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Is Schwab Fundamental International Small Company Index ETF (FNDC) a Strong ETF Right Now?
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The Schwab Fundamental International Small Company Index ETF (FNDC - Free Report) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDC has been able to amass assets over $3.19 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Russell RAFI Developed ex-U.S. Small Co. Index (Net).
The Russell RAFI Developed ex US Small Company Index (Net) measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Global Total Cap Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.39% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.90%.
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.
Looking at individual holdings, Rolls-Royce Holdings Plc (RR.) accounts for about 0.26% of total assets, followed by Celestica Inc (CLS - Free Report) and Meritz Financial Group Inc.
The top 10 holdings account for about 2.24% of total assets under management.
Performance and Risk
So far this year, FNDC has lost about -1.43%, and is up about 9.64% in the last one year (as of 01/11/2024). During this past 52-week period, the fund has traded between $30.23 and $34.87.
FNDC has a beta of 0.94 and standard deviation of 16.71% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1748 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Small Company Index ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $62.43 billion in assets, Vanguard FTSE Developed Markets ETF has $121.53 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 International Small Company Index ETF (FNDC) a Strong ETF Right Now?
The Schwab Fundamental International Small Company Index ETF (FNDC - Free Report) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
Products that are based on market cap weighted indexes, which are strategies designed to reflect a specific market segment or the market as a whole, have traditionally dominated the ETF industry.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
But, there are some investors who would rather invest in smart beta funds; these funds track non-cap weighted strategies, and are a strong option for those who prefer choosing great stocks in order to beat the market.
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.
This area offers many different investment choices, such as simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies; however, not all of these strategies can deliver superior results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDC has been able to amass assets over $3.19 billion, making it one of the larger ETFs in the Broad Developed World ETFs. This particular fund, before fees and expenses, seeks to match the performance of the Russell RAFI Developed ex-U.S. Small Co. Index (Net).
The Russell RAFI Developed ex US Small Company Index (Net) measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Global Total Cap Index.
Cost & Other Expenses
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain the same.
Operating expenses on an annual basis are 0.39% for this ETF, which makes it on par with most peer products in the space.
The fund has a 12-month trailing dividend yield of 2.90%.
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.
Looking at individual holdings, Rolls-Royce Holdings Plc (RR.) accounts for about 0.26% of total assets, followed by Celestica Inc (CLS - Free Report) and Meritz Financial Group Inc.
The top 10 holdings account for about 2.24% of total assets under management.
Performance and Risk
So far this year, FNDC has lost about -1.43%, and is up about 9.64% in the last one year (as of 01/11/2024). During this past 52-week period, the fund has traded between $30.23 and $34.87.
FNDC has a beta of 0.94 and standard deviation of 16.71% for the trailing three-year period, which makes the fund a low risk choice in the space. With about 1748 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Small Company Index ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $62.43 billion in assets, Vanguard FTSE Developed Markets ETF has $121.53 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.