The Schwab Fundamental Emerging Markets Large Company Index Fund
The Schwab Fundamental Emerging Markets Large Company Index Fund (SFENX) aims to track the performance (total returns) of the Russell RAFI Emerging Markets Large Company Index. This objective makes it a passive, index-tracking strategy fund.
Though the fund has been around since January 2008, it started tracking the aforementioned index from October 2012. As of the end of November 2016, it was managing assets worth $336.7 million. Meanwhile, as of September-end – the latest complete portfolio available – its assets were spread across 337 holdings. The fund is co-managed by Agnes Hong and Ferian Juwono.
The SFENX has had a terrific 2016 so far, with YTD returns until December 12 reading 34.1%.
Sectoral and geographic breakdown
The fund’s market cap allocation justifies its name: 43% of its assets are invested in stocks companies whose market cap is above $15 billion. Another 29% of it is invested in companies whose market cap lies in the $3 billion-$15 billion range.
In terms of sectoral allocation, the energy sector is the most invested, forming over a quarter of the portfolio. Financials and information technology, in that order, are among the top three invested sectors. Materials is the only other sector whose portfolio weight reads in double digits. Telecom services rounds-off the top five invested sectors; these five form over 80% of the fund’s assets.
The geographic exposure, as of September 2016, shows that South Korea and Brazil are quite close in terms of geographic allocation. Combined, they command 35% of the fund’s assets. China is third, forming 16% of the portfolio. Russia and Taiwan round-off the top five invested geographies.
South Korea’s Samsung Electronics is the fund’s single-largest holding, forming 5.2% of the fund’s September 2016 portfolio. Russian companies Public Joint Stock Company Oil Company LUKOIL (LUKOY) and Public Joint Stock Company Gazprom (OGZPY) follow Samsung at the second and third spots respectively. Brazil’s Petrobras (PBR) and China Construction Bank Corporation (CICHY) complete the top five invested stocks.
Fees and minimums
You require a minimum of $100 as initial investment. The fund does not charge any 12b-1, or distribution, fee. If you sell your investment in the fund within 30 days of purchase, you’ll be charged an additional fee of 2%. Inclusive of a 0.50% management fee as a value of investment, the gross expense ratio is 0.85%. Post an expense reduction, the net expense ratio comes to be 0.49%.
Let’s look at the Brandes Emerging Markets Value Fund – Class A (BEMAX) in the next article.