What is XAW ETF?
XAW is an index ETF. It’s an easy and effective way to get exposure to international markets. The fund invests in a basket of index funds that allow to benefit from growth opportunities outside of the Canadian market.
This fund is ideal as an addition to an existing portfolio that invests mainly in Canadian stocks. Buying XAW will help you invest in a global portfolio and thus achieve diversification.
XAW is ideal for long term investors.
Does XAW rebalance?
Yes, XAW rebalances itself. The manager makes sure the weighting for each market is stable.
XAW vs XEQT iShares all equity ETF
XEQT is an all in one ETF. By owning XEQT you a fully diversified portfolio that invests in Canadian and international markets at the same time. XAW as discussed invests solely in international markets excluding Canada. To build a fully diversified portfolio, one can hold a Canadian index ETF such as XIC and XAW.
XEQT holdings
| Name | Symbol | % Assets |
|---|---|---|
| iShares Core S&P Total US Stock Mkt ETF | ITOT | 47.54% |
| iShares Core S&P/TSX Capped Compost ETF | XIC.TO | 24.56% |
| iShares Core MSCI EAFE IMI ETF | XEF.TO | 22.71% |
| iShares Core MSCI Emerging Markets ETF | IEMG |
Tax implications of owning ETFs that invest in US and International stocks
There are tax implications when holding an ETF that invests in US and international stocks. Any dividend received will be reduced by withholding taxes depending on the scenarios below. The table below provides a summary:
| Canadian ETF: 1$ dividend scenario | Taxes | Dividend received |
| 1- Holding US or International stocks directly | -0.15$ (withholding tax from US or foreign jurisdiction) Creditable | 0.85$ |
| 2- Holding US listed ETFs that invest in US stocks | -0.15$ (withholding tax from US or foreign jurisdiction) Creditable | 0.85$ |
| 3- Holding US listed ETFs that invest in International stocks | -0.15$ (withholding tax from foreign jurisdiction) Non creditable -0.13 (withholding tax from US) Creditable | 0.72$ |
The chart is designed for illustrative purposes only and is subject to change. Please consult a tax specialist for more information.
XAW ETF historical performance and dividend yield
Dividend yield: 2.21% as of August 29th 2022
| Monthly total returns | |
| Year to date | -9.79 |
| 1-Month | 8.52 |
| 3-Month | 3.13 |
| 1-Year | -5.88 |
| 3-Year | 9.70 |
| 5-Year | 9.52 |
XAW ETF holdings
| Ticker | Name | Weight |
|---|---|---|
| IVV | ISHARES CORE S&P 500 ETF | 53.72 |
| XEF | ISHARES MSCI EAFE IMI INDEX | 25.49 |
| IEMG | ISHARES CORE MSCI EMERGING MARKETS | 11.49 |
| IJH | ISHARES CORE S&P MID-CAP ETF | 3.86 |
| ITOT | ISHARES CORE S&P TOTAL U.S. STOCK | 2.95 |
| IJR | ISHARES CORE S&P SMALL-CAP ETF | 2.39 |
| USD | USD CASH | 0.08 |
| CAD | CAD CASH | 0.02 |
