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Is Schwab Fundamental U.S. Large Company Index ETF (FNDX) a Strong ETF Right Now?
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Making its debut on 08/13/2013, smart beta exchange traded fund Schwab Fundamental U.S. Large Company Index ETF (FNDX - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $10.72 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. FNDX is managed by Charles Schwab. FNDX, before fees and expenses, seeks to match the performance of the Russell RAFI US Large Co. Index.
The Russell RAFI US Large Company Index measures the performance of the large company size segment by fundamental overall company scores.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
It's 12-month trailing dividend yield comes in at 1.77%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 15.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.36% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Chevron Corp (CVX - Free Report) .
FNDX's top 10 holdings account for about 20.52% of its total assets under management.
Performance and Risk
The ETF has lost about -4.67% so far this year and is up roughly 2.68% in the last one year (as of 06/02/2022). In the past 52-week period, it has traded between $52.82 and $59.90.
FNDX has a beta of 1 and standard deviation of 24.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 721 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Large Company Index ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $55.34 billion in assets, Vanguard Value ETF has $99.89 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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. Large Company Index ETF (FNDX) a Strong ETF Right Now?
Making its debut on 08/13/2013, smart beta exchange traded fund Schwab Fundamental U.S. Large Company Index ETF (FNDX - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
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.
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.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix 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
Because the fund has amassed over $10.72 billion, this makes it one of the larger ETFs in the Style Box - Large Cap Value. FNDX is managed by Charles Schwab. FNDX, before fees and expenses, seeks to match the performance of the Russell RAFI US Large Co. Index.
The Russell RAFI US Large Company Index measures the performance of the large company size segment by fundamental overall company scores.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
It's 12-month trailing dividend yield comes in at 1.77%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Representing 15.80% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.36% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Chevron Corp (CVX - Free Report) .
FNDX's top 10 holdings account for about 20.52% of its total assets under management.
Performance and Risk
The ETF has lost about -4.67% so far this year and is up roughly 2.68% in the last one year (as of 06/02/2022). In the past 52-week period, it has traded between $52.82 and $59.90.
FNDX has a beta of 1 and standard deviation of 24.09% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 721 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Large Company Index ETF is an excellent option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 1000 Value ETF (IWD - Free Report) tracks Russell 1000 Value Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. IShares Russell 1000 Value ETF has $55.34 billion in assets, Vanguard Value ETF has $99.89 billion. IWD has an expense ratio of 0.19% and VTV charges 0.04%.
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 - Large 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.