ZFL.TO vs. VAB.TO

Last updated Jun 4, 2026

ZFL.TO (BMO Long Federal Bond) and VAB.TO (Vanguard Canadian Aggregate Bond Index ETF) are both Canadian Government Bonds funds - ZFL.TO tracks the FTSE TMX Canada Long Term Federal Bond Index while VAB.TO tracks the Bloomberg Global Aggregate Canadian Float Adjusted Bond Index. Both are passively managed. Over the past 10 years, ZFL.TO returned -1.37%/yr vs 1.51%/yr for VAB.TO. Their correlation of 0.85 suggests significant overlap in exposure. ZFL.TO charges 0.22%/yr vs 0.09%/yr for VAB.TO.

Performance

ZFL.TO vs. VAB.TO - Performance Comparison

The chart below illustrates the hypothetical performance of a CA$10,000 investment in BMO Long Federal Bond (ZFL.TO) and Vanguard Canadian Aggregate Bond Index ETF (VAB.TO). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, ZFL.TO achieves a 2.39% return, which is significantly higher than VAB.TO's 1.62% return. Over the past 10 years, ZFL.TO has underperformed VAB.TO with an annualized return of -1.37%, while VAB.TO has yielded a comparatively higher 1.51% annualized return.

ZFL.TO

• 1D: -0.33%
• 1M: 2.93%
• YTD: 2.39%
• 6M: -0.37%
• 1Y: -0.83%
• 3Y*: -0.42%
• 5Y*: -3.89%
• 10Y*: -1.37%

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%

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

ZFL.TO vs. VAB.TO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
ZFL.TO BMO Long Federal Bond	2.39%	-5.14%	-2.20%	7.30%	-23.89%	-7.47%	12.68%	8.73%	2.69%	2.84%
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%

Correlation

The correlation between ZFL.TO and VAB.TO is 0.95, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	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	0.91
Correlation (All Time) Calculated using the full available price history since Dec 7, 2011	0.85

The correlation between ZFL.TO and VAB.TO shifts across timeframes, from 0.85 (all time) to 0.96 (3 years), reflecting how their relationship changes across market environments.

Return for Risk

ZFL.TO vs. VAB.TO — Risk / Return Rank

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

ZFL.TO

ZFL.TO Risk / Return Rank: 7
ZFL.TO Sharpe Ratio Rank: 8
ZFL.TO Sortino Ratio Rank: 7
ZFL.TO Omega Ratio Rank: 7
ZFL.TO Calmar Ratio Rank: 7
ZFL.TO Martin Ratio Rank: 8

VAB.TO

VAB.TO Risk / Return Rank: 21
VAB.TO Sharpe Ratio Rank: 20
VAB.TO Sortino Ratio Rank: 18
VAB.TO Omega Ratio Rank: 19
VAB.TO Calmar Ratio Rank: 24
VAB.TO Martin Ratio Rank: 21

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.

ZFL.TO vs. VAB.TO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for BMO Long Federal Bond (ZFL.TO) and Vanguard Canadian Aggregate Bond Index ETF (VAB.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.

	ZFL.TO	VAB.TO	Difference
Sharpe ratio: Return per unit of total volatility	-0.09	0.72	-0.80
Sortino ratio: Return per unit of downside risk	-0.05	0.98	-1.03
Omega ratio: Gain probability vs. loss probability	0.99	1.12	-0.13
Calmar ratio: Return relative to maximum drawdown	-0.12	1.10	-1.23
Martin ratio: Return relative to average drawdown	-0.22	2.61	-2.83
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ZFL.TO vs. VAB.TO - Sharpe Ratio Comparison

The current ZFL.TO Sharpe Ratio is -0.09, which is lower than the VAB.TO Sharpe Ratio of 0.72. The chart below compares the historical Sharpe Ratios of ZFL.TO and VAB.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

	ZFL.TO	VAB.TO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	-0.09	0.72	-0.80
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	-0.27	0.10	-0.37
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	-0.11	0.23	-0.34
Sharpe Ratio (All Time) Calculated using the full available price history	0.16	0.39	-0.23

Drawdowns

ZFL.TO vs. VAB.TO - Drawdown Comparison

The maximum ZFL.TO drawdown since its inception was -40.32%, which is greater than VAB.TO's maximum drawdown of -18.39%. Use the drawdown chart below to compare losses from any high point for ZFL.TO and VAB.TO.

Drawdown Indicators

	ZFL.TO	VAB.TO	Difference
Max Drawdown Largest peak-to-trough decline	-40.32%	-18.39%	-21.93%
Max Drawdown (1Y) Largest decline over 1 year	-6.68%	-2.83%	-3.85%
Max Drawdown (3Y) Largest decline over 3 years	-14.51%	-5.31%	-9.20%
Max Drawdown (5Y) Largest decline over 5 years	-32.25%	-15.82%	-16.43%
Max Drawdown (10Y) Largest decline over 10 years	-40.32%	-18.39%	-21.93%
Current Drawdown Current decline from peak	-31.87%	-1.92%	-29.95%
Average Drawdown Average peak-to-trough decline	-12.45%	-4.11%	-8.34%
Ulcer Index Depth and duration of drawdowns from previous peaks	3.82%	1.20%	+2.62%

Volatility

ZFL.TO vs. VAB.TO - Volatility Comparison

BMO Long Federal Bond (ZFL.TO) has a higher volatility of 3.14% compared to Vanguard Canadian Aggregate Bond Index ETF (VAB.TO) at 1.59%. This indicates that ZFL.TO's price experiences larger fluctuations and is considered to be riskier than VAB.TO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ZFL.TO	VAB.TO	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.14%	1.59%	+1.55%
Volatility (6M) Calculated over the trailing 6-month period	7.05%	3.45%	+3.60%
Volatility (1Y) Calculated over the trailing 1-year period	9.72%	4.38%	+5.34%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.71%	6.58%	+8.13%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	12.54%	6.48%	+6.06%

ZFL.TO vs. VAB.TO - Expense Ratio Comparison

ZFL.TO has a 0.22% expense ratio, which is higher than VAB.TO's 0.09% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

ZFL.TO vs. VAB.TO - Dividend Comparison

ZFL.TO's dividend yield for the trailing twelve months is around 2.84%, less than VAB.TO's 3.32% 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%
ZFL.TO BMO Long Federal Bond	2.84%	3.13%	3.20%	3.49%	3.77%	2.85%	2.57%	2.95%	3.00%	2.99%	3.05%	3.10%

Frequently Asked Questions

Can I hold both ZFL.TO and VAB.TO in my portfolio?

With a correlation of 0.95, ZFL.TO and VAB.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.

Which ETF is better, ZFL.TO or VAB.TO?

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.

Which ETF is cheaper, ZFL.TO or VAB.TO?

VAB.TO is cheaper with a 0.09% expense ratio, compared with 0.22% for ZFL.TO.

What is the main difference between ZFL.TO and VAB.TO?

ZFL.TO tracks FTSE TMX Canada Long Term Federal Bond Index, while VAB.TO tracks Bloomberg Global Aggregate Canadian Float Adjusted Bond Index. They also come from different issuers: BMO and Vanguard. Their fees differ too: 0.22% for ZFL.TO and 0.09% for VAB.TO.