Looking for broad exposure to the Large Cap Value segment of the US equity market? You should consider the Schwab Fundamental U.S. Large Company ETF (FNDX), a passively managed exchange traded fund launched on 08/13/2013.

The fund is sponsored by Charles Schwab. It has amassed assets over $16.32 billion, making it one of the largest ETFs attempting to match the Large Cap Value segment of the US equity market.

Why Large Cap Value

Large cap companies usually have a market capitalization above $10 billion. They tend to be stable companies with predictable cash flows and are usually less volatile than mid and small cap companies.

Carrying lower than average price-to-earnings and price-to-book ratios, value stocks also have lower than average sales and earnings growth rates. Looking at their long-term performance, value stocks have outperformed growth stocks in almost all markets. They are however likely to underperform growth stocks in strong bull markets.

Costs

Expense ratios are an important factor in the return of an ETF and in the long term, cheaper funds can significantly outperform their more expensive counterparts, other things remaining the same.

Annual operating expenses for this ETF are 0.25%, putting it on par with most peer products in the space.

It has a 12-month trailing dividend yield of 1.93%.

Sector Exposure and Top Holdings

While ETFs offer diversified exposure, which minimizes single stock risk, a deep look into a fund's holdings is a valuable exercise. And, most ETFs are very transparent products that disclose their holdings on a daily basis.

This ETF has heaviest allocation to the Financials sector--about 19.10% of the portfolio. Information Technology and Healthcare round out the top three.

Looking at individual holdings, Apple Inc (AAPL) accounts for about 4.67% of total assets, followed by Microsoft Corp (MSFT) and Berkshire Hathaway Inc Class B (BRK/B).

The top 10 holdings account for about 21.15% of total assets under management.

Performance and Risk

FNDX seeks to match the performance of the Russell RAFI US Large Co. Index before fees and expenses. The RAFI Fundamental High Liquidity US Large Index measures the performance of large U.S. companies based on their fundamental size and weight.

The ETF has lost about -5.72% so far this year and was up about 5.44% in the last one year (as of 04/16/2025). In the past 52-week period, it has traded between $20.84 and $25.11.

The ETF has a beta of 0.93 and standard deviation of 16.57% for the trailing three-year period, making it a medium risk choice in the space. With about 739 holdings, it effectively diversifies company-specific risk.

Alternatives

Schwab Fundamental U.S. Large Company ETF carries a Zacks ETF Rank of 3 (Hold), which is based on expected asset class return, expense ratio, and momentum, among other factors. Thus, FNDX is a good option for those seeking exposure to the Style Box - Large Cap Value area of the market. Investors might also want to consider some other ETF options in the space.

The Schwab U.S. Dividend Equity ETF (SCHD) and the Vanguard Value ETF (VTV) track a similar index. While Schwab U.S. Dividend Equity ETF has $65.67 billion in assets, Vanguard Value ETF has $127.25 billion. SCHD has an expense ratio of 0.06% and VTV charges 0.04%.

Bottom-Line

Retail and institutional investors increasingly turn to passively managed ETFs because they offer low costs, transparency, flexibility, and tax efficiency; these kind of funds are also excellent vehicles for long term investors.

To learn more about this product and other ETFs, screen for products that match your investment objectives and read articles on latest developments in the ETF investing universe, please visit Zacks ETF Center.

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Schwab Fundamental U.S. Large Company ETF (FNDX): ETF Research Reports

Apple Inc. (AAPL) : Free Stock Analysis Report

Microsoft Corporation (MSFT) : Free Stock Analysis Report

Vanguard Value ETF (VTV): ETF Research Reports

Schwab U.S. Dividend Equity ETF (SCHD): ETF Research Reports

This article originally published on Zacks Investment Research (zacks.com).

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