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

Launched on 01/14/2020, the iShares MSCI USA Quality GARP ETF (GARP) is a smart beta exchange traded fund offering broad exposure to the Style Box - All Cap Growth 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.

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.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

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.

This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.

Fund Sponsor & Index

Managed by Blackrock, GARP has amassed assets over $1.3 billion, making it one of the larger ETFs in the Style Box - All Cap Growth. Before fees and expenses, GARP seeks to match the performance of the MSCI USA QUALITY GARP SELECT INDEX .

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 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.

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 0.32%.

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.

GARP's heaviest allocation is in the Information Technology sector, which is about 49.7% of the portfolio. Its Telecom and Industrials round out the top three.

Looking at individual holdings, Kla Corp (KLAC) accounts for about 5.99% of total assets, followed by Lam Research Corp (LRCX) and Meta Platforms Inc Class A (META).

The top 10 holdings account for about 46.75% of total assets under management.

Performance and Risk

Year-to-date, the iShares MSCI USA Quality GARP ETF has lost about -0.34% so far, and was up about 25.87% over the last 12 months (as of 03/05/2026). GARP has traded between $45.13 $71.40 in this past 52-week period.

GARP has a beta of 1.16 and standard deviation of 22.69% for the trailing three-year period. With about 143 holdings, it effectively diversifies company-specific risk .

Alternatives

iShares 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 $2.85 billion in assets, iShares Core S&P U.S. Growth ETF has $27.14 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 Growth

Bottom Line

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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iShares MSCI USA Quality GARP ETF (GARP): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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