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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) made its debut on 09/27/2007, and is a smart beta exchange traded fund that provides 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. PXH has been able to amass assets over $1.33 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PXH 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
PXH's 12-month trailing dividend yield is 6.62%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 4% of total assets, followed by China Construction Bank Corp and Hon Hai Precision Industry Co Ltd.
The top 10 holdings account for about 24.66% of total assets under management.
Performance and Risk
Year-to-date, the Invesco FTSE RAFI Emerging Markets ETF has lost about -15.19% so far, and is down about -17.63% over the last 12 months (as of 06/27/2022). PXH has traded between $18.01 and $23.60 in this past 52-week period.
PXH has a beta of 0.79 and standard deviation of 24.13% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 396 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 $66.55 billion in assets, Vanguard FTSE Emerging Markets ETF has $72.25 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) made its debut on 09/27/2007, and is a smart beta exchange traded fund that provides 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Invesco. PXH has been able to amass assets over $1.33 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PXH 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.49%, making it on par with most peer products in the space.
PXH's 12-month trailing dividend yield is 6.62%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 4% of total assets, followed by China Construction Bank Corp and Hon Hai Precision Industry Co Ltd.
The top 10 holdings account for about 24.66% of total assets under management.
Performance and Risk
Year-to-date, the Invesco FTSE RAFI Emerging Markets ETF has lost about -15.19% so far, and is down about -17.63% over the last 12 months (as of 06/27/2022). PXH has traded between $18.01 and $23.60 in this past 52-week period.
PXH has a beta of 0.79 and standard deviation of 24.13% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 396 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 $66.55 billion in assets, Vanguard FTSE Emerging Markets ETF has $72.25 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.