Is Invesco S&P 500 Quality ETF (SPHQ) a Strong ETF Right Now?

The Invesco S&P 500 Quality ETF (SPHQ) was launched on 12/06/2005, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Large Cap Blend category of the market.What Are Smart Beta ETFs?Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexSPHQ is managed by Invesco, and this fund has amassed over $12.68 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. SPHQ, before fees and expenses, seeks to match the performance of the S&P 500 Quality Index.The S&P 500 Quality Index tracks the performance of stocks in the S&P 500 Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio.Cost & Other ExpensesExpense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.The fund has a 12-month trailing dividend yield of 1.14%.Sector Exposure and Top HoldingsETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.SPHQ's heaviest allocation is in the Information Technology sector, which is about 22.90% of the portfolio. Its Industrials and Financials round out the top three.Taking into account individual holdings, Johnson & Johnson (JNJ) accounts for about 5.99% of the fund's total assets, followed by Visa Inc (V) and Mastercard Inc (MA).The top 10 holdings account for about 46.63% of total assets under management.Performance and RiskSo far this year, SPHQ has added roughly 0.60%, and it's up approximately 13.55% in the last one year (as of 05/12/2025). During this past 52-week period, the fund has traded between $59.24 and $71.22.SPHQ has a beta of 0.93 and standard deviation of 16.94% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 101 holdings, it effectively diversifies company-specific risk.AlternativesInvesco S&P 500 Quality ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. There are other ETFs in the space which investors could consider as well.IShares Core Dividend Growth ETF (DGRO) tracks Morningstar US Dividend Growth Index and the Vanguard Dividend Appreciation ETF (VIG) tracks NASDAQ US Dividend Achievers Select Index. IShares Core Dividend Growth ETF has $30.18 billion in assets, Vanguard Dividend Appreciation ETF has $86.90 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.05%.Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Large Cap Blend.Bottom LineTo learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports Mastercard Incorporated (MA): Free Stock Analysis Report Visa Inc. (V): Free Stock Analysis Report Johnson & Johnson (JNJ): Free Stock Analysis Report Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares Core Dividend Growth ETF (DGRO): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks