Is Invesco S&P MidCap 400 GARP ETF (GRPM) a Strong ETF Right Now?

The Invesco S&P MidCap 400 GARP ETF (GRPM) made its debut on 12/03/2010, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Mid Cap Blend category of the market.

What Are Smart Beta ETFs?

For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund Sponsor & Index

The fund is managed by Invesco, and has been able to amass over $453.39 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Blend. This particular fund seeks to match the performance of the S&P MIDCAP 400 GARP INDEX before fees and expenses.

The S&P MidCap 400 GARP Index seeks to track companies with consistent fundamental growth, reasonable valuation, solid financial strength, and strong earning power.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Annual operating expenses for this ETF are 0.35%, making it on par with most peer products in the space.

GRPM's 12-month trailing dividend yield is 0.81%.

Sector Exposure and Top Holdings

ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.

GRPM's heaviest allocation is in the Financials sector, which is about 27.1% of the portfolio. Its Consumer Discretionary and Information Technology round out the top three.

Looking at individual holdings, Celsius Holdings Inc (CELH) accounts for about 3.35% of total assets, followed by Appfolio Inc (APPF) and Comfort Systems Usa Inc (FIX).

GRPM's top 10 holdings account for about 25.19% of its total assets under management.

Performance and Risk

The ETF has gained about 8.5% and was up about 11.64% so far this year and in the past one year (as of 09/12/2025), respectively. GRPM has traded between $90.38 and $126.41 during this last 52-week period.

The ETF has a beta of 1.11 and standard deviation of 21.45% for the trailing three-year period. With about 60 holdings, it effectively diversifies company-specific risk .

Alternatives

Invesco S&P MidCap 400 GARP ETF is a reasonable option for investors seeking to outperform the Style Box - Mid Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard Mid-Cap ETF (VO) tracks CRSP US Mid Cap Index and the iShares Core S&P Mid-Cap ETF (IJH) tracks S&P MidCap 400 Index. Vanguard Mid-Cap ETF has $88.88 billion in assets, iShares Core S&P Mid-Cap ETF has $101.6 billion. VO has an expense ratio of 0.04% and IJH changes 0.05%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Mid Cap Blend

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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