We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF) a Strong ETF Right Now?
Read MoreHide Full Article
The Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF - Free Report) was launched on 06/25/2007, and is a smart beta exchange traded fund designed to offer 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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 sponsored by Invesco. It has amassed assets over $1.12 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, 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
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 0.45% for this ETF, which makes it on par with most peer products in the space.
PXF's 12-month trailing dividend yield is 4.25%.
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.
Looking at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.21% of total assets, followed by Samsung Electronics Co Ltd and Nestle Sa (NESN).
The top 10 holdings account for about 12.39% of total assets under management.
Performance and Risk
So far this year, PXF has lost about -8.82%, and is down about -4.73% in the last one year (as of 05/03/2022). During this past 52-week period, the fund has traded between $42.52 and $50.38.
The ETF has a beta of 0.89 and standard deviation of 23.06% for the trailing three-year period, making it a medium risk choice in the space. With about 1043 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets exU.S. ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $48.45 billion in assets, Vanguard FTSE Developed Markets ETF has $99.30 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF) a Strong ETF Right Now?
The Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF - Free Report) was launched on 06/25/2007, and is a smart beta exchange traded fund designed to offer 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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.
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 sponsored by Invesco. It has amassed assets over $1.12 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, 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
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 0.45% for this ETF, which makes it on par with most peer products in the space.
PXF's 12-month trailing dividend yield is 4.25%.
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.
Looking at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.21% of total assets, followed by Samsung Electronics Co Ltd and Nestle Sa (NESN).
The top 10 holdings account for about 12.39% of total assets under management.
Performance and Risk
So far this year, PXF has lost about -8.82%, and is down about -4.73% in the last one year (as of 05/03/2022). During this past 52-week period, the fund has traded between $42.52 and $50.38.
The ETF has a beta of 0.89 and standard deviation of 23.06% for the trailing three-year period, making it a medium risk choice in the space. With about 1043 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets exU.S. ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $48.45 billion in assets, Vanguard FTSE Developed Markets ETF has $99.30 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.