Is Schwab Fundamental International Small Company Index (SFILX) a Strong Mutual Fund Pick Right Now?

If you've been stuck searching for Non US - Equity funds, consider Schwab Fundamental International Small Company Index (SFILX) as a possibility. While this fund is not tracked by the Zacks Mutual Fund Rank, we were able to examine other factors like performance, volatility, and cost.

Objective

Zacks categorizes SFILX as Non US - Equity, a segment stacked high with options. Non US - Equity mutual funds like to invest in companies outside of the United States, an important characteristic since global mutual funds are known to keep a good portion of their portfolio stateside. These kinds of funds can often extend across all cap levels, and will typically allocate their investments between emerging and developed markets.

History of Fund/Manager

Schwab Funds is based in San Francisco, CA, and is the manager of SFILX. Schwab Fundamental International Small Company Index debuted in January of 2008. Since then, SFILX has accumulated assets of about $717.26 million, according to the most recently available information. The fund is currently managed by a team of investment professionals.

Performance

Investors naturally seek funds with strong performance. SFILX has a 5-year annualized total return of 7.66%, and it sits in the bottom third among its category peers. Investors who prefer analyzing shorter time frames should look at its 3-year annualized total return of 16.15%, which places it in the bottom 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. SFILX's standard deviation over the past three years is 14.18% compared to the category average of 14.07%. The fund's standard deviation over the past 5 years is 16.27% compared to the category average of 16.25%. 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 0.76, so it is likely going to be 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. Over the past 5 years, the fund has a negative alpha of -2.43. This means that managers in this portfolio find it difficult to pick securities that generate better-than-benchmark returns.

Expenses

For investors, taking a closer look at cost-related metrics is key, since costs are increasingly important for mutual fund investing. Competition is heating up in this space, and a lower cost product will likely outperform its otherwise identical counterpart, all things being equal. In terms of fees, SFILX is a no load fund. It has an expense ratio of 0.39% compared to the category average of 1.01%. Looking at the fund from a cost perspective, SFILX is actually cheaper than its peers.

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

This could just be the start of your research on SFILX in the Non US - Equity category. Consider going to www.zacks.com/funds/mutual-funds for additional information about this fund, and all the others that we rank as well for additional information. For analysis of the rest of your portfolio, make sure to visit Zacks.com for our full suite of tools which will help you investigate all of your stocks and funds in one place.

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

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