Canadian Investors: Buy These Two ETFs Instead of XEQT/VGRO

Canadian investors love the Vanguard Growth ETF Portfolio (VGRO) and the iShares Core Equity ETF Portfolio (XEQT)—and it makes sense. I’ve had my differences with both before, but overall, they’re low-cost, highly diversified, and have made index investing more accessible than ever.

But if you’re looking for an alternative, that’s what I’m here to do today. The two ETFs I’m about to highlight either offer the potential for better performance than their Vanguard or iShares counterparts, or they simply do the same job at a lower cost.

Fidelity All-in-One Equity ETF (FEQT)

FEQT is my pick over XEQT (and it comes without a cult). Yes, it’s more expensive, with a 0.43% MER compared to XEQT’s 0.20%, but in this case, you get what you pay for.

The portfolio is currently 97% allocated to equities, spread across U.S., international, and Canadian markets. But unlike XEQT, which sticks to passive market-cap weighting, FEQT uses a factor-based approach. It allocates across low volatility, high quality, value, and momentum strategies, and includes a small global small-cap sleeve.

FEQT also includes a 3% allocation to bitcoin, which I think is the perfect amount for most investors: enough to participate if crypto runs, but small enough not to blow up your portfolio if it tanks.

And performance-wise, FEQT has delivered. It’s returned 15.74% annualized over the past three years, compared to XEQT’s 13.72% over the same period. It’s not just different—it’s objectively been better.

TD Growth ETF Portfolio (TGRO)

In my review of VGRO, I took issue with two flaws: a relatively high 0.24% expense ratio and the use of pricey, currency-hedged global bonds that drag on performance.

TGRO nearly fixes both of these problems. With a 0.17% MER, it’s extremely cheap—a full 0.05% lower than VGRO.

It’s also much simpler. The allocation is: 10% FTSE Canada Universe Bond Index, 30% Solactive Canada Broad Market Index, 40% Solactive U.S. Large Cap CAD Index, and 20% Solactive Developed Markets ex-North America Index.

You’ll notice that, unlike VGRO, TGRO only includes Canadian bonds, which means less drag from foreign withholding taxes and currency hedging, while still delivering comparable performance.

There are also two personal touches I prefer. First, no emerging markets exposure—something I’m fine excluding. Second, 10% bonds instead of 20%. Your mileage may vary, but I like both of these tweaks.

And while it’s irrelevant from a total return perspective, TGRO pays monthly distributions instead of quarterly like VGRO—which is just nicer psychologically, especially for those who like a more frequent drip.

But I Like VGRO/XEQT!

That’s fine—but let’s be clear: this isn’t a team sport. Loyalty to an ETF provider or a specific ETF is foolhardy. It’s an inanimate financial product—it won’t love you back.

Don’t let herd mentality blind you to the availability of objectively better alternatives. The investing world changes. New products launch. Some improve. Others stagnate. The best thing you can do as an investor is keep an open mind and continually learn.