XEQT Mid-2026 Check-In: What the First Half Taught Us and What Smart Investors Are Doing Now

It is the first week of June, and I just did something I promised myself I would only do twice a year: I opened my brokerage app and actually looked at my XEQT balance.

I brewed my coffee, sat down on the back porch, and pulled up the numbers. My heart did the usual little jump – not because anything dramatic happened, but because six months of contributions, dividends, and compounding were all sitting right there on the screen. Some months had been rough. Others had been surprisingly strong. But the overall picture? My portfolio was doing exactly what I expected it to do: growing quietly while I lived my life.

That is the thing about XEQT. The first half of 2026 has given us trade drama, rate cut debates, AI hype cycles, currency swings, and at least three separate headlines that made people on Reddit declare “the crash is finally here.” And yet, here we are at the halfway mark, and the boring one-ETF strategy is still winning.

Let me walk you through what actually happened in the first half of 2026, what it means for your XEQT holdings, and exactly what smart investors are doing as we head into the second half of the year.

1. H1 2026 in Review: The Story So Far

If you had to summarize the first half of 2026 in a single sentence, it would be this: volatile on the surface, resilient underneath.

Back in January, the mood was cautious. Investors were coming off a solid 2025, but the consensus was that 2026 would be “harder.” Trade tensions between Canada and the US were escalating, the Bank of Canada was deep into its rate-cutting cycle, and everyone seemed to have a hot take on whether AI stocks had peaked or were just getting started.

Then came the actual first half.

Markets swung. Some weeks were euphoric, with major indices hitting new highs. Other weeks brought sharp pullbacks on tariff headlines or unexpected economic data. If you checked your portfolio daily – and I know some of you did, because I wrote a whole post about why you should stop doing that – you probably felt like you were on a rollercoaster.

But if you zoom out? Global equities have had a solid first half overall. Not a blowout year like 2021 or 2024, but positive. The kind of year that rewards patience and punishes panic.

Here is the important takeaway: none of the scary headlines derailed the long-term trajectory. Not the tariff escalations. Not the rate cut uncertainty. Not the “is this a bubble?” AI debates. The global economy kept growing, companies kept earning revenue, and diversified investors kept getting paid.

2. What Happened in Global Markets

Let me break down what actually moved markets in the first half of 2026, region by region – because understanding these dynamics is key to understanding why XEQT’s global diversification continues to be your best friend.

United States (~45% of XEQT)

The US market has been the most talked-about story, as usual. Large-cap tech stocks – particularly those with real AI revenue – continued to drive gains. But the rally has broadened out compared to 2024, when a small number of mega-cap names carried almost all the weight. More sectors have participated in 2026, which is actually healthier for the market long-term.

Trade policy has been the wildcard. Tariff announcements and reversals have caused short-term volatility, but the underlying US economy has remained resilient, supported by a strong labour market and consumer spending.

Canada (~25% of XEQT)

Canada has been a mixed bag. The big banks have been steady performers, benefiting from the stabilizing rate environment. Energy has been volatile, tracking commodity price swings and global demand uncertainty. The housing market has started to show signs of life as lower interest rates trickle through to mortgage rates, but the recovery has been uneven across regions.

The Canadian dollar has fluctuated against the US dollar, which has created some interesting dynamics for XEQT holders. A weaker loonie boosts the value of your US and international holdings when measured in CAD, acting as a natural tailwind. We covered this in detail in our weak Canadian dollar and XEQT returns post.

International Developed (~20% of XEQT)

Europe has been a bright spot in 2026. Increased defence spending, fiscal stimulus in Germany, and a more stable energy situation compared to the 2022 crisis have supported European equities. Japan has continued its corporate governance reforms, which have been attracting global capital. Overall, international developed markets have held their own, providing valuable diversification when North American markets got choppy.

Emerging Markets (~10% of XEQT)

India has been one of the standout performers of 2026, driven by strong domestic growth, demographics, and increasing foreign investment. China has remained a question mark, with policy uncertainty and property sector concerns weighing on sentiment, though periodic stimulus measures have provided temporary lifts. The emerging markets slice of XEQT has been volatile but has added long-term growth potential to the mix.

The Diversification Payoff

Here is the thing that makes XEQT brilliant: you did not have to predict any of this. You did not need to know that Europe would surprise to the upside or that Indian markets would outperform. You own it all. When one region stumbles, another picks up the slack. That is diversification working as designed.

3. Bank of Canada and Rate Cuts: Where We Stand

The Bank of Canada has been one of the biggest stories for Canadian investors over the past 18 months, and its impact on the investing landscape cannot be overstated.

Let me recap the journey. After peaking at 5.00% in mid-2023, the overnight rate has come down significantly through a series of cuts that started in June 2024. By mid-2026, we are sitting in the mid-to-low 2% range – a dramatic shift from where we were just two years ago.

Here is what this means in practical terms:

• GIC rates have fallen substantially. If you loaded up on short-term GICs in 2023, your renewal rates are now much lower. The era of 5% guaranteed returns from a savings product is over.
• Mortgage rates are declining. This is boosting consumer confidence and slowly reviving the housing market, which is positive for the broader Canadian economy.
• The “cash is king” argument has weakened. When your savings account pays less than inflation, sitting in cash is no longer a viable long-term strategy.
• Equities look more attractive on a relative basis. As fixed-income yields drop, the equity risk premium – the extra return you expect for taking on stock market risk – becomes more compelling.

We covered the full impact of rate cuts in our Bank of Canada rate cuts and XEQT deep dive, but the short version is this: falling rates are generally good for equities, and XEQT is well-positioned to benefit.

If you are still holding a large allocation in GICs or high-interest savings accounts, it is worth revisiting whether that makes sense for your timeline. Money you will not need for five or more years has historically done much better in global equities than in guaranteed products – and the gap is only widening as rates come down.

4. What This Means for XEQT

So, after everything – trade tensions, rate cuts, AI debates, currency swings – where does XEQT stand at the midpoint of 2026?

In a word: exactly where you would want it to be.

XEQT has delivered a solid first half. Not spectacular, not terrible – just the kind of steady, globally diversified return that compounds meaningfully over years and decades. The structure has not changed. The MER is still 0.20%. The four underlying ETFs (ITOT, XIC, XEF, IEMG) continue to give you exposure to thousands of companies across nearly 50 countries.

A few things worth highlighting:

• XEQT’s assets under management have continued to grow. More Canadians are discovering the one-ETF approach, which keeps liquidity high and trading costs low.
• Dividend distributions continue on schedule. Quarterly payments have been consistent, and if you have DRIP enabled, those dividends are automatically buying you more shares.
• Rebalancing happens silently. BlackRock adjusts the regional weights behind the scenes so you do not have to. This is one of the most underrated benefits of an all-in-one ETF – automatic rebalancing that you never have to think about.

What the Pundits Got Wrong (Again)

One of my favourite exercises is comparing what “experts” predicted at the start of the year versus what actually happened. Here is a look at some common predictions from January 2026:

The lesson, as always: predictions are entertainment, not investment advice. The investors who ignored the noise and kept buying XEQT are the ones sitting in the best position right now.

5. What Smart Investors Are Doing Now

I talk to a lot of XEQT investors – through this blog, through comments, through messages. And the ones who consistently build wealth share a few common habits. Here is what the smart money is actually doing as we enter the second half of 2026:

Staying invested

This is the most important one, and it sounds obvious, but it is not. Every market wobble creates a wave of “should I sell?” anxiety. The smart investors have internalized that market volatility is not a bug – it is the feature that generates long-term returns. If stocks never went down, they would not offer higher returns than a savings account.

Continuing automatic contributions

The best XEQT investors I know have set up recurring purchases – weekly, bi-weekly, or monthly – and they do not touch the amount. When the market dips, their automatic purchase buys more shares for the same dollar amount. When the market rises, they participate in the gains. Dollar-cost averaging removes emotion from the equation entirely.

Maxing out tax-advantaged accounts first

Smart investors are using the mid-year mark to check their TFSA and RRSP contribution room. If you have not maxed out your TFSA for 2026, the second half is a great time to catch up. The contribution room does not expire, and every dollar inside a TFSA grows completely tax-free. We broke down the TFSA vs RRSP decision for XEQT if you are not sure where to prioritize.

Reviewing, not reacting

There is a big difference between reviewing your portfolio and reacting to your portfolio. Smart investors use the mid-year mark to check on their overall financial picture – contribution room, emergency fund, debt levels – without making impulsive changes to their investment strategy based on six months of market noise.

Ignoring the noise

This one is worth repeating. Every day brings a new headline designed to make you feel like you should be “doing something” with your portfolio. Smart investors understand that doing nothing is almost always the right move. The tariff panic did not warrant selling. The rate cut debates did not warrant switching strategies. The AI hype cycle did not warrant concentrating into tech stocks.

The most powerful investing skill in 2026 is the ability to be bored.

6. What NOT to Do

Just as important as knowing what to do is knowing what to avoid. Here are the biggest mistakes I see XEQT investors making at the mid-year mark:

Do not sell because of a headline

If your investment thesis was sound in January, it is still sound in June. XEQT holds thousands of stocks across the entire global economy. A single trade dispute, a single earnings miss, a single geopolitical event does not change the fundamental case for owning the world.

Do not try to time the second half

“Markets have been up in H1, so they’re due for a correction.” Or: “Markets have been choppy, so I’ll wait for things to settle down before investing more.” Both of these are market timing, and both of them are statistically likely to cost you money. Time in the market beats timing the market. Always has. Always will.

Do not chase whatever is hot right now

AI stocks are up? Maybe I should sell XEQT and go all-in on a tech ETF. Energy is surging? Maybe I should overweight Canadian energy. This is how portfolios get destroyed. The hot sector of the first half is often the underperformer of the second half. XEQT’s diversification protects you from the temptation to chase.

Do not compare your returns to someone else’s

Your coworker who put everything into a single stock that doubled is not a genius – they are lucky. And luck runs out. Compare your XEQT returns to your own financial goals, not to someone else’s cherry-picked highlight reel. We wrote about the financial comparison trap for exactly this reason.

Do not ignore your overall financial health

Some investors are so focused on their XEQT balance that they neglect the basics: emergency fund, high-interest debt, insurance, estate planning. Your XEQT portfolio is one part of a complete financial picture. Use the mid-year check-in to make sure the rest of your financial house is in order too.

7. Your Mid-Year Checklist

Here is a practical, step-by-step checklist for your mid-2026 portfolio review. Print it, bookmark it, or just work through it right now:

Contributions and Accounts:

• Check your TFSA contribution room for 2026 – are you on track to max it out?
• Check your RRSP contribution room – any unused room from prior years?
• Verify your automatic XEQT purchases are still running (check your brokerage settings)
• Confirm DRIP (dividend reinvestment) is enabled if you want it

Portfolio Health:

• Review your overall asset allocation – is XEQT still the right fit for your timeline and risk tolerance?
• If you are within 5 years of needing the money, consider whether some should move to a balanced option like XBAL or XGRO
• Check that you are not holding too much cash in low-interest savings accounts

Financial Foundations:

• Emergency fund: do you still have 3-6 months of expenses in a high-interest savings account?
• High-interest debt: are you carrying any credit card or other high-rate debt that should be paid off before investing more?
• Beneficiary designations: are your TFSA and RRSP beneficiaries up to date?
• Insurance: is your coverage appropriate for your current situation?

Mindset:

• Unsubscribe from at least one source of market noise (a newsletter, a subreddit, a podcast that makes you anxious)
• Set a calendar reminder for your next portfolio check – and do not look until then
• Remind yourself of your investment timeline – if it is 10+ years, today’s market moves are irrelevant
• Reread this post if you feel the urge to “do something” with your portfolio

The entire goal of this checklist is to make sure you are set up for the second half of 2026 and beyond – then step away and let compound growth do its thing.

Looking Ahead: What H2 2026 Might Bring

I am going to be upfront with you: I have no idea what the second half of 2026 will look like. Neither does your favourite financial YouTuber, your coworker who “studies the charts,” or the strategist being interviewed on BNN.

What I do know is this:

• The Bank of Canada will likely continue navigating between supporting economic growth and managing inflation. Whether that means more cuts, a pause, or something unexpected – XEQT investors do not need to predict it.
• Trade tensions could escalate or de-escalate. Either way, XEQT’s global diversification means you are not betting everything on one outcome.
• The AI theme will continue evolving. Some companies will deliver on their promises, others will disappoint. XEQT owns the entire basket, so you are positioned for any outcome.
• Market volatility will continue. It always does. Some weeks will feel great. Others will feel terrible. The long-term trajectory of the global economy remains upward.

The beauty of the XEQT approach is that you do not need any of these predictions to be right. You just need the global economy to continue growing over the next 10, 20, 30 years – something it has done through world wars, pandemics, financial crises, and every other catastrophe humans have thrown at it.

The Bottom Line: Stay Boring, Stay Invested

Six months into 2026, the evidence is the same as it has been every year since XEQT launched in 2019: the investors who do best are the ones who do the least.

They set up their automatic purchases. They chose the right account type. They turned on DRIP. And then they went and lived their lives – focused on their careers, their families, their hobbies, their health. They did not panic during the tariff headlines. They did not chase the AI rally. They did not try to outsmart the Bank of Canada.

They just kept buying XEQT.

That is the strategy. It is not exciting. It does not make for great dinner party conversation. But it works. It has worked through COVID, through inflation, through rate hikes, through trade wars, and through whatever new crisis is being manufactured by this week’s news cycle.

So here is my challenge to you as we cross the halfway point of 2026: check your portfolio today, run through the mid-year checklist above, make sure your automatic contributions are set – and then close the app. Do not open it again until December. Or better yet, do not open it again until this time next year.

Your future self, the one sitting on a growing pile of globally diversified wealth, will thank you for being boring.

See you at the year-end review.