Best Canadian Materials ETFs 2026: XMA vs ZMT Compared
The S&P/TSX Composite gets a huge slug of its return from materials, and 2026 has been a banner year for the sector as gold pushes past new highs and copper demand from grid buildouts sends base-metal miners flying. If you want concentrated Canadian mining and fertilizer exposure through a single ticker, only two ETFs really cover the full space. Here is how XMA and ZMT differ, what each one actually holds, and which fits your account in 2026.
Why hold a Canadian materials ETF at all?
Materials sit at roughly 12 to 14 percent of the S&P/TSX Composite in 2026, second only to financials and energy. That makes Canada one of the most materials-heavy developed markets in the world - the US S&P 500 by comparison carries only about 2 percent in the same sector. If you own a Canadian index fund like VCN, XIC or ZCN, you already have meaningful materials exposure through Barrick, Agnico Eagle, Wheaton Precious Metals, Nutrien and Teck Resources.
A dedicated materials ETF only makes sense when you want to overweight the sector. The three reasons investors typically do that: a bull thesis on gold, a bull thesis on the electrification-driven copper cycle, or a hedge against Canadian-dollar inflation, since commodity-heavy names tend to rise with CAD real assets.
Head-to-head: fees, structure and yield
| Metric | XMA | ZMT |
|---|---|---|
| Issuer | BlackRock (iShares) | BMO |
| Management fee | 0.55% | 0.55% |
| MER (all-in) | 0.61% | 0.61% |
| Index / method | S&P/TSX Capped Materials | Solactive Equal Weight Global Base Metals |
| Number of holdings | ~48 | ~30 |
| Weighting | Market-cap capped at 25% | Equal weight, rebalanced quarterly |
| Gold-miner weight | ~60-65% | 0% (excluded by design) |
| Base-metals weight | ~15-20% | ~85-90% |
| Fertilizer / other | ~15-20% (Nutrien-heavy) | ~10-15% |
| Distribution frequency | Quarterly | Semi-annual |
| Indicated yield (2026) | ~1.6% | ~2.1% |
| AUM | ~$400M | ~$120M |
| Currency exposure | CAD (unhedged) | CAD (unhedged, global) |
The fees are identical, but the underlying baskets could not be more different. XMA is the closest thing to a "one-ticker mining sector" fund for Canadians, dominated by the big gold names because Canadian mining is gold-heavy. ZMT strips out gold and silver entirely and holds a globally diversified basket of copper, nickel, zinc and iron ore producers - roughly a third US-listed, a third Canadian and a third international.
What is actually inside these ETFs?
XMA's top ten is a who's-who of Canadian mining: Agnico Eagle, Barrick Gold, Wheaton Precious Metals, Franco-Nevada, Kinross, Alamos, Kirkland Lake and Pan American Silver on the precious-metals side, plus Nutrien (the world's largest fertilizer producer) and Teck Resources as the two big non-gold anchors. Nutrien alone typically carries 8 to 10 percent of the fund - it is a materials ETF but it is heavily a gold-plus-fertilizer bet in disguise.
ZMT looks completely different. Its top holdings rotate more, but usually include First Quantum Minerals, Freeport-McMoRan (US copper), Southern Copper, Vale (Brazilian iron ore), Rio Tinto, BHP, Glencore, Antofagasta, Ivanhoe Mines and Teck Resources. Copper is the single biggest exposure at roughly 40 percent of the basket - so if you like the AI-data-center and EV-buildout copper thesis, ZMT is closer to a pure play than XMA.
XMA (Canadian materials)
- Cap-weight S&P/TSX Capped Materials
- Gold-miner heavy (~60-65%)
- Big Nutrien and Teck positions
- Best for a gold-cycle overweight
- Higher AUM, tighter spreads
ZMT (global base metals)
- Equal-weight base-metals miners
- Zero precious-metals exposure
- Copper-heavy (~40%), then nickel, zinc, iron ore
- Best for an electrification/copper thesis
- Smaller AUM, wider spreads at open
How the tax treatment differs
Both ETFs are Canadian-listed and hold a mix of Canadian and foreign equities. XMA is overwhelmingly Canadian-domiciled companies, so its distributions are made up mostly of eligible Canadian dividends. In a taxable account those qualify for the Canadian dividend tax credit, which for many investors makes the effective tax rate on distributions materially lower than for interest income or foreign dividends.
ZMT holds a significant chunk of US-listed and international miners. That means part of its distribution is foreign non-business income, taxed at your full marginal rate in a non-registered account and subject to US withholding tax at the fund level. Inside a TFSA the withholding is not recoverable; inside an RRSP the US portion is technically recoverable only for direct US-listed holdings, not through a Canadian-listed wrapper like ZMT.
Which materials ETF should you actually buy?
PICK BY THESIS
- Bullish on gold and central-bank buying: choose XMA. Two-thirds of the fund is precious metals, and Nutrien plus Teck give you diversifying non-gold ballast.
- Bullish on copper, electrification and AI data-center power buildouts: choose ZMT. Copper is the single largest sleeve and gold is explicitly excluded, so you get a cleaner base-metals bet.
- Want broad Canadian materials without the concentration risk of a single metal: choose XMA and size it modestly, since it already comes with a Nutrien fertilizer sleeve and gold-miner core built in.
- Already own broad Canada (VCN, XIC, ZCN): only add XMA or ZMT if you consciously want the sector 5 to 10 points overweight versus the TSX benchmark.
Position sizing and rebalancing
Materials is one of the most volatile sectors on the TSX. Gold miners can drop 30 percent in a single quarter; base-metal miners can do the same on a soft China print. A common mistake in bull cycles is letting a materials sleeve creep to 15 or 20 percent of a portfolio, then giving all of those gains back in the next drawdown. Most Canadian investors are best served with 3 to 7 percent of total equity in a materials overlay, tracked against a target so you can trim on rallies and add on drawdowns.
Wealth Rebalancer treats XMA and ZMT as first-class Canadian ETFs. Import your Questrade or Wealthsimple holdings, set a target weight for your materials sleeve, and the rebalancer will tell you exactly how many shares to buy with your next contribution to bring you back on target - without triggering unnecessary capital gains in taxable accounts.
What about specialty materials ETFs?
A few smaller Canadian-listed products cover narrower slices. XGD (iShares S&P/TSX Global Gold) is a pure-play gold-miner ETF and gives you a cleaner gold-equity bet than XMA. HUC and URNM.NE cover uranium miners - technically a materials sub-sector but usually treated separately. HXCU is Horizons' copper-futures ETF, useful for pure commodity price exposure without equity risk. And CGL or MNT give you physical gold bullion exposure with no miner operational risk at all.
- XMA: cap-weight, gold-miner heavy, quarterly distributions, best in taxable accounts
- ZMT: equal-weight base metals, copper-heavy, semi-annual distributions, best in RRSP or TFSA
- XGD: pure gold-miner alternative to XMA for concentrated gold bets
- CGL / MNT: physical gold rather than miner equity exposure
- HUC / URNM.NE: uranium miner subsector, complementary rather than substitute
Frequently asked questions
Which Canadian materials ETF has the lowest fee in 2026?
XMA and ZMT are tied at 0.61 percent MER. There is no cheaper broadly diversified Canadian materials ETF at this time - the alternative pure-play products like XGD sit at around 0.61 percent as well.
Is XMA a gold ETF or a materials ETF?
Technically materials, but roughly two-thirds of the fund is gold and precious-metals miners because that is how the Canadian materials sector is composed. If you want cleaner sector exposure that is not gold-dominated, ZMT is a better choice. If you specifically want gold-miner exposure, XGD is even more concentrated than XMA.
Should I hold a materials ETF in my TFSA or RRSP?
XMA works well in a taxable account thanks to the Canadian dividend tax credit on most of its distributions. ZMT is better suited to a TFSA or RRSP because it holds significant US and international content and distributes foreign dividends that are taxed at your full marginal rate in a non-registered account.
Are Canadian materials ETFs riskier than the broad TSX?
Yes. Materials is one of the most volatile sectors on the exchange and can swing 20 to 30 percent in a single quarter on commodity-price moves. Treat these ETFs as satellite positions inside a diversified portfolio, not core holdings.
Can I hold XMA and ZMT together?
You can, and they overlap surprisingly little because ZMT explicitly excludes gold and precious metals. A 60/40 split between XMA and ZMT gives you both the gold-miner exposure and the base-metals exposure in one materials sleeve, without much double-counting.
How much of my portfolio should be in a materials ETF?
A reasonable band is 3 to 7 percent of total equity for most Canadian portfolios. Anything higher is a concentrated commodity bet - fine if that is your thesis, but rebalance actively when it drifts more than a couple of points from target.