Is Schwab Health Care Fund (SWHFX) a Strong Mutual Fund Pick Right Now?
Any investors hoping to find a Mutual Fund Equity Report fund could think about starting with Schwab Health Care Fund (SWHFX). SWHFX carries a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWHFX. The Schwab Health Care Fund made its debut in June of 2000 and SWHFX has managed to accumulate roughly $829.03 million in assets, as of the most recently available information. The fund's current manager, Wei Li, has been in charge of the fund since June of 2013.
Performance
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 8.64%, and is in the middle 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 10.98%, 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. The standard deviation of SWHFX over the past three years is 16.6% compared to the category average of 19.21%. Over the past 5 years, the standard deviation of the fund is 15.65% compared to the category average of 18.8%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.69, so investors should note that it is hypothetically less volatile than the market at large. 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 positive alpha of 1.4. This means that managers in this portfolio are skilled in picking securities that generate better-than-benchmark returns.
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, SWHFX is a no load fund. It has an expense ratio of 0.80% compared to the category average of 1.29%. So, SWHFX is actually cheaper than its peers from a cost perspective.
Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.
Bottom Line
Overall, Schwab Health Care Fund ( SWHFX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.
Your research on the Mutual Fund Equity Report 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. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.
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