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Looking for a Government - Bonds: Misc fund? You may want to consider Schwab Treasury Inflation Protected Security (SWRSX - Free Report) as a possible option. SWRSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
SWRSX is one of many Government - Bonds: Misc funds to choose from. In their portfolios, Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWRSX. The Schwab Treasury Inflation Protected Security made its debut in March of 2006 and SWRSX has managed to accumulate roughly $923 million in assets, as of the most recently available information. The fund's current manager, Matthew Hastings, has been in charge of the fund since March of 2006.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 2.19%, and it sits in the top 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 3.09%, which places it in the top 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. Over the past three years, SWRSX's standard deviation comes in at 2.99%, compared to the category average of -4.05%. The fund's standard deviation over the past 5 years is 3.47% compared to the category average of -3.84%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. SWRSX has a modified duration of 7.41, which suggests that the fund will decline 7.41% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 0.84% means that a $10,000 investment should result in a yearly payout of $84.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. SWRSX carries a beta of 0.93, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.82, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SWRSX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.22%. So, SWRSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
This could just be the start of your research on SWRSXin the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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Is SWRSX a Strong Bond Fund Right Now?
Looking for a Government - Bonds: Misc fund? You may want to consider Schwab Treasury Inflation Protected Security (SWRSX - Free Report) as a possible option. SWRSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
Objective
SWRSX is one of many Government - Bonds: Misc funds to choose from. In their portfolios, Government - Bonds: Misc funds hold securities issued by the United States' federal government, which are often seen as risk-free assets and described as extremely low-risk from a default perspective. While a mixed approach usually results in a medium yield and risk profile, this fund category focuses across the curve, meaning the yields and interest rate sensitivity will vary.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWRSX. The Schwab Treasury Inflation Protected Security made its debut in March of 2006 and SWRSX has managed to accumulate roughly $923 million in assets, as of the most recently available information. The fund's current manager, Matthew Hastings, has been in charge of the fund since March of 2006.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund has delivered a 5-year annualized total return of 2.19%, and it sits in the top 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 3.09%, which places it in the top 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. Over the past three years, SWRSX's standard deviation comes in at 2.99%, compared to the category average of -4.05%. The fund's standard deviation over the past 5 years is 3.47% compared to the category average of -3.84%. This makes the fund more volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a given bond's interest rate sensitivity, and is a metric that's a good way to judge how fixed income securities will respond in a shifting rate environment.
For those that believe interest rates will rise, this is an important factor to consider. SWRSX has a modified duration of 7.41, which suggests that the fund will decline 7.41% for every hundred-basis-point increase in interest rates.
Income
Income is often a big reason for purchasing a fixed income security, so it is important to consider the fund's average coupon. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 0.84% means that a $10,000 investment should result in a yearly payout of $84.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Since income is just one part of the bond picture, investors need to consider risk relative to broad benchmarks. SWRSX carries a beta of 0.93, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -0.82, which measures performance on a risk-adjusted basis.
Expenses
For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SWRSX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.22%. So, SWRSX is actually cheaper than its peers from a cost perspective.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
This could just be the start of your research on SWRSXin the Government - Bonds: Misc category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.