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Is iShares MSCI USA Quality Factor ETF (QUAL) a Strong ETF Right Now?
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Launched on 07/16/2013, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All 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.
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.
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
Because the fund has amassed over $52.86 billion, this makes it one of the largest ETFs in the Style Box - All Cap Blend. QUAL is managed by Blackrock. QUAL, before fees and expenses, 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
For 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.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.91%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QUAL's heaviest allocation is in the Information Technology sector, which is about 35.3% of the portfolio. Its Financials and Telecom round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.63% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
Its top 10 holdings account for approximately 42.84% of QUAL's total assets under management.
Performance and Risk
So far this year, QUAL has added roughly 11.33%, and is up roughly 8.01% in the last one year (as of 11/13/2025). During this past 52-week period, the fund has traded between $152.42 and $199.18.
The ETF has a beta of 1.05 and standard deviation of 15.06% 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 $80.06 billion in assets, Vanguard Total Stock Market ETF has $564.37 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?
Launched on 07/16/2013, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - All 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.
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.
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
Because the fund has amassed over $52.86 billion, this makes it one of the largest ETFs in the Style Box - All Cap Blend. QUAL is managed by Blackrock. QUAL, before fees and expenses, 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
For 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.
Annual operating expenses for this ETF are 0.15%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 0.91%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
QUAL's heaviest allocation is in the Information Technology sector, which is about 35.3% of the portfolio. Its Financials and Telecom round out the top three.
Looking at individual holdings, Nvidia Corp (NVDA) accounts for about 7.63% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).
Its top 10 holdings account for approximately 42.84% of QUAL's total assets under management.
Performance and Risk
So far this year, QUAL has added roughly 11.33%, and is up roughly 8.01% in the last one year (as of 11/13/2025). During this past 52-week period, the fund has traded between $152.42 and $199.18.
The ETF has a beta of 1.05 and standard deviation of 15.06% 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 $80.06 billion in assets, Vanguard Total Stock Market ETF has $564.37 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.