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Is Schwab Fundamental Emerging Markets Equity ETF (FNDE) a Strong ETF Right Now?
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The Schwab Fundamental Emerging Markets Equity ETF (FNDE - Free Report) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Charles Schwab, and has been able to amass over $6.25 billion, which makes it one of the largest ETFs in the Broad Emerging Market ETFs. Before fees and expenses, FNDE seeks to match the performance of the Russell RAFI Emerging Markets Large Co. Index (Net).
The RAFI Fundamental High Liquidity Emerging Markets Index measures the performance of large sized companies, based on their fundamental size and weight, in emerging market countries.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.39%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.10%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing accounts for about 5.16% of total assets, followed by Hon Hai Precision Industry Ltd and China Construction Bank Corp H.
Performance and Risk
The ETF has added about 13.20% so far this year and it's up approximately 21.47% in the last one year (as of 08/20/2024). In the past 52-week period, it has traded between $25.33 and $30.76.
The fund has a beta of 0.76 and standard deviation of 16.37% for the trailing three-year period, which makes FNDE a medium risk choice in this particular space. With about 431 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $79.85 billion in assets, iShares Core MSCI Emerging Markets ETF has $80.81 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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 Emerging Markets Equity ETF (FNDE) a Strong ETF Right Now?
The Schwab Fundamental Emerging Markets Equity ETF (FNDE - Free Report) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Broad Emerging Market 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.
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.
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.
The smart beta space gives investors many different choices, from equal-weighting, one of the simplest strategies, to more complicated ones like fundamental and volatility/momentum based weighting. However, not all of these methodologies have been able to deliver remarkable returns.
Fund Sponsor & Index
The fund is managed by Charles Schwab, and has been able to amass over $6.25 billion, which makes it one of the largest ETFs in the Broad Emerging Market ETFs. Before fees and expenses, FNDE seeks to match the performance of the Russell RAFI Emerging Markets Large Co. Index (Net).
The RAFI Fundamental High Liquidity Emerging Markets Index measures the performance of large sized companies, based on their fundamental size and weight, in emerging market countries.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.39%, making it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 4.10%.
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.
Looking at individual holdings, Taiwan Semiconductor Manufacturing accounts for about 5.16% of total assets, followed by Hon Hai Precision Industry Ltd and China Construction Bank Corp H.
Performance and Risk
The ETF has added about 13.20% so far this year and it's up approximately 21.47% in the last one year (as of 08/20/2024). In the past 52-week period, it has traded between $25.33 and $30.76.
The fund has a beta of 0.76 and standard deviation of 16.37% for the trailing three-year period, which makes FNDE a medium risk choice in this particular space. With about 431 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental Emerging Markets Equity ETF is a reasonable option for investors seeking to outperform the Broad Emerging Market ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard FTSE Emerging Markets ETF (VWO - Free Report) tracks FTSE Emerging Markets All Cap China A Inclusion Index and the iShares Core MSCI Emerging Markets ETF (IEMG - Free Report) tracks MSCI Emerging Markets Investable Market Index. Vanguard FTSE Emerging Markets ETF has $79.85 billion in assets, iShares Core MSCI Emerging Markets ETF has $80.81 billion. VWO has an expense ratio of 0.08% and IEMG charges 0.09%.
Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Broad Emerging Market 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.