Is invesco RAFI US 1000 ETF (PRF) a strong ETF right now?

Launched on 12/19/2005, the Invesco RAFI US 1000 ETF (PRF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Large Cap Value category of the market.

What are smart Beta ETFs?

The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.

Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.

But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.

Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other such characteristics.

While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.

Fund sponsor and index

Because the fund has amassed over $8.72 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. PRF is managed by Invesco. 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.

Cost and other expenses

For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.

Operating expenses on an annual basis are 0.34% for PRF, making it on par with most peer products in the space.

PRF's 12-month trailing dividend yield is 1.56%.

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 in the Financials sector - about 19% of the portfolio. Information Technology and Healthcare round out the top three.

When you look at individual holdings, Alphabet Inc (GOOGL) accounts for about 4.51% of the fund's total assets, followed by Apple Inc (AAPL) and Microsoft Corp (MSFT).

Its top 10 holdings account for approximately 22.35% of PRF's total assets under management.

Performance and risk

The ETF has gained about 1.79% so far this year and is up roughly 19.44% in the last one year (as of 01/06/2026). In the past 52-week period, it has traded between $35.77 and $47.76

The fund has a beta of 0.88 and standard deviation of 13.39% for the trailing three-year period, which makes PRF a medium risk choice in this particular space. With about 1082 holdings, it effectively diversifies company-specific risk .

Alternatives

Invesco RAFI US 1000 ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Schwab U.S. Dividend Equity ETF (SCHD) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $72.84 billion in assets, Vanguard Value ETF has $159 billion. SCHD has an expense ratio of 0.06% and VTV changes 0.04%.

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