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Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
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The Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) was launched on 09/27/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. PXH has been able to amass assets over $1.30 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. PXH, before fees and expenses, seeks to match the performance of the FTSE RAFI Emerging Markets Index.
The FTSE RAFI Emerging Index is designed to track the performance of the emerging market stocks with the highest ranking cumulative score, selected from the constituents of the FTSE Emerging Large/Mid Cap Index.
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.
Operating expenses on an annual basis are 0.49% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.09%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.82% of total assets, followed by Alibaba Group Holding Ltd and Vale Sa (VALE3).
Performance and Risk
So far this year, PXH has added roughly 4.60%, and is down about -2.28% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $15.83 and $21.54.
The fund has a beta of 0.72 and standard deviation of 24.48% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 398 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $69.07 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.39 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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 Emerging Markets ETF (PXH) a Strong ETF Right Now?
The Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) was launched on 09/27/2007, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Emerging Market 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.
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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Invesco. PXH has been able to amass assets over $1.30 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. PXH, before fees and expenses, seeks to match the performance of the FTSE RAFI Emerging Markets Index.
The FTSE RAFI Emerging Index is designed to track the performance of the emerging market stocks with the highest ranking cumulative score, selected from the constituents of the FTSE Emerging Large/Mid Cap Index.
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.
Operating expenses on an annual basis are 0.49% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 5.09%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.82% of total assets, followed by Alibaba Group Holding Ltd and Vale Sa (VALE3).
Performance and Risk
So far this year, PXH has added roughly 4.60%, and is down about -2.28% in the last one year (as of 03/09/2023). During this past 52-week period, the fund has traded between $15.83 and $21.54.
The fund has a beta of 0.72 and standard deviation of 24.48% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 398 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $69.07 billion in assets, Vanguard FTSE Emerging Markets ETF has $71.39 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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.