ETF Comparison

XAW vs VXC

Which is Better for Canadian Investors?

Quick Verdict

Choose VXC for the marginally lower fee and quarterly distributions. Choose XAW if you prefer iShares and MSCI indexing. Both are functionally equivalent — they own the entire global stock market excluding Canada, making them the perfect complement to a standalone Canadian equity ETF.

Side-by-Side Comparison

Metric	XAW	VXC
Management Expense Ratio (MER)	0.22%	0.21%
Index Family	MSCI ACWI ex-Canada	FTSE Global All Cap ex-Canada
Number of Holdings	~9,000+	~12,000+
US Equity Weight	~60%	~58%
International Developed	~28%	~28%
Emerging Markets	~10%	~12%
Small-Cap Exposure	Limited	Yes (All Cap)
Distribution Frequency	Semi-annual	Quarterly
Listing Exchange	TSX	TSX
Eligible Accounts	TFSA, RRSP, FHSA, RESP	TFSA, RRSP, FHSA, RESP

Key Differences

Index Methodology

XAW tracks the MSCI All Country World ex-Canada Index (large and mid-cap focus), while VXC tracks the FTSE Global All Cap ex-Canada Index (including small caps). VXC's 'All Cap' mandate means it captures approximately 3,000 more small-cap stocks, providing slightly broader market coverage.

Small-Cap Exposure

VXC includes global small-cap stocks that XAW excludes. Small caps have historically delivered higher long-term returns (with higher volatility) than large and mid-caps alone. This gives VXC a slight diversification and return-potential advantage.

Distribution Schedule

VXC pays dividends quarterly while XAW pays semi-annually. If you reinvest dividends, quarterly payouts let you compound slightly faster. If you live off distributions, quarterly income is more practical for budgeting than semi-annual lumps.

Emerging Markets Weight

VXC holds slightly more emerging markets (~12% vs ~10%). This includes greater exposure to high-growth economies like India, Brazil, and Southeast Asia. The higher EM allocation adds growth potential but also slightly more political and currency risk.

Best For

Beginners

Either works perfectly as the international portion of a simple two-ETF portfolio (pair with VCN or XIC for Canada). VXC's quarterly distributions and slightly lower MER give it a marginal edge.

Long-Term TFSA & RRSP Investors

VXC for the lower MER, broader small-cap exposure, and quarterly distributions. Over a 25-year investing career, the combination of lower fees and more complete market coverage favors VXC.

DIY Portfolio Builders

Both are designed for investors who want to control their Canadian allocation separately. Pair either with a Canadian ETF (VCN at 0.05% MER) for a simple, low-cost two-fund portfolio.

Growth-Focused Investors

VXC's inclusion of small-cap stocks and higher emerging-market exposure gives it a slightly stronger growth tilt. For maximum growth, VXC paired with a small Canadian satellite position is a powerful combination.

Final Recommendation

Choose XAWif…

you prefer iShares products, are comfortable with semi-annual distributions, and want a large-and-mid-cap focused global ex-Canada portfolio.

Choose VXCif…

you want the broadest possible global ex-Canada exposure including small-cap stocks, prefer quarterly distributions, and want the lowest available MER on this type of ETF.

Explore Each ETF

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XAW

iShares Core MSCI All Country World ex Canada Index ETF