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Is Schwab Fundamental International Large Company Index ETF (FNDF) a Strong ETF Right Now?
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The Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
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.
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 $7.26 billion, this makes it one of the largest ETFs in the Broad Developed World ETFs. FNDF is managed by Charles Schwab. FNDF, 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
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.
Operating expenses on an annual basis are 0.25% for FNDF, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 4.25%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 3.23% of total assets, followed by Samsung Electronics Ltd and Bp Plc (BP.).
Its top 10 holdings account for approximately 10.44% of FNDF's total assets under management.
Performance and Risk
The ETF has lost about -15.41% so far this year and is down about -14.77% in the last one year (as of 09/05/2022). In the past 52-week period, it has traded between $26.96 and $34.12.
FNDF has a beta of 0.83 and standard deviation of 23.21% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 973 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 $45.35 billion in assets, Vanguard FTSE Developed Markets ETF has $89.98 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?
The Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the 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.
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.
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.
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 $7.26 billion, this makes it one of the largest ETFs in the Broad Developed World ETFs. FNDF is managed by Charles Schwab. FNDF, 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
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.
Operating expenses on an annual basis are 0.25% for FNDF, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 4.25%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. 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 3.23% of total assets, followed by Samsung Electronics Ltd and Bp Plc (BP.).
Its top 10 holdings account for approximately 10.44% of FNDF's total assets under management.
Performance and Risk
The ETF has lost about -15.41% so far this year and is down about -14.77% in the last one year (as of 09/05/2022). In the past 52-week period, it has traded between $26.96 and $34.12.
FNDF has a beta of 0.83 and standard deviation of 23.21% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 973 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 $45.35 billion in assets, Vanguard FTSE Developed Markets ETF has $89.98 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.