Schwab Fundamental International Equity ETF

Schwab Fundamental International Equity ETF (FNDF) is an index fund that holds large companies in developed markets outside the US, such as Samsung Electronics, Shell and TotalEnergies. Its index weights companies by sales, cash flow, and dividends plus share buybacks instead of stock-market value. Its 0.25% expense ratio is above the 0.12% average for similar funds, but FNDF beat all of them on 1- and 3-year returns through October 29, 2026.

• Over the year to Nov 2, 2026, FNDF returned +26.8%, 1st of 9 among similar funds.
• Its 5-year annualized return was +13.6% and its 10-year +11.6%.
• In the 2020 COVID crash it fell 35.7% and regained its old high 8 months after the low.
• Its worst full calendar year was 2018 (-14.3%); its best was 2025 (+41.0%).
• The deepest fall in its price history was 40.2% (Jan 26, 2018 to Mar 23, 2020), recovered by Jan 5, 2021.

As of Aug 31, 2026, the fund held 888 securities; the ten largest made up 14.95% of assets.

• Over the three months to Aug 31, 2026, investors added a net $1.06B (creations minus redemptions, per the N-PORT report).
• Monthly total returns reported for that quarter: -3.01%, +3.31%, +2.52%.

FNDF tracks the RAFI Fundamental High Liquidity Developed ex US Large Index, licensed from RAFI Indices. Most index funds weight companies by market capitalization, which is the total value of their shares. This index instead scores developed-market companies outside the US on business size: adjusted sales, retained operating cash flow, and dividends plus buybacks. The companies that make up the top 87.5% of cumulative scores are included, and each is weighted by its share of the total score. So a company with big sales but a modest market value can carry more weight than it would in a market-value index.

The index resets its members and weights once a year but phases the changes in. It is split into four equal segments, and one segment is rebalanced each quarter. That spreads out trading. Portfolio turnover was 11%, according to the prospectus filed June 26, 2026.

Normally, the fund keeps at least 90% of net assets in index stocks, including depositary receipts (certificates that represent foreign shares). Schwab uses sampling, which means holding a subset of stocks expected to behave like the full index. The fund had 888 holdings as of August 31, 2026. It may use futures for spare cash and lend out securities, both to help track the index more closely. It does not hedge currencies, so a stronger dollar reduces returns for US holders and a weaker one adds to them.

• FNDF charges 0.25% a year, versus an average of 0.12% for the similar funds below (7th of 9, cheapest first).
• Using the prospectus's standard example, $10,000 invested would cost about $26 in the first year and $318 over 10 years (assuming a 5% annual return).

It adds large non-US companies, weighted by business size rather than market value, to portfolios that lean on US stocks, but its deep drops rule out a defensive role.

FNDF can spread a US-heavy stock portfolio across Japan, the UK, South Korea, Canada, Germany and France. It is still an all-stock fund and falls hard in market slumps. It launched in 2013, so it missed the 2008 crisis. It dropped 35.7% in the 2020 COVID crash and recovered in eight months. It then fell 25.6% in 2022 and recovered by June 2023. Its deepest drop was 40.2%, from January 2018 to March 2020, and it wasn't erased until January 2021. Its worst calendar year was 2018, with a 14.19% loss. Cashing out shares during stretches like these locks in losses.

Income helps: the trailing yield was 3.02% as of October 29, 2026, paid twice a year. The 0.25% expense ratio is higher than most similar funds charge. In the SEC's standard example, costs come to $318 over 10 years on $10,000. Past results don't predict future ones, and a plan needs to weigh the whole portfolio, not one fund.

Matched by holdings overlap from the latest N-PORT reports.