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Is Schwab Small-Cap Equity (SWSCX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Schwab Small-Cap Equity (SWSCX - Free Report) . SWSCX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWSCX. Schwab Small-Cap Equity debuted in June of 2003. Since then, SWSCX has accumulated assets of about $573 million, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.72%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 8.75%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. SWSCX's standard deviation over the past three years is 24.31% compared to the category average of 24.72%. Looking at the past 5 years, the fund's standard deviation is 22.28% compared to the category average of 22.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.15, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -6.21, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 98.78% stock in stocks, with an average market capitalization of $3.14 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Technology
This fund's turnover is about 96%, so the fund managers are making more trades in a given year than the category average.
Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, SWSCX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.20%. SWSCX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Schwab Small-Cap Equity ( SWSCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into SWSCX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.
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Is Schwab Small-Cap Equity (SWSCX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Mutual Fund Equity Report category, but where should you start your research? Well, one fund that may not be worth investigating is Schwab Small-Cap Equity (SWSCX - Free Report) . SWSCX possesses a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWSCX. Schwab Small-Cap Equity debuted in June of 2003. Since then, SWSCX has accumulated assets of about $573 million, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 6.72%, and is in the bottom third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 8.75%, which places it in the middle third during this time-frame.
When looking at a fund's performance, it is also important to note the standard deviation of the returns. The lower the standard deviation, the less volatility the fund experiences. SWSCX's standard deviation over the past three years is 24.31% compared to the category average of 24.72%. Looking at the past 5 years, the fund's standard deviation is 22.28% compared to the category average of 22.25%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 1.15, so investors should note that it is hypothetically more volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. The fund has produced a negative alpha over the past 5 years of -6.21, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Exploring the equity holdings of a mutual fund is also a valuable exercise. This can show us how the manager is applying their stated methodology, as well as if there are any inherent biases in their approach. For this particular fund, the focus is primarily on equities that are traded in the United States.
Currently, this mutual fund is holding 98.78% stock in stocks, with an average market capitalization of $3.14 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Technology
This fund's turnover is about 96%, so the fund managers are making more trades in a given year than the category average.Expenses
As competition heats up in the mutual fund market, costs become increasingly important. Compared to its otherwise identical counterpart, a low-cost product will be an outperformer, all other things being equal. Thus, taking a closer look at cost-related metrics is vital for investors. In terms of fees, SWSCX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.20%. SWSCX is actually cheaper than its peers when you consider factors like cost.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Bottom Line
Overall, Schwab Small-Cap Equity ( SWSCX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively weak performance, average downside risk, and lower fees, this fund looks like a somewhat weak choice for investors right now.
For additional information on the Mutual Fund Equity Report area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into SWSCX too for additional information. If you want to check out our stock reports as well, make sure to go to Zacks.com to see all of the great tools we have to offer, including our time-tested Zacks Rank.