How do you ensure that your investment portfolio has the needed diversification to suit your investment objectives? As there are so many funds available, what are the best value stocks you can consider before investing your hard-earned money? Let’s find out in this SWPPX vs. SWTSX review which fund fits your situation best.
SWPPX vs. SWTSX are both mutual funds that have posted great results in the last few years. 401(k) managers highly subscribe to these Charles Schwab funds because they were highly profitable in the past.
One of the main draws of these mutual funds by Charles Schwab is that there are no minimum investment requirements. That puts them ahead of other funds with minimum requirements as high as $3,000.
Let’s begin our review of both funds.
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SWPPX: Schwab® S&P 500 Index Fund
SWPPX or Schwab S&P 500 Index Fund is a mutual fund from Charles Schwab. This fund tracks the returns of company stocks in the S&P 500 index. It is a low-cost investment fund with a very low expense ratio of 0.02% and no minimum investment requirement.
SWPPX can also serve as a diversified portfolio because it grants you access to a host of stocks in the S&P 500 Index. The S&P 500 is a category of the top 500 leading companies with publicly traded stocks in the US stock market. As it stands, SWPPX looks to capture about 80% coverage of all the available stocks in the index.
By investing in companies with large market capitalization across different sectors, you get a highly diversified portfolio with risk spread across various sectors. So if there is a market shock affecting companies in one industry, other industries will stay solid and absorb the portfolio decline.
Launched in May 1997, SWPPX is one of the oldest funds by this company. Over the last few years, it has had very good returns like:
- 16.14% over the last decade
- 16.20% over the last five years
- 20.45% over the last three years
- 26.54% over last year
So from all indications, investing in this fund offers long-term value moving forward.
SWPPX top 10 holdings worth 28.86% of total assets held:
|Alphabet Inc. Class A||2.26%|
|Alphabet Inc. Class C||2.12%|
|Meta Platforms Inc.||1.95%|
|Berkshire Hathaway Class B||1.35%|
|JPMorgan Chase & Co.||1.29%|
SWTSX: Schwab Total Stock Market Index Fund®
Also called SWTSX for short, the Schwab Total Stock Market Index Fund is another fund offered by Charles Schwab to investors. This fund seeks to track the returns of the US stock market based on the measurement of the Wilshire 5000 Equity Index.
SWTSX uses the Dow Jones Market Index, unlike SWPPX that uses the S&P 500 Market Index. The Dow Jones Index provides a robust measurement of all US securities in large-cap, mid-cap, and small-cap categories.
With this fund, investors can gain access to the US stock market to enjoy the benefits of investment appreciation.
SWTSX is like SWPPX in many ways because SWTSX seems to invest 80% of its investment into stocks traded in the Dow Jones. SWTSX may invest in futures contracts and derivatives and may also lend securities to minimize gaps that often appear between index funds and corresponding indexes.
For those looking for long-term investment portfolios, SWTSX is worth considering. The expense ratio is low at 0.03%, and you only have to invest what you can afford. Moreover, there is no minimum investment requirement attached to the fund. All these and more make it a worthy fund for those looking to build a strong retirement portfolio.
SWTSX top 10 holdings worth 23.63% of total holdings:
|Alphabet Inc. Class A||1.85%|
|Alphabet Inc. Class C||1.73%|
|Meta Platforms Inc. Class A||1.60%|
|Berkshire Hathaway Inc. Class B||1.10%|
|JPMorgan Chase & Co.||1.05%|
SWPPX Vs. SWTSX: Key Differences
With the tables detailing the top ten holdings of SWPPX vs. SWTSX, you can see that they both hold similar funds. So what makes each one different from the other? Very little. They are both mutual funds issued by Charles Schwab but with a slight difference which is more technical than anything else.
SWPPX tracks stocks in the S&P 500 while SWTSX tracks stocks in the Dow Jones total stock market. They both have large blends as well. So besides the indexes that they track, there is very little else that differentiates them.
SWPPX Vs. SWTSX: Composition Differences
Now, let’s look at the compositional differences of both funds to see how they stack up against each other.
|Type||Mutual Fund||Mutual Fund|
|Segment||Large Blend US Equity||Large Blend US Equity|
|Issuer||Charles Schwab||Charles Schwab|
|Net Assets||$67.41 billion||$18.23 billion|
SWPPX Vs. SWTSX: Performance Differences
Another way to know how a find will perform heading into the future is to review its performance based on historical data. In this section, we want to review the performance and returns of SWPPX vs. SWTSX.
SWPPX Performance Data And Returns
SWTSX Performance Data And Returns
SWPPX Vs. SWTSX: Fees
When deciding on a mutual fund or any other financial security to invest in, you need to be mindful of the expense fees you are paying. Also called expense ratios, these are the management fees charged by managers of the portfolio. A high expense ratio is better to avoid because you may end up paying the manager a significant percentage of your earnings.
The good news is that in the cases of SWPPX vs. SWTSX, the fees are quite low. SWPPX will cost you about 0.02%, while SWTSX has a fee of 0.03%. Both fees are low, but SWPPX is slightly lower. So if you are to decide on this basis alone, it appears to be the better investment option.
SWPPX Vs. SWTSX: Frequently Asked Questions
Here are some of the frequently asked questions that can guide you about the two funds: SWPPX and SWTSX.
Is SWPPX A Good Investment?
Yes, it is a good investment based on verifiable data. The five-year annualized returns have been 18.86% which is a very strong showing compared to similar funds in its category.
SWPPX is also a good idea if you prefer short-term investment because investors have earned about 21.45% annualized returns over the last three years. So if you were to invest in this fund, you would definitely want returns on your investment.
What Kind Of Fund Is SWTSX?
SWTSX is a low-cost investment mutual fund. It provides holders access to a wider range of US stocks. The stocks in this fund are classified as large-cap, mid-cap, and small-cap publicly traded securities.
Is SWPPX The Same As SWTSX?
For the most part, they are the same since they are both mutual funds. These funds are attractive for long-term investors and retirement planners. The only difference between the two is that they have slightly different expense ratios, and while SWPPX tracks total returns of stocks in the S&P 500, SWTSX tracks the Dow Jones Index.
SWPPX Vs. SWTSX – Which Index Fund To Buy?
Now that you have read through the finer points of each mutual fund, what would be the best option for you and your investment strategy? As most would tell you, the answer depends on your financial status and investment objective.
So after reading through this article, sit down and check your personal finance. Know where you are right now so you may map out your next plans on which fund will help you realize your goals. So enjoy your investment journey and ride off onto financial freedom sooner than later.
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Marjolein is a financial consultant who has built over €4,000 monthly passive income and saves over 70% of her income. Read Radicals’ inspiring story, from stuck in the 9-to-5 to loving life. Feel free to send Radical a message at the bottom of this page