For investors seeking momentum, Invesco S&P 500 Quality ETF SPHQ is probably on the radar. The fund just hit a 52-week high and is up 28.61% from its 52-week low price of $70.26/share.

But are more gains in store for this ETF? Let’s take a quick look at the fund and the near-term outlook on it to get a better idea of where it might be headed:

SPHQ in Focus

The S&P 500 Quality Index tracks the performance of stocks in the S&P 500 Index that have the highest quality score, which is calculated based on three fundamental measures — return on equity, accruals ratio and financial leverage ratio. The product charges 15 bps in annual fees (see: all the Large Cap Blend ETFs here).

Why the Move?

Quality funds have emerged as an attractive investment option amid persistent economic uncertainty and geopolitical risks. The technology sector's weakness in June, which prompted investors to rotate toward defensive sectors, has further reinforced the appeal of quality ETFs.

Amid market uncertainty, quality investing emerges as a strategic response and as a buffer against potential headwinds. This approach prioritizes identifying firms with robust fundamentals, consistent earnings and lasting competitive strengths. Investing in such high-quality companies can mitigate volatility for investors.

More Gains Ahead?

Currently, SPHQ has a Zacks ETF Rank #2 (Buy) with a Medium risk outlook. It might continue its strong performance in the near term, with a positive weighted alpha of 29.30 (as per Barchart.com), which gives cues of a further rally.

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Invesco S&P 500 Quality ETF (SPHQ): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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