Do you have above-average risk tolerance and are comfortable with the ups and downs of the stock market? An all-equity ETF like ZEQT could be your perfect portfolio. And this ZEQT review will help you decide if it’s right for you.
As you might know, “the higher the risk, the higher the returns” is one of the golden rules of investing. However, with a diversified all-equity ETF, you can earn high returns by spreading your investments across thousands of companies.
And this is exactly what the ZEQT portfolio helps you achieve.
In this ZEQT review, I explain everything you need to know about the BMO ETF including its asset allocation, returns, pros and cons, alternatives and more.
Overview of ZEQT
Below is a quick overview of the ZEQT key facts and characteristics as of the time of March 6, 2023.
| Inception date | January 17, 2022 |
| ETF name | BMO All-Equity ETF |
| Fund ticker | ZEQT |
| Portfolio manager | BMO Global Asset Management |
| Asset allocation | 99.94% on stocks and 0.16% on cash and cash equivalents |
| Exchange | Toronto Stock Exchange (TSX) |
| Eligibility | TFSA, RRSP, RRIF, RESP, DPSP |
| Risk level | Medium |
| Management fee | 0.18% |
| MER | 0.20% |
| Distribution yield | 2.49% |
| Distribution frequency | Quarterly |
What is ZEQT?
BMO All-Equity ETF Portfolio (ZEQT) is a new all-equity ETF from BMO that was launched on January 17, 2022. The ETF is managed by BMO Global Asset Management and is traded on the Toronto Stock Exchange with the ticker symbol “ZEQT”.
As an all-equity portfolio, ZEQT invests 100% of funds in equity across different markets with the objective of long-term capital growth. This makes the portfolio suitable for investors with high-risk tolerance looking to invest in a diversified equity portfolio.
ZEQT Investment Objective
The investment objective of ZEQT is to provide equity growth and long-term capital growth to its investors.
To this end, the portfolio manager seeks to invest 100% of funds in global equity ETFs and rebalances them quarterly.
The ETF is also diversified across different markets with the US and Canadian markets having a larger weighting in the portfolio.
ZEQT Assets Allocation
As of March 3, 2023, ZEQT is invests 99.94% on stocks and 0.16% on cash and cash equivalents d in equities.
With this allocation, the ETF proves to be a full-fledged all-equity portfolio compared to similar portfolios that allocate funds between equity and cash/cash equivalents like ZBAL and ZGRO.
ZEQT Top Holdings
ZEQT currently has 6 underlying ETFs with the following allocations as of March 3, 2023:
| ETF | Ticker | Weight (%) |
| BMO S&P 500 INDEX ETF | ZSP | 41.87% |
| BMO S&P/TSX CAPPED COMPOSITE INDEX ETF | ZCN | 25.17% |
| BMO MSCI EAFE INDEX ETF | ZEA | 21.10% |
| BMO MSCI EMERGING MARKETS INDEX ETF | ZEM | 7.96% |
| BMO S&P US MID CAP INDEX ETF | ZMID | 2.66% |
| BMO S&P US SMALL CAP INDEX ETF | ZSML | 1.08% |
| CASH | – | 0.16% |
Each of these ETFs are used to gain exposure to different global markets. For example, the BMO S&P 500 INDEX ETF (ZSP) is used to gain exposure to US- listed stocks that are part of the S&P 500 index.
ZCN, on the other hand, provides ZEQT with exposure to the Canadian market.
ZEQT Geographic Allocations
ZEQT invests 100% of its funds in equities worldwide. The following are the geographic allocations of the ETF as of the time of writing this review.
| Country | Weight (%) |
|---|---|
| United States | 45.80 |
| Canada | 25.08 |
| Switzerland | 4.50 |
| Japan | 4.20 |
| United Kingdom | 2.50 |
| France | 2.10 |
| Germany | 1.60 |
| Other countries | 13.50 |
Looking at the above table you can see that ZEQT is heavily weighted towards the US market to reflect its size of the global market. The Canadian market also gets a 20%+ allocation, way higher than our share of the global market.
ZEQT Dividend
ZEQT had provided a 2.49% dividend in its last distribution (February 24, 2023). The dividends are annualized and distributed quarterly to investors.
Compared to the previous dividends of similar portfolios such as XEQT and VEQT, it’s obvious that ZEQT has a competitive dividend.
Though it is too early to say, but you may want to consider ZEQT over XEQT and VEQT if you’re looking for a higher distribution.
ZEQT Portfolio Returns
As a new ETF that started trading in January 2022, ZEQT has not provided may returns to.
ZEQT has only provided a negative 1-year return of -0.57% to investors as of February 28, 2023.
In addition to the 1-year performance, you can use ZEQT’s previous dividends and current allocations to gain insights into its future performance.
Preferably, you can bookmark this page or leave a comment below to get updated about ZEQT’s future returns.
ZEQT Fees
The ZEQT ETF has a similar fee structure as other BMO ETFs. That is 0.18% management fee and 0.20% MER.
When you compare these fees with other ETFs or mutual funds, you will realize that ZEQT compares favourably.
Interestingly, you can limit the cost of trading ZEQT ETF by using one of the online discount brokerages which I discussed before the end of this review.
ZEQT Pros and Cons
Below are the top pros and cons of the BMO All-Equity ETF Portfolio (ZEQT).
Pros
- High dividends: ZEQT’s previous dividend yield is higher than the dividends of similar portfolios, such as XEQT and VEQT.
- Low fees: The management fees and management expense ratio of ZEQT are relatively low compared to other ETFs and mutual funds.
- Global diversification: The ETF portfolio is diversified across different countries with major allocation to the US and Canada.
Cons
- Short history: The portfolio is relatively new as it only provided 1-year return which is negative compared to the returns of similar portfolios.
How to Buy ZEQT ETF
You can buy and sell ZEQT yourself through an online brokerage or investment app that allows free trades on ETFs.
With a brokerage, you will be in charge of buying and selling the ETF as well as other portfolio management tasks. Wealthsimple Trade and Questrade are currently some of the best platforms for DIY investing in Canada.
Wealthsimple Trade gives you the opportunity to trade both ETFs and stocks without commission or a minimum deposit/balance requirement.
On the other hand, you need a minimum balance of $1,000 to trade on Questrade and enjoy a commission waiver on ETF buying.
Both platforms are a great place to ZEQT and gradually build a portfolio with low-cost and no quarterly admin fees to worry about.
But if you’d rather let all your investments be handled on your behalf, then check one of the best robo advisors in Canada.
Learn more: Wealthsimple Trade vs Questrade
Who is ZEQT For?
By design, ZEQT will experience more volatility than your average all-in-one ETF that holds some bonds.
Therefore, you should only invest in ZEQT is you have the risk tolerance to hold through all the ups and downs of the ETF. You should also consider how an all-equity portfolio fits into your overall financial goals and objective.
For example, if you’re investing or savings for a short-term goal and will need the fund in a year or two, you should definitely not be investing in ZEQT. Some of its alternatives like ZBAL may be more appropriate for your situation.
Overall, consult with a financial advisor to understand how ZEQT fits into your wider portfolio and financial goals.
ZEQT Alternatives
To help you make an informed decision, we’ll go over how ZEQT covers to some other all-in-one ETF portfolios from BMO and other ETF issuers.
ZEQT vs XEQT
XEQT is the ticker symbol of the iShares Core Equity ETF Portfolio managed by BlackRock. Below is how it compares with ZEQT as of the time of writing this review.
| Key Features | ZEQT | XEQT |
|---|---|---|
| Inception date | January 17, 2022 | Aug 7, 2019 |
| Asset allocation | 99.84% on stocks and 0.16% cash and cash equivalents | 99.79% on equity and 0.21% on cash and/or derivatives |
| Exchange | Toronto Stock Exchange (TSX) | Toronto Stock Exchange (TSX) |
| Eligible for registered accounts | Yes | Yes |
| Management fee | 0.18% | 0.18% |
| MER | 0.20% | 0.20% |
| Distribution yield | 2.49% | 2.64% |
| Distribution frequency | Quarterly | Quarterly |
As a multi-asset all-in-one equity ETF, XEQT is also traded on the Toronto Stock Exchange (TSX).
Obviously, XEQT shares a lot in common with ZEQT ranging from management fee, MER, to distribution frequency.
Like ZEQT, XEQT also seeks to achieve long-term capital growth by investing in global equity securities.
XEQT is also heavily weighted towards the US and Canada markets like ZEQT. Unlike ZEQT, XEQT invests both in equity and cash/derivatives making it have a low-to-medium risk level.
As of February 28, 2023, XEQT has provided an -1.76% average 1-year return and 8.97% average return since inception in 2019. With time, we’ll be able to see how ZEQT will perform compared to XEQT.
Learn more: XEQT Review
ZEQT vs VEQT
VEQT is the ticker symbol of the Vanguard All-Equity ETF Portfolio that is managed by Vanguard Investments Canada Inc. Below is how the ETF compares with ZEQT as of the time of writing this review.
| Key Features | ZEQT | VEQT |
|---|---|---|
| Inception date | January 17, 2022 | January 29, 2019 |
| Asset allocation | 99.84% on stocks and 0.16% cash and cash equivalents | 99.96% on stocks and 0.04% on short-term reserves |
| Exchange | Toronto Stock Exchange (TSX) | Toronto Stock Exchange (TSX) |
| Eligible for registered accounts | Yes | N/A |
| Management fee | 0.18% | 0.22% |
| MER | 0.20% | 0.24% |
| Distribution yield | 2.49% | 1.98% |
| Distribution frequency | Quarterly | Annually |
Like ZEQT, VEQT seeks to offer investors long-term capital appreciation by investing mainly in equity securities.
ZEQT also has a large allocation to the US markets (over 40%) and 30%+ allocation to the Canadian markets. However, the VEQT portfolio shares many differences with the ZEQT in terms of management fee, MER, and distribution frequency.
VEQT has provided competitive returns since its inception in 2019 and pays dividends annually. Below is a highlight of its current returns as at February 28, 2023:
- 1-year: -1.26%
- 3-year: +9.80%
- Since inception: +9.25%
ZEQT on the other hand has no performance data yet. That said, ZEQT has provided relatively higher dividends than VEQT in their last distributions.
Learn more: VEQT Review
ZEQT vs ZGRO vs ZBAL
ZEQT, ZGRO and ZBAL are all ETFs from BMO. Like ZEQT, ZGRO and ZBAL are multi-asset ETF portfolios that invests in diversified companies worldwide.
But unlike ZEQT, they have some allocation to fixed income securities (bonds) to provide reduce their portfolio risk and higher cash distribution to their investors.
If you’re not comfortable with the 100% equity allocation in ZEQT, ZGRO and ZBAL with 80% and 60% allocations could be right for you.
| BMO ETF | Equity Allocations |
|---|---|
| ZEQT | 100% |
| ZGRO | 80% |
| ZBAL | 60% |
Learn more about both ETFs below:
Verdict on ZEQT ETF Review
There you have it. The latest all-equity ETF portfolio in town with competitive dividends, low fees and global diversification.
Considering the assets allocation of ZEQT, you need to assess your risk tolerance and investment objective before investing in it.
The bottom line is that you can’t make the wrong choice with the portfolio so long as you’re looking for long-term capital growth without minding the ups and downs of the stock market.
But if you’re not comfortable with the asset allocation and risk level of ZEQT, I recommend you check out the following all-in-one ETF portfolios with some allocation to fixed income to provide some cushion in your portfolio.
ZEQT Review
Summary
BMO All-Equity ETF Portfolio (ZEQT) is an all-equity ETF from BMO that invests in a worldwide-diversified equity portfolio.
