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Is Schwab Fundamental U.S. Small Company ETF (FNDA) a Strong ETF Right Now?
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Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the Schwab Fundamental U.S. Small Company ETF (FNDA - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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
FNDA is managed by Charles Schwab, and this fund has amassed over $8.51 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The RAFI Fundamental High Liquidity US Small Index measures the performance of small U.S. companies based on their fundamental size and weight.
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%.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 19.40% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Echostar Corp Class A (SATS - Free Report) accounts for about 0.48% of the fund's total assets, followed by Abercrombie And Fitch Class A (ANF - Free Report) and Royal Caribbean Group Ltd (RCL - Free Report) .
FNDA's top 10 holdings account for about 3.46% of its total assets under management.
Performance and Risk
So far this year, FNDA has added about 2.09%, and is up about 14.22% in the last one year (as of 09/11/2024). During this past 52-week period, the fund has traded between $44.98 and $59.94.
The fund has a beta of 1.18 and standard deviation of 21.38% for the trailing three-year period, which makes FNDA a medium risk choice in this particular space. With about 1042 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $12.42 billion in assets, Vanguard Small-Cap Value ETF has $28.73 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
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 - Small 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.
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Is Schwab Fundamental U.S. Small Company ETF (FNDA) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the Schwab Fundamental U.S. Small Company ETF (FNDA - Free Report) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
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
FNDA is managed by Charles Schwab, and this fund has amassed over $8.51 billion, which makes it one of the larger ETFs in the Style Box - Small Cap Value. This particular fund seeks to match the performance of the Russell RAFI US Small Co. Index before fees and expenses.
The RAFI Fundamental High Liquidity US Small Index measures the performance of small U.S. companies based on their fundamental size and weight.
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%.
The fund has a 12-month trailing dividend yield of 1.42%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Representing 19.40% of the portfolio, the fund has heaviest allocation to the Industrials sector; Financials and Consumer Discretionary round out the top three.
Taking into account individual holdings, Echostar Corp Class A (SATS - Free Report) accounts for about 0.48% of the fund's total assets, followed by Abercrombie And Fitch Class A (ANF - Free Report) and Royal Caribbean Group Ltd (RCL - Free Report) .
FNDA's top 10 holdings account for about 3.46% of its total assets under management.
Performance and Risk
So far this year, FNDA has added about 2.09%, and is up about 14.22% in the last one year (as of 09/11/2024). During this past 52-week period, the fund has traded between $44.98 and $59.94.
The fund has a beta of 1.18 and standard deviation of 21.38% for the trailing three-year period, which makes FNDA a medium risk choice in this particular space. With about 1042 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company ETF is a reasonable option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Avantis U.S. Small Cap Value ETF (AVUV - Free Report) tracks ---------------------------------------- and the Vanguard Small-Cap Value ETF (VBR - Free Report) tracks CRSP U.S. Small Cap Value Index. Avantis U.S. Small Cap Value ETF has $12.42 billion in assets, Vanguard Small-Cap Value ETF has $28.73 billion. AVUV has an expense ratio of 0.25% and VBR charges 0.07%.
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 - Small 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.