Why is FNDF #1 in Foreign Large Value?

[Boho]

Why does U.S. News & World Report call FNDF a value fund? Their definition makes sense - "Foreign large-value portfolios invest mainly in big international stocks that are less expensive or growing more slowly than other large-cap stocks" but including FNDF, I think, doesn't make sense. This is what the prospectus says:

To pursue its goal, the fund generally invests in stocks that are included in the Russell RAFI Developed ex-U.S. Large Company Index † . The index selects, ranks, and weights securities by fundamental measures of company size — adjusted sales, retained operating cash flow, and dividends plus buybacks — rather than market capitalization.

I don't see the CAPE or PB ratios mentioned. Are there really value securities in this fund?

 

[jazz4cash]

FNDF $26.21 (+0.65%) on Yahoo Finance
https://finance.yahoo.com/quote/FNDF?p=FNDF

You could also check Schawb's website and see that it is in the large value segment on their style map.
http://www.schwab.com/public/schwab...rospect/Research/etfs/summary.asp?symbol=FNDX

 

[NW-Bound]

FNDF, a Schwab fund, is indeed a foreign value fund. It tracks the Russell RAFI Developed ex-U.S. Large Company Index, and holds shares of large companies like BP, Total, Toyota, Nestle, etc...

The composite P/E is 14.1, which is very low relative to the P/E ratio of 25 of the S&P.

 

[bingybear]

look at morningstar, it shows in the style box of large value. The other way to tell is look up all the holdings -- or many -- and you should see the same. If you look at the "fundamental" selection I think you will see the value tilt. That is really of the these indexes.

 

[Boho]

OK, but if it's not in the prospectus as an investment strategy it could be a coincidence that's subject to change. They should get an asterisk for that.

 

[Animorph]

They do take dividends into account, which will tend to make it value leaning. Depending on how they use their other metrics they can be used to select for value stocks as well. Typically, "fundamentally weighted" funds are looking for some version of value. This one just isn't saying value explicitly for some reason.

 

[FUEGO]

Speaking of international value, anyone know a good alternative to VTRIX that's cheaper? VTRIX is around .46% expense ratio and EFV is the only alternative I know of (at 0.40% ER, not much cheaper than VTRIX).