Launched on 08/13/2013, the Schwab Fundamental International Equity ETF (FNDF) is a smart beta exchange traded fund offering 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.
Because market cap weighted indexes provide a low-cost, convenient, and transparent way of replicating market returns, they work well for investors who believe in market efficiency.
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.
Non-cap weighted indexes try to choose stocks that have a better chance of risk-return performance, which is based on specific fundamental characteristics, or a mix of other 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
FNDF is managed by Charles Schwab, and this fund has amassed over $26.45 billion, which makes 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
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.
Annual operating expenses for this ETF are 0.25%, making it one of the cheaper products in the space.
It has a 12-month trailing dividend yield of 2.91%.
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 3.43% of total assets, followed by Shell Plc (SHEL) and Totalenergies (TTE).
FNDF's top 10 holdings account for about 14.76% of its total assets under management.
Performance and Risk
The ETF return is roughly 25.21% and is up about 37.87% so far this year and in the past one year (as of 09/07/2026), respectively. FNDF has traded between $42.35 and $56.31 during this last 52-week period.
The ETF has a beta of 0.71 and standard deviation of 14.94% for the trailing three-year period, making it a medium risk choice in the space. With about 904 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 Index Fund ETF Shares (VYMI) tracks FTSE All-World ex US High Dividend Yield Index. iShares International Select Dividend ETF has $8.77 billion in assets, Vanguard International High Dividend Yield Index Fund ETF Shares has $21.74 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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