Invesco's 276% ETF Flips Normal S&P 500 Rules And Still Wins Big | PRF, VOO

"When market volatility sends speculative stocks on wild rides and mega-cap tech names dominate headlines, some investors look for a different approach: fundamental indexing. Invesco RAFI US 1000 ETF ( NYSEARCA:PRF) offers exposure to U.S. large-cap stocks weighted not by market capitalization, but by fundamental metrics like sales, cash flow, and dividends. The question is whether this methodology delivers enough differentiation to justify its place in a portfolio."

"PRF tracks the RAFI U.S. 1000 Index, which selects and weights holdings based on fundamental factors rather than market cap. This means companies with stronger cash flows, higher book values, and greater sales receive larger allocations, regardless of their stock price momentum. The result is a portfolio that tilts toward value characteristics while maintaining broad diversification across sectors. The ETF casts a wide net with over 600 positions while charging a 0.34% expense ratio for its fundamental screening process."

"Mega-cap tech names like Alphabet ( NASDAQ:GOOGL), Apple ( NASDAQ:AAPL), and Microsoft ( NASDAQ:MSFT) still appear among top holdings, but the fundamental weighting creates meaningful differences from traditional indexes. Intel ( NASDAQ:INTC) provides a clear example: the company commands a 1.4% position in PRF-significantly higher than its S&P 500 weight-because the fundamental methodology rewards its strong cash flows even as the stock price has struggled."

PRF tracks the RAFI U.S. 1000 Index and selects and weights holdings based on fundamental factors such as sales, cash flow, and book value rather than market capitalization. The fund tilts the portfolio toward value characteristics while maintaining broad sector diversification. The ETF holds over 600 positions and charges a 0.34% expense ratio for its fundamental screening process. Technology and financials represent the largest sector allocations at roughly 18% and 16% respectively. Mega-cap tech names remain among top holdings but fundamental weights shift relative allocations, exemplified by Intel's 1.4% position that exceeds its S&P 500 weight due to strong cash flows. The approach has delivered consistent outperformance versus the S&P 500, especially over longer periods.

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