Invesco S&P MidCap Quality ETF

Invesco S&P MidCap Quality ETF (XMHQ) is an index fund that holds the 80 stocks in the S&P MidCap 400 that score highest on profitability, earnings quality and low debt. Because of that screen, it is far more concentrated than a broad mid-cap fund. Its 10 largest holdings made up 31.6% of assets as of July 31, 2026. Its 0.25% expense ratio is close to the 0.24% average for similar funds.

• Over the year to Oct 27, 2026, XMHQ returned +11.2%, 8th of 9 among similar funds.
• Its 5-year annualized return was +10.4%.
• Its worst full calendar year was 2022 (-12.4%); its best was 2023 (+29.5%).
• The deepest fall in its price history was 25.5% (Nov 16, 2021 to Jun 16, 2022), recovered by Jul 12, 2023.

As of Jul 31, 2026, the fund held 80 securities; the ten largest made up 31.63% of assets. It also reported 10.61% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Jul 31, 2026, investors withdrew a net $100.4M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +3.09%, +2.19%, +1.79%.

XMHQ tracks the S&P MidCap 400 Quality Index, which is run by S&P Dow Jones Indices. The index starts with the S&P MidCap 400, a benchmark of midsize US-listed companies. It gives each stock a quality score based on three measures. Return on equity is earnings per share over the past 12 months divided by book value per share, a gauge of profit on shareholders' money. The accruals ratio measures how much net operating assets grew compared with total assets, a check on whether earnings are backed by cash. Financial leverage is total debt divided by book value. Financial and real estate companies are scored on return on equity and leverage only. The 80 stocks with the highest scores make up the index.

Each stock's weight is its quality score multiplied by its market value, with limits on single stocks and sectors. As of June 30, 2026, the 80 members ranged from $1.9 billion to $30.7 billion in market value. The fund uses "full replication," which means it buys every stock in the index at roughly its index weight.

Because the fund follows the index, it won't sell a lagging stock until the index drops it. The prospectus reports 65% portfolio turnover. The fund had significant exposure to industrials as of April 30, 2026. If a few stocks grow large, the fund could become "non-diversified" under federal fund rules, so single stocks could take up a bigger share of the fund.

• XMHQ charges 0.25% a year, versus an average of 0.24% for the similar funds below (6th of 9, cheapest first).
• The fee includes a 0.05% waiver from the adviser, which may end.
• Using the prospectus's standard example, $10,000 invested would cost about $26 in the first year and $370 over 10 years (assuming a 5% annual return).

It is a concentrated mid-cap factor tilt with a small yield, so it may fit better beside a broad core fund than in place of one.

XMHQ could add a tilt toward profitable, lightly indebted midsize companies, but the ride has been bumpy. Its deepest drop in the available price history was 25.5%, from November 16, 2021, to June 16, 2022. It took about 13 months to recover, by July 12, 2023. It lost 12.4% in 2022, its worst calendar year in that period. The prospectus shows a 22.45% loss in the first quarter of 2020. Figures for the 2008 crisis aren't available here. Anyone forced to sell shares in a slump like 2022 would have locked in losses. Income is small: the trailing yield was 0.55% as of October 27, 2026, paid quarterly. Under the SEC's standard $10,000 example, costs come to $26 after one year and $370 after 10 years. Past results don't predict future returns, and a plan should weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.