XEQT vs VEQT vs XGRO: which all-in-one ETF is right for you?

If you’ve spent more than five minutes on r/PersonalFinanceCanada, you’ve seen the thread. Someone posts “I’m ready to start investing, should I buy XEQT, VEQT, or XGRO?” and within an hour there are forty replies, half of them contradicting each other, and at least one person saying “it doesn’t matter, just pick one.”

That last person is mostly right. But “it doesn’t matter” isn’t very satisfying when you’re about to put your money somewhere. So here’s what’s actually different between these three, what’s not, and how to think about the choice.

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.

The quick version

All three are all-in-one ETFs designed to give you broad global diversification in a single purchase. Two of them are practically identical. The third is meaningfully different.

Fund	Provider	Allocation	MER (approx.)
XEQT	iShares (BlackRock)	100% equities	around 0.20%
VEQT	Vanguard	100% equities	around 0.24%
XGRO	iShares (BlackRock)	80% equities, 20% bonds	around 0.20%

XEQT and VEQT both hold 100% stocks across Canada, the U.S., international developed markets, and emerging markets. XGRO holds that same mix of global stocks but adds a 20% allocation to bonds. That bond allocation is the real dividing line here.

XEQT vs. VEQT: a debate that doesn’t matter much

This is the comparison that fills the most Reddit threads and generates the least useful insight. Both funds do essentially the same thing. They hold thousands of stocks across the globe, they rebalance automatically, and they cost very little to own.

The differences are real but minor. XEQT and VEQT use different underlying funds to build their portfolios, and they weight geographic regions slightly differently. VEQT tends to hold a bit more in international developed markets and a bit less in Canada compared to XEQT. But these are small tilts, not fundamentally different strategies.

The MER gap between the two is roughly 0.04%. On a $50,000 portfolio, that’s about $20 per year. On $100,000, it’s $40. It’s not nothing over decades of compounding, but it’s also not a decision that should keep you up at night. And MERs can change. The gap could narrow or reverse in the future.

If you already hold one of them, there’s no compelling reason to switch to the other. If you’re choosing for the first time, pick whichever one feels right. Maybe you prefer iShares. Maybe you like Vanguard’s philosophy. Maybe one of them is easier to buy at your brokerage. Any of those reasons is fine. The important thing is that you buy one and keep contributing to it.

XGRO: the one that’s actually different

The interesting comparison isn’t XEQT versus VEQT. It’s either of those versus XGRO.

XGRO holds roughly 80% stocks and 20% bonds. That bond allocation changes the character of the fund in a meaningful way. Bonds tend to be less volatile than stocks. They don’t rise as much in good years, but they also don’t fall as hard in bad ones. A fund with 20% bonds will generally be smoother to hold through market downturns.

The trade-off is straightforward. Over long time horizons, stocks have historically outperformed bonds. So a 100% equity fund like XEQT or VEQT is expected to deliver higher long-term returns than an 80/20 fund like XGRO. The word “expected” is doing a lot of work in that sentence, because nothing is guaranteed, but the historical pattern is well established.

So why would anyone choose XGRO? Because expected returns only matter if you actually stick with the plan.

Risk tolerance is the real question

Here’s the thing about 100% equity funds. They can drop 30% or more in a bad year. That’s not hypothetical. It’s happened. And when it happens, every investing forum fills up with people asking whether they should sell everything and move to cash. Some of them do, and they lock in their losses right before the recovery.

If you’re the kind of person who can watch your portfolio drop by a third and keep buying, 100% equities makes sense for you. If you’re not sure, or if you know that kind of drop would make you panic, XGRO’s bond allocation acts as a buffer. Your portfolio still drops, but less violently. And a slightly lower return that you actually hold through the bad times will beat a higher return that you abandon halfway.

This isn’t about being brave or weak. It’s about being honest with yourself. I covered this in more detail in the XEQT deep dive, but the short version is: the best fund is the one you’ll actually hold for decades.

There’s also a time horizon component. If you’re in your twenties or thirties with decades until retirement, you have time to recover from downturns, which makes 100% equities easier to justify. If you’re closer to needing the money, some bond exposure can help you avoid selling stocks at the worst possible time.

What about VGRO?

Worth mentioning: VGRO is Vanguard’s version of the 80/20 split. Same idea as XGRO, different provider. The XEQT-vs-VEQT logic applies here too. XGRO and VGRO are close enough that the choice between them is mostly preference.

The Canadian Couch Potato connection

If you’ve read the Canadian Couch Potato blog (and if you’re researching all-in-one ETFs, you probably have), you’ll know that these funds are essentially the evolution of the model portfolios that site has recommended for years. The old approach was to buy three or four separate index funds and rebalance them yourself. All-in-one ETFs do that automatically for you, in a single purchase, at a very low cost.

The investing philosophy is the same. Buy broadly, keep costs low, stay the course. The wrapper just got simpler.

Just pick one

I know that’s unsatisfying. You came here hoping for a clear winner. But the honest answer is that the difference between XEQT and VEQT is too small to matter, and the difference between those and XGRO comes down to how you personally handle volatility.

If you want 100% equities and you’re comfortable with the ups and downs, XEQT or VEQT will serve you well. If you want a bit of a cushion, XGRO or VGRO will do the job. Both approaches are sound.

What matters far more than which fund you pick is whether you keep contributing to it. Regular contributions, over years and decades, through good markets and bad ones, is what actually builds wealth. The MER differences, the geographic weighting differences, the bond allocation, all of these are small variables compared to the simple question of whether you show up and invest consistently.

Don’t let the perfect choice become the enemy of a good one. Pick a fund, set up your contributions, and move on with your life. You can always revisit the decision later if your circumstances change. But waiting to invest while you analyze the third decimal place of an MER is costing you more than any of these funds ever will.

If you want to understand more about how to choose ETFs in general, why fees matter so much over time, or how to build a portfolio that doesn’t need babysitting, those guides go deeper.