We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
Read MoreHide Full Article
The Schwab Fundamental U.S. Small Company Index ETF (FNDA - Free Report) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Charles Schwab. It has amassed assets over $6.10 billion, making it one of the largest ETFs in the Style Box - Small Cap Value. Before fees and expenses, FNDA seeks to match the performance of the Russell RAFI US Small Co. Index.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.69%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 21.10% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Diversified Healthcare Trust (DHC - Free Report) accounts for about 0.55% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Xpo Inc (XPO - Free Report) .
Its top 10 holdings account for approximately 3.67% of FNDA's total assets under management.
Performance and Risk
The ETF has lost about -1.92% and is down about -1.19% so far this year and in the past one year (as of 10/26/2023), respectively. FNDA has traded between $45.32 and $53.63 during this last 52-week period.
The ETF has a beta of 1.20 and standard deviation of 22.38% for the trailing three-year period, making it a medium risk choice in the space. With about 990 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company Index ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $9.67 billion in assets, Vanguard Small-Cap Value ETF has $22.58 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Image: Bigstock
Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
The Schwab Fundamental U.S. Small Company Index ETF (FNDA - Free Report) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Style Box - Small Cap Value 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.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is sponsored by Charles Schwab. It has amassed assets over $6.10 billion, making it one of the largest ETFs in the Style Box - Small Cap Value. Before fees and expenses, FNDA seeks to match the performance of the Russell RAFI US Small Co. Index.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
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.
With on par with most peer products in the space, this ETF has annual operating expenses of 0.25%.
The fund has a 12-month trailing dividend yield of 1.69%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
This ETF has heaviest allocation in the Industrials sector - about 21.10% of the portfolio. Consumer Discretionary and Financials round out the top three.
Looking at individual holdings, Diversified Healthcare Trust (DHC - Free Report) accounts for about 0.55% of total assets, followed by Super Micro Computer Inc (SMCI - Free Report) and Xpo Inc (XPO - Free Report) .
Its top 10 holdings account for approximately 3.67% of FNDA's total assets under management.
Performance and Risk
The ETF has lost about -1.92% and is down about -1.19% so far this year and in the past one year (as of 10/26/2023), respectively. FNDA has traded between $45.32 and $53.63 during this last 52-week period.
The ETF has a beta of 1.20 and standard deviation of 22.38% for the trailing three-year period, making it a medium risk choice in the space. With about 990 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company Index ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 Value ETF (IWN - Free Report) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $9.67 billion in assets, Vanguard Small-Cap Value ETF has $22.58 billion. IWN has an expense ratio of 0.24% and VBR charges 0.07%.
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 - Small 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.