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Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
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Making its debut on 09/27/2007, smart beta exchange traded fund Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) provides investors broad exposure to the Broad Emerging Market ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $1.27 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.49%.
It's 12-month trailing dividend yield comes in at 6.67%.
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.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.96% of the fund's total assets, followed by Alibaba Group Holding Ltd and Tencent Holdings Ltd.
PXH's top 10 holdings account for about 24.08% of its total assets under management.
Performance and Risk
The ETF has lost about -15.78% and is down about -16.48% so far this year and in the past one year (as of 09/01/2022), respectively. PXH has traded between $17.19 and $23.54 during this last 52-week period.
The fund has a beta of 0.74 and standard deviation of 24.09% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 396 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $64.83 billion in assets, Vanguard FTSE Emerging Markets ETF has $70.43 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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?
Making its debut on 09/27/2007, smart beta exchange traded fund Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) provides investors broad exposure to the Broad Emerging Market ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is sponsored by Invesco. It has amassed assets over $1.27 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. 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
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.49%.
It's 12-month trailing dividend yield comes in at 6.67%.
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.
When you look at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 3.96% of the fund's total assets, followed by Alibaba Group Holding Ltd and Tencent Holdings Ltd.
PXH's top 10 holdings account for about 24.08% of its total assets under management.
Performance and Risk
The ETF has lost about -15.78% and is down about -16.48% so far this year and in the past one year (as of 09/01/2022), respectively. PXH has traded between $17.19 and $23.54 during this last 52-week period.
The fund has a beta of 0.74 and standard deviation of 24.09% for the trailing three-year period, which makes PXH a medium risk choice in this particular space. With about 396 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco FTSE RAFI Emerging Markets ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could 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 $64.83 billion in assets, Vanguard FTSE Emerging Markets ETF has $70.43 billion. IEMG has an expense ratio of 0.09% and VWO charges 0.08%.
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.