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

Launched on 12/06/2005, the Invesco S&P 500 Quality ETF (SPHQ) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Blend category of the market.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco. SPHQ has been able to amass assets over $11.39 billion, making it one of the largest ETFs in the Style Box - Large Cap Blend. Before fees and expenses, SPHQ 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 ExpensesFor ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.SPHQ's 12-month trailing dividend yield is 1.18%.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.Representing 33% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Industrials round out the top three.Looking at individual holdings, Broadcom Inc (AVGO) accounts for about 5.56% of total assets, followed by Mastercard Inc (MA) and Johnson & Johnson (JNJ).The top 10 holdings account for about 44.97% of total assets under management.Performance and RiskSo far this year, SPHQ has added about 22.91%, and is up roughly 36.08% in the last one year (as of 11/04/2024). During this past 52-week period, the fund has traded between $50.10 and $68.11.SPHQ has a beta of 0.92 and standard deviation of 17.16% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 102 holdings, it effectively diversifies company-specific risk.AlternativesInvesco S&P 500 Quality ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.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 $30.28 billion in assets, Vanguard Dividend Appreciation ETF has $84.84 billion. DGRO has an expense ratio of 0.08% and VIG charges 0.06%.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 Johnson & Johnson (JNJ): Free Stock Analysis Report Broadcom Inc. (AVGO): Free Stock Analysis Report Vanguard Dividend Appreciation ETF (VIG): ETF Research Reports iShares Core Dividend Growth ETF (DGRO): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks