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Is iShares MSCI USA Quality Factor ETF (QUAL) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) is a smart beta exchange traded fund launched on 07/16/2013.
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.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $47.62 billion, which makes it one of the largest ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the MSCI USA Sector Neutral Quality Index before fees and expenses.
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
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 0.15% for QUAL, making it one of the cheaper products in the space.
QUAL's 12-month trailing dividend yield is 0.97%.
Sector Exposure and Top Holdings
Most 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.
This ETF has heaviest allocation in the Information Technology sector - about 33.9% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.2% of total assets, followed by Nvidia Corp (NVDA) and Microsoft Corp (MSFT).
QUAL's top 10 holdings account for about 38.46% of its total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI USA Quality Factor ETF has lost about -2.01% so far, and was up about 13.63% over the last 12 months (as of 03/20/2026). QUAL has traded between $152.42 $205.45 in this past 52-week period.
QUAL has a beta of 1.04 and standard deviation of 14.28% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 125 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 Index Fund ETF Shares (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $79.68 billion in assets, Vanguard Total Stock Market Index Fund ETF Shares has $563.64 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?
Designed to provide broad exposure to the Style Box - All Cap Blend category of the market, the iShares MSCI USA Quality Factor ETF (QUAL - Free Report) is a smart beta exchange traded fund launched on 07/16/2013.
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.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Blackrock, and has been able to amass over $47.62 billion, which makes it one of the largest ETFs in the Style Box - All Cap Blend. This particular fund seeks to match the performance of the MSCI USA Sector Neutral Quality Index before fees and expenses.
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
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 0.15% for QUAL, making it one of the cheaper products in the space.
QUAL's 12-month trailing dividend yield is 0.97%.
Sector Exposure and Top Holdings
Most 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.
This ETF has heaviest allocation in the Information Technology sector - about 33.9% of the portfolio. Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 6.2% of total assets, followed by Nvidia Corp (NVDA) and Microsoft Corp (MSFT).
QUAL's top 10 holdings account for about 38.46% of its total assets under management.
Performance and Risk
Year-to-date, the iShares MSCI USA Quality Factor ETF has lost about -2.01% so far, and was up about 13.63% over the last 12 months (as of 03/20/2026). QUAL has traded between $152.42 $205.45 in this past 52-week period.
QUAL has a beta of 1.04 and standard deviation of 14.28% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 125 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 Index Fund ETF Shares (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $79.68 billion in assets, Vanguard Total Stock Market Index Fund ETF Shares has $563.64 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.