What is XEQT, and Why is It Perfect for Beginners?

If you’re new to investing, you’ve likely come across a dizzying array of choices: individual stocks, mutual funds, ETFs, and more. For many beginners, finding an easy, cost-effective way to invest can feel overwhelming. That’s where XEQT (iShares Core Equity ETF Portfolio) comes in.

XEQT is an all-in-one ETF designed to simplify investing while offering globally diversified exposure to the stock market. In this post, we’ll break down what XEQT is, how it works, and why it’s an excellent choice for beginners looking to start their investment journey.

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What is XEQT?

XEQT is a low-cost, all-equity ETF offered by iShares, a leading provider of exchange-traded funds. It’s part of their all-in-one ETF lineup, which includes options for investors with varying risk tolerances.

XEQT is unique because it invests 100% in equities (stocks), giving it the potential for high long-term growth. It holds a mix of ETFs that represent global markets, including Canadian, U.S., international, and emerging market stocks.

Key Details About XEQT:

• Management Expense Ratio (MER): 0.20% (low compared to mutual funds).
• Stock Market Exposure: 100% equity allocation across global markets.
• Dividend Yield: XEQT also pays dividends, which are reinvested or can provide passive income.
• Simplicity: A single ETF that provides instant diversification.

XEQT simplifies the investing process by packaging global diversification into one ticker symbol.

What is an All-in-One ETF?

An all-in-one ETF is a single investment that holds multiple ETFs or assets, creating a diversified portfolio. These ETFs are often referred to as “asset allocation ETFs” because they automatically balance and manage their holdings.

Why All-in-One ETFs Are Ideal for Beginners:

• Instant Diversification: Instead of buying individual stocks or ETFs, you get exposure to thousands of companies across global markets.
• No Rebalancing Needed: The fund automatically rebalances its portfolio to maintain its target asset allocation.
• Low Fees: All-in-one ETFs like XEQT have much lower fees compared to traditional mutual funds.

With XEQT, you don’t need to worry about picking individual stocks or adjusting your portfolio manually—it’s all done for you.

Why is XEQT Perfect for Beginners?

If you’re new to investing, XEQT offers several advantages that make it the perfect starting point.

1. Simplicity and Ease of Use

Beginners often feel intimidated by the complexity of investing. XEQT eliminates this challenge by offering a one-stop solution:

• One investment gives you exposure to global markets.
• No need to learn how to pick stocks or research individual ETFs.
• Available on most Canadian brokerage platforms, including Wealthsimple Trade.

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2. Low-Cost Investing

Fees can eat away at your returns, especially over the long term. XEQT has a Management Expense Ratio (MER) of just 0.20%, making it a cost-effective option.

For comparison:

• Mutual funds typically charge MERs of 2% or more.
• Individual stock trading often incurs commission fees (though platforms like Wealthsimple Trade eliminate this).

3. Globally Diversified Portfolio

XEQT holds a mix of stocks from Canada, the U.S., international developed markets, and emerging markets. Here’s a breakdown of XEQT’s allocation:

• Canada: ~25%
• United States: ~45%
• International Developed Markets: ~20%
• Emerging Markets: ~10%

This diversification reduces risk by spreading your investments across different regions and industries.

4. Set It and Forget It

XEQT is perfect for investors who want a hands-off approach. Once you buy XEQT, the fund automatically takes care of rebalancing, ensuring your portfolio stays aligned with its equity-focused strategy.

5. Scalable for Any Budget

With platforms like Wealthsimple Trade offering fractional shares, you can start investing in XEQT with as little as $1. This makes it accessible for beginners who may not have a lot of capital to start with.

Who Should Invest in XEQT?

XEQT is ideal for:

• Beginners who want a simple, diversified investment solution.
• Young investors with a long time horizon who can tolerate market fluctuations.
• Hands-off investors who don’t want to spend time rebalancing or managing their portfolio.

It’s important to note that XEQT is 100% equities, meaning it’s more volatile than balanced funds that include bonds. However, this higher risk comes with greater potential for long-term returns, making it a great choice for growth-oriented investors.

How to Get Started with XEQT

Getting started with XEQT is simple:

1. Open an account with a Canadian brokerage (e.g., Wealthsimple Trade, Questrade).
2. Contribute to a tax-advantaged account like a TFSA or RRSP to grow your investment tax-free.
3. Buy XEQT: Look up its ticker symbol on your platform and place an order.
4. Hold for the long term: Remember, XEQT is designed for long-term growth, so stay invested to let compounding work its magic.

🎁 Get $25 of XEQT for free on Wealthsimple

Final Thoughts

For beginners, XEQT offers an unmatched combination of simplicity, diversification, and cost-efficiency. It’s the perfect starting point for anyone looking to build wealth over the long term without the headaches of managing a complex portfolio.

Whether you’re just starting your financial journey or looking for a hands-off investment strategy, XEQT is a reliable and beginner-friendly option.

Are you ready to invest in XEQT? Let us know your thoughts or questions in the comments below!