Summary: Although iShares(XEQT/XGRO) and Vanguard(VEQT/VGRO) get all the love, the all-in-ones from BMO and TD are actually the current winners in the “lowest all-in-one fee award”. Given how similar they are to their competitors, I see no reason not to park money there.
I’m a fan of all-in-one1 ETFs in my retirement portfolio. If you’re new to the world of all-in-ones, you might want to start here. There’s at least five competing families of products out there, courtesy of iShares (XEQT, XGRO, XBAL et al), TD (TEQT, TGRO, TBAL et al), Vanguard(VEQT, VGRO, VBAL et al) BMO(ZEQT, ZGRO, ZBAL et al) and GlobalX2 (HEQT, HGRO, HBAL et al). We’ve taken a look at some of them “under the hood”, so to speak, but didn’t really find super-significant differences.
One facet I haven’t looked at yet is the fees each of these companies charge. As I’ve shown elsewhere, small differences can add up if you have significant investments or are holding them for a significant time.
TD and BMO are the low fee winners at the moment, but the gap has narrowed significantly from earlier in the year. I like low fees, and so I’ve started to invest in these families.
Technically called “asset allocation” ETFs, which is good, since asset allocation is how I view my own portfolio. ↩︎
Formerly known as Horizons, which explains the stock tickers used here. ↩︎
Most of the time I use MER (Management Expense Ratio) to report on fees, but since a few of these companies have lowered their Management fees this year, and since MER is only calculated annually, the MER values only become relevant again on Jan 1. They are a few basis points higher than the management fee, but just a few. Most of the cost is buried in the management fee. ↩︎
Summary: Vanguard asset allocation funds aka all-in-one funds VEQT, VGRO, VBAL, VCNS. VSIP have reduced their management fees to 0.17%, down from 0.22%, effective November 18, 2025.
It’s a good time to be an all-in-one investor, as I am. New to all-in-ones? Read all about them here.
The summary pretty much says it all. It just got cheaper to own Vanguard’s all-in-one funds. The amount of the reduction amounts to 50 cents for every $10001 invested per year, but compounded over many years, and multiplied by however much you have saved for retirement, it can be a surprisingly large number.
All-in-ones are much cheaper than either roboadvisors or your typical financial advisor, but as we studied before, they’re not without some cost, so fee reductions are always welcomed. Vanguard joins TD and BMO in reducing the cost of their all-in-ones. We looked at the makeup of each of these funds lately; there’s not a huge amount of difference, no matter which one you pick.
Anyway, you may note that Blackrock’s XEQT/XGRO/XINC family is now the most expensive of the lot; there’s no reason for that to be true given the competitive landscape. I would expect Blackrock to follow suit, or if not, I’ll probably be making some moves to get to lower fees, since a lot of my retirement portfolio is currently tied up in XEQT/XGRO. ZEQT/ZGRO I think is the closest in makeup to the XEQT/XGRO family.
Of course, if you only have $1000 saved for retirement, you have other worries. ↩︎
(New to asset allocation ETFs aka all-in-ones? Here’s a good place to start.)
Asset allocation ETFs can be purchased from any number of companies. In this article, we look at 4 of the biggest names:
TD, with TEQT, TGRO, TBAL et al
Blackrock/iShares with XEQT, XGRO, XBAL et al
BMO with ZEQT, ZGRO, ZBAL et al
Vanguard with VEQT, VGRO, VBAL et al
The blueprint for each of these ETFs are similar: pick Canadian, US, International and (where applicable1) bond indices, pick a target percentage allocation for each slice of the pie, and carry on…
I previously talked about the variations in percentage allocation (the size of the pie slices) between the major funds over here.
But what about the indices that each of the major fund families track? What’s in the pie? Are there significant differences? Here’s a summary of what I found:
Bloomberg Global Aggregate Canadian Float Adjusted Bond
So there is variation in the pie recipes (the underlying indices), but is it really of any significance? At a glance, I wonder how different the offerings from iShares and BMO actually are — the same index providers show up in each. Without looking at what stocks are actually found in each of these, here’s a quick take, simply based on the names of the indices:
Canadian Equity: All of these funds hold the broad Canadian market, over three different index providers23. iShares and BMO use a capped index, which, in theory, should limit exposure to the very largest Canadian businesses somewhat.
US Equity: Three different index providers seen here (Solactive, S&P and CRSP). TD only holds large US companies, the others hold smaller and midsized US companies. In the last ten years, this has been a winning strategy, but it’s not always been that way.
International Equity: Three different index providers: Solactive, MSCI, FTSE. TD excludes emerging markets (e.g. Brazil, Russia, Taiwan, China, India). The others don’t.
Bonds: Hard to tell just based on the names, but three of them use the same FTSE index. Vanguard uses a Bloomberg index. So I’ll say that it’s likely that Vanguard’s bond portfolio will look different from the other three.
In a future post, I’ll delve into what the main holdings of each of these funds are in each of these categories to see what differences emerge. And whether these differences actually matter!
This excludes 100% equity funds like XEQT, naturally ↩︎
The “composite” in “Capped Composite” means “all the stocks of the TSX”. ↩︎
ZGRO and ZGRO.T are both asset allocation funds (aka all-in-ones1) offered by BMO. They hold the same assets, and they both generate the same (dividends-reinvested) returns. But ZGRO.T says it has a yield of 5.65% whereas ZGRO has a yield of 1.73%2. How is this possible? Full disclosure: I don’t own either of these funds because I have historically invested in a very similar-to-ZGRO product, XGRO, instead3.
Let’s start with a really high level look at these funds4.
ZGRO vs ZGRO.T, Overview Tab (source bmogam.com)
The first thing I’ll point out is one of caution: ZGRO and ZGRO.T have very similar tickers and it’s all-too-easy to mix them up. The fund names are also very similar, although ZGRO.T adds the words “Fixed Percentage Distribution Units” to the mix. That’s a clue. The other things we can learn from this first glance is that ZGRO.T is pretty new (Inception Date), is about 1/20th the size of ZGRO in terms of investments (Net Assets), has an identical MER to ZGRO, but whoa, that distribution yield is off the charts. Put simply, if you had $1000 in ZGRO, and $1000 in ZGRO.T, and the last distribution paid was assumed to be constant5, you’d get $11.73 from ZGRO and $56.50 from ZGRO.T over the next twelve months. Huh?
This is even more puzzling if one takes a look at what each of the two ETFs hold: it’s identical:
Comparing top holdings, ZGRO versus ZGRO.T. Can you see a difference? I can’t see a difference.
I spent quite a bit of time searching on the BMO website trying to get their take on the difference. In a lot of places, (e.g. the simplified prospectus7), the two funds are treated as the same. After nearly giving up, I did come across this document which has a teeny tiny footnote, which I reproduce here:
These units are Fixed Percentage Distribution Units that provide a fixed monthly distribution based on an annual distribution rate. Distributions may be comprised of net income, net realized capital gains and/or a return of capital. The monthly amount is determined by applying the annual distribution rate to the T Series Fund’s unit price at the end of the previous calendar year, arriving at an annual amount per unit for the coming year. This annual amount is then divided into 12 equal distributions, which are paid each month.
So the big difference as I see is is that ZGRO.T attempts to give a stable yield in 12 month chunks. It does this by
Giving you dividends from the underlying assets (so does ZGRO)
Selling underlying assets (and generating a capital gain)
Giving you back your own money (this is known as as return of capital)
Let’s take a look at the two from a tax perspective (note that this only matters if you were to hold these funds in a non-registered account):
ZGRO vs ZGRO.T 2024 Distribution Tax Tab (source bmogam.com)
And here the distinction between the two becomes clearer: ZGRO.T is making good use of Return of Capital (RoC) to distribute a dividend with limited near-term tax implications. But as always, there’s no free lunch — using RoC means that future capital gains will be higher since RoC reduces the ACB8 of the funds in question, and if your ACB drops to zero, you have to treat RoC as a capital gain.
So when might you consider using ZGRO.T instead of ZGRO?
ZGRO.T makes sense in a RRIF account. It’s essentially automating some of the steps I have to take every month to get paid (you can see the mechanism I use here). Every month, I have to sell some of my holdings in order to get the RRIF-minimum payment out.
In a non-registered account, ZGRO.T’s monthly distributions might be useful if you had the need for consistent monthly cash flow; in addition, if you expect to at some point be in a lower tax bracket, it might help you save future tax, since it’s deferring some gains by using Return of Capital. In my case, I don’t see a good reason to use it since I would have to sell existing assets in order to raise funds to buy it, which generates capital gains.
So, in summary, the two funds are the same from a total return perspective, with ZGRO.T more monthly cash and ZGRO providing more paper gains. In a RRIF account, ZGRO.T automates some of the manual selling needed to execute decumulation. In a non-registered account, the tax treatment of the two is different, and you’d have to work out the numbers to see if it’s a benefit or not.
This yield is calculated by dividing the most recent per share distribution by the share price and multiplying by 12. In essence, this number is the value of the most recent (monthly in the case of ZGRO.T, quarterly in the case of ZGRO) dividend payout extrapolated over the full year. It may or may not represent what kind of yield you get in the future. ↩︎
Why? Inertia. There are minor differences in the makeup of XGRO versus ZGRO but either is a fine choice for the lazy investor. ↩︎
All the tables here are right off BMO’s ETF selector, which is excellent, by the way. ↩︎
ZGRO is currently paying 7.3 cents per share every quarter and this has been stable since 2020. ZGRO.T is currently paying 6 cents per unit held every month and this has been stable since March 2025. ↩︎
which weighs in at ~450 pages. I’d hate to see the non-simplified prospectus. ↩︎
Adjusted Cost Base. The average per unit price you pay for a share, necessary to track in order to accurately calculate capital gains (or losses). I use adjustedcostbase.ca for this, found in Tools I Use↩︎
I’ve talked about my approach to investing before, which is slavishly devoted to maintaining a constant asset allocation across all my accounts. And as I’ve mentioned, my current targets are:
20% is Canadian Equity, 36% is US Equity, and 24% is International Equity, for a total of 80% equity overall
15% bonds
5% cash
My allocation targets were picked to align with XGRO1, which, over time, will make up more and more of my retirement portfolio2.
As I’ve written elsewhere, these are pretty broad categories and could be sub-divided further. I’ve not bothered with this myself, but I thought it would be an interesting exercise to survey what the major all-equity and high-growth funds have under the hood. And so, I present this comparison:
A few notes on the above:
Canadian Equity: Some use an all-cap index (TGRO, VGRO) while some use a capped composite index (ZGRO, XGRO).
US Equity: VGRO and XGRO use an all-cap index, TGRO sticks to large cap, and ZGRO holds large, mid and small cap indices. TGRO is a bit of an outlier because it doesn’t hold small cap..
International Equity: TGRO takes an all countries approach, whereas the other three split between developed and emerging markets. Net effect is pretty much the same thing.
Bonds: Here you find the greatest variation; VGRO is the only ETF to hold bonds outside of North America whereas TGRO holds only Canadian bonds. XGRO and ZGRO are pretty similar, with XGRO having a bit more Canadian bond exposure over ZGRO.
The most notable difference between my allocations and the average allocation of the big 4 funds is that I have more international exposure than other funds, and that’s because I’ve chosen to hitch my wagon to the iShares/XGRO family.
The reason? I started investing in the iShares family some time ago because it was the family that my old provider (QTrade) allowed me to trade without fees. With my current provider (Questrade), all of the families are free to trade, and hence my continued devotion to iShares/XGRO no longer holds that attraction — I could buy any of the all-in-ones. (Indeed, I’ve actually been adding some TD all-in-ones because their management fees are a bit lower).
But this exercise has given me food for thought; perhaps I have a bit too much bias to the international equity portion of the portfolio. But honestly, I can’t believe it makes that much of a difference, and churning my portfolio simply to reduce my international exposure a point or two seems unnecessary3.
Why XGRO and not an all-in-one from another company? Read on. ↩︎
I’m slowly converting my main holding (AOA, which trades in USD) to XGRO on a quarterly basis so that I’m never over exposed to foreign exchange variations. I convert a percentage of these holdings annually, corresponding to the percentage at which I’m draining my RRIF. ↩︎
Running some numbers through https://www.dividendchannel.com/drip-returns-calculator/ demonstrates that XGRO is the bottom of the performance pile over the past 5 years or so as compared to TGRO, ZGRO and VGRO. The difference isn’t massive, and the window is short because these funds haven’t been around all that long, but it’s another data point to consider…p.s. the tool above doesn’t (yet?) understand the 3 for 1 reverse split ZGRO undertook in August, so best to end any simulation involving the BMO funds at August 1,2025. ↩︎
The Money Engineer 