ZEQT, VEQT, and XEQT are Canada’s most popular all-equity asset allocation ETFs. But while VEQT and XEQT have attracted tens of billions of dollars from investors, ZEQT receives far less attention. So why is that? Is there something materially different about ZEQT that explains the gap in assets — or are these ETFs far more similar than most investors assume? In this video, I compare ZEQT vs VEQT vs XEQT, looking at performance, portfolio structure, diversification, foreign withholding taxes, and fees to see whether there’s a clear reason investors tend to favour the Vanguard and iShares ETFs.
Topics covered include:
- Performance since ZEQT launched in 2022
- Canadian vs foreign equity exposure
- How each ETF constructs its global portfolio
- Diversification across U.S., international, and emerging markets
- Foreign withholding tax structure
- Management fees
Once you put everything together, these ETFs turn out to be far more similar than they are different. The large popularity gap may say more about investor behaviour than about meaningful differences in the portfolios.
If you’re currently investing in one of these all-equity ETFs, I’d be curious what drove your decision — feel free to share in the comments.
In my next video, I’ll look at the long-term backtested performance of BMO, Vanguard, and iShares asset allocation ETFs.
Chapters
- 00:00 Introduction
- 00:32 Performance Comparison
- 01:18 Strategic Asset Mix (Canada vs Foreign)
- 01:59 Foreign Equity Construction
- 02:56 Diversification Differences
- 04:31 Foreign Withholding Taxes
- 05:01 Fees Comparison
- 05:15 Final Thoughts
VEQT benefited from being a first mover and then XEQT followed a short time later—both were launched close to 10 years ago—and competed on price. ZEQT is a comparatively late entrant to this space, launching around 5 years after the other two.
It’s hard to attract capital if all things equal it’s not so different from the products with higher AUM and better liquidity.
@James – I’m not sure I totally agree with you regarding a first mover advantage. If we look at ZBAL and ZGRO, they were launched in February 2019 and have ~$1.09 billion of AUM (as of Jan 31, 2026). BlackRock effectively launched the new investment strategies of XBAL and XGRO around the same time, and they have ~$6.93 billion in AUM.
The comparison doesn’t really hold because XBAL and XGRO had a 12-year head start and existing AUM before the 2019 rebrand—they weren’t new products competing on equal footing. ZBAL and ZGRO launched fresh in 2019 and have ~$1.1B today, while XBAL/XGRO already had billions in legacy assets, which can partially explains the disparity.
At the same time, VBAL/VGRO launched well before both pairings and has significantly more AUM, again supporting the early movers but conjecture.
For the cleanest first-mover analysis, look at VEQT (Jan 2019), XEQT (Aug 2019), and ZEQT (much later). VEQT and XEQT launched within months of each other, have similar AUM (~$13B give or take), and dominate. ZEQT came years later with lower fees but only ~$600M. That is a first-mover advantage—once investors built positions in VEQT/XEQT, switching costs (tax, effort) created inertia, and later entrants struggled to gain traction despite lower cost.
BTW I’ve been a fan of yours for years and always refer to your “Model Portfolios” page as a point of reference when talking to people who are new to DIY investing. Also love the new PWL questionnaire, more revealing than the old Vanguard version.
@James – I’m glad you’ve found the online resources helpful over the years :)
Just to clarify, XBAL and XGRO changed their investment strategy at the end of 2018 to what we see today (so they would have been competing with ZBAL and ZGRO on equal footing at the time). And as of the end of 2018 (when their investment strategy was changed), XBAL had around $84 million in AUM and XGRO had $39 million, so only $123 million combined (not billions).
Like David Ressor, I favour Vanguard because they had the genius to create the category and have done so much to drive fees down in Canada and around the world. I simply like and trust the brand. They’ve also gathered the most assets – the market has spoken. As well, more generally, when I last looked into ROC and the need to track ACB in taxable accounts, BMO ETFs had far more of this than Vanguard did.
Hi Justin, thank you for this great article. I am a bit puzzled though. Where did you get the info that ZEQT is cap-weighted?
I have to admit that I tried to find this information for a long time and the only info I could find was this cryptic ‘strategic asset allocation weights.’
So I am very happy about this information, and I will buy ZEQT in the future for two main reasons: a cap-weighted allocation and a Canadian based ETF.
@Daniel – I was also confused with their cryptic ‘strategic asset allocation weights’ information (as well as past marketing brochures that looked like fixed foreign equity weights.
But then I started digging up the holdings from their historical semi-annual reports, and I noticed the foreign equity weights had been shifting over time, and these shifts were in line with global MSCI market cap-weightings. I reached out to BMO ETFs, and they confirmed my suspicions — they had always been managing the foreign equity allocation in their asset allocation ETFs to foreign equity weights (specifically, to the MSCI USA Index, MSCI EAFE Index, and MSCI Emerging Markets Index).
My choice of VEQT is simply because over the years, Vanguard has been instrumental in bringing down the cost of investing, and has often exhibited an orientation towards its investors. So, all else being (roughly) equal, I choose the Vanguard product. It all comes down to a matter of trust.
@David Reesor – Trust is an excellent reason (I’ll admit that I’m a bit of a Vanguard fanboy myself :)
I use veqt so I only get one divident a year, and fk bmo lol
@Al – Reminds me of that old Kids In The Hall sketch (The Bank)
hello
very interesting i like it
my questions is when i want to sell a big lot is there bid and ask important and yield also
XEQT because I am an rbc customer for banking, helix and rbc direct. One login for everything, one dashboard, good tech. I can trade for free using XEQT since it is an rbc ishares product so no reason to look elsewhere or trade elsewhere. It’s a no brainer rbc ecosystem trade.
@Senas – Makes total sense – many of the commentors on the channel also mentioned commission-free ETFs being the main tie breaker.