XSH.TO vs. ZDB.TO

Last updated Jun 4, 2026

XSH.TO (iShares Core Canadian Short Term Corporate Bond Index ETF) and ZDB.TO (BMO Discount Bond) are both Canadian Government Bonds funds - XSH.TO tracks the Morningstar Can 1-5Y Core Bd GR CAD while ZDB.TO tracks the FTSE Canada Universe Discount Bond Index. Both are passively managed. Over the past 10 years, XSH.TO returned 2.82%/yr vs 1.57%/yr for ZDB.TO. A 0.56 correlation means they provide meaningful diversification when combined. Both charge a 0.10% expense ratio.

Performance

XSH.TO vs. ZDB.TO - Performance Comparison

The chart below illustrates the hypothetical performance of a CA$10,000 investment in iShares Core Canadian Short Term Corporate Bond Index ETF (XSH.TO) and BMO Discount Bond (ZDB.TO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, XSH.TO achieves a 1.33% return, which is significantly lower than ZDB.TO's 1.53% return. Over the past 10 years, XSH.TO has outperformed ZDB.TO with an annualized return of 2.82%, while ZDB.TO has yielded a comparatively lower 1.57% annualized return.

XSH.TO

• 1D: 0.00%
• 1M: 1.13%
• YTD: 1.33%
• 6M: 1.34%
• 1Y: 3.85%
• 3Y*: 6.05%
• 5Y*: 2.86%
• 10Y*: 2.82%

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%

*Multi-year figures are annualized to reflect compound growth (CAGR)

XSH.TO vs. ZDB.TO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
XSH.TO iShares Core Canadian Short Term Corporate Bond Index ETF	1.33%	4.61%	7.11%	6.80%	-4.52%	-0.81%	6.28%	5.02%	1.28%	0.78%
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 XSH.TO and ZDB.TO is 0.72, 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	0.72
Correlation (3Y) Calculated over the trailing 3-year period	0.81
Correlation (5Y) Calculated over the trailing 5-year period	0.79
Correlation (10Y) Calculated over the trailing 10-year period	0.66
Correlation (All Time) Calculated using the full available price history since Feb 19, 2014	0.56

The correlation between XSH.TO and ZDB.TO shifts across timeframes, from 0.56 (all time) to 0.81 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

XSH.TO vs. ZDB.TO — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

XSH.TO

XSH.TO Risk / Return Rank: 53
XSH.TO Sharpe Ratio Rank: 51
XSH.TO Sortino Ratio Rank: 51
XSH.TO Omega Ratio Rank: 57
XSH.TO Calmar Ratio Rank: 51
XSH.TO Martin Ratio Rank: 57

ZDB.TO

ZDB.TO Risk / Return Rank: 19
ZDB.TO Sharpe Ratio Rank: 19
ZDB.TO Sortino Ratio Rank: 17
ZDB.TO Omega Ratio Rank: 18
ZDB.TO Calmar Ratio Rank: 22
ZDB.TO Martin Ratio Rank: 19

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.

XSH.TO vs. ZDB.TO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for iShares Core Canadian Short Term Corporate Bond Index ETF (XSH.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.

	XSH.TO	ZDB.TO	Difference
Sharpe ratio: Return per unit of total volatility	1.79	0.63	+1.16
Sortino ratio: Return per unit of downside risk	2.51	0.88	+1.63
Omega ratio: Gain probability vs. loss probability	1.36	1.11	+0.25
Calmar ratio: Return relative to maximum drawdown	2.57	0.97	+1.59
Martin ratio: Return relative to average drawdown	10.05	2.23	+7.82
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

XSH.TO vs. ZDB.TO - Sharpe Ratio Comparison

The current XSH.TO Sharpe Ratio is 1.79, which is higher than the ZDB.TO Sharpe Ratio of 0.63. The chart below compares the historical Sharpe Ratios of XSH.TO and ZDB.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.

Sharpe Ratios by Period

	XSH.TO	ZDB.TO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	1.79	0.63	+1.16
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	1.02	0.09	+0.93
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.64	0.25	+0.39
Sharpe Ratio (All Time) Calculated using the full available price history	0.74	0.38	+0.35

Drawdowns

XSH.TO vs. ZDB.TO - Drawdown Comparison

The maximum XSH.TO drawdown since its inception was -14.24%, smaller than the maximum ZDB.TO drawdown of -18.09%. Use the drawdown chart below to compare losses from any high point for XSH.TO and ZDB.TO.

Drawdown Indicators

	XSH.TO	ZDB.TO	Difference
Max Drawdown Largest peak-to-trough decline	-14.24%	-18.09%	+3.85%
Max Drawdown (1Y) Largest decline over 1 year	-1.51%	-2.79%	+1.28%
Max Drawdown (3Y) Largest decline over 3 years	-1.51%	-5.07%	+3.56%
Max Drawdown (5Y) Largest decline over 5 years	-7.80%	-16.25%	+8.45%
Max Drawdown (10Y) Largest decline over 10 years	-14.24%	-18.09%	+3.85%
Current Drawdown Current decline from peak	0.00%	-1.45%	+1.45%
Average Drawdown Average peak-to-trough decline	-0.93%	-4.21%	+3.28%
Ulcer Index Depth and duration of drawdowns from previous peaks	0.38%	1.22%	-0.84%

Volatility

XSH.TO vs. ZDB.TO - Volatility Comparison

The current volatility for iShares Core Canadian Short Term Corporate Bond Index ETF (XSH.TO) is 0.80%, while BMO Discount Bond (ZDB.TO) has a volatility of 1.55%. This indicates that XSH.TO experiences smaller price fluctuations and is considered to be less risky than ZDB.TO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	XSH.TO	ZDB.TO	Difference
Volatility (1M) Calculated over the trailing 1-month period	0.80%	1.55%	-0.75%
Volatility (6M) Calculated over the trailing 6-month period	1.83%	3.32%	-1.49%
Volatility (1Y) Calculated over the trailing 1-year period	2.16%	4.34%	-2.18%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	2.83%	6.52%	-3.69%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	4.42%	6.40%	-1.98%

XSH.TO vs. ZDB.TO - Expense Ratio Comparison

Both XSH.TO and ZDB.TO have an expense ratio of 0.10%, making them cost-effective options compared to the broader market, where average expense ratios typically range from 0.3% to 0.9%.

Dividends

XSH.TO vs. ZDB.TO - Dividend Comparison

XSH.TO's dividend yield for the trailing twelve months is around 3.89%, more than ZDB.TO's 2.00% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
XSH.TO iShares Core Canadian Short Term Corporate Bond Index ETF	3.89%	3.82%	3.64%	3.24%	2.97%	2.65%	2.61%	2.80%	2.86%	2.93%	3.08%	3.18%
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

Can I hold both XSH.TO and ZDB.TO in my portfolio?

XSH.TO and ZDB.TO have a correlation of 0.72, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which ETF is better, XSH.TO or ZDB.TO?

Both ETFs have the same 0.10% expense ratio. The better choice depends on whether you care most about return, fees, risk, or income.

Which ETF is cheaper, XSH.TO or ZDB.TO?

XSH.TO and ZDB.TO have the same expense ratio: 0.10% per year.

What is the main difference between XSH.TO and ZDB.TO?

XSH.TO tracks Morningstar Can 1-5Y Core Bd GR CAD, while ZDB.TO tracks FTSE Canada Universe Discount Bond Index. They also come from different issuers: iShares and BMO.