Investors Use ETFs to Access Proper Market Exposures

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 (SCHX A+) and Schwab U.S. Broad Market ETF (SCHB A), 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 A) 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 A-) 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 B+) 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 A-) 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.