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Is Invesco S&P 500 Quality ETF (SPHQ) a Strong ETF Right Now?
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The Invesco S&P 500 Quality ETF (SPHQ - Free Report) 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
SPHQ is managed by Invesco, and this fund has amassed over $14.16 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. SPHQ 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 Expenses
Since 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 this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.05%.
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 24.6% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Financials round out the top three.
When you look at individual holdings, Visa Inc (V) accounts for about 5.88% of the fund's total assets, followed by Netflix Inc (NFLX) and Mastercard Inc (MA).
The top 10 holdings account for about 48.04% of total assets under management.
Performance and Risk
The ETF has added about 6.76% and it's up approximately 12% so far this year and in the past one year (as of 07/14/2025), respectively. SPHQ has traded between $59.24 and $72.11 during this last 52-week period.
The fund has a beta of 0.92 and standard deviation of 15.97% for the trailing three-year period, which makes SPHQ a medium risk choice in this particular space. With about 101 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco 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 $32.48 billion in assets, Vanguard Dividend Appreciation ETF has $92.92 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 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.
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Is Invesco S&P 500 Quality ETF (SPHQ) a Strong ETF Right Now?
The Invesco S&P 500 Quality ETF (SPHQ - Free Report) 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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
SPHQ is managed by Invesco, and this fund has amassed over $14.16 billion, which makes it one of the largest ETFs in the Style Box - Large Cap Blend. SPHQ 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 Expenses
Since 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 this ETF are 0.15%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 1.05%.
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 24.6% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Industrials and Financials round out the top three.
When you look at individual holdings, Visa Inc (V) accounts for about 5.88% of the fund's total assets, followed by Netflix Inc (NFLX) and Mastercard Inc (MA).
The top 10 holdings account for about 48.04% of total assets under management.
Performance and Risk
The ETF has added about 6.76% and it's up approximately 12% so far this year and in the past one year (as of 07/14/2025), respectively. SPHQ has traded between $59.24 and $72.11 during this last 52-week period.
The fund has a beta of 0.92 and standard deviation of 15.97% for the trailing three-year period, which makes SPHQ a medium risk choice in this particular space. With about 101 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco 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 $32.48 billion in assets, Vanguard Dividend Appreciation ETF has $92.92 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 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.