XEQT vs ZGRO: iShares vs BMO

The one-line answer

XEQT and ZGRO cost exactly the same. The choice is entirely about asset allocation: 100% equity versus 80% equity with 20% bonds. If you want maximum long-run growth and can hold through 30% drawdowns, XEQT. If you want a smoother ride and can accept lower expected returns, ZGRO.

The issuer difference between iShares and BMO is not a meaningful factor for long-term investors. Both are major financial institutions. Both funds are regulated by Canadian securities law. Both track broadly diversified indices. Choosing between them based on the BMO or iShares logo would be a mistake.

What is ZGRO?

ZGRO is the BMO Growth ETF, a one-ticket all-in-one portfolio that launched in June 2018. It holds nine underlying BMO ETFs covering global equities and investment-grade bonds, targeting an 80% equity and 20% fixed income split.

BMO entered the all-in-one ETF space in 2018 alongside Vanguard, building a suite of products at different risk levels: ZCON (60/40 conservative), ZBAL (70/30 balanced), ZGRO (80/20 growth), and ZEQT (100% equity). ZGRO sits in the same market segment as VGRO from Vanguard and XGRO from iShares, all targeting the same investor profile: someone who wants mostly equities but with some bond exposure for stability.

As of early 2026, ZGRO manages approximately $1.8 billion in assets, significantly less than XEQT at roughly $15 billion. This is not a safety concern, but it does mean slightly wider bid-ask spreads and less institutional attention on the BMO product. For long-term buy-and-hold investors who trade infrequently, this difference is negligible.

Holdings comparison

Both funds provide broad global market exposure. XEQT uses four underlying iShares ETFs. ZGRO uses nine underlying BMO ETFs, which creates slightly different geographic weights and sector exposures at the margin.

The practical differences in the equity portion are small. Both hold US, Canadian, international developed, and emerging market equities in broadly similar proportions. The equity methodology differs somewhat: iShares primarily uses market-cap weighted indices while BMO uses a mix of market-cap and factor-tilted approaches in some underlying funds, though the all-in-one wrapper largely smooths these differences at the top level.

Cost and MER

At 0.20% each, XEQT and ZGRO cost exactly the same. This makes the cost comparison simple: there is no cost reason to choose one over the other. The decision rests entirely on asset allocation preference.

This was not always the case. When BMO launched its all-in-one suite, the MERs were slightly higher than today. Fee compression across the Canadian ETF industry has brought all three major providers (iShares, Vanguard, BMO) to virtually identical pricing at the all-in-one level. Investors benefit from this competition.

Geographic allocation

Both funds apply home-country bias, overweighting Canada relative to its global market weight of roughly 3%. XEQT holds approximately 25% Canadian equity. ZGRO holds approximately 23% Canadian equity within its equity portion, translating to roughly 18% of the total portfolio given the 80/20 split.

For a Canadian investor holding in Canadian dollars and planning to spend in Canadian dollars, some Canadian equity weighting reduces currency risk and improves tax efficiency on dividends. Both funds apply this sensibly. The difference between 25% and 23% Canadian weight is not a meaningful decision factor.

Performance comparison

Since XEQT launched in August 2019, it has outperformed ZGRO over the same period. This is the expected result when equities outperform bonds, which they did substantially from 2019 through 2025.

The comparison is not entirely apples-to-apples because XEQT and ZGRO hold different allocations. A fair comparison would be: if you wanted 80% equity exposure and were choosing between ZGRO and a self-constructed 80% XEQT / 20% bond portfolio, which would you prefer? For most investors, the simpler one-fund solution of ZGRO (or the iShares equivalent XGRO) makes sense if 80/20 is the target allocation.

BMO's ZEQT, which holds 100% equity across BMO underlying funds, provides a more direct apple-to-apple comparison with XEQT. Over the period where both have been available, the performance difference has been small, which makes sense given similar underlying exposures at different MER levels in prior years.

Does the issuer matter?

For practical purposes, no. Both BMO and BlackRock (iShares) are regulated financial institutions operating under Canadian securities law. Both funds are structured as exchange-traded funds regulated by securities regulators. The underlying holdings are segregated from the issuer's balance sheet, meaning if either company failed, the fund assets would be distributed to unitholders.

The practical differences worth knowing: XEQT is larger by a significant margin, which generally means tighter bid-ask spreads when buying and selling. XEQT also has a longer track record at scale. Neither difference should drive the asset allocation decision, but they are legitimate secondary factors if everything else is equal.

Brand loyalty to BMO or iShares is not a sound investment rationale. If you bank with BMO, there is no investment advantage to holding BMO ETFs. If you invest through Wealthsimple, both funds trade identically on the Toronto Stock Exchange with no additional cost.

Who should pick which

Choose XEQT if you have a long time horizon of 15-plus years, a stable income, and confidence that you would hold through a 30% portfolio decline without selling. The 100% equity allocation will likely produce meaningfully higher wealth over decades.

Choose ZGRO if you are within 10 years of retirement, have lower risk tolerance, or have experienced market downturns that caused you genuine financial or psychological difficulty. The 20% bond allocation smooths volatility and reduces peak-to-trough drawdowns at the cost of lower expected long-run returns.

If you have settled on 80/20 as your target allocation, also consider XGRO from iShares, which provides the same 80/20 allocation within the same fund family as XEQT at the same 0.20% MER. For most investors, XGRO and ZGRO are functionally interchangeable at this allocation level.

Verdict

XEQT for long-horizon investors who want maximum equity exposure. ZGRO (or XGRO) for investors who want the 80/20 allocation. The issuer difference between iShares and BMO is not a meaningful factor in the decision.

The more useful frame: decide on your allocation first. If 100% equity suits your risk tolerance and timeline, XEQT is the best-in-class product for that allocation in Canada. If 80/20 suits you better, XGRO and ZGRO are both excellent options at the same price. Pick either and hold it for decades. See the complete all-in-one ETF comparison for the full landscape.