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

If you've been stuck searching for Non US - Equity funds, you might want to consider passing on by Schwab International Core Equity (SICNX) as a possibility. SICNX has a Zacks Mutual Fund Rank of 4 (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. Since Schwab International Core Equity made its debut in May of 2008, SICNX has garnered more than $1.46 billion in assets. The fund's current manager is a team of investment professionals.

Performance

Obviously, what investors are looking for in these funds is strong performance relative to their peers. SICNX has a 5-year annualized total return of 2.1% and it sits 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 2.8%, which places it in the bottom 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. The standard deviation of SICNX over the past three years is 10.99% compared to the category average of 12.62%. The fund's standard deviation over the past 5 years is 11.19% compared to the category average of 12.65%. This makes the fund less 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.

Investors should note that the fund has a 5-year beta of 0.87, so it is likely going to be less volatile than the market at large. Another factor to consider is alpha, as it reflects a portfolio's performance on a risk-adjusted basis relative to a benchmark-in this case, the S&P 500. The fund has produced a negative alpha over the past 5 years of -6.79, which shows 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, SICNX is a no load fund. It has an expense ratio of 0.86% compared to the category average of 1.25%. SICNX is actually cheaper than its peers when you consider factors like cost.

Investors should also note that the minimum initial investment for the product is $100 and that each subsequent investment has no minimum amount.

Bottom Line

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

For additional information on this product, or to compare it to other mutual funds in the Non US - Equity, make sure to go to www.zacks.com/funds/mutual-funds 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.

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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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