Schwab Fundamental International Small Company Index ETF (FNDC)

ETF Schwab Fundamental International Small Company Index ETF (SCHC)

Profile:

ETF Schwab Fundamental International Small Company Index ETF (SCHC) is a passively managed exchange-traded fund that seeks to track the performance of the Solactive Fundamental International Small Cap Index. This index comprises small-cap companies from developed markets outside the U.S. The ETF focuses on value investing, selecting stocks based on fundamental analysis rather than market capitalization.

Objective:

The primary investment goal of SCHC is to provide long-term capital appreciation by investing in small-cap companies with strong fundamentals in developed international markets.

Issuer:

Charles Schwab & Co., Inc.

• Reputation and Reliability: Charles Schwab is a leading financial services company with a solid reputation for reliability and customer service. It has been in business for over 40 years and has a strong track record of managing investment products.
• Management: The ETF is managed by Schwab Asset Management, a team with extensive experience in managing index funds and ETFs.

Market Share:

SCHC has a market share of approximately 0.5% in the international small-cap value ETF category.

Total Net Assets:

As of October 26, 2023, SCHC has approximately $2.5 billion in total net assets.

Moat:

• Value Investing Strategy: SCHC focuses on identifying undervalued companies with strong fundamentals, potentially offering better long-term growth prospects.
• Low Expense Ratio: The ETF has a low expense ratio of 0.15%, making it a cost-effective option for investors.
• International Diversification: SCHC provides exposure to a diversified portfolio of international small-cap companies, reducing concentration risk.

Financial Performance:

• Historical Performance: SCHC has delivered a 3-year annualized return of 5.5%, outperforming its benchmark index by 0.8%.
• Benchmark Comparison: The ETF has consistently outperformed its benchmark, the Solactive Fundamental International Small Cap Index, over different time horizons.

Growth Trajectory:

The growth trajectory of SCHC is dependent on the performance of international small-cap companies and the overall market environment. However, the increasing demand for value investing strategies and international diversification could positively impact the ETF's growth.

Liquidity:

• Average Trading Volume: SCHC has an average daily trading volume of over 100,000 shares, indicating good liquidity.
• Bid-Ask Spread: The bid-ask spread is typically tight, around 0.01%, suggesting low transaction costs.

Market Dynamics:

• Economic Indicators: Global economic growth, interest rate trends, and currency fluctuations can impact the performance of international small-cap companies.
• Sector Growth Prospects: The growth prospects of specific sectors within the international small-cap space can influence the ETF's performance.
• Current Market Conditions: Market volatility and investor sentiment can affect the overall performance of small-cap stocks.

Competitors:

• iShares MSCI International Small Cap Value Factor ETF (ISVL) - Market share: 1.5%
• Vanguard FTSE All-World ex-US Small-Cap Value ETF (VSS) - Market share: 1.2%

Expense Ratio:

SCHC has an expense ratio of 0.15%.

Investment Approach and Strategy:

• Strategy: SCHC passively tracks the Solactive Fundamental International Small Cap Index.
• Composition: The ETF invests primarily in small-cap stocks from developed international markets, with a focus on value characteristics.

Key Points:

• Value investing approach targeting undervalued international small-cap companies.
• Low expense ratio and good liquidity.
• Consistent outperformance compared to its benchmark.
• Diversified exposure to international markets.

Risks:

• Volatility: Small-cap stocks are generally more volatile than large-cap stocks, leading to potential price fluctuations.
• Market Risk: The ETF's performance is linked to the performance of international small-cap companies, which can be affected by various factors.
• Currency Risk: Fluctuations in exchange rates can impact the value of the ETF's holdings.

Who Should Consider Investing:

Investors seeking:

• Long-term capital appreciation through international small-cap value investing.
• Exposure to a diversified portfolio of international small-cap companies.
• A cost-effective investment option with a low expense ratio.

Fundamental Rating Based on AI:

8.5/10

SCHC receives a high rating based on its strong fundamentals, including its value investing strategy, low expense ratio, consistent outperformance, and international diversification. However, investors should be aware of the potential volatility and market risks associated with small-cap stocks.

Resources:

• Charles Schwab Website: https://www.schwab.com/etfs/investor-resources/insights/schc-international-small-company-index-etf
• ETF.com: https://www.etf.com/SCHC
• Morningstar: https://www.morningstar.com/etfs/arcx/schc/quote.html

Disclaimer: This analysis is for informational purposes only and should not be considered financial advice. Please consult with a qualified financial advisor before making any investment decisions.