Example Mutual Fund Project

Example Mutual Fund Project - Mutual Fund Analysis Schwab...

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Unformatted text preview: Mutual Fund Analysis Schwab Total Stock Market Index SWTSX Finance 305 Investment Objectives (SWTSX) • Fund Category: Large Blend (Large Cap No Load) • Fund Manager: Agnes Hong, has managed fund for past 2 and a quarter years (Since 02/28/2012) • Minimum Investment: $100 o No different for minimum investment for IRAs • Top 5 holdings: 9.18% of total assets o Apple Inc (2.16%) o S&P500 Emini Fut Mar2014 Xcme 20140321 (2.14%) o Exxon Mobil Corporation (1.93%) o Google Inc Class A (1.59%) o Microsoft Corporation (1.38%) • Sector Allocation (% stocks): o Cyclical-­‐ 33.24% ! Basic Materials-­‐ 3.66 ! Consumer Cyclical-­‐ 11.61 ! Financial Services-­‐ 14.62 ! Real Estate-­‐ 3.35 o Sensitive-­‐ 42.04% ! Communication Services-­‐ 3.58 ! Energy-­‐ 9.19 ! Industrials-­‐ 12.42 ! Technology-­‐ 16.85 o Defensive-­‐ 24.72% ! Consumer Defensive-­‐ 8.89 ! Healthcare-­‐ 12.81 ! Utilities-­‐ 3.02 Fees and Expenses (SWTSX) • This fund is a no load fund • Management Fee: 0.06% • Expense Ratio: 0.09% • There is no 12b-­‐1 fee for this fund • The Turnover Ratio is .02 or 2% (2% of the fund is bought and sold annually) Performance • Current NAV (as of 06/09/2014) = $35.73 • NAV 52 week high and low: $28.59-­‐$35.73 • Total Return Year-­‐to-­‐Date: 6.12% • Yearly Returns: o 1 Year return: 21.60% o 3 Year return: 17.21% o 5 Year return: 18.58% o 10 Year Average: 8.47% • Performance Against Benchmark (S&P 500 TR USD): -­‐0.49 o SWTSX YTD-­‐ 6.03 o S&P 500 TR USD-­‐ 6.52 • Morningstar Rating: 4 stars, Silver • Sharpe Ratio: 1.14 After carefully analyzing the Schwab Total Stock Market Index Fund (SWTSX) and studying the information presented above I believe I would invest in this mutual fund. This fund is an open, no load fund with a low expense ratio and an extremely low turnover ratio. The low expense ratio and turnover ratio are particularly beneficial to me because lower expenses result in more money I can reinvest into the fund. The low turnover ratio is also appealing to investors because less turnover results in less taxes, and therefore more income available for reinvestment. Another positive is that this specific fund has no 12b-­‐1 fee. However, one minor area of concern would be the fund manager. Agnes Hong has managed the fund for the past 2 years, give or take 3 months. While I would like to see a fund with a manager in place for closer to five years, but with that said, it would not deter me from investing in this fund. In particular, this fund appeals to me because the initial required investment is very low, only one hundred dollars. Given my current financial position and my dedication to being a full time student, I would invest in the Schwab Total Stock Market Index Fund. ...
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