Is Schwab MarketTrack Growth Investor (SWHGX) a Strong Mutual Fund Pick Right Now?
If investors are looking at the Allocation Balanced fund category, Schwab MarketTrack Growth Investor (SWHGX) could be a potential option. SWHGX has a Zacks Mutual Fund Rank of 2 (Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
SWHGX is classified in the Allocation Balanced segment by Zacks, which is an area full of possibilities. Here, investors are able to get a good head start with diversified mutual funds, and play around with core holding options for a portfolio of funds. Allocation Balanced funds look to invest across 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.
History of Fund/Manager
Schwab Funds is responsible for SWHGX, and the company is based out of San Francisco, CA. Schwab MarketTrack Growth Investor debuted in November of 1995. Since then, SWHGX has accumulated assets of about $748 million, according to the most recently available information. Zifan Tang is the fund's current manager and has held that role since February of 2012.
Performance
Investors naturally seek funds with strong performance. SWHGX has a 5-year annualized total return of 11.92% and is 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 11.46%, which places it in the middle 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. SWHGX's standard deviation over the past three years is 16% compared to the category average of 15.99%. The fund's standard deviation over the past 5 years is 12.81% compared to the category average of 12.92%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
Investors should note that the fund has a 5-year beta of 0.83, which means it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio's performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. Over the past 5 years, the fund has a negative alpha of -2.22. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWHGX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 0.89%. Looking at the fund from a cost perspective, SWHGX is actually cheaper than its peers.
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 MarketTrack Growth Investor ( SWHGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, Schwab MarketTrack Growth Investor ( SWHGX ) looks like a good potential choice for investors right now.
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