BKSE vs FNDA

BKSEABNY Mellon US Small Cap Core Equity ETF

FNDABSchwab Fundamental U.S. Small Company Index ETF

In short

BKSE Small-cap indexing stripped to 0.04% a year, a fraction of what the typical fund in the category charges. About 600 US small caps, Morningstar's index, and a lot less name recognition than the household tickers.

FNDA Most small-cap index funds size positions by stock price. FNDA sizes them by fundamental measures of business size instead, which tilts the portfolio toward value. Schwab's contrarian take on small-cap indexing.

Stated mandate

BKSE The fund seeks to mirror the performance of the Morningstar US Small Cap Index. It normally invests nearly all assets in the index’s equity securities.

FNDA The fund seeks to track, before fees and expenses, an index representing small U.S. companies selected and weighted according to fundamental size measures.

Why people hold it

• BKSE A 0.04% expense ratio sits in the cheapest tier of US small-cap index funds, well under iShares' IWM at 0.19% and a hair off Vanguard's VB and Schwab's SCHA at 0.03%.
• Roughly 600 holdings across the Morningstar US Small Cap Index, so no single name drives the fund.
• Straight index mandate: nearly all assets go into the index's own stocks, and it has been one of the tightest-tracking implementations in its peer group.
• Pays distributions quarterly, on the standard schedule for a broad equity index fund.

• FNDA Weights companies by fundamental size measures rather than market price, so a name's slot in the fund follows the business, not the crowd's current enthusiasm for the shares.schwabassetmanagement.com
• Roughly 900 holdings, so no single small cap steers the whole portfolio.
• The 0.25% expense ratio sits right at the median for US small-cap ETFs, which is modest for a rules-based strategy that rebalances against price.
• A multi-billion-dollar fund that trades actively, running on an index built with a liquidity screen, which matters in a corner of the market where spreads bite.

Worth knowing

• BKSE Thinly traded and smaller than the category's household names, so bid-ask spreads can be wider and sizeable orders take more care at the screen.
• Launched in 2020, a shorter live record than small-cap funds that have run through several full market cycles.
• Small-cap stocks swing harder than large caps, and this fund holds the index as it comes with no defensive tilt.

• FNDA Plain market-cap rivals go far cheaper: SCHA and VB both charge 0.03%. The fundamental tilt carries a real fee premium over vanilla small-cap exposure.
• The advertised value screen means returns can drift from standard small-cap benchmarks for long stretches, in either direction.
• Fundamental weighting rebalances toward shares that have fallen relative to their business size, so the fund leans into unloved names by design.

Full BKSE profile⁠

Full FNDA profile⁠