Launched on December 19, 2005, the Invesco RAFI US 1000 ETF (PRF) is a passively managed exchange traded fund designed to provide a broad exposure to the Large Cap Value segment of the US equity market.
The fund is sponsored by Invesco. It has amassed assets over $8.21 billion, making it one of the larger ETFs attempting to match the Large Cap Value segment of the US equity market.
Why Large Cap Value
Companies that fall in the large cap category tend to have a market capitalization above $10 billion. Overall, they are usually a stable option, with less risk and more sure-fire cash flows than mid and small cap companies.
Value stocks are known for their lower than average price-to-earnings and price-to-book ratios, but investors should also note their lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.
Costs
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive counterparts if all other fundamentals are the same.
Annual operating expenses for this ETF are 0.33%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.66%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector -- about 20.3% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 3.2% of total assets, followed by Alphabet Inc (GOOGL) and Microsoft Corp (MSFT).
The top 10 holdings account for about 20.84% of total assets under management.
Performance and Risk
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.
The ETF has added roughly 12.55% so far this year and is up roughly 14.13% in the last one year (as of 09/18/2025). In the past 52-week period, it has traded between $35.77 and $45.04.
The ETF has a beta of 0.92 and standard deviation of 14.68% for the trailing three-year period, making it a medium risk choice in the space. With about 1087 holdings, it effectively diversifies company-specific risk.
Alternatives
Invesco RAFI US 1000 ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, PRF is a reasonable option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $71.82 billion in assets, Vanguard Value ETF has $146.48 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Bottom-Line
Passively managed ETFs are becoming increasingly popular with institutional as well as retail investors due to their low cost, transparency, flexibility and tax efficiency. They are excellent vehicles for long term investors.
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 US 1000 ETF (PRF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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