Prediction: SPHQ Will Be the Smartest Buy of 2026. Here's Why.
With geopolitical, inflation, and AI spending risks growing, investors are already pivoting toward higher-quality stocks in 2026.
Overview
Despite some bouts of volatility and ongoing concerns about the Iran war, rising inflation, and volatile oil prices, the S&P 500 is on pace for another strong year. The index is nearly up 9% year to date, following three consecutive years of double-digit gains.
However, investors are starting to show signs of being more selective about what they invest in. Optimism about the potential of artificial intelligence (AI) used to be enough to send some stocks doubling in value. Today, investors want to see results. A big part of why Microsoft is down roughly 30% from its highs is concerns about capex overspending.
Details
In short, fundamentals matter again. That idea shows up clearly in the results of the Invesco S&P 500 Quality ETF (NYSEMKT: SPHQ). It's outperforming the Vanguard S&P 500 ETF by around 9% so far in 2026. While investors are still in a mood to buy stocks, they're leaning toward companies that are producing tangible results.
Source
Originally published at www.fool.com.