SPHQ Outpaced JQUA by 500 Basis Points Over Five Years Despite Being the Riskier Trade

What Each Fund Is Actually Betting On

SPHQ tracks the S&P 500 Quality Index, a astir 100-stock subset of the S&P 500 ranked connected ROE, accruals ratio, and fiscal leverage. The implicit stake is that the highest-scoring prime names inside the S&P 500 volition compound faster than the scale itself. Concentration is the constituent of the design.

JQUA tracks JPMorgan's U.S. Quality Factor Index, drafting from a Russell 1000-style beingness of astir 200-plus names and blending profitability, solvency, and net quality. The stake is broader: ain much prime companies, judge little progressive share, get smoother behavior. In theory, that diversification should wage disconnected erstwhile enactment rotates.

Where the Difference Actually Showed Up

2022 looked similar JQUA's moment. In a twelvemonth erstwhile the 10-year Treasury output roseate sharply and long-duration names sold off, JQUA fell 13.11% from January 3 to year-end. SPHQ dropped 16.09% implicit the aforesaid window. JQUA's broader sleeve absorbed the complaint daze better, precisely arsenic designed.

The expert who called NVIDIA successful 2010 conscionable named his apical 10 stocks and JPMorgan US Quality Factor ETF wasn't 1 of them. Get them present FREE.

Then the betterment reversed the order. From that January 2022 starting enactment done May 13, 2026, SPHQ returned 63.94% against JQUA's 58.84%. SPHQ kept starring connected each modular model aft that, with the 10-year Treasury hovering adjacent 4.46% arsenic of May 12.

The Head-to-Head Numbers

SPHQ wins connected each model but the 2022 drawdown. That is the consistency I did not expect from the much concentrated fund.

The Verdict

For an capitalist who wants a cleanable prime tilt and is consenting to judge deeper drawdowns erstwhile rates spike, SPHQ has been the stronger prime crossed calendar windows and afloat cycles. The concentrated S&P 500 surface has much than paid for its other volatility. JQUA fits an capitalist who specifically wants the broader Russell 1000-style sleeve and is consenting to springiness up trailing instrumentality for a softer thrust done complaint shocks. What flips the call: different sharp, rate-driven repricing of the largest prime names. That is the situation wherever JQUA's diversification stops being a resistance and starts being the point.