# XGRO - one stop shop?



## Erome1 (Aug 19, 2016)

Hey all,

I have so many different accounts between me and my wife's various RRSP, TFSA, Cash trading, RESP etc.

I've got a balance of XEF, XIU, XBB, XIC in them.

I'm contemplating just moving them all into XGRO - and then I don't have to worry about my balance or rebalance.

It seems like XGRO holds a very similar setup, with a ratio I like. What are people's thoughts?


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## Topo (Aug 31, 2019)

You can't go wrong with an all-in-one asset allocation ETF in a tax advantaged account. VGRO and ZGRO are also similar, if you would like to diversify between issuers.


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## doctrine (Sep 30, 2011)

For the equity component, XGRO uses 45% Canadian, 25% US, 25% EAFE, and 5% emerging. XEQT is 100% equity, XGRO uses 80-20.

The Vanguard equivalent, VGRO, uses 30% Cdn, 42% US, 21% Developed ex-NA, 7% emerging. VEQT is 100% equity, VGRO uses 80-20

So the Vanguard ones use more international exposure than iShares. I tend to prefer it's lower weighting to Canadian stocks.


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## AltaRed (Jun 8, 2009)

doctrine said:


> For the equity component, XGRO uses 45% Canadian, 25% US, 25% EAFE, and 5% emerging. XEQT is 100% equity, XGRO uses 80-20.
> 
> The Vanguard equivalent, VGRO, uses 42% US, 30% Cdn, 21% Developed ex-NA, 7% emerging. VEQT is 100% equity, VGRO uses 80-20
> 
> So the Vanguard ones use more international exposure than iShares. I tend to prefer it's lower weighting to Canadian stocks.


I prefer VGRO for the lower Cdn equity component.


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## Erome1 (Aug 19, 2016)

This is great info - I must have missed this when looking into it!

I prefer more US to CAD in the folio, so I'm going to switch to the vanguard option.

Thanks!


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## scorpion_ca (Nov 3, 2014)

doctrine said:


> So the Vanguard ones use more international exposure than iShares. I tend to prefer it's lower weighting to Canadian stocks.


I think this is not true for VEQT (30% CAD) whereas XEQT (22% CAD) has more global weighting.


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## hfp75 (Mar 15, 2018)

I’d want as little Canadian exposure as possible...


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## Erome1 (Aug 19, 2016)

Can someone help me understand these last few posts? When I look at XGRO holdings it shows 37.5% US total...?

I think I may need a crash course in equity % and such...


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## Spudd (Oct 11, 2011)

Erome1 said:


> Can someone help me understand these last few posts? When I look at XGRO holdings it shows 37.5% US total...?
> 
> I think I may need a crash course in equity % and such...


You're not crazy. 

XGRO:

ITOTISHARES CORE S&P TOTAL U.S. STOCKCorporatesCAD 145,587,896.6637.45145,587,896.66XEFISHARES MSCI EAFE IMI INDEXCorporatesCAD 76,666,384.1419.7276,666,384.14XICISHARES S&P/TSX CAPPED COMPOSITEETFsCAD 74,101,401.0019.0674,101,401.00XBBISHS CORE CAD UNIV BND IDX ETF (CACorporatesCAD 48,670,615.9512.5248,670,615.95IEMGISHARES CORE MSCI EMERGING MARKETSCorporatesCAD 15,930,355.054.1015,930,355.05XSHISHARES CANADIAN SHORT TERM CORPORCorporatesCAD 12,287,303.703.1612,287,303.70USIGISHARES BROAD USD INVESTMENT GCorporatesCAD 7,792,021.342.007,792,021.34GOVTISHARES US TREASURY BOND ETFTreasuryCAD 7,341,589.961.897,341,589.96

Summary: 19.6% bonds, 80.4% equity

VGRO:
Vanguard US Total Market Index ETF 33.7%
Vanguard FTSE Canada All Cap Index ETF 23.9%
Vanguard FTSE Developed All Cap ex North America Index ETF 17.3%
Vanguard Canadian Aggregate Bond Index ETF 11.4%
Vanguard FTSE Emerging Markets All Cap Index ETF 5.8%
Vanguard Global ex-US Aggregate Bond Index ETF CAD-hedged 4.3%
Vanguard US Aggregate Bond Index ETF CAD-hedged 3.6% 

Summary: 19.3% bonds, 80.7% equity.

Equity percentage is about the same for both, so it's fair to just look at the percentage of US stocks in the portfolios rather than calculating a percent of equity holdings. And doing that, we can see that Blackrock has more US equity than Vanguard does. I am not sure how the previous poster got their data but I just got the above from the source websites in the past 5 minutes, perhaps they were looking at a third-party site such as Morningstar or something. However, Vanguard does have more Canadian than Blackrock. The difference is made up by Blackrock having more international. 

Nutshell winners:
US equity - Blackrock
International equity - Blackrock
Canadian equity - Vanguard
Global bonds - Vanguard


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## AltaRed (Jun 8, 2009)

Erome1 said:


> Can someone help me understand these last few posts? When I look at XGRO holdings it shows 37.5% US total...?
> 
> I think I may need a crash course in equity % and such...


I should have looked up the data myself rather than rely on other calculations. Regardless, I prefer the lower percentage of Cdn equity in an AA ETF.

P.S. I don't own any of the AA ETFs myself but spouse does own VBAL in her RRIF.


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## MrBlackhill (Jun 10, 2020)

I'm looking at the past performance of the one with the longest history (XGRO) and I was wondering : Why not 80% ZGQ + 20% ZAG (or ZGSB)? That makes the 80/20 and it's diversified through all sectors and geographics. XGRO has a 5-year history of 6% CAGR while 80/20 ZGQ/ZAG is at 12%. I don't know why ZGQ has such low volume, it has a history of 14% CAGR. It's even outperforming its index. BMO ETFs | Advisor | BMO Global Asset Management


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## Spudd (Oct 11, 2011)

XGRO hasn't really been around for 5 years. They converted an older asset allocation ETF into XGRO after VGRO launched. The older one had a different composition. 









iShares Launches All-in-One ETF Portfolios | Canadian Couch Potato


Back in February, writing about the newly launched Vanguard’s asset allocation ETFs, I asked why it had taken so long for someone to create an ETF version of the traditional balanced index mutual fund.



canadiancouchpotato.com


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## MrBlackhill (Jun 10, 2020)

Oh ok. I was trying to backtest ZGRO, VGRO and XGRO on PortfolioVisualizer and XGRO was the only one with 5 years history available in their database. But that's true, if I look on BlackRock website, XGRO has been there since 2007, with a 10-year performance of 7.37% and a 5-year performance of 5.60%. Still, I feel like 80/20 allocation on ZGQ/ZAG yields double CAGR compared to XGRO. But I don't know how equivalent it is on risk-basis.


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## Topo (Aug 31, 2019)

MrBlackhill said:


> Still, I feel like 80/20 allocation on ZGQ/ZAG yields double CAGR compared to XGRO.


I believe that ZGQ has a quality filter that would make it outperform a broad market index in some time frames, but may underperform during other times. A genuine "quality factor" however does appear to exist and could boost returns.


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## james4beach (Nov 15, 2012)

When looking at VGRO, XGRO, etc, all of these funds can change their country allocation (as long as they keep the 80% equity target) at the discretion of the fund manager.

So long term, you don't really know where the allocations will land and therefore it will be hard to back-test or estimate performance. The allocations are not set to constant numbers, nor is there a benchmark for the fund to follow.

They might not adjust the allocations at all, or they could adjust the country weights significantly over the years. There is no way to know, but in my view, it does add some uncertainty.


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