XEQT vs Tangerine Investment Funds: Which Is the Simpler Investment?

I have a soft spot for Tangerine Investment Funds because they were my first real investment.

Before I knew what an ETF was, before I understood MERs, before I’d ever heard the word “rebalancing” – I had a Tangerine Balanced Growth portfolio. I set up automatic deposits of $200 every two weeks from my chequing account, and for about 18 months, that was the extent of my investing knowledge. Money went in, line went up (mostly), and I didn’t have to think about it. It was beautiful in its simplicity.

Then I started reading. I found the Canadian Couch Potato blog, then r/PersonalFinanceCanada, and eventually this nagging question formed in my head: am I paying too much in fees? The answer, as I eventually discovered, was yes. Not criminally too much – Tangerine funds are far cheaper than the bank mutual funds most Canadians get sold – but enough that it would cost me tens of thousands of dollars over a lifetime of investing.

That realization led me to XEQT, and I haven’t looked back. But I also haven’t forgotten what Tangerine did for me: it got me started. And for a lot of Canadians, that’s the hardest part.

So this post isn’t going to trash Tangerine Investment Funds. It’s an honest comparison between two legitimate options for Canadian investors, written by someone who’s used both. Let’s dig in.

1. What Are Tangerine Investment Funds?

Tangerine Investment Funds are a family of index mutual funds offered by Tangerine Bank (a subsidiary of Scotiabank). They were designed for people who want to invest but don’t want to deal with the complexity of picking stocks, choosing ETFs, or rebalancing a portfolio.

There are five portfolios to choose from, each with a different mix of stocks and bonds:

• Balanced Income Portfolio (INE150) – 25% stocks / 75% bonds (conservative)
• Balanced Portfolio (INE200) – 40% stocks / 60% bonds (moderate-conservative)
• Balanced Growth Portfolio (INE250) – 60% stocks / 40% bonds (moderate)
• Equity Growth Portfolio (INE301) – 75% stocks / 25% bonds (growth)
• Equity Portfolio (INE160) – 100% stocks / 0% bonds (aggressive)

You pick the one that matches your risk tolerance, deposit money, and Tangerine handles literally everything else. The fund automatically purchases units when you deposit, automatically rebalances to maintain the target allocation, and automatically reinvests dividends.

A few important details:

• Index-based. Tangerine funds track broad market indices. They switched from S&P indices to Solactive indices in 2019, which was a quiet change most investors didn’t even notice. The practical difference is negligible – Solactive indices track substantially the same markets as the more expensive S&P indices.
• Global diversification. Each portfolio holds Canadian, U.S., and international stocks (plus bonds, depending on the portfolio). You’re not just buying Canadian banks and oil companies.
• MER of approximately 0.77%. This is the annual management expense ratio for all five Tangerine portfolios. It’s higher than XEQT, but significantly lower than the 2.0-2.5% MER on typical bank mutual funds at TD, RBC, BMO, CIBC, or Scotia.
• No minimum investment. You can start with as little as $25 in a regular purchase plan.

For a long time, Tangerine funds were the easiest way for a Canadian beginner to build a properly diversified, low-cost portfolio. And honestly? They’re still pretty good.

2. What Is XEQT? (Quick Refresher)

If you’re reading this blog, you probably already know what XEQT is. But just in case:

XEQT (iShares Core Equity ETF Portfolio) is an all-in-one, 100% equity ETF offered by iShares (BlackRock). It holds over 12,000 stocks from around the world – Canada, the U.S., international developed markets, and emerging markets – in a single ticker.

Key stats:

• MER: 0.20%
• Allocation: ~45% U.S., ~25% Canada, ~25% international developed, ~5% emerging markets
• Automatic rebalancing: iShares rebalances the underlying holdings for you
• Available on: Wealthsimple (commission-free), Questrade, and all major Canadian brokerages
• Fractional shares: Available on Wealthsimple, so you can invest as little as $1

XEQT is essentially the same concept as Tangerine’s Equity Portfolio – broad global stock market exposure in one product – but with a much lower fee and much broader diversification.

3. Head-to-Head Comparison: XEQT vs Tangerine Equity Growth

For this comparison, I’m primarily using Tangerine’s Equity Growth Portfolio (INE301) since it’s the most popular Tangerine fund and the closest equivalent to XEQT’s all-equity approach (though INE301 holds 75% stocks and 25% bonds, while XEQT is 100% stocks).

Both products give you diversified, globally allocated, index-based exposure. The biggest differences are the fee and the level of automation.

4. The Fee Difference: It’s Bigger Than You Think

At first glance, the difference between 0.20% and 0.77% doesn’t seem like much. It’s less than a percentage point. Who cares?

You should. Because over the long term, that 0.57% annual difference compounds into a staggering amount of money.

Let’s run a simple scenario. You invest $10,000 today and add $500 per month for 25 years, with an assumed average gross return of 7% per year.

That’s right. On a fairly modest portfolio, the fee difference costs you over $30,000 over 25 years. That’s not pocket change. That’s a new car. That’s a year of retirement spending. That’s a down payment boost for your kid’s first home.

And this example is conservative. If you’re investing more aggressively – say $1,000 per month, or starting with a larger lump sum – the gap grows even wider. At $1,000/month, the 25-year fee difference balloons to roughly $55,000 to $60,000.

This is the same principle I cover in detail in XEQT vs mutual funds. Fees are the single most reliable predictor of investment returns, and the lower they are, the more money stays in your pocket.

Now, I want to be fair here. Tangerine’s 0.77% MER is still much lower than typical Canadian bank mutual funds, which charge 2.0-2.5%. If you’re comparing Tangerine to an RBC Select Growth Portfolio (MER of ~2.1%), Tangerine saves you a fortune. But compared to XEQT, there’s a meaningful cost.

5. Where Tangerine Wins

This might surprise you on a blog literally called “Just Buy XEQT,” but I think Tangerine Investment Funds genuinely have some advantages over XEQT for certain people.

True set-and-forget automation

This is Tangerine’s killer feature, and it’s better than anything XEQT can offer.

With Tangerine, you set up automatic deposits from your bank account. When the money arrives, it automatically purchases fund units. You don’t need to open an app. You don’t need to place an order. You don’t need to confirm a trade. You don’t even need to know what a “trade” is.

XEQT on Wealthsimple now has an auto-invest feature, which is great. But you still need to set it up in the app, choose your ETF, and configure the schedule. With Tangerine, you literally just set up a bank transfer, and you’re done. The money goes in, units get purchased, dividends get reinvested, the portfolio gets rebalanced – all without you lifting a finger.

For someone who genuinely wants to never think about their investments, Tangerine’s level of automation is hard to beat.

Zero financial literacy required

I mean this in the most respectful way possible. XEQT is already simple compared to building your own portfolio, but it still requires you to:

• Download a brokerage app
• Know what a TFSA or RRSP is (and which one to open)
• Understand what an ETF is
• Search for “XEQT” and place a buy order
• Decide whether to use market or limit orders
• Figure out what to do with dividends

None of these are difficult. But they do require a baseline level of financial literacy that not everyone has – yet.

Tangerine strips away all of that. You walk into a decision that looks like: “Do you want conservative, balanced, or growth?” Pick one, deposit money, done. There’s no brokerage, no ticker symbols, no order types. It’s as simple as opening a savings account.

Bank integration

If you already bank with Tangerine, your investment accounts sit right alongside your chequing and savings accounts. One login, one app, one view of your financial life. There’s real value in that simplicity, especially for people who find the idea of a separate brokerage account intimidating.

Built-in bonds

For investors who don’t want 100% equity exposure, Tangerine offers portfolios with bonds built in. XEQT is 100% stocks. If you want bonds alongside your XEQT, you need to add another ETF (like XBAL or XGRO, or a bond ETF), which adds complexity. Tangerine’s Balanced Growth or Balanced Income portfolios give you a blended allocation in one product with no extra steps.

6. Where XEQT Wins

Now let’s talk about why most investors who are comparing these two options should probably choose XEQT.

Significantly lower fees

We covered the math above. A 0.57% annual fee difference compounds into tens of thousands of dollars over a typical investing timeline. This alone is the most important factor for most investors.

Broader diversification

XEQT holds over 12,000 stocks across Canadian, U.S., international developed, and emerging markets. Tangerine’s portfolios hold around 5,000 securities (including bonds). XEQT also includes meaningful emerging market exposure (~5%), which Tangerine’s funds have less of.

More diversification means smoother returns and less risk from any single country or sector underperforming.

Commission-free purchasing on Wealthsimple

You can buy XEQT on Wealthsimple with zero trading commissions and no minimum purchase amount. With fractional shares, you can invest as little as $1. This removes one of the historical advantages that mutual funds (including Tangerine) had over ETFs.

More account flexibility

Wealthsimple offers TFSA, RRSP, RESP, FHSA, LIRA, and non-registered accounts – all in one app, all commission-free. Tangerine’s investment accounts are more limited.

Better transparency

XEQT’s holdings are published daily. You can see exactly what you own at any time. Tangerine’s fund holdings are disclosed less frequently.

Industry-standard indices

XEQT tracks MSCI indices, which are the global standard for institutional investing. Tangerine switched to Solactive indices in 2019. While the practical performance difference is minimal, MSCI indices are more widely followed, more heavily tested, and used by the majority of institutional investors worldwide.

A growing ecosystem

When you invest in XEQT through Wealthsimple, you get access to a full-featured financial platform: auto-invest, fractional shares, a cash account, crypto (if you’re into that), tax-loss harvesting tools, and more. Tangerine’s investment platform is functional but basic.

7. Who Should Choose Tangerine?

Tangerine Investment Funds are a good fit if you’re:

• A complete beginner who has never invested before and finds the idea of a brokerage app overwhelming
• Someone who won’t invest otherwise. If the friction of opening a Wealthsimple account and buying an ETF is enough to stop you from investing at all, then Tangerine is infinitely better than keeping your money in a savings account earning next to nothing
• Already a Tangerine banking customer who values having everything under one roof
• Someone who wants bonds built in and doesn’t want to think about asset allocation at all
• Investing a small amount and the fee difference isn’t meaningful yet (on a $5,000 portfolio, the annual fee difference between XEQT and Tangerine is about $28 – real money, but not life-changing)

The most important thing about Tangerine funds is this: they get people investing who might not otherwise invest. That matters more than the fee difference. A person paying 0.77% in fees who stays invested for 30 years will be dramatically wealthier than a person who never starts because they found ETFs confusing.

I’ll say it plainly: if Tangerine is the only way you’ll actually invest your money, use Tangerine. Don’t let the perfect be the enemy of the good.

8. Who Should Choose XEQT?

XEQT is the better choice for most people, and especially if you’re:

• Comfortable using an app. If you can use Uber Eats, you can use Wealthsimple. The interface is designed for people who aren’t financial experts. Buying XEQT takes about 30 seconds once your account is set up.
• Investing for the long term (10+ years). The longer your timeline, the more the fee difference matters. Over 20-30 years, the savings from XEQT’s lower MER are substantial.
• Contributing regularly. With Wealthsimple’s auto-invest feature, you can set up automatic XEQT purchases on a schedule – weekly, bi-weekly, or monthly. It’s not quite as frictionless as Tangerine’s deposit-and-buy model, but it’s close.
• Investing larger amounts. As your portfolio grows, the fee difference becomes more meaningful. On a $100,000 portfolio, the annual fee gap is $570. On $500,000, it’s $2,850. Every year.
• Someone who values transparency. You can see exactly what XEQT holds, how it’s performing, and what you’re paying at any time.
• Already past the “getting started” phase. If you’ve been investing in Tangerine for a while and now feel comfortable with the basics, graduating to XEQT is a natural next step.

The reality is that XEQT is almost as simple as Tangerine once you’ve done the initial setup. The ongoing effort is minimal – especially with auto-invest enabled. And the fee savings are real.

9. How to Switch From Tangerine to XEQT

If you’re currently invested in Tangerine funds and want to move to XEQT, here’s how to do it step by step.

Step 1: Open a Wealthsimple account

If you don’t have one already, open a Wealthsimple account. It takes about 10 minutes. Open the same account type you have at Tangerine – if you have a Tangerine TFSA, open a Wealthsimple TFSA.

Step 2: Decide whether to transfer in-kind or in cash

You have two options:

• In-cash transfer: Sell your Tangerine fund units, wait for the cash to settle, and transfer the cash to Wealthsimple. This is simpler but triggers a taxable event in non-registered accounts.
• In-kind transfer (if available): Transfer the investments directly without selling. This avoids triggering capital gains taxes. However, Tangerine mutual fund units can’t be held at Wealthsimple, so they’ll need to be sold as part of the transfer process anyway. In practice, most Tangerine-to-Wealthsimple transfers end up being in cash.

For TFSA and RRSP accounts, there are no tax consequences regardless of which method you choose, since these are tax-sheltered accounts.

Step 3: Initiate the transfer from Wealthsimple’s side

In the Wealthsimple app:

1. Go to your account settings
2. Select “Transfer accounts”
3. Choose Tangerine as the institution
4. Enter your Tangerine account details
5. Wealthsimple will handle the rest

Important: Do NOT withdraw the money from Tangerine yourself if it’s in a TFSA or RRSP. If you withdraw from a TFSA, you lose that contribution room until the following year. If you withdraw from an RRSP, the withdrawal is taxed as income. Always use an official account transfer to avoid these problems.

Step 4: Wait for the transfer to complete

Transfers typically take 1 to 4 weeks. Wealthsimple may even cover any transfer fees Tangerine charges (they frequently cover transfer fees for accounts over a certain size – check their current promotion).

Step 5: Buy XEQT

Once the cash arrives in your Wealthsimple account, buy XEQT. Search for “XEQT” in the app, enter the amount, and confirm.

Step 6: Set up auto-invest

Don’t skip this step. Set up automatic recurring purchases so that your future contributions buy XEQT on a schedule. This replicates the automated investing experience you had with Tangerine, just at a lower cost.

10. What About Tangerine vs Wealthsimple Managed?

Some people considering Tangerine might also be looking at Wealthsimple Managed Investing (the robo-advisor option). Quick comparison:

Both are “set it and forget it” options. Wealthsimple Managed charges similar all-in fees to Tangerine but offers a few more features. However, both are more expensive than buying XEQT yourself. If you’re choosing between these two, read my detailed comparison of Wealthsimple Managed vs XEQT before deciding.

The bottom line: if you value maximum simplicity and don’t want to buy ETFs yourself, both Tangerine and Wealthsimple Managed are reasonable choices. But if you’re willing to do even a tiny bit of DIY, XEQT at 0.20% MER beats both.

11. The Honest Answer: Both Are 100x Better Than Doing Nothing

Here’s something I feel strongly about, and I want to be direct.

There are millions of Canadians with $50,000, $80,000, $100,000+ sitting in savings accounts earning 1-3% interest while inflation eats away at their purchasing power. They know they should invest, but they haven’t – because they’re overwhelmed by choices, scared of the stock market, or just don’t know where to start.

If you’re one of those people, I don’t care whether you choose Tangerine or XEQT. Either one will change your financial future. Both are diversified, low-cost, index-based investments that will grow your money over the long term. Both are incomparably better than:

• Leaving your money in a high-interest savings account forever
• Buying individual stocks you saw on TikTok
• Paying 2.5% MER for an actively managed bank mutual fund that underperforms the index
• Doing nothing and hoping CPP and OAS will be enough to retire on

The difference between Tangerine (0.77%) and XEQT (0.20%) is real and meaningful over decades. But the difference between either of them and not investing at all is astronomical.

Let me put it in perspective. Imagine you’re 30 years old with $10,000 saved and you add $500/month until age 65:

The gap between the savings account and Tangerine is $340,000. The gap between Tangerine and XEQT is about $75,000. Both gaps matter, but the first one is four times bigger.

So if reading about XEQT feels like too much and you just want something easy, open a Tangerine Investment Fund today and start depositing money. You can always switch to XEQT later when you’re ready. The important thing is that you start.

12. Final Verdict: Which Should You Choose?

Here’s my honest recommendation, based on having used both:

Choose Tangerine if:

• You’re a complete beginner and want the absolute lowest-friction way to start investing
• You bank with Tangerine and want everything in one place
• You want a portfolio with bonds included (not just stocks)
• The idea of downloading a brokerage app and buying an ETF feels like too much right now

Choose XEQT if:

• You’re comfortable using an app (and you probably are – you’re reading a blog about ETFs)
• You want to pay the lowest possible fees on a diversified global portfolio
• You’re investing for the long term and want to maximize your returns
• You’ve been investing in Tangerine or another mutual fund and are ready to “graduate”
• You value having access to a full investing platform with more features and flexibility

My take: For most people reading this post, XEQT is the better choice. If you’ve found your way to a blog called “Just Buy XEQT,” you almost certainly have the financial literacy to use Wealthsimple and buy an ETF. The fee savings are significant and compound over your entire investing lifetime.

But I genuinely respect Tangerine Investment Funds for what they are: a gateway product that gets Canadians investing when they might otherwise sit on the sidelines. If Tangerine was your first investment, be grateful it existed. It did its job. And if you’re ready for the next step, XEQT is waiting.

Tangerine Investment Funds are offered by Tangerine Investment Management Inc. XEQT is managed by BlackRock Canada. This post is for informational purposes and is not financial advice. Always do your own research before investing.