VEQT vs XEQT vs ZEQT 2026: Which 100% Equity ETF Should Canadians Actually Own?
VEQT, XEQT, and ZEQT are the three dominant 100% equity one-ticker ETFs in Canada. Until late 2025, VEQT was clearly the most expensive; after Vanguard slashed its management fee in November 2025, all three now sit at roughly 0.20% MER. So the fee argument is dead, and the real question becomes which underlying mix matches how you want to be invested globally.
What each ETF actually is
VEQT (Vanguard All-Equity ETF Portfolio) is a fund of underlying Vanguard index ETFs that spans Canadian, US, international developed, and emerging markets equities. It launched in January 2019 and is now Vanguard Canada's largest all-in-one ETF, with assets over $14 billion as of mid-2026.
XEQT (iShares Core Equity ETF Portfolio) does the same job using underlying iShares ETFs. It launched in August 2019 and has grown into the single most-held one-ticker ETF among Canadian self-directed investors, with roughly $10 billion in AUM.
ZEQT (BMO All-Equity ETF) is BMO's answer to VEQT and XEQT, built on BMO's own underlying equity ETFs. It launched in January 2022 and is still the smallest of the three, at just under $800 million in assets. It covers the same four regions as VEQT and XEQT, but weights them a bit differently.
Head-to-head: the numbers that actually matter
| Metric | VEQT | XEQT | ZEQT |
|---|---|---|---|
| Issuer | Vanguard | iShares (BlackRock) | BMO |
| Launch date | Jan 2019 | Aug 2019 | Jan 2022 |
| Management fee | 0.17% (cut Nov 2025) | 0.18% | 0.18% |
| MER (reported) | ~0.20% (catching up) | ~0.20% | ~0.20% |
| Equity split | 100% stocks | 100% stocks | 100% stocks |
| Canada weight | ~30% | ~25% | ~25% |
| US weight | ~44% | ~46% | ~47% |
| International developed | ~20% | ~24% | ~24% |
| Emerging markets | ~6% | ~5% | ~4% |
| Underlying ETFs used | Vanguard | iShares | BMO |
| Rebalance frequency | Quarterly | Quarterly | Quarterly |
| Distribution frequency | Quarterly | Quarterly | Quarterly |
| AUM (Oct 2026) | ~$14B | ~$10B | ~$0.8B |
| Bid-ask spread (typical) | 1 cent | 1 cent | 1-2 cents |
The 20-year fee drag at today's MERs
At roughly 0.20% MER across all three, the fee difference is now effectively zero. On $100,000 invested at a 7% annual return over 20 years, each fund drags about $14,000 in cumulative fees. That is identical, in dollar terms, to within a rounding error. Picking a fund to save on fees is no longer the exercise it was in 2024.
| Starting balance | VEQT (20-yr fee drag at ~0.20%) | XEQT (20-yr fee drag at ~0.20%) | ZEQT (20-yr fee drag at ~0.20%) |
|---|---|---|---|
| $25,000 | ~$3,500 | ~$3,500 | ~$3,500 |
| $100,000 | ~$14,000 | ~$14,000 | ~$14,000 |
| $250,000 | ~$35,000 | ~$35,000 | ~$35,000 |
| $500,000 | ~$70,000 | ~$70,000 | ~$70,000 |
The one thing that really differs: Canadian home bias
Canada is roughly 3% of global equity market capitalization. All three of these ETFs give Canada a much larger slice than that, because the fund committees want some home bias to reduce currency risk and dampen tracking error against what Canadian investors benchmark against. But they do not weight Canada equally.
VEQT (~30% Canada)
- Highest home bias of the three
- Lowest US exposure (~44%)
- Lowest intl developed exposure (~20%)
- Highest EM exposure (~6%)
- Favored if you want more Canadian content
XEQT (~25% Canada)
- Lower home bias than VEQT
- Higher US and intl developed
- Slightly less EM than VEQT
- Closest to a classic 'global market cap plus home bias' tilt
- The default for most Canadian couch potatoes
ZEQT (~25% Canada)
- Similar to XEQT on Canada weight
- Highest US exposure (~47%)
- Lowest EM exposure (~4%)
- Smaller intl developed than XEQT
- Favored if you want more US and less EM
Underlying holdings: what you actually own
All three are funds-of-funds. You buy one ticker, but what you really own is a basket of 4 to 8 underlying ETFs from the same issuer. Here is what sits inside each one.
Inside VEQT
- VCN (Canada FTSE Canada All Cap)
- VUN (US Total Market)
- VIU (International developed ex NA)
- VEE (Emerging markets)
Inside XEQT
- XIC (S&P/TSX Capped Composite)
- ITOT (US core S&P Total Market)
- XEF (International developed ex NA)
- IEMG (Emerging markets core)
Inside ZEQT
- ZCN (TSX Composite Canada)
- ZSP (S&P 500) + ZMID / ZSML
- ZEA (International developed ex NA)
- ZEM (Emerging markets)
A practical consequence: XEQT uses ITOT for US exposure, which is a US-listed total-market ETF inside the wrapper. That gives you broader small- and mid-cap US coverage than VEQT (VUN tracks the same CRSP total market index but is wrapped once more). ZEQT's US sleeve leans more on ZSP (S&P 500) with smaller allocations to mid and small caps, so it is slightly more large-cap tilted than the other two.
Which account should you hold it in?
All three funds have the same tax wrinkle: they hold US-listed stocks inside Canadian-wrapped sub-funds, so the 15% US withholding tax on US dividends is unrecoverable in every account, including the RRSP. That is the price of the one-ticker convenience. If you want to recover that tax, you have to unbundle and hold a US-listed total market ETF directly inside your RRSP. For most Canadians the convenience is worth the ~0.2% drag.
| Account | VEQT / XEQT / ZEQT verdict | Why |
|---|---|---|
| TFSA | Great fit | 100% equity suits long time horizons; tax-free growth and withdrawals compound the small fee drag away. All three work equally. |
| RRSP / RRIF | Great fit | Deferred growth and no annual drag; the 15% US withholding tax applies but is baked into the quoted yield either way. |
| FHSA | Great fit if horizon >5 years | You can only hold it for 15 years, so weigh the equity-only drawdown risk against your home-purchase timeline. |
| Non-registered | Fine, but understand distributions | Quarterly distributions are mostly eligible Canadian dividends, foreign dividends, and some capital gains. Expect T3 slips. All three distribute similarly. |
| RESP | Great fit if child is young | Long horizon, matching CESG grants compound. Reduce equity weight as the child nears 18. |
| LIRA / LRSP | Great fit | Same logic as RRSP. Review your pension's spousal rules before committing. |
How to pick between them
The 5-question decision
- Do you want more Canadian content? VEQT at ~30% beats XEQT and ZEQT at ~25%. Pick VEQT if you want home bias to buffer currency moves against the Canadian dollar.
- Do you want more emerging markets? VEQT (~6%) leads, XEQT (~5%) is middle, ZEQT (~4%) is lowest. If you want China/India/Brazil as a long-run growth sleeve, lean VEQT.
- Do you want the lowest tracking error vs global market cap? XEQT comes closest to a 'global market cap + modest home bias' tilt. It is the most 'neutral' pick.
- Do you care about liquidity for tax-loss harvesting partners? All three trade with 1-cent spreads at retail size, but ZEQT's smaller AUM means a wider book during volatile sessions. Not a blocker but worth noting.
- Which brokerage ecosystem do you already use? Wealthsimple and Questrade let you buy any of the three commission-free. If you use RBC Direct or TD Direct, factor the commission into very small purchases. XEQT and VEQT are more likely to appear in model portfolios, which can help with saved orders and recurring investments.
Historical performance: how similar they really are
Looking at the five full calendar years that VEQT and XEQT have both existed (2020 through 2024), the annual return gap between them has never exceeded 0.6%. ZEQT, having launched in January 2022, has a shorter track record but has tracked within 0.4% of the other two in 2022, 2023, and 2024. The 5-year annualized returns through year-end 2024 for all three cluster around 11% to 12%, driven largely by US large-cap performance.
Put differently: you cannot really 'pick the winner' here. If US tech outperforms, all three lift together. If Canadian financials outperform, VEQT lifts a touch more because of the extra Canada weight. If EM has a breakout year, VEQT again benefits slightly more. The structural overlap is simply too high to time one against the others.
Tax-loss harvesting pairs
If you hold one in a non-registered account and want to tax-loss harvest, you can rotate between the three without triggering the superficial loss rule, because they are all considered distinct property for CRA purposes (they track different indexes under the hood). The common pair patterns:
- XEQT → VEQT (or vice versa): both are 100% equity, both land in the ~25-30% Canada range. Cleanest swap for TLH.
- XEQT → ZEQT: similar country weights, so your allocation barely drifts. Good if you prefer the iShares ecosystem but need to realize losses now.
- Any of the three → VXC + XIC combo: holding Vanguard's global ex-Canada ETF alongside a Canadian index ETF replicates the all-equity exposure manually and is clearly distinct property.
- Avoid: harvesting one and buying back inside a TFSA or RRSP in the 30-day window. The superficial loss rule applies across your accounts and your spouse's.
What this looks like inside a rebalancer
A one-ticker 100% equity ETF is the simplest possible holding to rebalance against. You set a 100% target to VEQT/XEQT/ZEQT and the only thing to monitor is cash drift from new contributions and distributions. If you later decide to layer in a bond ETF (ZAG, VAB, XBB) to reduce volatility as you approach retirement, the Wealth Rebalancer app can show you exactly how much of each to buy with each new contribution to hit your new target split without triggering a full sell.
Frequently asked questions
After the Vanguard fee cut, is VEQT now cheaper than XEQT and ZEQT?
VEQT's management fee is now 0.17%, slightly lower than XEQT's and ZEQT's 0.18%. But the all-in MER (which includes operating costs and underlying fund fees) lands near 0.20% for all three. Published MER figures for VEQT may lag until Vanguard's next fiscal year-end calculation. The practical difference in dollars is tiny: on $100,000 held for a year, VEQT saves you about $10 vs XEQT. Not a reason to switch on its own.
Is VEQT, XEQT, or ZEQT better for an RRSP?
All three carry the same unrecoverable 15% US dividend withholding tax in an RRSP because the US exposure is held inside Canadian-wrapped sub-funds. For most investors the convenience of one ticker outweighs the ~0.2% annual drag. If you have a large RRSP (over $200,000) and are comfortable managing a 3-ETF portfolio, holding a US-listed total market ETF (ITOT, VTI, VOO) directly in the RRSP recovers that tax.
Can I hold VEQT, XEQT, or ZEQT in a FHSA?
Yes, all three are FHSA-eligible. The FHSA caps at a 15-year holding period and expects you to use the balance for a first-home purchase, so weigh 100% equity drawdown risk against your home-buying timeline. If you plan to buy within 2-3 years, a conservative all-in-one like VCNS or XCNS makes more sense.
Should I switch from VEQT to XEQT (or vice versa) to save on fees?
No. The fee gap at 2026 pricing is less than 0.03%, which is below the typical brokerage trading commission and the bid-ask spread. If you are in a taxable account, the capital gains tax on realizing the switch will dwarf the fee savings for years. Switch only if you want to change your allocation (e.g. moving to XEQT because you prefer less Canadian home bias).
Is ZEQT safe given it only has ~$800M in assets?
Yes. BMO is a major Canadian ETF issuer and ZEQT's underlying funds (ZCN, ZSP, ZEA, ZEM) are themselves large, liquid ETFs. The AUM figure for ZEQT as a wrapper is smaller because it is newer, but there is no structural fragility; the fund is cheap for BMO to operate because it holds its own ETFs. The practical downside is a slightly wider bid-ask during volatile sessions and a less-active model portfolio ecosystem.
What about VEQT vs ZEQT for a taxable account?
Both distribute similarly: roughly 2% yields paid quarterly, dominated by eligible Canadian dividends from the Canada sleeve, foreign dividends from the global sleeves, and modest capital gains. VEQT's slightly higher Canadian weight means marginally more eligible dividend income (tax-efficient for Canadian residents) and slightly less foreign dividend income (less efficient). The practical after-tax difference is small; it does not swing a decision.