A closer look at Fundamental Index®

A guide to exploring a different approach to investing

Deepen your knowledge of Fundamental Index, an objective and contrarian approach to investing. This approach can be used to help diversify portfolios and complement traditional market-capitalization index strategies.

Use the information in this guide to learn:

  • How Fundamental Index compares with a market cap-weighted approach
  • How Fundamental Index selects and weights stocks
  • The potential benefits of Fundamental Index and how the strategy can be used in portfolio construction
  • What's important to consider when evaluating Fundamental Index products
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Discovery

Explore how Fundamental Index works, why this approach was developed, and how it compares with a market cap-weighted approach.

  • What is Fundamental Index investing?
  • How does this approach work?
  • How does Fundamental Index compare with a market cap-weighted approach?
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Strategy

Understand how a portfolio may benefit from the Fundamental Index approach and how this strategy can be used in portfolio construction.

  • How can Fundamental Index help diversify portfolios?
  • How can Fundamental Index help diversify portfolios through weighting exposure?
  • How can Fundamental Index help diversify portfolios through factor exposure?
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Evaluation and selection

Learn what's important to consider when evaluating Fundamental Index products, and access tools to help with the product selection process.

  • What is important to consider when evaluating Fundamental Index products?
  • What tools are available to help with Fundamental Index product selection?
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Additional resources

Build your ETF expertise with ETF Know:How, our ETF education curriculum for advisors.

For additional information about the terms shown, please visit http://www.schwabassetmanagement.com/resources/glossary

The trade names "Research Affiliates®" and "Fundamental Index®" are registered trademarks of Research Affiliates, LLC.

Investors should consider carefully information contained in the prospectus or, if available, the summary prospectus, including investment objectives, risks, charges, and expenses. You can view and download a prospectus by visiting www.schwabassetmanagement.com/prospectus. Please read it carefully before investing.

Investment returns will fluctuate and are subject to market volatility, so that an investor’s shares, when redeemed or sold, may be worth more or less than their original cost. Shares of ETFs are not individually redeemable directly with the ETF. Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV).

There can be no assurance that the Fundamental Index® methodologies will achieve their desired outcomes. Each investing strategy brings with it its own set of unique risks and benefits.

Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

Indexes are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly.

Each RAFI Fundamental High Liquidity Index (each an Index) is a service mark of RAFI Indices, LLC or its affiliates (collectively, RAFI) and has been licensed for use by Charles Schwab Investment Management, Inc. The intellectual and other property rights to each Index are owned by or licensed to RAFI. The Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by RAFI, its agents or service providers (collectively, the RAFI Parties). The RAFI Parties: (i) make no representation or warranty as to the results to be obtained from the use of an Index or otherwise; and (ii) shall not be liable (whether in negligence or otherwise) to any person for any error in an Index. For full disclaimer, please see the funds’ statements of additional information.

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