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) is a smart beta exchange traded fund launched on 09/27/2007.What Are Smart Beta ETFs?The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.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.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.Fund Sponsor & IndexPXH is managed by Invesco, and this fund has amassed over $1.21 billion, which makes it one of the larger ETFs in the Broad Emerging Market ETFs. PXH, before fees and expenses, 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 ExpensesWhen considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.Operating expenses on an annual basis are 0.49% for PXH, making it on par with most peer products in the space.PXH's 12-month trailing dividend yield is 4.36%.Sector Exposure and Top HoldingsEven though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.Taking into account individual holdings, Taiwan Semiconductor Manufacturing Co Ltd accounts for about 7.01% of the fund's total assets, followed by Alibaba Group Holding Ltd and Tencent Holdings Ltd.PXH's top 10 holdings account for about 29.59% of its total assets under management.Performance and RiskYear-to-date, the Invesco FTSE RAFI Emerging Markets ETF return is roughly 1.61% so far, and was up about 16.45% over the last 12 months (as of 02/04/2025). PXH has traded between $18.69 and $23.20 in this past 52-week period.PXH has a beta of 0.70 and standard deviation of 18.01% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 414 holdings, it effectively diversifies company-specific risk.AlternativesInvesco 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) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $78.52 billion in assets, Vanguard FTSE Emerging Markets ETF has $79.44 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 LineTo 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.Want key ETF info delivered straight to your inbox?Zacks’ free Fund Newsletter will brief you on top news and analysis, as well as top-performing ETFs, each week.Get it free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Invesco FTSE RAFI Emerging Markets ETF (PXH): ETF Research Reports iShares Core MSCI Emerging Markets ETF (IEMG): ETF Research Reports Vanguard FTSE Emerging Markets ETF (VWO): ETF Research ReportsTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks