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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?
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.
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.
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
FNDX is managed by Charles Schwab, and this fund has amassed over $9.56 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 15.90% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.93% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 19.73% of FNDX's total assets under management.
Performance and Risk
The ETF has lost about -7.08% and is up about 1.13% so far this year and in the past one year (as of 08/02/2022), respectively. FNDX has traded between $49.93 and $59.90 during this last 52-week period.
The fund has a beta of 0.99 and standard deviation of 24.63% for the trailing three-year period, which makes FNDX a medium risk choice in this particular space. With about 731 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 $53.38 billion in assets, Vanguard Value ETF has $97.95 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?
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.
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.
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
FNDX is managed by Charles Schwab, and this fund has amassed over $9.56 billion, which makes it one of the larger ETFs in the Style Box - Large Cap Value. Before fees and expenses, this particular fund 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.95%.
Sector Exposure and Top Holdings
Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.
This ETF has heaviest allocation in the Information Technology sector - about 15.90% of the portfolio. Financials and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.93% of the fund's total assets, followed by Exxon Mobil Corp (XOM - Free Report) and Microsoft Corp (MSFT - Free Report) .
Its top 10 holdings account for approximately 19.73% of FNDX's total assets under management.
Performance and Risk
The ETF has lost about -7.08% and is up about 1.13% so far this year and in the past one year (as of 08/02/2022), respectively. FNDX has traded between $49.93 and $59.90 during this last 52-week period.
The fund has a beta of 0.99 and standard deviation of 24.63% for the trailing three-year period, which makes FNDX a medium risk choice in this particular space. With about 731 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 $53.38 billion in assets, Vanguard Value ETF has $97.95 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.