Quick Read – SPHQ filters the lowest-quality third of S&P 500 names and returned 309% over 10 years, nearly matching SPY’s 316% while avoiding weak balance sheets. – Apple’s 141% return on equity and Microsoft’s 34% ROE make them natural anchors that quality screens are designed…
keep and overweight. – For taxable accounts with large embedded SPY gains, redirecting new contributions to a quality ETF beats selling and triggering a decade of capital gains taxes. – Act now: the analyst who called NVIDIA in 2010 just named his top 10 AI stocks — and iShares MSCI USA Quality Factor ETF didn’t make the cut. Grab the names FREE today
The SPDR S&P 500 ETF Trust (NYSEARCA:SPY) is the default core holding for tens of millions of investors. It tracks the S&P 500, charges 0.0945% in expenses, pays a 1.25% dividend yield, and has returned about 314% over the past decade on a price basis. The pitch is simple: own the 500 largest U.S. companies for almost nothing and let market-cap weighting work.
Two funds run a different rule on the same names. The Invesco S&P 500 Quality ETF (NYSEARCA:SPHQ) and the iShares MSCI USA Quality Factor ETF (NYSEARCA:QUAL) keep only the companies that score well on financial strength, the so-called “S&P 500 minus the junk.” The surprise is what that screen has not done: beat the index over ten years. It offers a different exposure, not a higher return.