(SPHQ) Invesco SP500 Quality - Ratings and Ratios

The Invesco S&P 500® Quality ETF (NYSE ARCA: SPHQ) is designed to offer exposure to high-quality companies within the S&P 500® Index. The fund typically allocates at least 90% of its assets to the securities that make up its underlying index, ensuring a high level of alignment with the indexs performance. By focusing on quality, the ETF aims to capture companies with strong fundamentals that are better positioned to withstand market volatility and deliver consistent returns over the long term.

The underlying index is constructed by first calculating a quality score for each security in the S&P 500®. This quality score is determined by evaluating three key metrics: profitability, earnings consistency, and leverage. Profitability assesses a companys ability to generate earnings, earnings consistency evaluates the stability of a companys profits over time, and leverage measures the level of debt a company carries. The 100 companies with the highest quality scores are then selected for inclusion in the index, creating a portfolio of firms with robust financial health and sustainable business models.

As a large-cap blend ETF, SPHQ provides exposure to well-established companies with a mix of growth and value characteristics. The fund trades on the NYSE ARCA under the ticker symbol SPHQ and has a substantial asset base of over $11.7 billion, indicating its popularity and liquidity. With a focus on quality, the ETF is particularly appealing to investors seeking to reduce exposure to lower-quality stocks that may be more vulnerable during market downturns. Additionally, the funds expense ratio and tracking error are important considerations for investors evaluating its cost-effectiveness and ability to closely replicate the performance of its underlying index.