The Schwab Fundamental International Equity ETF (FNDF) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Foreign Large Value ETF category of the market.
What Are Smart Beta ETFs?
The ETF industry has long been dominated by products based on market cap weighted indexes, a strategy created to reflect the market or a particular market segment.
Market cap weighted indexes offer a low-cost, convenient, and transparent way of replicating market returns, and are a good option for investors who believe in market efficiency.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking 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 managed by Charles Schwab. FNDF has been able to amass assets over $23.19 billion, making it the largest ETF in the Foreign Large Value ETF. This particular fund, before fees and expenses, 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
Expense ratios are an important factor in the return of an ETF and in the long-term, cheaper funds can significantly outperform their more expensive cousins, other things remaining the same.
Annual operating expenses for this ETF are 0.25%, making it one of the least expensive products in the space.
It's 12-month trailing dividend yield comes in at 2.96%.
Sector Exposure and Top Holdings
While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Samsung Electronics Ltd accounts for about 3.9% of total assets, followed by Shell Plc (SHEL) and Totalenergies (TTE).
FNDF's top 10 holdings account for about 14.84% of its total assets under management.
Performance and Risk
The ETF has gained about 16.3% so far this year and it's up approximately 50.62% in the last one year (as of 02/26/2026). In the past 52-week period, it has traded between $32.25 and $52.58
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 894 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 $8.31 billion in assets, Vanguard International High Dividend Yield ETF has $18.16 billion. IDV has an expense ratio of 0.50% and VYMI changes 0.07%.
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
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 Equity ETF (FNDF): ETF Research ReportsThis article originally published on Zacks Investment Research (zacks.com).
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