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 Quick Quote SPGP - Free Report) , a passively managed exchange traded fund launched on 06/17/2011.
The fund is sponsored by Invesco. It has amassed assets over $3.77 billion, making it one of the larger 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. Something to keep in mind is the higher level of volatility that is affiliated with growth stocks. Even though growth stocks are more likely to outperform their value counterparts in strong bull markets, value stocks have a record of delivering better returns in almost all markets than growth stocks.
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.34%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.18%.
Sector Exposure and Top Holdings
ETFs offer a 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.
This ETF has heaviest allocation to the Energy sector--about 26.10% of the portfolio. Information Technology and Materials round out the top three.
Looking at individual holdings, Cf Industries Holdings Inc (
CF Quick Quote CF - Free Report) accounts for about 2.50% of total assets, followed by Diamondback Energy Inc ( FANG Quick Quote FANG - Free Report) and Marathon Petroleum Corp ( MPC Quick Quote MPC - Free Report) .
The top 10 holdings account for about 20.34% 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 gained about 10.40% so far this year and is up roughly 6.49% in the last one year (as of 11/13/2023). In the past 52-week period, it has traded between $81.27 and $96.18.
The ETF has a beta of 1.10 and standard deviation of 18.43% for the trailing three-year period. With about 77 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 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 Quick Quote VUG - Free Report) and the Invesco QQQ ( QQQ Quick Quote QQQ - Free Report) track a similar index. While Vanguard Growth ETF has $95.55 billion in assets, Invesco QQQ has $210.90 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.