Schwab Fundamental U.S. Broad Market Index ETF (FNDB)

Overview

The Schwab Fundamental U.S. Broad Market Index ETF (FNDB) seeks to track the Russell RAFI US Index, which selects and weights companies based on fundamental factors such as sales, cash flow, and book value, rather than market capitalization, aiming to provide exposure to a broad range of U.S. equities.

Reputation and Reliability

Schwab is a well-established and reputable financial services company with a strong track record in the ETF market.

Management Expertise

Schwab has a team of experienced investment professionals managing its ETFs, leveraging their expertise in index tracking and portfolio management.

Goal

The ETF aims to reflect the performance of the Russell RAFI US Index, providing broad market exposure using a fundamental weighting methodology.

Investment Approach and Strategy

Strategy: The ETF tracks the Russell RAFI US Index, which employs a fundamental weighting strategy, selecting and weighting companies based on fundamental factors.

Composition The ETF primarily holds U.S. stocks, spanning various sectors and market capitalizations, reflecting the composition of the Russell RAFI US Index.

Market Share: FNDB has a moderate market share within the broad market ETF category.

Total Net Assets (AUM): 11180000000

Key Competitors

• IVV (iShares Core S&P 500 ETF)
• VTI (Vanguard Total Stock Market ETF)
• SPY (SPDR S&P 500 ETF)

Competitive Landscape

The broad market ETF space is highly competitive, dominated by large index trackers like IVV, VTI and SPY. FNDB differentiates itself through its fundamental weighting strategy, potentially offering an alternative to market-cap-weighted ETFs. Its lower market share reflects this niche positioning.

Historical Performance: Historical performance data should be gathered directly from financial data providers for accurate representation, typically involving returns over 1, 3, 5, and 10-year periods.

Benchmark Comparison: Benchmark comparison involves assessing FNDB's performance against the Russell RAFI US Index, with data points showing alpha and tracking error.

Expense Ratio: 0.19

Average Trading Volume

FNDB exhibits moderate liquidity, with an average trading volume of approximately 200,000 shares, which is good for a passively managed ETF.

Bid-Ask Spread

FNDB's bid-ask spread is generally tight, typically around $0.01-$0.02, which indicates relatively low trading costs.

Market Environment Factors

Economic indicators such as GDP growth, inflation, and interest rates, along with sector-specific growth prospects, influence FNDB's performance.

Growth Trajectory

FNDB's growth trajectory is closely tied to the overall U.S. equity market and the performance of its fundamental weighting strategy. Any changes to the Russell RAFI US Index methodology can impact the ETF's holdings and performance.

Competitive Edge

FNDB's primary advantage lies in its fundamental weighting strategy, which aims to select and weight companies based on intrinsic value rather than market capitalization. This approach may offer downside protection during market downturns and capture long-term value opportunities. By focusing on fundamentally strong companies, FNDB seeks to deliver superior risk-adjusted returns compared to traditional market-cap-weighted ETFs. This gives investors diversification benefits.

Volatility

FNDB's volatility is generally comparable to that of other broad market U.S. equity ETFs.

Market Risk

FNDB is subject to market risk, which includes the potential for losses due to overall market declines or sector-specific downturns affecting its underlying holdings.

Ideal Investor Profile

FNDB is suitable for investors seeking broad exposure to the U.S. equity market with a focus on fundamental value and a potential for long-term capital appreciation.

Market Risk

FNDB is best for long-term investors who believe in the principles of fundamental investing and are seeking a diversified approach to U.S. equities.

The Schwab Fundamental U.S. Broad Market Index ETF (FNDB) offers a fundamentally weighted approach to accessing the U.S. equity market, tracking the Russell RAFI US Index. Its fundamental weighting strategy seeks to deliver enhanced risk-adjusted returns compared to traditional market-cap-weighted ETFs. FNDB is best suited for long-term investors looking for broad market exposure with a value tilt. However, investors should be aware of the potential risks associated with equity investing and consider their own investment objectives and risk tolerance before investing. FNDB has moderate liquidity with a tight bid-ask spread.

Data Sources:

• Schwab Asset Management
• Russell Investments
• Morningstar
• Yahoo Finance

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investors should conduct their own due diligence and consult with a qualified financial advisor before making any investment decisions. Market data and ETF performance are subject to change.