SPHQ Outpaced JQUA by 500 Basis Points Over Five Years Despite Being the Riskier Trade

If you want a quality-factor tilt on U.S. large caps, the two cleanest options are the Invesco S&P 500 Quality ETF (NYSEARCA:SPHQ | SPHQ Price Prediction) and the JPMorgan U.S. Quality Factor ETF (NYSEARCA:JQUA). Both screen for the same headline traits: high return on equity, clean accruals, strong balance sheets. Both charge similar fees. Going in, I expected JQUA to be the steadier performer because it draws from a wider universe. Running the numbers, the opposite turned out to be true.

What Each Fund Is Actually Betting On

SPHQ tracks the S&P 500 Quality Index, a roughly 100-stock subset of the S&P 500 ranked on ROE, accruals ratio, and financial leverage. The implicit bet is that the highest-scoring quality names inside the S&P 500 will compound faster than the index itself. Concentration is the point of the design.

JQUA tracks JPMorgan’s U.S. Quality Factor Index, drawing from a Russell 1000-style universe of roughly 200-plus names and blending profitability, solvency, and earnings quality. The bet is broader: own more quality companies, accept lower active share, get smoother behavior. In theory, that diversification should pay off when leadership rotates.

Where the Difference Actually Showed Up

2022 looked like JQUA’s moment. In a year when the 10-year Treasury yield rose sharply and long-duration names sold off, JQUA fell 13.11% from January 3 to year-end. SPHQ dropped 16.09% over the same window. JQUA’s broader sleeve absorbed the rate shock better, exactly as designed.

Then the recovery reversed the order. From that January 2022 starting line through May 13, 2026, SPHQ returned 63.94% against JQUA’s 58.84%. SPHQ kept leading on every standard window after that, with the 10-year Treasury hovering near 4.46% as of May 12.

The Head-to-Head Numbers

SPHQ wins on every window except the 2022 drawdown. That is the consistency I did not expect from the more concentrated fund.

The Verdict

For an investor who wants a clean quality tilt and is willing to accept deeper drawdowns when rates spike, SPHQ has been the stronger choice across calendar windows and full cycles. The concentrated S&P 500 screen has more than paid for its extra volatility. JQUA fits an investor who specifically wants the broader Russell 1000-style sleeve and is willing to give up trailing return for a softer ride through rate shocks. What flips the call: another sharp, rate-driven repricing of the largest quality names. That is the environment where JQUA’s diversification stops being a drag and starts being the point.