European and developed Asian stocks combine for over 85% of SCHF’s roster. Japan is the ETF’s largest geographic exposure at 22.69%, followed by the U.K. at 14.37%. France and Germany combine for over 16%.
“Market-cap-weighted funds, like this one, provide cost-efficient, diversified exposure to the opportunity set that active managers select from and make no active bets on specific regions, countries, sectors, or individual stocks,” said Morningstar. “Using this technique, a stock’s weighting will float with changes in its price and will require very little turnover to maintain its desired exposures. Market-cap weighting essentially free-rides on the judgment of active investors. The allocation to each stock reflects their collective opinion about its relative value. Low turnover translates into low transaction costs.”
Morningstar has a Silver rating on SCHF.
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