After surging in investor interest last year, the Invesco S&P 500 GARP ETF (SPGP) is continuing to see strong flows in the first weeks of 2023.
Year to date as of January 17, SPGP has seen $118 million in inflows. SPGP saw a jump in research and flows last year as investors searched for quality and value. While many funds prioritizing quality and value have underperformed over a longer period, SPGP has maintained notable outperformance over the S&P 500 in various market environments.
“While traditional growth index-based investments have bounced back in 2023 on renewed optimism regarding the U.S. economy, investors continue to be valuation conscious,” Todd Rosenbluth, head of research at VettaFi, said. “SPGP takes a more measured approach to large-cap growth investing than most alternatives.”
The fund, which has $2.1 billion in assets, hauled in $1.2 billion in net inflows last year. This is a significant jump from 2021 when the fund saw $442 million in inflows, and 2020 when the fund saw $173 million in outflows.
SPGP has historically provided attractive returns that outperform the S&P 500. SPGP has increased 4.88% year to date as of January 17, outperforming the S&P 500 by 77 basis points. In 2022, SPGP lost -13.83% while the S&P 500 declined -18.11%, each on a total return basis.
The fund is based on the S&P 500 Growth at a Reasonable Price Index, which is composed of approximately 75 securities in the S&P 500 that have been identified as having the highest “growth scores” and “quality and value composite scores,” calculated pursuant to the index methodology. The index constituents are weighted based on their growth scores.
Metrics such as total debt-to-book value, return on equity, and earnings-to-price ratios are combined with traditional sales and earnings growth ones to build SPGP, Rosenbluth wrote in December.
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