A smart beta exchange traded fund, the Schwab Fundamental U.S. Broad Market ETF (FNDB Quick QuoteFNDB - Free Report) debuted on 08/13/2013, and offers 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.

A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.

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.

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

Managed by Charles Schwab, FNDB has amassed assets over $1.21 billion, making it one of the larger ETFs in the Style Box - All Cap Value. Before fees and expenses, FNDB seeks to match the performance of the Russell RAFI US Index.

The RAFI Fundamental High Liquidity US All Index measures the performance of U.S. based companies based on their fundamental size and weight.

Cost & Other Expenses

Since cheaper funds tend to produce better results than more expensive funds, assuming all other factors remain equal, it is important for investors to pay attention to an ETF's expense ratio.

With one of the cheaper products in the space, this ETF has annual operating expenses of 0.25%.

It has a 12-month trailing dividend yield of 1.52%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

This ETF has heaviest allocation in the Information Technology sector - about 17.7% of the portfolio. Financials and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 3.76% of total assets, followed by Exxon Mobil Corp (XOM) and Alphabet Inc Class A (GOOGL).

Performance and Risk

The ETF return is roughly 8.86% so far this year and is up about 36.27% in the last one year (as of 04/21/2026). In the past 52-week period, it has traded between $21.56 and $28.82

FNDB has a beta of 0.89 and standard deviation of 13.26% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 1595 holdings, it effectively diversifies company-specific risk .

Alternatives

Schwab Fundamental U.S. Broad Market ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.

Fidelity High Dividend ETF (FDVV) tracks Fidelity Core Dividend Index and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Fidelity High Dividend ETF has $9.14 billion in assets, iShares Core S&P U.S. Value ETF has $25.27 billion. FDVV has an expense ratio of 0.15% and IUSV changes 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.