The Best Canadian Blackrock ETFs to Buy in November 2024

ByDan Kent Published On:

BlackRock, the world’s largest asset manager, offers a variety of exchange-traded funds (ETFs) tailored for Canadian investors. 

These funds provide a way to gain exposure to various asset classes, including equities and fixed income, across domestic and international markets. 

Canadian investors are often drawn to BlackRock ETFs for their relatively low management fees and brand recognition. The company is, after all, one of the largest asset managers in the world.

As the ETF landscape in Canada continues to evolve, BlackRock remains a key player. I’ve seen quite a few fresh funds from Blackrock hit the market over the last few months, catering to a wide variety of investors.

I’d imagine that’s why you’re here as well: to identify some of the best Blackrock ETFs for your portfolio. That’s exactly why we’re going to explore them in this article. 

Let’s get started

What are the best Blackrock ETFs in Canada?

  • iShares S&P/TSX 60 ETF (TSE:XIU)
  • iShares Core MSCI EAFE IMI ETF (TSE:XEF)
  • iShares Core Canadian Universe Bond ETF (TSE:XBB)
  • iShares Core S&P 500 ETF (TSE:XUS)
  • iShares Core Equity ETF Portfolio (TSE:XEQT)

iShares S&P/TSX 60 ETF (TSE:XIU)

The iShares S&P/TSX 60 Index ETF (TSE:XIU), commonly known as XIU, is designed to track the performance of the S&P/TSX 60 Index, which is composed of 60 large-cap Canadian stocks. 

Why 60? Primarily due to the size of our economy. When we look south of the border, we see the S&P 500. The difficulty here is the Canadian economy is not large enough to support an index of 500 major companies. For this reason, we stick to 60.

The fund is the first exchange-traded fund, introduced in the early 1990s, and is one of the most liquid funds on the TSX.

The fund’s top holdings include some of Canada’s largest companies, including Royal Bank (TSE:RY), Toronto Dominion Bank (TSE:TD), Shopify (TSE:SHOP), and Canadian Natural Resources (TSE:CNQ).

The fund’s management expense ratio isn’t particularly high, but it isn’t low either. At 0.18%, you’ll pay $1.80 every year per $1000 invested. Most index funds south of the border will have lower fees than this, but unfortunately, in Canada, we’re stuck with higher fees because of our smaller market.

The fund pays a distribution of around 3%, which isn’t all that surprising as most of the mature companies here in Canada are mature, high-yielding companies in the financial, utility, and oil and gas sectors.

Overall, XIU provides some pretty solid exposure to the Canadian markets. It focuses on the 60 top companies over the entire index, which typically removes some of the index’s cyclical nature.

iShares Core MSCI EAFE IMI ETF (TSE:XEF)

The iShares Core MSCI EAFE IMI ETF, or XEF, offers Canadian investors diversified exposure to international markets, excluding North America. 

This ETF tracks the performance of the MSCI EAFE Investable Market Index, which includes securities from markets in Europe, Australasia, and the Far East.

The fund is quite large, with over $8B in AUM at the time of writing. If a fund can get over $1B in AUM here in Canada, it is generally viewed as quite popular.

Because this fund is from North America, most of the top holdings will be unknown to the average investor. However, the fund does contain over 2600 total stocks, with very small weightings towards each. So, think of it as broad exposure to the international markets without any particular concentration risk.

The top holdings with around 2% allocations are Novo Nordisk, ASML Holdings, Nestle, and Toyota.

The fund has total fees of around 0.22%. While this may seem expensive on the surface, the fee isn’t bad, considering it effectively gives you exposure to the entire global markets outside of North America.

I personally know some investors who own a fund like this for broad diversification and then pick individual stocks inside North America, where they are more comfortable with equity research.

Its performance hasn’t been all that good as the international markets have really struggled. However, if you believe there is an opportunity moving forward, it is certainly one of the best ways to get international exposure.

iShares Core Canadian Universe Bond ETF (TSE:XBB)

I wanted to include a wide variety of ETFs on this list. In this case, we’ve arrived at one of Blackrock’s most popular bond ETFs.

The iShares Core Canadian Universe Bond ETF (XBB) is designed to provide investors with broad exposure to the Canadian investment-grade bond market. 

It aims to replicate the performance of the FTSE Canada Universe Bond Index. The ETF offers a diversified portfolio that includes a wide range of government and corporate bonds. 

This mix not only makes the yield more attractive via the addition of corporate bonds but also reduces risk and volatility with the addition of Government of Canada bonds.

The fund’s assets under management were just under $7B at the time of writing and paid a yield typically just north of 3%. 

In terms of bond allocations, the bulk of the fund is in bonds that mature in the next 1-10 years. This does mitigate the interest rate risk a bit, as shorter-maturity bonds are less volatile when it comes to policy rates. However, nearly 30% of the fund is still allocated to long-term bonds.

Although the fund does include corporate bonds, 75% of it is still government bonds, which is why the yield is a bit lower than that of a typical bond fund.

The fund’s management fees are only 0.1%, meaning you’ll pay just $1 every year for every $1000 you have invested.

Considering how difficult it was to buy individual bonds just 10 or 15 years ago, these bond funds have been a huge benefit to those who want fixed-income exposure without the hassle of choosing individual bonds.

If you’re looking to add fixed income to your portfolio, this is certainly one you should consider.

iShares Core S&P 500 ETF (TSE:XUS)

BlackRock’s iShares Core S&P 500 ETF (XUS) is an option for investors seeking long-term capital growth that mirrors the performance of the S&P 500 Index.

The S&P 500 is often considered the premier stock market index. It contains 500 of the largest companies in the United States and is often considered the key benchmark when it comes to investor portfolios. Beating the S&P 500 with a portfolio of individual stocks over the long term is the benchmark for being considered a solid investor.

Yet, the majority of investors fail to do so and, as such, often seek out an index fund that simply mirrors the index. For Canadians, XUS is one of the best.

The fund holds the iShares Core S&P 500 ETF IVV. This is Blackrock’s USD S&P 500 ETF. However, the inside of IVV contains the likes of Microsoft (MSFT), Apple (AAPL), NVIDIA (NVDA), and Amazon (AMZN).

The fund has fees of 0.09%, meaning you’ll pay just $0.90 annually for every $1000 you have invested. This makes it one of the lowest-cost ETFs on this list and a very easy way to get exposure to the S&P 500.

One important note, however. Many Canadians believe that holding US stocks and ETFs inside their RRSP makes them immune to the withholding tax on the distribution. This is the case with US-domiciled funds, yes.

However, XUS is a Canadian-domiciled fund that holds an underlying US ETF. So, unfortunately, even inside an RRSP, it is subject to withholding tax.

The fund only has a distribution of around 1%, so this isn’t really a deal breaker for those who want to keep their currency in CAD. However, those who want to avoid the withholding tax can do so by simply holding IVV instead of XUS.

iShares Core Equity ETF Portfolio (TSE:XEQT)

The iShares Core Equity ETF Portfolio (XEQT) is one of the most popular all-in-one ETFs in Canada. This type of ETF has been taking the investment world by storm recently. 

Designed to track the investment results of an index composed of Canadian, U.S., and international equities, XEQT stands out as a one-click solution to owning the entire market.

The fund contains a five-figure amount of holdings—yes, you read that right—over 10,000 of them. It does so by holding a wide variety of Blackrock ETFs, including a Total US Stock Market ETF, a TSX ETF, a Global ETF, and an Emerging Markets ETF.

The fund has fees of 0.2%, which means you’ll pay $2 every year per $1000 you have invested. This is one of the higher fees on this list, but it’s also important to consider the fact this is the most diversified fund on this list and gives you the widest exposure to the global markets.

Considering how difficult it would have been to construct a portfolio like this before these funds existed, $2 a year isn’t all that bad of a fee.

The fund pays a distribution of around 2%. However, this shouldn’t really be looked at as an income-orientated ETF. Instead, it should be held in an attempt to benefit from the total returns of the global market.

Key factors when selecting an ETF

Management Expense Ratio (MER)

The Management Expense Ratio (MER) represents the combined total of all management fees and operating expenses associated with an ETF, expressed as a percentage of the ETF’s average net assets. 

You should heavily scrutinize the MER as it directly impacts your net returns. Keep in mind that you need to look to the fact sheet of an ETF, not a standard data website like Yahoo Finance, for total fees. There can be additional fees on top of what is listed publicly.

Portfolio diversification

Diversification benefits are key in mitigating risk. An ETF with a comprehensive sector allocation can protect investors from volatility in any single sector. For instance, BlackRock offers ETFs that diversify not just across industries but global markets as well, safeguarding against regional downturns.

Tax efficiency

ETFs can offer better tax efficiency through lower turnover of holdings, which can result in fewer capital gains distributions. There are also funds that pay particularly high distributions that can expose investors to higher taxable income if held in taxable accounts.

It’s important to consider the overall amount and the structure of an ETF distribution to make sure it’s right for you.