The Schwab Fundamental U.S. Broad Market ETF (FNDB) made its debut on 08/13/2013, and is a smart beta exchange traded fund that provides broad exposure to the Style Box - All Cap Value category of the market.
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.
A good option for investors who believe in market efficiency, market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns.
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.
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
Managed by Charles Schwab, FNDB has amassed assets over $1.15 billion, making it one of the larger ETFs in the Style Box - All Cap Value. FNDB seeks to match the performance of the Russell RAFI US Index before fees and expenses.
The RAFI Fundamental High Liquidity US All Index measures the performance of U.S. based companies based on their fundamental size and weight.
Cost & Other Expenses
For ETF investors, expense ratios are an important factor when considering a fund's return; in the long-term, cheaper funds actually have the ability to outperform their more expensive cousins if all other things remain the same.
Annual operating expenses for this ETF are 0.25%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 1.52%.
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.
Representing 16% of the portfolio, the fund has heaviest allocation to the Information Technology sector; Financials and Healthcare round out the top three.
Taking into account individual holdings, Apple Inc (AAPL) accounts for about 4.09% of the fund's total assets, followed by Microsoft Corp (MSFT) and Alphabet Inc Class A (GOOGL).
FNDB's top 10 holdings account for about 18.27% of its total assets under management.
Performance and Risk
Year-to-date, the Schwab Fundamental U.S. Broad Market ETF has gained about 6.51% so far, and is up roughly 18.21% over the last 12 months (as of 02/17/2026). FNDB has traded between $20.36 $28.56 in this past 52-week period.
The fund has a beta of 0.91 and standard deviation of 13.45% for the trailing three-year period, which makes FNDB a medium risk choice in this particular space. With about 1607 holdings, it effectively diversifies company-specific risk .
Alternatives
Schwab Fundamental U.S. Broad Market ETF is a reasonable option for investors seeking to outperform the Style Box - All Cap Value segment of the market. However, there are other ETFs in the space which investors could consider.
Fidelity High Dividend ETF (FDVV) tracks Fidelity Core Dividend Index and the iShares Core S&P U.S. Value ETF (IUSV) tracks S&P 900 Value Index. Fidelity High Dividend ETF has $8.69 billion in assets, iShares Core S&P U.S. Value ETF has $24.68 billion. FDVV has an expense ratio of 0.15% and IUSV changes 0.04%.
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 - All 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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Schwab Fundamental U.S. Broad Market ETF (FNDB): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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