Looking for an Allocation Balanced fund? You may want to consider Schwab MarketTrack Allocation Equity Portfolio SWEGX as a possible option. SWEGX bears a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.
SWEGX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWEGX. Schwab MarketTrack Allocation Equity Portfolio debuted in May of 1998. Since then, SWEGX has accumulated assets of about $693 million, according to the most recently available information. The fund's current manager, Zifan Tang, has been in charge of the fund since February of 2012.
Of course, investors look for strong performance in funds. This fund in particular has delivered a 5-year annualized total return of 7.32%, and is in the top third among its category peers. If you're interested in shorter time frames, do not dismiss looking at the fund's 3-year annualized total return of 9.81%, 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. SWEGX's standard deviation over the past three years is 11.98% compared to the category average of 7.36%. The standard deviation of the fund over the past 5 years is 12.05% compared to the category average of 7.65%. This makes the fund more volatile than its peers over the past half-decade.
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, SWEGX lost 53.34% and underperformed comparable funds by 17%. This might suggest that the fund is a worse choice than its peers during a bear market.
Even still, the fund has a 5-year beta of 0.98, so investors should note that it is hypothetically as volatile as 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 negative alpha of -3.39. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWEGX is a no load fund. It has an expense ratio of 0.52% compared to the category average of 0.89%. So, SWEGX 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.
Overall, Schwab MarketTrack Allocation Equity Portfolio ( SWEGX ) has a neutral Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab MarketTrack Allocation Equity Portfolio ( SWEGX ) looks like a somewhat average choice for investors right now.
Want even more information about SWEGX? Then go over to Zacks.com and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis for additional information. And don't forget, Zacks has all of your needs covered on the equity side too! Make sure to check out Zacks.com for more information on our screening capabilities, Rank, and all our articles as well.
(NOTE: We are re-issuing this article to correct an inaccuracy. The original article, published Thursday, August 29, 2019, should no longer be relied upon.)
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