On Wednesday, Invesco rolled out a new addition to its exchange traded fund library with the launch of the Invesco S&P SmallCap 600 GARP ETF (NYSE Arca: GRPZ), a fund that implements a factor-based strategy.
GRPZ has a net expense ratio of 0.35%. The fund is benchmarked to the S&P SmallCap 600 GARP Index.
The underlying index draws its holdings from the S&P SmallCap 600 Index ‘s components. It ultimately includes 90 holdings that it selects based on their exposure to the quality, value and growth factors as determined by a scoring system that incorporates relevant data. The index methodology then weighs the component companies based on their growth scores, the prospectus says.
As of the end of February 2024, the document further notes that the underlying index includes shares in 88 companies with market caps sitting between $436 million and $7.8 billion. It undergoes a rebalancing and reconstitution twice a year.
Completed Invesco Fund Suite
Invesco is also the issuer of the $361.4 million Invesco S&P MidCap 400 GARP ETF (GRPM) and the $4.8 billion Invesco S&P 500 GARP ETF (SPGP), so the addition of GRPZ completes the suite of funds. The initialism “GARP” represents the financial catchphrase “growth at a reasonable price.” The idea is to avoid the outlandish valuations that can sometimes accompany growth stocks while also avoiding value traps by investing in companies that demonstrate earnings growth.
“Advisors are increasingly looking for small cap ETFs to diversify their client portfolios according to our research. This new smart beta ETF will pair well with its older sibling SPGP,” VettaFi head of research Todd Rosenbluth noted.
Invesco currently has 221 different ETFs listed in the United States. These funds represent over $500 billion in assets under management. Invesco’s largest fund, the Invesco QQQ Trust Series I (NYSE Arca: QQQ), oversees more than $250 billion in AUM.
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