How to Invest in Quebec Stocks Using Canadian ETFs

One trend I've been watching south of the border is the growing number of state-specific ETFs. The U.S. ETF industry has become large enough that issuers are beginning to launch funds focused on individual states, with Texas in particular seeing several dedicated products over the past few years.

Canada has started to see a similar, albeit much smaller, trend. Given the size of our ETF market, there isn't enough demand for funds covering every province. Instead, the niche has largely centered around one province: Quebec. For readers unfamiliar with Canadian civics, Quebec occupies a unique place within Confederation.

Quebec is Canada's only majority French-speaking province, operates under a civil law system rather than the common law used elsewhere in the country, and has long maintained a distinct cultural identity. Quebec is also home to many of the Canada’s largest publicly traded companies across sectors such as financial services, industrials, transportation, utilities, and consumer products.

Perhaps because of that unique identity, three Canadian ETF issuers have launched products specifically focused on Quebec-domiciled companies. Today, we'll take a look at each of them, explain how they differ from a broad Canadian equity ETF, and discuss which type of investor each may be best suited for.

CI Morningstar National Bank Quebec Index ETF (QXM)

QXM is the oldest of Canada's three Quebec-focused equity ETFs, having launched in February 2012. While the fund has never attracted the same level of assets as many broad-market Canadian ETFs, it has still grown to approximately $93 million in assets under management, making it large enough that the risk of fund closure appears relatively low.

QXM tracks the Morningstar National Bank Quebec Index, a passive benchmark designed to capture publicly traded companies headquartered in Quebec. To be eligible, companies must maintain their headquarters in the province and meet a minimum float-adjusted market capitalization of $150 million. Beyond those rules, there is no active management or discretionary stock selection. The ETF simply seeks to replicate the composition of its underlying index.

That methodology produces a portfolio that looks noticeably different from a traditional Canadian equity benchmark such as the S&P/TSX 60. Financials remain the largest sector, but at just 17.27% they carry a much smaller weighting than in the broader Canadian market, while energy exposure is almost nonexistent. Instead, consumer services account for 15.59% of the portfolio and industrial services represent another 15.45%, giving the fund a distinctly different sector mix.

Among its largest holdings are familiar Canadian names including IA Financial Corporation, Alimentation Couche-Tard, National Bank of Canada, Bombardier, Power Corporation of Canada, Dollarama, Canadian National Railway, Metro, Gildan Activewear, WSP Global, and Atkinsrealis Group.

QXM charges a 0.57% expense ratio. By today's standards, that's relatively expensive for a passive index ETF. However, when the fund launched in 2012, management fees at that level were much more common and considerably more competitive than they appear today.

Desjardins Quebec Equity ETF (DMQC)

Unlike Canada's major publicly traded banks, Desjardins operates as a financial cooperative owned by its members rather than outside shareholders. Founded in Quebec more than a century ago, it has long been one of the province's most recognizable financial institutions.

Given that history, it's not surprising that Desjardins introduced its own Quebec-focused equity ETF, DMQC in June 2025. Since launch, DMQC has grown modestly to approximately $40 million in assets under management. The fund's biggest differentiator, however, isn't its holdings but its cost.

Desjardins charges a 0% management fee, and after administrative and operating expenses, the ETF has a management expense ratio of just 0.01%. That makes it dramatically less expensive than QXM for investors seeking dedicated exposure to Quebec-listed companies.

The portfolio itself looks broadly similar to the other Quebec equity funds. Financials remain the largest sector at 25.52% of assets, followed by consumer services at 15.27% and industrial services at 12.63%. Many of the top holdings will therefore match QXM.

The ETF's ultra-low fees also allow more of its underlying dividends to flow through to investors. While QXM currently has a trailing 12-month distribution yield of approximately 1.00%, DMQC's trailing yield is a noticeably higher 1.67%. Most of that difference can be attributed to the fund's near-zero expenses.

NBI Quebec Growth Fund (NBQC)

Headquartered in Montreal, National Bank has deep roots in Quebec dating back to its founding in 1859 and remains one of the province's largest financial institutions. Given that history and local expertise, it is well positioned to manage an active portfolio focused specifically on Quebec-based companies.

NBQC reports approximately $683 million in assets under management. However, NBQC itself represents only the ETF series of the broader NBI Quebec Growth Fund, which is primarily offered as a mutual fund (advisor and F series). While active management naturally commands a higher price than passive indexing, NBQC is still relatively expensive, carrying a 1.12% expense ratio.

That higher fee does buy investors a portfolio that looks meaningfully different from either QXM or DMQC. Rather than largely mirroring Quebec's largest publicly traded companies, NBQC places a much greater emphasis on small- and mid-cap businesses. Investors will find companies such as Richelieu Hardware, Savaria Corporation, and Stella-Jones among the fund's larger holdings.

The sector allocation is also noticeably different. Industrials dominate the portfolio at 39.7% of assets, while financials and consumer services account for a smaller 13.8% and 11.9%, respectively. The result is a more concentrated portfolio that may appeal to investors seeking exposure to Quebec's smaller growth-oriented companies rather than tracking the province's largest publicly listed firms.