XEQT vs TEC: Should Canadian Investors Add a Tech ETF to Their Portfolio?

Last fall, a friend texted me a screenshot of his Wealthsimple portfolio. He had been buying XEQT faithfully every two weeks for about a year and a half, and his returns were solid. But then he added a single line: “I keep seeing TEC everywhere. My portfolio feels too boring. Should I add some tech?”

I laughed, because I had the exact same thought about eighteen months into my own XEQT journey. You start reading about how much of the market’s recent gains have been driven by technology companies, and suddenly your perfectly diversified portfolio feels like it is missing out. Apple, NVIDIA, Microsoft – they keep posting massive earnings, and you start wondering if a little tech tilt would supercharge your returns.

Here’s the thing: that impulse is completely natural. And unlike some of the more speculative ideas out there, TEC is actually a reasonable ETF from a reputable provider. The question is not whether TEC is a good fund. The question is whether it adds meaningful value on top of XEQT, or whether you are just adding complexity (and concentration risk) for a marginal benefit.

Let me walk you through everything I considered when I looked at this exact question for my own portfolio.

1. What Is TEC, Exactly?

TEC – formally the TD Global Technology Leaders Index ETF – is a Canadian-listed ETF that gives you concentrated exposure to the world’s largest technology companies. It trades on the TSX in Canadian dollars, which makes it easy to buy alongside XEQT in any Canadian brokerage account.

Here is the quick overview:

• Full name: TD Global Technology Leaders Index ETF
• Ticker: TEC (TSX)
• MER: 0.35%
• Index tracked: Solactive Global Technology Leaders Index
• Number of holdings: Approximately 280 technology stocks
• Launch date: 2019
• Currency: CAD (with unhedged USD/global currency exposure)
• Provider: TD Asset Management

What does TEC hold?

TEC’s top holdings read like a who’s who of Big Tech. As of early 2026, the largest positions include:

1. Apple (~16%)
2. Microsoft (~14%)
3. NVIDIA (~12%)
4. Alphabet (Google) (~7%)
5. Amazon (~6%)
6. Meta Platforms (~5%)
7. Broadcom (~4%)
8. Taiwan Semiconductor (TSMC) (~3%)
9. Samsung Electronics (~2%)
10. ASML (~2%)

The top 10 holdings alone make up roughly 70% of the fund. That is a key characteristic to understand: even though TEC holds about 280 stocks, it is a very top-heavy fund. Your performance is largely going to be driven by a handful of mega-cap tech names.

How TEC differs from broader tech ETFs

TEC is not just a US tech fund. Because it tracks the Solactive Global Technology Leaders Index, it includes technology companies from around the world – TSMC from Taiwan, Samsung from South Korea, ASML from the Netherlands, SAP from Germany. About 75-80% of the fund is US-listed, but that remaining 20-25% of international tech exposure is a genuine differentiator.

I’ll be honest, this is one of the things that makes TEC attractive. You are not just buying Silicon Valley. You are buying the global technology supply chain.

2. TEC vs XEQT: The Side-by-Side Comparison

Let’s put the numbers next to each other so you can see exactly what you are choosing between.

Returns are approximate based on historical data through early 2026. Past performance does not guarantee future results.

A few things that jump out:

TEC has crushed XEQT on raw returns over the last five years. A roughly 17% annualized return versus 9.5% is a substantial gap. If you had put $10,000 into each fund five years ago, your TEC position would be worth about $22,000 while your XEQT would be around $15,700. That is a meaningful difference.

But TEC got destroyed in 2022. A 35% decline in a single year is genuinely painful. That $22,000 peak would have cratered to around $14,300 before recovering. Meanwhile, XEQT’s 11% decline took that $15,700 down to about $14,000. During the worst of it, the “boring” fund and the “exciting” fund were practically neck and neck.

The MER gap is small but real. TEC costs 0.35% versus XEQT’s 0.20%. On a $50,000 position, that is $175 versus $100 per year. Not a dealbreaker, but worth noting.

Dividends are nearly absent from TEC. Tech companies tend to reinvest profits rather than pay them out. If you are building a portfolio with any income focus, TEC will not contribute much.

3. How Much Tech Does XEQT Already Give You?

This is the question most people skip, and it is arguably the most important one.

XEQT is a fund of funds. It holds four underlying iShares ETFs that together cover the global equity market. Let me break down the technology exposure you are already getting:

XEQT’s underlying ETFs and their tech weights

So roughly one-fifth to one-quarter of your XEQT portfolio is already in technology stocks. That includes many of the same mega-cap names that dominate TEC: Apple, Microsoft, NVIDIA, Alphabet, Amazon, and Meta all appear in XEQT through its US holdings.

Look, this matters a lot. When people say “I want more tech exposure,” what they usually mean is “I want more of the companies I read about in the news.” But you already own them. If you hold $50,000 in XEQT, approximately $10,750 of that is in technology companies. That is not nothing.

The difference is one of concentration. In XEQT, Apple might represent about 3.5% of your portfolio. In TEC, Apple is roughly 16%. The question is whether you want to dial that concentration up further – and whether the potential upside justifies the added risk.

4. When Adding TEC to Your Portfolio Makes Sense

I am not going to tell you that adding TEC is always wrong. There are legitimate scenarios where a tech tilt can be a rational decision. Here are the main ones:

You have high conviction in long-term tech dominance

If you genuinely believe that technology will continue to capture a growing share of the global economy over the next 10-20 years – and there are good arguments for this – then tilting toward tech is a way to express that view. AI, cloud computing, semiconductors, and digital infrastructure are structural trends that are not going away anytime soon.

You have a long time horizon (15+ years)

The longer your time horizon, the more you can stomach short-term volatility. TEC’s 35% drawdown in 2022 was brutal over 12 months, but investors who held through it were rewarded with a strong recovery. If you are in your twenties or thirties and investing for retirement, a tech tilt has more time to play out.

You understand and accept the volatility

This is the big one. Adding TEC means accepting that your portfolio will swing more violently in both directions. In bull markets, you will feel like a genius. In bear markets, you will question every decision you ever made. If you can genuinely handle that – not just hypothetically, but when your account is actually down 30% – then a tech tilt can work.

You are willing to maintain a disciplined allocation

Adding TEC means you now have two positions to manage. You need to decide on a target allocation, rebalance periodically, and resist the urge to chase performance by shifting more into whichever fund is doing better at the moment. If you are the type of person who sets a plan and sticks to it, this is manageable. If you tend to tinker, it can be dangerous.

5. When Sticking with XEQT Alone Is the Better Choice

For the majority of Canadian investors, I believe XEQT alone remains the superior choice. Here is why:

Simplicity is an investment advantage

This is not just a nice-to-have. Simplicity directly improves your returns because it reduces the number of decisions you can get wrong. With XEQT alone, your entire investment strategy is: buy more XEQT. There is nothing to rebalance, no allocation to second-guess, no underperforming position to agonize over.

Every additional holding you add introduces decision points. Should I rebalance? Is my tech allocation too high now? Should I sell some TEC after that big run-up? Each of these moments is an opportunity to make a behavioral mistake that costs you money.

Diversification protects you from what you cannot predict

The technology sector has been the best-performing sector over the last decade. But sectors rotate. In the 2000s, tech was the worst-performing sector following the dot-com bust. Energy and commodities led instead. In the 1990s before the bust, everyone was certain that tech was different this time and that the old rules did not apply.

XEQT’s broad diversification means you always own whatever sector ends up leading next. You do not need to predict it. That is an enormous advantage that most people undervalue.

The behavioral edge

I’ll be honest – this is the one that matters most. The biggest risk to your long-term returns is not picking the wrong ETF. It is panicking during a downturn and selling at the worst possible time.

A portfolio that drops 11% in a bad year (XEQT in 2022) is much easier to hold than one that drops 25-35%. When your tech-heavy portfolio is down a third, you start reading headlines about “the end of the tech bubble” and “the new dot-com crash,” and suddenly selling feels like the responsible thing to do. With XEQT, the drawdowns are more modest and easier to ride out.

You already have meaningful tech exposure

As we covered in section 3, about 21-25% of XEQT is already in technology. That is not an underweight position by any historical standard. The only reason it feels like “not enough” is because tech has been the recent winner, and we tend to want more of whatever has been going up.

6. The Overlap Problem: What You Are Actually Adding

Here is something that surprised me when I first dug into it. When you hold XEQT and TEC together, the overlap is significant. You are not adding entirely new exposure – you are doubling up on companies you already own.

Quantifying the overlap

Let me walk through this with concrete numbers. Assume a portfolio of $50,000 in XEQT and $10,000 in TEC (an 83/17 split).

Before adding TEC (XEQT only, $50,000):

After adding $10,000 in TEC (combined $60,000 portfolio):

By adding TEC at just a 17% allocation, you have nearly doubled your exposure to the top tech names. Apple goes from 3.5% of your portfolio to 5.6%. NVIDIA goes from 2.8% to 4.3%.

Is that what you wanted? Maybe. But you should go in with your eyes open. You are not adding “tech exposure” as if it were something entirely missing from your portfolio. You are concentrating more heavily into companies you already own significant positions in.

The true “new” exposure from TEC

The genuinely new stocks that TEC adds – the ones you do not already own through XEQT – tend to be smaller international tech companies and some mid-cap names that fall outside XEQT’s top holdings. Companies like Shopify (as a larger position), ServiceNow, Palo Alto Networks, and some Asian semiconductor firms beyond TSMC.

This new exposure represents maybe 15-20% of TEC’s total weight. So of that $10,000 you put into TEC, roughly $1,500-$2,000 is genuinely new exposure, and $8,000-$8,500 is overlap with what you already own in XEQT.

That does not make it worthless. Increasing your weight in existing tech holdings is a deliberate tilt, and if tech continues to outperform, it will pay off. But it is important to understand what you are actually doing.

7. How to Pair TEC with XEQT If You Decide To

Alright, let’s say you have read everything above and you still want to add TEC. I respect that. Here is how I would approach it sensibly.

The 90/10 split (conservative tech tilt)

This is my preferred approach for most people. A 10% allocation to TEC is enough to give you a meaningful tech tilt without dramatically changing your portfolio’s risk profile.

With a 90/10 split on a $50,000 portfolio:

• Your tech exposure goes from about 21% to roughly 29%
• Your worst-case annual drawdown increases modestly (from about -11% to about -13.5% using 2022 numbers)
• Your portfolio’s MER increases from 0.20% to 0.215% (barely noticeable)

This is a tilt, not a transformation. You still have a broadly diversified portfolio. You still sleep well at night during corrections. But you have a slightly larger bet on tech continuing to outperform.

The 80/20 split (aggressive tech tilt)

This is as far as I would recommend anyone go. At a 20% TEC allocation, your technology exposure jumps to roughly 35% of your total portfolio. That is a substantial overweight – you are making a clear bet that tech will continue to outperform other sectors.

With an 80/20 split on a $50,000 portfolio:

• Your tech exposure jumps from about 21% to roughly 35%
• Your worst-case annual drawdown increases more noticeably (from about -11% to about -16% using 2022 numbers)
• Your portfolio’s MER increases to 0.23%

I’ll be honest: I would only recommend this for investors who genuinely understand the risk and have a time horizon of at least 15 years. If a 16% annual decline would cause you to sell, this allocation is too aggressive.

Rebalancing rules

Whatever split you choose, write it down and commit to rebalancing at least once a year. Here is a simple approach:

1. Pick a rebalancing date. I like January 1st because it is easy to remember, but any date works.
2. Check your allocation. If TEC has drifted more than 5 percentage points from your target (for example, your 10% TEC allocation has grown to 15%), rebalance.
3. Rebalance by directing new purchases. Instead of selling the outperformer, just put your new contributions entirely into the underperforming fund until your allocation is back on target. This avoids triggering capital gains in a taxable account.
4. Do not rebalance more than twice a year. More frequent rebalancing adds stress and transaction costs without improving returns.

Account placement considerations

If you hold investments across multiple account types (TFSA, RRSP, and non-registered), think about where to place TEC:

• TFSA: Good for TEC because any capital gains are tax-free, and TEC’s growth potential is its main appeal.
• RRSP: Also fine for TEC. US foreign withholding tax on dividends is recoverable in an RRSP, though TEC’s dividend yield is so low this barely matters.
• Non-registered: Least ideal for TEC because its gains are primarily capital appreciation, which will be taxable when you sell. But if this is your only option, it still works.

For most people keeping it simple, just hold both XEQT and TEC in the same TFSA and call it a day.

8. What About the Long-Term Case for Tech?

I want to address the elephant in the room. Part of the reason people want to add TEC is a belief that technology is not just another sector – it is THE sector of the future. And honestly, there is a reasonable case for this.

Technology companies are:

• Eating every other industry. Banking is becoming fintech. Healthcare is becoming biotech. Retail is becoming e-commerce. The line between “tech company” and “regular company” keeps blurring.
• Generating enormous cash flows. The largest tech companies are among the most profitable businesses in human history. Apple alone generates more free cash flow than most countries’ GDP.
• Investing heavily in AI. The artificial intelligence revolution is still in its early innings, and the companies best positioned to benefit are overwhelmingly in TEC’s portfolio.

But here is the counterargument, and it is an important one:

Markets are forward-looking. All of those bullish facts about technology? Every other investor knows them too. The reason tech stocks trade at premium valuations is because the market has already priced in much of this expected growth. When you buy TEC at current prices, you are not buying a secret. You are buying a well-known thesis at a price that already reflects widespread optimism.

The history of sector investing is littered with periods where the “obvious” winner turned out to be a mediocre investment precisely because everyone piled in and drove valuations to unsustainable levels. The dot-com bubble is the classic example, but it has happened with energy, financials, and real estate in different decades too.

XEQT’s market-cap weighting already automatically increases your tech allocation as tech companies grow. If Apple’s market cap doubles over the next decade, your XEQT exposure to Apple will naturally increase. You get the tech upside without making an explicit bet.

9. Final Verdict: Should You Add TEC to Your XEQT Portfolio?

Here is my honest take, the same thing I told my friend when he texted me that screenshot.

For most Canadian investors, XEQT alone is the better choice. It is simpler, cheaper, more diversified, and already gives you meaningful technology exposure. The behavioral advantages of a single-ETF portfolio are real and underappreciated. You will never need to rebalance, never agonize over whether your tech allocation is too high or too low, and never be tempted to sell one position to chase performance in another.

If you want a tech tilt, TEC is a reasonable way to get it. It is a well-constructed, low-cost ETF from a reputable provider. A 90/10 XEQT/TEC split gives you a modest tech overweight without dramatically changing your portfolio’s risk profile. I would cap TEC at 20% of your portfolio maximum.

But ask yourself the hard question first: Are you adding TEC because you have a genuine, long-term investment thesis? Or are you adding it because tech has been the recent winner and you have FOMO? If it is the second one – and be really honest with yourself here – you are better off sticking with XEQT.

I ended up telling my friend the same thing I will tell you: if you have to ask whether you should add TEC, you probably do not need it. The fact that you are even considering it means XEQT’s built-in tech exposure is working exactly as intended, even if it does not feel exciting enough.

The best portfolio is not the one that maximizes theoretical returns. It is the one you actually stick with through the inevitable downturns. For most people, that is a single ETF that does everything for you.

The quick decision framework

Ask yourself these three questions:

1. Do I have a time horizon of 15+ years? If no, stick with XEQT alone.
2. Could I hold TEC through a 35% decline without selling? If no, stick with XEQT alone.
3. Am I adding TEC because of a long-term thesis, not recent performance? If you are chasing returns, stick with XEQT alone.

If you answered yes to all three, a 90/10 XEQT/TEC split is a reasonable approach. Keep it simple, rebalance once a year, and do not overthink it.

This post is for informational purposes only and does not constitute financial advice. All investment decisions should be based on your own research and consideration of your personal financial situation. ETF returns and characteristics described are based on data available as of early 2026 and are subject to change.