What are expense ratios in the context of ETFs?

An expense ratio is an annual fee charged by the ETF issuer to cover management and operational costs, deducted directly from the fund's assets. It represents the portion of your investment used to pay for the fund's operation. A lower expense ratio generally means more of your returns are retained. For comparison, FNDC has a ratio of 0.39%, while SCHC charges just 0.06%, highlighting a difference in cost structure between these two Schwab international small-cap offerings.

How does the fee difference between FNDC and SCHC impact long-term returns?

A higher expense ratio reduces compound growth over time because fees are deducted annually from the fund's net asset value. FNDC's 0.39% fee is significantly higher than SCHC's 0.06% fee. Over a decade, this 0.33 percentage point difference means an investor in FNDC would accumulate less net wealth compared to an identical investment in SCHC, assuming gross returns are equal. This cost drag makes fee analysis crucial for long-term hold strategies.

What does the category 'Foreign Small/Mid' signify?

This category indicates that the fund invests in small and medium-sized companies located outside the investor's home country. Small and mid-cap firms can offer higher growth potential but come with increased volatility and risk compared to large-cap multinationals. FNDC focuses on 'Value' strategies within this group, seeking undervalued stocks, while SCHC adopts a 'Blend' approach, mixing value and growth characteristics to capture a broader spectrum of international small-cap performance.

How do FNDC and SCHC differ in their tracking exposure?

FNDC tracks a Foreign Small/Mid Value index, targeting undervalued international small-cap companies. In contrast, SCHC tracks a Foreign Small/Mid Blend index, which includes a mix of value and growth stocks. This distinction means their underlying stock selections and sector allocations will differ, leading to different risk-return profiles. While specific index methodologies are not disclosed for these funds, the fundamental strategy labels 'Value' versus 'Blend' signal different approaches to capturing international market opportunities.

Do FNDC and SCHC share any top holdings?

According to the available data, there are no shared top-10 holdings between FNDC and SCHC. While SCHC lists specific top holdings like SSRM and FRO, FNDC's top holdings are not available. This lack of overlap suggests that the value-focused strategy of FNDC and the blend strategy of SCHC select quite different companies from the international small-cap universe, which could reduce correlation between the two funds if held together in a portfolio.

What role does net asset size play in ETF liquidity?

Net assets reflect the total market value of all investments held by the fund. Larger funds like SCHC ($5.8 billion) and FNDC ($3.2 billion) generally offer better liquidity and tighter bid-ask spreads, making them easier to trade without significantly affecting the share price. While both funds are substantial, SCHC's larger size may provide slightly more depth. Investors should consider size as an indicator of the fund's stability and ease of entry or exit in the market.

How do dividend yields compare between these two funds?

FNDC offers a current dividend yield of 3.55%, while SCHC provides a slightly lower yield of 3.31%. A higher yield can be attractive for income-focused investors seeking regular cash distributions. However, yield differences may reflect variations in the underlying holdings' ability to pay dividends or the fund's capital structure. It is important to note that yields fluctuate based on market price changes and corporate actions, so a higher yield does not guarantee better total returns.

How do ETF distributions work?

ETFs distribute income, such as dividends from held stocks or interest from bonds, to shareholders periodically. FNDC and SCHC pay dividends, with yields of 3.55% and 3.31% respectively. These distributions are not guaranteed and depend on the companies within the index. Investors receive these payments in cash or can choose to reinvest them. Understanding distribution frequency and tax implications is essential for managing the cash flow generated by international equity ETFs like these.

What does the lack of sector weight disclosure mean for investors?

Sector weights show how much of the fund is invested in specific industries like technology, healthcare, or financials. The provided data indicates that sector weights are 'not available' for both FNDC and SCHC. This limits an investor's ability to assess industry concentration risks directly. Without this information, one must rely on the general strategy labels (Value vs Blend) and assume a diversified spread across international sectors, which requires a higher level of trust in the fund's methodology.

Which fund is better suited for a value-oriented portfolio?

FNDC is designed for investors seeking a value-oriented approach to international small-cap equities, as indicated by its 'Foreign Small/Mid Value' category. It aims to find companies trading below their intrinsic value. SCHC, being a 'Blend' fund, offers a more balanced exposure. If an investor specifically wants to tilt their portfolio towards undervalued international stocks, FNDC's strategy aligns with this goal, albeit at a higher cost than SCHC. This is an educational observation, not a recommendation.

What educational disclaimer applies to this comparison?

This content is for educational purposes only and does not constitute financial advice. Investments in international small-cap equity ETFs like FNDC and SCHC carry risks, including currency fluctuation, political instability, and market volatility. Past performance, dividend yields, and expense ratios are historical data points and do not guarantee future results. Investors should conduct their own due diligence, consider their risk tolerance and financial situation, and consult a qualified financial advisor before making any investment decisions.

FNDC vs SCHC

Two funds, one decision: we compare cost, performance and what each ETF actually holds in October 2026.

Compare FNDC and SCHC: fees, holdings, dividends and tracking. FNDC (0.39% fee, $3.2bn, 3.55% yield) vs SCHC (0.06% fee, $5.8bn, 3.31% yield). Educational content, not financial advice.

Fund Snapshot

Key Fund Metrics

FNDC

Metric

SCHC

0.39%

Expense Ratio

0.06%

3.55%

Dividend Yield

3.31%

$3.23B

Net Assets

$5.83B

1,588

Holdings

2,196

Aug 15, 2013

Inception Date

Jan 14, 2010

–

Index Tracked

–

Foreign Small/Mid Value

Fund Category

Foreign Small/Mid Blend

SCHC costs about $33.00 less per year for every $10,000 invested.

Shared Top Holdings

These funds do not share any of their top holdings.

Investment Analysis

FNDC

Pros

The fund offers a higher dividend yield of 3.55%, potentially providing greater current income compared to similar funds.
With $3.2 billion in net assets, the fund has a substantial size, supporting reasonable liquidity and operational efficiency.
It provides exposure to the Foreign Small/Mid Value sector, which may offer different risk-return characteristics than broad international small-cap funds.

Considerations

The expense ratio of 0.39% is significantly higher than the 0.06% of the alternative fund, reducing net returns.
Information on top holdings and sector weights is not available, limiting the ability to assess concentration risk or diversification.
The index methodology is not disclosed, making it difficult to evaluate the consistency and transparency of the tracking approach.

SCHC

Pros

The low expense ratio of 0.06% enhances net returns, making it a cost-efficient vehicle for international small-cap exposure.
With $5.8 billion in net assets, the fund is large, which generally supports better liquidity and tighter bid-ask spreads.
The inception date of January 2010 provides a longer track record compared to the alternative fund, offering more historical performance data.

Considerations

The dividend yield of 3.31% is slightly lower than the alternative fund, potentially resulting in less immediate income.
Information on sector weights is not available, hindering a detailed assessment of industry diversification or concentration.
The index methodology is not disclosed, limiting transparency regarding the fund's strategic approach to stock selection and rebalancing.

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About FNDC and SCHC

FNDC (FNDC)

The Schwab Fundamental International Small Equity ETF offers investors exposure to small and mid-sized companies in developed markets outside the United States. This fund employs a systematic, fundamental index strategy, selecting stocks based on metrics like sales, cash flow, book value, and dividends rather than traditional market capitalisation. This approach aims to identify potentially undervalued companies by reducing exposure to those with high valuations and increasing exposure to those with stronger fundamentals. With an expense ratio of 0.39% and a recent dividend yield of approximately 3.55%, the fund provides a cost-effective way to diversify across international small-cap value markets. However, investors should be aware that small-cap stocks often experience greater volatility than large-cap companies, and international investments are subject to currency fluctuations and local economic risks. As always, fund values can rise and fall, and returns are not guaranteed.

SCHC (SCHC)

Schwab International Small‑Cap Equity ETF (SCHC) offers investors broad exposure to small‑capitalisation companies in developed markets outside the United States. The fund seeks to track an index of international small‑cap equities, providing diversified access across countries and sectors in a single, exchange‑listed vehicle. Small‑cap stocks can offer attractive long‑term growth potential due to their capacity for rapid expansion, but they also tend to be more volatile, less liquid and more sensitive to local economic and currency shifts than large‑cap or domestic holdings. SCHC can complement a global equity allocation, but investors should expect wider performance swings and be mindful of political, market and currency risks. This information is educational and not personal financial advice. Consider your investment objectives, time horizon and risk tolerance, and consult a financial adviser if unsure whether this ETF suits your needs.

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FNDC vs SCHC

Fund Snapshot

Investment Analysis

FNDC

Pros

Considerations

SCHC

Pros

Considerations

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Capital Returns: The Shareholder Yield Play

Buy FNDC or SCHC in Nemo

Zero Commission

Trusted & Regulated

6% Interest on Cash

Frequently asked questions

What are expense ratios in the context of ETFs?

How does the fee difference between FNDC and SCHC impact long-term returns?

What does the category 'Foreign Small/Mid' signify?

How do FNDC and SCHC differ in their tracking exposure?

Do FNDC and SCHC share any top holdings?

What role does net asset size play in ETF liquidity?

How do dividend yields compare between these two funds?

How do ETF distributions work?

What does the lack of sector weight disclosure mean for investors?

Which fund is better suited for a value-oriented portfolio?

What educational disclaimer applies to this comparison?

Fund Snapshot

Related Market Insights

Capital Returns: The Shareholder Yield Play

Related Market Insights

Capital Returns: The Shareholder Yield Play

About FNDC and SCHC

Which Baskets Do They Appear In?

Capital Returns: The Shareholder Yield Play

Which Baskets Do They Appear In?

Capital Returns: The Shareholder Yield Play