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Is Invesco FTSE RAFI Developed Markets exU.S. ETF (PXF) a Strong ETF Right Now?
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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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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. PXF has been able to amass assets over $1.13 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the FTSE RAFI Developed ex-U.S. Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PXF are 0.45%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.49%.
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.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.21% of the fund's 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
Year-to-date, the Invesco FTSE RAFI Developed Markets exU.S. ETF has lost about -14.32% so far, and is down about -12.97% over the last 12 months (as of 07/04/2022). PXF has traded between $39.56 and $49.42 in this past 52-week period.
PXF has a beta of 0.90 and standard deviation of 23.53% for the trailing three-year period, which makes the fund 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 $45.43 billion in assets, Vanguard FTSE Developed Markets ETF has $91.59 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?
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?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
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. PXF has been able to amass assets over $1.13 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the FTSE RAFI Developed ex-U.S. Index before fees and expenses.
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
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for PXF are 0.45%, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 5.49%.
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.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.21% of the fund's 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
Year-to-date, the Invesco FTSE RAFI Developed Markets exU.S. ETF has lost about -14.32% so far, and is down about -12.97% over the last 12 months (as of 07/04/2022). PXF has traded between $39.56 and $49.42 in this past 52-week period.
PXF has a beta of 0.90 and standard deviation of 23.53% for the trailing three-year period, which makes the fund 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 $45.43 billion in assets, Vanguard FTSE Developed Markets ETF has $91.59 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.