Schwab Mutual Funds Beat out ETFs
04/06/2011 0 comments
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Retirement investing is a "hair on fire" problem -- especially for baby boomers for whom retirement is a near and present danger. There is a real lack of consistent, unbiased information that a retiree can use to help improve risk adjusted returns. Blogger Jenny Hollingworth has been teaching herself about investing and has come to the point where she is going to choose a plan and make her first investments.
In her recent post New Steps she sorted through a list of alternatives and chose the Schwab OneSource Select List Funds.
The reason for her choice was:
- The highest possible rating for each plan is 5 stars. So I bypassed anything that didn’t have 5 (because really, why go for less?)
- Picked out a name I knew: Schwab. Specifically: Schwab OneSource Select List Funds. I selected it.
- This is an application to Charles Schwab's OneSource Select List mutual funds. These funds are No Load and No Transaction Fee (NTF) mutual funds. Based on Schwab's policy, the no load NTF funds have 90 days redemption fee period. As of 1/1/2010, there are total 140 OneSource Select List funds available from Schwab.
We are going to review the Schwab OneSource Select List Funds to see whether she chose a good plan. The plan consists of 137 funds. These funds enable participants to gain exposure to 6 major assets: US Equity, Commodity, Foreign Equity, REITs, Emerging Market Equity, Fixed Income.
Asset Class | Ticker | Name |
---|---|---|
LARGE VALUE | AAGPX | American Beacon Lg Cap Value Inv |
Foreign Large Value | AAIPX | American Beacon Intl Equity Inv |
Retirement Income | AANPX | American Beacon Retire Inc & Apprec Inv |
High Yield Muni | ABHYX | American Century High-Yield Muni Inv |
Inflation-Protected Bond | ACITX | American Century Infl-Adj Bond Inv |
Muni National Long | ACLVX | American Century Long-Term Tax-Free Inv |
MID-CAP VALUE | ACMVX | American Century Mid Cap Value Inv |
Conservative Allocation | AONIX | American Century One Choice: Vry Cnsrv I |
MID-CAP VALUE | ARDEX | Aston/River Road Dividend All Cap Val N |
Target Date 2011-2015 | ARFIX | American Century LIVESTRONG 2015 Inv |
Retirement Income | ARTOX | American Century LIVESTRONG Inc Inv |
Target Date 2021-2025 | ARWIX | American Century LIVESTRONG 2025 Inv |
Target Date 2031-2035 | ARYIX | American Century LIVESTRONG 2035 Inv |
SMALL VALUE | AVPAX | American Beacon Small Cp Val Inv |
EUROPE STOCK | AXEAX | Threadneedle European Equity A |
Muni National Interm | BMBSX | Baird Intermediate Muni Bd Inv |
Technology | BOGSX | Black Oak Emerging Technology |
Small Growth | BSCFX | Baron Small Cap |
Moderate Allocation | BUFBX | Buffalo Balanced |
Technology | BUFTX | Buffalo Science & Technology |
DIVERSIFIED EMERGING MKTS | CEMVX | Causeway Emerging Markets Investor |
MID-CAP BLEND | CHTTX | Aston/Optimum Mid Cap N |
Intermediate Government | CPTNX | American Century Government Bond Inv |
Small Growth | CSMVX | Century Small Cap Select Inv |
REAL ESTATE | CSRSX | Cohen & Steers Realty Shares |
Long-Short | CVSIX | Calamos Market Neutral Income A |
SMALL BLEND | DISSX | Dreyfus Small Cap Stock Index |
Bank Loan | EABLX | Eaton Vance Floating Rate Adv |
Conservative Allocation | EXDAX | Manning & Napier Pro-Blend Cnsrv Term S |
Foreign Large Blend | EXWAX | Manning & Napier World Opportunities A |
Moderate Allocation | FAGSX | First American Strat Growth Allc A |
Financial | FBRSX | FBR Small Cap Financial |
ULTRASHORT BOND | FEUGX | Federated Adjustable Rate Secs Instl |
Intermediate Government | FICMX | Federated Income Instl |
Muni National Interm | FIMTX | Federated Intermediate Municipal Instl |
LARGE BLEND | FMIHX | FMI Large Cap |
Long-Short | FMLSX | Wasatch-1st Source Long/Short |
SHORT GOVERNMENT | FSGVX | Federated US Govt 1-3 Yr Instl |
Muni Short | FSHIX | Federated Shrt-Interm Dur Muni Instl |
Short-Term Bond | FSTIX | Federated Short-Term Income Instl |
Intermediate-Term Bond | FTRFX | Federated Total Return Bond Instl Svc |
SMALL BLEND | GABSX | Gabelli Small Cap Growth AAA |
Communications | GABTX | GAMCO Global Telecommunications AAA |
LARGE GROWTH | HCAIX | Harbor Capital Appreciation Inv |
Foreign Large Blend | HIINX | Harbor International Inv |
WORLD STOCK | HLMGX | Harding Loevner Global Equity Advisor |
Foreign Large Growth | HLMNX | Harding Loevner International Equity Inv |
Equity Energy | ICENX | ICON Energy S |
China Region | ICHKX | Guinness Atkinson China & Hong Kong |
LARGE VALUE | INDZX | RiverSource Diversified Equity Inc A |
Moderate Allocation | JABAX | Janus Balanced T |
Health | JAGLX | Janus Global Life Sciences T |
LARGE GROWTH | JAMRX | Janus Research T |
Small Growth | JATTX | Janus Triton T |
Foreign Large Blend | JETAX | Artio International Equity II A |
Target Date 2021-2025 | JNSAX | JPMorgan SmartRetirement 2025 A |
LARGE BLEND | JRMSX | INTECH Risk-Managed Core T |
Target Date 2011-2015 | JSFAX | JPMorgan SmartRetirement 2015 A |
Target Date 2026-2030 | JSMAX | JPMorgan SmartRetirement 2030 A |
Target Date 2016-2020 | JTTAX | JPMorgan SmartRetirement 2020 A |
LARGE BLEND | JUEAX | JPMorgan US Equity A |
LARGE VALUE | JVLAX | JHancock3 Disciplined Value A |
Small Growth | KGSCX | Kalmar Growth-with-Value Small Cap |
LARGE GROWTH | LGILX | Laudus Growth Investors US Large Cap Gr |
WORLD BOND | LIFNX | Laudus Mondrian Intl Fixed Income |
Foreign Large Blend | LISOX | Lazard Intl Strategic Equity Open |
Multisector Bond | LSBRX | Loomis Sayles Bond Retail |
DIVERSIFIED PACIFIC/ASIA | MAPIX | Matthews Asia Pacific Equity Income |
PACIFIC/ASIA EX-JAPAN STK | MAPTX | Matthews Pacific Tiger Investor |
China Region | MCHFX | Matthews China Investor |
Muni National Interm | MITFX | Marshall Intermediate Tax-Free Inv |
JAPAN STOCK | MJFOX | Matthews Japan Investor |
Foreign Large Blend | MKIEX | McKee International Equity Instl |
DIVERSIFIED PACIFIC/ASIA | MPACX | Matthews Asia Pacific Investor |
High Yield Bond | MWHYX | Metropolitan West High Yield Bond M |
Short-Term Bond | MWLDX | Metropolitan West Low Duration Bond M |
Intermediate-Term Bond | MWTRX | Metropolitan West Total Return Bond M |
MID-CAP BLEND | NMMCX | Northern Multi-Manager Mid Cap |
SMALL VALUE | NOSGX | Northern Small Cap Value |
Muni National Long | NOTEX | Northern Tax-Exempt |
Small Growth | NSPAX | ING Small Cap Opportunities A |
Foreign Small/Mid Value | OAKEX | Oakmark International Small Cap I |
WORLD STOCK | OAKGX | Oakmark Global I |
COMMODITIES BROAD BASKET | PCRDX | PIMCO Commodity Real Ret Strat D |
Emerging Markets Bond | PEMDX | PIMCO Emerging Markets Bond D |
LARGE BLEND | PEOPX | Dreyfus S&P 500 Index |
WORLD BOND | PFODX | PIMCO Foreign Bond (USD-Hedged) D |
Intermediate-Term Bond | PGBOX | JPMorgan Core Bond A |
Multisector Bond | PONDX | PIMCO Income D |
LARGE BLEND | PRBLX | Parnassus Equity Income - Inv |
Inflation-Protected Bond | PRRDX | PIMCO Real Return D |
SMALL VALUE | PSOAX | JPMorgan Small Cap Value A |
Intermediate-Term Bond | PTTDX | PIMCO Total Return D |
SMALL BLEND | RYTFX | Royce Total Return Svc |
Intermediate-Term Bond | SAMIX | RidgeWorth Intermediate Bond I |
Foreign Large Blend | SICNX | Schwab International Core Equity Inst |
Foreign Large Blend | SIEIX | RidgeWorth Intl Equity Index I |
ULTRASHORT BOND | SIGVX | RidgeWorth US Gov Sec Ultra-Short Bd I |
Target Date 2031-2035 | SRJAX | JPMorgan SmartRetirement 2035 A |
DIVERSIFIED EMERGING MKTS | SSEMX | SSgA Emerging Markets Instl |
High Yield Bond | STHTX | RidgeWorth High Income I |
Muni National Interm | STTBX | RidgeWorth Investment Grade T/E Bond I |
LARGE BLEND | SWANX | Schwab Core Equity Inv |
Global Real Estate | SWASX | Schwab Global Real Estate Select |
Target Date 2026-2030 | SWDRX | Schwab Target 2030 |
LARGE VALUE | SWDSX | Schwab Dividend Equity |
Financial | SWFFX | Schwab Financial Services |
Target Date 2011-2015 | SWGRX | Schwab Target 2015 |
Intermediate Government | SWGSX | Schwab GNMA |
Long-Short | SWHEX | Schwab Hedged Equity |
Health | SWHFX | Schwab Health Care |
Target Date 2021-2025 | SWHRX | Schwab Target 2025 |
Intermediate-Term Bond | SWIIX | Schwab Premier Income Instl |
Foreign Large Blend | SWISX | Schwab International Index |
Retirement Income | SWKRX | Schwab Monthly Income Enh Payout |
Retirement Income | SWLRX | Schwab Monthly Income Max Payout |
LARGE GROWTH | SWLSX | Schwab Large-Cap Growth |
Foreign Large Growth | SWMIX | Laudus International MarketMasters Sel |
Small Growth | SWMSX | Laudus Small-Cap MarketMasters Select |
Muni National Interm | SWNTX | Schwab Tax-Free Bond |
Moderate Allocation | SWOBX | Schwab Balanced Inv |
LARGE BLEND | SWPPX | Schwab S&P 500 Index |
SMALL BLEND | SWSSX | Schwab Small Cap Index |
LARGE GROWTH | TGCNX | TCW Select Equities N |
Mid-Cap Growth | TGDNX | TCW Growth Equities N |
EQUITY PRECIOUS METALS | TGLDX | Tocqueville Gold |
LARGE BLEND | TICRX | TIAA-CREF Social Choice Eq Retail |
LARGE GROWTH | TIRTX | TIAA-CREF Large-Cap Growth Retail |
LARGE GROWTH | TWCGX | American Century Growth Inv |
Muni National Interm | TWTIX | American Century Interm-T Tx-Fr Bd Inv |
SHORT GOVERNMENT | TWUSX | American Century Short-Term Govt Inv |
LARGE VALUE | TWVLX | American Century Value Inv |
Foreign Large Value | TWWDX | Thomas White International |
Foreign Large Growth | UMBWX | Scout International |
SMALL VALUE | VSFAX | Federated Clover Small Value A |
Mid-Cap Growth | WTMGX | Westcore MIDCO Growth |
LARGE VALUE | YAFFX | Yacktman Focused |
Asset Class | Number of funds |
---|---|
Balanced Fund | 21 |
REITs | 2 |
Fixed Income | 34 |
Commodity | 1 |
Sector Fund | 9 |
Foreign Equity | 18 |
Emerging Market Equity | 7 |
US Equity | 41 |
Other | 4 |
Total | 137 |
As of Apr 5, 2011, this plan investment choice is rated as above average based on MyPlanIQ Plan Rating methodology that was designed to measure how effective a plan's available investment funds are . It has the following detailed ratings:
Diversification -- Rated as great (98%)
Fund Quality -- Rated as average (54%)
Portfolio Building -- Rated as great (86%)
Overall Rating: above average (80%)
Portfolio Discussions
The chart and table below show the historical performance of moderate model portfolios employing strategic and tactical asset allocation strategies. For comparison purpose, we also include the moderate model portfolios of a typical 6 asset SIB (Simpler Is Better) plan . This SIB plan has the following candidate index funds and their ETFs equivalent:
US Equity: SPY or VTI
Commodity: DBC
Foreign Equity: EFA or VEU
REITs: IYR or VNQ or ICF
Emerging Market Equity: EEM or VWO
Fixed Income: AGG or BND
Performance chart (as of Apr 5, 2011)
Performance table (as of Apr 5, 2011)
Portfolio Name | 1Yr AR | 1Yr Sharpe | 3Yr AR | 3Yr Sharpe | 5Yr AR | 5Yr Sharpe |
---|---|---|---|---|---|---|
Schwab OneSource Select List Funds Tactical Asset Allocation Moderate | 13% | 106% | 10% | 91% | 13% | 110% |
Schwab OneSource Select List Funds Strategic Asset Allocation Moderate | 12% | 152% | 4% | 32% | 7% | 52% |
Six Core Asset ETF Benchmark Tactical Asset Allocation Moderate | 10% | 81% | 9% | 82% | 13% | 89% |
Six Core Asset ETF Benchmark Strategic Asset Allocation Moderate | 14% | 121% | 4% | 20% | 7% | 34% |
With six asset classes and a wide number of funds, the returns beat the six asset class benchmark. With high scores in all categories, this plan delivers portfolios that have produced strong historical returns.
Symbols: SPY, VTI, EFA, VEU, EEM, VWO, IYR, VNQ, ICF, AGG, BND, DBC, HYG, JNK, PHB, AOM, AOK, CIU, BIV, ITM, MUB, TFI, PZA, MLN, IYH, IXJ, VHT, XBI, PBE, DBR, RYH, EFG, IXP, PTE, DGG, LTL, MTK, PTF, DBT, RYT, ROM, GWL, PFA, IVE, IWW, JKF, VTV, ELV, PWV, RPV, SCHV, SCZ, EFV, PID, DWM, IYF, VFH, IPF, PFI, DRF, RYF, IFGL, RWX, TZE, TZG, TZI, TZO, TZL, IGOV, BWX, WIP, IVV, IYY, IWV, VV, DLN, RSP, SCHX, IOO, VT, SHY, SHV, VGSH, PLK, USY, IEV, VGK, PEF, DEB, IVW, IWZ, JKE, VUG, ELG, QQQQ, RPG, SCHG, IJJ, IWS, JKI, VOE, EMV, PWP, RFV, UVU, IJH, IWR, JKG, VO, MDY, EMM, PJG, DON, EZM, MVV, IJS, IWN, JKL, VBR, DSV, PWY, RZV, UVT, IJR, IWM, JKJ, VB, DSC, PJM, DES, SAA, UWM, SCHA, GMM, PXH, DEM, SCHE, GBF, LAG, PCY, CSJ, BSV, VCSH, ITE, IXC, IPW, DBE, RYE, DKA, IEI, VGIT, IJK, IWP, VOT, EMG, PWJ, RFG, UKW, IJT, IWO, JKK, VBK, DSG, PWT, RZG, UKK, TIP, DBP, EPP, VPL, GMF, PAF, AAXJ, DND, EWJ, JPP, PJO, DXJ, GSG, BIL
Disclosure:
MyPlanIQ does not have any business relationship with the company or companies mentioned in this article. It does not set up their retirement plans. The performance data of portfolios mentioned above are obtained through historical simulation and are hypothetical.
Originally from the UK, Jenny Hollingworth lives with her husband and two sons in Northern California. She is a wife, mother, writer, theatre director, coffee drinker, avid reader, keen walker, movie watcher, Jane Austen lover and observer of life, in no particular order. MyPlanIQ has no formal relationship with Jenny Hollingworth.
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