Investors favor quality over momentum in S&P 500 as flows shift to SPHQ
According to Dow Jones Newswires, investors this year have preferred quality S&P 500 stocks over momentum names amid worries about the stock market outlook.
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what happened
According to Dow Jones Newswires, investors have steadily put money into the Invesco S&P 500 Quality ETF this year. Rene Reyna, head of ETF strategy at Invesco, says the shift is not driven by AI infrastructure spending alone. Worried about the market outlook, investors have clearly preferred quality stocks, which tend to hold up best during broad declines, over recent high-flying momentum shares.
In August, $680 million left SPHQ while $714 million flowed into the momentum fund SPMO. In September the activity was muted and reversed: $3.4 million came into SPHQ and $43 million left SPMO. In the first half of 2026, SPHQ returned 20.8%, SPMO 36%, and the S&P 500 10.2%.
why it matters
The momentum fund tends to gain in rising markets but loses more in declines: its downside capture over the past year was 106.4%, versus 61.1% for SPHQ, according to Invesco. Reyna also flagged 10-year Treasury yields near 5.02% as a possible draw for money away from stocks.
market impact
US equities: rotation from momentum to quality stocks amid market worries
tags
instruments
sources
- Investors' recent money moves show a preference for quality over momentum within the S&P 500 — Dow Jones Newswires, 22 October 2026 at 15:10 UTC
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