Is Schwab Balanced Fund (SWOBX) a Strong Mutual Fund Pick Right Now?

·3-min read

If investors are looking at the Mutual Fund Equity Report fund category, Schwab Balanced Fund (SWOBX) could be a potential option. SWOBX holds a Zacks Mutual Fund Rank of 2 (Buy), which is based on various forecasting factors like size, cost, and past performance.

History of Fund/Manager

Schwab Funds is based in San Francisco, CA, and is the manager of SWOBX. Schwab Balanced Fund debuted in October of 1996. Since then, SWOBX has accumulated assets of about $619.50 million, according to the most recently available information. Zifan Tang is the fund's current manager and has held that role since February of 2012.


Investors naturally seek funds with strong performance. SWOBX has a 5-year annualized total return of 4.72% 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 4.6%, which places it in the middle 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. SWOBX's standard deviation over the past three years is 14.64% compared to the category average of 14.71%. The standard deviation of the fund over the past 5 years is 12.8% compared to the category average of 12.68%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.67, so it is likely going to be 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. The fund has produced a negative alpha over the past 5 years of -2.41, which shows that 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, SWOBX is a no load fund. It has an expense ratio of 0.50% compared to the category average of 0.86%. So, SWOBX is actually cheaper than its peers from a cost perspective.

While the minimum initial investment for the product is $0, investors should also note that there is no minimum for each subsequent investment.

Bottom Line

Overall, Schwab Balanced Fund ( SWOBX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively similar performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Want even more information about SWOBX? Then go over to and check out our mutual fund comparison tool, and all of the other great features that we have to help you with your mutual fund analysis 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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