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Is Schwab Small-Cap Equity (SWSCX) a Strong Mutual Fund Pick Right Now?
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If you're looking for a Small Cap Growth fund category, then a potential option is Schwab Small-Cap Equity (SWSCX - Free Report) . SWSCX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
SWSCX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWSCX. Schwab Small-Cap Equity made its debut in June of 2003, and since then, SWSCX has accumulated about $482.28 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
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 7.92%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.54%, 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 SWSCX over the past three years is 20.25% compared to the category average of 20.58%. The standard deviation of the fund over the past 5 years is 23.68% compared to the category average of 23.48%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.13, the fund is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -6.61. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 largely on equities that are traded in the United States.
This fund is currently holding about 97.36% in stocks, and these companies have an average market capitalization of $3.02 billion. The fund has the heaviest exposure to the following market sectors:
Finance
Industrial Cyclical
Other
Technology
Turnover is about 43%, so those in charge of the fund make fewer trades than comparable funds.
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, SWSCX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.01%. So, SWSCX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and higher fees, Schwab Small-Cap Equity ( SWSCX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Small Cap Growth 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 SWSCX too 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 Equity (SWSCX) a Strong Mutual Fund Pick Right Now?
If you're looking for a Small Cap Growth fund category, then a potential option is Schwab Small-Cap Equity (SWSCX - Free Report) . SWSCX holds a Zacks Mutual Fund Rank of 3 (Hold), which is based on various forecasting factors like size, cost, and past performance.
Objective
SWSCX is part of the Small Cap Growth category, and this segment boasts an array of many other possible options. Small Cap Growth mutual funds usually focus their portfolios on stocks with large growth opportunities and a market cap of under $2 billion. These portfolios tend to feature small companies in up-and-coming industries and markets.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWSCX. Schwab Small-Cap Equity made its debut in June of 2003, and since then, SWSCX has accumulated about $482.28 million in assets, per the most up-to-date date available. A team of investment professionals is the fund's current manager.
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 7.92%, and it sits in the middle third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 6.54%, 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 SWSCX over the past three years is 20.25% compared to the category average of 20.58%. The standard deviation of the fund over the past 5 years is 23.68% compared to the category average of 23.48%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
With a 5-year beta of 1.13, the fund is likely to be more volatile than the market average. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. Over the past 5 years, the fund has a negative alpha of -6.61. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
Holdings
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 largely on equities that are traded in the United States.
This fund is currently holding about 97.36% in stocks, and these companies have an average market capitalization of $3.02 billion. The fund has the heaviest exposure to the following market sectors:
- Finance
- Industrial Cyclical
- Other
- Technology
Turnover is about 43%, so those in charge of the fund make fewer trades than comparable funds.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, SWSCX is a no load fund. It has an expense ratio of 1.09% compared to the category average of 1.01%. So, SWSCX is actually more expensive than its peers from a cost perspective.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.
Bottom Line
Overall, even with its comparatively similar performance, average downside risk, and higher fees, Schwab Small-Cap Equity ( SWSCX ) has a neutral Zacks Mutual Fund rank, and therefore looks a somewhat average choice for investors right now.
For additional information on the Small Cap Growth 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 SWSCX too 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.