The Invesco RAFI US 1000 ETF started on December 19, 2005. It focuses on the Large Cap Value market and uses a smart beta approach. This means it doesn’t depend on market capitalization but rather targets specific fundamental traits to aim for better returns. Managed by Invesco, this ETF seeks to match the performance of the FTSE RAFI US 1000 Index without charging any fees. It has over $8.72 billion in assets and an annual operating expense ratio of 0.34%. Currently, its 12-month trailing dividend yield stands at 1.56%.

Portfolio Allocation Analysis

PRF invests about 19% of its portfolio in the Financials sector. Information Technology and Healthcare also have significant allocations. The top individual holdings are Alphabet (4.51%), Apple, and Microsoft, with the top 10 holdings representing 22.35% of total assets. For 2026, PRF is up by 1.79% and has increased by 19.44% over the last year. In the past 52 weeks, its trading range has been between $35.77 and $47.76. The ETF follows a medium-risk strategy with a beta of 0.88 and shows a standard deviation of 13.39% over three years. Similar investment options include the Schwab U.S. Dividend Equity ETF (0.06% expense ratio) and the Vanguard Value ETF (0.04% expense ratio). These alternatives are appealing for those looking for lower-cost and lower-risk choices. Since the Invesco RAFI US 1000 ETF (PRF) has a beta of 0.88, it is less volatile than the overall market. For those trading derivatives, this means options on PRF likely have lower implied volatility when compared to market ETFs like SPY. Thus, purchasing calls or puts may be more affordable.

Volatility and Interest Rate Impact

Currently, the 30-day implied volatility on many large-cap funds is around 12%, which is lower than PRF’s three-year average of 13.39%. This indicates that options might be underpriced compared to the fund’s typical price fluctuations. This market condition could benefit long volatility strategies, anticipating increased price movement. The ETF’s significant 19% allocation to Financials makes it sensitive to interest rate changes. After several rate hikes in 2025, the market now expects a pause from the Federal Reserve. A stable interest rate environment could boost financial stocks, which supports a positive outlook for PRF in the near future. PRF’s fundamental weighting gives it a distinct value focus, a trend that started to strengthen in the latter half of 2025. This momentum continues, with PRF gaining 1.79% just a few days into the new year. Traders may want to consider options on PRF to speculate on the ongoing shift from growth to value stocks. Given the fund’s impressive performance over the last year, gaining 19.44%, bullish strategies might be worthwhile. For instance, buying call options for March or April could offer amplified exposure to continued upward potential. This could be especially effective if the market’s low volatility, indicated by a VIX around 15, begins to increase. Create your live VT Markets account and start trading now.

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