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Is Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF) a Strong ETF Right Now?
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A smart beta exchange traded fund, the Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF - Free Report) debuted on 06/25/2007, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco, and has been able to amass over $1.33 billion, which makes it one of the larger ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI Developed ex-U.S. Index.
The FTSE RAFI Developed ex U.S. 1000 Index is designed to track the performance of the largest developed market equities, excluding the US, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
PXF's 12-month trailing dividend yield is 3.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.79% of the fund's total assets, followed by Bp Plc (BP/) and Totalenergies Se (TTE - Free Report) .
Performance and Risk
The ETF return is roughly 4.53% and is down about -7.06% so far this year and in the past one year (as of 01/11/2023), respectively. PXF has traded between $35.01 and $49.42 during this last 52-week period.
The ETF has a beta of 0.89 and standard deviation of 24.84% for the trailing three-year period, making it a medium risk choice in the space. With about 1047 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets exU.S. ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $51.66 billion in assets, Vanguard FTSE Developed Markets ETF has $103.59 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 Developed Markets exU.S. ETF (PXF) a Strong ETF Right Now?
A smart beta exchange traded fund, the Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF - Free Report) debuted on 06/25/2007, and offers broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide 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.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
The fund is managed by Invesco, and has been able to amass over $1.33 billion, which makes it one of the larger ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI Developed ex-U.S. Index.
The FTSE RAFI Developed ex U.S. 1000 Index is designed to track the performance of the largest developed market equities, excluding the US, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends.
Cost & Other Expenses
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.45%.
PXF's 12-month trailing dividend yield is 3.43%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
When you look at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.79% of the fund's total assets, followed by Bp Plc (BP/) and Totalenergies Se (TTE - Free Report) .
Performance and Risk
The ETF return is roughly 4.53% and is down about -7.06% so far this year and in the past one year (as of 01/11/2023), respectively. PXF has traded between $35.01 and $49.42 during this last 52-week period.
The ETF has a beta of 0.89 and standard deviation of 24.84% for the trailing three-year period, making it a medium risk choice in the space. With about 1047 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets exU.S. ETF is not a suitable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $51.66 billion in assets, Vanguard FTSE Developed Markets ETF has $103.59 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.