ZGB.TO vs. ZAG.TO

Last updated Jun 5, 2026

ZGB.TO (BMO Government Bond Index ETF) and ZAG.TO (BMO Aggregate Bond Index ETF) are both Canadian Government Bonds funds from BMO - ZGB.TO tracks the FTSE Canada All Government Bond Index while ZAG.TO tracks the FTSE Canada Universe Bond Index. Both are passively managed. Over the past 5 years, ZGB.TO returned 0.16%/yr vs 0.76%/yr for ZAG.TO. A 0.75 correlation means they provide meaningful diversification when combined. ZGB.TO charges 0.17%/yr vs 0.09%/yr for ZAG.TO.

Performance

ZGB.TO vs. ZAG.TO - Performance Comparison

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

Returns By Period

The year-to-date returns for both stocks are quite close, with ZGB.TO having a 1.73% return and ZAG.TO slightly lower at 1.70%.

ZGB.TO

• 1D: 0.11%
• 1M: 1.59%
• YTD: 1.73%
• 6M: 0.92%
• 1Y: 2.45%
• 3Y*: 3.59%
• 5Y*: 0.16%
• 10Y*: —

ZAG.TO

• 1D: 0.00%
• 1M: 1.82%
• YTD: 1.70%
• 6M: 1.18%
• 1Y: 2.95%
• 3Y*: 4.31%
• 5Y*: 0.76%
• 10Y*: 1.68%

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

ZGB.TO vs. ZAG.TO - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018
ZGB.TO BMO Government Bond Index ETF	1.73%	1.54%	3.30%	5.92%	-12.38%	-2.74%	8.37%	5.42%	3.57%
ZAG.TO BMO Aggregate Bond Index ETF	1.70%	2.25%	4.48%	6.41%	-11.60%	-2.60%	8.34%	6.84%	2.39%

Correlation

The correlation between ZGB.TO and ZAG.TO is 0.79, 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	0.79
Correlation (3Y) Calculated over the trailing 3-year period	0.81
Correlation (5Y) Calculated over the trailing 5-year period	0.81
Correlation (All Time) Calculated using the full available price history since Mar 8, 2018	0.75

The correlation between ZGB.TO and ZAG.TO has been stable across timeframes, ranging from 0.75 to 0.81 - a consistent structural relationship.

Return for Risk

ZGB.TO vs. ZAG.TO — Risk / Return Rank

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

ZGB.TO

ZGB.TO Risk / Return Rank: 18
ZGB.TO Sharpe Ratio Rank: 18
ZGB.TO Sortino Ratio Rank: 17
ZGB.TO Omega Ratio Rank: 17
ZGB.TO Calmar Ratio Rank: 21
ZGB.TO Martin Ratio Rank: 18

ZAG.TO

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

ZGB.TO vs. ZAG.TO - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for BMO Government Bond Index ETF (ZGB.TO) and BMO Aggregate Bond Index ETF (ZAG.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.

	ZGB.TO	ZAG.TO	Difference
Sharpe ratio: Return per unit of total volatility	0.56	0.67	-0.11
Sortino ratio: Return per unit of downside risk	0.78	0.94	-0.16
Omega ratio: Gain probability vs. loss probability	1.10	1.12	-0.02
Calmar ratio: Return relative to maximum drawdown	0.89	1.06	-0.17
Martin ratio: Return relative to average drawdown	1.89	2.48	-0.59
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

ZGB.TO vs. ZAG.TO - Sharpe Ratio Comparison

The current ZGB.TO Sharpe Ratio is 0.56, which is comparable to the ZAG.TO Sharpe Ratio of 0.67. The chart below compares the historical Sharpe Ratios of ZGB.TO and ZAG.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

	ZGB.TO	ZAG.TO	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	0.56	0.67	-0.11
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.02	0.12	-0.09
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	—	0.24	—
Sharpe Ratio (All Time) Calculated using the full available price history	0.26	0.45	-0.19

Drawdowns

ZGB.TO vs. ZAG.TO - Drawdown Comparison

The maximum ZGB.TO drawdown since its inception was -19.31%, which is greater than ZAG.TO's maximum drawdown of -18.03%. Use the drawdown chart below to compare losses from any high point for ZGB.TO and ZAG.TO.

Drawdown Indicators

	ZGB.TO	ZAG.TO	Difference
Max Drawdown Largest peak-to-trough decline	-19.31%	-18.03%	-1.28%
Max Drawdown (1Y) Largest decline over 1 year	-2.76%	-2.79%	+0.03%
Max Drawdown (3Y) Largest decline over 3 years	-5.86%	-5.42%	-0.44%
Max Drawdown (5Y) Largest decline over 5 years	-16.35%	-15.77%	-0.58%
Max Drawdown (10Y) Largest decline over 10 years	—	-18.03%	—
Current Drawdown Current decline from peak	-5.06%	-1.09%	-3.97%
Average Drawdown Average peak-to-trough decline	-6.98%	-3.54%	-3.44%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.30%	1.19%	+0.11%

Volatility

ZGB.TO vs. ZAG.TO - Volatility Comparison

BMO Government Bond Index ETF (ZGB.TO) has a higher volatility of 1.84% compared to BMO Aggregate Bond Index ETF (ZAG.TO) at 1.68%. This indicates that ZGB.TO's price experiences larger fluctuations and is considered to be riskier than ZAG.TO based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	ZGB.TO	ZAG.TO	Difference
Volatility (1M) Calculated over the trailing 1-month period	1.84%	1.68%	+0.16%
Volatility (6M) Calculated over the trailing 6-month period	3.52%	3.43%	+0.09%
Volatility (1Y) Calculated over the trailing 1-year period	4.42%	4.45%	-0.03%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	6.81%	6.58%	+0.23%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	6.15%	7.11%	-0.96%

ZGB.TO vs. ZAG.TO - Expense Ratio Comparison

ZGB.TO has a 0.17% expense ratio, which is higher than ZAG.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

ZGB.TO vs. ZAG.TO - Dividend Comparison

ZGB.TO's dividend yield for the trailing twelve months is around 3.04%, less than ZAG.TO's 3.42% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
ZAG.TO BMO Aggregate Bond Index ETF	3.42%	3.48%	3.44%	3.47%	3.56%	3.04%	2.88%	3.03%	2.92%	2.95%	3.07%	3.13%
ZGB.TO BMO Government Bond Index ETF	3.04%	2.81%	2.69%	2.71%	2.76%	2.38%	2.26%	2.41%	2.58%	0.00%	0.00%	0.00%

Frequently Asked Questions

Can I hold both ZGB.TO and ZAG.TO in my portfolio?

ZGB.TO and ZAG.TO have a correlation of 0.79, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which ETF is better, ZGB.TO or ZAG.TO?

On fees, ZAG.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, ZGB.TO or ZAG.TO?

ZAG.TO is cheaper with a 0.09% expense ratio, compared with 0.17% for ZGB.TO.

What is the main difference between ZGB.TO and ZAG.TO?

ZGB.TO tracks FTSE Canada All Government Bond Index, while ZAG.TO tracks FTSE Canada Universe Bond Index. Their fees differ too: 0.17% for ZGB.TO and 0.09% for ZAG.TO.