High Quality ETFs Remain in Focus

Even after high demand in 2023, quality-focused investments are popular again in 2024. Indeed, during the VettaFi Equity Symposium last week, advisors told us that the quality factor was highly appealing in the current environment.

While the strong performing growth factor garnered the highest percentage of poll responses (37%), quality came in second (26%). These two were easily ahead of value (10.3%), momentum (9.9%), small size (9.9%), and low volatility (7.3%).


Which Factor Looks Appealing in Current Environment?

Top Quality ETF Traded Heavily Last Week

This data was pulled together on Wednesday last week. However, on Thursday, the largest quality ETF had unusually strong volume. The iShares MSCI USA Quality Factor ETF (QUAL) had $39 billion in assets on March 13 and traded on average 1.1 million shares daily. On March 14, the fund traded a relatively high 18 million shares.

We believe investors often turn to ETFs like QUAL to add equity exposure but in a modest risk-conscious manner. This is often around events like the end of strong earnings season or ahead of a key Federal Reserve meeting. The last time in 2024 that QUAL traded so heavily was on January 25, when the fund traded 19 million shares.