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

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

What Are Smart Beta ETFs?

Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.

Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.

Fund Sponsor & Index

The fund is managed by Invesco, and has been able to amass over $465 million, which makes it one of the average sized ETFs in the Style Box - Mid Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the S&P MIDCAP 400 GARP INDEX .

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

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 GRPM are 0.35%, which makes it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 0.89%.

Sector Exposure and Top Holdings

It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

GRPM's heaviest allocation is in the Consumer Discretionary sector, which is about 26.3% of the portfolio. Its Energy and Industrials round out the top three.

Looking at individual holdings, Celsius Holdings Inc (CELH) accounts for about 4.67% of total assets, followed by Halozyme Therapeutics Inc (HALO) and Roivant Sciences Ltd (ROIV).

The top 10 holdings account for about 27.7% of total assets under management.

Performance and Risk

The ETF has lost about -0.64% and was up about 0.07% so far this year and in the past one year (as of 07/08/2025), respectively. GRPM has traded between $90.38 and $126.41 during this last 52-week period.

The fund has a beta of 1.09 and standard deviation of 21.81% 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 $84 billion in assets, iShares Core S&P Mid-Cap ETF has $96.42 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

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).

Zacks Investment Research