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Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
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The Schwab Fundamental U.S. Small Company Index ETF (FNDA - Free Report) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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.
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.
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
The fund is managed by Charles Schwab. FNDA has been able to amass assets over $7.70 billion, making it one of the larger ETFs in the Style Box - Small Cap Value. FNDA seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
Representing 21.10% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Diversified Healthcare Trust (DHC - Free Report) accounts for about 0.55% of the fund's 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
Year-to-date, the Schwab Fundamental U.S. Small Company Index ETF return is roughly 20.31% so far, and was up about 20.13% over the last 12 months (as of 12/26/2023). FNDA has traded between $44.98 and $55.45 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 22.12% 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 $12.42 billion in assets, Vanguard Small-Cap Value ETF has $26.87 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.
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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) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - Small 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.
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.
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
The fund is managed by Charles Schwab. FNDA has been able to amass assets over $7.70 billion, making it one of the larger ETFs in the Style Box - Small Cap Value. FNDA seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
Cost & Other Expenses
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.37%.
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.
Representing 21.10% of the portfolio, the fund has heaviest allocation to the Industrials sector; Consumer Discretionary and Financials round out the top three.
Taking into account individual holdings, Diversified Healthcare Trust (DHC - Free Report) accounts for about 0.55% of the fund's 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
Year-to-date, the Schwab Fundamental U.S. Small Company Index ETF return is roughly 20.31% so far, and was up about 20.13% over the last 12 months (as of 12/26/2023). FNDA has traded between $44.98 and $55.45 in this past 52-week period.
The ETF has a beta of 1.20 and standard deviation of 22.12% 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 $12.42 billion in assets, Vanguard Small-Cap Value ETF has $26.87 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.