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Is Schwab Fundamental International Large Company Index ETF (FNDF) a Strong ETF Right Now?
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Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDF has been able to amass assets over $7.34 billion, making it one of the largest 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 US Large Co. Index (Net).
The Russell RAFI Developed ex US Large Company Index (Net) measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the companies included in the Russell Developed ex-U.S. Index.
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.
Operating expenses on an annual basis are 0.25% for FNDF, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 3.73%.
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, Shell Plc (SHEL - Free Report) accounts for about 3.97% of total assets, followed by Bp Plc (BP.) and Samsung Electronics Ltd.
FNDF's top 10 holdings account for about 12.65% of its total assets under management.
Performance and Risk
The ETF has lost about -5.89% so far this year and is down about -3.56% in the last one year (as of 05/04/2022). In the past 52-week period, it has traded between $29.70 and $34.94.
FNDF has a beta of 0.84 and standard deviation of 22.57% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 946 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Large 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 $48.87 billion in assets, Vanguard FTSE Developed Markets ETF has $100.03 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 Large Company Index ETF (FNDF) a Strong ETF Right Now?
Designed to provide broad exposure to the Broad Developed World ETFs category of the market, the Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
Based on specific fundamental characteristics, or a combination of such, these indexes attempt to pick stocks that have a better chance of risk-return performance.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDF has been able to amass assets over $7.34 billion, making it one of the largest 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 US Large Co. Index (Net).
The Russell RAFI Developed ex US Large Company Index (Net) measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the companies included in the Russell Developed ex-U.S. Index.
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.
Operating expenses on an annual basis are 0.25% for FNDF, making it one of the cheaper products in the space.
The fund has a 12-month trailing dividend yield of 3.73%.
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, Shell Plc (SHEL - Free Report) accounts for about 3.97% of total assets, followed by Bp Plc (BP.) and Samsung Electronics Ltd.
FNDF's top 10 holdings account for about 12.65% of its total assets under management.
Performance and Risk
The ETF has lost about -5.89% so far this year and is down about -3.56% in the last one year (as of 05/04/2022). In the past 52-week period, it has traded between $29.70 and $34.94.
FNDF has a beta of 0.84 and standard deviation of 22.57% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 946 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Large 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 $48.87 billion in assets, Vanguard FTSE Developed Markets ETF has $100.03 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.