FolioNorth

Just Buy XEQT

Should you just buy XEQT?

iShares' all-equity ETF is Canada's most-bought single-ticker portfolio. Here's the case for it, and what it costs you in convenience.

TL;DR

If you want this, XEQT delivers

  • ✓ The lowest MER among major all-equity all-in-ones (0.20%)
  • ✓ Highest AUM and tightest bid-ask spreads of any all-in-one ETF
  • ✓ True global market-cap weighting with no factor bets

Worth knowing

  • · US equity held through a CAD wrapper: FWT applies even inside an RRSP
  • · Quarterly distributions mean four T3 events per year in non-registered accounts
  • · Pure passive means no factor tilt: if you want small-cap value exposure, look at CAGE

ETF specifications

XEQT: ETF Specifications

MER
0.20%
Holdings
~9,800
Equity / Bond
100% equity
Distribution
Quarterly
Inception
Aug 7, 2019
AUM
~$8B CAD
Exchange
TSX
Currency
CAD

Who XEQT is for

XEQT is the right starting point for investors who want a single ticker, the lowest possible MER, and no interest in thinking about factor investing or distribution timing. It holds roughly 9,800 stocks across Canada, the US, international developed markets, and emerging markets, proportional to each market's global weight. You buy one ETF and own the world.

It's especially suited to investors in registered accounts (RRSP, TFSA) where the distribution frequency doesn't create extra bookkeeping. In a non-registered account, XEQT's quarterly distributions mean four separate capital-gains-adjusting events per year. With VEQT's MER recently reduced to ~0.20% (est.), matching XEQT, investors holding in non-registered accounts who want simpler ACB tracking now have no real cost reason not to prefer VEQT's single annual distribution.

The convenience trade-off

Just-buying XEQT is a perfectly reasonable choice. Here's what that convenience costs annually and over 20 years compared to splitting into ITOT + XIC + XEF + XEC (XEQT's underlying components) with the US portion held in an RRSP.

The convenience cost: XEQT vs splitting

Assumes 50% RRSP allocation. See the calculator for your own numbers.

PortfolioAnnual cost20-year cost (compounded)
$250K$401/yr$14,749
$500K$802/yr$29,497
$1M$1,604/yr$58,995
See your portfolio's cost → ETF Split Calculator

Annual cost combines MER drag and foreign withholding tax savings foregone. Assumes 50% RRSP / 50% TFSA split. 20-year figure compounds annual savings at 6% growth.

Common alternatives

XEQT vs VEQTSimilar strategy, different distribution timing, and MERs now essentially matched. Which one to pick?Full comparison →XEQT vs CAGEPure passive index vs factor-tilted. A philosophy question as much as a numbers question.Full comparison →

Frequently asked questions

Is XEQT better than VEQT?+
They're functionally similar. The main differences are distribution frequency (XEQT distributes quarterly while VEQT distributes once a year in December) and slightly different country weights. For most investors, the choice comes down to distribution timing preference and whether you're holding in a non-registered account where ACB tracking matters. See the full comparison at folionorth.ca/compare/xeqt-vs-veqt.
What's the convenience cost vs splitting?+
Splitting XEQT into its underlying components (ITOT, XIC, XEF, XEC) saves money in two ways: the weighted MER of the split is lower than XEQT's 0.20%, and holding ITOT directly in an RRSP eliminates the US foreign withholding tax that XEQT pays through its Canadian wrapper (XUU). The ETF Split Calculator at FolioNorth shows your exact numbers based on portfolio size and account allocation.
Can I hold XEQT in my RRSP?+
Yes. XEQT is fully RRSP-eligible. However, holding XEQT in an RRSP still means paying US foreign withholding tax on the US equity portion, because XEQT holds US stocks through a Canadian-dollar wrapper (XUU). Holding ITOT directly in your RRSP eliminates this drag: that's one of the key benefits of splitting XEQT into its components.
Why is XEQT the most popular all-in-one ETF?+
XEQT has the lowest MER among major all-equity all-in-one ETFs at 0.20%, the largest AUM, and the tightest bid-ask spreads. The iShares brand from BlackRock is widely recognized, and quarterly distributions are familiar to most brokerages and tax software. These factors combine to make it the most frequently recommended single-ticker solution for Canadian passive investors.

See exactly what splitting XEQT would save for your portfolio size and account mix.

Open the ETF Split Calculator →