Is Invesco RAFI Developed Markets ex-U.S. ETF (PXF) a Strong ETF Right Now?

The Invesco RAFI Developed Markets ex-U.S. ETF (PXF), a smart beta ETF with $2.03 billion AUM, has returned approximately 20.89% over the past year. PXF, which tracks the FTSE RAFI Developed ex-U.S. Index, has an expense ratio of 0.43% and a 12-month trailing dividend yield of 3.09%; its top holdings include Shell, Samsung Electronics, and HSBC Holdings. While PXF aims to outperform the Foreign Large Value ETF segment, the article notes that cheaper, lower-risk market cap weighted ETFs and alternatives like VYMI and FNDF may be worth considering.

Analysis

The Invesco RAFI Developed Markets ex-U.S. ETF (PXF), a smart beta fund with $2.03 billion in assets under management, provides exposure to the Foreign Large Value ETF category by tracking the FTSE RAFI Developed ex-U.S. Index. This index selects constituents based on four fundamental measures: book value, cash flow, sales, and dividends. PXF has demonstrated strong recent performance, delivering a year-to-date gain of approximately 20.39% and a one-year return of about 20.89% as of June 17, 2025. The ETF offers a 12-month trailing dividend yield of 3.09% and operates with an annual expense ratio of 0.43%. Its risk profile is characterized as medium within its peer group, with a three-year beta of 0.81 and a standard deviation of 16.15%. The fund is well-diversified, holding approximately 1149 securities, with top holdings like Shell Plc (2.11% of assets), Samsung Electronics Co Ltd, and HSBC Holdings Plc; the top 10 holdings constitute about 11.13% of total assets. While PXF is positioned as a reasonable option for outperforming the Foreign Large Value segment, the article highlights that alternative ETFs such as the Vanguard International High Dividend Yield ETF (VYMI) with $10.57 billion AUM and a 0.17% expense ratio, and the Schwab Fundamental International Equity ETF (FNDF) with $16.21 billion AUM and a 0.25% expense ratio, offer similar strategic exposure at lower costs and with larger asset bases. Traditional market-cap weighted ETFs are also presented as cheaper, potentially lower-risk alternatives.

Key Decisions for Investors

• Investors seeking fundamentally-weighted exposure to developed ex-U.S. markets could consider PXF given its strong recent performance of 20.89% over the past year and a 3.09% dividend yield, though its 0.43% expense ratio warrants attention.
• It is advisable to compare PXF with lower-cost and larger alternatives like VYMI (0.17% expense ratio) and FNDF (0.25% expense ratio), or traditional market-cap weighted ETFs, especially if cost and AUM liquidity are primary concerns.
• Monitor the ongoing performance of the RAFI fundamental indexing strategy pursued by PXF relative to its peers and broader market-cap benchmarks to ensure its alpha generation potential justifies its expense ratio and medium-risk profile.