Evaluating the Performance of Invesco's S&P SmallCap Quality ETF (XSHQ)

Invesco S&P SmallCap Quality ETF (XSHQ) is a smart beta ETF that tracks the SmallCap 600 Quality Index, composed of 120 securities with the highest quality score based on return on equity, accruals ratio, and financial leverage ratio. The fund has $315.24 million in assets and an expense ratio of 0.29%, making it a relatively cheap option in its category. It has a 12-month trailing dividend yield of 1.21% and is heavily weighted in the Industrials sector, with the Financials and Consumer Discretionary sectors also making up a significant portion of the portfolio.

The Invesco S&P SmallCap Quality ETF (XSHQ) is a smart beta exchange-traded fund (ETF) that provides broad exposure to the Small Cap Blend segment of the U.S. equity market. Launched on April 6, 2017, XSHQ aims to match the performance of the S&P SmallCap 600 Quality Index, which is composed of 120 securities from the S&P SmallCap 600 Index that have the highest quality scores based on return on equity, accruals ratio, and financial leverage ratio [1].

XSHQ has amassed over $315.24 million in assets, positioning it as an average-sized ETF in its category. It is managed by Invesco and has an annual operating expense ratio of 0.29%, making it a relatively cheap option compared to many other ETFs in the space [1]. Additionally, the fund offers a 12-month trailing dividend yield of 1.21%, providing a modest income stream for investors [1].

The ETF is heavily allocated to the Industrials sector, with approximately 25% of the portfolio, followed by the Financials and Consumer Discretionary sectors. Sterling Infrastructure Inc (STRL), Armstrong World Industries Inc (AWI), and Brinker International Inc (EAT) are among the top holdings, accounting for about 20.69% of the total assets under management [1].

XSHQ has shown mixed performance in recent periods. As of August 13, 2025, the fund has gained about 2.16% year-to-date and is up approximately 9.48% over the past year. Over the past 52 weeks, it has traded between $34.34 and $47.59. The ETF has a beta of 0.98 and a standard deviation of 21.33% for the trailing three-year period, indicating a moderate level of risk compared to the broader market [1].

Investors seeking exposure to the Small Cap Blend segment of the market may consider XSHQ as an option. However, it is essential to evaluate other ETFs in the space, such as the Vanguard Small-Cap ETF (VB) and the iShares Core S&P Small-Cap ETF (IJR), which have larger asset bases and slightly different expense ratios [1].

In conclusion, the Invesco S&P SmallCap Quality ETF (XSHQ) offers investors a smart beta approach to the Small Cap Blend segment with a reasonable expense ratio and modest dividend yield. As with any investment, it is crucial to conduct thorough research and consider your investment objectives before making a decision.

References:
[1] https://finviz.com/news/138777/is-invesco-sp-smallcap-quality-etf-xshq-a-strong-etf-right-now
[2] https://finance.yahoo.com/news/invesco-p-smallcap-quality-etf-102002879.html