SWHEX — Schwab Hedged Equity Fund
Data updated: 2021-09-24
SWHEX — Schwab Hedged Equity Fund. Money Market · $68.05M AUM · 1.91% expense ratio · 20.0% 1-yr return. Holdings, fees, performance and SEC filings.
SWHEX Fund Overview
SWHEX — Schwab Hedged Equity Fund is a US mutual fund managed by Schwab Capital Trust, categorised as Money Market. ABC INVEST provides holdings, performance, costs, cashflows, risk data, prospectus documents and SEC filings, sourced from SEC filings.
- Type: US mutual fund
- Manager: Schwab Capital Trust
- Category: Money Market
- Assets under management: $68.05M
- 1-year return: 20.0%
- Ticker: SWHEX
- SEC CIK: 0000904333
- SEC series ID: S000005517
- Share class ID: C000015018
SWHEX Investment Objective and Strategy
Schwab Hedged Equity Fund describes its objective and strategy as follows, from its latest prospectus filed with the SEC by Schwab Capital Trust.
Investment objective
The fund seeks long-term capital appreciation over market cycles with lower volatility than the broad equity market.
Principal investment strategy
To pursue its investment objective, the fund establishes long and short positions in equity securities issued by U.S. companies. Under normal circumstances it will invest at least 80% of its net assets (including, for this purpose, any borrowings for investment purposes) in equity securities issued by U.S. companies; typically, the actual percentage will be higher. The fund will notify its shareholders at least 60 days before changing this policy. The fund typically purchases or sells short stocks of companies that have market capitalizations of $1 billion or more at the time the stock is purchased or sold short. The fund approaches risk management from the perspective of its comparative index, the S&P 500 Index (the Index). The portfolio managers seek to keep the funds volatility lower than that of the Index.
To aid its stock selection, the fund uses Schwab Equity Ratings , a model that assigns ratings to approximately 3,000 of the largest (by market cap) U.S. traded stocks. In addition to using Schwab Equity Ratings, the portfolio managers utilize investment data and other analytics to help manage the funds portfolio. Generally, when constructing the portfolio, the portfolio managers select long positions from stocks that are highly rated by Schwab Equity Ratings and select short positions from stocks that are lower rated by Schwab Equity Ratings. As part of the portfolio construction process, the portfolio managers will purchase lower-rated stocks or stocks that are not rated by Schwab Equity Ratings, or sell short higher-rated stocks, such as for purposes of diversification, or for managing the funds liquidity, turnover, or volatility relative to the Index.
This investment approach under normal conditions will result in a long portfolio that maintains an overall weighting toward highly-rated stocks, and a short portfolio that maintains an overall weighting toward lower-rated stocks; however, the long portfolio will usually include some lower-rated stocks and the short-portfolio may contain some highly-rated stocks. The portfolio managers will consider the current market environment and any potential negative impact on the fund in determining when to sell a downgraded stock or close out an upgraded short position. The fund uses a portfolio optimization process to assist in constructing the portfolio. The portfolio managers use the portfolio optimization process to seek to build a portfolio they believe will provide the optimal balance between risk and expected return, subject to parameters such as the number of stocks desired in the portfolio, the level of portfolio turnover, industry and sector diversification, and volatility considerations.
For more information on Schwab Equity Ratings, please see the More About Schwabs Research section in the prospectus. When the fund takes a long position, it purchases a stock outright. When the fund takes a short position, it sells a stock that it has borrowed. To complete, or close out, the short sale transaction, the fund buys the same stock in the market and returns it to the lender. The fund makes money if the market price of the stock goes down after the short sale. Conversely, if the price of the stock goes up after the short sale, the fund will lose money because it will have to pay more to replace the borrowed stock than it received when it sold the stock short. Short positions may be used to hedge against the volatility of the long portion of the overall portfolio and/or to garner returns from declines in securities prices.
The fund also may invest in derivatives, principally futures contracts, primarily to seek returns on the funds otherwise uninvested cash assets. A futures contract is a contract to buy or sell a specific financial instrument at a specified price at a specific future time. The fund may invest in exchange-traded funds (ETFs) and stocks of real estate investment trusts (REITs). The fund may buy and sell portfolio securities actively. If it does, its portfolio turnover rate and transaction costs may rise, which may lower fund performance and may increase the likelihood of capital gains distributions. For temporary defensive purposes during unusual economic or market conditions or for liquidity purposes, the fund may invest up to 100% of its assets in cash, money market instruments, repurchase agreements and other short-term obligations.
When the fund engages in such activities, it may not achieve its investment objective.
SWHEX Performance
Total returns for SWHEX (as of 2026-10-01), from SEC filings.
| Period | Total return |
|---|---|
| 1 year | 20.0% |
| 3 years (annualised) | 6.6% |
SWHEX Risk Information
Risk metrics for SWHEX, derived from monthly returns in SEC filings.
- 1-year volatility (annualised): 9.8%
SWHEX Costs and Fees
SWHEX costs about $191 per $10,000 invested per year in fund expenses.
- Net expense ratio: 1.91%
- Gross expense ratio: 1.95%
- Portfolio turnover: 168%
- Brokerage commissions: 9.39 bps of average net assets (SEC N-CEN)
SWHEX Cashflows
Over the 12 months to 2021-07, Schwab Hedged Equity Fund had net outflows of $23.31M, from monthly SEC N-PORT filings.
| Month | Net flow |
|---|---|
| 2021-07 | −$89.15K |
| 2021-06 | −$736.18K |
| 2021-05 | −$705.88K |
| 2021-04 | −$1.86M |
| 2021-03 | −$2.15M |
| 2021-02 | −$2.01M |
SWHEX Debt Constituents
No individual debt constituents are reported in Schwab Hedged Equity Fund's latest SEC N-PORT filing.
SWHEX Prospectus and SEC Filings
Official Schwab Hedged Equity Fund filings on SEC EDGAR — prospectus, portfolio holdings and annual reports.
- Prospectus (485BPOS) — filed 2021-02-25
- Prospectus (485BPOS) — filed 2020-03-17
- Prospectus (485BPOS) — filed 2019-03-18
- Portfolio holdings (N-PORT) — filed 2021-09-24
- Portfolio holdings (N-PORT) — filed 2021-06-24
- Portfolio holdings (N-PORT) — filed 2021-03-25
- Annual census (N-CEN) — filed 2021-01-13
- Annual census (N-CEN) — filed 2020-01-14
Related Funds
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Data Sources
ABC INVEST compiles this page from public filings made to the U.S. Securities and Exchange Commission (SEC) through EDGAR: portfolio holdings and monthly cashflows from Form N-PORT, expenses and returns from fund prospectuses (Form 485BPOS) and the SEC DERA Risk/Return Summary data sets, annual data from Form N-CEN, and shareholder reports from Form N-CSR.