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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?
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.
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.
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
The fund is managed by Charles Schwab. FNDX has been able to amass assets over $14.89 billion, making 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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.
The fund has a 12-month trailing dividend yield of 1.77%.
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 Financials sector - about 19.80% of the portfolio. Information Technology and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.71% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Meta Platforms Inc Class A (META - Free Report) .
Its top 10 holdings account for approximately 20.74% of FNDX's total assets under management.
Performance and Risk
The ETF has gained about 5.67% and is up roughly 21.88% so far this year and in the past one year (as of 05/06/2024), respectively. FNDX has traded between $53.46 and $67.39 during this last 52-week period.
FNDX has a beta of 1 and standard deviation of 15.95% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 730 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $54.65 billion in assets, Vanguard Value ETF has $112.51 billion. SCHD has an expense ratio of 0.06% 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?
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.
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.
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
The fund is managed by Charles Schwab. FNDX has been able to amass assets over $14.89 billion, making 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
Investors should also pay attention to an ETF's expense ratio. Lower cost products will produce better results than those with a higher cost, assuming all other metrics remain 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.
The fund has a 12-month trailing dividend yield of 1.77%.
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 Financials sector - about 19.80% of the portfolio. Information Technology and Telecom round out the top three.
Looking at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 3.71% of total assets, followed by Microsoft Corp (MSFT - Free Report) and Meta Platforms Inc Class A (META - Free Report) .
Its top 10 holdings account for approximately 20.74% of FNDX's total assets under management.
Performance and Risk
The ETF has gained about 5.67% and is up roughly 21.88% so far this year and in the past one year (as of 05/06/2024), respectively. FNDX has traded between $53.46 and $67.39 during this last 52-week period.
FNDX has a beta of 1 and standard deviation of 15.95% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 730 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.
Schwab U.S. Dividend Equity ETF (SCHD - Free Report) tracks Dow Jones U.S. Dividend 100 Index and the Vanguard Value ETF (VTV - Free Report) tracks CRSP U.S. Large Cap Value Index. Schwab U.S. Dividend Equity ETF has $54.65 billion in assets, Vanguard Value ETF has $112.51 billion. SCHD has an expense ratio of 0.06% 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.