A smart beta exchange traded fund, the iShares MSCI USA Quality GARP ETF (GARP) debuted on 01/14/2020, and offers broad exposure to the Style Box - All Cap Growth category of the market.
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
The fund is managed by Blackrock, and has been able to amass over $1.2 billion, which makes it one of the larger ETFs in the Style Box - All Cap Growth. This particular fund, before fees and expenses, seeks to match the performance of the MSCI USA QUALITY GARP SELECT INDEX .
The MSCI USA Quality GARP Select Index composes of U.S. large and mid-capitalization growth stocks exhibiting favourable value and quality characteristics.
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for GARP are 0.15%, which makes it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 0.32%.
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.
Representing 52.4% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Telecom and Financials round out the top three.
Taking into account individual holdings, Lam Research Corp (LRCX) accounts for about 5.58% of the fund's total assets, followed by Apple Inc (AAPL) and Broadcom Inc (AVGO).
GARP's top 10 holdings account for about 44.6% of its total assets under management.
The ETF has added about 23.86% so far this year and was up about 29.01% in the last one year (as of 10/30/2025). In the past 52-week period, it has traded between $45.13 and $69.52
The ETF has a beta of 1.14 and standard deviation of 23.60% for the trailing three-year period. With about 134 holdings, it effectively diversifies company-specific risk .
iShares MSCI USA Quality GARP ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Growth segment of the market. However, there are other ETFs in the space which investors could consider.
iShares Morningstar Growth ETF (ILCG) tracks MORNINGSTAR US LARGE-MID CP BRD GRWTH ID and the iShares Core S&P U.S. Growth ETF (IUSG) tracks S&P 900 Growth Index. iShares Morningstar Growth ETF has $3.17 billion in assets, iShares Core S&P U.S. Growth ETF has $26.39 billion. ILCG has an expense ratio of 0.04% and IUSG changes 0.04%.
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 - All Cap Growth
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
This article originally published on Zacks Investment Research (zacks.com).
| Mar-05 | |
| Jan-01 | |
| Oct-30 | |
| Aug-25 | |
| Jun-30 | |
| Jun-23 | |
| May-01 | |
| Apr-30 | |
| Apr-30 | |
| Apr-22 | |
| Apr-15 | |
| Mar-31 | |
| Sep-26 | |
| Jul-10 |
Join thousands of traders who make more informed decisions with our premium features. Real-time quotes, advanced visualizations, alerts, and much more.
Learn more about Finviz Elite