XEQT vs TD e-Series Index Funds: Which Is Better for Canadian Investors?

Back in 2017, when I first decided to stop paying a bank advisor 2% a year to underperform the market, the Canadian personal finance internet had one overwhelming recommendation: TD e-Series index funds. Every blog post, every Reddit thread, every “couch potato portfolio” guide pointed to the same place. Open a TD Direct Investing account, buy the four e-Series funds, rebalance once a year, and you were set.

So that’s what I did. I dutifully opened a TD Direct Investing account (which took an absurd amount of paperwork), set up pre-authorized contributions to four separate mutual funds, and spent the first few months fiddling with spreadsheets to make sure my Canadian-US-international-bond split stayed on target.

It worked. The fees were low. The returns were solid. But it was fussy. And when commission-free ETF platforms showed up and products like XEQT launched in 2019, I realized the entire value proposition of e-Series had been undercut. Today, almost everything that made TD e-Series great can be replicated with a single ETF purchase on Wealthsimple – with lower fees, less hassle, and better diversification.

But that doesn’t mean e-Series are dead. For certain investors, they still make sense. Let me walk you through the full comparison.

1. What Are TD e-Series Index Funds?

TD e-Series are a family of low-cost index mutual funds offered by TD Asset Management. They were launched in the early 2000s and quickly became the go-to recommendation for Canadian passive investors because they offered something almost nobody else did at the time: index-tracking mutual funds with MERs under 0.50%.

The classic “couch potato” e-Series portfolio uses four funds:

• TDB900 – TD Canadian Index Fund (MER: 0.28%)
• TDB902 – TD US Index Fund (MER: 0.35%)
• TDB911 – TD International Index Fund (MER: 0.48%)
• TDB909 – TD Canadian Bond Index Fund (MER: 0.48%)

You pick your own allocation across these four funds, rebalance periodically, and that’s your portfolio. For years, this was the cheapest and most accessible way for everyday Canadians to build a diversified index portfolio.

2. What Is XEQT?

If you have been reading this blog, you already know the answer. XEQT (iShares Core Equity ETF Portfolio) is BlackRock Canada’s all-in-one, 100% equity ETF. It launched in August 2019 and has since become the most popular all-equity ETF in Canada, with over $7 billion in assets under management.

XEQT holds four underlying iShares index ETFs that give you exposure to roughly 12,000+ stocks across the globe:

• US equities: ~45%
• Canadian equities: ~25%
• International developed: ~25%
• Emerging markets: ~5%

The MER is 0.20%, it rebalances automatically, and you can buy it on any Canadian brokerage – including Wealthsimple, where it’s commission-free.

3. The Head-to-Head Comparison

Here’s how XEQT stacks up against a typical TD e-Series portfolio:

A few things jump out immediately: XEQT is cheaper, holds more stocks, and rebalances for you. The e-Series portfolio requires you to manage four separate funds and manually keep your allocation on target. Let’s dig deeper into what these differences actually mean for your money.

4. Fees: XEQT Wins, and It’s Not Close

The single most important factor for long-term returns (after your savings rate) is fees. And on fees, XEQT has a clear advantage.

XEQT charges a flat 0.20% MER. That’s it. No trading commissions on Wealthsimple, no account fees, no rebalancing costs.

A typical e-Series portfolio – say, 25% Canadian, 25% US, 25% international, 25% bonds – has a blended MER of roughly 0.38%. That’s nearly double XEQT’s fee. And the international fund (TDB911) alone charges 0.48%, which is almost two and a half times what you’d pay for XEQT’s international exposure through its underlying iShares ETFs.

On a $100,000 portfolio, that difference is roughly $180 per year. On $500,000, it’s $900 per year. Over a 30-year investing career with growing contributions, that fee gap compounds into tens of thousands of dollars in lost wealth.

TD has not meaningfully reduced e-Series fees in years. Meanwhile, the ETF price war has driven all-in-one ETF costs down to 0.20% or less. The gap is only getting wider.

5. Convenience: The Killer Feature Nobody Talks About

Here’s where things really shifted for me. When I used e-Series, my investing routine looked like this:

1. Log into TD Direct Investing (clunky interface, slow loading)
2. Calculate how much to put into each of the four funds based on my target allocation
3. Place four separate purchase orders
4. Check my allocation quarterly to see if I needed to rebalance
5. If rebalancing was needed, sell from the overweight fund and buy the underweight one

With XEQT on Wealthsimple, my routine is:

1. Money gets auto-deposited and auto-invested into XEQT via recurring buys

That’s it. No allocation math. No rebalancing spreadsheets. No multiple orders. BlackRock’s portfolio managers handle the rebalancing inside XEQT, so the allocation stays on target without me lifting a finger.

If you are the kind of person who enjoys spreadsheets and manual control, e-Series might scratch that itch. But if you want to spend less time managing your portfolio and more time living your life, XEQT is in a different league.

6. Tax Efficiency: Why the ETF Structure Matters

This one is a bit technical, but it matters – especially if you hold investments in a non-registered (taxable) account.

Mutual funds like TD e-Series can generate capital gains distributions even when you haven’t sold anything. When other investors in the fund redeem their units, the fund manager may need to sell holdings to raise cash, and those realized gains get passed on to all unitholders – including you. You owe tax on gains you never chose to realize.

ETFs like XEQT largely avoid this problem thanks to their “in-kind” creation and redemption mechanism. When institutional investors redeem ETF units, the ETF can deliver the underlying stocks directly rather than selling them. This means fewer taxable events for you as a holder.

In a TFSA or RRSP, this difference is irrelevant because you are not paying tax on gains inside those accounts anyway. But in a non-registered account, XEQT’s ETF structure is meaningfully more tax-efficient than an e-Series mutual fund doing the same thing.

7. Account Availability: XEQT’s Biggest Structural Advantage

TD e-Series can only be purchased through TD Direct Investing. That’s it. You can’t buy them on Wealthsimple, Questrade, Interactive Brokers, or any other Canadian brokerage. If you want e-Series, you need a TD account.

This is a major limitation. TD Direct Investing’s platform is functional but dated. The mobile app is fine but not great. And you are locked into TD’s fee structure for everything else in your financial life.

XEQT, on the other hand, trades on the TSX like any other stock. You can buy it on literally any Canadian brokerage. If Wealthsimple launches a feature you don’t like, you can transfer to Questrade. If Questrade raises their fees, you move to Interactive Brokers. Your investment is portable in a way that e-Series simply are not.

This portability might not feel important when you are starting out, but as your portfolio grows to $100,000+, having the freedom to choose the best platform without being tied to a specific product is genuinely valuable.

8. Performance Comparison: How Do the Returns Stack Up?

This is the question everyone wants answered, so let’s address it directly. On a pure returns basis, XEQT and a well-constructed e-Series portfolio have produced broadly similar results. And that makes sense – they’re both holding diversified baskets of global equities.

The differences come down to the details:

• XEQT’s emerging markets exposure (~5%) gives it a slice of high-growth economies like India, Brazil, and Vietnam that the standard e-Series four-fund portfolio doesn’t include (TDB911 covers only developed international markets)
• XEQT’s lower MER creates a persistent annual drag advantage of roughly 0.18% – small in any single year, but compounding over decades
• e-Series rebalancing lag can create slight performance differences. If you don’t rebalance your e-Series portfolio regularly, your allocation drifts – potentially becoming overweight in whichever region performed best recently. XEQT stays on target automatically.

Over a 10-year period, the MER difference alone accounts for roughly $1,800 per $100,000 invested in lost wealth for the e-Series holder. Add in the broader diversification and automatic rebalancing of XEQT, and the performance edge – while small – consistently favors XEQT.

That said, both products will get you roughly 90% of the way to the same destination. The bigger risk is not choosing between XEQT and e-Series – it’s spending so long deciding between them that you don’t invest at all.

9. The Historical Context: Why e-Series Were Revolutionary

To fully appreciate the XEQT vs e-Series debate, you need to understand what investing looked like in Canada before e-Series existed.

In the early 2000s, the average Canadian mutual fund charged an MER of 2.0% to 2.5%. These were mostly actively managed funds that, year after year, underperformed their benchmark indexes. The typical bank advisor would put you in a “balanced” fund with a 2.3% MER and call it diversified. You had no idea what you owned, no control over your allocation, and no way to avoid the fee without leaving the bank’s advisory channel.

TD e-Series changed that. At an MER of 0.28-0.48%, they were roughly one-fifth the cost of a typical bank mutual fund. They tracked indexes rather than trying to beat them. And they were available through TD’s self-directed platform, which meant you could buy them without an advisor skimming 1% off the top.

This was transformative. The entire “couch potato portfolio” movement – popularized by Dan Bortolotti and the Canadian Couch Potato blog – was built on e-Series. A generation of Canadian investors learned to invest for themselves because e-Series made it cheap and accessible enough to try.

XEQT is the next evolution of that same idea. It took the low-cost index approach and made it even cheaper, even simpler, and even more accessible. If e-Series were the Model T of Canadian passive investing, XEQT is the Tesla – same destination, smoother ride.

10. The Case for TD e-Series (Yes, There Is Still One)

I have been fairly hard on e-Series so far, so let me be fair. There are situations where they still make sense:

• You already have a large TD e-Series portfolio and don’t want the hassle of transferring everything. Inertia is a valid reason to stay, as long as you understand the ongoing fee difference.

• You want to include bonds easily. XEQT is 100% equity. If you want a portfolio with bonds, you’d need to buy a separate bond ETF (or choose XBAL or XGRO instead). With e-Series, you just add TDB909 and set your allocation.

• You prefer dollar-amount purchases. Mutual funds let you invest exact dollar amounts ($500.00, not “however many shares $500 buys”). Wealthsimple now supports fractional shares, which largely eliminates this advantage, but other brokerages may not.

• You are deeply embedded in the TD ecosystem. If your chequing account, credit card, mortgage, and everything else are at TD, keeping your investments there too might simplify your financial life.

11. Switching from e-Series to XEQT

If you’re currently holding e-Series funds and want to switch, here’s the basic process:

1. Open a Wealthsimple account (use a referral link for a $25 bonus)
2. Initiate an in-kind or in-cash transfer from TD Direct Investing to Wealthsimple. Wealthsimple handles most of the paperwork.
3. Sell the e-Series funds once they arrive at Wealthsimple (or before the transfer if going in-cash). In a non-registered account, selling may trigger capital gains.
4. Buy XEQT with the proceeds
5. Set up recurring buys so your future contributions go straight into XEQT via dollar-cost averaging

The whole process typically takes 1-3 weeks. Wealthsimple often covers the transfer fee charged by TD (up to $150) if you are transferring a large enough account.

If your e-Series are in a TFSA or RRSP, selling and rebuying inside the registered account has zero tax consequences. You are just swapping one investment for another within a tax-sheltered wrapper.

The Bottom Line

TD e-Series were the gateway drug of Canadian index investing. They introduced an entire generation to the idea that you didn’t need an expensive advisor or high-fee mutual funds to build wealth. I am genuinely grateful they exist.

But in 2026, with commission-free ETF platforms, automatic rebalancing, fractional shares, and MERs of 0.20%, the original case for e-Series has mostly evaporated. XEQT does everything the four-fund e-Series portfolio does, but cheaper, simpler, and with broader diversification.

If you are starting fresh, buy XEQT. If you are holding e-Series and the fee difference bothers you, consider making the switch. And if you are happily invested in e-Series and don’t want to deal with a transfer? That’s fine too. You’re still light-years ahead of anyone paying 2% for an actively managed mutual fund.

The most important thing isn’t which low-cost index product you choose. It’s that you’re investing at all.