After a more volatile first quarter, the second quarter of 2026 has been a period where growth has been rewarded. Yet some advisors remain cautiously optimistic and are looking to lean on companies with stronger financial profiles. While many are familiar with established benchmarks like the Invesco S&P 500 Quality ETF (SPHQ ), 2026 has seen a shift toward strategies that pair that high-quality core with a specific growth tilt.
Beyond Standard Quality
The $18 billion SPHQ remains a key fund for investors seeking exposure to US large-cap stocks selected for their return on equity (ROE) and low financial leverage. As of April 30, SPHQ sector profile leaned on Information Technology (29%), Industrials (25%), and Consumer Staples (15%). The fund is a rules-based approach that has been a portfolio staple for more than 20 years. However, for advisors looking to stay offensive while maintaining that quality guardrail, newer funds are intentionally blending factors to capture the best of both worlds.
Focusing on the Cash Flow Engine
One offering in this category is the VictoryShares Free Cash Flow Growth ETF (GFLW ). Launched in December 2024, GFLW goes beyond standard quality metrics by tracking an index of 100 large-cap growth companies selected for positive free cash flow trends and return on investment (ROI).
Compared to the Russell 1000 Growth Index, GFLW offers a unique sector footprint. It is significantly overweight in Industrials (18% vs. 7%) and Materials (5% vs. 0.3%), while remaining lighter in Information Technology (44% vs. 51%). By weighting its portfolio based on a combination of free cash flow and momentum, GFLW provides a quality growth experience that looks quite different from a standard index. Recent top 10 holdings included Comfort Systems and Newmont Corporation alongside tech leaders Broadcom and NVIDIA.
A Targeted Approach to Quality Growth
Similarly, the WisdomTree U.S. Quality Growth Fund (QGRW) has garnered significant interest since launching in 2022, with assets climbing to $2.5 billion. QGRW targets the 100 large-cap growth companies exhibiting the strongest quality characteristics relative to their peers.
This fund offers a more focused exposure to modern growth leaders. While it maintains a quality screen, QGRW leans more heavily into Information Technology (52%) and Communication Services (17%). Its top 10 holdings—including names like NVIDIA, Alphabet, and Apple—represent a larger portion of the portfolio (61%) compared to GFLW (34%) or SPHQ (41%). Thus far in 2026, QGRW has risen 13% and gathered $155 million in net inflows.
This fund offers a more focused exposure to modern growth leaders. While it maintains a quality screen, QGRW leans more heavily into Information Technology (52%) and Communication Services (17%). Its top 10 holdings—including names like NVIDIA, Alphabet, and Apple—represent a larger portion of the portfolio (61%) compared to GFLW (34%) or SPHQ (41%).
| ETF (Ticker) | Largest Sector | 2nd Largest Sector | 3rd Largest Sector |
|---|---|---|---|
| Invesco S&P 500 Quality ETF (SPHQ) | Info. Tech (29%) | Industrials (25%) | Consumer Staples (15%) |
| VictoryShares Free Cash Flow Growth ETF (GFLW) | Info. Tech (44%) | Industrials (18%) | Consumer Discretionary (15%) |
| WisdomTree U.S. Quality Growth Fund (QGRW) | Info. Tech (52%) | Comm. Services (17%) | Consumer Discretionary (12%) |
The Importance of Knowing Your Quality
The overlap between these funds is notably low. GFLW and QGRW share only 29% of their equity members, according to VettaFi analysis. The similarities between SPHQ and these two funds is even lower. This underscores the importance of choosing a fund that aligns with your specific portfolio goals.
Quality is often in the eye of the beholder, but in a 2026 market that might reward financial resilience, choosing an index-based ETF like GFLW or QGRW provides the defensive benefits of quality with the added fuel of a growth bias.
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VettaFi LLC (“VettaFi”) is the index provider for GFLW, for which it receives an index licensing fee. However, GFLW is not issued, sponsored, endorsed, or sold by VettaFi, and VettaFi has no obligation or liability in connection with the issuance, administration, marketing, or trading of GFLW.
