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Is Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ) a Strong ETF Right Now?
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The Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ - Free Report) made its debut on 09/20/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PRFZ is managed by Invesco, and this fund has amassed over $1.94 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Blend. PRFZ seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index before fees and expenses.
The FTSE RAFI US 1500 Small-Mid Index is comprised of approximately 1,500 U.S. stocks. The FTSE US 1500 Small-Mid Index is designed to track the performance of small and medium-sized U.S. equity stocks selected based on the following four fundamental measures of firm size: book value, income, cash flow and dividends.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.39% for PRFZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.35%.
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.
For PRFZ, it has heaviest allocation in the Financials sector --about 18.50% of the portfolio --while Industrials and Information Technology round out the top three.
Looking at individual holdings, Consol Energy Inc (CEIX - Free Report) accounts for about 0.43% of total assets, followed by Scorpio Tankers Inc (STNG - Free Report) and Tenneco Inc .
PRFZ's top 10 holdings account for about 2.82% of its total assets under management.
Performance and Risk
So far this year, PRFZ has lost about -16.61%, and is down about -16.74% in the last one year (as of 11/03/2022). During this past 52-week period, the fund has traded between $145.71 and $201.01.
PRFZ has a beta of 1.17 and standard deviation of 30.14% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1468 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI US 1500 SmallMid ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P SmallCap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $51.44 billion in assets, iShares Core S&P SmallCap ETF has $64.30 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small Cap Blend.
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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Is Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ) a Strong ETF Right Now?
The Invesco FTSE RAFI US 1500 SmallMid ETF (PRFZ - Free Report) made its debut on 09/20/2006, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small Cap Blend 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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
PRFZ is managed by Invesco, and this fund has amassed over $1.94 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Blend. PRFZ seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index before fees and expenses.
The FTSE RAFI US 1500 Small-Mid Index is comprised of approximately 1,500 U.S. stocks. The FTSE US 1500 Small-Mid Index is designed to track the performance of small and medium-sized U.S. equity stocks selected based on the following four fundamental measures of firm size: book value, income, cash flow and dividends.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.39% for PRFZ, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.35%.
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.
For PRFZ, it has heaviest allocation in the Financials sector --about 18.50% of the portfolio --while Industrials and Information Technology round out the top three.
Looking at individual holdings, Consol Energy Inc (CEIX - Free Report) accounts for about 0.43% of total assets, followed by Scorpio Tankers Inc (STNG - Free Report) and Tenneco Inc .
PRFZ's top 10 holdings account for about 2.82% of its total assets under management.
Performance and Risk
So far this year, PRFZ has lost about -16.61%, and is down about -16.74% in the last one year (as of 11/03/2022). During this past 52-week period, the fund has traded between $145.71 and $201.01.
PRFZ has a beta of 1.17 and standard deviation of 30.14% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1468 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI US 1500 SmallMid ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P SmallCap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $51.44 billion in assets, iShares Core S&P SmallCap ETF has $64.30 billion. IWM has an expense ratio of 0.19% and IJR charges 0.06%.
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 - Small Cap Blend.
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.