Is Schwab Fundamental International Equity ETF (FNDF) a Strong ETF Right Now?

Designed to provide broad exposure to the Foreign Large Value ETF category of the market, the Schwab Fundamental International Equity ETF (FNDF) 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.

Investors who believe in market efficiency should consider market cap indexes, as they replicate market returns in a low-cost, convenient, and transparent way.

There are some investors, though, who think it's possible to beat the market with great stock selection; this group likely invests in another class of funds known as smart beta, which track non-cap weighted strategies.

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

The fund is sponsored by Charles Schwab. It has amassed assets over $19.55 billion, making it the largest ETF in the Foreign Large Value ETF. Before fees and expenses, FNDF seeks to match the performance of the Russell RAFI Developed ex US Large Co. Index (Net).

The RAFI Fundamental High Liquidity Developed ex US Large Index measures the performance of large non-U.S. developed market companies based on their fundamental size and weight.

Cost & Other Expenses

Cost is an important factor in selecting the right ETF, and cheaper funds can significantly outperform their more expensive cousins if all other fundamentals are the same.

Operating expenses on an annual basis are 0.25% for FNDF, making it one of the least expensive products in the space.

FNDF's 12-month trailing dividend yield is 3.44%.

Sector Exposure and Top Holdings

Most ETFs are very transparent products, and disclose their holdings on a daily basis. ETFs also offer diversified exposure, which minimizes single stock risk, though it's still important for investors to research a fund's holdings.

When you look at individual holdings, Samsung Electronics Ltdaccounts for about 2.87% of the fund's total assets, followed by Shell Plc (SHEL) and Totalenergies (TTE).

Its top 10 holdings account for approximately 13.25% of FNDF's total assets under management.

Performance and Risk

Year-to-date, the Schwab Fundamental International Equity ETF has gained about 40.81% so far, and was up about 40.81% over the last 12 months (as of 12/25/2025). FNDF has traded between $32.25 $45.85 in this past 52-week period.

FNDF has a beta of 0.70 and standard deviation of 14.00% for the trailing three-year period, which makes the fund a medium risk choice in the space. With about 944 holdings, it effectively diversifies company-specific risk .

Alternatives

Schwab Fundamental International Equity ETF is a reasonable option for investors seeking to outperform the Foreign Large Value ETF segment of the market. However, there are other ETFs in the space which investors could consider.

iShares International Select Dividend ETF (IDV) tracks Dow Jones EPAC Select Dividend Index and the Vanguard International High Dividend Yield ETF (VYMI) tracks FTSE All-World ex US High Dividend Yield Index. iShares International Select Dividend ETF has $6.69 billion in assets, Vanguard International High Dividend Yield ETF has $14.28 billion. IDV has an expense ratio of 0.50% and VYMI changes 0.17%.

Investors looking for cheaper and lower-risk options should consider traditional market cap weighted ETFs that aim to match the returns of the Foreign Large Value ETF

Bottom Line

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This article originally published on Zacks Investment Research (zacks.com).

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