Schwab S&P 500 Index Fund Select Shares (SWPIX) achieve a 8 Fund Authority Score The Skilled

Post on: 18 Июнь, 2015 No Comment

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Fund Authority Scores rate mutual funds and exchange traded funds (ETFs) on the most important economic factors that influence individual investors net long term diversified investment fund performance. The Skilled Investor developed the Fund Authority Score system to provide individual investors with concise, objective, and realistic summaries of mutual funds and ETFs for comparisons within investment asset classes.

The diversified mutual fund investment strategy of this Schwab S&P 500 Index mutual Fund

At approximately $3.9 billion in assets, the Schwab S&P 500 Index Fund (SWPIX) is a low cost, medium sized, passively managed diversified index mutual fund. This mutual funds investment portfolio consists of large capitalization U.S. stock securities, and the objective of this index mutual fund is to match closely the investment results of the Standard & Poor’s 500 Index.

Schwab S&P 500 Index Fund Select Shares (SWPIX) can be purchased directly by an individual investor from Charles Schwab & Co, Inc. with only $100 as an opening balance.

The Skilled Investors analysis of this passively managed S&P 500 index mutual fund

The Schwab S&P 500 Index Fund Select Shares (SWPIX) have tended to match relatively closely the returns of the Standard and Poors 500 Index, and have done so, in part, because of this funds relatively low management expense ratio. For the most recent three-year Morningstars and Lippers relative performance ratings, this funds performance has been average for actively managed and passively managed mutual funds benchmarked against the S&P500 index.

This Schwab mutual fund has achieved a +8 Fund Authority Score rating, because of its low cost structure and its reasonably faithful tracking of the S & P 500 index. For an individual investor interested in such an index fund, Schwab S&P 500 Index Fund Select Shares (SWPIX) are certainly one of the better index mutual fund choices in the marketplace given the unreasonably high fees of so many other mutual fund promoter companies. The problem that some investors might have is that they would like to pay less than .36% annually in management fees for a commodity S & P 500 index fund. There are some solutions to this problem.

If an investor has a reason to stay within the Schwab family of mutual funds, then he or she might choose a sister fund, which is named the Schwab S&P 500 Index Fund Select Shares (SWPPX). Notice that the only difference in the naming is that the fourth letter of the ticker symbol in parentheses has changed from an I to a P. However, this change does have its financial implications.

The good news is that the annual percentage expense ratio moves down from .36% per year to .19% per year. The bad news is that the Schwab SWPPX fund requires a $50000 minimum commitment. In other respects, the Schwab SWPIX and Schwab SWPPX index mutual funds are very similar. The other good news is that the Schwab SWPPX fund received the highest +10 Fund Authority Score due to its lower management expense ratio which added another point to the score. Lower fees also probably impacted positively the total of the Morningstar and Lipper 3-year performance ratings, which helped to add another point.

Note also that the Schwab SWPPX equity index fund was listed as one of the top 25 lowest cost S and P 500 index mutual funds in a research study. See this article on The Skilled Investor website, which describes this study: Low Cost S&P 500 Index Mutual Funds .

Another alternative that an individual investor has is to choose a similar index mutual fund that has both a lower annual management expense ratio and a lower minimum assets requirement. Check the directory of the Fund Authority Score reports of other mutual funds and ETFs for such alternative choices.