Taking control of your personal finances in Canada can quickly feel overwhelming. Between stock market jargon, the wide range of registered accounts (TFSA, RRSP, FHSA), and the thousands of stocks available, many beginners fall victim to analysis paralysis.
However, a quiet revolution has transformed passive investing over the past few years: all-in-one ETFs (also known as asset allocation funds).
Among the most popular options on the Toronto Stock Exchange (TSX), ZGRO (BMO Growth ETF) stands out as a turnkey solution for anyone looking to grow their wealth over the long term without spending hours managing their portfolio each week.
This article takes an in-depth look at the ZGRO ETF to help you determine whether it deserves a place in your investment portfolio.
1. What Is the ZGRO ETF?
Launched by BMO Global Asset Management in February 2019, ZGRO is an asset allocation exchange-traded fund (ETF).
Instead of purchasing hundreds of individual stocks and bonds, you buy a single unit of ZGRO, and BMO takes care of allocating your money across global markets. This is often referred to as a “fund of funds” because ZGRO is composed of a basket of underlying index ETFs managed by BMO.
Its mission is simple: to provide long-term capital growth through global equity exposure while maintaining a modest level of protection against market volatility.
2. ZGRO’s Asset Allocation: The 80/20 Formula
The secret behind ZGRO lies in its predefined and consistent structure. The fund maintains a strict target allocation of:
- 80% Equities: Designed to maximize long-term growth potential. Stocks represent ownership in companies that tend to appreciate over time, although they can fluctuate significantly in the short term.
- 20% Fixed Income (Bonds): Intended to stabilize the portfolio. Bonds act as a cushion during market downturns and provide a steady stream of income through interest payments.
Geographic and Sector Diversification
ZGRO does not put all its eggs in one basket. By investing in ZGRO, you instantly gain ownership of thousands of companies around the world through a strategically diversified portfolio.
Here is a typical breakdown of ZGRO’s major underlying holdings:
| Underlying ETF Name | Ticker | Approximate Weight |
| BMO S&P 500 Index ETF | ZSP | ~36% |
| BMO S&P/TSX Capped Composite ETF | ZCN | ~20% |
| BMO MSCI EAFE Index ETF | ZEA | ~14% |
| BMO Discount Bond Index ETF | ZDB | ~13% |
| BMO MSCI Emerging Markets ETF | ZEM | ~7% |
| BMO US Aggregate Bond Index ETF (Hedged) | ZUAG.F | ~6% |
| Ticker | Role in the Portfolio |
| ZSP | Large U.S. companies (Apple, Microsoft, Amazon, etc.) |
| ZCN | Canadian stock market (Banks, Energy, Railways) |
| ZEA | Developed international markets (Europe, Japan, Australia) |
| ZDB | High-quality Canadian bonds (government and corporate) |
| ZEM | Emerging economies (China, India, Taiwan, Brazil) |
| ZUAG.F | U.S. bonds hedged against currency risk |
3. Why Choose an All-in-One ETF as a Beginner?
For a beginner Canadian investor, ZGRO offers three major advantages:
Automatic Rebalancing
In the stock market, asset values are constantly changing. If U.S. stocks surge higher, the equity portion of your portfolio could grow from 80% to 85%. Conversely, the bond allocation could fall to 15%.
In a traditional portfolio, you would need to calculate the allocation drift yourself, sell some stocks (which could trigger taxes), and purchase additional bonds to return to the 80/20 target allocation. With ZGRO, BMO’s management team handles this rebalancing on a quarterly basis. Everything happens behind the scenes, with no trading commissions for you and no headaches.
Simplicity
Instead of logging into your brokerage account and placing 5 or 6 different purchase orders each month, you only need to enter one symbol: ZGRO.TO. Buy the number of units you want, and you’re done. This significantly reduces the risk of making investment mistakes.
Eliminating Emotional Bias
The number one enemy of investors is emotion. When markets decline, it can be difficult to continue buying the assets that are falling in value. ZGRO removes much of this emotional bias by following a disciplined, rules-based indexing strategy.
4. Cost Analysis: ZGRO Management Fees
Fees are one of the most predictable factors affecting your long-term investment returns. Traditional Canadian banks often sell mutual funds with management expense ratios (MERs) around 2.00%. This means you could pay approximately $200 annually for every $10,000 invested.
What about ZGRO?
- Management Fee: 0.15% (reduced by BMO to remain highly competitive)
- Total MER: 0.18% (including taxes and underlying fund expenses)
For a $10,000 investment, ZGRO would cost approximately $18 per year. This represents a substantial savings compared to traditional mutual funds, leaving more money invested and benefiting from the power of compound growth.
5. Who Is ZGRO Suitable For?
BMO classifies ZGRO’s risk level as low to medium. However, the word “Growth” in its name clearly indicates a strong emphasis on equities.
ZGRO may be an excellent fit if:
1. Your Investment Horizon Is Longer Than 5 to 10 Years
Because the fund holds approximately 80% equities, it will experience declines during bear markets. You need enough time to allow markets to recover from temporary downturns.
2. You Have a Moderate to High Tolerance for Volatility
You should be comfortable seeing your portfolio decline by 15% to 20% during a major market correction without panicking or selling at a loss.
3. Your Financial Goals Are Long-Term
ZGRO is well suited for investors saving toward long-term objectives such as:
- Building a down payment for a home (through a FHSA or TFSA)
- Saving for retirement (through an RRSP)
- Growing long-term wealth through a diversified portfolio of global stocks and bonds
6. Tax Considerations: Which Account Should Hold ZGRO?
As a Canadian resident, you have access to several powerful tax-advantaged accounts. ZGRO is fully eligible to be held in all of them.
TFSA (Tax-Free Savings Account)
For many beginners, this is often the best place to start. Investments grow tax-free, and all withdrawals are completely tax-free.
Holding ZGRO in a TFSA allows you to build long-term wealth without paying taxes to either the Canada Revenue Agency (CRA) or your provincial tax authority on capital gains or distributions.
RRSP (Registered Retirement Savings Plan)
If you are in a higher tax bracket, investing in ZGRO through an RRSP allows you to deduct your contributions from your current taxable income.
The fund can then grow tax-deferred until retirement, helping you maximize long-term compounding.
FHSA (First Home Savings Account)
If you plan to purchase your first home within the next 5 to 15 years, the FHSA combines the benefits of both an RRSP (tax deduction) and a TFSA (tax-free withdrawals).
ZGRO can be an excellent fit for an FHSA, provided your home purchase timeline is not too short. As a general rule, an 80% equity portfolio may not be appropriate if you expect to buy a home within the next 12 months.
7. Head-to-Head Comparison: ZGRO vs XGRO vs VGRO vs XEQT vs VEQT
Growth Portfolio Allocation Comparison
MER = Management Expense Ratio / Portfolio Allocation
At first glance, the differences between ZGRO, XGRO, and VGRO are minimal. All three ETFs offer a similar asset allocation consisting of approximately 80% equities and 20% bonds, while maintaining a management expense ratio of roughly 0.20%.
For most investors, choosing between these three products is unlikely to have a significant impact on long-term performance.
The more important decision is whether you want an 80/20 growth portfolio (ZGRO, XGRO, or VGRO) or a 100% equity portfolio (XEQT or VEQT).
Investors who prefer a smoother ride and some downside protection may favor ZGRO, XGRO, or VGRO. Meanwhile, investors with a longer time horizon and a higher tolerance for volatility may prefer XEQT or VEQT, which eliminate bonds entirely in pursuit of maximum long-term growth potential.
Historical Performance Comparison
| Symbol | 1 Year | 3 Years | 5 Years | 10 Years |
| ZGRO.TO | 25.28% | 16.34% | 10.78% | — |
| XGRO.TO | 25.16% | 16.56% | 10.71% | 10.20% |
| VGRO.TO | 25.74% | 16.54% | 10.57% | — |
| VEQT.TO | 32.32% | 20.10% | 13.24% | — |
| XEQT.TO | 31.47% | 19.93% | 13.24% | — |
As of May 2026
Historical data confirms this reality. Over the past five years, annualized returns for ZGRO, XGRO, and VGRO have ranged from just 10.57% to 10.78%, representing a negligible difference in performance. This is largely because all three funds invest in many of the same global regions and follow a similar investment philosophy.
By contrast, VEQT and XEQT stand out due to their 100% equity exposure. The absence of bonds has allowed these ETFs to generate higher returns in recent years. Over the past five years, VEQT and XEQT delivered annualized returns of 13.24%, approximately 2.5 percentage points higher than the growth-oriented 80/20 ETFs.
However, this outperformance comes with greater volatility. During market corrections, investors holding VEQT or XEQT should be prepared to experience larger declines than those invested in ZGRO, XGRO, or VGRO.
For younger investors with a long investment horizon and a high tolerance for risk, XEQT or VEQT may be attractive options. On the other hand, investors seeking to modestly reduce portfolio volatility may prefer ZGRO, XGRO, or VGRO because of their 20% bond allocation.
Conclusion
Ultimately, the choice among these five ETFs depends more on your risk tolerance than on historical performance.
Performance differences between funds within the same category are relatively small. The real decision comes down to whether you prefer a 100% equity approach (XEQT or VEQT) or a more balanced portfolio with 20% bonds (ZGRO, XGRO, or VGRO).
Investors seeking maximum long-term growth and who can tolerate significant market fluctuations may lean toward XEQT or VEQT. Those looking for a smoother investing experience with some downside protection may find ZGRO, XGRO, or VGRO to be a better fit.
8. How to Buy Your First Shares of ZGRO (Step by Step)
Buying ZGRO is remarkably simple if you use a discount brokerage platform (such as Wealthsimple, Questrade, or the online brokerage platforms offered by major Canadian banks like Disnat or National Bank Direct Brokerage).
Open a Brokerage Account
Choose the platform that best suits your needs and open a TFSA, RRSP, or FHSA account.
Whenever possible, prioritize platforms that offer commission-free ETF purchases to maximize your long-term returns.
Transfer Funds
Link your everyday bank account and deposit the amount you are ready to invest.
Search for the Ticker Symbol
In your brokerage app’s search bar, enter the ticker symbol ZGRO (sometimes displayed as ZGRO.TO to indicate that it trades on the Toronto Stock Exchange).
Place a Buy Order
- Select a Market Order if you want to purchase shares immediately at the current market price during stock market trading hours (9:30 a.m. to 4:00 p.m. Eastern Time).
- Enter the number of shares you would like to purchase based on your available budget.
Optional – Activate DRIP
If your brokerage supports it, consider activating a Dividend Reinvestment Plan (DRIP).
ZGRO pays quarterly distributions. A DRIP automatically reinvests those distributions into additional shares of ZGRO without any trading commissions, helping accelerate the power of compounding over time.
Conclusion: The Final Verdict on the ZGRO ETF
Investing in ZGRO is one of the most logical and efficient decisions a beginner Canadian investor can make.
For a modest annual cost of just 0.18%, you delegate portfolio management, global diversification, and rebalancing to professionals at BMO.
This ETF eliminates the need to stress over daily market fluctuations or spend countless hours analyzing complex financial statements. If you are looking for a true “buy-and-hold” solution to maximize the long-term growth of your TFSA or RRSP, ZGRO checks virtually every box.
Its combination of simplicity, diversification, low cost, and automatic portfolio maintenance makes it an excellent core holding for investors seeking long-term wealth creation without the complexity of managing multiple ETFs.
Disclaimer
Investing involves the risk of capital loss. This article is provided for informational and educational purposes only and does not constitute professional financial advice. Always evaluate your personal financial situation and consider consulting a qualified financial advisor before making any investment decisions.
