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Is Invesco FTSE RAFI Developed Markets ex-U.S. ETF (PXF) a Strong ETF Right Now?
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The Invesco FTSE RAFI Developed Markets ex-U.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 World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.61 billion, this makes it one of the larger ETFs in the World ETFs. PXF is managed by Invesco. PXF 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
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.
Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.28%.
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.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.34% of the fund's total assets, followed by Totalenergies Se (TTE - Free Report) and Bp Plc (BP/).
The top 10 holdings account for about 11.73% of total assets under management.
Performance and Risk
The ETF has gained about 9.50% so far this year and was up about 8.93% in the last one year (as of 05/16/2023). In the past 52-week period, it has traded between $35.01 and $45.62.
The fund has a beta of 0.90 and standard deviation of 18.98% for the trailing three-year period, which makes PXF a medium risk choice in this particular space. With about 1048 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets ex-U.S. ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Aptus International Enhanced Yield ETF (IDUB - Free Report) tracks ---------------------------------------- and the ActivePassive International Equity ETF (APIE - Free Report) tracks ----------------------------------------. Aptus International Enhanced Yield ETF has $61.15 million in assets, ActivePassive International Equity ETF has $67 million. IDUB has an expense ratio of 0.43% and APIE charges 0.45%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the 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 ex-U.S. ETF (PXF) a Strong ETF Right Now?
The Invesco FTSE RAFI Developed Markets ex-U.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 World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $1.61 billion, this makes it one of the larger ETFs in the World ETFs. PXF is managed by Invesco. PXF 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
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.
Annual operating expenses for this ETF are 0.45%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 3.28%.
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.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.34% of the fund's total assets, followed by Totalenergies Se (TTE - Free Report) and Bp Plc (BP/).
The top 10 holdings account for about 11.73% of total assets under management.
Performance and Risk
The ETF has gained about 9.50% so far this year and was up about 8.93% in the last one year (as of 05/16/2023). In the past 52-week period, it has traded between $35.01 and $45.62.
The fund has a beta of 0.90 and standard deviation of 18.98% for the trailing three-year period, which makes PXF a medium risk choice in this particular space. With about 1048 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets ex-U.S. ETF is not a suitable option for investors seeking to outperform the World ETFs segment of the market. Instead, there are other ETFs in the space which investors should consider.
Aptus International Enhanced Yield ETF (IDUB - Free Report) tracks ---------------------------------------- and the ActivePassive International Equity ETF (APIE - Free Report) tracks ----------------------------------------. Aptus International Enhanced Yield ETF has $61.15 million in assets, ActivePassive International Equity ETF has $67 million. IDUB has an expense ratio of 0.43% and APIE charges 0.45%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the 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.