Quality On Tap

I was appointed the finance correspondent for Senior Life Advisor, an online magazine for investors near or in retirement. The articles for Senior Life Advisor were designed to offer actionable information as well as items of interest about economics, investing and personal finance.

The term Flight To Quality is often heard on Wall Street, particularly when times are tough. Two exchange trades funds that embody this notion are: Invesco S&P 500® Quality ETF (SPHQ) and iShares Edge MSCI USA Quality Factor ETF (QUAL).

We’re not recommending that investors purchase these funds. We do however find it instructive to look at the notion of quality through the lens of Wall Street, and to see what firms these funds hold, presumably because they rank high on a quality ranking.

Both funds, and there may well be others, hold stocks with the following characteristics: high returns on equity, low levels or debt, stable growth and earnings that have little in the way of adjustments or estimates. Notably, neither fund has delivered returns dramatically different from the market at large, but some investors might feel that could change if economic conditions deteriorate further.

The following companies are the largest holdings in both funds.

Johnson & Johnson (JNJ)

Sources:

https://www.invesco.com/us/financial-products/etfs/product-detail?ticker=SPHQ

https://www.ishares.com/us/products/256101/ishares-msci-usa-quality-factor-etf#/

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Securitizing Structured Settlement Payment Streams: A Primer

Fall 2012. This article was written with Stefano Sola and Phil Donahue, executives at JGWPT Holdings. We were engaged by JGWPT to assist them
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Is The Media Biased?

This story is from our February 2024 update newsletter that offers communications insights, and hopefully, some amusing diversion.

David R. Evanson, LLC David R. Evanson, LLC