Any investors who are searching for Index funds should take a look at Schwab Total Stock Market (
SWTSX Quick Quote 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 responsible for SWTSX, and the company is based out of San Francisco, CA. Schwab Total Stock Market debuted in June of 1999. Since then, SWTSX has accumulated assets of about $10.22 billion, according to the most recently available information. The fund's current manager is a team of investment professionals.
Obviously, what investors are looking for in these funds is strong performance relative to their peers. SWTSX has a 5-year annualized total return of 5.66% 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 3.88%, 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. SWTSX's standard deviation over the past three years is 15.83% compared to the category average of 7.29%. The fund's standard deviation over the past 5 years is 14.15% compared to the category average of 8.11%. This makes the fund more volatile than its peers over the past half-decade.
It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. In SWTSX's case, the fund lost 50.2% in the most recent bear market and underperformed comparable funds by 7%. This might suggest that the fund is a worse choice than its peers during a bear market.
Nevertheless, with a 5-year beta of 1.03, the fund is likely to be as volatile as 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. SWTSX's 5-year performance has produced a negative alpha of -1.13, which means managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Examining 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.
This fund is currently holding about 99.77% stock in stocks, with an average market capitalization of $205.99 billion. The fund has the heaviest exposure to the following market sectors:
With turnover at about 3%, this fund is making fewer trades than comparable funds.
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, SWTSX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 0.84%. From a cost perspective, SWTSX is actually cheaper than its peers.
This fund requires a minimum initial investment of $0, while there is no minimum for each subsequent investment.
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