QFRD vs SPHQ

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

SPHQAInvesco S&P 500 Quality 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.

SPHQ Live since 2005, SPHQ is an elder statesman of quality investing: rank the S&P 500 on profitability, earnings quality and balance-sheet strength, hold the top 100, charge 0.15% net of a waiver through August 31, 2028.

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.

SPHQ The fund seeks exposure to the S&P 500 Quality Index and normally invests at least 90% of assets in common stocks included in that index.

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.

• SPHQ 0.15% net of a waiver through August 31, 2028 (0.20% gross), below the median for quality factor funds and level with QUAL and FQAL at 0.15%.
• The rules are published and mechanical: score the S&P 500 on return on equity, accruals ratio and financial leverage ratio, take the top 100, weight by quality score times market cap.spglobal.com
• Universe discipline: candidates come only from the S&P 500, so every holding is an established large cap rather than a smaller name screened in from a broader pool.spglobal.com
• A multi-billion-dollar fund that trades actively, pays quarterly, and has run since 2005. It sits in the stronger tier of quality factor ETFs.

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.

• SPHQ About 100 stocks, weighted by quality score times market cap, so the biggest high-scorers carry real weight. Narrower than owning the full S&P 500.spglobal.com
• The index rebalances semiannually, so a company whose fundamentals slip mid-period stays in the portfolio until the next reshuffle.spglobal.com
• Two peers undercut it on fee: JQUA at 0.12% and VFQY at 0.13%.

Full QFRD profile⁠

Full SPHQ profile⁠