BMO Aggregate Bond Index ETF
Price
C$13.58
YTD
+2.50%
Expense
0.09%
Yield
3.35%
🇨🇦 Canada
Best Canadian Bond ETFs — Fixed Income on TSX
Top Canadian bond ETFs. Compare ZAG vs XBB — MER, yield, duration.
Best Canadian Bond ETFs — 2026 Guide
Canadian bond ETFs provide the fixed-income foundation. With yields ~3.3-3.5% and ultra-low MERs, they offer government and corporate bond exposure.
ZAG vs XBB
Both track similar indices. ZAG: 0.09% MER, CAD 11.87B AUM. XBB: 0.10% MER, CAD 9.02B AUM. Performance virtually identical.
🏆 Winner — #1 pick
iShares Core Canadian Universe Bond Index ETF
Price
C$27.63
YTD
+2.30%
Expense
0.10%
Yield
3.33%
Frequently asked questions
What are Canadian bond ETFs?
Canadian bond ETFs are exchange-traded funds that invest in Canadian government and corporate bonds, providing stable income and portfolio diversification.
Why invest in Canadian bond ETFs?
They offer a low-cost, liquid way to access a diversified portfolio of bonds with predictable income, typically yielding around 3.3-3.5%.
Which Canadian bond ETF is the #1 pick?
ZAG (BMO Aggregate Bond Index ETF) is the top pick due to its large asset base, low MER, and broad Canadian bond exposure.
What does ZAG track?
ZAG tracks the FTSE Canada Universe Bond Index, covering a wide range of Canadian government and corporate bonds.
What is the expense ratio of ZAG?
ZAG has an ultra-low expense ratio of 0.09%.
What is the yield of ZAG?
ZAG offers a yield of approximately 3.35%.
What is XBB ETF?
XBB is the iShares Core Canadian Universe Bond Index ETF, providing broad exposure to Canadian bonds with a long-established track record.
How does XBB compare to ZAG?
XBB and ZAG have nearly identical performance, with XBB having a slightly higher expense ratio (0.10%) and a yield of 3.33%.
What is the asset size of ZAG and XBB?
ZAG has approximately CAD 11.87 billion in assets, while XBB has around CAD 9.02 billion.
How many bonds are typically held in these ETFs?
XBB holds over 1,500 Canadian government and corporate bonds; ZAG has similar broad diversification.
What types of bonds are included in these ETFs?
They include federal and provincial government bonds, corporate bonds, and other investment-grade fixed-income securities.
Are Canadian bond ETFs suitable for conservative investors?
Yes, they are ideal for conservative investors seeking stable income and low-risk exposure to the Canadian bond market.
What is MER in bond ETFs?
MER stands for Management Expense Ratio, which is the annual fee charged by the ETF for managing the fund.
What is the YTD return of ZAG?
ZAG has a year-to-date return of approximately +2.50%.
What is the YTD return of XBB?
XBB has a year-to-date return of about +2.30%.
Do these ETFs provide monthly income?
Yes, both ZAG and XBB distribute income monthly from interest earned on their bond holdings.
Are Canadian bond ETFs affected by interest rate changes?
Yes, bond ETFs can fluctuate in value with changes in interest rates, though they remain a lower-risk option compared to equities.
Can these ETFs be used for portfolio diversification?
Yes, they provide a low-volatility complement to equity holdings, reducing overall portfolio risk.
Which ETF is better for cost-conscious investors?
ZAG is slightly better for cost-conscious investors due to its lower expense ratio of 0.09%.
Are ZAG and XBB available on the TSX?
Yes, both ZAG and XBB are listed and trade on the Toronto Stock Exchange (TSX).