XEQT Sector Breakdown: What Industries You're Actually Investing In

Most people who buy XEQT know the geographic split — roughly 45% US, 25% Canada, 20% international developed, and 10% emerging markets. But when someone asks “what industries are you actually invested in?”, things get a lot quieter.

I used to be in that camp. I knew I owned “the whole world” through XEQT, but I couldn’t tell you whether I had more exposure to tech companies or banks. I had no idea how much of my money was in healthcare or energy. That changed when I spent a rainy Saturday pulling apart the underlying ETFs, and honestly, the diversification blew me away.

Let me walk you through exactly what sectors your money touches when you buy a single share of XEQT.

How XEQT’s Sector Exposure Works

XEQT doesn’t directly hold 12,000+ stocks. It holds four underlying iShares ETFs, each covering a different geographic region:

1. ITOT (iShares Core S&P Total U.S. Stock Market ETF) — ~45%
2. XIC (iShares Core S&P/TSX Capped Composite Index ETF) — ~25%
3. XEF (iShares Core MSCI EAFE IMI Index ETF) — ~20%
4. IEMG (iShares Core MSCI Emerging Markets ETF) — ~10%

Each of these ETFs holds stocks across every major industry sector. When you combine them together using XEQT’s weightings, you get a blended sector allocation that looks very different from what you’d get holding only Canadian stocks.

That’s the key insight here. Your sector exposure through XEQT is the weighted average of what each underlying ETF holds. And because those ETFs cover different economies with different industry strengths, the result is remarkably well-diversified.

The Complete XEQT Sector Breakdown

Here’s the approximate sector allocation when you roll up all four underlying ETFs into one view. These numbers shift slightly as markets move, but they give you a solid picture of where your money sits:

The takeaway: No single sector dominates your portfolio. Even the largest — information technology at roughly 22% — is balanced by the other ten sectors. Compare this to what happens when Canadians only hold Canadian stocks.

Why This Matters: XEQT vs a Canada-Only Portfolio

This is where things get really interesting, and where I think the sector breakdown tells the most important story.

The Canadian stock market is famously concentrated. If you only held Canadian stocks through XIC, here’s roughly what your sector breakdown would look like:

See the problem? A Canada-only portfolio puts nearly half your money into just two sectors: financials and energy. That’s banks and oil companies. If either of those sectors has a bad decade — and energy absolutely did in the mid-2010s — your entire portfolio suffers disproportionately.

With XEQT, you get meaningful exposure to sectors that barely exist in Canada: healthcare (we have almost no major pharma companies), technology (beyond Shopify and a few others), and global consumer brands.

I remember when oil prices crashed in 2014-2016 and the TSX went essentially sideways for years. Meanwhile, the US market — driven by tech — was booming. If I’d been in XEQT instead of overweighting Canadian stocks, that period would have looked very different.

Sector-by-Sector Deep Dive

1. Information Technology (~22%)

This is your largest sector exposure, and it’s mostly driven by the US allocation through ITOT. You own pieces of the world’s biggest tech companies — Apple, Microsoft, NVIDIA, Alphabet, and hundreds of smaller ones.

You also get tech exposure from international markets (Samsung through IEMG, ASML through XEF) and Canada (Shopify, Constellation Software through XIC).

Why it matters: Technology has been the driving force behind global economic growth for the last two decades. Owning 22% in tech means you benefit when AI, cloud computing, and digital transformation continue reshaping industries. But you’re not overexposed the way a Nasdaq-only investor would be.

2. Financials (~17%)

This is your second-largest sector, and it’s a blend of Canadian banks (Royal Bank, TD, BMO through XIC), American financial giants (JPMorgan, Berkshire Hathaway through ITOT), and international banks (HSBC, UBS through XEF).

Why it matters: Financial companies tend to do well when economies are growing and interest rates are reasonable. Canada’s banks are known for stability and consistent dividends. The US and international financials add growth potential and diversification away from Canada-specific housing market risks.

3. Healthcare (~10%)

This is one of the biggest benefits of global diversification. Canada has almost zero large-cap pharmaceutical or biotech companies. Through XEQT, you own UnitedHealth, Johnson & Johnson, Eli Lilly, Novo Nordisk (the GLP-1 weight loss drug company), Pfizer, and hundreds of others.

Why it matters: Healthcare is defensive — people need medicine regardless of the economy. It’s also one of the highest-growth sectors thanks to aging populations worldwide and breakthrough therapies.

4. Industrials (~10%)

Think of the companies that build and move things: Canadian National Railway, Caterpillar, Deere, Siemens, Airbus. This sector spans defence contractors, airlines, construction equipment, and logistics companies.

Why it matters: Industrials are tied to economic activity. When countries build infrastructure, manufacture goods, and expand supply chains, these companies profit.

5. Consumer Discretionary (~10%)

Amazon, Tesla, Toyota, Home Depot, LVMH — these are companies that sell things people want rather than need. This ranges from luxury goods to automobiles to online retail.

Why it matters: Consumer discretionary spending drives a huge portion of GDP in developed economies. When consumers are confident and employed, these companies thrive.

6. Energy (~6%)

Canadian Natural Resources, Suncor, ExxonMobil, Shell, TotalEnergies. Through XEQT, you get energy exposure from both Canadian oil sands producers and global integrated energy majors.

Why it matters: At 6%, your energy exposure is meaningful but not overwhelming. Compare this to 17% in a Canada-only portfolio. You still benefit from energy price increases without being devastated by an oil crash.

7. Communication Services (~6%)

Alphabet (Google), Meta (Facebook), Netflix, Walt Disney, BCE, Telus. This sector combines tech-adjacent digital advertising companies with traditional telecom providers.

Why it matters: Digital advertising and streaming continue to grow. Telecom companies provide steady dividends and essential services.

8. Consumer Staples (~5%)

Procter & Gamble, Nestlé, Costco, Loblaw, Coca-Cola, Walmart. These companies sell things people buy regardless of economic conditions — food, household products, groceries.

Why it matters: Consumer staples are your portfolio’s anchor during downturns. When markets crash, people still buy toothpaste and groceries. These companies provide stability.

9. Materials (~5%)

Barrick Gold, Nutrien, BHP, Rio Tinto, Teck Resources. This covers mining, metals, chemicals, and agricultural inputs.

Why it matters: Materials companies benefit from commodity price increases and infrastructure spending. Canada’s mining sector is well-represented here.

10. Utilities (~3%) & Real Estate (~3%)

Fortis, NextEra Energy, Brookfield, American Tower, Prologis. These are traditionally defensive, income-oriented sectors.

Why it matters: Utilities and real estate provide portfolio ballast and tend to hold up better during economic downturns. The allocation is small but adds diversification.

How Sector Weights Change Over Time

One thing that trips people up is thinking these percentages are fixed. They’re not. XEQT’s sector allocation shifts as stock prices move.

In 2020, information technology was closer to 18% of a global portfolio. By 2024, it had grown to roughly 23%, driven by the massive run-up in mega-cap tech stocks. Energy, meanwhile, went from about 3% in late 2020 to over 5% after the 2022 oil price spike.

This is actually a feature of market-cap weighting. As companies grow and become more valuable, they naturally take up a larger share of the index. When they shrink, they take up less. You don’t need to do anything — XEQT’s underlying ETFs automatically reflect the current state of the global market.

This is fundamentally different from a portfolio where you manually pick sector weights and have to rebalance yourself. With XEQT, the market does it for you.

Common Questions About XEQT’s Sector Exposure

“Am I too heavy in tech?”

At ~22%, technology is your largest sector but it’s not dangerously concentrated. The Nasdaq 100 is about 60% tech. The S&P 500 is about 30%. XEQT’s 22% reflects global market reality, and the other 78% provides plenty of diversification.

“I want more Canadian bank exposure. Should I add XIC on top of XEQT?”

This is one of the most common questions I see. Adding XIC on top of XEQT gives you even more financials and energy exposure in a market that’s already heavy in those sectors. Most of the time, the answer is no — XEQT already gives you 25% Canadian allocation. If you’re really passionate about Canadian banks, keep it to a small satellite holding.

“What about sectors XEQT doesn’t cover?”

XEQT covers all 11 GICS sectors. There’s nothing missing. You might not have exposure to very niche sub-industries (private equity, cryptocurrency miners), but from a broad sector perspective, you’re covered.

“Do sector weights affect dividends?”

Yes. Sectors like utilities, financials, and energy tend to pay higher dividends than technology or healthcare. Because XEQT is overweight tech compared to a Canada-only portfolio, its dividend yield (~2%) is lower than something like XIC (~3%). But remember, total return (price appreciation + dividends) is what matters, and XEQT’s tech exposure has been a major driver of total return growth.

The Bottom Line

When you buy XEQT, you’re not just buying “the stock market.” You’re buying a carefully diversified slice of every major industry on the planet — from Silicon Valley tech giants to Swiss pharmaceutical companies to Australian mining conglomerates to Canadian banks.

No single sector can tank your portfolio. No industry downturn will catch you completely off guard. You’re as diversified across industries as you are across countries.

And the best part? You don’t have to manage any of it. One ETF. Every sector. Automatically rebalanced.

That’s the beauty of XEQT. It’s simple on the surface, but incredibly sophisticated underneath.