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3 Top-Performing Active-Equity Funds From Schwab In 2020

3 Top-Performing Active-Equity Funds From Schwab In 2020

As you probably already know, 2020 has been somewhat of a roller coaster ride for many stocks and funds. This volatile environment hasn’t prevented Schwab’s list of actively-managed stock funds from finding daylight, though.

Here are three funds in particular that have done well during the virus outbreak.

Schwab Health Care Fund™ (SWHFX)

COVID-19 has given a boost to the health care sector in 2020, and Schwab’s actively-managed health care fund is no exception to the rule. SWHFX is up 7.2% so far this year. This return is more than 2% higher than the S&P 500 Health Care index over the same period.

Like other securities in 2020, SWHFX  had a rough journey in March, bottoming out on March 23 at more than 25% in the red for the year. But it bounced back quickly as panic subsided and investors realized that health care stocks might actually benefit from the outbreak.

Schwab’s health care fund invests in a wide variety of companies connected to health care—from hospitals to biotech firms to pharmaceutical manufacturers. So SWHFX delivers exposure to a wide swath of the health care sector.

Stocks in the fund include:

  • Johnson & Johnson (NYSE: JNJ)
  • Merck & Co (NYSE: MRK)
  • Pfizer (NYSE: PFE)
  • UnitedHealth Group (NYSE: UNH)
  • Amgen (NASDAQ: AMGN)
  • Medtronic (NYSE: MDT)
  • Gilead Sciences (NASDAQ: GILD)

Roughly 20% of the holdings trade on foreign exchanges, which is above average for the category. Switzerland is the largest country represented after the United States.

Although Schwab’s fund is actively managed, it has an expense ratio of just 80 basis points, a low number for an active fund.

SWHFX comes with no load and has no transaction fee when purchased at Schwab. It has 3 stars from Morningstar.

Schwab Large-Cap Growth Fund™ (SWLSX)

Although Schwab’s health care fund has done well during the virus pandemic, the company’s large-cap growth fund is on a completely different level. SWLSX has delivered a very impressive 21.9% increase so far this year. That’s light years ahead of the S&P 500, which is around 6% YTD.

And just how exactly has Schwab’s large-cap growth fund managed to deliver such an impressive performance? By investing in large U.S.-based companies, such as:

SWLSX manages its portfolio for 99 basis points per year. While this is a little steep, the fund’s performance does seem to justify the cost. This is also true on a long-term basis. The fund has a 10-year annualized return of 15.9%, very impressive by any standard. The S&P 500, for example, has returned 14.9% over the same period.

Morningstar gives Schwab’s fund 3 stars out of 5 for its overall performance; while Lipper grades the fund a 5 out of 5 across all time frames.

Schwab Core Equity Fund™ (NYSE: SWANX)

Rounding out our list of the 3 best-performing assets on Schwab’s list of actively-managed mutual funds is SWANX. The core equity fund attempts to beat the S&P 500 index with active management. The fund team consists of three managers with an average tenure of 7 years.

And how have they done? Their fund has a 10-year annualized return of 13.4%. In 2019, SWANX delivered a very impressive 29.5%. So far in 2020, the fund has returned 5.5%, a decent performance given the difficult circumstances.

Schwab’s core equity fund invests at least 80% of its assets in U.S. companies that are expected to grow over time. Thus, the fund focuses on long-term capital appreciation instead of dividends.

Nevertheless, some holdings do pay dividends. Top stocks in the portfolio include:

  • Microsoft
  • Intel (NYSE: INTC)
  • Facebook
  • JPMorgan Chase & Co (NYSE: JPM)
  • Allstate (NYSE: ALL)

SWANX has itself paid out at least one dividend every year for the past 24 years.

In return for its long performance, SWANX has received 3 stars from both Morningstar and Lipper. Although these aren’t the best ratings, the core equity fund only charges 73 basis points per year for its management.

As with Schwab’s other funds, there is no minimum investment amount; so it’s possible to start with just $1 to get into the fund. You can also check out if Schwab provides any new account promotional offers


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Posted-In: Health Care ETFs General