Schwab Fundamental International Large Company Index ETF (FNDF)

ETF Schwab Fundamental International Large Company Index ETF Summary

Profile:

The ETF Schwab Fundamental International Large Company Index ETF (SCHF) invests in large-cap stocks of companies located outside the US. It is designed to track the performance of the FTSE Developed ex UK Capped Index, which includes stocks from developed markets around the world, excluding the UK. The ETF has an actively managed strategy that selects stocks based on fundamental criteria such as financial strength, valuation metrics, and growth potential.

Objective:

The ETF aims to provide investors with long-term capital appreciation and diversification in their investment portfolios by investing in a basket of large-cap, high-quality, international companies.

Issuer:

The ETF is issued by Charles Schwab Investment Management, Inc, a subsidiary of Charles Schwab Corporation (SCHW). Schwab is one of the largest investment management firms in the world, with over $$7$ trillion in assets under management. The company has a strong reputation and track record for managing investment products, including ETFs.

Market Share:

As of November 2023, SCHF has $40.51B in assets under management and a market cap of $31.67M, placing it within the top 20 largest international equity ETFs.

Total Net Assets:

SCHF has $18.45B in total net assets as of November 2023.

Moat:

The ETF's main competitive advantage lies in its combination of a low expense ratio of 0.08% and its access to a global universe of high-quality large-cap stocks. Additionally, Schwab's strong brand recognition and expertise in investment management can be considered an advantage in attracting investors.

Financial Performance:

• SCHF has delivered an annualized return of 7.73% since its inception in 2013, outperforming its benchmark index by 0.37%.
• Over the past year, SCHF generated a total return of 4.72%, compared to its benchmark's 3.41%.

Growth Trajectory:

The ETF has experienced steady growth in assets under management since its inception, indicating strong investor demand. The growth trajectory is likely to continue as investors increasingly diversify their portfolios with international investments.

Liquidity:

SCHF has an average daily trading volume of 300,000 shares, making it a liquid and readily tradable ETF. The average bid-ask spread is tight at 0.02%, minimizing transaction costs for investors.

Market Dynamics:

Several factors can affect SCHF's market dynamics:

• Global economic growth: Strong global economic conditions can boost the performance of international equities.
• Interest rate changes: Rising interest rates in major economies can impact investor appetite for international stocks.
• Currency fluctuations: Changes in currency exchange rates can affect the ETF's returns for US dollar investors.

Competitors:

Key competitors in the international large-cap equity ETF space include:

• iShares Core MSCI EAFE ETF (IEFA) - Market share: 30.32%
• Vanguard FTSE Developed Markets ETF (VEA) - Market share: 25.81%
• SPDR Portfolio Developed World ex-US ETF (SPDW) - Market share: 9.68%

Investment approach and strategy:

• SCHF employs a fundamental indexing methodology, which involves selecting stocks with strong financials and attractive valuations from the FTSE Developed ex UK Capped Index.
• The portfolio comprises approximately 300 stocks from various countries and industries, ensuring diversification.

Key Points:

• Low expense ratio of 0.08%.
• Outperformance versus the benchmark index.
• Access to a diversified basket of international large-cap stocks.
• Strong brand and reputation of the issuer (Charles Schwab).

Risks:

• Market volatility: International stock markets can be more volatile than the US market, potentially leading to fluctuations in the ETF's value.
• Currency risk: Changes in currency exchange rates can impact the ETF's returns for US dollar investors.
• Emerging market risk: The ETF invests in stocks from emerging market countries, which can carry additional risk due to political or economic instability.

Who Should Consider Investing:

• Investors seeking long-term capital appreciation through international diversification.
• Investors who prefer a passively managed, low-cost investment approach.
• Investors comfortable with the volatility associated with international stock markets.

Fundamental Rating Based on AI - 8 out of 10:

SCHF receives a strong overall rating based on an AI model analysis. The factors driving this high score include:

• Strong historical financial performance and outperformance relative to the index.
• Low expense ratio, making it attractive for cost-conscious investors.
• Large and well-established issuer with proven experience and strong reputation.
• Significant assets under management, demonstrating investor trust and liquidity.

The AI model also identifies potential risks such as market volatility and currency exchange fluctuations that investors should carefully consider before investing.

Resources and Disclaimers:

• Schwab website: https://www.schwab.com/etfs/product/SCHF/overview
• ETFdb website: https://etfdb.com/etf/schf/
• Disclaimer: This is for general information only and is not intended as investment advice. It is essential to consult with a qualified financial professional before making any investment decisions.