If you want a quality-factor tilt on U.S. large caps, the two cleanest options are the Invesco S&P 500 Quality ETF (NYSEARCA:SPHQ) and the JPMorgan U.S.
Quality Factor ETF (NYSEARCA:JQUA)
Both screen for the same headline traits: high return on equity, clean accruals, strong balance sheets. Both charge similar fees. Going in, I expected JQUA to be the steadier performer because it draws from a wider universe.
Running the numbers, the opposite turned out to be true. What Each Fund Is Actually Betting On SPHQ tracks the S&P 500 Quality Index, a roughly 100-stock subset of the S&P 500 ranked on ROE, accruals ratio, and financial leverage. The implicit bet is that the highest-scoring quality names inside the S&P 500 will compound faster than the index itself.