If you have been looking for Allocation Balanced funds, a place to start could be Schwab MarketTrack Growth Investor (SWHGX). SWHGX carries a Zacks Mutual Fund Rank of 1 (Strong Buy), which is based on various forecasting factors like size, cost, and past performance.

Objective

The world of Zacks' Allocation Balanced funds is an area filled with options, such as SWHGX. These funds like to invest in a variety of asset types, finding a balance between stocks, bonds, cash, and sometimes even precious metals and commodities; they are mostly categorized by their respective asset allocation. For investors, Allocation Balanced funds can provide an entry point into diversified mutual funds, and present core holding options for a portfolio of funds.

History of Fund/Manager

Schwab Funds is responsible for SWHGX, and the company is based out of San Francisco, CA. Schwab MarketTrack Growth Investor made its debut in November of 1995, and since then, SWHGX has accumulated about $1.13 billion in assets, per the most up-to-date date available. The fund's current manager, Zifan Tang, has been in charge of the fund since February of 2012.

Performance

Of course, investors look for strong performance in funds. This fund carries a 5-year annualized total return of 8.72%, and is in the top 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 15.6%, which places it in the top 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. SWHGX's standard deviation over the past three years is 9.57% compared to the category average of 8.85%. Looking at the past 5 years, the fund's standard deviation is 12.26% compared to the category average of 10.62%. This makes the fund more volatile than its peers over the past half-decade.

Risk Factors

Investors should note that the fund has a 5-year beta of 0.75, which means 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. The fund has produced a negative alpha over the past 5 years of -2.31, which shows that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

Costs 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, SWHGX is a no load fund. It has an expense ratio of 0.38% compared to the category average of 0.70%. So, SWHGX is actually cheaper than its peers from a cost perspective.

Investors need to be aware that with this product, the minimum initial investment is $0; each subsequent investment has no minimum amount.

Fees charged by investment advisors have not been taken into consideration. Returns would be less if those were included.

Bottom Line

Overall, Schwab MarketTrack Growth Investor ( SWHGX ) has a high Zacks Mutual Fund rank, and in conjunction with its comparatively strong performance, average downside risk, and lower fees, this fund looks like a good potential choice for investors right now.

Don't stop here for your research on Allocation Balanced funds. We also have plenty more on our site in order to help you find the best possible fund for your portfolio. Make sure to check out www.zacks.com/funds/mutual-funds for more information about the world of funds, and feel free to compare SWHGX to its peers as well for additional information. Zacks provides a full suite of tools to help you analyze your portfolio - both funds and stocks - in the most efficient way possible.

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This article originally published on Zacks Investment Research (zacks.com).

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