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Is Invesco RAFI US 1500 Small-Mid ETF (PRFZ) a Strong ETF Right Now?
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Launched on 09/20/2006, the Invesco RAFI US 1500 Small-Mid ETF (PRFZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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. PRFZ has been able to amass assets over $2.32 billion, making it one of the larger ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index.
The RAFI Fundamental Select US 1500 Index tracks the performance of small and medium-sized US companies, based on the four fundamental measures of size: book value, cash flow, sales and dividends.
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 0.34%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.42%.
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.
Representing 19.60% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.
When you look at individual holdings, Applovin Corp (APP - Free Report) accounts for about 0.61% of the fund's total assets, followed by Palantir Technologies Inc (PLTR - Free Report) and Carvana Co (CVNA - Free Report) .
PRFZ's top 10 holdings account for about 4.31% of its total assets under management.
Performance and Risk
The ETF has lost about -4.89% and is up about 4.95% so far this year and in the past one year (as of 06/05/2025), respectively. PRFZ has traded between $33.13 and $45.39 during this last 52-week period.
The fund has a beta of 1.09 and standard deviation of 21.94% for the trailing three-year period, which makes PRFZ a medium risk choice in this particular space. With about 1732 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco RAFI US 1500 Small-Mid ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $63.94 billion in assets, iShares Core S&P Small-Cap ETF has $77.65 billion. IWM has an expense ratio of 0.19% and IJR 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 Style Box - Small Cap Blend.
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 RAFI US 1500 Small-Mid ETF (PRFZ) a Strong ETF Right Now?
Launched on 09/20/2006, the Invesco RAFI US 1500 Small-Mid ETF (PRFZ - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Blend category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
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.
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.
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. PRFZ has been able to amass assets over $2.32 billion, making it one of the larger ETFs in the Style Box - Small Cap Blend. Before fees and expenses, this particular fund seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index.
The RAFI Fundamental Select US 1500 Index tracks the performance of small and medium-sized US companies, based on the four fundamental measures of size: book value, cash flow, sales and dividends.
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 0.34%, making it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.42%.
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.
Representing 19.60% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.
When you look at individual holdings, Applovin Corp (APP - Free Report) accounts for about 0.61% of the fund's total assets, followed by Palantir Technologies Inc (PLTR - Free Report) and Carvana Co (CVNA - Free Report) .
PRFZ's top 10 holdings account for about 4.31% of its total assets under management.
Performance and Risk
The ETF has lost about -4.89% and is up about 4.95% so far this year and in the past one year (as of 06/05/2025), respectively. PRFZ has traded between $33.13 and $45.39 during this last 52-week period.
The fund has a beta of 1.09 and standard deviation of 21.94% for the trailing three-year period, which makes PRFZ a medium risk choice in this particular space. With about 1732 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco RAFI US 1500 Small-Mid ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 ETF (IWM - Free Report) tracks Russell 2000 Index and the iShares Core S&P Small-Cap ETF (IJR - Free Report) tracks S&P SmallCap 600 Index. IShares Russell 2000 ETF has $63.94 billion in assets, iShares Core S&P Small-Cap ETF has $77.65 billion. IWM has an expense ratio of 0.19% and IJR 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 Style Box - Small Cap Blend.
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.