What the iShares S&P/TSX 60 Index ETF Is
The iShares S&P/TSX 60 Index ETF trades under the ticker XIU on the Toronto Stock Exchange. It is a passively managed fund that mirrors the S&P/TSX 60 Index, a rules-based basket of the 60 largest companies listed on Canadian exchanges by float-adjusted market capitalization. Because the index is reconstituted and rebalanced semi-annually, the fund aims to deliver returns closely tracking the broad Canadian equity market with minimal tracking error. The fund is managed by BlackRock, one of the world's largest asset managers, and is part of the iShares family of index ETFs that spans dozens of countries and asset classes.
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How the Fund Works and What It Costs
XIU uses a full-replication strategy, meaning it holds all 60 index constituents in roughly the same weights rather than sampling or using derivatives. The fund's management expense ratio (MER) is among the lowest in the Canadian ETF space, typically around 0.06%, which translates to roughly $6 per year per $10,000 invested. The fund pays out dividends from its holdings, and investors can choose between a standard cash dividend and a distribution option depending on their account type and tax planning goals. Because the underlying index is reviewed twice a year, changes to the fund's holdings are infrequent and predictable, which keeps trading costs and tax events modest.
Key Holdings and Sector Exposure
The S&P/TSX 60 Index is heavily weighted toward financials and energy, reflecting the structure of the Canadian economy. The fund's top holdings typically include the Big Five Canadian banks, major insurance companies, and large-cap resource and telecom firms. Financials often make up a third or more of the weight, while energy and materials can be significant as well. Technology exposure is relatively limited compared with U.S.-focused Canadian ETFs, which means the fund's returns are tied closely to commodity prices, interest-rate cycles, and the fortunes of domestic banks and energy producers.
Performance and Long-Term Behavior
Over long periods, XIU has delivered returns that track the overall Canadian stock market. Because the index is market-cap-weighted, the fund's performance is dominated by the largest names, and a few outsized holdings can move the needle more than the broader index would suggest. In volatile years, the fund's heavy tilt toward financials and energy can produce outsized losses or gains relative to more diversified global funds. Investors should expect the fund to behave less like a growth vehicle and more like a barometer of Canadian corporate earnings, commodity prices, and the loonie's exchange rate.
Who Should Consider the iShares S&P/TSX 60 Index ETF
XIU is a natural core holding for investors who want broad, low-cost exposure to large-cap Canada. It suits those building a Canadian equity sleeve, those who want a simple equity fund inside a TFSA or RRSP, and investors who believe in the long-term stability of the Canadian financial and resource sectors. It is less ideal for investors seeking international diversification or heavy technology growth, since the fund's universe is limited to 60 Canadian names and skews toward traditional sectors.
How XIU Compares With Other Canadian ETFs
Several Canadian ETFs target the broad equity market, but XIU is often compared with the Vanguard FTSE Canada All Cap Index ETF (VCN) and the iShares Core S&P/TSX Capped Composite Index ETF (XIC). VCN covers the full Canadian market including small and mid-cap names, which can add volatility and higher tracking error in thin names. XIC tracks the broader TSX Composite but uses a capping methodology that limits single-stock weightings. XIU's narrow focus on the 60 largest names makes it more concentrated but also easier to understand and more liquid, with tighter bid-ask spreads and higher average daily trading volume than many of its peers.
Practical Considerations for Buying XIU
Before buying, check whether your brokerage charges a commission on ETF trades, as zero-commission platforms have made XIU cheaper to access. Consider the impact of currency if you hold U.S.-denominated accounts, since the fund's assets are denominated in Canadian dollars. Also review the fund's distribution policy if you are investing inside a registered account, as the tax treatment of distributions can differ from capital gains. For most buy-and-hold investors, XIU offers a simple, low-cost way to own the core of the Canadian equity market in a single fund.