There are plenty of choices in the Small Cap Growth category, but where should you start your research? Well, one fund that might be worth investigating is Schwab Small-Cap Equity (SWSCX – Free Report). SWSCX possesses a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on nine forecasting factors like size, cost, and past performance.
Objective
SWSCX is one of many different Small Cap Growth funds to choose from. Small Cap Growth mutual funds build portfolios around stocks with markets caps under $2 billion and large growth opportunities. Additionally, these portfolios typically highlight smaller companies in promising markets and industries.
History of Fund/Manager
Schwab Funds is based in San Francisco, CA, and is the manager of SWSCX. Schwab Small-Cap Equity debuted in June of 2003. Since then, SWSCX has accumulated assets of about $626 million, according to the most recently available information. Jonas Svallin is the fund’s current manager and has held that role since August of 2012.
Performance
Of course, investors look for strong performance in funds. SWSCX has a 5-year annualized total return of 14.96% and it sits in the top 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 9.41%, 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. SWSCX’s standard deviation over the past three years is 14.33% compared to the category average of 13.97%. Over the past 5 years, the standard deviation of the fund is 14.12% compared to the category average of 13.82%. This makes the fund more 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. In SWSCX’s case, the fund lost 54.71% in the most recent bear market and underperformed comparable funds by 1.64%. This makes the fund a possibly worse choice than its peers during a sliding market environment.
