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For investors seeking momentum, PowerShares S&P 500 Quality Portfolio SPHQ is probably on radar now. The fund just hit a 52-week high and is up about 17.3% from its 52-week low price of $25.89/share.
But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea on where it might be headed:
SPHQ in Focus
SPHQ provides exposure to stocks within the S&P 500 Index that demonstrate the greatest quality characteristics based on three fundamental measures — return on equity, accruals ratio and financial leverage ratio. With a basket of 99 stocks, it has key holdings in industrials, information technology, consumer discretionary and consumer staples. It charges 29 bps in annual fees (see: all the Large Cap ETFs here).
Why the Move?
The quality corner of the broad investing world has been an area to watch lately as the uncertainty in the final tax bill has rekindled investors’ faith in products that provide stability and safety. Quality stocks consistently deliver superior risk-adjusted returns than the broader market over the long term while reduce risk in a portfolio. More importantly, these stocks generally outperform in a crumbling market.
More Gains Ahead?
Currently, SPHQ has a Zacks ETF Rank #3 (Hold) with a Medium risk outlook. Therefore, it is hard to get a handle on its future returns one way or the other. However, many of the segments that make up this ETF have a strong Zacks Industry Rank. So, there is definitely some promise for those who want to ride this surging ETF a little further.
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PWRSH-SP5 HQ (SPHQ): ETF Research Reports
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