Invesco FTSE RAFI Emerging Markets ETF (PXH)

Overview

The Invesco FTSE RAFI Emerging Markets ETF (PXH) seeks to track the investment results of the FTSE RAFI Emerging Markets Index, which is designed to track the performance of stocks in emerging markets selected using the RAFI methodology, emphasizing fundamental factors such as book value, cash flow, sales, and dividends.

Reputation and Reliability

Invesco is a well-established global investment management firm with a strong reputation and a long track record of managing ETFs and other investment products.

Management Expertise

Invesco has a dedicated team of experienced portfolio managers and analysts who specialize in managing ETFs, including those focused on emerging markets.

Goal

To track the investment results of the FTSE RAFI Emerging Markets Index.

Investment Approach and Strategy

Strategy: The ETF aims to replicate the FTSE RAFI Emerging Markets Index, which uses a fundamental indexing approach rather than market capitalization weighting. This means it selects and weights securities based on fundamental factors.

Composition The ETF holds a diversified portfolio of stocks from emerging market countries, weighted according to fundamental measures of company size rather than market capitalization.

Market Share: PXH's market share in the emerging markets ETF sector is relatively small compared to larger, more established ETFs.

Total Net Assets (AUM): 400000000

Key Competitors

• Vanguard FTSE Emerging Markets ETF (VWO)
• iShares Core MSCI Emerging Markets ETF (IEMG)
• Schwab Emerging Markets Equity ETF (SCHE)

Competitive Landscape

The emerging markets ETF space is dominated by a few large players like VWO and IEMG. PXH differentiates itself through its fundamental indexing approach, potentially offering different risk-return characteristics than market-cap weighted ETFs. However, its smaller size can lead to lower liquidity compared to its larger competitors.

Historical Performance: Historical performance data should be obtained from reputable financial data providers.

Benchmark Comparison: Performance should be compared against the FTSE RAFI Emerging Markets Index.

Expense Ratio: 0.0049

Average Trading Volume

The average trading volume of PXH is moderate, potentially leading to wider bid-ask spreads compared to more liquid ETFs.

Bid-Ask Spread

The bid-ask spread for PXH varies, but it tends to be wider than those of larger, more liquid emerging market ETFs due to its lower trading volume.

Market Environment Factors

Emerging market equities are influenced by global economic growth, commodity prices, currency fluctuations, and geopolitical risks. Performance is tied to the economic health and stability of the emerging market nations represented in the index.

Growth Trajectory

The growth trajectory of PXH depends on the overall performance of emerging markets and the effectiveness of its fundamental indexing strategy. Changes in the composition of the FTSE RAFI Emerging Markets Index can affect its future performance.

Competitive Edge

PXH's competitive advantage lies in its RAFI fundamental indexing methodology, which aims to select and weight securities based on factors beyond market capitalization. This approach can potentially offer enhanced returns and reduced volatility compared to traditional market-cap weighted indexes. The fund offers a different approach to emerging market investing for investors seeking alternative weighting schemes. However, fundamental indexing may not always outperform market-cap weighted strategies.

Volatility

PXH's volatility is expected to be similar to that of other emerging market ETFs, influenced by the inherent risks associated with emerging market equities.

Market Risk

The ETF is subject to market risk, including economic, political, and currency risks specific to emerging markets. These risks can lead to significant fluctuations in the ETF's value.

Ideal Investor Profile

The ideal investor for PXH is someone seeking exposure to emerging market equities with a preference for a fundamental indexing strategy. Investors should have a long-term investment horizon and a tolerance for the higher volatility associated with emerging markets.

Market Risk

PXH is suitable for long-term investors who are comfortable with the risks of emerging markets and are seeking a potentially different return profile than market-cap weighted ETFs.

Invesco FTSE RAFI Emerging Markets ETF (PXH) provides exposure to emerging market equities using a fundamental indexing approach, aiming to select and weight securities based on factors beyond market capitalization. Its smaller size and moderate liquidity might pose challenges compared to larger competitors. PXH is best suited for investors seeking diversification and are comfortable with the inherent risk associated with investing in emerging economies and alternative weighting methodologies. However, potential investors should carefully consider its lower liquidity compared to larger peers such as VWO and IEMG before investing.

Data Sources:

• Invesco official website
• FTSE Russell
• Morningstar
• Bloomberg

Disclaimers:

The data provided is for informational purposes only and should not be considered investment advice. Investment decisions should be based on individual circumstances and consultation with a financial professional. Market share data is approximate and based on publicly available information as of the date of analysis.