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Is iShares MSCI USA Quality Factor ETF (QUAL) a Strong ETF Right Now?
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The iShares MSCI USA Quality Factor ETF (QUAL - Free Report) made its debut on 07/16/2013, and is a smart beta exchange traded fund that provides 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $48.59 billion, making it one of the largest ETFs in the Style Box - All Cap Blend. QUAL 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
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 0.84%.
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 40.1% of the portfolio --while Telecom and Financials round out the top three.
Looking at individual holdings, Microsoft (MSFT) accounts for about 7.61% of total assets, followed by Apple (AAPL) and Nvidia (NVDA).
Its top 10 holdings account for approximately 44.34% of QUAL's total assets under management.
Performance and Risk
The ETF return is roughly 14.37% and was up about 15.93% so far this year and in the past one year (as of 10/06/2026), respectively. QUAL has traded between $186.49 and $227.18 during this last 52-week period.
The ETF has a beta of 1.00 and standard deviation of 14.20% for the trailing three-year period, making it a medium risk choice in the space. With about 122 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 Morningstar Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $97.73 billion in assets, Vanguard Morningstar Total Stock Market ETF has $695.77 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?
The iShares MSCI USA Quality Factor ETF (QUAL - Free Report) made its debut on 07/16/2013, and is a smart beta exchange traded fund that provides 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 offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Blackrock. It has amassed assets over $48.59 billion, making it one of the largest ETFs in the Style Box - All Cap Blend. QUAL 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
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.15%.
It's 12-month trailing dividend yield comes in at 0.84%.
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 40.1% of the portfolio --while Telecom and Financials round out the top three.
Looking at individual holdings, Microsoft (MSFT) accounts for about 7.61% of total assets, followed by Apple (AAPL) and Nvidia (NVDA).
Its top 10 holdings account for approximately 44.34% of QUAL's total assets under management.
Performance and Risk
The ETF return is roughly 14.37% and was up about 15.93% so far this year and in the past one year (as of 10/06/2026), respectively. QUAL has traded between $186.49 and $227.18 during this last 52-week period.
The ETF has a beta of 1.00 and standard deviation of 14.20% for the trailing three-year period, making it a medium risk choice in the space. With about 122 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 Morningstar Total Stock Market ETF (VTI) tracks CRSP US Total Market Index. iShares Core S&P Total U.S. Stock Market ETF has $97.73 billion in assets, Vanguard Morningstar Total Stock Market ETF has $695.77 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.