Invesco RAFI US 1500 Small-Mid ETF

Invesco RAFI US 1500 Small-Mid ETF (PRFZ) is an index fund that holds about 1,500 small and mid-sized US companies from the RAFI Fundamental Select US 1500 Index. Most index funds weight stocks by market value. This index weights them by business size instead: sales, cash flow, book value, and dividends plus buybacks. Its 0.36% annual fee is higher than the fees of all eight similar funds we compared, including Schwab's FNDA at 0.25%.

• Over the year to Oct 27, 2026, PRFZ returned +15.8%, 4th of 9 among similar funds.
• Its 5-year annualized return was +8.7% and its 10-year +11.6%.
• In the 2020 COVID crash it fell 41.7% and regained its old high 7.8 months after the low.
• Its worst full calendar year was 2008 (-39.1%); its best was 2009 (+58.6%).
• The deepest fall in its price history was 62.4% (Jul 13, 2007 to Mar 9, 2009), recovered by Apr 14, 2010.

As of Jul 31, 2026, the fund held 1,504 securities; the ten largest made up 3.81% of assets. It also reported 32.62% in a money-market fund, most likely cash collateral from lending out shares rather than uninvested money.

• Over the three months to Jul 31, 2026, investors withdrew a net $280.2M (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: +2.88%, +7.33%, -3.64%.

The fund tracks the RAFI Fundamental Select US 1500 Index. RAFI Indices, LLC builds and maintains the index. It starts from RAFI's global pool of investable stocks and picks about 1,500 small and mid-sized US companies. As of June 30, 2026, the index held 1,508 companies, with market values ranging from $23.2 million to $158 billion.

The weighting is what sets it apart. Most index funds weight by market capitalization, which is share price times shares outstanding, so a stock's weight grows as its price rises. This index instead weights companies by four measures of business size: book value plus intangibles, adjusted cash flow, adjusted sales, and dividends plus buybacks. A company with large sales and cash flow but a modest share price can get more weight than the market alone would give it. This tends to tilt the fund toward cheaper, value-style stocks.

Invesco uses full replication, meaning the fund generally holds every stock in the index at its index weight. As of July 31, 2026, the fund had 1,504 holdings, and the 10 largest made up just 3.81% of assets. The largest were Par Pacific Holdings, ATI and Roivant Sciences. The fund generally trades only when the index changes. The prospectus lists portfolio turnover of 35%.

• PRFZ charges 0.36% a year, versus an average of 0.1% for the similar funds below (9th of 9, cheapest first).
• Of that, 0.29% is the management fee; the rest covers other fund expenses.
• Using the prospectus's standard example, $10,000 invested would cost about $37 in the first year and $456 over 10 years (assuming a 5% annual return).

Its small- and mid-size US stocks could add breadth beyond large companies, but past drops of up to 62.4% and a fee above similar funds may make it a better fit for a smaller slice of a portfolio than for the core.

PRFZ tracks the RAFI Fundamental Select US 1500 Index, which weights smaller companies by sales, cash flow, book value and payouts. It could add small- and mid-size firms to a large-company core, with sharper swings. It fell 61.7% in the 2008 financial crisis, 41.7% in the 2020 COVID crash and 24.4% in the 2022 bear market, which took nearly 15 months to recover. Its worst calendar year was 2008, down 39.1%. Its deepest drop, 62.4%, ended in March 2009 and took 13 months to recover. Selling shares for income in such a year would lock in steep losses.

Its yield was 0.82% as of October 27, 2026, paid quarterly. Its 0.36% annual fee is above the 0.10% average of similar funds; the SEC's $10,000 example puts costs at $456 over 10 years. Past results don't predict the future, and a plan should look at the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.