Invesco’s Quality Fund Beat VIG Over Five Years. 76.4% Against 65.69%.

Many investors hold the Vanguard Dividend Appreciation ETF (NYSEARCA:VIG) as a core position because it owns companies with a record of raising dividends, a simple filter for durable businesses. That reputation holds up. Morningstar named VIG one of its favourite dividend funds as recently as October 23. Still, a fund that picks S&P 500 companies on quality measures has outperformed VIG. Over five years, the Invesco S&P 500 Quality ETF (NYSEARCA:SPHQ) returned 76.4%, while VIG returned 65.69%, a gap of 10.71 percentage points.

A $100,000 position opened in each fund on October 29, 2021 grew to $176,400 in SPHQ and $165,690 in VIG. The two windows share a start date, and both figures assume every distribution was reinvested. The comparison measures total return, so the payout is already included in the result.

A Decade of Returns Shows an Even Wider Lead

Over ten years, the gap grows. Measured from October 31, 2016, for both funds, SPHQ returned 300.31%, and VIG returned 264.04%. That puts SPHQ ahead by 36.27 percentage points.

In dollars, $100,000 became $400,310 in SPHQ and $364,040 in VIG, again with distributions reinvested. SPHQ led over two overlapping long windows, so the five-year result did not depend on one starting date. For a VIG holder with a 10-year horizon, that gap is material.

Two Funds Built for Different Jobs

Vanguard says VIG “seeks to track the performance of a benchmark index that measures the investment return of common stocks of companies that have a record of increasing dividends over time.” That benchmark is the S&P U.S. Dividend Growers Index, and the fund replicates it in full. A company qualifies by consistently raising its dividend.

SPHQ chooses companies a different way. Its index gives each S&P 500 company a quality score built from three measures: return on equity, accruals ratio, and financial leverage ratio. It looks for companies that earn high returns on shareholder capital, report earnings supported by cash, and carry modest debt. Dividend history plays no part in that score, so SPHQ is a quality fund that also pays dividends. If you specifically want a portfolio of dividend growers, SPHQ gives you something different. Before switching, income-focused holders should compare the two funds’ current distributions.

The portfolios also differ in concentration. In filings dated July 31, 2026, SPHQ’s largest positions were Mastercard (NYSE:MA | MA Price Prediction) at 5.76% of net assets and Visa (NYSE:V) at 5.57%. VIG’s largest, Broadcom (NASDAQ:AVGO), made up 4.63%.

Check Taxes Before You Swap

In an IRA or 401(k), selling VIG to buy SPHQ creates no tax. In a taxable account, selling VIG shares that have gained value locks in a capital gain. Shares held longer than a year are taxed at long-term rates, and a large tax bill can cancel years of performance edge. Some investors in taxable accounts keep existing VIG shares and direct new contributions to SPHQ, or make the full switch inside retirement accounts. At delayed quotes from the Thursday, October 29 close, VIG traded at $248.30 and SPHQ at $84.83.

Which Investors Each Fund Fits Best

Long-term investors who own VIG for total return, especially inside retirement plans, may find SPHQ’s record most relevant to their goals, given its lead over both five and ten years. Investors who want their portfolio built around companies that raise dividends, or who would realize large gains outside a retirement account, may find VIG’s dividend-growth approach a closer fit.

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