Using a proprietary fundamental weighting methodology, the fund holds more than 1,500 US stocks, from large caps to small caps. The key idea is that investment weights are set by a company's real economic size rather than its share price.

It suits investors who want broad US market exposure that avoids the overvaluation risk of market-cap weighting and favors companies with strong underlying fundamentals.

It is a passive (index-tracking) ETF launched by Charles Schwab in 2013.

Each stock's weight is determined by combining its five-year average sales, operating cash flow, and shareholder returns (dividends and share buybacks). As a result, companies with large real business operations receive higher weights than companies whose share prices have simply risen sharply.

• Maintains lower valuations than traditional market-cap-weighted approaches
• Secures broad market exposure through wide diversification across stocks

Assets under management (AUM) stand at $1.5B, and the expense ratio is 0.25% per year.

It effectively combines similar-strategy products such as the large-cap ETF FNDX and the small-cap ETF FNDA into one, and its fees are lower than those of the index-tracking ETF PRF, which makes it cost-efficient for long-term holding.

Even during a market rally led by tech stocks, the fund has delivered steady results backed by solid earnings, and it has shown better downside resilience than the market index, particularly in environments that favor value stocks.

Money has been flowing in steadily from smart beta investors wary of portfolios skewed toward growth stocks, and the fund remains popular with long-term capital seeking systematic value investing.

The fund allows for a sensible investment approach grounded in companies' underlying fundamentals, but investors should keep in mind that it may underperform the market during sharp rallies led by growth stocks.

RECS and JHMM, shown in the table, are alternatives that use enhanced research and multifactor strategies, respectively. For conventional market-cap-based exposure to the whole US market, VTI is the main competitor, and IWV or ITOT, which track the Russell 3000 Index, are also worth comparing. If you want to stay with a fundamental strategy but prefer only large caps, narrowing the scope to FNDX is another option.

These are the key points to verify before investing in FNDB ETF. It is important to understand the distinctive return structure of fundamental weighting.

Because fundamental weighting automatically sells stocks whose prices have risen excessively relative to their fundamentals, it has a structural limitation: it can miss additional gains in an overheated market.

For long-term investors who want to trust a company's real value rather than be swayed by short-term price swings, it can be a useful asset allocation tool.