PRFZ vs PRSMX Fund Comparison

A comparison between PRFZ and PRSMX based on their expense ratio, growth, holdings and how well they match their benchmark performance.

Group Created with Sketch.

Minafi's Take on PRFZ vs PRSMX

Here's an in depth look at the differences between Invesco FTSE RAFI US 1500 Small-Mid ETF ($PRFZ) and T. Rowe Price Summit Municipal Intermediate Fund Investor Class ($PRSMX).

To start off, here's a look at the basics of each fund. Keep an eye on the FI Score. That's a custom score from 0 to 100 that we generate based on how good this fund is for the casual investor. Most investors only need a handful of total funds in their portfolio. The higher the score, the more likely this is one of those few. Score alone isn't enough! Keep reading on to see how different (or perhaps similar) these two funds are.

73% FI Score
  • prfz
  • ETF
  • US Stocks
  • Small Blend

Invesco FTSE RAFI US 1500 Small-Mid ETF

Expenses: 0.39% (Better than 1% of similar funds)

This is an OK choice for a Small Blend US Stocks fund. See why »

77% FI Score
  • prsmx
  • Mutual Fund
  • Bond
  • Municipal Bond

T. Rowe Price Summit Municipal Intermediate Fund Investor Class

Expenses: 0.50% (Better than 1% of similar funds)

This is an OK choice for a Municipal Bond Bond fund. See why »

$PRFZ is classified as an ETF while $PRSMX is classified as a Mutual Fund. Even though one of these is a mutual fund and the other is an ETF, that doesn't matter too much for their holdings. Both ETFs and mutual funds are just containers to hold lots of investments inside of them.

The biggest differences between these two is where they may be offered. ETFs are more widely availble from a larger number of investment apps and websites. Mutual funds, on the other hand, are generally offered by the platform they're issued by (Fidelity funds on Fidelity, Vanguard funds on Vanguard). Usually 401(k)'s will offer both ETFs and Mutual Funds. If you're investing outside of a 401(k), I'd recommend you verify the fees associated with ETF and mutual fund transactions. Some platforms charge an additional fee to purchase a mutual fund.

To learn more about the difference between these two, you can read about the difference between ETFs and Mutual Funds.

When evaluating a fund, the first things I look at are:

  • What it invests in
  • How much it charges in fees
  • How large the fund is

Let's look into these criteria one by one and see if either of these funds stands out.

Fund Holdings Comparison

Minafi's FI Score algorithm takes into account the category and market. The more niche a fund is, the lower the score. This doesn't mean it's a worse fund, but it does mean you should stop and make sure this a fund you need to diversify your portfolio.

PRFZ PRSMX
Market Score 8.8 /10 9.1 /10
Category Score 5.0 /10 8.0 /10
Total 13.8 17.1

A score of 10 means this is a solid market and category that almost every investor will want to have investments in. The lower the score, the more specific the investment. These scores are based on when most investors would add these funds to their portfolio. A score of 10 means that this fund (or one like it) belongs in a three-fund portfolio. The lower the score, the farther down in your portfolio a fund would go.

Winner: $PRSMX

Fee Comparison

Fees are one of the biggest killers of portfolio growth. The difference between a 2% fee and a 0.04% fee over 30 years can result in your portfolio having half the total value!

If you're just getting started investing and learning how fees impact your portfolio, I'd encourage you to read through my free investment course (specifically '2.2 - All About Fees') where I go over all the different types of fees you can be charged and how to lower them.

For these two funds, PRFZ has an expense ratio of 0.39% while PRSMX has an expense ratio of 0.50%. In this case, both of these funds have a similar fee.

Winner: $PRFZ (barely)

Fund Size Comparison

Both PRFZ and PRSMX have a similar number of assets under management. PRFZ has 1.54 Billion in assets under management, while PRSMX has 5.61 Billion.

Minafi categorizes both of these funds as large funds. Fund size is a good indication of how many other investors trust this fund. A large fund by itself doesn't mean it's a good fund, but it is one thing to consider when figuring out how to choose the right fund.

Winner: tie

Which Should You Choose? PRFZ or PRSMX?

Comparing these two funds isn't an apples to apples comparison. PRFZ is a US Stocks Small Blend fund, while PRSMX is a Bond Municipal Bond fund.

If you're aiming to build a diversified, low-fee, tax-optimized portfolio you likely won't be choosing between these two funds since they're different enough.

Running both of these funds through Minafi's FI Score algorithm, gives PRFZ a score of 73 and PRSMX a score of 77.

Winner: Neither, I'd research more funds if you're looking to invest for retirement.

$PRFZ

Invesco FTSE RAFI US 1500 Small-Mid ETF

73

Read More
Ratings
Rating Type Rating
Diversification Score 6 /10
Expense Ratio Score 9 /10
Expense Rating 6 /10
Market Score 9 /10
Category Score 5 /10
Overview
Overview Details
Fund Type ETF
Inception Date Sep-20-2006
Exchange NASDAQ
Expense Ratio 0.390%
Net Assets 1.54 Billion
Yield 1.84%
Holdings
Description Info
Market US Stocks
Category Small Blend
Sectors
  • Basic Materials 5.44%
  • Communication Services 4.65%
  • Consumer Cyclicals 11.93%
  • Consumer Defensive 4.60%
  • Energy 4.91%
  • Financial Services 15.45%
  • Healthcare 11.24%
  • Industrials 17.66%
  • Real Estate 7.09%
  • Technology 15.32%
  • Utilities 1.72%
Regions
  • Africa/Middle East 0.19%
  • Asia Developed 0.08%
  • Asia Emerging 0.41%
  • Europe Developed 0.55%
  • Europe Emerging 0.04%
  • Latin America 0.92%
  • North America 97.32%
  • United Kingdom 0.51%

$PRSMX

T. Rowe Price Summit Municipal Intermediate Fund Investor Class

77

Read More
Ratings
Rating Type Rating
Expense Ratio Score 8 /10
Expense Rating 5 /10
Market Score 9 /10
Category Score 8 /10
Overview
Overview Details
Fund Type Mutual Fund
Inception Date Oct-29-1993
Exchange NMFQS
Expense Ratio 0.500%
Net Assets 5.61 Billion
Yield 2.39%
Holdings
Description Info
Market Bond
Category Municipal Bond
Sectors
  • Advance Refunded 7.36%
  • Cash & Equivalents 0.21%
  • Education 3.67%
  • Health 14.22%
  • Housing 0.47%
  • Industrial 2.04%
  • Miscellaneous Revenue 9.79%
  • Municipal 99.79%
  • Other 0.00%
  • State and Local General Obligation 16.21%
  • Tobacco 0.90%
  • Transportation 29.32%
  • Utilities 10.36%
  • Water & Sewer 5.45%

Adam says: Learn how to confidently invest for retirement!

Join the Minafi Investor Bootcamp to see how.

This 10-course bootcamp starts at only $10 for everything!

Minafi - The intersection of FI, minimalism & mindfulness.

Don't miss out on new posts, courses, interactive articles and more!

Join & Get Your First Course Free

© 2024   Adam Fortuna

Site Map
Triangle Graduation Cap Angle Down Book regular Phone laptop regular fire regular fire regular search regular Acorn duotone Seedling duotone thumbs down duo