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GMO U.S. Quality ETF employs an active, quality-centered strategy that brings together fundamental and quantitative methods. I maintain the Hold rating on QLTY owing to its recent underperformance vs. IVV, unappealing risk metrics, and the factor mix light in GARP stocks. Quality characteristics of the QLTY portfolio are impressive, yet they alone cannot drive outperformance.
QLTY: Excellent Factor Mix, Robust Returns, A Few Issues Not To Overlook
The GMO U.S. Quality ETF (NASDAQ:QLTY) has attracted $3 billion since launching in November 2023 by focusing on companies with exceptional returns on capital.
Each month brings new ETFs to the ever-expanding ETF ecosystem. And October had its fair share of intriguing launches.
On the latest ETF 360, VettaFi's Cinthia Murphy interviewed GMO Asset Allocation's Asset Allocation Strategist Catherine LeGraw. The two discussed quality, the speculative market, and value dislocation.
On Tuesday, GMO launched three new active ETFs. They are the GMO International Quality ETF (QLTI), the GMO U.S. Value ETF (GMOV), and the GMO International Value ETF (GMOI).
The GMO U.S. Quality ETF is designed to generate total return by investing in high-quality U.S. equities. One thing that stands out about the top 10 holdings of QLTY is Nvidia is nowhere to be found. The real differentiator is Healthcare, which has a more than double weighting relative to the S&P 500.
GMO's first exchange-traded fund is beating the S&P 500 so far in 2024 — without holding the skyrocketing stock of artificial-intelligence darling Nvidia Corp.
SEC filings for QLTY aren't indexed yet — common for recently launched funds. Browse the issuer's filings on SEC EDGAR directly.