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Is Schwab Fundamental International Large Company Index ETF (FNDF) a Strong ETF Right Now?
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Launched on 08/13/2013, the Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDF has been able to amass assets over $7.75 billion, making it one of the largest ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the Russell RAFI Developed ex US Large Co. Index (Net) before fees and expenses.
The Russell RAFI Developed ex US Large Company Index (Net) measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the companies included in the Russell Developed ex-U.S. Index.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.25%.
FNDF's 12-month trailing dividend yield is 4.21%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 3.30% of the fund's total assets, followed by Bp Plc (BP.) and Samsung Electronics Ltd.
The top 10 holdings account for about 11.52% of total assets under management.
Performance and Risk
The ETF has lost about -14.68% and is down about -14.94% so far this year and in the past one year (as of 11/07/2022), respectively. FNDF has traded between $25.15 and $34.12 during this last 52-week period.
FNDF has a beta of 0.84 and standard deviation of 23.80% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 970 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Large Company Index ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $45.49 billion in assets, Vanguard FTSE Developed Markets ETF has $91.40 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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 International Large Company Index ETF (FNDF) a Strong ETF Right Now?
Launched on 08/13/2013, the Schwab Fundamental International Large Company Index ETF (FNDF - Free Report) is a smart beta exchange traded fund offering broad exposure to the Broad Developed World ETFs 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well 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.
These indexes attempt to select stocks that have better chances of risk-return performance, based on certain fundamental characteristics or a combination of such characteristics.
Even though this space provides many choices to investors--think one of the simplest methodologies like equal-weighting and more complicated ones like fundamental and volatility/momentum based weighting--not all have been able to deliver first-rate results.
Fund Sponsor & Index
The fund is managed by Charles Schwab. FNDF has been able to amass assets over $7.75 billion, making it one of the largest ETFs in the Broad Developed World ETFs. This particular fund seeks to match the performance of the Russell RAFI Developed ex US Large Co. Index (Net) before fees and expenses.
The Russell RAFI Developed ex US Large Company Index (Net) measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the companies included in the Russell Developed ex-U.S. Index.
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.
With one of the cheaper products in the space, this ETF has annual operating expenses of 0.25%.
FNDF's 12-month trailing dividend yield is 4.21%.
Sector Exposure and Top Holdings
ETFs offer diversified exposure and thus minimize single stock risk, but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 3.30% of the fund's total assets, followed by Bp Plc (BP.) and Samsung Electronics Ltd.
The top 10 holdings account for about 11.52% of total assets under management.
Performance and Risk
The ETF has lost about -14.68% and is down about -14.94% so far this year and in the past one year (as of 11/07/2022), respectively. FNDF has traded between $25.15 and $34.12 during this last 52-week period.
FNDF has a beta of 0.84 and standard deviation of 23.80% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 970 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Large Company Index ETF is a reasonable option for investors seeking to outperform the Broad Developed World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS - Free Report) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA - Free Report) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $45.49 billion in assets, Vanguard FTSE Developed Markets ETF has $91.40 billion. VXUS has an expense ratio of 0.07% and VEA charges 0.05%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Developed World ETFs.
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.