SPHQ

Invesco S&P 500 Quality ETF (SPHQ) is an exchange-traded fund that seeks to track the performance of an index composed of S&P 500 companies with strong fundamentals, high profitability, and disciplined management practices. The ETF is managed by Invesco Capital Management LLC and trades under the ticker SPHQ on NYSE Arca.

Classified as a U.S. equity ETF, SPHQ aims to reflect, before fees and expenses, the aggregated performance of the securities included in its benchmark index.

The fund follows a passive management strategy and seeks to replicate the S&P 500 Quality Index, which selects companies based on metrics related to profitability, earnings stability, and financial leverage. Constituents are weighted according to the methodology defined by the index provider.

The S&P 500 Quality Index selects companies from the S&P 500 that meet specific financial quality criteria, including return on equity, earnings consistency, and balance sheet strength. Index constituents are weighted in accordance with the index methodology, and the composition is reviewed periodically to maintain adherence to the established criteria.

Diversification and sector exposure

SPHQ provides exposure to the U.S. equity market with a focus on fundamental quality, including companies across several key sectors, such as:

• Information technology.

• Health care.

• Financials.

• Consumer discretionary.

• Industrials.

Structure and costs

Shares of SPHQ are traded on the secondary market, while creation and redemption of shares are carried out by authorized participants, a mechanism that helps keep the ETF’s market price close to its net asset value (NAV).

The fund charges a management fee and does not charge a performance fee. SPHQ may make periodic income distributions derived from dividends paid by the underlying holdings. The ETF has a single share class and trades exclusively under the ticker SPHQ.

History and evolution of the ETF

The Invesco S&P 500 Quality ETF was launched in 2005, during a period of increasing development of factor-based investment strategies in the U.S. equity market.

Over time, SPHQ has been incorporated into allocation strategies targeting the quality factor within the large-cap U.S. equity universe.

Between 2020 and 2024, the ETF reflected the performance of companies exhibiting quality characteristics in an environment marked by shifts in monetary policy, inflationary pressures, and changing economic conditions.