In This Article:
Are you on the hunt for an Index fund? You should think about starting with Schwab Total Stock Market Index (SWTSX). 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
SWTSX finds itself in the Schwab Funds family, based out of San Francisco, CA. Schwab Total Stock Market Index made its debut in June of 1999, and since then, SWTSX has accumulated about $25.80 billion in assets, per the most up-to-date date available. The fund's current manager is a team of investment professionals.
Performance
Of course, investors look for strong performance in funds. This fund has delivered a 5-year annualized total return of 18.06%, 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 8.1%, which places it in the middle 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. Compared to the category average of 16.81%, the standard deviation of SWTSX over the past three years is 17.72%. The fund's standard deviation over the past 5 years is 17.48% compared to the category average of 18.3%. 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 1.03, so it is likely going to be as volatile as 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 -0.76. This means that managers in this portfolio find it difficult to pick 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, SWTSX is a no load fund. It has an expense ratio of 0.03% compared to the category average of 0.73%. Looking at the fund from a cost perspective, SWTSX is actually cheaper than its peers.