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)

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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