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Is Schwab Total Stock Market (SWTSX) a Strong Mutual Fund Pick Right Now?
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If you're looking for an Index fund category, then a possible option is Schwab Total Stock Market (SWTSX - Free Report) . SWTSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWTSX. Since Schwab Total Stock Market made its debut in June of 1999, SWTSX has garnered more than $11.49 billion 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 in particular has delivered a 5-year annualized total return of 16.55%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 17.01%, 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. The standard deviation of SWTSX over the past three years is 19.4% compared to the category average of 19%. The standard deviation of the fund over the past 5 years is 15.62% compared to the category average of 15.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.04, so it is likely going to be more 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. SWTSX's 5-year performance has produced a negative alpha of -0.31, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 principally on equities that are traded in the United States.
Right now, 91.89% of this mutual fund's holdings are stocks, which have an average market capitalization of $226.66 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
Retail Trade
With turnover at about 4%, this fund is making fewer trades than the average comparable fund.
Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, SWTSX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 0.80%. From a cost perspective, SWTSX is actually cheaper than its peers.
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
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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 Schwab Total Stock Market (SWTSX) a Strong Mutual Fund Pick Right Now?
If you're looking for an Index fund category, then a possible option is Schwab Total Stock Market (SWTSX - Free Report) . SWTSX has no Zacks Mutual Fund Rank, but we have been able to look into other metrics like performance, volatility, and cost.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWTSX. Since Schwab Total Stock Market made its debut in June of 1999, SWTSX has garnered more than $11.49 billion 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 in particular has delivered a 5-year annualized total return of 16.55%, and is in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 17.01%, 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. The standard deviation of SWTSX over the past three years is 19.4% compared to the category average of 19%. The standard deviation of the fund over the past 5 years is 15.62% compared to the category average of 15.6%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 1.04, so it is likely going to be more 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. SWTSX's 5-year performance has produced a negative alpha of -0.31, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
Investigating 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 principally on equities that are traded in the United States.
Right now, 91.89% of this mutual fund's holdings are stocks, which have an average market capitalization of $226.66 billion. The fund has the heaviest exposure to the following market sectors:
- Technology
- Finance
- Retail Trade
With turnover at about 4%, this fund is making fewer trades than the average comparable fund.Expenses
Costs are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, SWTSX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 0.80%. From a cost perspective, SWTSX is actually cheaper than its peers.
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
For additional information on this product, or to compare it to other mutual funds in the Index, make sure to go to www.zacks.com/funds/mutual-funds 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.