A smart beta exchange traded fund, the Invesco S&P International Developed Quality ETF (IDHQ) debuted on 06/13/2007, and offers broad exposure to the Foreign Large Growth ETF category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Managed by Invesco, IDHQ has amassed assets over $915.89 million, making it one of the largest ETFs in the Foreign Large Growth ETF. This particular fund seeks to match the performance of the S&P Quality Developed ex US LargeMidCap Index before fees and expenses.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.29%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.02%.
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.
When you look at individual holdings, Asml Holding Nv (ASML) accounts for about 5.98% of the fund's total assets, followed by Sk Hynix Inc (Y8085F100) and Novartis Ag (NOVN).
IDHQ's top 10 holdings account for about 36.39% of its total assets under management.
Performance and Risk
The ETF has added about 25.11% and was up about 34% so far this year and in the past one year (as of 07/13/2026), respectively. IDHQ has traded between $31.73 and $44.13 during this last 52-week period.
The fund has a beta of 0.91 and standard deviation of 16.94% for the trailing three-year period, which makes IDHQ a low risk choice in this particular space. With about 207 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 Equity Opportunities ETF (FPXI) tracks IPOX International Index and the Invesco Dorsey Wright Developed Markets Momentum ETF (PIZ) tracks Dorsey Wright Developed Markets Technical Leaders Index. First Trust International Equity Opportunities ETF has $312.99 million in assets, Invesco Dorsey Wright Developed Markets Momentum ETF has $751.43 million. FPXI 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
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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).