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Is Schwab Health Care Fund (SWHFX) a Strong Mutual Fund Pick Right Now?
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There are plenty of choices in the Sector - Health category, but where should you start your research? Well, one fund that may not be worth investigating is Schwab Health Care Fund (SWHFX - Free Report) . SWHFX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes SWHFX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
SWHFX finds itself in the Schwab Funds family, based out of San Francisco, CA. Since Schwab Health Care Fund made its debut in June of 2000, SWHFX has garnered more than $779 million in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.09%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 6.13%, 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. SWHFX's standard deviation over the past three years is 13.06% compared to the category average of 17.13%. Over the past 5 years, the standard deviation of the fund is 13.52% compared to the category average of 18.19%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In SWHFX's case, the fund lost 36.2% in the most recent bear market and underperformed comparable funds by 2%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.77, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -1.08, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWHFX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.36%. Looking at the fund from a cost perspective, SWHFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Schwab Health Care Fund ( SWHFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab Health Care Fund ( SWHFX ) looks like a somewhat weak choice for investors right now.
For additional information on the Sector - Health 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 SWHFX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.
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Is Schwab Health Care Fund (SWHFX) a Strong Mutual Fund Pick Right Now?
There are plenty of choices in the Sector - Health category, but where should you start your research? Well, one fund that may not be worth investigating is Schwab Health Care Fund (SWHFX - Free Report) . SWHFX carries a Zacks Mutual Fund Rank of 4 (Sell), which is based on nine forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes SWHFX as Sector - Health, a segment packed with options. Sector - Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
SWHFX finds itself in the Schwab Funds family, based out of San Francisco, CA. Since Schwab Health Care Fund made its debut in June of 2000, SWHFX has garnered more than $779 million in assets. A team of investment professionals is the fund's current manager.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 4.09%, and is in the top third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 6.13%, 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. SWHFX's standard deviation over the past three years is 13.06% compared to the category average of 17.13%. Over the past 5 years, the standard deviation of the fund is 13.52% compared to the category average of 18.19%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should always remember the downsides to a potential investment, and this segment carries some risks one should be aware of. In SWHFX's case, the fund lost 36.2% in the most recent bear market and underperformed comparable funds by 2%. These results could imply that the fund is a worse choice than its peers during a sliding market environment.
Investors should note that the fund has a 5-year beta of 0.77, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. With a negative alpha of -1.08, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWHFX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.36%. Looking at the fund from a cost perspective, SWHFX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
Bottom Line
Overall, Schwab Health Care Fund ( SWHFX ) has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab Health Care Fund ( SWHFX ) looks like a somewhat weak choice for investors right now.
For additional information on the Sector - Health 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 SWHFX too for additional information. Want to learn even more? We have a full suite of tools on stocks that you can use to find the best choices for your portfolio too, no matter what kind of investor you are.