Should Invesco RAFI US 1000 ETF (PRF) Be on Your Investing Radar?

Launched on December 19, 2005, the Invesco RAFI US 1000 ETF (PRF) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.

The fund is sponsored by Invesco. It has amassed assets over $8.70 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies typically have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

While value stocks have lower than average price-to-earnings and price-to-book ratios, they also have lower than average sales and earnings growth rates. Value stocks have outperformed growth stocks in nearly all markets when you consider long-term performance, growth stocks are more likely to outpace value stocks in strong bull markets.

Costs

When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.

Annual operating expenses for this ETF are 0.34%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.97%.

Sector Exposure and Top Holdings

Even though ETFs offer diversified exposure that minimizes single stock risk, investors should also look at the actual holdings inside the fund. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Information Technology sector -- about 18.3% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Alphabet Inc (GOOGL) accounts for about 4.35% of total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

The top 10 holdings account for about 22.08% of total assets under management.

Performance and Risk

PRF seeks to match the performance of the FTSE RAFI US 1000 Index before fees and expenses. The RAFI Fundamental Select US 1000 Index tracks the performance of the largest US equities, selected based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends.

The ETF return is roughly 1.23% so far this year and it's up approximately 19.11% in the last one year (as of 03/24/2026). In the past 52-week period, it has traded between $35.77 and $50.01.

The ETF has a beta of 0.89 and standard deviation of 13.03% for the trailing three-year period, making it a medium risk choice in the space. With about 979 holdings, it effectively diversifies company-specific risk.

Alternatives

Invesco RAFI US 1000 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PRF is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value Index Fund ETF Shares (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $83.60 billion in assets, Vanguard Value Index Fund ETF Shares has $164.44 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.03%.

Bottom-Line

Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.

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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Invesco RAFI US 1000 ETF (PRF): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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