One of the big challenges facing US banks this year has been the drop in trade volumes even as the market continues to climb and retail investors have regained the confidence in stocks that was lost during the financial crisis. Citigroup Inc. (NYSE:C) and JPMorgan Chase & Co. (NYSE:JPM) have both warned investors to expect a 20% or higher drop in trade revenue, while Charles Schwab Corp (NYSE:SCHW) is reporting record volumes. Smart beta strategies pose a challenge to fundamental investors The rise of exchange traded funds (ETF), which average about a tenth as much stock turnover as active management,…