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

Designed to provide broad exposure to the Style Box - Large Cap Blend category of the market, the Invesco S&P 500 Quality ETF (SPHQ) is a smart beta exchange traded fund launched on 12/06/2005.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.Fund Sponsor & IndexManaged by Invesco, SPHQ has amassed assets over $14.85 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. This particular fund seeks to match the performance of the S&P 500 Quality Index before fees and expenses.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 ExpensesSince cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.Annual operating expenses for SPHQ are 0.15%, which makes it one of the cheaper products in the space.It has a 12-month trailing dividend yield of 1.06%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.This ETF has heaviest allocation in the Industrials sector - about 26.1% of the portfolio. Information Technology and Consumer Staples round out the top three.When you look at individual holdings, Apple Inc (AAPL) accounts for about 5.77% of the fund's total assets, followed by Mastercard Inc (MA) and Costco Wholesale Corp (COST).SPHQ's top 10 holdings account for about 39.42% of its total assets under management.Performance and RiskThe ETF has added about 10.46% so far this year and was up about 9.21% in the last one year (as of 11/17/2025). In the past 52-week period, it has traded between $59.24 and $75.00The ETF has a beta of 0.91 and standard deviation of 14.11% for the trailing three-year period, making it a medium risk choice in the space. With about 102 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 $34.86 billion in assets, Vanguard Dividend Appreciation ETF has $98.81 billion. DGRO has an expense ratio of 0.08% and VIG changes 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 BlendBottom 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>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 ReportsThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks