XGRO Review

iShares Core Growth or XGRO Is one of the best growth ETFs from the BlackRock fund house. XGRO’s current NAV (Net Asset Value) stands at CAD 22.10, at the time of writing this article. The year-to-date (YTD) market return is 4.81%. XGRO has a Risk Indicator of Low to Medium by the BlackRock Fund House. 

Don’t think of XGRO/VGRO as 1 fund, because they are fund-of-funds. I like XGRO over VGRO because XGRO is more heavily invested in US stocks, and has a lower MER. I also do the pre-authorized purchase plans with TD e series funds, but will likely transition out of them and just buy the ETFs on WealthSimple Trade.

For example, XGRO is made up of 8 other ETFs so whether you buy those ETFs individually or you buy XGRO, you still own the same portfolio. Owning an all-in-one fund isn’t “putting all your eggs in one basket” in case that’s what was concerning you. In this article let’s take a look at everything XGRO has to offer, in terms of diversity, characteristics, market returns, dividends, exposure to the sectors in the market, and so on. Now, Let’s begin. 

What Is XGRO?

First of all, why XGRO? 

When you have a bunch of interesting Canadian ETFs and Mutual why choose the XGRO? What makes it appealing to the end-user like you and me? 

Like I said earlier, XGRO is from the BlackRock fund house. In case you don’t know, BlackRock is one of the best fund houses in the world along with Vanguard and others. 

While the BlackRock fund house has 100s of excellent ETFs under its portfolio, XGRO being one of them.

Why XGRO? 

With VGRO or XGRO you can almost flip a coin. I’ll personally lean towards XGRO for the lower MER, slightly higher US allocation/less Canadian, and the option to DRIP.

Otherwise, you can’t go wrong with either and they will perform very closely in the long term. FWIW, when you backtest XGRO vs VGRO to 25 years, XGRO performed slightly better at 7.49% vs 7.22% with VGRO.

One should go with the TD e-series if they highly value automating the process as much as possible since you can set up a pre-authorized purchase plan (PPP).

The advantage with this is when you automate things you are more likely to be disciplined and stick to your plan. If you think you can be disciplined and consistent with buying ETF shares regularly, then I’d go in that direction.

1. By Investing in the XGRO you’ll end up having exposure to a portfolio of ETFs that is broadly diversified by asset class and across regions, in one convenient package

2. XGRO is continuously monitored by asset managers and automatically rebalanced, as needed, to maintain asset class target weights

3. The management fee is only 0.18% and MER is 0.20% (Management Expense Ratio), which are the best in class for any Exchange Traded Fund (ETF)

XGRO ETF Characteristics 

First of all, in case you don’t know, XGRO accepts investments through DRIP, PACC and SWP. 

The dividend yield is 2.43% or $0.13 and is paid out quarterly. 

Quick Look At The XGRO Fund Facts:

• Net Assets: CAD 428,671,350 (428 M)

• Commencement/Inception Date: Jun 21, 2007

• Exchange: Toronto Stock Exchange (TSX)

• Asset Class: Multi-Asset

• Fiscal Year End: Dec 31, 2019

• Rebalance Frequency: Quarterly

• Units Outstanding: 19,400,000 (19M)

• Number of Holdings: 8

• Number of Underlying Holding: 17849

• Price: 22.11 CAD

Top 10 Holdings of XGRO 

As you can notice from the above chart, almost 38% of your money in XGRO goes into ITOT which is an S&P Total US Market Fund. 

While the YTD returns of ITOT is 8.45%, the Expense Ratio is excellent at just 0.03%. 

Let’s briefly look at the ITOT returns for the maximum time frame: 

As you can see, the returns have been excellent! That’s because the overall US markets have done extremely well in recent months. 

Next, 19.13% of your XGRO money is invested in XIC. 

Now, XIC is another excellent ETF from the BlackRock Fund house. With XIC, you’ll pretty much own the entire Canadian Stock Market. 

XIC returns snapshot: (Maximum time frame)

Now, that’s 60% of your money invested through XGRO into ITOT and XIC. 

Next up is XEF, with a 19.5% allocation. Now, what is this XEF? 

XEF is another ETF from the BlackRock fund house which contains over 1500 stocks from Europe, Asia, and Australia. The YTD returns of the XEF fund is not all that great and is negative at -2.5%. 

XEF Chart: (Market Returns)

So that’s where 80% of your XGRO money is invested in.

The rest of the money is invested in XBB, Emerging Markets and Hedge funds for (USD/CAD exchanges).

All I can say here is that the money you invest in XGRO is extremely well diversified with good geographical exposure. Let us continue. 

XGRO Exposure Breakdown 

Even though the majority of the money invested by XGRO is in equities, almost 18.59% of your money goes into the Fixed Income as well with Cash at 0.20%. 

Type	Fund
Equity	81.21
Fixed Income	18.59
Cash and/or Derivatives	0.20

XGRO ETF Performance 

Below is the market performance of XGRO: 

Please note that I have considered the calendar year returns so that it’ll help you know the market returns in a more transparent and better understanding of the returns you can expect: (average)