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Is Schwab Small-Cap Index (SWSSX) a Strong Mutual Fund Pick Right Now?
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Have you been searching for a Small Cap Blend fund? You might want to begin with Schwab Small-Cap Index (SWSSX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
SWSSX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Schwab Funds is responsible for SWSSX, and the company is based out of San Francisco, CA. The Schwab Small-Cap Index made its debut in May of 1997 and SWSSX has managed to accumulate roughly $6.43 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.82%, and is in the bottom 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 13.12%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 SWSSX over the past three years is 19.38% compared to the category average of 18%. Looking at the past 5 years, the fund's standard deviation is 19.91% compared to the category average of 18.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -7.46. This means that 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 primarily on equities that are traded in the United States.
The mutual fund currently has 92.88% of its holdings in stocks, with an average market capitalization of $4.92 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Technology
Industrial Cyclical
Other
Health
Turnover is 12%, which means, on average, the fund makes fewer trades than its comparable peers.
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, SWSSX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.98%. So, SWSSX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Your research on the Small Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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 Small-Cap Index (SWSSX) a Strong Mutual Fund Pick Right Now?
Have you been searching for a Small Cap Blend fund? You might want to begin with Schwab Small-Cap Index (SWSSX - Free Report) . The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
Objective
SWSSX is one of many Small Cap Blend funds to choose from. Small Cap Blend mutual funds allow investors a way to diversify their funds among various types of small-cap stocks. These funds seek companies with market capitalization of less than $2 billion, and aid in reducing volatility inherent in lower market cap stocks.
History of Fund/Manager
Schwab Funds is responsible for SWSSX, and the company is based out of San Francisco, CA. The Schwab Small-Cap Index made its debut in May of 1997 and SWSSX has managed to accumulate roughly $6.43 billion in assets, as of the most recently available information. The fund is currently managed by a team of investment professionals.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 3.82%, and is in the bottom 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 13.12%, which places it in the top third during this time-frame.
It is important to note that the product's returns may not reflect all its expenses. Any fees not reflected would lower the returns. Total returns do not reflect the fund's [%] sale charge. If sales charges were included, total returns would have been lower.
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 SWSSX over the past three years is 19.38% compared to the category average of 18%. Looking at the past 5 years, the fund's standard deviation is 19.91% compared to the category average of 18.67%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.09, the fund is likely to be more volatile than the market average. Because alpha represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which is the S&P 500 in this case, one should pay attention to this metric as well. Over the past 5 years, the fund has a negative alpha of -7.46. This means that 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 primarily on equities that are traded in the United States.
The mutual fund currently has 92.88% of its holdings in stocks, with an average market capitalization of $4.92 billion. The fund has the heaviest exposure to the following market sectors:
Turnover is 12%, which means, on average, the fund makes fewer trades than its comparable peers.
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, SWSSX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.98%. So, SWSSX is actually cheaper than its peers from a cost perspective.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.
Bottom Line
Your research on the Small Cap Blend segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.