Is Invesco S&P International Developed Quality ETF (IDHQ) a Strong ETF Right Now?

The Invesco S&P International Developed Quality ETF (IDHQ) was launched on 06/13/2007, and is a smart beta exchange traded fund designed to offer 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.

Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.

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However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

Because the fund has amassed over $462.27 million, this makes it one of the larger ETFs in the Foreign Large Growth ETF. IDHQ is managed by Invesco. IDHQ, before fees and expenses, 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

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.29% for IDHQ, making it the least expensive product in the space.

It has a 12-month trailing dividend yield of 2.29%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

Taking into account individual holdings, Novartis Ag (NOVN) accounts for about 5.41% of the fund's total assets, followed by Asml Holding Nv (ASML) and Nestle Sa (NESN).

Its top 10 holdings account for approximately 34.01% of IDHQ's total assets under management.

Performance and Risk

Year-to-date, the Invesco S&P International Developed Quality ETF has gained about 18.02% so far, and is up roughly 10.3% over the last 12 months (as of 06/30/2025). IDHQ has traded between $27.24 and $33.15 in this past 52-week period.

The ETF has a beta of 0.89 and standard deviation of 16.28% for the trailing three-year period, making it a low risk choice in the space. With about 204 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 $220.8 million in assets, Invesco Dorsey Wright Developed Markets Momentum ETF has $347.69 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.

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Invesco S&P International Developed Quality ETF (IDHQ): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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