Yahoo Finance Is Schwab Fundamental International Large Company Index ETF (FNDF) a Strong ETF Right Now?
Designed to provide broad exposure to the World ETFs category of the market, the Schwab Fundamental International Large Company Index ETF (FNDF) is a smart beta exchange traded fund launched on 08/13/2013.
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.
Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.
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.
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
Because the fund has amassed over $9.78 billion, this makes it one of the largest ETFs in the World ETFs. FNDF is managed by Charles Schwab. Before fees and expenses, this particular fund seeks to match the performance of the Russell RAFI Developed ex US Large Co. Index (Net).
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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.25%, making it one of the cheaper products in the space.
FNDF's 12-month trailing dividend yield is 2.84%.
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.
Looking at individual holdings, Shell Plc (SHEL) accounts for about 2.32% of total assets, followed by Samsung Electronics Ltd and Toyota Motor Corp.
FNDF's top 10 holdings account for about 12.4% of its total assets under management.
Performance and Risk
The ETF return is roughly 9.46% and was up about 8.03% so far this year and in the past one year (as of 05/17/2023), respectively. FNDF has traded between $25.15 and $32.25 during this last 52-week period.
FNDF has a beta of 0.86 and standard deviation of 18.68% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 951 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 World ETFs segment of the market. However, there are other ETFs in the space which investors could consider.
Vanguard Total International Stock ETF (VXUS) tracks FTSE Global All Cap ex US Index and the Vanguard FTSE Developed Markets ETF (VEA) tracks FTSE Developed All Cap ex US Index. Vanguard Total International Stock ETF has $55.63 billion in assets, Vanguard FTSE Developed Markets ETF has $111.37 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 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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Schwab Fundamental International Large Company Index ETF (FNDF): ETF Research Reports
Vanguard FTSE Developed Markets ETF (VEA): ETF Research Reports
Vanguard Total International Stock ETF (VXUS): ETF Research Reports
Shell PLC Unsponsored ADR (SHEL) : Free Stock Analysis Report
