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

Core Viewpoint - The Invesco RAFI US 1000 ETF (PRF) is designed to provide broad exposure to the Large Cap Value segment of the US equity market, with significant assets under management and a focus on stable, lower-risk investments [1][2]. Group 1: Fund Overview - The Invesco RAFI US 1000 ETF was launched on December 19, 2005, and has accumulated over $7.83 billion in assets, making it one of the larger ETFs in its category [1]. - The ETF targets companies with a market capitalization above $10 billion, which are generally considered stable with more reliable cash flows compared to mid and small cap companies [2]. Group 2: Investment Characteristics - Value stocks, which the ETF primarily invests in, typically have lower price-to-earnings and price-to-book ratios, as well as lower sales and earnings growth rates [3]. - Historically, value stocks have outperformed growth stocks in most markets, although they may underperform during strong bull markets [3]. Group 3: Costs and Performance - The ETF has an annual operating expense ratio of 0.33% and a 12-month trailing dividend yield of 1.76%, which is competitive within its peer group [4]. - As of July 17, 2025, the ETF has returned approximately 6.18% year-to-date and 8.97% over the past year, with a trading range between $35.77 and $43.05 in the last 52 weeks [7]. Group 4: Sector Exposure and Holdings - The ETF has a significant allocation to the Financials sector, comprising about 21.80% of the portfolio, followed by Information Technology and Healthcare [5]. - Microsoft Corp (MSFT) represents about 2.39% of total assets, with the top 10 holdings accounting for approximately 19.42% of total assets under management [6]. Group 5: Risk Profile - The ETF has a beta of 0.91 and a standard deviation of 15.22% over the trailing three-year period, indicating a medium risk profile [8]. - With around 1,092 holdings, the ETF effectively diversifies company-specific risk [8]. Group 6: Alternatives - The Invesco RAFI US 1000 ETF has a Zacks ETF Rank of 3 (Hold), suggesting it is a viable option for investors seeking exposure to the Large Cap Value segment [9]. - Alternative ETFs in this space include the Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV), which have larger asset bases and lower expense ratios [10]. Group 7: Conclusion - Passively managed ETFs like the Invesco RAFI US 1000 ETF are favored by both institutional and retail investors due to their low costs, transparency, flexibility, and tax efficiency [11].