The Invesco S&P 500 GARP ETF (SPGP) was launched on 06/17/2011, and is a passively managed exchange traded fund designed to offer broad exposure to the Large Cap Growth segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $836.72 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. Overall, they are usually a stable option, with less risk and more sure-fire cash flows 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. Additionally, growth stocks have a greater level of risk associated with them. They are likely to outperform value stocks in strong bull markets but over the longer-term, value stocks have delivered better returns than growth stocks in almost all markets.
Investors should also pay attention to an ETF’s expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
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 0.77%.
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 30.90% of the portfolio. Information Technology and Financials round out the top three.
Looking at individual holdings, Vertex Pharmaceuticals Inc (VRTX) accounts for about 2.53% of total assets, followed by Fortinet Inc (FTNT) and Cigna Corp (CI).
The top 10 holdings account for about 18.9% 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 has lost about -10.55% so far this year and is up roughly 1.78% in the last one year (as of 04/28/2022). In the past 52-week period, it has traded between $83.61 and $97.61.
The ETF has a beta of 1.17 and standard deviation of 27.78% for the trailing three-year period. With about 76 holdings, it effectively diversifies company-specific risk.
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 excellent 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 $73.42 billion in assets, Invesco QQQ has $169.83 billion. VUG has an expense ratio of 0.04% and QQQ charges 0.20%.
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
Vertex Pharmaceuticals Incorporated (VRTX) : Free Stock Analysis Report
Cigna Corporation (CI) : Free Stock Analysis Report
Invesco QQQ (QQQ): ETF Research Reports
Fortinet, Inc. (FTNT) : Free Stock Analysis Report
Vanguard Growth ETF (VUG): ETF Research Reports
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