The Morningstar Medalist Rating for the iShares Core S&P/TSX Capped Composite Index ETF was recently upgraded as part of a refresh of the Medalist Rating methodology. This analysis was written in July 2025.
Key Morningstar Metrics for iShares Core S&P/TSX Capped Composite Index ETF XIC
- : GoldMorningstar Medalist Rating
- : Above AverageProcess Pillar
- : Above AveragePeople Pillar
- : Above AverageParent Pillar
IShares Core S&P/TSX Capped Composite ETF offers broad exposure to the Canadian stock market at a low price, a simple formula that few of its peers have been able to beat in the long run.
Tracking nearly the entire Canadian stock market makes this a well-diversified portfolio. It normally tallies around 230 holdings, the top 10 of which represented between 35% and 39% of the portfolio over the past 10 years. That’s a higher share than the category average but on par with its Morningstar Canada Index category benchmark. Sweeping in mid- and small-cap stocks can present an edge when large caps fall out of favor.
This strategy weights stocks by market capitalization, a cost-efficient and proven approach. Market-cap weighting channels the market’s collective view on the relative value of each holding, allowing the fund to coast on the research of the crowd without incurring a lot of expenses. It also requires little turnover, a benefit that’s enhanced further by index buffers that are designed to cut back on trading and the costs that come with it.
The shape of this index fund looks a lot like the average portfolio in the Canadian equity Morningstar Category. Its average holding is a bit larger than the category average, but the portfolios sport nearly identical sector compositions and value-growth orientations. Mirroring the category norm indicates that this fund captures the full opportunity set available to its active peers. It also means that the fund maximizes the impact of its cost advantage, a reliable engine for sound category-relative performance.
Sector-level concentration creeps into this portfolio. Heavy stakes in financials (32% of assets as of August 2025) and energy (16%) tend to soak up about half the portfolio. These biases reflect the composition of the Canadian market rather than a flaw in its target index. Still, the fund can suffer when those sectors, or certain industries within them, face challenges.
The fund outperformed its average peer by 1.51 percentage points annualized over the past 10 years through August 2025. The fund’s return fluctuated more than its average peer during that period, but its risk-adjusted performance was still higher. Low fees, low turnover, and little cash allow the fund to capture the Canadian stock market’s performance with minimal drag.
iShares Core S&P/TSX Capped Composite Index ETF: Performance Highlights
The fund has capitalized on its low fee and low transaction costs by effectively tracking the Canadian stock market.
The fund outperformed its average peer in the Canada equity Morningstar Category by 98 basis points annualized since its February 2001 inception through August 2025. The fund notched better risk-adjusted performance during that period. The fund’s performance fluctuated more than its average peer since it remains fully invested. Staying invested helps during rallies but can hurt in broad declines compared with peers that hold more cash.
It’s possible for the fund to lose more than the average Canada equity fund when the market falters. For example, the fund lost 5.85% in 2022: 0.81 percentage points worse than the average Canada equity fund, which lost 5.04%. The fund rebounded in the next couple of years, though, outperforming the category average by 1.10 and 2.33 percentage points in 2023 and 2024, respectively.
This fund tends to measure up best when large-cap stocks dominate their smaller peers. And they have: The Morningstar Canada Large-Mid Index dusted the Morningstar Canada Small Cap Index by over 3 percentage points annualized over the trailing 20 years through August 2025. The fund won’t always have that tailwind, but market-cap weighting and its competitive fee should help it weather the periods when it isn’t.
