Is Invesco RAFI US 1500 Small-Mid ETF (PRFZ) a Strong ETF Right Now?

The Invesco RAFI US 1500 Small-Mid ETF (PRFZ) was launched on 09/20/2006, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Blend category of the market.What Are Smart Beta ETFs?Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.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.However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of such characteristics.The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.Fund Sponsor & IndexThe fund is managed by Invesco, and has been able to amass over $2.38 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Blend. PRFZ, before fees and expenses, seeks to match the performance of the FTSE RAFI US 1500 Small-Mid Index.The RAFI Fundamental Select US 1500 Index tracks the performance of small and medium-sized US companies, based on the four fundamental measures of size: book value, cash flow, sales and dividends.Cost & Other ExpensesInvestors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.Annual operating expenses for this ETF are 0.34%, making it on par with most peer products in the space.It's 12-month trailing dividend yield comes in at 1.23%.Sector Exposure and Top HoldingsMost ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.Representing 18.6% of the portfolio, the fund has heaviest allocation to the Financials sector; Industrials and Information Technology round out the top three.When you look at individual holdings, Applovin Corp (APP) accounts for about 0.49% of the fund's total assets, followed by Carpenter Technology Corp (CRS) and Carvana Co (CVNA).The top 10 holdings account for about 3.73% of total assets under management.Performance and RiskThe ETF has gained about 0.19% so far this year and it's up approximately 7.11% in the last one year (as of 08/05/2025). In the past 52-week period, it has traded between $33.13 and $45.39PRFZ has a beta of 1.09 and standard deviation of 21.35% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1714 holdings, it effectively diversifies company-specific risk .AlternativesInvesco RAFI US 1500 Small-Mid ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Blend segment of the market. However, there are other ETFs in the space which investors could consider.Vanguard Small-Cap ETF (VB) tracks CRSP US Small Cap Index and the iShares Core S&P Small-Cap ETF (IJR) tracks S&P SmallCap 600 Index. Vanguard Small-Cap ETF has $64.39 billion in assets, iShares Core S&P Small-Cap ETF has $80.07 billion. VB has an expense ratio of 0.05% and IJR changes 0.06%.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 - Small Cap BlendBottom LineTo 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.Research Chief Names "Single Best Pick to Double"From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. 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