The Invesco S&P International Developed Quality ETF (IDHQ) made its debut on 06/13/2007, and is a smart beta exchange traded fund that provides broad exposure to the Foreign Large Growth ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
The fund is managed by Invesco. IDHQ has been able to amass assets over $492.45 million, making it one of the larger ETFs in the Foreign Large Growth ETF. Before fees and expenses, this particular fund seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index.
The S&P Quality Developed ex US LargeMidCap Index tracks the performance of stocks in the S&P Developed Ex-US LargeMidCap Index that have the highest quality score, which is calculated based on three fundamental measures, return on equity, accruals ratio and financial leverage ratio.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
Annual operating expenses for IDHQ are 0.29%, which makes it the least expensive product in the space.
The fund has a 12-month trailing dividend yield of 2.29%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Asml Holding Nv (ASML) accounts for about 4.62% of total assets, followed by Novartis Ag (NOVN) and Nestle Sa (NESN).
Its top 10 holdings account for approximately 30.21% of IDHQ's total assets under management.
Performance and Risk
The ETF has gained about 18.16% and is up about 5.39% so far this year and in the past one year (as of 09/01/2025), respectively. IDHQ has traded between $27.24 and $33.40 during this last 52-week period.
The ETF has a beta of 0.89 and standard deviation of 16.05% for the trailing three-year period, making it a low risk choice in the space. With about 208 holdings, it effectively diversifies company-specific risk .
Alternatives
Invesco S&P International Developed Quality ETF is a reasonable option for investors seeking to outperform the Foreign Large Growth ETF segment of the market. However, there are other ETFs in the space which investors could consider.
First Trust International Developed Capital Strength ETF (FICS) tracks INTERNATIONAL DEVLPD CAPITAL STRENGTH ID and the Invesco Dorsey Wright Developed Markets Momentum ETF (PIZ) tracks Dorsey Wright Developed Markets Technical Leaders Index. First Trust International Developed Capital Strength ETF has $226.16 million in assets, Invesco Dorsey Wright Developed Markets Momentum ETF has $416.93 million. FICS has an expense ratio of 0.70% and PIZ changes 0.80%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Growth ETF
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Invesco S&P International Developed Quality ETF (IDHQ): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
Zacks Investment Research
