JPMorgan US Quality Factor ETF

JQUA

Market cap $7.44B

With stocks sliding, volatility spiking and bubble concerns mounting, investors need a defensive game plan. These ETFs can help you navigate the turbulence.

JPMorgan U.S. Quality Factor ETF (JQUA) offers a compelling, lower-cost alternative to the Russell 1000, emphasizing quality and diversification. JQUA screens for companies with strong profitability, solvency, and earnings quality, resulting in a more resilient and less concentrated portfolio than IWB. The ETF delivers similar long-term returns as the benchmark but with lower risk, superior drawdown control, and a higher dividend yield.

As market optimism builds, investors may want to fortify portfolios with defensive ETFs like VTV, XLP and QUAL to weather potential volatility.

With U.S. debt hitting a record $38 trillion amid a prolonged shutdown, investors should turn to defensive ETF strategies for stability.

The S&P 500‘s 2.7% drop on Friday expose its tech-heavy tilt. Top 10 stocks represent 37% of the index's weight, while the Magnificent 7 account for about 35% of YTD gains.

Goldman Sachs warns of rising AI bubble risks, making diversification with equal-weight, value and quality ETFs a smart defensive move.

Mega-cap tech stocks are driving market gains, but their dominance creates significant concentration risk in major ETFs like SCHG. SCHG's top three holdings—Nvidia, Microsoft, and Apple—make up over 30% of its portfolio, undermining diversification benefits. JQUA offers similar exposure to leading tech names but with much better diversification, as no single stock exceeds 2.5% of the portfolio.

Some investors are worried that the stock market is set up for a tech-driven decline.

JQUA offers a quality-focused, rules-based approach with strong diversification and low concentration risk, making it a refreshing alternative to megacap-heavy ETFs. While JQUA's total returns closely track SPY, its main advantage lies in mitigating drawdowns during market downturns, though not consistently outperforming peers. The ETF's sector diversification is only marginally better than SPY, but its low expense ratio and methodology provide valuable portfolio diversification.

As policy risks rise and stagflation fears grow, investors turn to defensive ETFs to weather a volatile 2025 market.