iShares MSCI USA Quality Factor ETF (QUAL)

quarterly-dividends dividend-growth

Focused on large- and mid-cap U.S. stocks with high quality scores by tracking the MSCI USA Sector Neutral Quality Index. QUAL has an expense ratio of 0.15%, which is relatively low for a factor-based ETF. The fund distributes dividends quarterly. QUAL uses a modified market-cap weighting methodology that tilts towards companies with high return on equity, stable year-over-year earnings growth, and low financial leverage. A key differentiating quality of QUAL is its sector-neutral approach, maintaining sector weights similar to the broader market to isolate the quality factor effect. This strategy aims to capture the potential outperformance of high-quality stocks without introducing sector biases. QUAL typically holds between 125-150 stocks, providing a focused portfolio of companies exhibiting strong quality characteristics. This approach may appeal to investors seeking exposure to stable, well-managed companies within the U.S. equity market.