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

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

Profile: PRF is an ETF that tracks the FTSE RAFI US 1500 Small-Mid Index, investing in approximately 1500 small- and mid-cap US companies. The underlying index employs a fundamental, rules-based approach, overweighting stocks with higher fundamental characteristics like sales, cash flow, and book value.

Objective: PRF seeks to provide long-term capital appreciation by tracking the performance of the underlying index.

Issuer:

• Invesco: Invesco Ltd. is a global asset management company with over $1.42 trillion in assets under management (AUM) as of September 30, 2023.
• Reputation and Reliability: Invesco is a reputable and established company with a long history of managing assets and offering ETFs.
• Management: The ETF is managed by a team of experienced portfolio managers at Invesco.

Market Share: PRF has a market share of approximately 0.2% in the small-cap blend ETF category.

Total Net Assets: PRF has $96.48 million in total net assets as of 11/03/2023.

Moat:

• Unique Strategy: Invesco utilizes the FTSE RAFI methodology, prioritizing fundamental strength over traditional market capitalization weighting.
• Diversification: The ETF offers exposure to a broad range of small- and mid-cap companies across various industries.

Financial Performance:

• Historical Performance: PRF has delivered a 9.73% annualized return since its inception in September 2010.
• Benchmark Comparison: The ETF has outperformed the Russell 2500 Index, its benchmark, over the past three and five years.

Growth Trajectory: The small-cap market is expected to experience growth in the long term, potentially benefitting PRF.

Liquidity:

• Average Trading Volume: PRF has an average daily trading volume of 126,000 shares.
• Bid-Ask Spread: The bid-ask spread for PRF is relatively tight, indicating good liquidity.

Market Dynamics: The overall market performance, interest rate fluctuations, and economic conditions could affect PRF's performance.

Competitors: iShares Russell 2500 Value ETF (IWN), Vanguard Small-Cap Value ETF (VBR)

Expense Ratio: PRF's expense ratio is 0.39%.

Investment Approach and Strategy:

• Strategy: PRF tracks the FTSE RAFI US 1500 Small-Mid Index, aiming to replicate its performance.
• Composition: The ETF invests primarily in small- and mid-cap stocks across various sectors, with a focus on companies with strong fundamentals.

Key Points:

• Invesco FTSE RAFI US 1500 Small-Mid ETF offers exposure to a diversified basket of small- and mid-cap stocks.
• The ETF utilizes a fundamental indexing approach, potentially enhancing returns over the long term.
• It has a low expense ratio and demonstrates strong liquidity.

Risks:

• Volatility: Small-cap stocks tend to be more volatile than larger companies, increasing the ETF's risk profile.
• Market Risk: The ETF's performance is tied to the overall market conditions and the performance of small-cap stocks.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through exposure to small- and mid-cap companies with strong fundamentals.
• Investors comfortable with a higher degree of volatility compared to large-cap investments.

Fundamental Rating Based on AI: 8.5

Justification: The AI analysis considers PRF's robust financial performance, competitive advantage via its unique indexing methodology, and strong liquidity, leading to a positive rating. However, the higher volatility associated with small-cap stocks is factored into the rating.

Resources and Disclaimers:

• Invesco: https://www.invesco.com/us/financial-products/etfs/product-detail?audienceType=Investor&productId=PRF
• Morningstar: https://www.morningstar.com/etfs/usn/prf/portfolio
• ETF Database: https://etfdb.com/etf/PRF/

Disclaimer: This information is for educational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.