VEQT, XEQT, ZEQT, HEQT, FEQT: 2026 Canadian Asset Allocation ETF Roundtable

Asset allocation ETFs have been a fixture of the Canadian investing landscape for years now, much to the irritation of bank advisors who can no longer quietly steer clients into high-fee mutual funds.

That shift has been a net positive for investors. Low costs, broad diversification, and simple portfolio construction have become the default rather than the exception.

The downside is choice overload. The sheer number of asset allocation ETFs available today can make it harder for new investors to get started. You can do reasonably well by defaulting to a familiar name like Vanguard or BlackRock, but there is a case for looking beyond the obvious options.

That is what I am doing here. I am walking through six of the major Canadian asset allocation ETFs, selected based on assets under management and issuer scale, with a specific focus on their all-equity versions. These are 100% stock portfolios, generally best suited for investors with long time horizons and a high tolerance for volatility.

My takeaways are candid and intentionally succinct. They reflect my views, not universal truths. As always, the goal is to give you some color commentary evaluate your options, not to replace your own research or judgment.

Vanguard All-Equity ETF Portfolio (VEQT)

One thing I genuinely appreciate with VEQT is Vanguard Canada’s recent fee cut. Vanguard remains one of the few providers willing to cut fees aggressively and consistently, forcing competitors to follow along in the fee compression trend investors benefit from.

The stated MER for VEQT is currently 0.24%. However, effective November 18, 2025, Vanguard reduced the management fee from 0.22% to 0.17%.

The lower fee has not yet shown up in the reported MER because Canadian funds only update MERs at fiscal year-end, but I expect the effective MER to settle somewhere in the 0.19% to 0.20% range, which is very competitive for an all-in-one equity ETF.

Structurally, VEQT is straightforward. It uses an ETF-of-ETFs approach and currently allocates roughly 44% to the U.S. total market, 30% to Canadian equities, 17% to developed markets outside North America, and 7% to emerging markets.

That mix broadly reflects global market-cap weights once you account for the deliberate Canadian home-country bias. In classic Vanguard fashion, all of the underlying holdings are low-cost, index-based ETFs.

The one aspect that mildly irritates me is the annual distribution schedule. From a purely mechanical standpoint, it makes no difference. Distributions reduce net asset value dollar for dollar.

Still, for many beginner investors, receiving more frequent distributions can help reinforce the habit of staying invested through volatility. Moving to a quarterly distribution would not materially change outcomes, but it could improve the investor experience at very little cost.

iShares Core Equity ETF Portfolio (XEQT)

XEQT has become something of a cult classic. It has its own subreddit, r/JustBuyXEQT, where the entire investment philosophy is exactly what the name suggests. It makes for boring conversation, but generally sensible investing behavior.

From a construction standpoint, XEQT is very similar to VEQT. The main difference is index selection. Where Vanguard leans on CRSP and FTSE benchmarks, iShares uses a mix of S&P and MSCI indices. In practice, that distinction does not materially change outcomes. The exposures are broadly comparable.

There are some small allocation differences. XEQT carries a smaller Canadian equity weight and a smaller emerging markets allocation relative to VEQT, though these figures can drift over time as markets move and portfolios rebalance. They simply reflect slightly different design choices.

On costs, XEQT remains competitive. The current MER is 0.20%, based on a 0.17% management fee that was previously reduced from 0.18%. Whether the reported MER ultimately ticks down closer to 0.19% at fiscal year-end remains to be seen.

One small but notable advantage over VEQT is distribution frequency. XEQT pays distributions quarterly rather than annually. From a total return perspective, this does not change anything, especially for investors reinvesting distributions.

Psychologically, though, more frequent distributions can be comforting for newer investors and can help reinforce the habit of staying invested through market volatility.

BMO All-Equity ETF (ZEQT)

If you want to stick with a homegrown provider, ZEQT is the obvious place to look. While Vanguard and BlackRock both have Canadian subsidiaries, they are still U.S.-based firms. BMO is one of the few truly domestic options offering a full all-equity asset allocation ETF.

ZEQT follows many of the same conventions as its peers. It is a 100% equity portfolio built using underlying index ETFs from within the BMO lineup, and it carries a competitive 0.20% MER. That puts it right in the middle of the pack on cost.

At roughly $547 million in assets under management, it is smaller than VEQT and XEQT, but still plenty large by Canadian ETF standards and not remotely at risk of closure.

Where ZEQT differentiates itself is in its underlying construction. The Canadian equity allocation is broadly in line with XEQT, but BMO makes a deliberate effort to round out market-cap exposure.

In addition to large-cap equities, ZEQT includes dedicated allocations to mid-cap and small-cap stocks using S&P indices. I actually like this design choice. Many market-cap-weighted benchmarks are heavily top-heavy, and that effect is especially pronounced when U.S. exposure is concentrated in the S&P 500.

Like XEQT, ZEQT pays distributions on a quarterly basis. It does not change long-term returns for investors reinvesting distributions, but again, from a behavioral standpoint, I still think quarterly payouts are more psychologically helpful for newer investors trying to stay invested through market swings.

Global X All-Equity Asset Allocation ETF (HEQT)

If you dislike the higher Canadian equity allocations seen in the previous asset allocation ETFs, HEQT may be a better fit. Offered by Global X Canada, HEQT pares Canadian equity exposure down to about 20%.

That Canadian sleeve is also strictly large cap. It tracks the S&P/TSX 60 Index, which excludes mid-cap and small-cap stocks. That large-cap bias carries through much of the rest of the portfolio as well. For U.S. and international exposure, HEQT relies on the S&P 500 and the MSCI EAFE Index, both of which are focused on large and mid-cap companies.

Where HEQT starts to diverge from the pack is in its intentional tilts. The ETF adds a notable overweight to large-cap growth and technology through a Nasdaq-100 index ETF. At the same time, it introduces a small-cap tilt via a Russell 2000 index ETF.

Those choices can lead to periods of outperformance or underperformance depending on market leadership. I actually appreciate the attempt to do something different here. It gives investors a clear stylistic bias rather than a pure market-cap blend.

On cost, HEQT is in line with its peers, carrying a 0.20% management expense ratio. There is no pricing penalty for the additional tilts. Finally, one feature of HEQT I particularly like is the monthly distribution schedule.

Fidelity All-in-One Equity ETF (FEQT)

HEQT already breaks with traditional asset allocation conventions by deliberately overweighting the Nasdaq-100 and the Russell 2000. FEQT takes that idea further by layering in both factor investing and cryptocurrency exposure.

At a high level, the geographic split in FEQT looks broadly similar to the other all-equity ETFs discussed so far. Where it diverges meaningfully is in the choice of underlying holdings.

Instead of relying primarily on low-cost, market-cap-weighted index ETFs, Fidelity targets four specific factors: low volatility, value, quality, and momentum. Those factor tilts are applied consistently across the U.S., Canadian, and international equity sleeves. FEQT also includes a dedicated allocation to global small-cap equities through an actively managed fund.

The other defining feature is its exposure to cryptocurrencies. FEQT currently allocates about 2.4% to Fidelity’s spot Bitcoin ETF. Because Bitcoin is highly volatile, even a small allocation can have a noticeable impact on performance.

Historically, that combination of factor tilts and crypto exposure has helped FEQT outperform its peers, though it is worth stating plainly that past performance does not guarantee similar future results.

The trade-off is cost. FEQT carries a materially higher MER of 0.43%. That premium reflects the use of active management, factor strategies, and cryptocurrency exposure. Whether that fee is worth paying comes down to whether you believe those tilts will continue to add value over a full market cycle.