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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 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Invesco. PXF has been able to amass assets over $1.72 billion, making it one of the larger ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund 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
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.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.38%.
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.
Looking at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.37% of total assets, followed by Totalenergies Se (TTE - Free Report) and Samsung Electronics Co Ltd.
PXF's top 10 holdings account for about 11.21% of its total assets under management.
Performance and Risk
So far this year, PXF return is roughly 8.19%, and was up about 12.50% in the last one year (as of 12/12/2024). During this past 52-week period, the fund has traded between $45.74 and $52.64.
The ETF has a beta of 0.90 and standard deviation of 16.52% for the trailing three-year period, making it a medium risk choice in the space. With about 1039 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets ex-U.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 $77.98 billion in assets, Vanguard FTSE Developed Markets ETF has $139.06 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
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 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 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.
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.
However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
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
The fund is managed by Invesco. PXF has been able to amass assets over $1.72 billion, making it one of the larger ETFs in the Broad Developed World ETFs. Before fees and expenses, this particular fund 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
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.
Operating expenses on an annual basis are 0.45% for this ETF, which makes it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 3.38%.
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.
Looking at individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.37% of total assets, followed by Totalenergies Se (TTE - Free Report) and Samsung Electronics Co Ltd.
PXF's top 10 holdings account for about 11.21% of its total assets under management.
Performance and Risk
So far this year, PXF return is roughly 8.19%, and was up about 12.50% in the last one year (as of 12/12/2024). During this past 52-week period, the fund has traded between $45.74 and $52.64.
The ETF has a beta of 0.90 and standard deviation of 16.52% for the trailing three-year period, making it a medium risk choice in the space. With about 1039 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Developed Markets ex-U.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 $77.98 billion in assets, Vanguard FTSE Developed Markets ETF has $139.06 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
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.