XEQT vs GEQT: Which All-Equity ETF Is Better for Canadian Investors?

A few months ago, I was scrolling through a thread on Reddit’s PersonalFinanceCanada and saw someone ask a question I had been quietly wondering about myself: “Has anyone looked at GEQT? It seems like XEQT but cheaper.”

I had been investing in XEQT for years at that point. It was the foundation of my portfolio – the one ticker I bought every two weeks without a second thought. But the idea that there might be a legitimate competitor from Global X (formerly Horizons) with a lower fee caught my attention. A few basis points might not sound like much, but compounded over 25 or 30 years, the difference can add up to thousands of dollars.

So I did what I always do: I spent way too many hours digging through fund facts, index methodology documents, and tax filing data. I compared every detail I could find – MERs, underlying indexes, geographic allocations, trading volume, tax efficiency, and more. And I came away with a clear opinion on which one I prefer and why.

If you are in the same boat – staring at these two tickers and wondering which one deserves your hard-earned money – this post is for you. Let me walk you through everything I found.

1. What Are XEQT and GEQT?

Both XEQT and GEQT are Canadian-listed, all-in-one, 100% equity ETFs. They are designed to give you global stock market exposure in a single purchase. You buy one ticker, and the fund manager handles everything else – diversification across countries and sectors, rebalancing, currency exposure, the whole thing.

The concept is identical. The execution differs in some important ways.

XEQT – iShares Core Equity ETF Portfolio

XEQT is managed by BlackRock, the largest asset manager in the world. It launched in August 2019 and quickly became the go-to choice for Canadian investors who wanted 100% equity exposure without the hassle of managing multiple ETFs. It is a “fund of funds” that holds four underlying iShares ETFs covering the US, Canada, international developed, and emerging markets.

GEQT – Global X All-Equity Asset Allocation ETF

GEQT is managed by Global X Canada, formerly known as Horizons ETFs. Global X is the Canadian arm of the Mirae Asset group, a large South Korean financial services company. GEQT launched in November 2021, making it the newer entrant in this comparison. Like XEQT, it is a fund of funds that holds underlying ETFs to achieve global equity exposure.

Here is the quick side-by-side overview:

2. MER Comparison: Does the Fee Difference Matter?

This is the first question most people ask, so let me address it head-on.

XEQT has an MER of 0.20%. GEQT has an MER of 0.24%. That is a difference of 0.04% per year, or 4 basis points.

Let me put that in real dollar terms so you can decide whether it is worth worrying about:

On a $50,000 portfolio, you are paying $20 more per year for GEQT. On $100,000, it is $40. These are not life-changing amounts, and they are absolutely dwarfed by factors like your savings rate, your asset allocation, and how consistently you invest.

That said, fees compound over time. Over a 30-year investing horizon, that 0.04% annual difference on a $100,000 starting balance (assuming 7% annual growth) works out to roughly $3,000-$4,000 in total lost returns. That is not nothing, but it is also not the most important factor in this comparison.

My take: XEQT wins on fees, but the margin is small enough that it should not be the sole deciding factor. If GEQT offered something meaningfully better in terms of holdings, tax efficiency, or methodology, the 0.04% premium could be justified. Let’s see if it does.

3. Holdings and Geographic Allocation

Both funds aim to give you global equity exposure with a deliberate tilt toward Canada (also known as a home country bias). Canadian investors benefit from this tilt because Canadian dividends receive preferential tax treatment, and holding Canadian stocks avoids foreign withholding tax entirely.

Here is how each fund slices up the world:

The allocations are remarkably similar. Both funds give you roughly a quarter of your portfolio in Canadian stocks, about 43-45% in the US, around 20-22% in international developed markets (Europe, Japan, Australia, etc.), and approximately 10% in emerging markets (China, India, Brazil, Taiwan, and others).

The small differences – a couple of percentage points more or less in US versus international developed – are not meaningful enough to drive a decision. If one region outperforms the other over the next decade, these minor allocation differences will make a negligible impact on your overall returns.

Underlying ETFs: What is inside each fund?

This is where the structural differences start to appear.

XEQT holds four iShares ETFs:

• ITOT (iShares Core S&P Total US Stock Market ETF) – US exposure
• XIC (iShares Core S&P/TSX Capped Composite Index ETF) – Canadian exposure
• XEF (iShares Core MSCI EAFE IMI Index ETF) – International developed exposure
• IEMG (iShares Core MSCI Emerging Markets ETF) – Emerging markets exposure

GEQT holds Global X’s own suite of ETFs:

• HXS (Global X S&P 500 Index ETF) – US large-cap exposure
• HXCN (Global X S&P/TSX 60 Index ETF) – Canadian exposure
• HXDM (Global X Developed Markets Equity Index ETF) – International developed exposure
• HXEM (Global X Emerging Markets Equity Index ETF) – Emerging markets exposure

A few notable differences stand out. XEQT’s US sleeve uses ITOT, which tracks the total US stock market – large, mid, and small caps. GEQT’s US sleeve uses HXS, which tracks the S&P 500 – large caps only. This means XEQT gives you broader US exposure including smaller companies, while GEQT focuses on the 500 largest.

Similarly, XEQT’s Canadian sleeve (XIC) holds the broad TSX Composite (~230 stocks), while GEQT’s Canadian sleeve (HXCN) tracks the TSX 60 – only the 60 largest Canadian companies. You get less small- and mid-cap Canadian exposure with GEQT.

These differences explain why XEQT holds roughly 12,000 stocks compared to GEQT’s approximately 9,000. Both are well-diversified by any reasonable standard, but XEQT casts a wider net.

4. Index Methodology: MSCI/S&P vs Solactive

This is a subtle but interesting difference that most investors never think about.

XEQT’s underlying ETFs track indexes from MSCI, S&P Dow Jones, and FTSE – the three most established index providers in the world. These are the benchmarks that institutional investors, pension funds, and sovereign wealth funds use. The methodologies are well-tested, transparent, and have decades of track records.

GEQT’s underlying ETFs track Solactive indexes. Solactive is a German index provider that has grown rapidly over the past decade by offering lower licensing fees to ETF managers. This is one reason GEQT’s underlying funds can keep costs competitive – the index licensing fees are lower than what MSCI and S&P charge.

Does this matter in practice? For the most part, no. The Solactive equivalents of major market indexes hold virtually the same stocks with virtually the same weights. Return differences are typically measured in hundredths of a percent. For a buy-and-hold all-in-one investor, the choice of index provider is a rounding error compared to factors like fees and behavior.

5. Performance Comparison

Here is where we need to be careful, because GEQT has a much shorter track record than XEQT.

XEQT launched in August 2019, giving us nearly seven years of live performance data. GEQT launched in November 2021, so we have less than five years. Comparing them over GEQT’s shorter lifespan gives us some useful data, but it is not enough to draw sweeping conclusions.

Over the period both funds have existed (late 2021 onward), their returns have been very similar – within fractions of a percent of each other in most years. This is exactly what you would expect from two funds with nearly identical geographic allocations holding overlapping sets of global stocks.

The minor performance differences that do show up tend to come from:

• The 0.04% MER gap – this slightly favours XEQT every year
• Small/mid-cap exposure – XEQT’s broader US and Canadian holdings capture some additional return (or loss) from smaller companies
• Index tracking differences – minor variations in how each fund replicates its underlying indexes
• Cash drag – the small amount of uninvested cash each fund holds for liquidity purposes

In any given year, these factors might make one fund beat the other by 0.1-0.3%. Over a 20-30 year holding period, XEQT’s lower MER gives it a structural advantage, but the real-world difference in total returns is likely to be modest.

My honest assessment: if you are choosing between these two funds, performance should not be your primary concern. They will deliver similar returns over time because they hold similar stocks. Focus on the other factors.

6. Tax Efficiency

Tax efficiency is an area where Global X (Horizons) has historically had a genuine edge, and it is worth understanding the nuances.

The swap structure legacy

Global X’s predecessor, Horizons ETFs, was famous for using total return swap structures that deferred or eliminated taxable distributions. This made their ETFs exceptionally tax-efficient in non-registered accounts. However, the CRA changed the tax rules in 2019-2020, and Horizons had to restructure many of its swap-based ETFs. Some of GEQT’s underlying funds still use corporate class or swap-adjacent structures, but the tax advantages are more modest than they once were.

Foreign withholding tax

Both XEQT and GEQT face similar foreign withholding tax drag. When you hold a Canadian-listed fund of funds that owns international stocks, there are multiple layers where withholding tax can be applied. The US, for example, withholds 15% on dividends paid to Canadian ETFs.

Neither fund has a meaningful structural advantage here. Both experience roughly 0.20-0.30% of annual drag from foreign withholding taxes, depending on dividend yields in a given year. This drag applies in TFSAs, RRSPs, and non-registered accounts, though in a non-registered account you may be able to claim some of the taxes back via foreign tax credits.

Distributions

XEQT typically distributes dividends quarterly. GEQT also distributes periodically, though its distribution schedule and composition can vary. In a tax-sheltered account like a TFSA or RRSP, distributions are irrelevant from a tax perspective because all growth and income is sheltered.

In a non-registered account, the composition of distributions matters – capital gains and Canadian dividends are taxed more favourably than foreign income. Both funds distribute a mix of Canadian dividends, foreign income, and capital gains, and the exact split varies year to year. Neither fund has a clear, consistent advantage here.

Bottom line on taxes: The two funds are roughly equivalent in terms of tax efficiency. The era of Horizons’ dramatic tax advantages has largely passed, and both XEQT and GEQT will produce similar after-tax returns in most account types.

7. Liquidity, AUM, and Trading Volume

This is the category where XEQT has the most commanding lead, and it matters more than you might think.

XEQT is one of the most popular ETFs on the TSX, period. Its massive AUM and trading volume mean you can buy or sell large positions without meaningfully moving the price. The bid-ask spread is almost always a single penny, which means you are not giving up anything on execution costs.

GEQT is much smaller. While $500 million in AUM is perfectly respectable and the fund is in no danger of being shut down, the lower trading volume means wider bid-ask spreads and slightly less liquidity. For a long-term buy-and-hold investor making regular purchases, this is unlikely to cause problems. But if you ever need to liquidate a large position quickly, XEQT’s deeper liquidity is a genuine advantage.

Does AUM size matter for fund survival?

A question I see come up frequently: could GEQT be shut down due to low assets? It is extremely unlikely at its current size. ETFs typically face closure risk when AUM drops below $10-$20 million. At ~$500 million, GEQT is well above that threshold. And Global X Canada is a well-capitalized firm backed by Mirae Asset, one of the largest independent financial groups in Asia.

That said, XEQT’s dominant market position gives it a network effect. More assets attract more investors, which improves liquidity, which attracts more assets. It is a virtuous cycle that makes XEQT increasingly difficult to displace over time.

8. Pros and Cons of Each Fund

Let me lay out the strengths and weaknesses of each fund as clearly as I can.

XEQT Pros

• Lower MER at 0.20%, the cheapest all-in-one equity ETF in Canada
• Massive AUM and liquidity – you will never have trouble buying or selling
• Broader holdings with ~12,000 stocks including small and mid caps
• Established track record of nearly seven years
• Industry-standard indexes (MSCI, S&P, FTSE) used by institutional investors worldwide
• Widespread familiarity – your accountant, financial planner, and fellow investors all know what XEQT is

XEQT Cons

• Slightly higher foreign withholding tax drag compared to a DIY multi-ETF approach (a trade-off of the fund-of-funds structure)
• Home country bias may not suit every investor’s preference (though I think the 25% Canada allocation is reasonable)
• No ability to customize regional weights – you get BlackRock’s allocation or nothing

GEQT Pros

• Competitive MER at 0.24%, still very low by Canadian standards
• Solid geographic diversification similar to XEQT
• Global X/Horizons heritage in swap-based and tax-efficient fund structures
• Solactive indexes keep underlying licensing costs down
• Good option if you want to diversify across fund providers (not keeping everything with BlackRock)

GEQT Cons

• Higher MER than XEQT by 0.04%, which compounds over decades
• Smaller AUM means wider bid-ask spreads and less liquidity
• Shorter track record – less than five years of live data
• Narrower US exposure (S&P 500 only versus total US market)
• Narrower Canadian exposure (TSX 60 versus TSX Composite)
• Less name recognition – fewer resources, communities, and discussions available online

9. Which Fund Is Right for You?

After looking at all the data, here is how I think about the decision.

Choose XEQT if:

• You want the lowest possible MER on an all-equity, all-in-one ETF
• You value deep liquidity and tight bid-ask spreads
• You prefer broader market exposure including small and mid-cap stocks
• You want a fund with a longer track record and widespread community support
• You are building a simple, one-ETF portfolio and want the most established option
• You plan to invest for decades and want every basis point of fee savings working in your favour

Choose GEQT if:

• You want to diversify your fund providers (not holding everything with BlackRock)
• You prefer Solactive-based index tracking
• You are comfortable with a newer fund that has less trading volume
• You already hold other Global X or Horizons products and want to stay within that ecosystem
• The 0.04% MER difference does not bother you
• You believe in Global X’s approach to fund management and want to support competition in the Canadian ETF market

The “it honestly does not matter” camp

I want to be transparent here: for most Canadian investors, the difference between XEQT and GEQT will be imperceptible over a 20-30 year holding period. Both funds will give you globally diversified, 100% equity exposure at a very low cost. Both will capture the long-term growth of the global stock market. Both are excellent choices.

If you have been going back and forth between these two funds for weeks, the biggest drag on your returns is not the 0.04% MER difference – it is the time you have spent not investing while you deliberate. The best ETF is the one you actually buy and hold consistently. If you are experiencing analysis paralysis, pick one and start.

10. My Verdict: XEQT Remains the Better Choice for Most Canadians

After weighing every factor – fees, holdings breadth, index methodology, performance, tax efficiency, liquidity, track record, and AUM – I give the edge to XEQT. It is not a blowout victory, but the advantages are consistent and they compound over time.

Here is the summary of why:

XEQT costs less. The 0.20% MER versus 0.24% is a small but persistent advantage that adds up over decades. Every year, you keep an extra 0.04% of your money working for you.

XEQT is more diversified. With ~12,000 holdings versus ~9,000, and broader exposure to small- and mid-cap stocks in both the US and Canada, XEQT gives you a more complete picture of the global equity market.

XEQT is more liquid. The massive AUM and trading volume mean tighter spreads and zero concerns about execution quality. You can buy or sell any amount at any time with confidence.

XEQT has a longer track record. Nearly seven years of live data versus less than five. This matters for building conviction, especially during market downturns when you need to trust that your fund will do what it is supposed to do.

XEQT has stronger institutional backing. BlackRock manages over $10 trillion globally. While Global X is a legitimate operation, BlackRock’s scale provides an extra layer of confidence for long-term investors.

GEQT is not a bad fund. If you already own it, there is no urgent reason to sell and switch. The performance difference over your investing lifetime will be modest. But if you are starting from scratch and choosing between the two, XEQT is the one I would pick – and the one I do hold in my own portfolio.

The real enemy is not picking the slightly less optimal ETF. The real enemy is not investing at all, or tinkering endlessly instead of letting compound growth do its work. Buy either one of these funds, set up automatic purchases, and get on with your life. Your future self will thank you.