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

Allocation Balanced fund seekers should consider taking a look at Schwab Balanced Fund (SWOBX). SWOBX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.ObjectiveSWOBX is one of many Zacks' Allocation Balanced mutual funds to pick from. Allocation Balanced funds seek to invest in a balance of asset types, like stocks, bonds, and cash, though including precious metals or commodities is not unusual; these funds are mostly categorized by their respective asset allocation. Investors utilize Allocation Balanced funds as a way to get a good start with diversified mutual funds, as well as for core holdings in a portfolio of funds.History of Fund/ManagerSWOBX is a part of the Schwab Funds family of funds, a company based out of San Francisco, CA. Since Schwab Balanced Fund made its debut in October of 1996, SWOBX has garnered more than $708.27 million in assets. The fund is currently managed by a team of investment professionals.PerformanceObviously, what investors are looking for in these funds is strong performance relative to their peers. This fund in particular has delivered a 5-year annualized total return of 8.12%, and is in the middle third among its category peers. But if you are looking for a shorter time frame, it is also worth looking at its 3-year annualized total return of 5.16%, 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 12.57% compared to the category average of 12.1%. Over the past 5 years, the standard deviation of the fund is 12.64% compared to the category average of 12.98%. This makes the fund less volatile than its peers over the past half-decade.Risk FactorsInvestors should note that the fund has a 5-year beta of 0.69, 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. SWOBX has generated a negative alpha over the past five years of -3.96, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.ExpensesCosts are increasingly important for mutual fund investing, and particularly as competition heats up in this market. And all things being equal, a lower cost product will outperform its otherwise identical counterpart, so taking a closer look at these metrics is key for investors. In terms of fees, SWOBX is a no load fund. It has an expense ratio of 0.02% compared to the category average of 0.80%. Looking at the fund from a cost perspective, SWOBX 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.Fees charged by investment advisors have not been taken into considiration. Returns would be less if those were included.Bottom LineOverall, 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.Your research on the Allocation Balanced segment doesn't have to stop here. You can check out all the great mutual fund tools we have to offer by going to www.zacks.com/funds/mutual-funds to see the additional features we offer as well 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.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Get Your Free (SWOBX): Fund Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks