FNDA Profile
The Schwab Fundamental U.S. Small Company Index ETF aims to provide investors with exposure to small-cap U.S. companies by tracking the performance of its underlying index. The fund typically invests at least 90% of its net assets in stocks included in this index, including any borrowings for investment purposes. This index is part of the FTSE Global Total Cap Index and measures the performance of small-cap companies based on their fundamental overall company scores. These scores are determined using a variety of financial metrics to assess the fundamental strength of each company.
Under normal market conditions, the ETF seeks to closely replicate the performance of the FTSE USA Small Cap Fundamental Index, which focuses on the smallest segment of the U.S. equity market by fundamental size. The index methodology incorporates fundamental measures such as adjusted sales, retained operating cash flow, and dividends plus buybacks to evaluate and weight the companies. This approach aims to provide a more stable and representative measure of small-cap company performance compared to traditional market-cap weighted indices.
The Schwab Fundamental U.S. Small Company Index ETF offers investors a strategic way to gain exposure to the small-cap segment of the U.S. equity market, which can be a source of significant growth potential. Small-cap companies are typically more agile and have greater potential for rapid growth compared to their large-cap counterparts. However, they also tend to be more volatile and carry higher risk. The fundamental indexing approach used by this ETF seeks to mitigate some of this risk by focusing on companies with strong financial health and stable fundamentals.
As part of its investment strategy, the ETF provides diversification across various small-cap companies, spreading risk and opportunities across a broad array of sectors and industries. This makes it an attractive option for investors looking to enhance their portfolio with small-cap exposure while benefiting from a fundamentally driven selection process. The fund is suitable for investors seeking long-term growth opportunities and willing to accept the higher volatility associated with small-cap stocks. By investing in this ETF, investors can tap into the potential upside of the U.S. small-cap market through a disciplined, fundamentally-based investment approach
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