Charles Schwab Corp.'s
Schwab fund family is one of the largest and most influential mutual fund companies in the U.S.
That's why at TheStreet.com Ratings, we took a look at the performances of the top-rated funds among the largest fund families. Today, we focus on the cream of the Schwab Funds' crop.
First on our list is the
Schwab International Index (SWINX): As the fund's name implies, it tracks the Schwab International Index, which is a broad-based index consisting of 380 stocks concentrated predominantly in bank stocks (23%), oil & gas (9%), telecommunications (8%), insurance (7%), pharmaceuticals (7%) and electric (5%).
In terms of geographical distribution, the fund is focused in the U.K. with 21% of its holdings, followed by Japan (18%), France (11%), and Germany and Switzerland at approximately an 8% allocation each.
The fund invests in major international companies and brands including
Toyota Motor Corp.
With a low expense ratio of 0.69% and a minimum initial investment of $2,500, Schwab International Index gives investors a great way to play large-capitalized international stocks at a time when a slowing U.S. economy should have investors looking overseas for better performance.
Laudus International MarketMasters (SWOIX): This fund offers another vehicle into international markets and differs from Schwab International Index in that it has a multi-cap focus, contains 570 holdings and is not classified as an index fund despite having a larger number of holdings.
It has similar sector and geographic allocations to the Schwab International Index fund and has the highest year-to-date return in our list. However a negative is the much higher expense ratio of 1.57%. This suggests that Laudus may be more actively managed, in which case a higher fee is to be expected. Investors are paying for the extra return from this fund which seems justified given its performance figures.
Both the Laudus and the Schwab International Index funds are diversified in terms of geography, sector and a large number of holdings that make them suitable for risk-averse investors. Please note, however, that international investing carries its own risks.
Schwab Health Care Focus (SWHFX):
We first wrote about the Schwab Health Care Fund back in September of 2006, and this fund continues to perform despite the naysayers and their political concerns in regards to the Democratic control of Congress and the potential adverse consequences for the pharmaceutical industry, in which this fund allocates 43% of its assets. Other sector allocations for the fund include health care products (18%), health care services (12%), electronics (8%), biotechnology (6%) and commercial services (5%).
In terms of performance, this fund compares very well over all time periods displayed in the table, especially its one-month performance, which leads its peers. The fund has a low expense ratio of 0.84%.
The fund invests 100% of assets in U.S. companies that have a significant international presence, such as
Johnson & Johnson
. This strategy is a similar theme to the Dow's on-going success, as large multinationals benefit from higher growth rates overseas, as well as any devaluation of the dollar.
Schwab Core Equity (SWANX): An alternative U.S. domestic play is the Core Equity fund, which differs in its sector allocations from Schwab Health Care, but still carries some big multinational companies in its top 10 holdings.
This fund allocates to the following sectors: computers (12%), insurance (11%), aerospace/defense (10%), pharmaceuticals (9%) and oil & gas (5%). The top 10 holdings is a "who's who" of U.S. multinational companies, including
J.P. Morgan Chase
The performance of this fund is very competitive over all time periods shown and is a good way to play the U.S. market -- i.e., stick to large-cap multinational names. The fund has a low expense ratio of 0.75%.
Sam Patel, CFA, is the manager of mutual fund research for the TheStreet.com Ratings.
In keeping with TSC's Investment Policy, employees of TheStreet.com Ratings with access to pre-publication ratings data must pre-clear any potential trade through the legal department, and are prohibited from trading any security that is the subject of an unpublished rating revision until the second business day after the rating is published.
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