The RAFI US 1000 Portfolio ETF (Symbol: PRF) has outperformed its cap-weight rivals the S&P 500 and the Russell 1000 by a huge margin over the past five years since its inception according to a press release by PRF's manager Powershares. That's 23.1% for PRF vs 11.99% (S&P 500) / 13.8% (Russell 1000). Even better from a practical viewpoint, the PRF fund has outdone the indices i.e. the higher expenses of PRF have been more than offset. The cap-weight indices portray better results than an investor could actually achieve since the indices do not reflect the cost drag from the MERs of ETFs that invest in those indices.
Perhaps most telling for PRF fans, of which I am one (I own shares), PRF has outperformed by an even greater margin the Russell 1000 Value Index, which produced a measly 6.68% over the five years. If RAFI is only/merely value investing, it sure seems a better way to do it.
Monday, 17 January 2011
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