Then and Now – XAW

Then and Now – XAW

Hi Everyone…Happy Holidays!

Welcome to another Then and Now post, a continuation of my series where I revisit some older blogposts and either rip them to shreds (because my thinking has totally changed on such subjects) or I’ll confirm my position on some subjects including some specific stock or ETF investments.

Today’s post is yet another departure from any top-stocks that I/we own.

Before the investing year comes to a close, I thought I would publish this post about my thoughts and current postion on low-cost, ex-Canada ETF: XAW. This includes how I might add more of this ETF in 2024! I’ll come back to that. 🙂 

You can read about my previous Then and Now posts on certain stocks (good and bad!) at the end of this post.

Then – XAW

Long-time readers of this site will recall I really ramped up my DIY investing journey, around the time of the Great Financial Crisis. I’ve managed this blog and chronicled my/our journey to financial independence ever since….

Even before that market meltdown, I was transitioning to becoming a DIY investor and My Own Advisor following the tech/dot-com crash that occurred about a decade prior. It was during that crash that I learned a few valuable personal finance lessons:

  1. Nobody cares more about your money than you do/you will. 
  2. The same assets that could make you wealthy could also make you poor. 

What I mean by #2 is, you can have too much of a seemingly “good investing thing”. I can’t tell you specifically what stocks will rise or fall in value over time. I don’t know what inflation may or may not be next year. I have no idea what new taxation rules or legislation could be years down the line – although my hunch is taxation will get higher and more complex to navigate!


Jokes aside, unlike Warren Buffett of late, I believe diversification matters.

Weekend Reading – Does diversification really matter?

There are simply too many unknowns for me as a DIY investor to go all-in on Apple, let alone all U.S. tech stocks, let alone just the U.S. market.

For fun, I’ve compared the returns of U.S. tech (via QQQ ETF), vs. our top-TSX stocks (via XIU), vs. a popular U.S. international index fund that many experts tout. See below.

The financial future will always be cloudy but hindsight can be a wonderful woulda, coulda, shoulda game…!

Then and Now - XAW pic 2

Sources for charts: Portfolio Visualizer.

I started off my DIY investing journey, and chronicling our path to financial independence, with a focus on buying and holding Canadian and U.S. stocks that pay dividends, although I’ve always had some international assets in our portfolio too. I simply don’t disclose everything I own. 

I started buying XAW shortly after this ETF launched.

Earlier this year, I updated this post below, highlighting some important lessons learned in diversification, what matters as we progress towards realizing some major financial milestones…

Lessons learned in diversification – reducing my Canadian home bias

Over the years, I have purchased XAW for lazy ex-Canada investing and my plan going forward is just to add more.

Now – XAW

  • XAW now makes up a good portion of our total portfolio value, and growing.
  • I tend to reinvest all XAW distributions paid to buy a few more XAW units commission-free.
  • I own XAW to earn ex-Canada returns from a global pool of stocks, without any individual stock risk.

The reason for owning some ETFs beyond some dividend growth stocks is simple: I cannot predict for certain which stocks will truly succeed long-term. 

So, owning low-cost ETFs is a hedge against how I’ve largely unbundled my Canadian ETF for income, beyond holding a few U.S. stocks for mostly portfolio defence.

Then and Now – XAW Summary

Until I decide that XAW does not fit my/our investment objectives, I will continue to own it and buy more of it over time.

That includes buying more of this low-cost ETF inside our TFSA for 2024, as new Tax Free Savings Account contribution room opens up in just a few short weeks. 

Then and Now - XAW post

As 2023 comes to a close and as 2024 begins, I continue to believe our hybrid approach to investing (via owning some stocks and some low-cost ETFs) delivers two key benefits to help fund our semi-retirement dreams:

  1. Dividend income, earned today, to reinvest (or eventually spend) the money as I please.
  2. Low-cost, global growth, beyond Canadian borders. 

My final dividend income tally for 2023 will be posted in a few weeks, but for now, here is where things stand: 

November 2023 Dividend Income Update

Will post again, soon!

In the meantime, I welcome all comments or opinions about our approach even if you invest differently. 

Happy Holidays,


Further Reading / Selected Then and Now posts and stock ownership:

Earlier this year, I recapped why I own Canadian Natural Resources (CNQ).

I continue to own a bit of BlackRock (BLK) stock in the portfolio. 

This was my update about owning Telus (T), how long, and why. 

I enjoy owning low-volatility, higher growth stocks like Waste Connections (WCN)

This is my 10-year+ ownership in Procter & Gamble (PG).

But not every purchase is a good one. Far from it! Read on about H&R REIT – and why I kicked this company to the curb and no longer own it.

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

33 Responses to "Then and Now – XAW"

    1. Humm, can’t provide advice, but if I was investing in a corporate account I’d likely go with one of Horizons ETFs corporate class funds or swap-based funds – therefore low-cost ETFs for corporate taxable investing. XAW is a great low-cost fund but there are other options.

      Here is an example:

      One way to invest inside a corporation is via corporate class funds.

      Hope that helps some reading!

  1. Other great low costs ETF’s include VFV (Vanguard S&P 500 Index) and VUN (Vanguard U.S. Total Market Index). They have provided very consistent returns over the years. What are your thoughts, Mark?

    Happy holidays to you and let’s hope the stock market will be generous to us in 2024 and beyond!!!!.

    1. VFV has a cheap MER, but relies on the S&P committee in picking stocks for its index and it’s just large/mid. VUN is decent because it holds all caps so a little more diversification, but personally it bothers me because it’s a Canadian wrapper that holds US-listed VTI which has an MER of 0.03%, but VUN charges 0.17%. Why? And unlikely to drop rate anytime soon because it’s AUM is one of the highest for US stocks in the Canadian ETF space. I still probably go with VUN though, sadly because it captures more of the US market.

  2. Hi Mark – I also own XAW for beyond-Canada exposure and have been very happy with it. One comment though – I find it odd that XAW only pays a dividend once a year (June) vs quarterly or even monthly. Is that normal for these all-world type of ETFs?

    1. Well, the frequency and timing of any dividend or distribution doesn’t really impact the long-term returns…just money coming back from total return…since the ETF price will always fall by an amount approximately equal to their distribution. This happens because on the ex-dividend date, the distribution money owed to investors is removed from the fund.

      The share price adjusts because the distribution is withdrawn from the fund’s total assets, which decreases the net asset value (NAV).

      That said…XAW should pay twice per year: June and December.

      Hope that helps!
      Happy Holidays to you.

  3. Mark,
    I suggest you have a good look at “BMO MSCI All Country World High Quality Index ETF (ZGQ)”. Its been around longer than XAW, has outperformed them by over 3%/yr and would fit well with your Canadian content.

    1. Thanks! I had a quick look, seems to have done well largely because ZGQ is 75% U.S. exposure vs. XAW 53% U.S. exposure. Seems to be more like an all-world tech index with some developed markets just in case! 🙂 Not sure I like the higher MER of 0.50% for the BMO product myself but returns in the past have been better, for sure!

      1. I do own it via the BMO Global Quality ETF Fund F6 (BMO36263) which holds ZGQ. Being retired I prefer this version because it pays a target 6% yield distributed monthly. Its MER is 0.51% which is very decent for a mutual fund. I’ve done quite well with it performance wise. I don’t own any other specific ex-Canada funds but do have about 40% US equity content overall via stocks and US concentrated ETFs. Fyi XAW US exposure is up to 63% these days and it holds about 23% in Tech.
        Thanks for the holiday greetings Mark! All the best to you and yours!

        1. Yes, XAW is climbing with tech % given it holds IVV…maybe even more next year in 2024??

          I would agree, MER is modest for a good performing fund for you – it meets your objectives, that’s all that matters!

          Happy Holidays back! 🙂

    1. Both are excellent choices. I prefer XAW over the VXC because it has more international content – which seems to be the entire point of diversification but some might argue VXC is better for quarterly distributions and higher U.S. exposure.

      Just some initial thoughts!
      Thanks for your comment.

      1. Hi Mark, I’m sorry but this doesn’t make sense to me. XAW and VXC own all investable companies outside of Canada so the country by country breakdown should be the same with the only variance coming from Developed vs Emerging only because of how each ETFs underlying indexes categorize certain countries. Both have the same MER of 0.22% and country weighting, so really both are on the same page. If someone has VXC (like the post author), there’s no need to switch over. Unless I’m missing something.

        1. Thanks, E.

          Sorry, I should have been more clear. I prefer XAW over the VXC because it has more international content – beyond the U.S.

          VXC has higher U.S. exposure…so I prefer, if going “international” to own a bit more assets in the name of diversification beyond the U.S. %.

          If someone owns VXC, I agree with you, don’t switch. 🙂

          1. Sorry, but I have to challenge you on the international content statement – they’re both equivalent (more or less) – source: ETF website:

            XAW (as of Dec 28/23):
            US = 63.53%
            Dev = 25.77%
            EM = 10.70%
            (*ie – international = 36.47%)

            VXC (as of Nov 30/23):
            US = 62.67%
            Dev = 27.03%
            EM = 10.30%
            (*ie – international = 37.33%)

            1. Welcome to challenge me, that they are equivalent now. 🙂 Historically, VXC has been higher with U.S. content, including from an S&P 500 perspective, than XAW. I should have been more specific. Only recently has the gap been closing. XAW, a fund of funds, has IVV at 52.82%. VXC uses a slightly different structure but owns 55.79% of U.S. large-cap / S&P 500.

              Those are the facts based on their respective sites. I prefer to go to source if you want to be detailed.



              All said, I really don’t think it matters if you buy XAW or VXC or a few other ex-Canada ETFs for diversification. I think that matters for long-term diversification benefits and I will support all DIY investors who invest that way.

              Happy investing,

  4. Thanks Mark for the article and sharing what has worked for you. I’m trying to figure out whether I’ll lock in all $7,000 in January or space it out over the year. I’ve never been in this position as I’ve just recently maxed out my TFSA. Exciting for sure but I might miss the monthly buys, lol. I’m leaning towards XIU or VFV. And of course a few individual stocks.

    1. Here is a link, not advice, just consideration:

      Based on various studies, not just this one, lump sum investing tends to provide better, long-term returns since simply put, money is working sooner to take advantage of gains. The stock market goes up, on average, about 70% of the time.

      If you feel better with monthly or even quarterly buys, all good but it may not work out as well as lump sum investing historically speaking.

      XIU is excellent for Canada.
      VFV is equally excellent for U.S.

      Very smart!
      Happy Holidays.

  5. What a great ETF in XAW. I am considering to buy some in my TFSA for next year. Wish you Mark a very safe, healthy and joyous festive season and even greater success in 2024.

    1. Yes, it’s really been on a run this year thanks to its 53% weight in the U.S. market. Nice to own some stocks from around the world as well without much thought – just buy and buy more over time.

      Happy Holidays back and thanks for your kind words Ken.

  6. Hi Mark,
    Your reference to yourself starting your DIY journey brings back memories of myself doing the same. I refer to the DIY investing journey as “Going It Alone”, as you don’t have the bank rep to discuss your investments with. Well with sites like yours it doesn’t feel like I am “Going It Alone”. When I did set up my own investing portfolio, XAW was the ETF that I purchased for my non-Canadian investments so re-assuring to hear you did the same.
    For future purchases in the TFSA I am considering EMA. I mostly have dividend stocks in my TFSA and would be interested in your thoughts on that stock. I think I saw it in your portfolio as well.

    Thanks for helping us DIY investors with great posts and information/insight.


    1. Very kind, Steve.

      There are literally tens of thousands of DIY investors out there, I just happen to chronicle my/our journey much more than most. 🙂

      I believe XAW is a great, low-cost ETF for beyond Canada. It’s designed that way. Returns for XAW YTD > 18%. Since inception, close to 9%. I’ll happily take that if that occurs for the coming 10-20 years. 🙂

      I own XAW for all the reasons in the post, an easy way to diversify beyond my basket of Canadian stocks that largely deliver income.

      I have a mix of XAW and Canadian stocks in my/our TFSAs and many Canadian utilities as boring bond proxies are some of them, like EMA, that raise their dividends every year.

      Not a recommendation for purchase of course and I’m baised, but dividend stocks + low-cost ETFs are helping us meet our income objectives for semi-retirement.

      Happy Holidays to you.

      1. XAW has been my longtime favorite and best performing ETF and I’m glad to see you highlighting it. I currently have it in my RRIF, but do you know about its tax efficiency in a non-registered account?

        1. Registered or non-registered accounts can work for XAW, although owning stocks or ETFs that pay little to no dividends or distributions inside taxable accounts is likely more tax-efficient.

          That said, rough math for XAW:
          1. RRSP/RRIF = MER 0.22% + ~ 0.32% of withholding tax.
          2. TFSA = as above.
          3. Non-reg accounts = MER 0.22% + ~ 0.04% of withholding tax.

          As a general guideline:
          15% withholding tax occurs for XAW, for registered accounts like RRSPs, RRIFs, TFSAs; same goes for other/many low-cost ETFs that hold U.S. ETFs.

          So….15% x XAW ETF yield of 2% = ~ 0.30% withholding tax beyond MER for any such ETFs/funds.

          The alternative is to buy any U.S. stocks or ETFs in the US-$$ sub-account of your RRSP/RRIF but then you have exchanges fees, etc.
          Unless you’re over $100k or so in XAW, I think the simplicity of the all-in-one ETF is worth the small/extra cost. It will cost $500 per year to own every $100,000 in XAW that should return ~ 6-7% for the coming decades.

          A trade-off 🙂

          Happy Holidays, Deb!

    2. Hi Mark,

      I also own a few XAW units in my TFSA account and after reading your Then and Now article, I am inclined to more units to my portfolio.

      I love reading your articles as they are unbiased and very informative. Keep up the good work and “Happy Holidays “

      1. Thanks for the wishes, Fred. Back at ya! 🙂

        I like XAW for all the reasons in the post, lazy way to own the rest of the world in one simple fund! It won’t always go up 18-20% like this year, but glad it has! Nice home for TFSA given that’s both an income and growth account for us.


  7. (RBull) deane hennigar · Edit

    Same choice here for both our TFSA’s in ’24.

    Happy Holidays to you and your wife and best wishes for an exciting looking year ahead.


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