The 100% Equity ETF Battle: TD’s New TEQT vs. VEQT, XEQT, and ZEQT (A Deep-Dive Analysis)

Section 1: The "One-Click" Portfolio: A New Giant Enters the Ring

For the past several years, asset-allocation exchange-traded funds (ETFs) have revolutionized the way Canadians invest. These "all-in-one" or "one-click" solutions offer a pre-built, globally diversified, and automatically rebalanced portfolio in a single fund.1 They have democratized sophisticated portfolio management, making it accessible to any DIY investor with a discount brokerage account.

Into this established arena, a new giant has entered the ring. On April 15, 2025, TD Asset Management Inc. (TDAM) officially launched the TD All-Equity ETF Portfolio (TEQT) on the Toronto Stock Exchange (TSX).2 This is a significant development. TDAM, backed by over 30 years of investment experience 2 and the institutional power of one of Canada's largest banks, has thrown its hat into the 100% equity space, offering a "simple and efficient all-in-one equity solution".2

But with highly popular, multi-billion dollar products already dominating this field—namely Vanguard's VEQT, iShares' XEQT, and BMO's ZEQT—the launch of TEQT raises a critical question: Is this just a "me-too" product designed to capture assets from TD's existing clients, or does it offer a genuinely different strategy?

This report will conduct a rigorous, "look-through" analysis of TEQT's structure. It will move past the launch-day press releases and compare its internal mechanics, costs, and, most importantly, its precise geographic and sector allocations against its three main rivals. As this deep dive will show, TEQT is not a copy; it is a fundamentally different choice, built on a specific and bold strategic bet.

For investors new to this concept, our guide on(https://www.investingforcanadians.ca/what-is-an-asset-allocation-etf/) provides an excellent starting point.

Section 2: Meet the New Contender: TD All-Equity ETF Portfolio (TEQT)

Before comparing it to its peers, it is essential to understand what TEQT is and how it is built.

The Fund Vitals

Full Name: TD All-Equity ETF Portfolio 4
Ticker Symbol: TEQT 4
Inception Date: April 15, 2025 2
CIFSC Category: Global Equity 5
Risk Rating: Medium 5
Distributions: Quarterly 5

The Investment Strategy

TEQT's stated objective is to provide long-term capital growth.3 It is designed as an all-in-one solution 2 that achieves this by investing primarily in units of other equity-oriented ETFs, specifically those managed by TDAM.4

The portfolio managers, Laurie-Anne Davison and Alex Sandercock 5, are not making active stock-picking decisions. Instead, they adhere to a strategic asset mix that provides 100% exposure to equities.4 The fund is rebalanced on a quarterly basis to bring the portfolio's allocations back to their desired geographic targets.4

A Note on "Active" vs. "Passive"

There has been some confusion regarding TEQT's management style. Some third-party data providers list the fund as "Actively managed".7 However, official TD product documents clearly state the "Management Style" is "Passive".5

This is a common point of confusion with all-in-one funds. The underlying ETFs that TEQT holds are passive, index-tracking funds.4 The TEQT portfolio itself is passively managed because its advisers are not making tactical market calls; they are simply adhering to a fixed, strategic benchmark. Therefore, for an investor's purposes, it should be considered a passive, strategic-allocation ETF, just like its peers.

The TEQT Blueprint and Benchmark

The structure of TEQT is elegant in its simplicity. While its competitors hold four, five, or even six underlying funds, TEQT holds only three 8:

TD U.S. Equity Index ETF (~54.8% weight)
TD Canadian Equity Index ETF (~25.5% weight)
TD International Equity Index ETF (~19.6% weight)

This 3-fund "fund-of-funds" structure is dictated by the ETF's own benchmark, which is the most critical piece of data for understanding its long-term strategy 5:

55% Solactive US Large Cap CAD Index
25% Solactive Canada Broad Market Index
20% Solactive GBS Developed Markets ex North America Large & Mid-Cap CAD Index

This benchmark reveals the fund's defining characteristic. The allocation is not to a "total world" index; it is to a "Developed World" index. There is a 0% allocation to Emerging Markets. This is not an oversight but a deliberate, structural decision that makes TEQT a unique offering in the Canadian market. This exclusion is what allows for the fund's significant overweight to U.S. equities, a point we will analyze in detail.

Section 3: Analysis Part 1: The New War on Fees

When TEQT launched, its most heavily marketed feature was its low cost.2 TDAM positioned it as a "lower-cost solution" 2, and the numbers backed this up.

TEQT was launched with a Management Fee of 0.15% 5 and a Management Expense Ratio (MER) of 0.17%.4 This MER (as of June 30, 2025) successfully undercut all of its primary competitors, which, at the time, featured MERs of:

XEQT (iShares): 0.20% 10
ZEQT (BMO): 0.20% 12
VEQT (Vanguard): 0.24% 13

This 3 to 7 basis point advantage was a clear shot across the bow, establishing TEQT as the new low-cost leader in the 100% equity category.

However, the "Big Bank" competition did not take this lying down. In a move that demonstrates the intensity of the Canadian ETF fee war, BMO announced a change to ZEQT. Effective June 6, 2025—less than two months after TEQT's debut—BMO reduced ZEQT's management fee to 0.15%.15 This move brings ZEQT's adjusted MER down to 0.17% 15, a figure identical to TEQT's.

This development is critical: TD's primary marketing advantage was neutralized by its main bank-owned rival almost immediately. The fee war between TEQT and ZEQT is effectively a stalemate. While both remain cheaper than XEQT and VEQT, the choice between the two "Big Bank" options can no longer be made on cost. The decision must be based on what is inside the portfolio.

This fee compression is a massive win for investors. To see why, our guide on(https://www.investingforcanadians.ca/how-etf-mers-impact-your-long-term-returns/) explains the long-term impact of even small cost differences.

Table 1: The All-Equity ETF Fee & Spec Showdown (Data as of Q4 2025)

TickerFund NameManagerInceptionMgmt. FeeMERTEQTTD All-Equity ETF PortfolioTDAMApr 15, 20250.15%0.17%ZEQTBMO All-Equity ETFBMO GAMJan 24, 20220.15%0.17%*XEQTiShares Core Equity ETF PortfolioBlackRockAug 7, 20190.18%0.20%VEQTVanguard All-Equity ETF PortfolioVanguardJan 29, 2019N/A0.24%

*ZEQT's MER is an adjusted figure reflecting the fee reduction effective June 6, 2025.15

Section 4: Analysis Part 2: Under the Hood - Structure & Complexity

Not all "all-in-one" ETFs are built alike. The number of underlying funds they hold reveals a philosophical difference between simplicity and granularity.

TEQT (The Simplest): As noted, TEQT holds just 3 funds—one each for the U.S., Canada, and International Developed markets.8
VEQT (The Standard): Vanguard's model holds 4 funds—U.S. Total Market, Canada All Cap, Developed ex-North America, and Emerging Markets.14
XEQT (The Total-Market Model): iShares' model holds 5 funds—it uses two funds for the U.S. market, plus funds for Canada, EAFE (Developed ex-NA), and Emerging Markets.10
ZEQT (The Granular Model): BMO's fund is the most complex, holding 6 funds.17

This difference in fund count is not trivial; it reveals a different approach to portfolio construction, particularly in the U.S. sleeve.

A closer look at ZEQT's holdings shows why it needs six funds: in addition to its primary holdings for the S&P 500 (large-cap), Canada, EAFE, and Emerging Markets, it also carves out dedicated, separate allocations for the BMO S&P US Mid Cap Index ETF (2.50%) and the BMO S&P US Small Cap Index ETF (1.17%).17

This construction indicates a deliberate, albeit small, "factor tilt" towards smaller-cap stocks. Academic research has long identified a "size premium," suggesting that smaller companies may (at times) outperform larger ones over the long term. ZEQT's managers have built this academic principle directly into the fund.

TEQT's strategy is the polar opposite. Its U.S. allocation tracks a "US Large Cap" index.5 This prioritizes simplicity and means its performance will be overwhelmingly dominated by U.S. mega-cap stocks. VEQT and XEQT, which use "Total U.S. Market" funds 10, sit in the middle, capturing the entire market (large, mid, and small) in a single, cap-weighted holding.

Ultimately, TEQT is the choice for maximum simplicity. ZEQT is the choice for investors who appreciate a more granular, factor-aware construction.

Table 2: The "Fund-of-Funds" Blueprint (Data as of Q4 2025)

TickerUnderlying Funds & Weights (Simplified)Total #TEQTTD U.S. Equity (~55%), TD Canadian Equity (~25%), TD International Equity (~20%)3VEQTVanguard U.S. Total Market (~45%), Vanguard FTSE Canada (~30%), Vanguard Dev. ex-NA (~17%), Vanguard Emerging Markets (~7%)4XEQTiShares U.S. Total Market (~44%), iShares S&P/TSX (~25%), iShares MSCI EAFE (~25%), iShares Emerging Markets (~5%)5ZEQTBMO S&P 500 (~46%), BMO S&P/TSX (~25%), BMO MSCI EAFE (~17%), BMO Emerging Markets (~8%), BMO US Mid Cap (~2.5%), BMO US Small Cap (~1.2%)6

Section 5: Analysis Part 3: Geographic Allocation – The Critical Difference

This section contains the most important analysis for any potential investor. The fee war is largely a sideshow. The real difference between these ETFs is where in the world they invest your money. These are not minor tracking errors; they are fundamental, multi-billion-dollar strategic decisions.

Before diving in, it is worth addressing the "home bias" in all these funds. Investors often wonder why a "global" ETF holds 25-30% in Canada, a country that makes up only ~3% of the global market. For a detailed explanation, our guide on(https://www.investingforcanadians.ca/canadian-home-bias-risk-or-reward/) is an essential read.

The "Home Bias" Spectrum

The first major difference is the size of that Canadian allocation.

Vanguard's VEQT is the clear outlier, with a ~30.6% allocation to the Vanguard FTSE Canada All Cap Index ETF.14 This is the fund for investors who want a pronounced overweight to Canadian banks, energy, and materials.
TEQT, XEQT, and ZEQT have all converged on a "standard" ~25% Canadian bias.5 This makes VEQT the high-bias option, while the other three are interchangeable on this specific metric.

The U.S. Allocation: TEQT's Big Overweight

This is where TEQT's strategy becomes clear. Its benchmark targets a 55% allocation to U.S. equities 5, a target reflected in its ~54.8% holding.8

This is a significantly higher U.S. weighting than any of its peers:

ZEQT: ~49.4% 17
VEQT: ~45.4% 14
XEQT: ~43.5% 10

TEQT is, by a wide margin, the most U.S.-centric portfolio in this category. It represents a concentrated bet on the continued outperformance of the U.S. stock market relative to the rest of the world.

The 0% Emerging Markets Allocation: The Defining Feature

How does TEQT "afford" to hold 5-11% more U.S. stocks than its rivals? The answer lies in the asset class it excludes entirely: Emerging Markets (EM).

As established, TEQT's benchmark and holdings show a 0% allocation to EM.5

This is in stark contrast to its "total world" competitors, which all carry significant EM weight:

ZEQT: 8.34% held in the BMO MSCI Emerging Markets Index ETF.17
VEQT: 7.27% held in the FTSE Emerging Markets All Cap Index ETF.14
XEQT: ~5.2% held in the iShares MSCI Emerging Market ETF.10

This creates the fundamental philosophical divide in the all-equity space.

The Case FOR TEQT (Pro-Exclusion): An investor might choose TEQT's model to deliberately reduce portfolio volatility, as EM equities are historically more volatile than developed markets. Others may wish to avoid the specific geopolitical and governance risks associated with certain large EM countries, such as China.
The Case AGAINST TEQT (Pro-"Total World"): An investor choosing VEQT, XEQT, or ZEQT is buying a "total world" portfolio. They are capturing the long-term growth potential of the world's fastest-growing economies, including China, India, Taiwan, and Brazil. By omitting this entire asset class, TEQT is making a massive active bet by omission. It is not a true "global" fund; it is a "Developed World" fund.

Table 3: Look-Through Geographic Allocation Showdown (Data as of Q4 2025)

TickerCanadaUnited StatesDeveloped (ex-NA)Emerging MarketsTEQT~25.5%~54.8%~19.6%0.0%ZEQT~24.7%~49.4%~17.5%*~8.3%VEQT~30.6%~45.4%~16.7%~7.3%XEQT~25.2%~43.5%~25.9%~5.2%

Section 6: Analysis Part 4: Look-Through Sector Exposure

Given the significant differences in geographic allocation, one would expect to see a wildly different final "sector recipe." The reality, however, is surprisingly mundane.

All four ETFs are, unsurprisingly, dominated by the Technology and Financials sectors. This is a simple function of the modern global economy: the U.S. market is dominated by Technology, and the Canadian market is dominated by Financials. When these are the two largest country allocations in every fund, the outcome is similar.

TEQT Sector Data: ~23.4% Technology, ~20.3% Financials, ~11.0% Industrials.8
ZEQT Sector Data: ~22.6% Info Technology, ~20.9% Financials, ~11.2% Industrials.17
VEQT Sector Data: ~24.2% Technology, ~20.6% Financials, ~12.0% Industrials.14
XEQT Sector Data: ~22.3% Technology, ~20.4% Financials, ~12.1% Industrials.18

The most striking takeaway is this similarity. Despite TEQT's massive U.S. overweight and 0% EM allocation, its final sector weights are nearly identical to its peers. The explanation is that the markets TEQT underweights (Developed ex-NA and EM) also have heavy Technology exposure (e.g., ASML in the Netherlands, TSMC in Taiwan, SAP in Germany). Likewise, its 0% EM allocation means less exposure to Basic Materials, but its higher U.S. allocation seems to balance this out.

The conclusion here is simple: an investor cannot use one of these funds to "overweight" or "underweight" Technology or Financials. All four are, by their very nature, heavily exposed to these two dominant sectors. The geographic allocation remains the primary, and most meaningful, differentiator.

Table 4: Look-Through Sector Allocation (Data as of Q4 2025)

SectorTEQTZEQTVEQTXEQTTechnology~23.4%~22.6%~24.2%~22.3%Financials~20.3%~20.9%~20.6%~20.4%Industrials~11.0%~11.2%~12.0%~12.1%Cons. Discretionary~8.6%~9.0%~11.2%~8.6%Health Care~7.2%~6.5%~6.1%~7.0%Energy~6.5%~6.3%~7.0%~6.3%Basic Materials~5.9%~6.7%~7.1%~6.6%

Section 7: How to Choose: An Expert's View on the "Right" ETF for You

There is no such thing as the "best" all-in-one ETF. There is only the "best" ETF for an investor's specific thesis. Based on this analysis, here is how to choose.

The Case for TEQT (The U.S. Optimist / EM Skeptic)

An investor is the ideal candidate for TEQT if they:

Are highly cost-conscious, desiring the rock-bottom 0.17% MER.4
Are a TD client and prefer the convenience of staying within the TDAM ecosystem.9
Crucially: Believe the U.S. market (at a 55% allocation 5) will continue to outperform the rest of the world.
And: Specifically want to avoid Emerging Markets, either to reduce volatility or to eliminate geopolitical risk from their portfolio.

The Case for ZEQT (The "Factor-Aware" Total-World Investor)

An investor is the ideal candidate for ZEQT if they:

Are also highly cost-conscious and want the same 0.17% MER as TEQT.15
Want a true "total world" portfolio that includes a significant (8.3%) allocation to Emerging Markets.17
Appreciate the slightly more complex, "factor-aware" construction that includes dedicated holdings for U.S. mid-cap and small-cap stocks.17

The Case for VEQT (The "Canada-Bull" / Total-Market Purist)

An investor is the ideal candidate for VEQT if they:

Are a Vanguard loyalist who believes in their pure, cap-weighted, "total market" philosophy.
Are willing to pay a higher 0.24% MER 13 for this specific structure and brand.
Crucially: Believe in a stronger Canadian Home Bias and actively want the 30% allocation to Canadian stocks 14, the highest in the category.

The Case for XEQT (The "Standard" with a Global-EAFE Tilt)

An investor is the ideal candidate for XEQT if they:

Want the "standard" 25% Canadian home bias 10 and a "total world" portfolio that includes Emerging Markets.11
Are comfortable with its competitive 0.20% MER.10
Subtly: Want the highest allocation to Developed ex-North America (EAFE region: Europe, Japan, Australia) at ~25.9% (see Table 3).

Once an investor has made their choice, the next step is implementation. Our guide,(https://www.investingforcanadians.ca/how-to-build-a-one-etf-portfolio-in-your-rrsp-or-tfsa/), provides a step-by-step walkthrough.

Section 8: Final Verdict: A Welcome, Cheaper, but Different Choice

The launch of the TD All-Equity ETF Portfolio (TEQT) is an unambiguously positive development for Canadian investors.2 It brings a trusted "Big 6" bank brand to the 100% equity ETF space, and its aggressive 0.17% MER 4 has already had a positive deflationary effect on the market, forcing a key competitor, BMO, to match its price.15

However, the fee is no longer the story. The real story is the allocation.

TEQT is not a "total world" ETF. It is a "Developed World" ETF. It is defined by two major strategic bets: a massive 55% overweight to U.S. stocks 5 and a 0% allocation to all Emerging Markets.5

This makes TEQT a fundamentally different product. It is not "better" or "worse" than VEQT, XEQT, or ZEQT. It is a different choice for an investor with a different thesis. Its launch is a welcome addition, as it finally provides a simple, low-cost option for investors who actively want to exclude Emerging Markets from their global portfolio.

For investors who believe "global diversification" means owning everything—capturing the growth of the entire world, including its emerging economies—the "total world" models from Vanguard, iShares, and BMO remain the standards. As always, the "best" investment is the one whose strategy is understood, believed in, and can be held for the long term.