As investors build our their portfolios, many are turning to ETFs to tap into the global opportunities that are now readily available.
“What I really think about kind of going forward in the opportunities for us are navigating the world because the next three years will look very different from the last. Whether that’s market volatility, competition, the role of technology, the world is changing so quickly. We’re working really diligently to make sure that we stay up with all those evolutions,” Jonathan de St. Paer, President, Charles Schwab Investment Management, said at Inside ETFs 2019.
ETF investors who are interested in international exposure now have a number of ways to capture foreign market moves. For example, the Schwab International Equity ETF (SCHF A) and Schwab Emerging Markets Equity ETF (SCHE A) are two cheap and easy ways to diversify into overseas exposures. SCHF tracks developed markets outside the U.S. while SCHE covers developing economies.
Additionally, investors can look to smart beta or factor-based ETF strategies like the Schwab Fundamental International Large Company ETF (FNDF B+) and Schwab Fundamental Emerging Markets Large Company ETF (FNDE A-) to further diversify and limit risk exposures.
The fundamental indexing methodology weights holdings based on fundamental factors like adjusted sales, retained operating cash flow and dividends plus buybacks. The strategy increases exposure to stocks that have become cheaper relative to these metrics and cuts back on exposure to those that have grown more expensive, which tilts the portfolio toward a more value style.
Watch the full video interview between Tom Lydon and Jonathan de St. Paer:
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