One of the more unique ETFs out there is the First Asset Morningstar National Bank Quebec Index ETF (TSX:QXM), which invests in Quebec-based companies with a minimum float capitalization of $150 million.
The fund has been around for a little over five years, first trading on the TSX on February 2, 2012. It has a total asset base of $60 million with a little over 3.15 million units outstanding. Keep in mind the ETF isn’t very liquid; average daily volume is just over 900 shares.
QXM holds a total of 61 different securities. Largest positions include National Bank of Canada (representing 6.04% of assets), followed by Power Corporation (5.4% of assets), Canadian National Railway (5.1% of assets) and Power Financial Corp (4.9% of assets).
The ETF pays a dividend of approximately $0.07 per share each quarter, good enough for a 1.5% yield. It has a management expense ratio of 0.5%.
Investing in Quebec-based companies has been a smart move, at least over the last five years. QXM shares are up 85.4% since February 17, 2012, versus a 27.7% move for the TSX Composite. The TSX Composite has paid more in dividends during that time, but not nearly enough to make up the difference.
Much of this outperformance can be linked to the Quebec ETF’s lack of energy or natural resource exposure. It does not own one energy company, and just 4.3% of assets are invested in materials stocks. Thus, we may see a lot of its outperformance go away when those two sectors recover.
