Schwab's new Fundamental ETFs

Sammy_M · Post by **Sammy_M** » Sat Mar 23, 2013 5:40 am

Schwab's new Fundamental ETFs look promising as a way to tilt toward Value. Their Fundamental index funds are reasonably priced. I expect the ETFs will have even lower expense ratios and may be a nice alternative to Powershares.

http://www.indexuniverse.com/sections/f ... ineup.html

Schwab Fundamental U.S. All Company ETF, which will trade as “FNDB” and be based on the Russell Fundamental U.S. Index
Schwab Fundamental U.S. Large Company ETF, which will trade as “FNDX” and be based on the Russell Fundamental U.S. Large Company Index.
Schwab Fundamental U.S. Small Company ETF, which will trade as “FNDA” and be based on the Russell Fundamental U.S. Small Company Index
Schwab Fundamental International Large Company ETF, which will trade as “FNDF” and be based on the Russell Fundamental Developed ex-U.S. Large Company Index
Schwab Fundamental International Small Company ETF, which will trade as “FNDC” and be based on the Russell Fundamental Developed ex-U.S. Small Company Index
Schwab Fundamental Emerging Markets Large Company ETF, which will trade as “FNDE” and be based on the Russell Fundamental Emerging Markets Large Company Index

I particularly like their International funds and hold them in tax-advantaged accounts where turnover is less of a concern.

gt4715b · Post by **gt4715b** » Sat Mar 23, 2013 7:35 am

It looks like the Russell Fundamental index series is equivalent to the FTSE RAFI Fundamental series so I don't think these new ETFs represent anything new in terms of market exposure. For example,

“FNDB” Russell Fundamental U.S. Index = mix of PRF/PRFZ
“FNDX” Russell Fundamental U.S. Large Company Index = PRF
“FNDA” Russell Fundamental U.S. Small Company Index = PRFZ
“FNDF” Russell Fundamental Developed ex-U.S. Large Company Index = PXF
“FNDC” Russell Fundamental Developed ex-U.S. Small Company Index = PDN
“FNDE” Russell Fundamental Emerging Markets Large Company Index = PXH

My real hope is that they come with ERs that are lower than the Powershares ETFs, which have ERs from 0.45-0.49%. Maybe in the 0.35%-0.40% range.

shawcroft · Post by **shawcroft** » Sat Mar 23, 2013 8:04 am

These should prove to be interesting discussion topics on the Forum. I know a bit but certainly not enough to purchase one of these "new-fangled" index funds. I will await-with interest- the discussion of these funds by my Boglehead colleagues, virtually all of whom are far more astute on these matters than I.
Shawcroft

nisiprius · Post by **nisiprius** » Sat Mar 23, 2013 9:43 am

Sammy_M wrote:Schwab's new Fundamental ETFs look promising as a way to tilt toward Value. Their Fundamental index funds are reasonably priced.

1) But "All the proposed ETFs... don’t yet have a price tag..." I betcha a nickel that the ETFs will have the same ER's as the mutual funds, making them "reasonably priced" for a mutual fund but high-ish for an ETF.

2) Schwab Fundamental US Large Company Index Fund, SFLNX: 0.35% net (0.44% gross)
Schwab Total Stock Market Index, SWTSX: 0.09%

Difference: 0.26% extra for "Fundamentalism"

3) SFLNX is distinctly riskier than the total market.

Measuring by your personal "utility function," do you personally feel that seeing
13,378.76 - 12,833.18 = $545 more in your account in 2013...
is an adequate reward for seeing
$4,782 - $5,436 = $654 less in your account in 2009?

(Morningstar is showing five-year Sharpe ratios are 0.40% for SFNLX and 0.37% for SWTSX so the official Sharpe-ratio answer is "yes.")

I particularly like their International funds....

Why do you "particularly" like their international funds? To my eyeball, judging by (yes) past performance, I don't see anything here "particularly" to care about. It's about the same as Vanguard Total International. What do you "particularly" like? Other than the $100 minimum investment, of course!

dave.d · Post by **dave.d** » Sat Mar 23, 2013 11:14 am

Our brother Nisiprius is my favorite poster, but here I disagree. These are value funds and SHOULD be riskier than total market funds, in the same way that any value or small value index is. You can no more judge these funds' performance on a short period vs. total markets than you can with value, which we recall looked like a complete disaster for years in the late 1990's, and yet we know from Fama and French that value has higher long-term returns. Arnott's theory seems very sensible to me, and the backtesting reflects exposure to the value premium that varies directly with its apparent size at any given date. i'm not convinced that these funds are worth the extra cost on the domestic side, where VTV and VBR are so cheap, but I find them compelling on the international side where they are priced very similarly to other alternatives for value and small exposure. I am concerned about liquidity in the ETF's, but the Schwab mutual funds are easy enough to use. I haven't checked spreads on the Powershares funds in a while; those ETF's may be large enough now that liquidity is not an issue.

Sammy_M · Post by **Sammy_M** » Sat Mar 23, 2013 5:15 pm

nisiprius wrote:I betcha a nickel that the ETFs will have the same ER's as the mutual funds, making them "reasonably priced" for a mutual fund but high-ish for an ETF.

I'd be surprised but that, but okay...

do you personally feel that seeing
13,378.76 - 12,833.18 = $545 more in your account in 2013...
is an adequate reward for seeing
$4,782 - $5,436 = $654 less in your account in 2009?

I choose to allocate toward value risk exposure both domestically and abroad. I expect to pay higher expenses for value funds vs. blend/core funds...and I of course expect higher risk, especially in financial crises. There is of course no guarantee of a value premium going forward, much less one that covers the added expenses. I'm okay with that.

Why do you "particularly" like their international funds?

International value tilting options are limited for retail investors. With Vanguard you have to go with active management. With Wisdomtree you have one weighting factor - dividends. The fundamental indexes use multiple weightings. "Fundamentalism" as you've termed, is just another way to acheive a value tilt in my book.

SFILX and SFNNX are the best international value options today, IMO, if you want to go after lower-priced (i.e., value) equities abroad. If the ETFs are lower priced and build enough volume to have reasonable spreads, they will be even better.

Perfectly okay to stick with TISM though.

Hub · Post by **Hub** » Sat Mar 23, 2013 10:40 pm

Interesting and potentially very good news. Especially for those of us with Schwab self directed accounts within 401ks.

letsgobobby · Post by **letsgobobby** » Sun Mar 24, 2013 9:43 am

What does fundamental mean in this context?

YDNAL · Post by **YDNAL** » Sun Mar 24, 2013 9:52 am

letsgobobby wrote:What does fundamental mean in this context?

These are Russell Indices.... right?
http://www.russell.com/indexes/document ... dology.pdf

The Russell Fundamental Index Series is designed to select and weight securities by fundamental measures of company size as opposed to market capitalization. The Russell Fundamental Index Series selects companies by non-price measures of firm size using the following fundamental variables: Adjusted Sales, Retained Operating Cash Flow, and Dividend plus buybacks (the ”Russell Fundamental Factors"). The Russell Fundamental Index weights are calculated by Research Affiliates®.

letsgobobby · Post by **letsgobobby** » Sun Mar 24, 2013 9:56 am

So there's nothing "indexy" about these at all?

Rick Ferri · Post by **Rick Ferri** » Sun Mar 24, 2013 10:20 am

letsgobobby wrote:So there's nothing "indexy" about these at all?

They are referred to as "strategy indexes" in the industry because they follow an investment strategy rather than a market benchmark.

This was called active management before 2003. That was the year Powershares launched the first ETF that followed a strategy index (the quant-heavy "intellidex" index) and the water became very muddy.

Rick Ferri

YDNAL · Post by **YDNAL** » Sun Mar 24, 2013 10:25 am

letsgobobby wrote:So there's nothing "indexy" about these at all?

Sure, an Index based on a strategy to weigh by "company size" * and NOT price that you, I, and a bunch of other amateurs and pros alike are willing to pay for AAPL.

* Adjusted Sales, Retained Operating Cash Flow, and Dividend plus buybacks.

letsgobobby · Post by **letsgobobby** » Sun Mar 24, 2013 12:30 pm

Ah, so this is active management. It makes sense now.

Rick Ferri · Post by **Rick Ferri** » Sun Mar 24, 2013 12:41 pm

Everything investment strategy involves active management to some degree. The providers of fundamental indexing ETFs call it a passive strategy because their funds follow an "index", but this index sits several rows back from the passive altar of capitalization weighted indexing.

Rick Ferri

grap0013 · Post by **grap0013** » Tue Apr 02, 2013 11:59 am

I must've been on vacation during this thread. How could I miss a FI discussion?!

If Nisi is going to cherry pick one comparison so am I.

Graph VEA vs. SFILX over the past 3 years.

VEA is cap weighted ex US developed large blend
SFILX is fundamental ex US developed small

Yes VEA is cheaper but SFILX had better returns despite the extra ER and even a lower SD. Yep that's right, a lower SD with higher returns. Sharpe ratio was higher too, so it even had higher risk adjusted returns. And yes I bought my first big chunk of SFILX in 3/2010 so I actually realized those returns. They were not in some backtested simulation.

I am highly confident these new Schwab ETFs will have lower fees than their FI mutual funds.

Finally it does not matter whether you call them indexes or not. They are formulaic in nature and are thus a passive strategy which I feel is the key to an asset class.

ftobin · Post by **ftobin** » Tue Apr 02, 2013 1:51 pm

Sammy_M wrote:SFILX and SFNNX are the best international value options today, IMO, if you want to go after lower-priced (i.e., value) equities abroad.

I'll point out that EFV is available for developed international value, ER of 0.40%. It has less turnover than SFNNX.

You're right about small developed value, through (and likely SFENX for emerging markets value).

However, I'll point out that the Schwab Funds have had a horrific time of tracking their indexes, particularly SFENX. I currently hold SFILX and SFENX, but If it didn't cost me anything, I'd be out of them in a heartbeat -- they've trailed by enough to lose any expected value bonus.

ClosetIndexer · Post by **ClosetIndexer** » Thu Apr 04, 2013 12:15 am

gt4715b wrote:It looks like the Russell Fundamental index series is equivalent to the FTSE RAFI Fundamental series so I don't think these new ETFs represent anything new in terms of market exposure. For example,

“FNDB” Russell Fundamental U.S. Index = mix of PRF/PRFZ
“FNDX” Russell Fundamental U.S. Large Company Index = PRF
“FNDA” Russell Fundamental U.S. Small Company Index = PRFZ
“FNDF” Russell Fundamental Developed ex-U.S. Large Company Index = PXF
“FNDC” Russell Fundamental Developed ex-U.S. Small Company Index = PDN
“FNDE” Russell Fundamental Emerging Markets Large Company Index = PXH

My real hope is that they come with ERs that are lower than the Powershares ETFs, which have ERs from 0.45-0.49%. Maybe in the 0.35%-0.40% range.

Just want to point out that these indexes, as far as I can tell, are similar but certainly not equal. Will do regressions when I have a bit more time (or someone please feel free to beat me to it), but even just looking at charts of, for example, SFILX vs PDN, it's clear that they differ by more than their difference in costs: http://finance.yahoo.com/q/bc?t=5y&s=SF ... c=pdn&ql=1. (Unfortunately the underlying index returns for RAFI indexes are not publicly available, and afaik the same is true for Russell, but fund returns should provide a decent comparison.)

Similar, certainly, but not the same. As one who believes fundamental indexing is simply another way to capture known market risk factors, I would want to do actual regressions to get an idea of which fund does a better job of capturing those factors efficiently. Regardless, more options are always a good thing, especially internationally where they're still quite lacking.

stlutz · Post by **stlutz** » Thu Aug 08, 2013 9:27 pm

Pricing has been announced on these.

http://www.indexuniverse.com/sections/f ... apest.html

Ranging from 0.32 percent to 0.46 percent in annual fees...

I actually am quite surprised that they didn't even try to be competitive with Ishares VALU which is priced at .15%.

Marie Chandoha, president of investment management at Schwab, said the expense ratios on these fundamental ETFs would be higher than the firm’s market-cap-weighted ETFs because the costs to manage them are higher. Chandoha stressed that Schwab’s “commitment to offer the lowest expense ratios in their Lipper categories” remained intact for the firms’ 15 core ETFs.

Despite assurances to the contrary, this does make me doubt that Schwab actually does intend to keep the lowest ERs on their core ETFs over the long haul (although it's hard to get beat when you're already at .04%).

caklim00 · Post by **caklim00** » Wed Aug 14, 2013 9:12 am

Boo...

FNDC (Schwab Fundamental International Small Company Index ETF) has the same ER as SFILX (Schwab Fundamental International Small Company Index) which is 0.46. No reason for me to move to the ETF version.

Rick Ferri · Post by **Rick Ferri** » Wed Aug 14, 2013 11:51 am

caklim00 wrote:Boo...

FNDC (Schwab Fundamental International Small Company Index ETF) has the same ER as SFILX (Schwab Fundamental International Small Company Index) which is 0.46. No reason for me to move to the ETF version.

It is likely to be more tax-efficient in ETF form if held in a taxable account.

Rick Ferri

caklim00 · Post by **caklim00** » Wed Aug 14, 2013 12:20 pm

Rick Ferri wrote:
caklim00 wrote:Boo...

FNDC (Schwab Fundamental International Small Company Index ETF) has the same ER as SFILX (Schwab Fundamental International Small Company Index) which is 0.46. No reason for me to move to the ETF version.
It is likely to be more tax-efficient in ETF form if held in a taxable account.

Rick Ferri

I'm not sure I'm ready to hold one of these funds in taxable. I'm comfortable with cap weighted SCV, but not the fundamental stuff. Maybe I'm wrong, but I'm guessing these will have large dividends.

Rick Ferri · Post by **Rick Ferri** » Wed Aug 14, 2013 2:11 pm

It's not the dividend that causes a tax problem in a SCV fund, it's capital gains from turnover. You won't have that in established ETFs.

Rick Ferri

grap0013 · Post by **grap0013** » Wed Aug 14, 2013 3:24 pm

PDN has never distributed a short or long term capital gain.

Tax cost ratio for 1,3, and 5 years is:

0.75, 0.81, 0.77

For VSS tax cost ratio for last 1 and 3 years:

1.05, 0.83

Potential Capital gains exposure:
PDN: -2.27
VSS: 6.73

PDN looks more tax efficent than VSS. FNDC may be a good tax loss harvesting partner. If both these crack 100 million in AUM I'd have no problem using them in taxable. Biggest issue is fear of ETF closing due to lack of profitability and getting stuck with large tax bill.

caklim00 · Post by **caklim00** » Wed Aug 14, 2013 3:35 pm

How will PDN compete with Schwab's new ETF? ER of .75 vs .46 is a decent difference.

Decisions to make as IRAs are now full and will begin taxable investing for the year soon and I'm light on international now. I feel like there is no good place for International Small. You lose tax credit in tax deferred, but higher tax costs/ER in taxable.

grap0013 · Post by **grap0013** » Wed Aug 14, 2013 3:40 pm

caklim00 wrote:How will PDN compete with Schwab's new ETF? ER of .75 vs .46 is a decent difference.

Decisions to make as IRAs are now full and will begin taxable investing for the year soon and I'm light on international now. I feel like there is no good place for International Small. You lose tax credit in tax deferred, but higher tax costs/ER in taxable.

PDN lowered its ER to 0.49 about 1 year ago. Also, it roughly tracks its index by about the ER. Much like PXSV, these fundamental index funds are much better than most people think.

caklim00 · Post by **caklim00** » Thu Aug 15, 2013 2:10 pm

grap0013 wrote:
caklim00 wrote:How will PDN compete with Schwab's new ETF? ER of .75 vs .46 is a decent difference.

Decisions to make as IRAs are now full and will begin taxable investing for the year soon and I'm light on international now. I feel like there is no good place for International Small. You lose tax credit in tax deferred, but higher tax costs/ER in taxable.
PDN lowered its ER to 0.49 about 1 year ago. Also, it roughly tracks its index by about the ER. Much like PXSV, these fundamental index funds are much better than most people think.

Had no idea that they reduced the ER... Too bad the spread is still horrible. I just checked:
Bid: 25.65 x 400
Ask: 25.92 x 200
Ouch!!!

stlutz · Post by **stlutz** » Thu Aug 15, 2013 11:21 pm

The end of this article (http://www.indexuniverse.com/sections/n ... -etfs.html) on these was interesting.

"The Russell series [which Schwab tracks] has a bit less of a deep value tilt, and that shows up in having, on average, less in financials over time than FTSE RAFI. But in the long run, their performance is nearly identical.”

FWIW.

Rick Ferri · Post by **Rick Ferri** » Fri Aug 16, 2013 4:19 am

One difference that I like with Russell FI indexes over RAFI is that they include share buybacks as a dividends.

Rick Ferri

grap0013 · Post by **grap0013** » Fri Aug 16, 2013 9:54 am

stlutz wrote:The end of this article (http://www.indexuniverse.com/sections/n ... -etfs.html) on these was interesting.

"The Russell series [which Schwab tracks] has a bit less of a deep value tilt, and that shows up in having, on average, less in financials over time than FTSE RAFI. But in the long run, their performance is nearly identical.”

FWIW.

Maybe the Russell series has a higher profitability load than RAFI? That could explain the small difference in returns.

grap0013 · Post by **grap0013** » Fri Aug 16, 2013 10:02 am

caklim00 wrote:bad the spread is still horrible.

Well, 1 hour and 20 minutes into this trading day and the spread on PDN is 0.46%. A little steep but could be mitigated with limit orders. You could just buy SFILX thru VB brokerage for $35/transaction.

Personally my entire dev international ex US allocation is only SFILX. I buy for $75/transaction through my work's brokerage window. I think I've bought it one time in the past two years. Target 25% allocation. I buy it up to 30%, when it drifts down to 20% I buy it back up to 30% with one big purchase. There is something definitely to be said of "less is more."

caklim00 · Post by **caklim00** » Tue Sep 10, 2013 11:02 am

The spreads on the Schwab ETFs appear to be really low

even better than VSS

Trying to decide whether its worth the risk in taxable...

I have the ability to buy SFILX, but am afraid of using that vs the ETF in taxable based on the reasons previously documented here.

caklim00 · Post by **caklim00** » Tue Sep 10, 2013 11:13 am

The six funds, five of which already exist in mutual fund wrappers with a combined $4.5 billion in assets gathered since their launch in 2007, are also going to be part of Schwab’s OneSource platform—a broad free-ETF trading program that involves 90 non-Schwab ETFs as well as its own proprietary funds launched in February.

Any idea what mutual fund wrapper means? Does this mean that the ETF is no more efficient than the mutual fund? (like vanguard etfs?)

caklim00 · Post by **caklim00** » Tue Sep 10, 2013 12:59 pm

Schwab seemed to have no idea what I meant when I asked the question if the ETF and Index funds are part of different shares classes or different funds. That said, read an article about why Schwab would be introducing ETF versions of indexes they already offer in mutual fund and the director at Schwab mentioned tax efficiency compared to utal funds, so guess I can infer that they are completely separate funds.

grap0013 · Post by **grap0013** » Tue Sep 10, 2013 3:19 pm

caklim00 wrote:The spreads on the Schwab ETFs appear to be really low even better than VSS

Trying to decide whether its worth the risk in taxable...

I have the ability to buy SFILX, but am afraid of using that vs the ETF in taxable based on the reasons previously documented here.

I think companies keep the spreads narrow sometimes with new ETFs to encourage trading. I wouldn't count on it to last unless it gets a bunch of assets. Wait til it gets more AUM. I wouldn't buy SFILX in taxable either with its' high tax cost ratio. I sound like a Debbie Downer! Sorry!

caklim00 · Post by **caklim00** » Tue Sep 10, 2013 4:28 pm

grap0013 wrote:
caklim00 wrote:The spreads on the Schwab ETFs appear to be really low even better than VSS

Trying to decide whether its worth the risk in taxable...

I have the ability to buy SFILX, but am afraid of using that vs the ETF in taxable based on the reasons previously documented here.
I think companies keep the spreads narrow sometimes with new ETFs to encourage trading. I wouldn't count on it to last unless it gets a bunch of assets. Wait til it gets more AUM. I wouldn't buy SFILX in taxable either with its' high tax cost ratio. I sound like a Debbie Downer! Sorry!

I couldn't quite pull the trigger today, but I'm betting this fund gets some traction given its being marketed as a Core fund with Schwab. That's a lot of assets that have this one as a recommended fund. Spread was consistently around 0.04 - 0.08%% today

Rick Ferri · Post by **Rick Ferri** » Wed Sep 11, 2013 6:54 am

ETF spreads are a function of the underlying liquidity of its holdings. US equity ETFs that hold mainly large and mid cap stocks have low spreads because those underlying US stocks are heavily traded and they individually have low spreads. Think of spreads as liquidity risk a market maker must take to hold shares.

Rick Ferri

caklim00 · Post by **caklim00** » Wed Sep 11, 2013 9:43 am

Decided to pull the trigger on FNDC today. Spreads are definitely manageable right now and even better than VSS. Here's to hoping Schwab can get more AUM and keep this fund tax efficient. Its nice there is a very comparable tax loss harvest partner in PDN although I'll be hesitant since the spreads are much higher on PDN.

Its nice to finally hold an international scv fund in taxable

Gmaloof · Post by **Gmaloof** » Wed Sep 11, 2013 11:00 am

I see the developed small cap value but does any of these cover Emerging Market Value or more specifically SCV ?

caklim00 · Post by **caklim00** » Wed Sep 11, 2013 12:16 pm

Gmaloof wrote:I see the developed small cap value but does any of these cover Emerging Market Value or more specifically SCV ?

Unfortunately there is no fundamental small cap emerging market option. Its a shame as there is an index that tracks the russell fundamental small cap exUs, but the Schwab fund tracks the russell fundamental small exUS Developed index

DGS is probably still the best Value tilted SC International although I'm definitely afraid of holding that one in taxable. FWIW, the dividend yield on the russell fundamental small exUS Developed index is the same as the Russell small exUS Developed index (both were 2.6% as of 6/28).

grap0013 · Post by **grap0013** » Wed Sep 11, 2013 7:15 pm

caklim00 wrote:Decided to pull the trigger on FNDC today. Spreads are definitely manageable right now and even better than VSS. Here's to hoping Schwab can get more AUM and keep this fund tax efficient. Its nice there is a very comparable tax loss harvest partner in PDN although I'll be hesitant since the spreads are much higher on PDN.

Its nice to finally hold an international scv fund in taxable

Now you just need to buy some PXSV so we can get those AUMs up!

RNJ · Post by **RNJ** » Wed Sep 11, 2013 8:25 pm

Gmaloof wrote:I see the developed small cap value but does any of these cover Emerging Market Value or more specifically SCV ?

How about FlexShares Morningstar Emerging Markets Factor Tilt Index (TLTE)? I'd definitely appreciate seeing other's thoughts about this.

http://etfs.morningstar.com/quote?t=TLTE

grabiner · Post by **grabiner** » Wed Sep 11, 2013 10:42 pm

Rick Ferri wrote:ETF spreads are a function of the underlying liquidity of its holdings. US equity ETFs that hold mainly large and mid cap stocks have low spreads because those underlying US stocks are heavily traded and they individually have low spreads. Think of spreads as liquidity risk a market maker must take to hold shares.

ETF spreads are also affected by the liquidity of the ETF itself. VWO (Vanguard Emerging Markets ETF) is the third-largest ETF in the country; it usually trades at a one-cent spread even though emerging-markets stocks are illiquid. VOOG and VOOV (Vanguard S&P 500 Growth and Value ETFs) trade at much larger spreads than VOO (Vanguard S&P 500 ETF) and VUG and VTV (Vanguard Growth and Value ETFs) even though all five of these hold very liquid stocks. In fact, according to Vanguard's chart of bid-ask spreads, VOOV has a larger spread than any Vanguard stock ETF other than the naturally high-spread VSS (FTSE small-cap).

caklim00 · Post by **caklim00** » Thu Sep 12, 2013 9:46 am

RNJ wrote:
Gmaloof wrote:I see the developed small cap value but does any of these cover Emerging Market Value or more specifically SCV ?

How about FlexShares Morningstar Emerging Markets Factor Tilt Index (TLTE)? I'd definitely appreciate seeing other's thoughts about this.

http://etfs.morningstar.com/quote?t=TLTE

TLTE looks awful. Bid/Ask of over 2% around 10:40. Also, its a LCV fund mostly.

caklim00 · Post by **caklim00** » Thu Sep 12, 2013 9:48 am

grap0013 wrote:
caklim00 wrote:Decided to pull the trigger on FNDC today. Spreads are definitely manageable right now and even better than VSS. Here's to hoping Schwab can get more AUM and keep this fund tax efficient. Its nice there is a very comparable tax loss harvest partner in PDN although I'll be hesitant since the spreads are much higher on PDN.

Its nice to finally hold an international scv fund in taxable
Now you just need to buy some PXSV so we can get those AUMs up!

Not quite ready for that when I still have access to VBR, VIOV/IJS (although Wells Fargo recently stopped allowing VIOV

)

I'm on the Fundamental train in international since its the only player in town.

Gecko10x · Post by **Gecko10x** » Thu Sep 12, 2013 10:20 am

What are opinions on FNDC vs SCHF SCHC? Do you think there's enough of a difference in the funds to justify the .11% ER difference? (.09% vs .20%)

To answer my own question...
SCHF:
YTD (as of 8/31/13): +4.43% (looks to be up ~4% since then, so 8%)
1Yr: +15.83%
3Yr: +8.71%

SCHC
YTD (as of 8/31/13): +6.43% (looks to be up ~5% since then, so 9.5%)
1Yr: +18.83%
3Yr: +10.03%

RUFDXUSU (source)
YTD (as of 9/11/13): +17.8%
1Yr: +26.7%
3Yr: +12.8%

Does the above look correct? Based solely on that (which I'm aware is a very poor way to judge things), there appears to be a large difference in factor weighing/risk/performance, and I'd say it easily justifies the .11% ER difference.

caklim00 · Post by **caklim00** » Thu Sep 12, 2013 12:41 pm

Gecko10x wrote:What are opinions on FNDC vs SCHF? Do you think there's enough of a difference in the funds to justify the .37% ER difference? (.09% vs .46%)

To answer my own question...
SCHF:
YTD (as of 8/31/13): +4.43% (looks to be up ~4% since then, so 8%)
1Yr: +15.83%
3Yr: +8.71%

RUFDXUSU (source)
YTD (as of 9/11/13): +17.8%
1Yr: +26.7%
3Yr: +12.8%

Does the above look correct? Based solely on that (which I'm aware is a very poor way to judge things), there appears to be a large difference in factor weighing/risk/performance, and I'd say it easily justifies the .37% ER difference.

You are comparing wrong funds. You need to compare FNDC to SCHC. It is a .26% difference in ER

Gecko10x · Post by **Gecko10x** » Thu Sep 12, 2013 12:51 pm

caklim00 wrote:You are comparing wrong funds. You need to compare FNDC to SCHC. It is a .26% difference in ER

Correct, that was a poor comparison. Fixed. Only a .11% difference in ER though.

BlueEars · Post by **BlueEars** » Thu Sep 12, 2013 1:17 pm

When I took a look at SFILX a few years ago I rejected it because it had a high 33% in Japan. Now that Japan exposure is 40% according to M*. As a comparison with a mid/small cap international, VFSVX (all World ex-US small cap) has 12% in Japan.

Are those in SFILX comfortable with this?

caklim00 · Post by **caklim00** » Thu Sep 12, 2013 3:52 pm

BlueEars wrote:When I took a look at SFILX a few years ago I rejected it because it had a high 33% in Japan. Now that Japan exposure is 40% according to M*. As a comparison with a mid/small cap international, VFSVX (all World ex-US small cap) has 12% in Japan.

Are those in SFILX comfortable with this?

Guess that means Japan is fundamentally a better value right now?

grap0013 · Post by **grap0013** » Thu Sep 12, 2013 8:36 pm

BlueEars wrote:When I took a look at SFILX a few years ago I rejected it because it had a high 33% in Japan. Now that Japan exposure is 40% according to M*. As a comparison with a mid/small cap international, VFSVX (all World ex-US small cap) has 12% in Japan.

Are those in SFILX comfortable with this?

My entire 25% target of international dev ex-US is SFILX. That means 10% of my total portfolio is Japan SCV stocks. Seems kinda funny. Although 50% of my portfolio is domestic SCV.

I looked at the value metrics a little while back and indeed, small cap value stocks in Japan are very cheap. Should pay off in the long run. Or I might die first.