Schwab Fundamental International Large Company Index ETF (FNDF)

Overview

The Schwab Fundamental International Large Company Index ETF (FNDF) seeks to track the RAFI Fundamental Developed ex-U.S. Index, which selects and weights stocks based on fundamental factors such as sales, cash flow, book value, and dividends. It focuses on large-cap companies in developed markets, excluding the U.S. The ETF aims to provide diversified exposure to international equities using a fundamentally weighted approach.

Reputation and Reliability

Schwab is a well-established and reputable financial services company known for its low-cost ETF offerings and reliable investment management.

Management Expertise

Schwab Asset Management has extensive experience in managing index-tracking ETFs, with a strong team dedicated to portfolio management and research.

Goal

The primary investment goal of FNDF is to track the investment results of an index composed of large-capitalization developed market equities, excluding the United States, that are selected using fundamental measures.

Investment Approach and Strategy

Strategy: FNDF tracks the RAFI Fundamental Developed ex-U.S. Index, which uses fundamental factors to select and weight stocks.

Composition The ETF holds stocks of large-cap companies located in developed countries outside of the United States. Top holdings include companies from Japan, the United Kingdom, and Germany.

Market Share: FNDF holds a moderate market share within the international large-cap ETF segment.

Total Net Assets (AUM): 9197000000

Key Competitors

• VEA
• IEFA
• SCHF

Competitive Landscape

The international large-cap ETF market is highly competitive, with numerous ETFs offering similar exposure. FNDF differentiates itself through its fundamental weighting strategy, which may offer advantages over market-cap weighting. However, it faces competition from larger, more liquid ETFs with lower expense ratios. VEA, IEFA and SCHF are some examples.

Historical Performance: Historical performance data can be obtained from financial websites. Performance varies based on market conditions, the RAFI methodology is not always better than market cap weighting.

Benchmark Comparison: The ETF's performance should be compared to the RAFI Fundamental Developed ex-U.S. Index to assess its tracking efficiency.

Expense Ratio: 0.25

Average Trading Volume

FNDF exhibits a moderate average trading volume, which may impact trade execution costs for large orders.

Bid-Ask Spread

The bid-ask spread is generally tight, reflecting the ETF's liquidity and trading efficiency.

Market Environment Factors

Economic growth in developed markets, currency fluctuations, and geopolitical events can all impact FNDF's performance.

Growth Trajectory

FNDF's growth is tied to the performance of international large-cap equities and the adoption of fundamental indexing strategies.

Competitive Edge

FNDF's competitive advantage lies in its fundamentally weighted approach, which aims to select and weight stocks based on factors beyond market capitalization, potentially leading to better risk-adjusted returns. The RAFI methodology prioritizes companies with strong fundamentals, and this approach may provide downside protection in volatile markets. Schwab's brand and low expense ratio also contribute to its competitive position. Finally, the ETF benefits from a strong distribution network.

Volatility

FNDF's volatility is generally similar to that of other international large-cap equity ETFs.

Market Risk

The ETF is subject to market risk, currency risk, and country-specific risks associated with international investments.

Ideal Investor Profile

FNDF is suitable for investors seeking diversified exposure to international large-cap equities and who believe in the value of fundamental indexing. Investors who want to exclude US stocks would benefit from investing in FNDF.

Market Risk

FNDF is suitable for long-term investors and passive index followers who are comfortable with international equity risk.

The Schwab Fundamental International Large Company Index ETF (FNDF) is a low-cost ETF that seeks to track the RAFI Fundamental Developed ex-U.S. Index, offering exposure to large-cap companies in developed markets outside the U.S. Its fundamental weighting strategy distinguishes it from market-cap-weighted peers. FNDF is suitable for long-term investors seeking diversified international equity exposure with a focus on fundamentally strong companies. Investors should consider its potential benefits and risks when deciding whether to add it to their portfolio.

Data Sources:

• Schwab Asset Management
• ETF.com
• Morningstar
• Bloomberg

Disclaimers:

The data and analysis provided are for informational purposes only and should not be considered investment advice. Investment decisions should be based on individual circumstances and consultation with a qualified financial advisor.