SPHQ’s application of the quality factor is evident in its sector allocations. For example, materials and energy, recently two of the worst-performing sectors, combine for just over 9% of the ETF’s weight. Conversely, the ETF allocates a combined 45.7% of its weight to industrial and consumer discretionary names.
Valuing high quality value is particularly important as bull markets enter their waning stages, as some market observers believe the current bull market is doing. In the early stages of bull markets, lower quality companies see their shares soar. However, as the bull matures, investors often exhibit a preference for higher quality fare with more compelling valuations. [Very Valuable Value ETFs]
SPHQ’s “record of strong upside potential, plus downside protection, makes it a solid choice for long-term successful investing. SPHQ produced an annual average 2.7%, 14.6% and 13.5% gain over the over the past one, three and five years as of Jan. 5, respectively,” adds IBD.
PowerShares S&P 500 High Quality Portfolio