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My thoughts on XEQT and VEQT

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1) What exactly are XEQT and VEQT?


XEQT – iShares Core Equity ETF Portfolio

VEQT – Vanguard All-Equity ETF Portfolio

Sponsor / Inception

BlackRock Canada – Aug 7 2019

Vanguard Canada – Jan 29 2019

Mandate

One-ticket 100 % global-equity portfolio built from 5 underlying iShares index ETFs (Canada, U.S., developed ex-NA, EM)

One-ticket 100 % global-equity portfolio built from 4 underlying Vanguard index ETFs (same regional mix)

Strategic weights

~45 % U.S., 30 % Canada, 20 % developed ex-NA, 5 % EM

~45 % U.S., 31 % Canada, 18 % developed ex-NA, 7 % EM

Management fee / MER

0.18 % / 0.20 % blackrock.com

0.22 % / 0.24 % vanguard.ca

Rebalancing

Continuous, rules-based

Continuous, rules-based

Distributions

Quarterly, ~1 % yield blackrock.com

Annually, ~1.6 % yield finance.yahoo.com

Both ETFs give you thousands of stocks in a single trade, eliminate home-bias debates, and are eligible for TFSA, RRSP, FHSA, etc.



2) Where do they stand right now? (25 June 2025 close)


Price

52-week Range

Assets

YTD Total-Return

1-Year Total-Return

XEQT

CA $35.46 blackrock.com

29.80 – 35.41 blackrock.com

~CA $8.1 B AUM blackrock.com

+5.4 % NAV blackrock.com

~+15.5 % blackrock.com

VEQT

CA $47.51 stockinvest.us

39.24 – 47.56 stockinvest.us

~CA $6 B † (estimate)

+3.5 % YTD ca.finance.yahoo.com

~+16.2 % 1-yr ca.finance.yahoo.com

† Vanguard doesn’t publish intraday AUM but it’s roughly in the CA $6-7 B range.

Both funds are sitting near their 52-week highs after a strong rebound in global equities this spring.

3) What is the potential gain over the next 12 months?

  • Base-case capital-market forecasts (Vanguard VCMM, Nov 2024):

    • Developed-world equities ex-Canada: ~7–9 % expected nominal return.

    • Emerging-market equities: ~5–7 % expected. corporate.vanguard.com

  • Because XEQT/VEQT are 100 % equity and closely mirror global-equity indices, a reasonable one-year expectation (60 % probability band) is -10 % to +15 %, with a midpoint around +6 %.

  • Short-term outcomes will hinge on:

    1. Central-bank rate-cut timing (BoC & Fed).

    2. Earnings growth outside the U.S. tech mega-caps.

    3. FX (CAD tends to appreciate when commodities rally, trimming CAD returns).

In other words, upside is modestly positive but far from guaranteed; equity risk remains very real over a 12-month horizon.

4) Is it a good moment to buy? (Professional view)

Pros

  1. Near-all-time highs don’t equal over-valuation: Global forward P/E sits near its 10-year average (~17×). Outside the U.S. it’s closer to 14×, leaving room for multiple expansion if rates drift lower.

  2. One-ticket simplicity and 0.20–0.24 % MER is still cheaper than building the four-ETF sleeve yourself once trading costs and slippage are counted.

  3. Automatic rebalancing removes behavioural errors—valuable when volatility returns.

  4. CAD hedge: Neither ETF hedges currency, giving you natural diversification if the CAD weakens.

Cons / risks

  1. Concentration in U.S. mega-caps (≈45 % weight) means any tech-led pull-back will hit both funds hard.

  2. Rate-cut disappointment: If inflation proves sticky, equities could correct 10 – 15 %.

  3. No ballast: Being 100 % equity, neither fund cushions downside—investors needing shorter-term capital (e.g., your 2027 home) should pair with cash or short-term bonds.

Verdict: For long-horizon growth capital (≥7 yrs) the risk-adjusted reward remains attractive, and dollar-cost-averaging into XEQT or VEQT still makes strategic sense. If your purchase horizon is < 3 yrs (e.g., a 2027 down payment) keep contributions capped and balance with cash-equivalents; equity drawdowns can easily wipe out one year of savings.




 
 
 

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