income assets allocation. Like other ETFs and investments in general, XGRO does not provide any guarantees and you can lose some of your investments. 

Does XGRO pay dividend?

Yes, XGRO pays dividends to its investors. However, the dividend is paid quarterly and not monthly. If you need monthly distributions, you should look elsewhere by considering other ETFs.

What companies are in XGRO?

XGRO invests in the biggest companies across several sectors like information technology, financials, energy, communication, and consumer discretionary companies. Apple, Microsoft, RBC and many other big companies make up its top holdings.

What is the best all-in-one ETF in Canada?

The best all-in-one ETF in Canada is one that fits your risk tolerance and investment objective. If you’re a low-medium risk tolerance, XGRO or VGRO may be ideal for you. But if you have a high-risk profile, XEQT or its equivalent could be your best option. 


Verdict on XGRO Review

That brings us to the end of this XGRO review. The bottom line is that XGRO is a low-cost balanced fund for investors with low-medium risk profiles looking for a diversified portfolio with minimal maintenance.

You can buy it from any brokerage in Canada. But better still, use a brokerage or stock trading app that supports commission-free ETF purchases like Wealthsimple Trade or Questrade.

And if XGRO does not totally meet your needs, feel free to consider one of the XGRO alternatives covered earlier including signing up with a robo-advisor for automated investing.

Let me know in the comment section the ETF portfolio you’re going with. 

If you like this XGRO review, kindly check out our other relevant posts for more information about the best investment products and services in Canada.

XGRO Review
4.8

Summary

XGRO is a low-cost growth ETF fund for investors with low-medium risk profiles looking for a diversified portfolio with minimal maintenance.

Simon is a CPA by day and a Personal Finance Blogger by night. With over a decade experience in financial services, he's passionate about personal finance, investing and helping people take control of their financial life.

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