Invesco S&P 500 Quality ETF Predicted to Outperform in Bear Market

The Invesco S&P 500 Quality ETF holds 100 of the highest-quality financials from the S&P 500 Index, making it a more defensive holding. The fund focuses on companies with high return on equity, low accruals ratio, and low financial leverage ratio.

During the last bear market, this ETF outperformed the S&P 500, declining by 17.3% compared to the broader market index's 19.4% slump. Morningstar notes that its holdings give it a more defensive posture and make it less volatile during bear markets.

Morningstar also states that the fund's holdings should 'help it stay afloat during bear markets.' The Invesco S&P 500 Quality ETF currently holds 99 stocks, with Mastercard, Visa, GE Vernova, Costco, and GE Aerospace among its top 10 holdings. While it still has a heavy concentration among its largest holdings, its top 10 is much less tech-heavy.

The author predicts that this ETF will beat the S&P 500 during the next bear market due to its focus on quality over quantity. The fund's high-quality stocks are expected to outperform in a bear market, making it an ideal holding for those seeking a less volatile investment.