Financial advisors are looking for ways to better utilize and incorporate exchange traded funds into a diversified investment portfolio.
“They’re asking us a lot of questions on how to position portfolios. Given the market environment we’re in, the great bull market we’ve had, they’re really thinking, ‘Do I have the right allocation? What’s that equity-fixed-income allocation look like? How do I use cap-weighted and smart beta in my portfolio to really provide the right investor outcome?'” David Botset, Senior Vice President, Strategy & Product, Charles Schwab Investment Management, said at the Inside ETFs conference.
To help investors achieve their goals, Charles Schwab has offered a line of broad index-based ETFs at dirt-cheap costs. Schwab offers some of the cheapest U.S.-listed ETFs on the market, including the Schwab U.S. Large-Cap ETF (NYSEArca: SCHX) and Schwab U.S. Broad Market ETF (NYSEArca: SCHB), which both come with a 0.03% expense ratio.
Additionally, Schwab offers a suite of “intelligent-” or “smart-“beta index-based ETFs that screen for fundamental measures of adjusted sales, retained operating cash flow, and dividends plus buybacks, including:
- Schwab Fundamental U.S. All Company ETF (FNDB) tries to reflect the performance of the Russell Fundamental U.S. Index, which includes components from the Russell 3000 Index.
- Schwab Fundamental U.S. Large Company ETF (FNDX) tries to reflect the performance of the Russell Fundamental U.S. Large Company Index, which includes the top companies that weigh above 87.5% from the Russell 3000 Index.
- Schwab Fundamental U.S. Small Company ETF (FNDA) tries to reflect the performance of the Russell Fundamental U.S. Small Company Index, which includes the bottom companies that weigh below 87.5% from the Russell 3000 Index.
- Schwab Fundamental International Large Company ETF (FNDF) tries to reflect the performance of the Russell Fundamental Developed ex-U.S. Large Company Index, which includes companies with weights above 87.5% of the Russell Developed ex-U.S. Index.
- Schwab Fundamental International Small Company ETF (FNDC) tries to reflect the performance of the Russell Fundamental Developed ex-U.S. Small Company Index, which includes companies with weights below 87.5% of the Russell Developed ex-U.S. Index.
- Schwab Fundamental Emerging Markets Large Company ETF (FNDE) tries to reflect the performance of the Russell Fundamental Emerging Markets Large Company Index, which includes companies with weights above 87.5% of the Russell Emerging Markets Index.
Watch David Botset Discuss Proper Portfolio Positioning:
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