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Government - Bonds: Misc fund seekers should consider taking a look at Schwab Treasury Inflation Protected Security (SWRSX - Free Report) . SWRSX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that SWRSX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.
History of Fund/Manager
SWRSX finds itself in the Schwab Funds family, based out of San Francisco, CA. The Schwab Treasury Inflation Protected Security made its debut in March of 2006 and SWRSX has managed to accumulate roughly $817 million in assets, as of the most recently available information. Matthew Hastings is the fund's current manager and has held that role since March of 2006.
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 1.5%, 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 2.38%, 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. Over the past three years, SWRSX's standard deviation comes in at 3.1%, compared to the category average of 3.33%. Looking at the past 5 years, the fund's standard deviation is 3.47% compared to the category average of 3.81%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. SWRSX has a modified duration of 7.47, which suggests that the fund will decline 7.47% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 0.82% means that a $10,000 investment should result in a yearly payout of $82.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. SWRSX carries a beta of 0.91, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -1.13, which measures performance on a risk-adjusted basis.
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, SWRSX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.81%. SWRSX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Treasury Inflation Protected Security ( SWRSX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Government - Bonds: Misc 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 SWRSX 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 SWRSX a Strong Bond Fund Right Now?
Government - Bonds: Misc fund seekers should consider taking a look at Schwab Treasury Inflation Protected Security (SWRSX - Free Report) . SWRSX bears a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
We note that SWRSX is a Government - Bonds: Misc option, and this area is loaded with many different choices. Often seen as risk-free assets and described as extremely low-risk from a default perspective, Government - Bonds: Misc funds hold securities issued by the United States' federal government. This category stretches across the curve, meaning the yields and interest rate sensitivity will vary, but a mixed approach can typically result in a medium yield and risk profile.
History of Fund/Manager
SWRSX finds itself in the Schwab Funds family, based out of San Francisco, CA. The Schwab Treasury Inflation Protected Security made its debut in March of 2006 and SWRSX has managed to accumulate roughly $817 million in assets, as of the most recently available information. Matthew Hastings is the fund's current manager and has held that role since March of 2006.
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 1.5%, 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 2.38%, 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. Over the past three years, SWRSX's standard deviation comes in at 3.1%, compared to the category average of 3.33%. Looking at the past 5 years, the fund's standard deviation is 3.47% compared to the category average of 3.81%. This makes the fund less volatile than its peers over the past half-decade.
Bond Duration
Modified duration is a measure of a specific bond's interest rate sensitivity, and is an excellent way to judge how fixed income securities will respond to a shifting rate environment.
If you believe interest rates will rise, this is an important factor to look at. SWRSX has a modified duration of 7.47, which suggests that the fund will decline 7.47% for every hundred-basis-point increase in interest rates.
Income
It is important to consider the fund's average coupon because income is often a big reason for purchasing a fixed income security. This metric calculates the fund's average payout in a given year. For example, this fund's average coupon of 0.82% means that a $10,000 investment should result in a yearly payout of $82.
For those seeking a strong level of current income, a higher coupon is typically good news. However, it could pose a reinvestment risk if rates are lower in the future when compared to the initial purchase date of the bond.
Investors also need to consider risk relative to broad benchmarks, as income is only one part of the bond picture. SWRSX carries a beta of 0.91, meaning that the fund is less volatile than a broad market index of fixed income securities. With this in mind, it has a negative alpha of -1.13, which measures performance on a risk-adjusted basis.
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, SWRSX is a no load fund. It has an expense ratio of 0.05% compared to the category average of 0.81%. SWRSX is actually cheaper than its peers when you consider factors like cost.
Investors should also note that the minimum initial investment for the product is $0 and that each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Treasury Inflation Protected Security ( SWRSX ) has a high Zacks Mutual Fund rank, strong performance, average downside risk, and lower fees compared to its peers.
For additional information on the Government - Bonds: Misc 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 SWRSX 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.