Building an investment portfolio doesn’t have to be time-consuming or complicated — especially if you’re working with $40,000 and want a hands-off approach. While individual stocks may offer the potential for high returns, they also demand time, research, and the emotional stamina to ride out volatility. If that sounds overwhelming, there’s a much simpler way to invest — and it doesn’t involve monitoring the markets daily or re-balancing your holdings every few months.
The all-in-one solution: XEQT
Enter iShares Core Equity ETF Portfolio (TSX:XEQT) — a powerful all-in-one equity exchange-traded fund (ETF) designed for investors who want long-term growth with minimal effort. Launched in 2019, XEQT has quickly become a favourite among passive investors in Canada, with net assets hitting close to $7.9 billion.
This ETF automatically re-balances itself and is composed of other ETFs that offer diversified exposure to global stock markets. Despite this complexity under the hood, XEQT is incredibly simple for investors to use. And at a low management expense ratio (MER) of just 0.20%, it’s also cost-efficient. If you had invested in XEQT five years ago, you would have enjoyed an annualized return of 13.2%. Of course, past performance doesn’t guarantee future results, but it highlights the potential for strong long-term growth. A smart approach would be to dollar-cost average — investing small amounts consistently over time and buying more during market dips.
What’s inside XEQT?
Think of XEQT as a portfolio within a portfolio. It holds a mix of five core ETFs, offering exposure to over 7,000 companies worldwide. Here’s how that $40,000 would be distributed:
- 33% in iShares Core S&P Total U.S. Stock Market ETF: This U.S.-listed fund includes over 2,400 companies across all sizes. Top holdings include tech giants like NVIDIA, Microsoft, and Apple.
- 26% in iShares Core MSCI EAFE IMI Index ETF: Offers broad exposure to over 1,500 companies from Europe, Asia, and Australia. Sector allocations span financials (22%), industrials (19%), health care (11%), consumer discretionary (10%), information technology (8%), consumer staples (8%), and more.
- 26% in iShares Core S&P/TSX Capped Composite Index ETF: Covers over 200 Canadian companies. Key holdings include Royal Bank of Canada, Shopify, and Toronto-Dominion Bank.
- 10% in iShares Core S&P 500 Index ETF (TSX:XUS): Provides extra exposure to large-cap U.S. stocks, including the S&P 500 heavyweights.
- 5% in iShares Core MSCI Emerging Markets IMI Index ETF: Adds global diversification with over 3,100 companies in developing markets. Its top holding is Taiwan Semiconductor, which makes up 8% of the fund.
Why XEQT is ideal for passive investors
The beauty of XEQT lies in its simplicity. Instead of managing dozens — or even hundreds — of individual stocks or ETFs, investors hold one globally diversified fund. It automatically adjusts as markets move and as the underlying ETFs evolve.
This means you don’t have to worry about re-balancing, tracking sector weights, or stressing over economic cycles. Just buy regularly, whether that’s weekly, monthly, or quarterly, and let the compounding do the heavy lifting.
In short, if you’re looking to grow a $40,000 portfolio without spending hours researching stocks or adjusting allocations, XEQT offers an efficient, low-maintenance path to building long-term wealth. All it takes is consistency and patience.
