Invesco’s SPHQ ETF Smoked The S&P 500 With A Simple Screen

Core Insights - The Invesco S&P 500 Quality ETF (SPHQ) focuses on financially sound companies by screening for profitability, stability, and operational excellence rather than just market capitalization [2][3] - SPHQ aims to provide core equity exposure with a preference for companies that generate strong returns on capital and maintain consistent earnings, distinguishing itself from growth or value funds [3] Fund Methodology - The fund screens 120 S&P 500 companies based on return on equity, financial leverage, and earnings consistency, favoring businesses with pricing power and predictable cash flows [4] - Major holdings include Mastercard and Visa, which together account for nearly 10% of the portfolio, benefiting from network effects and transaction volume growth [4][8] - Costco is also a top holding, known for its membership-driven model that generates predictable revenue streams [5] Performance Metrics - Over the past five years, SPHQ has returned 93.7%, outperforming the S&P 500's 77.1%, indicating that filtering for financial strength adds value over time [6][8] - Year to date in 2026, SPHQ gained 6.0% compared to the S&P 500's 1.5% [6][8] - Individual holdings like Mastercard have consistently beaten earnings estimates, reflecting the competitive advantages of quality companies [7]