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Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
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Launched on 09/27/2007, the Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) is a smart beta exchange traded fund offering 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.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.35 billion, this makes it one of the larger ETFs in the Broad Emerging Market ETFs. PXH is managed by Invesco. PXH seeks to match the performance of the FTSE RAFI Emerging Markets Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.50% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.77%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.68% of the fund's total assets, followed by Gazprom Pjsc (GAZP) and Hon Hai Precision Industry Co Ltd.
Its top 10 holdings account for approximately 24.31% of PXH's total assets under management.
Performance and Risk
Year-to-date, the Invesco FTSE RAFI Emerging Markets ETF return is roughly 6.25% so far, and was up about 9.80% over the last 12 months (as of 12/22/2021). PXH has traded between $20.65 and $24.30 in this past 52-week period.
The ETF has a beta of 0.85 and standard deviation of 23.37% for the trailing three-year period, making it a medium risk choice in the space. With about 419 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $75.42 billion in assets, Vanguard FTSE Emerging Markets ETF has $77.61 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
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?
Launched on 09/27/2007, the Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) is a smart beta exchange traded fund offering 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.
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.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
Because the fund has amassed over $1.35 billion, this makes it one of the larger ETFs in the Broad Emerging Market ETFs. PXH is managed by Invesco. PXH seeks to match the performance of the FTSE RAFI Emerging Markets Index before fees and expenses.
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
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.
Operating expenses on an annual basis are 0.50% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.77%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.68% of the fund's total assets, followed by Gazprom Pjsc (GAZP) and Hon Hai Precision Industry Co Ltd.
Its top 10 holdings account for approximately 24.31% of PXH's total assets under management.
Performance and Risk
Year-to-date, the Invesco FTSE RAFI Emerging Markets ETF return is roughly 6.25% so far, and was up about 9.80% over the last 12 months (as of 12/22/2021). PXH has traded between $20.65 and $24.30 in this past 52-week period.
The ETF has a beta of 0.85 and standard deviation of 23.37% for the trailing three-year period, making it a medium risk choice in the space. With about 419 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is not a suitable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. Instead, there are other ETFs in the space which investors should 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 $75.42 billion in assets, Vanguard FTSE Emerging Markets ETF has $77.61 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
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.