iShares MSCI USA Quality Factor ETF: An Investment Overview

iShares MSCI USA Quality Factor ETF (QUAL) has gained 14.41% in the past year, making it a compelling investment choice. This analysis highlights factors that may influence stock prices for major holdings like Apple (AAPL) and Microsoft (MSFT).

Date: 04-03-2025

AI Rating: 7

Performance and Fund Metrics

The iShares MSCI USA Quality Factor ETF (QUAL) is one of the largest ETFs in its category, with assets exceeding $50 billion. Its strong performance, with a 14.41% increase in the last year, indicates robust investor interest and potential positive sentiment for related stocks.

The fund has an annual operating expense of 0.15%, making it a cost-effective choice for investors. A lower expense ratio often correlates with better net returns, enhancing the attractiveness of QUAL.

Sector Allocation

QUAL's primary allocation in the Information Technology sector, about 30%, positions it well for growth, particularly with major holdings like Apple Inc (AAPL) at 6.30% and Microsoft Corp (MSFT). The performance of these underlying stocks can significantly impact QUAL's price and, consequently, the overall market reaction.

Top Holdings

Considering that QUAL's top 10 holdings account for approximately 40.62% of total assets, any significant performance change in these companies can sway the ETF's overall performance. This concentration underscores the risk and reward relationship for investors focusing on tech-driven funds.

Market Risks

The ETF's beta of 1.03 suggests it has a slightly above-average risk compared to the overall market, indicating that while there is potential for higher rewards, there is inherent volatility. The standard deviation of 17.73% points to moderate risk, which investors should factor into their investment strategies.

Stocks: AAPL MSFT V