Launched on 12/19/2005, the Invesco FTSE RAFI US 1000 ETF (
PRF Quick Quote PRF - Free Report) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $6.40 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that find themselves in the large cap category typically have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Annual operating expenses for this ETF are 0.39%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.63%.
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.
This ETF has heaviest allocation to the Financials sector--about 19.10% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (
AAPL Quick Quote AAPL - Free Report) accounts for about 2.36% of total assets, followed by Microsoft Corp ( MSFT Quick Quote MSFT - Free Report) and Jpmorgan Chase & Co ( JPM Quick Quote JPM - Free Report) .
The top 10 holdings account for about 16.86% of total assets under management.
Performance and Risk
PRF seeks to match the performance of the FTSE RAFI US 1000 Index before fees and expenses. The FTSE RAFI US 1000 Index is designed to track the performance of the largest U.S. equities, selected based on the following four fundamental measures of firm size: book value, income, sales and dividends. U.S. equities are then weighted by each of these four fundamental measures.An overall weight is calculated for each firm by equally-weighting each fundamental measure.
The ETF has lost about -0.65% so far this year and is up about 16.09% in the last one year (as of 03/23/2022). In the past 52-week period, it has traded between $148.01 and $175.48.
The ETF has a beta of 1.03 and standard deviation of 23.90% for the trailing three-year period, making it a medium risk choice in the space. With about 1001 holdings, it effectively diversifies company-specific risk.
Invesco FTSE RAFI US 1000 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PRF is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The iShares Russell 1000 Value ETF (
IWD Quick Quote IWD - Free Report) and the Vanguard Value ETF ( VTV Quick Quote VTV - Free Report) track a similar index. While iShares Russell 1000 Value ETF has $58.46 billion in assets, Vanguard Value ETF has $102.01 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%. Bottom-Line
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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.