VAB.TO vs. ZDB.TO
VAB.TO (Vanguard Canadian Aggregate Bond Index ETF) and ZDB.TO (BMO Discount Bond) are both Canadian Government Bonds funds - VAB.TO tracks the Bloomberg Global Aggregate Canadian Float Adjusted Bond Index while ZDB.TO tracks the FTSE Canada Universe Discount Bond Index. Both are passively managed. Over the past 10 years, VAB.TO returned 1.51%/yr vs 1.57%/yr for ZDB.TO. A 0.78 correlation means they provide meaningful diversification when combined. VAB.TO charges 0.09%/yr vs 0.10%/yr for ZDB.TO.
Performance
VAB.TO vs. ZDB.TO - Performance Comparison
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Returns By Period
In the year-to-date period, VAB.TO achieves a 1.62% return, which is significantly higher than ZDB.TO's 1.53% return. Both investments have delivered pretty close results over the past 10 years, with VAB.TO having a 1.51% annualized return and ZDB.TO not far ahead at 1.57%.
VAB.TO
- 1D
- -0.07%
- 1M
- 1.70%
- YTD
- 1.62%
- 6M
- 0.78%
- 1Y
- 3.12%
- 3Y*
- 4.12%
- 5Y*
- 0.66%
- 10Y*
- 1.51%
ZDB.TO
- 1D
- -0.13%
- 1M
- 1.48%
- YTD
- 1.53%
- 6M
- 0.70%
- 1Y
- 2.71%
- 3Y*
- 4.07%
- 5Y*
- 0.56%
- 10Y*
- 1.57%
VAB.TO vs. ZDB.TO - Yearly Performance Comparison
| 2026 (YTD) | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | |
|---|---|---|---|---|---|---|---|---|---|---|
VAB.TO Vanguard Canadian Aggregate Bond Index ETF | 1.62% | 2.28% | 3.98% | 6.90% | -11.86% | -2.88% | 8.26% | 6.77% | 1.13% | 2.30% |
ZDB.TO BMO Discount Bond | 1.53% | 2.03% | 4.26% | 6.69% | -11.99% | -2.77% | 9.50% | 6.74% | 1.33% | 2.00% |
Correlation
The correlation between VAB.TO and ZDB.TO is 0.95 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.
| Correlation | |
|---|---|
Correlation (1Y) Calculated over the trailing 1-year period | 0.95 |
Correlation (3Y) Calculated over the trailing 3-year period | 0.96 |
Correlation (5Y) Calculated over the trailing 5-year period | 0.95 |
Correlation (10Y) Calculated over the trailing 10-year period | 0.89 |
Correlation (All Time) Calculated using the full available price history since Feb 19, 2014 | 0.78 |
The correlation between VAB.TO and ZDB.TO shifts across timeframes, from 0.78 (all time) to 0.96 (3 years), reflecting how their relationship changes across market environments.
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Return for Risk
VAB.TO vs. ZDB.TO — Risk / Return Rank
VAB.TO
ZDB.TO
VAB.TO vs. ZDB.TO - Risk-Adjusted Trends Comparison
This table presents a comparison of risk-adjusted performance metrics for Vanguard Canadian Aggregate Bond Index ETF (VAB.TO) and BMO Discount Bond (ZDB.TO). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.
| VAB.TO | ZDB.TO | Difference | |
|---|---|---|---|
| Sharpe ratioReturn per unit of total volatility | +0.09 | ||
| Sortino ratioReturn per unit of downside risk | +0.10 | ||
| Omega ratioGain probability vs. loss probability | 1.12 | 1.11 | +0.01 |
| Calmar ratioReturn relative to maximum drawdown | 1.10 | 0.97 | +0.13 |
| Martin ratioReturn relative to average drawdown | 2.61 | 2.23 | +0.39 |
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month. | |||
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Sharpe Ratios by Period
| VAB.TO | ZDB.TO | Difference | |
|---|---|---|---|
Sharpe Ratio (1Y)Calculated over the trailing 1-year period | 0.72 | 0.63 | +0.09 |
Sharpe Ratio (5Y)Calculated over the trailing 5-year period | 0.10 | 0.09 | +0.01 |
Sharpe Ratio (10Y)Calculated over the trailing 10-year period | 0.23 | 0.25 | -0.01 |
Sharpe Ratio (All Time)Calculated using the full available price history | 0.39 | 0.38 | +0.01 |
Drawdowns
VAB.TO vs. ZDB.TO - Drawdown Comparison
The maximum VAB.TO drawdown since its inception was -18.39%, roughly equal to the maximum ZDB.TO drawdown of -18.09%. Use the drawdown chart below to compare losses from any high point for VAB.TO and ZDB.TO.
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Drawdown Indicators
| VAB.TO | ZDB.TO | Difference | |
|---|---|---|---|
Max DrawdownLargest peak-to-trough decline | -18.39% | -18.09% | -0.30% |
Max Drawdown (1Y)Largest decline over 1 year | -2.83% | -2.79% | -0.04% |
Max Drawdown (3Y)Largest decline over 3 years | -5.31% | -5.07% | -0.24% |
Max Drawdown (5Y)Largest decline over 5 years | -15.82% | -16.25% | +0.43% |
Max Drawdown (10Y)Largest decline over 10 years | -18.39% | -18.09% | -0.30% |
Current DrawdownCurrent decline from peak | -1.92% | -1.45% | -0.47% |
Average DrawdownAverage peak-to-trough decline | -4.11% | -4.21% | +0.10% |
Ulcer IndexDepth and duration of drawdowns from previous peaks | 1.20% | 1.22% | -0.02% |
Volatility
VAB.TO vs. ZDB.TO - Volatility Comparison
Vanguard Canadian Aggregate Bond Index ETF (VAB.TO) and BMO Discount Bond (ZDB.TO) have volatilities of 1.59% and 1.55%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.
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Volatility by Period
| VAB.TO | ZDB.TO | Difference | |
|---|---|---|---|
Volatility (1M)Calculated over the trailing 1-month period | 1.59% | 1.55% | +0.04% |
Volatility (6M)Calculated over the trailing 6-month period | 3.45% | 3.32% | +0.13% |
Volatility (1Y)Calculated over the trailing 1-year period | 4.38% | 4.34% | +0.04% |
Volatility (5Y)Calculated over the trailing 5-year period, annualized | 6.58% | 6.52% | +0.06% |
Volatility (10Y)Calculated over the trailing 10-year period, annualized | 6.48% | 6.40% | +0.08% |
VAB.TO vs. ZDB.TO - Expense Ratio Comparison
VAB.TO has a 0.09% expense ratio, which is lower than ZDB.TO's 0.10% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.
Dividends
VAB.TO vs. ZDB.TO - Dividend Comparison
VAB.TO's dividend yield for the trailing twelve months is around 3.32%, more than ZDB.TO's 2.00% yield.
| Position | TTM | 2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | 2015 |
|---|---|---|---|---|---|---|---|---|---|---|---|---|
VAB.TO Vanguard Canadian Aggregate Bond Index ETF | 3.32% | 3.33% | 3.19% | 2.95% | 2.87% | 2.48% | 2.50% | 2.65% | 2.79% | 2.77% | 2.75% | 2.78% |
ZDB.TO BMO Discount Bond | 2.00% | 2.28% | 2.38% | 2.42% | 2.52% | 2.16% | 2.06% | 2.20% | 2.07% | 2.06% | 1.95% | 1.99% |
Frequently Asked Questions
With a correlation of 0.95, VAB.TO and ZDB.TO move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.
On fees, VAB.TO is cheaper at 0.09% per year. The better choice depends on whether you care most about return, fees, risk, or income.
VAB.TO is cheaper with a 0.09% expense ratio, compared with 0.10% for ZDB.TO.
VAB.TO tracks Bloomberg Global Aggregate Canadian Float Adjusted Bond Index, while ZDB.TO tracks FTSE Canada Universe Discount Bond Index. They also come from different issuers: Vanguard and BMO. Their fees differ too: 0.09% for VAB.TO and 0.10% for ZDB.TO.
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