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 Index, which is composed of publicly traded companies in emerging markets selected based on fundamental factors such as sales, cash flow, book value, and dividends. It offers a diversified portfolio of emerging market equities.

Reputation and Reliability

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

Management Expertise

Invesco has a team of experienced portfolio managers and analysts dedicated to managing its ETF offerings.

Goal

The ETF seeks to track the investment results (before fees and expenses) of the FTSE RAFI Emerging Index.

Investment Approach and Strategy

Strategy: The ETF employs a full replication strategy, meaning it invests in all of the securities in the underlying index in proportion to their index weightings.

Composition The ETF primarily holds stocks of companies located in emerging market countries. The index is reconstituted annually.

Market Share: PXHu2019s market share in the emerging markets ETF sector is relatively small compared to larger competitors.

Total Net Assets (AUM): 265295088.37

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 highly competitive, dominated by low-cost, market-cap weighted funds from Vanguard and iShares. PXH differentiates itself through its fundamental indexing approach. A potential disadvantage of PXH is its higher expense ratio compared to its competitors, which could hinder its ability to outperform on a net basis. A significant advantage is the RAFI methodology which targets undervalued stocks.

Historical Performance: Historical performance data can be obtained from financial websites; however, past performance is not indicative of future results.

Benchmark Comparison: The ETF's performance can be compared to the FTSE RAFI Emerging Index to assess its tracking effectiveness.

Expense Ratio: 0.0049

Average Trading Volume

The ETF's average trading volume can be found on major financial websites and represents the number of shares traded daily.

Bid-Ask Spread

The bid-ask spread represents the difference between the highest price a buyer is willing to pay and the lowest price a seller is willing to accept for the ETF shares.

Market Environment Factors

Economic growth rates in emerging markets, currency fluctuations, geopolitical events, and changes in commodity prices can all impact the performance of PXH.

Growth Trajectory

Growth trends depend on the performance of the underlying index and investor demand for emerging market exposure. There is no recent changes in strategy and holdings.

Competitive Edge

PXH's primary competitive advantage lies in its fundamentally weighted indexing approach, which selects and weights companies based on factors such as sales, cash flow, book value, and dividends. This methodology aims to identify undervalued companies and potentially outperform traditional market-cap-weighted indexes. The fund's fundamental approach distinguishes it from competitors. However, this strategy may not always outperform market-cap weighted strategies.

Volatility

The ETF's volatility can be measured by its beta and standard deviation, which indicate how much its price fluctuates relative to the overall market.

Market Risk

The ETF is subject to market risk, including the risk of declines in emerging market equity prices. Specific risks include currency risk, political risk, and regulatory risk associated with investing in emerging markets.

Ideal Investor Profile

The ETF is suitable for investors seeking diversified exposure to emerging market equities and who believe in the potential for outperformance through fundamental indexing.

Market Risk

The ETF is suitable for long-term investors seeking capital appreciation and diversification in their portfolios. It is appropriate for investors who understand the risks associated with investing in emerging markets.

Invesco FTSE RAFI Emerging Markets ETF (PXH) offers exposure to emerging market equities through a fundamentally weighted indexing approach, aiming to outperform traditional market-cap-weighted indexes. Its primary advantage is its methodology focusing on undervalued companies, but it faces competition from larger, low-cost market-cap weighted ETFs. Investors should consider the higher expense ratio and the inherent risks of emerging market investments before investing. PXH would be ideal for investors who believe in fundamental indexing and are looking for an alternative to market-cap-weighted emerging market ETFs.

Data Sources:

• Invesco.com
• etf.com
• Morningstar.com
• finance.yahoo.com

Disclaimers:

The information provided is for informational purposes only and should not be construed as investment advice. Investors should consult with a qualified financial advisor before making any investment decisions. Past performance is not indicative of future results. Market share data is based on available data and may not be exact.