雅虎香港財經 Is Schwab Fundamental U.S. Small Company Index ETF (FNDA) a Strong ETF Right Now?
Designed to provide broad exposure to the Style Box - Small Cap Value category of the market, the Schwab Fundamental U.S. Small Company Index ETF (FNDA) is a smart beta exchange traded fund launched on 08/13/2013.
What Are Smart Beta ETFs?
Market cap weighted indexes were created to reflect the market, or a specific segment of the market, and the ETF industry has traditionally been dominated by products based on this strategy.
Market cap weighted indexes work great for investors who believe in market efficiency. They provide a low-cost, convenient and transparent way of replicating market returns.
On the other hand, some investors who believe that it is possible to beat the market by superior stock selection opt to invest in another class of funds that track non-cap weighted strategies--popularly known as smart beta.
By attempting to pick stocks that have a better chance of risk-return performance, non-cap weighted indexes are based on certain fundamental characteristics, or a combination of such.
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
Because the fund has amassed over $8.03 billion, this makes it one of the larger ETFs in the Style Box - Small Cap Value. FNDA is managed by Charles Schwab. This particular fund, before fees and expenses, seeks to match the performance of the Russell RAFI US Small Co. Index.
The Russell RAFI US Small Company Index measures the performance of the small company size segment by fundamental overall company scores.
Cost & Other Expenses
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Operating expenses on an annual basis are 0.25% for this ETF, which makes it on par with most peer products in the space.
It's 12-month trailing dividend yield comes in at 1.42%.
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.
FNDA's heaviest allocation is in the Industrials sector, which is about 21.50% of the portfolio. Its Financials and Consumer Discretionary round out the top three.
Looking at individual holdings, Super Micro Computer Inc (SMCI) accounts for about 0.94% of total assets, followed by Abercrombie And Fitch Class A (ANF) and Echostar Corp Class A (SATS).
Its top 10 holdings account for approximately 4.38% of FNDA's total assets under management.
Performance and Risk
The ETF has lost about -0.93% and was up about 18.44% so far this year and in the past one year (as of 05/03/2024), respectively. FNDA has traded between $44.98 and $57.03 during this last 52-week period.
The fund has a beta of 1.20 and standard deviation of 21.52% for the trailing three-year period, which makes FNDA a medium risk choice in this particular space. With about 954 holdings, it effectively diversifies company-specific risk.
Alternatives
Schwab Fundamental U.S. Small Company Index ETF is an excellent option for investors seeking to outperform the Style Box - Small Cap Value segment of the market. There are other ETFs in the space which investors could consider as well.
IShares Russell 2000 Value ETF (IWN) tracks Russell 2000 Value Index and the Vanguard Small-Cap Value ETF (VBR) tracks CRSP U.S. Small Cap Value Index. IShares Russell 2000 Value ETF has $11.83 billion in assets, Vanguard Small-Cap Value ETF has $27.61 billion. IWN has an expense ratio of 0.24% and VBR charges 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 Style Box - Small 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. Small Company Index ETF (FNDA): ETF Research Reports
Abercrombie & Fitch Company (ANF) : Free Stock Analysis Report
EchoStar Corporation (SATS) : Free Stock Analysis Report
Super Micro Computer, Inc. (SMCI) : Free Stock Analysis Report
Vanguard Small-Cap Value ETF (VBR): ETF Research Reports
iShares Russell 2000 Value ETF (IWN): ETF Research Reports
