We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco S&P SmallCap Quality ETF (XSHQ) a Strong ETF Right Now?
Read MoreHide Full Article
Making its debut on 04/06/2017, smart beta exchange traded fund Invesco S&P SmallCap Quality ETF (XSHQ - Free Report) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
XSHQ is managed by Invesco, and this fund has amassed over $328.02 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, XSHQ seeks to match the performance of the SmallCap 600 Quality Index.
The S&P SmallCap 600 Quality Index is composed of 120 securities in the S&P SmallCap 600 Index that have the highest quality score, which is calculated based on the average of three fundamental measures: return on equity, accruals ratio and financial leverage ratio.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.29% for XSHQ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
ETFs 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.
Representing 22.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Corcept Therapeutics Inc (CORT - Free Report) accounts for about 2.85% of the fund's total assets, followed by Armstrong World Industries Inc (AWI - Free Report) and Adma Biologics Inc (ADMA - Free Report) .
Its top 10 holdings account for approximately 21.84% of XSHQ's total assets under management.
Performance and Risk
The ETF has lost about -3.05% and is up roughly 5.50% so far this year and in the past one year (as of 06/11/2025), respectively. XSHQ has traded between $34.34 and $47.59 during this last 52-week period.
The fund has a beta of 0.98 and standard deviation of 21.79% for the trailing three-year period. With about 118 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Quality ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Small-Cap ETF (VB - Free Report) tracks CRSP US Small Cap Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. Vanguard Small-Cap ETF has $62.77 billion in assets, iShares Core S&P Small-Cap ETF has $79.30 billion. VB has an expense ratio of 0.05% and IJR 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 - Small Cap Blend.
Bottom Line
To 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco S&P SmallCap Quality ETF (XSHQ) a Strong ETF Right Now?
Making its debut on 04/06/2017, smart beta exchange traded fund Invesco S&P SmallCap Quality ETF (XSHQ - Free Report) provides investors broad exposure to the Style Box - Small Cap Blend category of the market.
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 work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
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.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
XSHQ is managed by Invesco, and this fund has amassed over $328.02 million, which makes it one of the average sized ETFs in the Style Box - Small Cap Blend. Before fees and expenses, XSHQ seeks to match the performance of the SmallCap 600 Quality Index.
The S&P SmallCap 600 Quality Index is composed of 120 securities in the S&P SmallCap 600 Index that have the highest quality score, which is calculated based on the average of three fundamental measures: return on equity, accruals ratio and financial leverage ratio.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.29% for XSHQ, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 1.30%.
Sector Exposure and Top Holdings
ETFs 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.
Representing 22.20% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Corcept Therapeutics Inc (CORT - Free Report) accounts for about 2.85% of the fund's total assets, followed by Armstrong World Industries Inc (AWI - Free Report) and Adma Biologics Inc (ADMA - Free Report) .
Its top 10 holdings account for approximately 21.84% of XSHQ's total assets under management.
Performance and Risk
The ETF has lost about -3.05% and is up roughly 5.50% so far this year and in the past one year (as of 06/11/2025), respectively. XSHQ has traded between $34.34 and $47.59 during this last 52-week period.
The fund has a beta of 0.98 and standard deviation of 21.79% for the trailing three-year period. With about 118 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco S&P SmallCap Quality ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Small-Cap ETF (VB - Free Report) tracks CRSP US Small Cap Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. Vanguard Small-Cap ETF has $62.77 billion in assets, iShares Core S&P Small-Cap ETF has $79.30 billion. VB has an expense ratio of 0.05% and IJR 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 - Small Cap Blend.
Bottom Line
To 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.