QUAL

iShares MSCI USA Quality Factor ETF (QUAL) is an exchange-traded fund that seeks to track the performance of U.S. companies selected based on the quality factor. The ETF follows an index composed of U.S. firms exhibiting characteristics associated with financial strength and operational efficiency. The fund is managed by BlackRock and trades on NYSE Arca under the ticker QUAL.

Classified as a U.S. equity ETF focused on the quality factor, QUAL follows a passive investment strategy. The fund aims to replicate, before fees and expenses, the performance of its benchmark index by maintaining a portfolio aligned with the index’s selection and weighting methodology.

The index tracked by QUAL consists of U.S. equities selected based on metrics related to profitability, financial stability, and operational efficiency. Security weighting follows criteria established by the index provider, with periodic reviews that include rebalancing and constituent changes reflected in the ETF’s holdings.

Diversification and sector exposure

QUAL provides exposure across multiple sectors of the U.S. economy, consistent with the application of quality-based criteria. Sector exposure includes:

• Information technology.
• Health care.
• Financials.
• Consumer discretionary.
• Consumer staples.
• Industrials.
• Energy.
• Communication services.
• Materials.
• Utilities.

Sector allocation reflects the structure of the underlying index.

Structure and costs

Shares of QUAL trade on the secondary market during regular trading hours. Creation and redemption are carried out by authorized participants, supporting alignment between the ETF’s market price and its net asset value (NAV).

The fund charges a management fee and does not apply a performance fee. QUAL may distribute income periodically, primarily derived from dividends paid by its underlying holdings.

History and evolution of the ETF

iShares MSCI USA Quality Factor ETF was launched in 2013 amid growing demand for factor-based equity strategies in the United States.

In recent years, QUAL has reflected varying U.S. market conditions, including periods of strength in companies with solid financial fundamentals, rotations across investment styles, and the effects of the interest rate tightening cycle that began in 2022. 

The fund’s behavior has been closely linked to shifts in macroeconomic expectations and the performance dynamics of the quality factor within the U.S. equity market.