RBC iShares launches three new asset allocation ETFs in Canada

Aug 14th, 2019 | By | Category: Alternatives / Multi-Asset

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RBC iShares, the brand name for the joint venture between RBC Global Asset Management and BlackRock Canada, has introduced three new asset allocation ETFs on the Toronto Stock Exchange.

Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada

Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada.

The funds are part of the venture’s Core ETF Portfolios suite which provides low-cost, one-ticket solutions for investors seeking globally diversified multi-asset exposure.

Each ETF gains its exposure by investing in other iShares ETFs including equity (Canadian, US, international developed, and emerging market) and fixed income (Canadian and international) funds.

The three new ETFs provide access to ‘Equity’, ‘Conservative Balanced’, and ‘Income Balanced’ portfolio strategies.

They are the iShares Core Equity ETF Portfolio (XEQT CN), which invests exclusively in equity ETFs; the iShares Core Conservative Balanced ETF Portfolio (XCNS CN), which targets a 40/60 equity to fixed income long-term allocation; and the iShares Core Income Balanced ETF Portfolio (XINC CN), which targets 20/80 equity to fixed income.

The ETFs are monitored continuously and rebalanced as needed to keep their asset allocations within a 10% deviation from their targets.

RBC iShares now offers five funds within its Core ETF Portfolios suite. The other two Portfolios are the iShares Core Growth ETF Portfolio (XGRO CN), which targets 80/20 equity to fixed income; and the iShares Core Balanced ETF Portfolio (XBAL CN), which targets 60/40 equity to fixed income.

Each ETF comes with an expense ratio of 0.18% which includes the cost of investing in the underlying iShares ETFs. Distributions are made to investors on a quarterly basis.

Pat Chiefalo, Managing Director, Head of iShares, BlackRock Canada, commented, “We know investing can be complicated, but it doesn’t have to be. Since launching our iShares Core ETF Portfolios, Canadian investors and advisors have shown tremendous enthusiasm for our one-ticket multi-asset ETF solutions.

“Recognizing that each investor is unique, we’re excited to add three ETFs to the suite, to help meet the range of investors’ goals and risk profiles. ETFs were originally created to help simplify the investment process; these ETF portfolios build upon that idea, by providing a low-cost, diversified investment solution in one simple package.”

RBC iShares is not alone in offering multi-asset portfolio ETFs in Canada; Vanguard Canada was the first to enter the space with a suite of five portfolios with similar asset allocations to the RBC iShares ETFs. Vanguard charges 0.22% for its portfolios which includes the cost of the underlying Vanguard ETFs.

Horizons ETFs is another firm to test this market, but it has taken a unique approach with its offering. The firm currently offers two ETF Portfolios, targeting 50/50 and 70/30 equity to fixed income allocations, and charges zero direct management fees, although investors still pay the costs on the underlying Horizons ETFs, estimated to be around 0.18%.

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