Any investors hoping to find a Allocation Balanced fund could think about starting with Schwab Balanced Fund (SWOBX). SWOBX bears a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.
Objective
The world of Zacks’ Allocation Balanced funds is an area filled with options, such as SWOBX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWOBX. The Schwab Balanced Fund made its debut in October of 1996 and SWOBX has managed to accumulate roughly $759.03 million in assets, as of the most recently available information. The fund is currently managed by Zifan Tang who has been in charge of the fund since February of 2012.
Performance
Obviously, what investors are looking for in these funds is strong performance relative to their peers. This fund carries a 5-year annualized total return of 5.68%, and is in the bottom third among its category peers. If you’re interested in shorter time frames, do not dismiss looking at the fund’s 3-year annualized total return of 12.43%, 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. SWOBX’s standard deviation over the past three years is 8.51% compared to the category average of 8.91%. The standard deviation of the fund over the past 5 years is 11.01% compared to the category average of 10.84%. This makes the fund more volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.68, so investors should note that it is hypothetically less 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. SWOBX has generated a negative alpha over the past five years of -4.19, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.