QFRD vs QUAL

QFRDCPacer S&P 500 Quality FCF R&D Leaders ETF

QUALAiShares MSCI USA Quality Factor ETF

In short

QFRD Most quality funds chase steady profits. QFRD screens S&P 500 names for free-cash-flow quality first, then keeps the 50 spending most heavily on R&D: cash-rich innovators in one rules-based basket.

QUAL QUAL screens US large and mid caps for high return on equity, low debt and steady earnings, then does it sector by sector, so the portfolio stays spread across the market instead of piling into whichever sector looks healthiest.

Stated mandate

QFRD The ETF seeks capital appreciation through a rules-based selection of 50 S&P 500 companies with high R&D expenditures and strong free-cash-flow quality. It also seeks to track the S&P 500 Quality FCF R&D Leaders Index before fees and expenses.

QUAL The fund tracks an index of U.S. large- and mid-capitalization stocks selected for quality characteristics, including high return on equity, stable earnings, and low debt.

Why people hold it

• QFRD Two-step build: clear the free-cash-flow margin and FCF-return-on-capital bars, then rank on research spending. You are buying innovation budgets backed by real cash.paceretfs.comindexologyblog.com
• The R&D screen is what sets it apart in a quality cohort otherwise dominated by broad, low-cost giants like QUAL, JQUA and FQAL.paceretfs.com
• Rules-based and index-tracked, with about 50 S&P 500 members. No manager deciding which innovator looks exciting this quarter.

• QUAL At 0.15%, it undercuts the typical quality-factor fund, where the cohort median sits at 0.29%.
• Sector neutral by design: companies are ranked on return on equity, leverage and earnings variability against rivals in their own GICS sector.msci.comishares.com
• Running since 2013, now a $25B-$100B fund that trades actively, with returns that stay close to its index.

Worth knowing

• QFRD At 0.49% a year it sits at the expensive end of the quality-factor shelf, where the largest peers charge well under half that.
• It launched in 2026 as a small, lightly traded fund. That combination usually means wider bid-ask spreads, and there is little live record to judge.
• Fifty names ranked on R&D intensity is a concentrated slice of the S&P 500, so single stocks and single sectors move it more than a broad index.

• QUAL About 120 large and mid caps, leaning on the same familiar giants as a broad US index fund. This is a tilt on core equity, not new ground.
• Sector neutrality cuts both ways: it keeps a foot in every sector rather than stepping away from ones with weak fundamentals.msci.com
• Cheap, not cheapest. JQUA (0.12%) and VFQY (0.13%) shave a basis point or three off the fee.

Full QFRD profile⁠

Full QUAL profile⁠