The Schwab Fundamental International Equity ETF (FNDF) was launched on 08/13/2013, and is a smart beta exchange traded fund designed to offer broad exposure to the Foreign Large Value ETF category of the market.
What Are Smart Beta ETFs?
For a long time now, the ETF industry has been flooded with products based on market capitalization weighted indexes, which are designed to represent the broader 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.
If you're the kind of investor who would rather try and beat the market through good stock selection, then smart beta funds are your best choice; this fund class is known for tracking non-cap weighted strategies.
This kind of index follows this same mindset, as it attempts to pick stocks that have better chances of risk-return performance; non-cap weighted strategies base selection on certain fundamental characteristics, or a mix of 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 $24.22 billion, which makes it the largest ETF in the Foreign Large Value ETF. Before fees and expenses, FNDF 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
When considering an ETF's total return, expense ratios are an important factor. And, cheaper funds can significantly outperform their more expensive cousins in the long term if all other factors remain equal.
Annual operating expenses for this ETF are 0.25%, making it one of the cheaper products in the space.
It's 12-month trailing dividend yield comes in at 3.09%.
Sector Exposure and Top Holdings
Even though ETFs offer diversified exposure which minimizes single stock risk, it is still important to look into a fund's holdings before investing. Luckily, most ETFs are very transparent products that disclose their holdings on a daily basis.
Looking at individual holdings, Samsung Electronics Ltd accounts for about 3.42% of total assets, followed by Shell Plc (SHEL) and Totalenergies (TTE).
The top 10 holdings account for about 15.55% of total assets under management.
Performance and Risk
The ETF has gained about 17.84% and is up roughly 37.09% so far this year and in the past one year (as of 07/08/2026), respectively. FNDF has traded between $39.87 and $55.17 during this last 52-week period.
The ETF has a beta of 0.71 and standard deviation of 14.95% for the trailing three-year period, making it a medium risk choice in the space. With about 907 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 $8.14 billion in assets, Vanguard International High Dividend Yield Index Fund ETF Shares has $19.88 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
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Schwab Fundamental International Equity ETF (FNDF): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).