Investing

iShares Asset Allocation ETFs, Cheaper than Vanguard!

  • Last Updated:
  • Jan 11th, 2019 2:56 pm
[OP]
Deal Addict
User avatar
Apr 12, 2012
1578 posts
508 upvotes
Toronto

iShares Asset Allocation ETFs, Cheaper than Vanguard!

Even cheaper than the vanguard alternatives. The war to zero is heating up!
https://www.canadianportfoliomanagerblo ... tion-etfs/
https://www.blackrock.com/ca/individual ... 2-7-en.pdf

BlackRock’s new tickers come as no surprise; their XBAL and XGRO will be in direct competition with Vanguard’s VBAL and VGRO (Note: The ticker for each iShares Fund is expected to change on or about December 18, 2018). The MER for each Vanguard fund is 0.25%; the projected MER for each iShares ETF is around 0.21%.
XBAL’s long-term strategic asset allocation will be approximately 40% fixed income and 60% equities. XGRO’s strategic asset mix will be more aggressive, with 20% fixed income and 80% equities.

As a bonus iShares ETFs can be setup for pre authorized payment purchases as well (https://www.blackrock.com/ca/individual ... -en-ca.pdf) whereas Vanguard ones cannot.
That makes a big difference as you could now throw $X into XGRO monthly automatically and then have automatic purchases. Completely eliminates all manual work.
15 replies
Member
Sep 14, 2009
257 posts
57 upvotes
Vancouver
I hold VGRO and these look really interesting. I especially like that they are underweight CDN equites and overweight US compared to Vanguard but too bad no global bonds exposure vs Vanguard.
Newbie
Jan 27, 2017
35 posts
28 upvotes
Has there been any indication that XBAL and XGRO will be PACC eligible? Or are you just assuming this? Only some of the iShares ETFs are eligible for PACC and it's typically the higher fee, actively managed funds.

If they are indeed PACC eligible this is huge. Makes robo-advisors irrelevant as the only really advantage they offer over VGRO is automated contributions.
[OP]
Deal Addict
User avatar
Apr 12, 2012
1578 posts
508 upvotes
Toronto
patommel wrote:
Dec 16th, 2018 5:46 pm
Has there been any indication that XBAL and XGRO will be PACC eligible? Or are you just assuming this? Only some of the iShares ETFs are eligible for PACC and it's typically the higher fee, actively managed funds.

If they are indeed PACC eligible this is huge. Makes robo-advisors irrelevant as the only really advantage they offer over VGRO is automated contributions.
Their current tickers are CBD and CBN which are currently PACC eligible, through questrade forms. Since these ETFs are just a name change and fee reduction, they should continue to be PACC eligible.
https://www.blackrock.com/ca/individual ... -en-ca.pdf

At most brokerages, iShares ETFs are eligible for a pre-authorized purchase plan, or PACC. First you arrange to contribute a fixed dollar amount to your account each month, then you instruct the brokerage to buy a fixed dollar amount of the ETF each month with no commission. Only whole shares can be purchased, so for example, if you set up a PACC for $200 per month and the ETF is trading at $22, you’ll buy nine shares and the other $2 will remain uninvested.
Deal Addict
Nov 25, 2014
1730 posts
932 upvotes
Newton Brook, ON
I don't think Blackrock will be able to steal much of the $800 million already with Vanguard. I could be wrong, but I feel like if the target audience for these funds don't care about the extra 0.11% they're already paying versus buying the underlying funds themselves, 0.04% probably won't be enough to change anything for most.
You need someone with an umbrella not a fork
Deal Fanatic
User avatar
Jun 19, 2009
5150 posts
981 upvotes
Scarborough
nmclean wrote:
Dec 17th, 2018 9:56 am
I don't think Blackrock will be able to steal much of the $800 million already with Vanguard. I could be wrong, but I feel like if the target audience for these funds don't care about the extra 0.11% they're already paying versus buying the underlying funds themselves, 0.04% probably won't be enough to change anything for most.
This, but it might affect new contributions going forward. If I were buying these funds I'd probably go with iShares as a result. Also I think 80/20 is more suited for me than 70/30 aggressive allocation (from Horizons). It will compete with Horizon's funds HBAL/HCON and VGRO/VBAL as well
Deal Addict
User avatar
Dec 26, 2010
1703 posts
743 upvotes
Calgary
I don't think there's enough MER difference to really jump from one ship to the other, but I do like iShares allocations better.
Indexer, non-yield chasing, low cost, broad based, as simple as possible investor.
Newbie
Jul 8, 2017
64 posts
40 upvotes
XBAL and XGRO are commission-free, for buying and selling, at Qtrade.

They might soon be commission-free at Scotia iTrade, if they wake up!
Member
Jan 13, 2016
246 posts
64 upvotes
Vancouver, BC
I asked TD direct investing and they said you can't use the ishares PACC there. Obviously brokerages don't want to support PACC when they would be losing commissions by supporting it.
Sr. Member
Mar 17, 2008
644 posts
155 upvotes
Looks like Questrade supports BlackRock iShares' Pre-Authorized Cash Contribution (“PACC Plan”)

I obviously understand that ETFs are free to buy at Questrade but PACC can force people -not- to time the market.
Thanks for contacting Questrade. My name is Questrade Agent. How can I help you?
Me (3:39:44 PM):Hi, I would like to know if Questrade supports Pre-Authorized Cash Contribution (“PACC Plan”) for BlackRock iShares ETF Funds?
Me (3:39:50 PM):Info: https://www.blackrock.com/ca/individual ... t-programs
Questrade Agent (3:42:30 PM):Hi heredago, I can most certainly assist you with this.
Questrade Agent (3:43:12 PM):Questrade does support this and you can enroll in PACC. I can provide your the steps.
Questrade Agent (3:43:32 PM):When this program is set up, funds are automatically debited from your bank account and used to purchase shares of BlackRock ETFs. The maximum number of full units of the ETF will be purchased and the excess funds will be credited back into your bank account automatically. No partial shares will be able to be purchased.
Questrade Agent (3:44:01 PM):To enroll in the PACC program, please complete the following steps:

1. Ensure that you currently hold an eligible ETF in your Questrade account. Only Canadian BlackRock iShares that trade on the TSX are eligible.

2. Complete a separate enrollment form for each ETF to be registered with the PACC program. The form can be found here:
http://media.questrade.com/downloads/ac ... t_form.pdf
Due to government regulations and guidelines, we are required to have the original, hard-copy form returned to us and not an electronic copy. For reference, Questrade’s mailing address is:
Questrade Inc.
North American Centre
5700 Yonge Street, Unit G1 – Ground Floor
North York, ON M2M 4K2 Canada

3. Provide Questrade with a scan of your void cheque or stamped direct deposit form. You can scan and upload the document to: myQuestrade > Account Management > Upload Documents.

4. Ensure that you have sufficient funds within your bank account for a monthly PACC withdrawal at least five business days before the end of the month

5. Allow ten days before the last business day of the month for the initial PACC enrollment.

The enrollment time frame is the last point there. Please allow ten days before the last business days of the month for the initial PACC.
Deal Fanatic
User avatar
Jun 19, 2009
5150 posts
981 upvotes
Scarborough
heredago wrote:
Jan 4th, 2019 8:55 am
Looks like Questrade supports BlackRock iShares' Pre-Authorized Cash Contribution (“PACC Plan”)

I obviously understand that ETFs are free to buy at Questrade but PACC can force people -not- to time the market.
Does this PACC offer any discounts to the share price? Could be an interesting alternative.
Member
User avatar
Dec 6, 2017
204 posts
70 upvotes
Currently holding VGRO and very interested in buying XGRO moving forward due to asset allocation.
Just one more deal.... :twisted:
Member
Mar 11, 2017
230 posts
35 upvotes
BC
iwuzhere wrote:
Jan 3rd, 2019 3:31 pm
XBAL and XGRO are commission-free, for buying and selling, at Qtrade.

They might soon be commission-free at Scotia iTrade, if they wake up!
XBAL & XGRO at iTrade is free. They just have not updated their website. I spoke to their agent today.

Top