Investing is one of the most reliable ways to boost your income over time. With the right strategy, it doesn’t have to be overwhelming or time-consuming either. One of the easiest ways to get started is by investing in exchange-traded funds (ETFs). These investment tools provide access to diversified portfolios, spreading your money across a range of assets such as stocks and bonds. Not only does this approach minimize risk, but it also creates a pathway for steady growth and income. One standout option for beginners and seasoned investors alike is iShares Core Balanced ETF Portfolio (TSX:XBAL).
Image source: Getty Images
About XBAL
XBAL is a balanced ETF, meaning it combines both equities (stocks) and fixed income (bonds) in a single fund. Specifically, its target allocation is 60% equities and 40% fixed income, providing the perfect mix for those who want to grow their investment while maintaining stability. This balanced approach is like enjoying the best of both worlds: the growth potential of stocks and the steadiness of bonds. Whether you’re saving for retirement, a big purchase, or just building wealth, XBAL could be the steady companion you need.
Getting started with XBAL is surprisingly easy. If you have a brokerage account, you can buy units of the ETF just like you would buy a stock. Before diving in, consider your financial goals and risk tolerance. Are you looking for long-term stability with moderate growth? If so, this ETF could be the perfect match. With a management fee of just 0.18%, XBAL is also a cost-effective choice compared to many mutual funds.
The recent performance of XBAL is impressive and reflects its resilience across varying market conditions. As of writing, its year-to-date return stood at 15.26%. For perspective, XBAL returned 12.78% in 2023, though like most funds, it experienced a dip in 2022, posting a negative return of 11.08% due to market volatility. Looking back further, XBAL returned 11.06% in 2021 and 10.58% in 2020, highlighting its consistency during favourable conditions. This track record underscores its potential as a balanced, long-term investment.
Future income
XBAL’s income potential is another reason it’s a standout option for boosting income. The ETF distributes income quarterly, with the latest distribution of $0.15 per unit in September 2024. Its distribution yield currently sits at 1.92%. These payouts typically consist of interest and dividends from its underlying holdings, along with any realized capital gains. While the yield isn’t sky-high, the steady income adds up over time, complementing the fund’s growth potential.
Future prospects for XBAL look promising. Its diversified nature makes it well-suited to handle market fluctuations. In times of economic growth, its equity portion stands to benefit, while the fixed-income portion provides a cushion during periods of uncertainty. With central banks signalling a gradual easing of interest rate hikes, bond performance is likely to improve, adding another layer of stability to the portfolio.
Bottom line
In short, if you’re looking for an easy way to boost your income through investing, XBAL could be a fantastic starting point. It’s balanced, diversified, and managed by one of the world’s leading asset managers. By investing in XBAL, you’re setting yourself up for growth and stability, making it an excellent addition to your portfolio and a reliable step toward life-long financial health.
