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Is Schwab Fundamental U.S. Large Company 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 ETF (FNDX - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDX has been able to amass assets over $17.40 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. FNDX, before fees and expenses, seeks to match the performance of the Russell RAFI US Large Co. Index.
The RAFI Fundamental High Liquidity US Large Index measures the performance of large U.S. companies based on their fundamental size and weight.
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.
Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.36%.
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 19.20% of the portfolio. Information Technology and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.67% 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 21.15% of FNDX's total assets under management.
Performance and Risk
The ETF has added roughly 0.21% and is up about 9.07% so far this year and in the past one year (as of 03/21/2025), respectively. FNDX has traded between $21.29 and $25.11 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 15.24% for the trailing three-year period, making it a medium risk choice in the space. With about 739 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Large Company ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $69.92 billion in assets, Vanguard Value ETF has $133.90 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 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 ETF (FNDX - Free Report) provides investors broad exposure to the Style Box - Large Cap Value category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
While this space offers a number of choices to investors, including simplest equal-weighting, fundamental weighting and volatility/momentum based weighting methodologies, not all these strategies have been able to deliver superior results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDX has been able to amass assets over $17.40 billion, making it one of the largest ETFs in the Style Box - Large Cap Value. FNDX, before fees and expenses, seeks to match the performance of the Russell RAFI US Large Co. Index.
The RAFI Fundamental High Liquidity US Large Index measures the performance of large U.S. companies based on their fundamental size and weight.
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.
Annual operating expenses for this ETF are 0.25%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.36%.
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 19.20% of the portfolio. Information Technology and Healthcare round out the top three.
When you look at individual holdings, Apple Inc (AAPL - Free Report) accounts for about 4.67% 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 21.15% of FNDX's total assets under management.
Performance and Risk
The ETF has added roughly 0.21% and is up about 9.07% so far this year and in the past one year (as of 03/21/2025), respectively. FNDX has traded between $21.29 and $25.11 during this last 52-week period.
The ETF has a beta of 0.98 and standard deviation of 15.24% for the trailing three-year period, making it a medium risk choice in the space. With about 739 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Large Company ETF is a reasonable option for investors seeking to outperform the Style Box - Large Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
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 $69.92 billion in assets, Vanguard Value ETF has $133.90 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.