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Is Schwab Fundamental International Equity ETF (FNDF) a Strong ETF Right Now?
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Making its debut on 08/13/2013, smart beta exchange traded fund Schwab Fundamental International Equity ETF (FNDF - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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, and has been able to amass over $12.74 billion, which makes it one of the largest ETFs in the Broad Developed World ETFs. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.21%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.51% of the fund's total assets, followed by Samsung Electronics Ltd and Toyota Motor Corp.
The top 10 holdings account for about 2.51% of total assets under management.
Performance and Risk
The ETF has added roughly 1.42% and it's up approximately 6.74% so far this year and in the past one year (as of 08/08/2024), respectively. FNDF has traded between $30.23 and $36.51 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 16.23% for the trailing three-year period, making it a medium risk choice in the space. With about 989 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Equity 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 $70.55 billion in assets, Vanguard FTSE Developed Markets ETF has $129.36 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
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 Equity ETF (FNDF) a Strong ETF Right Now?
Making its debut on 08/13/2013, smart beta exchange traded fund Schwab Fundamental International Equity ETF (FNDF - Free Report) provides investors broad exposure to the Broad Developed World ETFs category of the market.
What Are Smart Beta ETFs?
The ETF industry has traditionally been dominated by products based on market capitalization weighted indexes that are designed to represent the market or a particular segment of the market.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.
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, and has been able to amass over $12.74 billion, which makes it one of the largest ETFs in the Broad Developed World ETFs. 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
Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.21%.
Sector Exposure and Top Holdings
It is important to delve into an ETF's holdings before investing despite the many upsides to these kinds of funds like diversified exposure, which minimizes single stock risk. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Taking into account individual holdings, Shell Plc (SHEL - Free Report) accounts for about 2.51% of the fund's total assets, followed by Samsung Electronics Ltd and Toyota Motor Corp.
The top 10 holdings account for about 2.51% of total assets under management.
Performance and Risk
The ETF has added roughly 1.42% and it's up approximately 6.74% so far this year and in the past one year (as of 08/08/2024), respectively. FNDF has traded between $30.23 and $36.51 during this last 52-week period.
The ETF has a beta of 0.87 and standard deviation of 16.23% for the trailing three-year period, making it a medium risk choice in the space. With about 989 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental International Equity 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 $70.55 billion in assets, Vanguard FTSE Developed Markets ETF has $129.36 billion. VXUS has an expense ratio of 0.08% and VEA charges 0.06%.
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.