Wall Street loves a good acronym, but "GARP" always felt like a mouthful. Growth at a Reasonable Price. It sounds like something a sensible grandparent would tell you while wagging a finger at your speculative crypto portfolio. But in 2026, as the market wrestles with whether Big Tech is overvalued or just getting started, the iShares MSCI USA Quality GARP ETF—ticker symbol GARP—is suddenly the name everyone is dropping at cocktail parties. Or, you know, on Finance Twitter.
The thing is, most people treat it like a generic growth fund. It's not.
Honestly, if you just buy the S&P 500, you’re betting on momentum and size. If you buy a pure growth fund, you're betting on dreams and future promises. But the iShares MSCI USA Quality GARP ETF is a bit more cynical. It wants growth, sure, but it demands proof of life in the form of earnings and it refuses to pay a "luxury tax" for them.
Why the methodology is weirder than you think
Most ETFs just follow the biggest companies. Not this one.
The fund tracks the MSCI USA Quality GARP Select Index. To get into this club, a stock has to survive a triple-threat match. First, it needs to show actual growth. We’re talking long-term forward EPS growth, short-term forward EPS growth, and historical internal growth. It's basically a background check for a company's checkbook.
But then comes the "Quality" and "Value" filter.
BlackRock’s team, including managers like Jennifer Hsui and Steven White, oversee a process that looks for high Return on Equity (ROE) and low financial leverage. They want companies that make money without drowning in debt. Finally, they tilt the whole thing toward stocks that have lower valuations compared to their growth.
Basically, it’s a filter for the "Adults in the Room."
The 2026 reality check: What's actually inside?
If you look at the portfolio today, you’ll see some usual suspects, but the weightings might surprise you. As of mid-January 2026, the fund is heavily leaning into Information Technology (nearly 50% of the bag) and Communication Services.
Check out these top holdings:
- KLA Corp (KLAC) and Lam Research (LRCX): Often higher weights here than in your standard Nasdaq fund because their fundamentals are rock solid.
- Meta Platforms (META): A massive player that often hits that sweet spot of high growth and (relative) value.
- Broadcom (AVGO) and Nvidia (NVDA): They're in there, but they have to keep proving their "Quality" scores to stay at the top.
- Alphabet (GOOGL) and Visa (V): These are the anchors.
The expense ratio is a measly 0.15%. That's basically the cost of a coffee once a year for every few thousand dollars you invest. Compared to active managers charging 1% to do the same thing (usually worse), it’s a steal.
The "Quality" Trap: Is it actually safer?
People see the word "Quality" and think "Safe." Sorta.
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In a market crash, everything usually goes down together. However, during the choppy waters of late 2025 and early 2026, GARP showed its teeth. Because the fund avoids companies with massive debt (leverage), it doesn't get hit as hard when interest rates stay "higher for longer."
It has a beta of about 1.15.
That means it’s actually a bit more volatile than the broad market, not less. If the S&P moves 1%, this might move 1.15%. Why? Because it’s concentrated. With around 145 holdings—and the top 10 eating up over 46% of the assets—you’re making a concentrated bet on a specific style of company.
It’s not a "set it and forget it" for the faint of heart, but it’s a scalpels-and-forceps approach to growth.
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What most people get wrong about GARP vs. QUAL
There is another iShares fund called QUAL (the iShares MSCI USA Quality Factor ETF). They are not the same thing.
QUAL is like the "Defensive" version. It just wants high ROE and low debt. It doesn't care as much about how fast the company is growing. GARP, on the other hand, is the "Aggressive" sibling. It wants the growth first, then checks the quality, then checks the price.
If you're looking for a boring, stable ride, you pick QUAL. If you want to outperform in a bull market without buying "junk" stocks, you look at the iShares MSCI USA Quality GARP ETF.
Does it actually work?
Performance has been... well, let's look at the tape.
Over the last three years (leading into 2026), the fund has seen annualized returns north of 30%. That's insane. But remember, that was a period where high-quality tech names dominated. In 2022, when growth got wrecked, this fund felt the pain too, dropping significantly.
The biggest risk? Sector concentration. If the semiconductor industry has a bad week, this ETF has a bad week. Since it’s 50% tech, you aren't exactly diversified across the whole economy. You're diversified across the best parts of the economy, which is a very different thing.
Actionable insights for your portfolio
If you're thinking about adding the iShares MSCI USA Quality GARP ETF to your brokerage account, don't just dump your life savings in at once.
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- Check your overlap: If you already own a lot of NVDA or MSFT, you’re doubling down here. Use a tool to see how much "X-ray" overlap you have with your current holdings.
- Tax Efficiency: Since it’s an ETF, it’s generally tax-efficient, but it does have a turnover rate of around 69%. That's high for a passive fund. It means the index rebalances often to kick out companies that get too expensive or stop growing.
- The "Vibe" Check: Use this fund as a "Satellite" holding. Maybe 10-20% of your total equity. It provides a nice "tilt" toward growth without the stupidity of paying 100x earnings for a company that doesn't make a profit.
To get started, look at your current "Growth" allocation. If you’re holding expensive mutual funds with high fees, swapping them for the 0.15% expense ratio of GARP is a move most experts would call a "no-brainer." Review the latest fact sheet from BlackRock to ensure the sector weights haven't drifted too far from your comfort zone before clicking buy.