FNDC: An Efficient Way To Invest In Cheap International Small Caps
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Ivo Kolchev1.54K FollowersFollow5ShareSavePlay(10min)CommentsSummaryThe Schwab Fundamental International Small Equity ETF invests in companies with a market capitalization of about $5.6 billion domiciled outside the United States.FNDC's benchmark index screens companies by adjusted sales, retained operating cash flow, and dividends plus buybacks, resulting in a value bias for the ETF.FNDC holdings trade at a trailing P/E of only 15x, partially explained by an overweight position in cyclical sectors.Despite a slower earnings growth outlook and a somewhat elevated expense ratio, I see FNDC outperforming the S&P 500, ranking it a buy.Underperformance during periods of weak economic growth and a reversal of recent USD weakness are key risks in the investment case. Martin Barraud/OJO Images via Getty Images Introduction Benefitting from cheap valuations and a weak U.S. dollar, the Schwab Fundamental International Small Equity ETF (FNDC) has notably outperformed the Vanguard S&P 500 ETF (VOO) over theThis article was written byIvo Kolchev1.54K FollowersFollowI ventured into investing in high school in 2011, mainly in REITs, preferred stocks, and high-yield bonds, starting a fascination with markets and the economy that has not faded despite the years. More recently I have been combining long stock positions with covered calls and cash secured puts. I approach investing purely from a fundamental long-term point of view.
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