Is Invesco RAFI Developed Markets ex-U.S. ETF (PXF) a Strong ETF Right Now?

A smart beta exchange traded fund, the Invesco RAFI Developed Markets ex-U.S. ETF (PXF) debuted on 06/25/2007, and offers broad exposure to the Foreign Large Value ETF category of the market.

What Are Smart Beta ETFs?

The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.

Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: 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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Managed by Invesco, PXF has amassed assets over $2.61 billion, making it one of the larger ETFs in the Foreign Large Value ETF. This particular fund, before fees and expenses, seeks to match the performance of the FTSE RAFI Developed ex-U.S. Index.

The RAFI Fundamental Select Developed ex US 1000 Index tracks the performance of the largest developed market equities, excluding the US, based on the following four fundamental measures of firm size: book value, cash flow, sales and dividends.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

Operating expenses on an annual basis are 0.43% for PXF, making it on par with most peer products in the space.

The fund has a 12-month trailing dividend yield of 3.31%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

When you look at individual holdings, Samsung Electronics Co Ltd (Y74718100) accounts for about 4.34% of the fund's total assets, followed by Shell Plc (SHEL) and Totalenergies Se (TTE).

Its top 10 holdings account for approximately 14.48% of PXF's total assets under management.

Performance and Risk

The ETF has added about 9.77% so far this year and was up about 43.23% in the last one year (as of 03/04/2026). In the past 52-week period, it has traded between $46.22 and $76.15

PXF has a beta of 0.71 and standard deviation of 14.28% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1013 holdings, it effectively diversifies company-specific risk .

Alternatives

Invesco RAFI Developed Markets ex-U.S. ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.

Vanguard International High Dividend Yield Index Fund ETF Shares (VYMI) tracks FTSE All-World ex US High Dividend Yield Index and the Schwab Fundamental International Equity ETF (FNDF) tracks Russell RAFI Developed ex US Large Co. Index (Net). Vanguard International High Dividend Yield Index Fund ETF Shares has $17.26 billion in assets, Schwab Fundamental International Equity ETF has $21.99 billion. VYMI has an expense ratio of 0.07% and FNDF changes 0.25%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF

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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Invesco RAFI Developed Markets ex-U.S. ETF (PXF): ETF Research Reports

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

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