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Is Invesco FTSE RAFI Emerging Markets ETF (PXH) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) is a smart beta exchange traded fund launched on 09/27/2007.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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 managed by Invesco. PXH has been able to amass assets over $1.31 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PXH seeks to match the performance of the FTSE RAFI Emerging Markets Index.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.49% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.11%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 5.33% of total assets, followed by Alibaba Group Holding Ltd and Petroleo Brasileiro Sa (PETR4).
PXH's top 10 holdings account for about 27.08% of its total assets under management.
Performance and Risk
The ETF has gained about 10.34% and it's up approximately 20.05% so far this year and in the past one year (as of 05/29/2024), respectively. PXH has traded between $17.24 and $21.43 during this last 52-week period.
The ETF has a beta of 0.74 and standard deviation of 17.08% for the trailing three-year period, making it a medium risk choice in the space. With about 413 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.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $79.39 billion in assets, iShares Core MSCI Emerging Markets ETF has $79.74 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
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?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Invesco FTSE RAFI Emerging Markets ETF (PXH - Free Report) is a smart beta exchange traded fund launched on 09/27/2007.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
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.
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 managed by Invesco. PXH has been able to amass assets over $1.31 billion, making it one of the larger ETFs in the Broad Emerging Market ETFs. Before fees and expenses, PXH seeks to match the performance of the FTSE RAFI Emerging Markets Index.
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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.49% for PXH, making it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 4.11%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 5.33% of total assets, followed by Alibaba Group Holding Ltd and Petroleo Brasileiro Sa (PETR4).
PXH's top 10 holdings account for about 27.08% of its total assets under management.
Performance and Risk
The ETF has gained about 10.34% and it's up approximately 20.05% so far this year and in the past one year (as of 05/29/2024), respectively. PXH has traded between $17.24 and $21.43 during this last 52-week period.
The ETF has a beta of 0.74 and standard deviation of 17.08% for the trailing three-year period, making it a medium risk choice in the space. With about 413 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.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $79.39 billion in assets, iShares Core MSCI Emerging Markets ETF has $79.74 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
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.