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Quality 40 Index

QYIX

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Index Performance

-3.66%
QYIX
+3.10%
VTV
-3.15%
SPY
Jan 10, 2025Jan 21, 2025Jan 29, 2025Feb 6, 2025Feb 14, 2025Feb 25, 2025Mar 5, 2025Mar 13, 2025Mar 21, 2025Apr 2, 2025-10%0%10%

Overview

Description

This index is based on the assumption that 1) the SP500, although a great index, is filled with low quality companies and that 2) company quality can be evaluated mainly on the return it gets on its invested capital (ROIC) as said by notable investors (Munger, Smith, etc.). Following these assumptions, this index was made by taking the the 40 (number to be revised) top businesses in the SP500 based on their ROIC and weighting them according to their market cap to reduce the need for rebalancing. Although the index beats the SP500, it does have a few problems which will need to be addressed. For one since the index is market cap weighted, Apple holds a very large part of the pie. This exposure could be reduced with more diversification. However, doing so might reduce returns since the more business are added, the lesser the quality of the index.

  • TickerQYIX
  • Inception Date08/18/2023
  • WeightingMarket Cap
  • # of holdings40
What's inside?

Holdings

All holdings as of April 2, 2025
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Apple, Inc. (AAPL)52.84%$3.36T3.95%46.88%9.89
Mastercard, Inc. (MA)7.78%$499.05B12.07%96.30%17.68
The Home Depot, Inc. (HD)5.82%$368.68B4.48%31.52%2.99
QUALCOMM, Inc. (QCOM)2.69%$170.41B17.45%55.77%4.34
Texas Instruments Incorporated (TXN)2.55%$162.14B-10.72%58.14%11.45
The TJX Cos., Inc. (TJX)2.21%$140.44B3.95%30.60%2.65
Lowe's Companies, Inc. (LOW)2.09%$131.69B-3.13%31.25%2.21
Automatic Data Processing, Inc. (ADP)1.97%$125.00B8.15%49.94%6.12
Applied Materials, Inc. (AMAT)1.89%$120.04B6.92%48.79%N/A
Starbucks Corp. (SBUX)1.77%$112.92B-0.29%18.12%3.51
Altria Group, Inc. (MO)1.52%$96.57B-0.28%70.27%5.46
Lam Research Corp. (LRCX)1.49%$94.71B16.44%47.37%5.81
KLA Corp. (KLAC)1.43%$91.19B24.09%60.25%8.00
McKesson Corp. (MCK)1.37%$86.92B17.80%3.38%0.24
O'Reilly Automotive, Inc. (ORLY)1.27%$81.11B5.67%48.46%4.63
Fortinet, Inc. (FTNT)1.18%$75.42B12.27%78.89%11.74
Chipotle Mexican Grill, Inc. (CMG)1.11%$70.50B14.61%23.71%7.61
AutoZone, Inc. (AZO)1.00%$63.72B2.41%53.86%3.84
Paychex, Inc. (PAYX)0.88%$55.81B4.84%74.33%9.95
Fair Isaac Corp. (FICO)0.73%$46.15B15.16%80.15%29.11
Yum! Brands, Inc. (YUM)0.69%$44.16B6.68%47.48%6.58
Otis Worldwide Corp. (OTIS)0.65%$41.21B0.37%30.14%3.08
Old Dominion Freight Line, Inc. (ODFL)0.57%$36.15B-0.88%33.20%6.58
IDEXX Laboratories, Inc. (IDXX)0.54%$34.54B6.46%60.88%9.01
HP, Inc. (HPQ)0.42%$26.28B3.47%20.37%N/A
Mettler-Toledo International, Inc. (MTD)0.38%$24.44B2.22%58.17%7.27
VeriSign, Inc. (VRSN)0.38%$24.17B4.31%87.71%13.82
NVR, Inc. (NVR)0.34%$21.68B10.81%23.81%2.48
Synchrony Financial (SYF)0.34%$21.40B19.73%80.11%1.35
Ulta Beauty, Inc. (ULTA)0.28%$17.33B0.79%38.84%1.82
Expeditors International of Washington, Inc. (EXPD)0.26%$16.79B13.98%14.89%1.43
Domino's Pizza, Inc. (DPZ)0.25%$16.06B5.07%39.28%4.13
Best Buy Co., Inc. (BBY)0.25%$16.01B-4.43%22.55%0.49
Masco Corp. (MAS)0.24%$15.06B-1.74%36.25%2.39
CF Industries Holdings, Inc. (CF)0.21%$13.29B-10.48%34.72%3.31
Moderna, Inc. (MRNA)0.17%$10.69B-52.69%48.92%2.99
APA Corp. (APA)0.12%$7.73B17.61%39.45%1.54
Zions Bancorporation NA (ZION)0.12%$7.44B7.91%N/A2.49
Bath & Body Works, Inc. (BBWI)0.11%$6.81B-1.64%44.25%1.74
Robert Half, Inc. (RHI)0.09%$5.59B-9.33%37.85%1.20
Market data by FactSet