Designed to provide broad exposure to the Large Cap Value segment of the US equity market, the Schwab Fundamental U.S. Large Company ETF (FNDX) is a passively managed exchange traded fund launched on 08/13/2013.
The fund is sponsored by Charles Schwab. It has amassed assets over $17.98 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.
Large cap companies usually have a market capitalization above $10 billion. Considered a more stable option, large cap companies boast more predictable cash flows and are less volatile than their mid and small cap counterparts.
Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. When you look at long-term performance, value stocks have outperformed growth stocks in nearly all markets. But in strong bull markets, growth stocks are more likely to be winners.
When considering an ETF's total return, expense ratios are an important factor, and cheaper funds can significantly outperform their more expensive counterparts in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.
It has a 12-month trailing dividend yield of 1.70%.
ETFs offer a diversified exposure and thus minimize single stock risk but it is still important to delve into a fund's holdings before investing. Most ETFs are very transparent products and many disclose their holdings on a daily basis.
This ETF has heaviest allocation to the Financials sector--about 19.50% of the portfolio. Information Technology and Healthcare round out the top three.
Looking at individual holdings, Apple Inc (AAPL) accounts for about 5.06% of total assets, followed by Microsoft Corp (MSFT) and Berkshire Hathaway Inc Class B (BRK/B).
The top 10 holdings account for about 21.54% of total assets under management.
FNDX seeks to match the performance of the Russell RAFI US Large Co. Index before fees and expenses. The RAFI Fundamental High Liquidity US Large Index measures the performance of large U.S. companies based on their fundamental size and weight.
The ETF has gained about 3.72% so far this year and was up about 17.48% in the last one year (as of 02/13/2025). In the past 52-week period, it has traded between $21.08 and $25.11.
The ETF has a beta of 0.99 and standard deviation of 15.42% for the trailing three-year period, making it a medium risk choice in the space. With about 738 holdings, it effectively diversifies company-specific risk.
Schwab Fundamental U.S. Large Company ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNDX is a sufficient option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.
The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $67.38 billion in assets, Vanguard Value ETF has $134.95 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.
Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.
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. Large Company ETF (FNDX): ETF Research Reports
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
Vanguard Value ETF (VTV): ETF Research Reports
Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports
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