Are you on the hunt for an Index fund? You should think about starting with Schwab Small-Cap Index (SWSSX). The fund does not have a Zacks Mutual Fund Rank, though we have been able to explore other metrics like performance, volatility, and cost.
History of Fund/Manager
Schwab Funds is responsible for SWSSX, and the company is based out of San Francisco, CA. Schwab Small-Cap Index debuted in May of 1997. Since then, SWSSX has accumulated assets of about $3.99 billion, according to the most recently available information. The fund is currently managed by a team of investment professionals.
Investors naturally seek funds with strong performance. This fund has delivered a 5-year annualized total return of 16.42%, and it sits in the top third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 14.85%, 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. Over the past three years, SWSSX’s standard deviation comes in at 25.76%, compared to the category average of 25.89%. Looking at the past 5 years, the fund’s standard deviation is 21.05% compared to the category average of 21.42%. This makes the fund less volatile than its peers over the past half-decade.
Investors should note that the fund has a 5-year beta of 1.25, which means it is hypothetically more volatile than the market at large. 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 -2.59, managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.
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, SWSSX is a no load fund. It has an expense ratio of 0.04% compared to the category average of 0.80%. From a cost perspective, SWSSX is actually cheaper than its peers.
While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.
For additional information on the Index area of the mutual fund world, make sure to check out www.zacks.com/funds/mutual-funds. There, you can see more about the ranking process, and dive even deeper into SWSSX too 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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