If investors are looking at the Sector – Health fund category, make sure to pass over Schwab Health Care Fund (SWHFX). SWHFX holds a Zacks Mutual Fund Rank of 4 (Sell), which is based on various forecasting factors like size, cost, and past performance.
Objective
Zacks categorizes SWHFX as Sector – Health, a segment packed with options. Sector – Health mutual funds offer investors a focus on the healthcare industry, one of the largest sectors in the American economy. These funds can include everything from pharmaceutical companies to medical device manufacturers and for-profit hospitals.
History of Fund/Manager
SWHFX is a part of the Schwab Funds family of funds, a company based out of San Francisco, CA. The Schwab Health Care Fund made its debut in June of 2000 and SWHFX has managed to accumulate roughly $635.94 million in assets, as of the most recently available information. Wei Li is the fund’s current manager and has held that role since June of 2013.
Performance
Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 5.54%, 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 5.68%, 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. The standard deviation of SWHFX over the past three years is 13.67% compared to the category average of 15.6%. The fund’s standard deviation over the past 5 years is 14.84% compared to the category average of 16.63%. This makes the fund less volatile than its peers over the past half-decade.
Risk Factors
The fund has a 5-year beta of 0.65, so investors should note that it is hypothetically less volatile than the market at large. Alpha is an additional metric to take into consideration, since it represents a portfolio’s performance on a risk-adjusted basis relative to a benchmark, which in this case, is the S&P 500. SWHFX has generated a negative alpha over the past five years of -2.83, demonstrating that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.