This ETF looks for higher quality stocks within Global Industry Classification Standard sectors, but doesn’t make active bets in the form of sector tilts or biases. QUAL tracks the MSCI USA Sector Neutral Quality Index.
The fund does, however, tilt toward pricier stocks as well as companies of larger market capitalization compared to the MSCI ACWI index. The table below shows factor loading in QUAL relative to the broader index.
QUAL Factor Tilts
Sources: MSCI, ETF.com
DGRW Offers Quality With Dividend Growth Focus
Competing DGRW is a different beast. It too captures quality through metrics such as return on equity (ROE) as well as historical data, but with a focus on dividend growth stocks.
“Not surprisingly, this makes DGRW the most ‘value friendly’ of the three ETFs,” Idzal said.
This dividend focus leads the portfolio into companies of larger market capitalization, and into some notable sector tilts such as consumer stocks and industrials relative to the broader market.
DGRW Factor Tilts