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Is iShares MSCI USA Quality Factor ETF (QUAL) a Strong ETF Right Now?
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A smart beta exchange traded fund, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) debuted on 07/16/2013, and offers broad exposure to the Style Box - All 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.
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.
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.
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.
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
Managed by Blackrock, QUAL has amassed assets over $55.12 billion, making it one of the largest ETFs in the Style Box - All Cap Blend. Before fees and expenses, QUAL seeks to match the performance of the MSCI USA Sector Neutral Quality Index.
The MSCI USA Sector Neutral Quality Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
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 0.98%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QUAL, it has heaviest allocation in the Information Technology sector --about 33.3% of the portfolio --while Financials and Telecom round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.95% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
QUAL's top 10 holdings account for about 42.81% of its total assets under management.
Performance and Risk
The ETF has gained about 8.01% and is up about 10.67% so far this year and in the past one year (as of 09/12/2025), respectively. QUAL has traded between $152.42 and $191.57 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 16.62% for the trailing three-year period, making it a medium risk choice in the space. With about 129 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares MSCI USA Quality Factor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $76.82 billion in assets, Vanguard Total Stock Market ETF has $538.73 billion. ITOT has an expense ratio of 0.03% and VTI changes 0.03%.
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 - All 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 iShares MSCI USA Quality Factor ETF (QUAL) a Strong ETF Right Now?
A smart beta exchange traded fund, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) debuted on 07/16/2013, and offers broad exposure to the Style Box - All 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.
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.
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.
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.
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
Managed by Blackrock, QUAL has amassed assets over $55.12 billion, making it one of the largest ETFs in the Style Box - All Cap Blend. Before fees and expenses, QUAL seeks to match the performance of the MSCI USA Sector Neutral Quality Index.
The MSCI USA Sector Neutral Quality Index is based on a traditional market capitalization-weighted parent index, the MSCI USA Index which includes U.S. large and mid capitalization stocks.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
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 0.98%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
For QUAL, it has heaviest allocation in the Information Technology sector --about 33.3% of the portfolio --while Financials and Telecom round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.95% of total assets, followed by Microsoft Corp (MSFT) and Apple Inc (AAPL).
QUAL's top 10 holdings account for about 42.81% of its total assets under management.
Performance and Risk
The ETF has gained about 8.01% and is up about 10.67% so far this year and in the past one year (as of 09/12/2025), respectively. QUAL has traded between $152.42 and $191.57 during this last 52-week period.
The ETF has a beta of 1.04 and standard deviation of 16.62% for the trailing three-year period, making it a medium risk choice in the space. With about 129 holdings, it effectively diversifies company-specific risk .
Alternatives
iShares MSCI USA Quality Factor ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Core S&P Total U.S. Stock Market ETF (ITOT) tracks S&P Total Market Index and the Vanguard Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $76.82 billion in assets, Vanguard Total Stock Market ETF has $538.73 billion. ITOT has an expense ratio of 0.03% and VTI changes 0.03%.
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 - All 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.