ZEQ.TO vs. XEM.TO

Last updated Apr 1, 2026

Compare and contrast key facts about BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.TO) and iShares MSCI Emerging Markets Index ETF (XEM.TO).

ZEQ.TO and XEM.TO are both exchange-traded funds (ETFs), meaning they are traded on stock exchanges and can be bought and sold throughout the day. ZEQ.TO is a passively managed fund by BMO that tracks the performance of the MSCI Europe Quality 100% Hedged to CAD Index. It was launched on Feb 10, 2014. XEM.TO is a passively managed fund by iShares that tracks the performance of the Morningstar EM GR CAD. It was launched on Jun 18, 2009. Both ZEQ.TO and XEM.TO are passive ETFs, meaning that they are not actively managed but aim to replicate the performance of the underlying index as closely as possible.

Performance

ZEQ.TO vs. XEM.TO - Performance Comparison

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

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

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
ZEQ.TO BMO MSCI Europe High Quality Hedged to CAD Index ETF	-2.07%	7.89%	2.54%	15.35%	-12.26%	25.16%	6.22%	33.21%	-7.10%	15.45%
XEM.TO iShares MSCI Emerging Markets Index ETF	5.19%	27.25%	14.98%	6.49%	-15.74%	-4.09%	14.12%	11.48%	-8.05%	27.78%

Returns By Period

In the year-to-date period, ZEQ.TO achieves a -2.07% return, which is significantly lower than XEM.TO's 5.19% return. Over the past 10 years, ZEQ.TO has outperformed XEM.TO with an annualized return of 8.42%, while XEM.TO has yielded a comparatively lower 7.86% annualized return.

ZEQ.TO

• 1D: 1.91%
• 1M: -7.56%
• YTD: -2.07%
• 6M: 0.87%
• 1Y: 1.48%
• 3Y*: 4.02%
• 5Y*: 5.26%
• 10Y*: 8.42%

XEM.TO

• 1D: 3.91%
• 1M: -6.04%
• YTD: 5.19%
• 6M: 6.54%
• 1Y: 28.18%
• 3Y*: 16.30%
• 5Y*: 5.17%
• 10Y*: 7.86%

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

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

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

XEM.TO

iShares MSCI Emerging Markets Index ETF

ZEQ.TO

BMO MSCI Europe High Quality Hedged to CAD Index ETF

Return for Risk

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

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

ZEQ.TO

ZEQ.TO Risk / Return Rank: 13
ZEQ.TO Sharpe Ratio Rank: 14
ZEQ.TO Sortino Ratio Rank: 13
ZEQ.TO Omega Ratio Rank: 13
ZEQ.TO Calmar Ratio Rank: 13
ZEQ.TO Martin Ratio Rank: 13

XEM.TO

XEM.TO Risk / Return Rank: 77
XEM.TO Sharpe Ratio Rank: 79
XEM.TO Sortino Ratio Rank: 79
XEM.TO Omega Ratio Rank: 77
XEM.TO Calmar Ratio Rank: 78
XEM.TO Martin Ratio Rank: 71

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.

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

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

	ZEQ.TO	XEM.TO	Difference
Sharpe ratio Return per unit of total volatility	0.09	1.45	-1.36
Sortino ratio Return per unit of downside risk	0.25	1.97	-1.72
Omega ratio Gain probability vs. loss probability	1.03	1.29	-0.25
Calmar ratio Return relative to maximum drawdown	0.06	2.07	-2.01
Martin ratio Return relative to average drawdown	0.19	7.00	-6.81
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

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

The current ZEQ.TO Sharpe Ratio is 0.09, which is lower than the XEM.TO Sharpe Ratio of 1.45. The chart below compares the historical Sharpe Ratios of ZEQ.TO and XEM.TO, offering insights into how both investments have performed under varying market conditions. These values are calculated using daily returns over the previous 12 months.

Sharpe Ratios by Period

	ZEQ.TO	XEM.TO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.09	1.45	-1.36
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.38	0.32	+0.06
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.55	0.45	+0.10
Sharpe Ratio (All Time) Calculated using the full available price history	0.53	0.37	+0.16

Correlation

The correlation between ZEQ.TO and XEM.TO is 0.49, which is considered to be moderate. This suggests that the two assets have some degree of positive relationship in their price movements. Moderate correlation can be acceptable for portfolio diversification, offering a balance between risk and potential returns.

Dividends

ZEQ.TO vs. XEM.TO - Dividend Comparison

ZEQ.TO's dividend yield for the trailing twelve months is around 3.14%, more than XEM.TO's 1.81% yield.

	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ZEQ.TO BMO MSCI Europe High Quality Hedged to CAD Index ETF	3.14%	3.10%	2.04%	2.50%	2.62%	1.78%	1.94%	2.04%	3.21%	2.07%	2.01%	2.06%
XEM.TO iShares MSCI Emerging Markets Index ETF	1.81%	1.90%	2.08%	2.39%	2.10%	1.91%	1.28%	2.57%	1.96%	1.78%	1.96%	2.22%

Drawdowns

ZEQ.TO vs. XEM.TO - Drawdown Comparison

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

Drawdown Indicators

	ZEQ.TO	XEM.TO	Difference
Max Drawdown Largest peak-to-trough decline	-29.13%	-35.29%	+6.16%
Max Drawdown (1Y) Largest decline over 1 year	-10.97%	-12.64%	+1.67%
Max Drawdown (5Y) Largest decline over 5 years	-20.54%	-31.08%	+10.54%
Max Drawdown (10Y) Largest decline over 10 years	-29.13%	-35.29%	+6.16%
Current Drawdown Current decline from peak	-7.93%	-8.84%	+0.91%
Average Drawdown Average peak-to-trough decline	-4.31%	-10.54%	+6.23%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.56%	3.74%	-0.18%

Volatility

ZEQ.TO vs. XEM.TO - Volatility Comparison

The current volatility for BMO MSCI Europe High Quality Hedged to CAD Index ETF (ZEQ.TO) is 5.72%, while iShares MSCI Emerging Markets Index ETF (XEM.TO) has a volatility of 10.49%. This indicates that ZEQ.TO experiences smaller price fluctuations and is considered to be less risky than XEM.TO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ZEQ.TO	XEM.TO	Difference
Volatility (1M) Calculated over the trailing 1-month period	5.72%	10.49%	-4.77%
Volatility (6M) Calculated over the trailing 6-month period	9.20%	14.51%	-5.31%
Volatility (1Y) Calculated over the trailing 1-year period	15.67%	19.64%	-3.97%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.02%	16.33%	-2.31%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	15.44%	17.85%	-2.41%