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Is Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 $5.09 billion, this makes it one of the largest ETFs in the Broad Emerging Market ETFs. FNDE is managed by Charles Schwab. Before fees and expenses, this particular fund seeks to match the performance of the Russell RAFI Emerging Markets Large Co. Index (Net).
The Index ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets 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.
Annual operating expenses for FNDE are 0.39%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.31%.
Performance and Risk
The ETF has added roughly 15.40% and it's up approximately 37.77% so far this year and in the past one year (as of 11/04/2021), respectively. FNDE has traded between $25.03 and $33.49 during this last 52-week period.
FNDE has a beta of 0.85 and standard deviation of 22.89% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 370 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental Emerging Markets Large Company Index ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $79.70 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.69 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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 Emerging Markets Large Company Index ETF (FNDE) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Emerging Market ETFs category of the market, the Schwab Fundamental Emerging Markets Large Company Index ETF (FNDE - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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 $5.09 billion, this makes it one of the largest ETFs in the Broad Emerging Market ETFs. FNDE is managed by Charles Schwab. Before fees and expenses, this particular fund seeks to match the performance of the Russell RAFI Emerging Markets Large Co. Index (Net).
The Index ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets 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.
Annual operating expenses for FNDE are 0.39%, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 2.31%.
Performance and Risk
The ETF has added roughly 15.40% and it's up approximately 37.77% so far this year and in the past one year (as of 11/04/2021), respectively. FNDE has traded between $25.03 and $33.49 during this last 52-week period.
FNDE has a beta of 0.85 and standard deviation of 22.89% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 370 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental Emerging Markets Large Company Index ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
IShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index and the Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index. IShares Core MSCI Emerging Markets ETF has $79.70 billion in assets, Vanguard FTSE Emerging Markets ETF has $80.69 billion. IEMG has an expense ratio of 0.11% and VWO charges 0.10%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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.