Analyzing a ‘Foreign’ ETF

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker, financial journalist, and money manager.

Sometimes, it is best to stay at home and remain faithful to the tried-and-true experiences that you’ve known all your life. Such a decision provides one with a safe harbor during tumultuous times. At other times, it is wiser to cast off, explore new horizons and experience new sensations.

This dilemma also applies to the stock market. At certain periods in the market cycle, it is wise to remain faithful to the well-known and stable companies and funds that are stalwarts in any balanced portfolio. Such a decision often produces a reliable, if not spectacular, return. At other times, investing in foreign or less-well-known companies may be the wiser decision to maximize returns, at, of course, the risk of incurring heavier losses.

One exchange-traded fund (ETF) that is heavily involved in foreign companies is the Schwab Fundamental International Large Company Index ETF (NYSEARCA: FNDF). This ETF tracks an index of large firms from developed markets that are not in the United States. To select the stocks in its portfolio, it consults three different metrics: sales, cash flow and dividends. The fund’s managers then measure large-cap companies from FNDF’s parent index, the FTSE Global Total Cap Index, by these metrics. The top 87.5% of the companies by score are included in the portfolio.

Interestingly, while the index weights are determined annually, they are implemented across the year instead of all at once. That is, the fund’s managers divide the portfolio into four equal segments, and each segment is rebalanced on a quarterly basis. Not only does this methodology reduce the risk of buying shares of the fund at a bad time, but it also increases investment capacity.

Currently, the fund’s top holdings include Shell PLC (NYSE: SHEL), BP plc (NYSE: BP), Toyota Motor Corp. (NYSE: TM), Samsung Electronics Co., Ltd. (KRX: 005930), TotalEnergies SE (NYSE: TTE), HSBC Holdings Plc (NYSE: HSBC), Nestle SA (OTCMKTS: NSRGY) and Glencore plc (OTCMKTS: GLNCY).

This fund’s performance has been problematic, especially when including the damage done by the COVID-19 pandemic. As of Feb. 15, FNDF has been down 1.14% over the past month and up 2.64% over the past three months. It is currently up 3.72% year to date.

Chart courtesy of

The fund has amassed $7.70 billion in assets under management and has an expense ratio of 0.25%.

While FNDF does provide an investor with a way to profit from foreign companies, this kind of ETF may not be appropriate for all portfolios. Thus, interested investors should always conduct their due diligence and decide whether the fund is suitable for their investing goals.

As always, I am happy to answer any of your questions about ETFs, so do not hesitate to send me an email. You just may see your question answered in a future ETF Talk.

share on:

Like This Article?
Now Get Jim's FREE Special Report:
The Top 11 Dividend ETFs to
Buy Right Now

Get up to 5X the yields of traditional income plays.

Get Access to the Report, 100% FREE

share on:


Dr. Mark Skousen

Named one of the "Top 20 Living Economists," Dr. Skousen is a professional economist, investment expert, university professor, and author of more than 25 books.

Product Details

  • Forecasts & Strategies
  • Home Run Trader
  • Fast Money Alert
  • Five Star Trader
  • TNT Trader

Bryan Perry

A former Wall Street financial advisor with three decades' experience, Bryan Perry focuses his efforts on high-yield income investing and quick-hitting options plays.

Product Details

  • Cash Machine
  • Premium Income PRO (exclusively for subscribers of Cash Machine)
  • Quick Income Trader
  • Breakout Options Alert
  • Hi-Tech Trader

Jim Woods

Jim Woods has over 20 years of experience in the markets from working as a stockbroker,
financial journalist, and money manager. As well as a book author and regular contributor to
numerous investment websites, Jim is the editor of:

Product Details

  • Successful Investing
  • High Velocity Options
  • Intelligence Report
  • Bullseye Stock Trader
  • Eagle Eye Opener

Bob Carlson

Bob Carlson provides independent, objective research covering all the financial issues of retirement and retirement planning. In addition, Bob serves as Chairman of the Board of Trustees of the Fairfax County (VA) Employees’ Retirement System, which has over $2.8 billion in assets.

Product Details

  • Retirement Watch
  • Retirement Watch Spotlight Series
  • Lifetime Retirement Protection Program

Jon Johnson

Jon Johnson's philosophy in investing and trading is to take what the market gives you regardless if that is to the upside or downside. For the past 21 years, Jon has helped thousands of clients gain success in the financial markets through his newsletters and education services:

Product Details

  • Investment House Daily
  • Stock of the Week
  • Technical Traders Alert
  • Rapid Profits Stock Trader

Used by financial advisors and individual investors all over the world, is the premier provider and one-stop shop for dividend information and research.

Product Details

Popular tools include our proprietary Dividend Calendar, Dividend Calculator, Dividend Score Card, and many more.

  • Dividend Investor

George Gilder

George Gilder is the most knowledgeable man in America when it comes to the future of technology and its impact on our lives.  He’s an established investor, bestselling author, and economist with an uncanny ability to foresee how new breakthroughs will play out, years in advance.

Product Details

  • Technology Report
  • Technology Report PRO
  • Moonshots
  • Private Reserve
  • Millionaire Circle


DayTradeSPY was founded by head trader Hugh Grossman, a retired internal auditor for a Fortune 500 company. After years of first-hand experience trying out one trading strategy after another, Hugh instead developed his own trading system centered around day trading SPY options. That’s it... Nothing else.

Product Details

  • Trading Room
  • Pick of the Day
  • Inner Circle
  • Online Workshops