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Is Schwab Fundamental U.S. Broad Market Index ETF (FNDB) a Strong ETF Right Now?
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The Schwab Fundamental U.S. Broad Market Index ETF (FNDB - 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 - All 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.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
FNDB is managed by Charles Schwab, and this fund has amassed over $663.17 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. FNDB, before fees and expenses, seeks to match the performance of the Russell RAFI US Index.
The Russell RAFI US Index measures the performance of the constituent companies by fundamental overall company scores.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 has a 12-month trailing dividend yield of 1.79%.
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.
For FNDB, it has heaviest allocation in the Financials sector --about 18.80% of the portfolio --while Information Technology and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.29% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Berkshire Hathaway Inc Class B (BRK/B).
Its top 10 holdings account for approximately 20.08% of FNDB's total assets under management.
Performance and Risk
The ETF has gained about 0.97% and is up roughly 13.73% so far this year and in the past one year (as of 01/26/2024), respectively. FNDB has traded between $51.70 and $61.69 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 16.48% for the trailing three-year period, making it a medium risk choice in the space. With about 1689 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Broad Market Index ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.46 billion in assets, iShares Core S&P U.S. Value ETF has $15.48 billion. DFAT has an expense ratio of 0.28% and IUSV 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 - All 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. Broad Market Index ETF (FNDB) a Strong ETF Right Now?
The Schwab Fundamental U.S. Broad Market Index ETF (FNDB - 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 - All 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.
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.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
FNDB is managed by Charles Schwab, and this fund has amassed over $663.17 million, which makes it one of the larger ETFs in the Style Box - All Cap Value. FNDB, before fees and expenses, seeks to match the performance of the Russell RAFI US Index.
The Russell RAFI US Index measures the performance of the constituent companies by fundamental overall company scores.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
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 has a 12-month trailing dividend yield of 1.79%.
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.
For FNDB, it has heaviest allocation in the Financials sector --about 18.80% of the portfolio --while Information Technology and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.29% of the fund's total assets, followed by Microsoft Corp (MSFT - Free Report) and Berkshire Hathaway Inc Class B (BRK/B).
Its top 10 holdings account for approximately 20.08% of FNDB's total assets under management.
Performance and Risk
The ETF has gained about 0.97% and is up roughly 13.73% so far this year and in the past one year (as of 01/26/2024), respectively. FNDB has traded between $51.70 and $61.69 during this last 52-week period.
The ETF has a beta of 1.02 and standard deviation of 16.48% for the trailing three-year period, making it a medium risk choice in the space. With about 1689 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Broad Market Index ETF is an excellent option for investors seeking to outperform the Style Box - All Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
Dimensional U.S. Targeted Value ETF (DFAT - Free Report) tracks ---------------------------------------- and the iShares Core S&P U.S. Value ETF (IUSV - Free Report) tracks S&P 900 Value Index. Dimensional U.S. Targeted Value ETF has $9.46 billion in assets, iShares Core S&P U.S. Value ETF has $15.48 billion. DFAT has an expense ratio of 0.28% and IUSV 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 - All 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.