Designed to provide broad exposure to the Foreign Large Value ETF category of the market, the Schwab Fundamental International Equity ETF (FNDF Quick QuoteFNDF - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.

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.

However, some investors believe in the possibility of beating the market through exceptional stock selection, and choose a different type of fund that tracks non-cap weighted strategies: smart beta.

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.

Methodologies like equal-weighting, one of the simplest options out there, fundamental weighting, and volatility/momentum based weighting are all choices offered to investors in this space, but not all of them can deliver superior returns.

Fund Sponsor & Index

Because the fund has amassed over $18.23 billion, this makes it the largest ETF in the Foreign Large Value ETF. FNDF is managed by Charles Schwab. FNDF, before fees and expenses, seeks to match the performance of the Russell RAFI Developed ex US Large Co. Index (Net).

The RAFI Fundamental High Liquidity Developed ex US Large Index measures the performance of large non-U.S. developed market companies based on their fundamental size and weight.

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 FNDF, making it one of the least expensive products in the space.

It's 12-month trailing dividend yield comes in at 2.79%.

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.

Looking at individual holdings, Samsung Electronics Ltd accounts for about 2.67% of total assets, followed by Shell Plc (SHEL) and Totalenergies (TTE).

The top 10 holdings account for about 12.18% of total assets under management.

Performance and Risk

So far this year, FNDF return is roughly 33.07%, and is up about 26.74% in the last one year (as of 10/24/2025). During this past 52-week period, the fund has traded between $32.25 and $44.00.

FNDF has a beta of 0.79 and standard deviation of 14.63% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 946 holdings, it effectively diversifies company-specific risk .

Alternatives

Schwab Fundamental International Equity ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.

iShares International Select Dividend ETF (IDV) tracks Dow Jones EPAC Select Dividend Index and the Vanguard International High Dividend Yield ETF (VYMI) tracks FTSE All-World ex US High Dividend Yield Index. iShares International Select Dividend ETF has $6.02 billion in assets, Vanguard International High Dividend Yield ETF has $12.86 billion. IDV has an expense ratio of 0.49% and VYMI changes 0.17%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF

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.