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Is Schwab Balanced Fund (SWOBX) a Strong Mutual Fund Pick Right Now?
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Having trouble finding a Mutual Fund Equity Report fund? Schwab Balanced Fund (SWOBX - Free Report) is a potential starting point. SWOBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), 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 SWOBX. Schwab Balanced Fund made its debut in October of 1996, and since then, SWOBX has accumulated about $804 million in assets, per the most up-to-date date available. Zifan Tang is the fund's current manager and has held that role since February of 2012.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.28%, and is in the middle 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 10.71%, 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. SWOBX's standard deviation over the past three years is 11.43% compared to the category average of 12.24%. Looking at the past 5 years, the fund's standard deviation is 10.28% compared to the category average of 10.8%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SWOBX has a 5-year beta of 0.64, which means it is likely to be less volatile than the market average. 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 -0.81, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWOBX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.86%. Looking at the fund from a cost perspective, SWOBX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Balanced Fund ( SWOBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Schwab Balanced Fund ( SWOBX ) looks like a good potential 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 SWOBX 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 Balanced Fund (SWOBX) a Strong Mutual Fund Pick Right Now?
Having trouble finding a Mutual Fund Equity Report fund? Schwab Balanced Fund (SWOBX - Free Report) is a potential starting point. SWOBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), 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 SWOBX. Schwab Balanced Fund made its debut in October of 1996, and since then, SWOBX has accumulated about $804 million in assets, per the most up-to-date date available. Zifan Tang is the fund's current manager and has held that role since February of 2012.
Performance
Investors naturally seek funds with strong performance. This fund in particular has delivered a 5-year annualized total return of 9.28%, and is in the middle 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 10.71%, 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. SWOBX's standard deviation over the past three years is 11.43% compared to the category average of 12.24%. Looking at the past 5 years, the fund's standard deviation is 10.28% compared to the category average of 10.8%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SWOBX has a 5-year beta of 0.64, which means it is likely to be less volatile than the market average. 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 -0.81, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWOBX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.86%. Looking at the fund from a cost perspective, SWOBX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Balanced Fund ( SWOBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Schwab Balanced Fund ( SWOBX ) looks like a good potential 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 SWOBX 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.