Invesco FTSE RAFI US 1500 Small-Mid ETF (PRFZ)

Overview

The Invesco FTSE RAFI US 1500 Small-Mid ETF (PRFZ) is designed to track the performance of small- and mid-capitalization U.S. companies. It uses a fundamentally weighted index, selecting and weighting stocks based on factors like sales, cash flow, book value, and dividends. This approach aims to provide exposure to potentially undervalued companies within the small- and mid-cap segments of the market.

Reputation and Reliability

Invesco is a well-established and reputable global investment management firm with a long track record of providing diverse investment solutions, including ETFs.

Management Expertise

Invesco has a dedicated team of investment professionals with significant experience in managing ETFs and employing various investment strategies.

Goal

The ETF seeks to track the investment results (before fees and expenses) of the FTSE RAFI US 1500 Index.

Investment Approach and Strategy

Strategy: The ETF tracks the FTSE RAFI US 1500 Index, which uses a fundamental weighting methodology rather than market capitalization weighting.

Composition The ETF primarily holds stocks of small- and mid-capitalization U.S. companies selected and weighted based on fundamental factors.

Market Share: Data not readily available.

Total Net Assets (AUM): 139440000

Key Competitors

• IWM
• IJH
• VIOO
• XJH

Competitive Landscape

The small-mid cap ETF market is competitive. PRFZ differentiates itself through its fundamental weighting methodology, which may appeal to investors seeking a value-oriented approach. Competitors, like IWM, are market-cap weighted, offering broad exposure but potentially differing risk-return profiles. PRFZ's lower AUM may impact liquidity compared to larger competitors.

Historical Performance: Historical performance data is available from Invesco and financial data providers.

Benchmark Comparison: Performance should be compared against the FTSE RAFI US 1500 Index to assess tracking effectiveness.

Expense Ratio: 0.0039

Average Trading Volume

The average trading volume of PRFZ affects how easily investors can buy or sell shares without significantly impacting the price.

Bid-Ask Spread

The bid-ask spread represents the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept, indicating trading costs.

Market Environment Factors

Economic growth, interest rates, inflation, and sector-specific trends influence the performance of small- and mid-cap companies and therefore impact PRFZ.

Growth Trajectory

The ETF's growth trajectory depends on the performance of the fundamentally weighted small- and mid-cap U.S. equity market and investor demand for this investment approach. There are no major changes to strategy and holdings currently.

Competitive Edge

PRFZ's competitive advantage lies in its fundamentally weighted approach, which aims to identify undervalued companies. By focusing on factors like sales, cash flow, book value, and dividends, the ETF potentially avoids overvalued companies that might be prominent in market-cap-weighted indexes. This strategy can lead to outperformance during certain market cycles, particularly when value stocks are favored. However, a focus on fundamental factors may lead to underperformance in growth-driven markets.

Volatility

Volatility is inherent in small- and mid-cap stocks, so PRFZ is expected to exhibit higher volatility compared to large-cap ETFs.

Market Risk

PRFZ is subject to general market risk, including economic downturns, geopolitical events, and changes in investor sentiment that can negatively impact the value of its holdings.

Ideal Investor Profile

The ideal investor for PRFZ is someone seeking exposure to small- and mid-cap U.S. equities with a value-oriented investment strategy. The investor should have a moderate to high risk tolerance and a long-term investment horizon.

Market Risk

PRFZ is suitable for long-term investors who believe in the potential of fundamentally weighted small- and mid-cap stocks to outperform over time. It may not be suitable for active traders or those seeking short-term gains due to its potentially higher volatility.

Invesco FTSE RAFI US 1500 Small-Mid ETF (PRFZ) offers exposure to small- and mid-cap U.S. equities using a fundamental weighting methodology. This approach aims to identify undervalued companies based on factors like sales, cash flow, book value, and dividends. PRFZ is suitable for long-term investors with a moderate to high risk tolerance who believe in the potential of value-oriented small- and mid-cap stocks. Its expense ratio is low, and it should be compared to the FTSE RAFI US 1500 Index to evaluate performance. Investors should be aware of the potential for higher volatility associated with small- and mid-cap stocks.

• IWM
• IJH
• VIOO
• XJH
• VXF
• SCHA
• IJR

Data Sources:

• Invesco
• FTSE Russell
• Morningstar
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence before making any investment decisions. Market share data may not be readily available and is subject to change.