Quality

Why invest in Quality ?

Quality factor tends to focus on companies displaying an above average signs of growth , in this regard Quality might be viewed  upon as an alternate to growth investing . The companies selected might not be the cheapest in their category . There are  usually 3 parameters used to define quality and they are , ROE ratio ; focusing on companies that have a higher ratio and hence higher returns, financial leverage ratio which finds companies with lesser leverage as they have more capital to invest and grow their businesses and lastly the companies with higher accruals ratio which is barometer for operational success and hence poised for future growth.

Quality factor could have better downside protection and a low maximum drawdown over long periods of time.

 

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
iShares Edge MSCI USA Quality Factor   QUAL 07/16/2013  0.15%
PowerShares S&P 500 Quality   SPHQ 12/06/2005 0.29%

 

Top 2 Quality Dividend

Name of the Fund Ticker Symbol /Total AUM* Year of Inception Expense Ratio
FlexShares Quality Dividend    QDF  12/14/2012  0.37%
WisdomTree US Quality Dividend Growth    DGRW  05/22/2013  0.28%