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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.

Big picture: Products with familiar features

Fundamental Index and market cap-weighted products use the same product types and asset classes, making for a familiar selection process.

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What is important to consider when evaluating Fundamental Index products?

Fundamental Index products, in some ways, resemble their market cap-weighted counterparts. These products use the same product type and asset classes you're familiar with in market capitalization. While expense ratios for Schwab Fundamental Index ETFs and mutual funds tend to be higher than the average market cap-weighted index fund, their average expense ratio is lower than the industry average for strategic beta ETFs and mutual funds.1

Another important consideration is that relative to a fund tracking a market cap-weighted benchmark, strategic beta funds, such as Schwab Fundamental Index ETFs and mutual funds, will generally have larger turnover2, tracking error3 and higher fees.

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What tools are available to help with product selection?

Fee impact simulator

Use the fee impact simulator to see the long-term effects of pricing on a portfolio.

Product finder

Explore Schwab investment products.

Featured products

FNDE

Schwab Fundamental Emerging Markets Equity ETF

FNDF

Schwab Fundamental International Equity ETF

FNDX

Schwab Fundamental U.S. Large Company ETF

Access our complete lineup of Fundamental Index products

1. Source: Based on the Morningstar Strategic Beta Group classification, the average expense ratio for Schwab Fundamental Index ETFs and mutual funds is 0.30% and 0.32%, respectively. This is lower than the industry average of 0.42% for strategic beta ETFs and 0.72% for strategic beta mutual funds. Data as of September 30, 2025.

2. "Turnover" is a measurement of how long a fund holds the securities it buys. The longer the holding period, the lower the turnover and vice versa.

3. "Tracking error" is the standard deviation of the difference between an investment's returns and the benchmark's returns

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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Investment and Insurance Products Are: Not FDIC Insured • Not Insured by Any Federal Government Agency • Not a Deposit or Other Obligation of, or Guaranteed by, the Bank or Any of Its Affiliates • Subject to Investment Risks, Including Possible Loss of Principal Amount Invested

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