XEQT vs GEQT: iShares' all-equity ETF versus its ESG-screened sibling

Short answer: XEQT and GEQT are both iShares all-equity, globally diversified, one-ticker portfolio ETFs. GEQT applies an ESG screen to the same building blocks XEQT uses, and charges about 5 basis points more for it (0.25% vs roughly 0.20%). They are the same idea, run by the same manager, in the same wrapper. The screen changes what you own more than how it tends to perform. If ESG matters to you, GEQT is a low-friction way to express it. If it doesn’t, XEQT does the same job for less.

XEQT gets all the airtime. It is probably the single most recommended ETF in Canadian DIY circles, the default answer to “I have $5,000, what do I buy.” GEQT is the quieter cousin that shows up when someone asks the follow-up: “is there a version that screens out the stuff I don’t want to own?” There is, and it comes from the same shop.

So “XEQT vs GEQT” is a fair question. It just has a smaller answer than most comparison threads imply, because these two funds are far more alike than different.

This is not financial advice. I’m sharing what I’ve learned from my own research, and your situation might be different from mine. Fund compositions, MERs, and allocations change over time. Always check the current details before making any decisions.

What each one is

Both are ETFs managed by iShares (BlackRock) Canada, listed on the TSX, trading in Canadian dollars. Both are structured as a fund-of-funds: one ticker that holds a basket of underlying iShares index ETFs, rebalanced back to target weights. Both are 100% equity, which means no bond sleeve and full exposure to the ups and downs of the stock market.

One structural difference is worth knowing up front. XEQT spreads across four regions: U.S., Canada, international developed, and a small emerging-markets sleeve. GEQT holds three underlying ESG Advanced funds covering the U.S., Canada, and international developed (EAFE) only, with no dedicated emerging-markets component. So GEQT is both ESG-screened and developed-markets-only.

XEQT is the iShares Core Equity ETF Portfolio. It uses the standard, broad cap-weighted index components, owning the global market roughly in proportion to company size.

GEQT is the iShares ESG Equity ETF Portfolio. It uses the ESG-screened versions of those same index components. The screen excludes tobacco, controversial weapons, companies caught in severe ESG controversies, and the lowest ESG-rated companies in each sector. Everything else about the structure is the same.

The cleanest way to think about it: GEQT is XEQT with a filter applied to the underlying holdings, plus a small fee for running that filter.

The fee

This is the most concrete difference, so it’s worth pinning down first.

Five basis points is a small premium. On a $100,000 portfolio it’s about $50 a year. It isn’t zero, and over decades small fee differences compound, but this is not the kind of gap that should drive the decision on its own. The fee here is really a proxy for one question: do you want the ESG screen or not? If you do, 5 bps is a reasonable price. If you’re indifferent, there’s no reason to pay it.

What the ESG screen actually changes

This is the part that matters, and it’s the part most “XEQT vs GEQT” comparisons skip past.

The iShares ESG screen is what’s sometimes called a “best-in-class” or exclusionary screen, not a deep-green or impact strategy. It does two things: it excludes certain categories outright (tobacco, controversial weapons, thermal coal and oil sands above thresholds, severe controversies), and it tilts away from the lowest ESG-rated companies within each sector while keeping the sector roughly intact.

The practical effect is more subtle than people expect. It is not “no energy companies” or “only solar stocks.” It’s closer to “the broad market, minus the worst-rated names in each corner of it.” Sector weights stay broadly similar to the unscreened index. The number of individual holdings drops, and a handful of names you’d find in XEQT won’t be in GEQT.

So the honest framing is: the screen changes what you own at the margins. It does not turn an all-equity global portfolio into something exotic. Anyone expecting a dramatic difference in either holdings or returns is likely to be surprised by how close the two funds behave.

XEQT vs GEQT side-by-side

A couple of things stand out. The geographic splits are close but not identical: GEQT runs a touch heavier on Canada (around 29% versus XEQT’s 24%), which is typical of how iShares builds its Canadian wrappers. And the size gap is large. XEQT is one of the biggest ETFs in the country; GEQT is a fraction of its size. That doesn’t make GEQT fragile (it’s a BlackRock fund tracking liquid index components), but XEQT’s scale means tighter spreads and more trading volume if either of those matters to you.

If you want the standalone picture of either fund before weighing them against each other, the GEQT ETF guide walks through exactly what GEQT holds and how the ESG ladder works, and the just buy XEQT guide covers why XEQT became the default in the first place.

Do they perform differently?

Over the time both have existed, the two have tracked closely. That’s expected: same manager, same fund-of-funds structure, same broad market, with the screen only nudging holdings at the edges.

The honest caveat is that an ESG screen can cause performance to diverge in either direction over shorter stretches. If the excluded sectors (say, certain energy or tobacco names) have a strong run, a screened fund will lag the unscreened one for that period. If those same sectors lag, the screened fund looks better. Neither outcome tells you the screen is “working” or “broken.” It just means you own a slightly different slice of the market.

So the right expectation is: roughly market returns, with small tracking differences versus XEQT that come and go. Don’t pick GEQT expecting higher returns from the screen, and don’t avoid it expecting a big drag. The performance case for or against is close to a wash. The screen is a values decision, not a returns decision.

Which one fits

This is observation, not recommendation.

XEQT fits the investor who wants the broadest, cheapest, simplest all-equity exposure and doesn’t have a strong preference about screening out particular industries. It’s the lower-fee default, the larger and more liquid fund, and the one most of the DIY community is already holding. If you have no specific ESG conviction, XEQT is the cleaner choice and you don’t need to think about it further.

GEQT fits the investor who wants the same one-ticker, all-equity, globally diversified setup but would rather not hold tobacco, controversial weapons, and the worst ESG-rated companies, and is fine paying about 5 bps for that filter. The key is that the preference should be real and yours. “I’d genuinely rather not own these things” is a good reason. “ESG sounds responsible so I guess I should” tends not to survive the first year the screen happens to lag.

If you’re choosing between the two, decide the values question first (do I want the screen?), and let the fee follow from that. The cost gap is small enough that it shouldn’t override a genuine preference in either direction.

A related thought worth raising: whichever you pick, it helps to actually know what’s inside it. Both funds are fund-of-funds holding hundreds of underlying companies, and “I own XEQT” or “I own GEQT” is easy to say without ever looking through to the holdings. If you like understanding what you actually own, that look-through is worth doing once.

Frequently asked questions

What is the difference between XEQT and GEQT?

Both are iShares all-equity, globally diversified, one-ticker portfolio ETFs built as a fund-of-funds. XEQT (iShares Core Equity ETF Portfolio) uses standard cap-weighted index components. GEQT (iShares ESG Equity ETF Portfolio) uses the ESG-screened versions of those same components, excluding tobacco, controversial weapons, severe ESG controversies, and the lowest ESG-rated companies. GEQT charges about 5 basis points more for the screen.

Is GEQT just XEQT with an ESG filter?

Essentially, yes. They share the same manager, the same fund-of-funds structure, the same 100% equity global mandate, and similar geographic exposure. GEQT applies an ESG screen to the underlying holdings and charges a slightly higher MER. The screen changes which individual companies are held at the margins, not the overall character of the fund.

Which has the lower fee, XEQT or GEQT?

XEQT. Its MER is roughly 0.20% after BlackRock’s December 2025 fee cut, versus 0.25% for GEQT. The 5 basis point difference is about $50 a year on a $100,000 portfolio and covers the cost of GEQT’s ESG screening overlay.

Does GEQT perform worse than XEQT?

Not in any consistent way. Because they hold nearly the same market, returns track closely over time, with small differences in either direction over shorter periods depending on how the screened-out sectors do. The ESG screen is best understood as a values decision rather than a way to raise or lower expected returns.

Can I hold XEQT or GEQT in a TFSA or RRSP?

Yes. Both trade on the TSX in Canadian dollars and are eligible in all standard Canadian registered accounts: TFSA, RRSP, FHSA, RESP, RDSP, RRIF, and LIRA, as well as non-registered accounts. Because both hold foreign equities, the foreign-income slice is most tax-efficient inside a registered account.

Should I switch from XEQT to GEQT?

If you already hold XEQT and it’s doing what you wanted, the existence of GEQT isn’t a reason to switch. In a non-registered account, swapping can trigger a taxable capital gain for very little change in underlying exposure. The only good reason to move is a genuine, lasting preference for the ESG screen.

Bottom line

XEQT and GEQT are two versions of the same iShares idea: a single-ticker, all-equity, globally diversified portfolio. GEQT adds an ESG screen for about 5 basis points; XEQT leaves it off and costs a little less. They behave similarly because they hold nearly the same market. So the choice isn’t really about returns or even cost, it’s about whether you want the screen. Decide that, and the rest follows. If you don’t have a strong view, XEQT is the simpler, cheaper default. If you do, GEQT is a clean way to act on it.