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Is Schwab Core Equity (SWANX) a Strong Mutual Fund Pick Right Now?
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If investors are looking at the Large Cap Blend fund category, Schwab Core Equity (SWANX - Free Report) could be a potential option. SWANX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
SWANX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWANX. Schwab Core Equity debuted in June of 1996. Since then, SWANX has accumulated assets of about $2.24 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.04%, and it sits 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 10.14%, 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. SWANX's standard deviation over the past three years is 11.11% compared to the category average of 10.58%. The fund's standard deviation over the past 5 years is 10.35% compared to the category average of 10.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, SWANX lost 46.56% and underperformed comparable funds by 3.11%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.04, 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 -1.4. 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.
This fund is currently holding about 78.61% stock in stocks, with an average market capitalization of $169.51 billion. The fund has the heaviest exposure to the following market sectors:
Technology
Finance
With turnover at about 94%, this fund is making more trades in a given year than the average of comparable funds.
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, SWANX is a no load fund. It has an expense ratio of 0.73% compared to the category average of 1%. Looking at the fund from a cost perspective, SWANX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100; each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Core Equity has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab Core Equity looks like a good potential choice for investors right now.
Your research on the Large 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 Core Equity (SWANX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Large Cap Blend fund category, Schwab Core Equity (SWANX - Free Report) could be a potential option. SWANX has a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
SWANX is classified in the Large Cap Blend segment by Zacks, which is an area full of potential. Targeting companies with market caps of more than $10 billion, Large Cap Blend mutual funds offer a stable investment choice; these funds are perfect for investors with a " buy and hold " mindset. Since blended funds mix large, more established firms into their portfolios, investors are exposed to both value and growth opportunities.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWANX. Schwab Core Equity debuted in June of 1996. Since then, SWANX has accumulated assets of about $2.24 billion, according to the most recently available information. A team of investment professionals is the fund's current manager.
Performance
Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 12.04%, and it sits 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 10.14%, 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. SWANX's standard deviation over the past three years is 11.11% compared to the category average of 10.58%. The fund's standard deviation over the past 5 years is 10.35% compared to the category average of 10.32%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment. In the most recent bear market, SWANX lost 46.56% and underperformed comparable funds by 3.11%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
Nevertheless, with a 5-year beta of 1.04, 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 -1.4. 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.
This fund is currently holding about 78.61% stock in stocks, with an average market capitalization of $169.51 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 94%, this fund is making more trades in a given year than the average of comparable funds.
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, SWANX is a no load fund. It has an expense ratio of 0.73% compared to the category average of 1%. Looking at the fund from a cost perspective, SWANX is actually cheaper than its peers.
Investors need to be aware that with this product, the minimum initial investment is $100; each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Core Equity has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab Core Equity looks like a good potential choice for investors right now.
Your research on the Large 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.