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Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
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Launched on 08/13/2013, the Schwab Fundamental U.S. Small Company Index ETF (FNDA - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $5.22 billion, this makes it one of the largest ETFs in the Style Box - Small Cap Value. FNDA is managed by Charles Schwab. FNDA seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.54%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 18.60% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, First Citizens Bancshares Inc Clas (FCNCA - Free Report) accounts for about 0.50% of total assets, followed by Arch Resources Inc Class A (ARCH - Free Report) and Warrior Met Coal Inc (HCC - Free Report) .
Its top 10 holdings account for approximately 3.95% of FNDA's total assets under management.
Performance and Risk
So far this year, FNDA has lost about -18.36%, and is down about -12.02% in the last one year (as of 07/18/2022). During this past 52-week period, the fund has traded between $44.28 and $57.77.
The ETF has a beta of 1.18 and standard deviation of 30.27% for the trailing three-year period, making it a medium risk choice in the space. With about 909 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company Index ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.52 billion in assets, Vanguard SmallCap Value ETF has $21.95 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.
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Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
Launched on 08/13/2013, the Schwab Fundamental U.S. Small Company Index ETF (FNDA - Free Report) is a smart beta exchange traded fund offering broad exposure to the Style Box - Small Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.
Fund Sponsor & Index
Because the fund has amassed over $5.22 billion, this makes it one of the largest ETFs in the Style Box - Small Cap Value. FNDA is managed by Charles Schwab. FNDA seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
Cost & Other Expenses
Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.54%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 18.60% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, First Citizens Bancshares Inc Clas (FCNCA - Free Report) accounts for about 0.50% of total assets, followed by Arch Resources Inc Class A (ARCH - Free Report) and Warrior Met Coal Inc (HCC - Free Report) .
Its top 10 holdings account for approximately 3.95% of FNDA's total assets under management.
Performance and Risk
So far this year, FNDA has lost about -18.36%, and is down about -12.02% in the last one year (as of 07/18/2022). During this past 52-week period, the fund has traded between $44.28 and $57.77.
The ETF has a beta of 1.18 and standard deviation of 30.27% for the trailing three-year period, making it a medium risk choice in the space. With about 909 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company Index ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard SmallCap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.52 billion in assets, Vanguard SmallCap Value ETF has $21.95 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Style Box - Small Cap Value.
Bottom Line
To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.