By Tony Dong, MSc, CETF on November 4, 2026 Estimated reading time: 7 minutes

All you need to know about accumulating “.L” ETFs as a Canadian investor

By Tony Dong, MSc, CETF on November 4, 2026 Estimated reading time: 7 minutes

Accumulating ETFs don’t defer taxation, but they can simplify compounding in a portfolio focused on the long term.

One thing Canadian investors will eventually notice after exploring the domestic exchange-traded fund (ETF) market is that certain ETF tickers come with a suffix. In a previous article, we looked at U.S.-dollar-denominated ETFs, such as the BMO S&P 500 Index ETF (ZSP.U). These funds provide the same underlying investment exposure as their Canadian-dollar counterparts, with the main difference being the currency in which their units trade.

Similarly, some currency-hedged ETFs have their own suffixes. One example from the same provider is the BMO Long-Term U.S. Treasury Bond Index ETF (Hedged Units) (ZTL.F). It provides exposure to the same underlying bond portfolio as the unhedged version, but uses currency derivatives to mitigate fluctuations between the Canadian and U.S. dollars.

There’s a third suffix worth knowing about, though. And once again, we can turn to BMO for an example: the BMO Ultra Short-Term Bond ETF (ZST.L). The “.L” suffix identifies accumulating units, which fundamentally change how an ETF handles the income generated by its underlying investments. 

Accumulating ETFs aren’t unique to Canada. They’re also widely available in Europe, where many ETF providers offer accumulating share classes under the Undertakings for Collective Investment in Transferable Securities (UCITS) regulatory framework. That said, these products remain a relatively small segment of the Canadian ETF market. According to Cboe Canada’s ETF Market Screener, just 93 ETFs are currently classified as accumulating. 

Given their relatively limited presence, it’s understandable that many Canadian investors may be unfamiliar with accumulating ETFs or how they differ from conventional distributing funds. So, let’s examine how they work, the practical differences for investors, and, most importantly, how their mechanics affect taxation.

How do accumulating ETFs work?

In Canada, one of the easiest ways to understand the difference is to compare ZST.L with its distributing counterpart ZST. Both hold a diversified portfolio of short-term, investment-grade bonds, generally targeting maturities of one year or........

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