COWZ, QUAL and SPHQ all promise exposure to stronger companies, yet their portfolios answer different questions. July 31, 2026 regulatory filings cited by 24/7 Wall St. showed only 12 stocks held by all three funds.
That small overlap is not a flaw. It is evidence that "quality" is a method, not a universal list of companies.
Three screens, three portfolios
Pacer's COWZ selects companies for free-cash-flow yield. That approach can favor mature businesses whose cash generation looks high relative to market value. It held 100 stocks, and its ten largest positions represented about 20.4% of assets in the cited filing.
BlackRock's QUAL tracks an index of large- and mid-cap U.S. companies with quality characteristics based on fundamental metrics. Its official fact sheet listed a 0.15% expense ratio and 121 holdings in a later snapshot. In the July filing used for the comparison, QUAL held 125 stocks and placed 43.2% in its top ten, with Microsoft, Apple and Nvidia among the largest positions.
Invesco's SPHQ follows a quality score built from return on equity, accruals and financial leverage. Its top ten represented 43.1% in the same filing, with large weights in Mastercard, Visa and Apple.
Why combining them may not diversify as expected
Owning two funds with different tickers does not guarantee a broader portfolio. COWZ may add sector and valuation differences, while QUAL and SPHQ can still concentrate capital in large profitable companies. Investors should compare holdings, sector weights and top-ten concentration before stacking the funds.
The funds also respond differently to market conditions. A cash-flow-yield strategy can lean toward cheaper cyclical businesses. A profitability screen can stay exposed to expensive market leaders. Neither approach is automatically superior, and each can lag when its preferred factor falls out of favor.
The practical question is what problem the investor wants to solve. COWZ is closer to a cash-generating value screen. QUAL emphasizes broad fundamental quality. SPHQ applies a tighter S&P 500 quality filter. The word on the label is the same, but the source of risk and return is not.