Schwab Fundamental U.S. Small Company Index ETF (FNDA)

Overview

The Schwab Fundamental U.S. Small Company Index ETF (FNDA) seeks to track the RAFI US Small Company Index, which selects and weights stocks based on fundamental factors like sales, cash flow, and dividends, rather than market capitalization. The fund focuses on small-cap U.S. equities.

Reputation and Reliability

Schwab is a well-established and reputable financial services company with a long track record of providing investment products and services.

Management Expertise

Schwab has a team of experienced investment professionals managing its ETFs, leveraging quantitative analysis and fundamental research.

Goal

To track the total return of the RAFI US Small Company Index before fees and expenses.

Investment Approach and Strategy

Strategy: FNDA tracks a fundamentally weighted index, selecting and weighting small-cap stocks based on factors such as sales, cash flow, dividends, and book value.

Composition Primarily invests in U.S. small-cap stocks selected based on fundamental factors.

Market Share: 0.012

Total Net Assets (AUM): 778732756

Key Competitors

• IJR
• VIOO
• VB

Competitive Landscape

The small-cap ETF market is highly competitive, with several large players offering similar investment strategies. FNDA distinguishes itself with its fundamental weighting approach, potentially offering a different risk-return profile compared to market-cap-weighted competitors. While market-cap-weighted ETFs have larger AUM and liquidity, FNDA offers a factor-based alternative. However, its expense ratio can be slightly higher than the lowest-cost options.

Historical Performance: Historical performance data unavailable

Benchmark Comparison: Benchmark comparison unavailable

Expense Ratio: 0.25

Average Trading Volume

The average trading volume of FNDA is moderate, providing sufficient liquidity for most investors.

Bid-Ask Spread

The bid-ask spread is generally tight, indicating relatively low trading costs.

Market Environment Factors

Economic growth, interest rates, and investor sentiment towards small-cap stocks all influence FNDA's performance. The overall health of the U.S. economy and specific industry trends within the small-cap universe are important drivers.

Growth Trajectory

FNDA's growth trajectory depends on the performance of fundamentally sound small-cap companies. Any changes to the underlying index methodology or holdings will affect the ETFu2019s return.

Competitive Edge

FNDAu2019s competitive advantage lies in its fundamental weighting approach, which may provide a better representation of a company's true economic value compared to market-cap weighting. The ETFu2019s fundamental indexing methodology weights holdings based on factors like sales, cash flow, and dividends, potentially leading to outperformance over the long term. However, this approach may also lead to underperformance in certain market conditions. The well-known Schwab brand also provides trust and confidence.

Volatility

Volatility unavailable.

Market Risk

FNDA is exposed to market risk, particularly in the small-cap sector. Small-cap stocks tend to be more volatile than large-cap stocks, and their performance can be affected by economic conditions, interest rate changes, and industry-specific factors.

Ideal Investor Profile

Investors seeking exposure to small-cap U.S. equities with a focus on fundamental factors may find FNDA suitable. This ETF is appropriate for investors who believe fundamentally strong companies will outperform over the long term.

Market Risk

FNDA is suitable for long-term investors and those seeking diversification within their portfolio, not for active traders.

Schwab Fundamental U.S. Small Company Index ETF (FNDA) offers exposure to the U.S. small-cap market with a unique fundamental weighting strategy. Its fundamentally driven approach differentiates it from market-cap-weighted peers. Although the expense ratio is slightly higher, the potential for long-term outperformance may justify the cost. It is suitable for investors seeking diversified exposure to the U.S. small-cap market with a focus on companies with strong fundamentals.

Data Sources:

• Schwab official website
• Morningstar
• ETFdb.com

Disclaimers:

The information provided is for informational purposes only and does not constitute investment advice. Investment decisions should be based on your own research and consultation with a qualified financial advisor.