Markets

Is Schwab MarketTrack Allocation Equity Portfolio (SWEGX) a Strong Mutual Fund Pick Right Now?

An image of a few devices next to a stock chart
Credit: Shutterstock photo

Any investors hoping to find an Allocation Balanced fund could think about starting with Schwab MarketTrack Allocation Equity Portfolio (SWEGX). SWEGX carries a Zacks Mutual Fund Rank of 3 (Hold), which is based on nine forecasting factors like size, cost, and past performance.

Objective

SWEGX 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

SWEGX finds itself in the Schwab Funds family, based out of San Francisco, CA. Since Schwab MarketTrack Allocation Equity Portfolio made its debut in May of 1998, SWEGX has garnered more than $660 million in assets. The fund is currently managed by Zifan Tang who has been in charge of the fund since February of 2012.

Performance

Investors naturally seek funds with strong performance. This fund carries a 5-year annualized total return of 7.17%, and it sits in the top 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 12.33%, 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 11.39% compared to the category average of -36.4%. The standard deviation of the fund over the past 5 years is 11.49% compared to the category average of -0.17%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

It's always important to be aware of the downsides to any future investment, so one should not discount the risks that come with this segment. SWEGX lost 53.33% in the most recent bear market and outperformed its peer group by 3%. This makes the fund a possibly better choice than its peers during a sliding market environment.

Nevertheless, investors should also note that the fund has a 5-year beta of 0.99, which means it is hypothetically 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. With a negative alpha of -3.28, 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, SWEGX is a no load fund. It has an expense ratio of 0.39% compared to the category average of -53.33%. So, SWEGX is actually more expensive 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 MarketTrack Allocation Equity Portfolio ( SWEGX ) has a neutral Zacks Mutual Fund rank, strong performance, worse downside risk, and higher fees compared to its peers.

Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare SWEGX to its peers 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.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

Get Your Free (SWEGX): Fund Analysis Report

To read this article on Zacks.com click here.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

In This Story

SWEGX

Other Topics

Stocks

Latest Markets Videos

    Zacks

    Zacks is the leading investment research firm focusing on stock research, analysis and recommendations. In 1978, our founder discovered the power of earnings estimate revisions to enable profitable investment decisions. Today, that discovery is still the heart of the Zacks Rank. A wealth of resources for individual investors is available at www.zacks.com.

    Learn More