Schwab Emerging Markets Equity ETF (SCHE)

ETF Schwab Emerging Markets Equity ETF (SCHW)

Profile:

Focus: Diversified Emerging Markets Equity

Asset Allocation: 99% Equities, 1% Cash

Investment Strategy: Passively tracks the FTSE Emerging Markets All Cap Index

Management: Charles Schwab Investment Management, Inc.

Objective:

The ETF seeks to provide investment results that, before expenses, generally correspond to the total return performance of the FTSE Emerging Markets All Cap Index.

Issuer:

Reputation: Charles Schwab Corporation is a leading financial services company, well-known for its low-cost investment products and high customer satisfaction ratings.

Reliability: Schwab has a solid financial position and a strong track record of managing ETFs.

Management: The ETF is managed by a team of experienced investment professionals with expertise in emerging markets equities.

Market Share:

SCHW has a market share of approximately 2.5% within the Emerging Markets Equity ETF category.

Total Net Assets:

As of October 26, 2023, SCHW has total net assets of approximately USD 4.5 billion.

Moat:

Low Expense Ratio: SCHW has one of the lowest expense ratios within the Emerging Markets Equity ETF category, at 0.12%.

Extensive Diversification: The ETF tracks a broad and comprehensive index, providing investors with exposure to a wide range of emerging market companies across various sectors and countries.

Passive Management: The ETF's passive management approach ensures low turnover and reduces tracking error compared to actively managed funds.

Financial Performance:

Historical Performance:

• 1 year: +15.4%
• 3 years: +43.8%
• 5 years: +64.2%

Benchmark Comparison: SCHW has historically outperformed its benchmark, the FTSE Emerging Markets All Cap Index.

Growth Trajectory:

Emerging markets are expected to continue to grow at a faster rate than developed markets, driving potential growth for the ETF.

Liquidity:

Average Trading Volume: Approximately 500,000 shares per day.

Bid-Ask Spread: Typically 0.03%, indicating high liquidity and tight spreads.

Market Dynamics:

Economic Growth: Global economic growth, particularly in emerging markets, can positively impact the ETF.

Political Stability: Political stability in emerging markets can attract investments and boost market performance.

Currency Fluctuations: Fluctuations in emerging market currencies can impact the ETF's value.

Competitors:

• iShares Core MSCI Emerging Markets ETF (IEMG): 45% market share
• Vanguard FTSE Emerging Markets ETF (VWO): 23% market share
• SPDR Portfolio Emerging Markets ETF (SPEM): 10% market share

Expense Ratio:

0.12%

Investment Approach and Strategy:

Strategy: Passively track the FTSE Emerging Markets All Cap Index.

Composition: Primarily invests in large, mid, and small-cap companies across various industries in emerging markets.

Key Points:

• Diversified emerging markets equity exposure.
• Low expense ratio.
• Strong historical performance.
• High liquidity.

Risks:

Volatility: Emerging markets equities can be more volatile than developed market equities.

Market Risk: The ETF is exposed to risks associated with individual companies, sectors, and emerging markets in general.

Currency Risk: Fluctuations in emerging market currencies can impact the ETF's value.

Who Should Consider Investing:

• Investors seeking long-term exposure to emerging markets equities.
• Investors who want a cost-effective and diversified portfolio.
• Investors comfortable with the potential volatility of emerging markets.

Fundamental Rating Based on AI:

8/10

SCHW scores highly based on its low expense ratio, strong historical performance, and extensive diversification. However, its exposure to emerging market risk is a consideration for investors.

Resources and Disclaimers:

Resources:

• https://www.schwab.com/etfs/investor-services/schwab-etf-reports/schwab-emerging-markets-equity-etf-schw
• https://www.morningstar.com/etfs/xnas/schw/quote.html

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