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Should Invesco S&P 500 GARP ETF (SPGP) Be on Your Investing Radar?

Style Box ETF report for SPGP

By
This story originally appeared on Zacks

Looking for broad exposure to the Large Cap Growth segment of the US equity market? You should consider the Invesco S&P 500 GARP ETF (SPGP), a passively managed exchange traded fund launched on 06/17/2011.

- Zacks

The fund is sponsored by Invesco. It has amassed assets over $703.39 million, making it one of the average sized ETFs attempting to match the Large Cap Growth segment of the US equity market.

Why Large Cap Growth

Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Growth stocks have higher than average sales and earnings growth rates. While these are expected to grow faster than the broader market, they also have higher valuations. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Compared to value stocks, growth stocks are a safer bet in a strong bull market, but don't perform as strongly in almost all other financial environments.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.36%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 0.70%.

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.

This ETF has heaviest allocation to the Healthcare sector--about 28.20% of the portfolio. Information Technology and Financials round out the top three.

Looking at individual holdings, Fortinet Inc (FTNT) accounts for about 2.84% of total assets, followed by Etsy Inc (ETSY) and Adobe Inc (ADBE).

The top 10 holdings account for about 19.95% of total assets under management.

Performance and Risk

SPGP seeks to match the performance of the S&P 500 GROWTH AT A REASONABLE PRICE IDX before fees and expenses. The S&P 500 Growth at a Reasonable Price Index is composed of securities with strong growth characteristics selected from the Russell Top 200 Index.

The ETF return is roughly 32.59% so far this year and is up about 32.41% in the last one year (as of 12/20/2021). In the past 52-week period, it has traded between $70.84 and $95.75.

The ETF has a beta of 1.17 and standard deviation of 27.77% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco S&P 500 GARP ETF holds a Zacks ETF Rank of 2 (Buy), which is based on expected asset class return, expense ratio, and momentum, among other factors. Because of this, SPGP is an outstanding option for investors seeking exposure to the Style Box - Large Cap Growth segment of the market. There are other additional ETFs in the space that investors could consider as well.

The Vanguard Growth ETF (VUG) and the Invesco QQQ (QQQ) track a similar index. While Vanguard Growth ETF has $87.28 billion in assets, Invesco QQQ has $203.46 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.

Bottom-Line

An increasingly popular option among retail and institutional investors, passively managed ETFs offer low costs, transparency, flexibility, and tax efficiency; they are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.



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Invesco S&P 500 GARP ETF (SPGP): ETF Research Reports

 

Adobe Inc. (ADBE): Free Stock Analysis Report

 

Invesco QQQ (QQQ): ETF Research Reports

 

Fortinet, Inc. (FTNT): Free Stock Analysis Report

 

Etsy, Inc. (ETSY): Free Stock Analysis Report

 

Vanguard Growth ETF (VUG): ETF Research Reports

 

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