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Is Schwab International Core Equity (SICNX) a Strong Mutual Fund Pick Right Now?

Having trouble finding a Non US - Equity fund? Well, Schwab International Core Equity SICNX would not be a good potential starting point right now. SICNX bears a Zacks Mutual Fund Rank of 5 (Strong Sell), which is based on nine forecasting factors like size, cost, and past performance.

Objective

We classify SICNX in the Non US - Equity category, which is an area rife with potential choices. Investing in companies outside the United States is how Non US - Equity funds set themselves apart, since global funds tend to keep a good portion of their portfolio stateside. Many of these funds like to allocate across emerging and developed markets, and will often focus on all cap levels.

History of Fund/Manager

Schwab Funds is based in San Francisco, CA, and is the manager of SICNX. Schwab International Core Equity debuted in May of 2008. Since then, SICNX has accumulated assets of about $1.4 billion, according to the most recently available information. 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 8.85%, and is 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 8.47%, 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. SICNX's standard deviation over the past three years is 10.95% compared to the category average of 12.53%. The fund's standard deviation over the past 5 years is 10.97% compared to the category average of 11.95%. This makes the fund less volatile than its peers over the past half-decade.

Risk Factors

Investors cannot discount the risks to this segment though, as it is always important to remember the downside for any potential investment.

Investors should not forget about beta, an important way to measure a mutual fund's risk compared to the market as a whole. SICNX has a 5-year beta of 0.87, which means it is likely to be less volatile than the market average. 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. With a negative alpha of 2.85, 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, SICNX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.29%. Looking at the fund from a cost perspective, SICNX is actually cheaper than its peers.

This fund requires a minimum initial investment of $100, while there is no minimum for each subsequent investment.

Bottom Line

Overall, Schwab International Core Equity has a low Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, Schwab International Core Equity looks like a somewhat weak choice for investors right now.

Don't stop here for your research on Non US - Equity 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 SICNX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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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.

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