Peter Lynch, one of the most legendary investors of our time, popularized the concept of GARP — Growth at a Reasonable Price — an approach that blends growth and value investing. At Validea, we’ve captured the essence of Lynch’s strategy in our quantitative model, which evaluates stocks based on metrics like the P/E-to-growth (PEG) ratio, growth, and other key fundamentals.
With Validea’s Strategy/ETF Matching Tool, investors can now take that same Lynch-inspired approach and identify U.S. equity ETFs that most closely mirror the factor profile of our Lynch model. The tool compares the 50 top-rated stocks based on our Peter Lynch strategy with the holdings of hundreds of ETFs, using over 20 value, growth, momentum, quality, and volatility factors.
Here are 6 ETFs that most closely match the factor profile of Validea’s Peter Lynch strategy right now:
6 ETFs Matching the Peter Lynch (GARP) Strategy
- FNK – First Trust Mid Cap Value AlphaDEX ETF
A fundamentally weighted ETF focused on mid-cap value stocks, FNK aligns well with Lynch’s preference for reasonably valued companies showing solid earnings growth. - SYLD – Cambria Shareholder Yield ETF
This fund selects companies with strong free cash flow, shareholder-friendly capital allocation (buybacks + dividends), and attractive valuations—elements that echo the balance of growth and value in Lynch’s methodology. - SPGP – Invesco S&P 500 GARP ETF
A pure GARP play, SPGP is designed to track stocks in the S&P 500 with solid growth and appealing valuations, making it a natural match for the Lynch approach. - QVAL – Alpha Architect U.S. Quantitative Value ETF
While more deep-value oriented, QVAL’s focus on high-quality, undervalued companies shares several foundational traits with the Lynch model, particularly for investors leaning toward GARP with a value tilt. - EZM – WisdomTree U.S. MidCap Earnings ETF
With a focus on mid-sized firms that generate positive earnings, EZM captures a core tenet of the Lynch philosophy: invest in profitable, growing companies at reasonable valuations. - CALF – Pacer US Small Cap Cash Cows 100 ETF
This small-cap fund focuses on companies with high free cash flow yield – often overlooked companies with strong fundamentals and growth potential that Lynch would have appreciated.
Why This Matters for Investors
Investors often struggle to find ETFs that align with their investing philosophy. Validea’s ETF Matching Tool bridges that gap by using objective, factor-based analysis to find ETFs whose holdings most closely resemble the kinds of stocks favored by top investors like Peter Lynch. Whether you’re a long-time believer in Peter Lynch’s GARP framework or just discovering it, these ETFs provide a way to gain broad, diversified exposure to stocks that fit the Lynch mold.
Further Research
- Try the Validea ETF Matching Tool to find ETFs that align with other strategies like Warren Buffett, Benjamin Graham, Joel Greenblatt, and more.
- See Validea’s Peter Lynch GARP model – Check It Out
- Use our ETF Screener to find new ETF investment ideas
- Learn More about Validea’s Full Suite of Investing Tools and Resources.
