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XEM.TO vs. ZEQ.TO
Performance
Return for Risk
Drawdowns
Volatility
Dividends

XEM.TO vs. ZEQ.TO

Last updated Jun 4, 2026

XEM.TO (iShares MSCI Emerging Markets Index ETF) and ZEQ.TO (BMO MSCI Europe High Quality Hedged to CAD Index ETF) are both exchange-traded funds - XEM.TO is a Emerging Markets Equities fund tracking the Morningstar EM GR CAD, while ZEQ.TO is a Europe Equities fund tracking the MSCI Europe Quality 100% Hedged to CAD Index. Both are passively managed. Over the past 10 years, XEM.TO returned 10.27%/yr vs 8.55%/yr for ZEQ.TO. At a 0.49 correlation, their price movements are largely independent. XEM.TO charges 0.81%/yr vs 0.45%/yr for ZEQ.TO.

Performance

XEM.TO vs. ZEQ.TO - Performance Comparison

The chart below illustrates the hypothetical performance of a CA$10,000 investment in iShares MSCI Emerging Markets Index ETF (XEM.TO) and BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.TO). The values are adjusted to include any dividend payments, if applicable.

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Returns By Period

In the year-to-date period, XEM.TO achieves a 29.23% return, which is significantly higher than ZEQ.TO's 1.89% return. Over the past 10 years, XEM.TO has outperformed ZEQ.TO with an annualized return of 10.27%, while ZEQ.TO has yielded a comparatively lower 8.55% annualized return.

XEM.TO

1D
-0.85%
1M
11.30%
YTD
29.23%
6M
29.57%
1Y
57.02%
3Y*
24.75%
5Y*
9.57%
10Y*
10.27%

ZEQ.TO

1D
-0.83%
1M
2.57%
YTD
1.89%
6M
2.82%
1Y
4.15%
3Y*
5.01%
5Y*
4.74%
10Y*
8.55%
*Multi-year figures are annualized to reflect compound growth (CAGR)

XEM.TO vs. ZEQ.TO - Yearly Performance Comparison

2026 (YTD)202520242023202220212020201920182017
XEM.TO
iShares MSCI Emerging Markets Index ETF		29.23%27.25%14.98%6.49%-15.74%-4.09%14.12%11.48%-8.05%27.78%
ZEQ.TO
BMO MSCI Europe High Quality Hedged to CAD Index ETF		1.89%7.89%2.54%15.35%-12.26%25.16%6.22%33.21%-7.10%15.45%

Correlation

The correlation between XEM.TO and ZEQ.TO is 0.51, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

Correlation
Correlation (1Y)
Calculated over the trailing 1-year period

0.51

Correlation (3Y)
Calculated over the trailing 3-year period

0.49

Correlation (5Y)
Calculated over the trailing 5-year period

0.48

Correlation (10Y)
Calculated over the trailing 10-year period

0.53

Correlation (All Time)
Calculated using the full available price history since Feb 18, 2014

0.49

The correlation between XEM.TO and ZEQ.TO has been stable across timeframes, ranging from 0.48 to 0.53 - a consistent structural relationship.

XEM.TO vs. ZEQ.TO - Sectors Allocation Comparison

Sectors
XEM.TO
ZEQ.TO

Technology

37.0%
10.2%

Financial Services

19.4%
9.7%

Consumer Cyclical

9.6%
9.8%

Industrials

7.5%
22.4%

Communication Services

6.9%
1.5%

Basic Materials

6.5%
6.2%

Energy

4.0%

-

Consumer Defensive

3.0%
15.3%

Healthcare

2.9%
24.5%

Utilities

2.1%
0.3%

Real Estate

1.1%

-

Technology

XEM.TO
37.0%
ZEQ.TO
10.2%

Financial Services

XEM.TO
19.4%
ZEQ.TO
9.7%

Consumer Cyclical

XEM.TO
9.6%
ZEQ.TO
9.8%

Industrials

XEM.TO
7.5%
ZEQ.TO
22.4%

Communication Services

XEM.TO
6.9%
ZEQ.TO
1.5%

Basic Materials

XEM.TO
6.5%
ZEQ.TO
6.2%

Energy

XEM.TO
4.0%
ZEQ.TO

-

Consumer Defensive

XEM.TO
3.0%
ZEQ.TO
15.3%

Healthcare

XEM.TO
2.9%
ZEQ.TO
24.5%

Utilities

XEM.TO
2.1%
ZEQ.TO
0.3%

Real Estate

XEM.TO
1.1%
ZEQ.TO

-

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iShares MSCI Emerging Markets Index ETF

BMO MSCI Europe High Quality Hedged to CAD Index ETF

Often compared with XEM.TO:
XEM.TO vs. XEC.TOXEM.TO vs. XEF.TOXEM.TO vs. XEQT.TOXEM.TO vs. ZEA.TOXEM.TO vs. VXC.TOXEM.TO vs. VOOXEM.TO vs. VFV.TO
Often compared with ZEQ.TO:
ZEQ.TO vs. ZEQT.TOZEQ.TO vs. ZQQ.TOZEQ.TO vs. ZWP.TOZEQ.TO vs. VE.TOZEQ.TO vs. ZUQ.TOZEQ.TO vs. XEH.TOZEQ.TO vs. ZDI.TO

Return for Risk

XEM.TO vs. ZEQ.TO — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.
XEM.TO
XEM.TO Risk / Return Rank: 8585
Overall Rank
XEM.TO Sharpe Ratio Rank: 8888
Sharpe Ratio Rank
XEM.TO Sortino Ratio Rank: 8484
Sortino Ratio Rank
XEM.TO Omega Ratio Rank: 8787
Omega Ratio Rank
XEM.TO Calmar Ratio Rank: 8585
Calmar Ratio Rank
XEM.TO Martin Ratio Rank: 8383
Martin Ratio Rank
ZEQ.TO
ZEQ.TO Risk / Return Rank: 1313
Overall Rank
ZEQ.TO Sharpe Ratio Rank: 1414
Sharpe Ratio Rank
ZEQ.TO Sortino Ratio Rank: 1313
Sortino Ratio Rank
ZEQ.TO Omega Ratio Rank: 1313
Omega Ratio Rank
ZEQ.TO Calmar Ratio Rank: 1313
Calmar Ratio Rank
ZEQ.TO Martin Ratio Rank: 1414
Martin Ratio Rank
The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

XEM.TO vs. ZEQ.TO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares MSCI Emerging Markets Index ETF (XEM.TO) and BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.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.

XEM.TOZEQ.TODifference
Sharpe ratioReturn per unit of total volatility
2.97
0.32

+2.66

Sortino ratioReturn per unit of downside risk
3.85
0.55

+3.29

Omega ratioGain probability vs. loss probability

1.55

1.07

+0.48

Calmar ratioReturn relative to maximum drawdown

4.67

0.38

+4.29

Martin ratioReturn relative to average drawdown

17.00

1.11

+15.89

Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XEM.TO vs. ZEQ.TO - Sharpe Ratio Comparison

The current XEM.TO Sharpe Ratio is 2.97, which is higher than the ZEQ.TO Sharpe Ratio of 0.32. The chart below compares the historical Sharpe Ratios of XEM.TO and ZEQ.TO, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

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Sharpe Ratios by Period

XEM.TOZEQ.TODifference

Sharpe Ratio (1Y)

Calculated over the trailing 1-year period

2.97

0.32

+2.66

Sharpe Ratio (5Y)

Calculated over the trailing 5-year period

0.58

0.34

+0.24

Sharpe Ratio (10Y)

Calculated over the trailing 10-year period

0.57

0.55

+0.02

Sharpe Ratio (All Time)

Calculated using the full available price history

0.43

0.54

-0.11

Drawdowns

XEM.TO vs. ZEQ.TO - Drawdown Comparison

The maximum XEM.TO drawdown since its inception was -35.29%, which is greater than ZEQ.TO's maximum drawdown of -29.13%. Use the drawdown chart below to compare losses from any high point for XEM.TO and ZEQ.TO.

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Drawdown Indicators

XEM.TOZEQ.TODifference

Max Drawdown

Largest peak-to-trough decline

-35.29%

-29.13%

-6.16%

Max Drawdown (1Y)

Largest decline over 1 year

-12.27%

-10.97%

-1.30%

Max Drawdown (3Y)

Largest decline over 3 years

-15.30%

-14.47%

-0.83%

Max Drawdown (5Y)

Largest decline over 5 years

-31.08%

-20.54%

-10.54%

Max Drawdown (10Y)

Largest decline over 10 years

-35.29%

-29.13%

-6.16%

Current Drawdown

Current decline from peak

-0.85%

-4.20%

+3.35%

Average Drawdown

Average peak-to-trough decline

-10.45%

-4.31%

-6.14%

Ulcer Index

Depth and duration of drawdowns from previous peaks

3.36%

3.76%

-0.40%

Volatility

XEM.TO vs. ZEQ.TO - Volatility Comparison

iShares MSCI Emerging Markets Index ETF (XEM.TO) has a higher volatility of 8.30% compared to BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.TO) at 4.59%. This indicates that XEM.TO's price experiences larger fluctuations and is considered to be riskier than ZEQ.TO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

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Volatility by Period

XEM.TOZEQ.TODifference

Volatility (1M)

Calculated over the trailing 1-month period

8.30%

4.59%

+3.71%

Volatility (6M)

Calculated over the trailing 6-month period

16.79%

10.60%

+6.19%

Volatility (1Y)

Calculated over the trailing 1-year period

19.28%

13.15%

+6.13%

Volatility (5Y)

Calculated over the trailing 5-year period, annualized

16.84%

14.18%

+2.66%

Volatility (10Y)

Calculated over the trailing 10-year period, annualized

18.12%

15.51%

+2.61%

XEM.TO vs. ZEQ.TO - Expense Ratio Comparison

XEM.TO has a 0.81% expense ratio, which is higher than ZEQ.TO's 0.45% expense ratio.

Dividends

XEM.TO vs. ZEQ.TO - Dividend Comparison

XEM.TO's dividend yield for the trailing twelve months is around 1.47%, less than ZEQ.TO's 3.02% yield.

PositionTTM20252024202320222021202020192018201720162015
XEM.TO
iShares MSCI Emerging Markets Index ETF		1.47%1.90%2.08%2.39%2.10%1.91%1.28%2.57%1.96%1.78%1.96%2.22%
ZEQ.TO
BMO MSCI Europe High Quality Hedged to CAD Index ETF		3.02%3.10%2.04%2.50%2.62%1.78%1.94%2.04%3.21%2.07%2.01%2.06%

Frequently Asked Questions

XEM.TO and ZEQ.TO have a correlation of 0.51, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

On fees, ZEQ.TO is cheaper at 0.45% per year. The better choice depends on whether you care most about return, fees, risk, or income.

ZEQ.TO is cheaper with a 0.45% expense ratio, compared with 0.81% for XEM.TO.

XEM.TO is categorized as Emerging Markets Equities, while ZEQ.TO is Europe Equities. XEM.TO tracks Morningstar EM GR CAD, while ZEQ.TO tracks MSCI Europe Quality 100% Hedged to CAD Index. They also come from different issuers: iShares and BMO. Their fees differ too: 0.81% for XEM.TO and 0.45% for ZEQ.TO.

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