Is iShares MSCI USA Quality GARP ETF (GARP) a Strong ETF Right Now?

The iShares MSCI USA Quality GARP ETF (GARP) was launched on 01/14/2020, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - All Cap Growth category of the market.What Are Smart Beta ETFs?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.On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.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.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexBecause the fund has amassed over $1.95 billion, this makes it one of the larger ETFs in the Style Box - All Cap Growth. GARP is managed by Blackrock. GARP seeks to match the performance of the MSCI USA QUALITY GARP SELECT INDEX before fees and expenses.The MSCI USA Quality GARP Select Index composes of U.S. large and mid-capitalization growth stocks exhibiting favourable value and quality characteristics.Cost & Other ExpensesFor 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.Operating expenses on an annual basis are 0.15% for GARP, making it one of the least expensive products in the space.It has a 12-month trailing dividend yield of 0.27%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.This ETF has heaviest allocation in the Information Technology sector - about 52.5% of the portfolio. Telecom and Industrials round out the top three.Taking into account individual holdings, Lam Research Corp (LRCX) accounts for about 5.21% of the fund's total assets, followed by Nvidia Corp (NVDA) and Apple Inc (AAPL).Its top 10 holdings account for approximately 40.33% of GARP's total assets under management.Performance and RiskThe ETF has added about 12.25% and was up about 44.58% so far this year and in the past one year (as of 05/07/2026), respectively. GARP has traded between $53.55 and $76.40 during this last 52-week period. The ETF has a beta of 1.19 and standard deviation of 22.68% for the trailing three-year period. With about 151 holdings, it effectively diversifies company-specific risk .AlternativesiShares 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 $3.03 billion in assets, iShares Core S&P U.S. Growth ETF has $31.16 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 GrowthBottom LineTo 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.Boost Your Portfolio with Our Top ETF InsightsZacks' exclusive Fund Newsletter delivers actionable information, top news and analysis, as well as top-performing ETFs, straight to your inbox every week.Don’t miss out on this valuable resource. It’s free!Get it now >>This article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks