The Schwab Core Equity Fund seeks to outperform the S&P 500® Index1 over the long term while maintaining a similar level of volatility, offering the potential for above-average long-term growth with a level of investment risk similar to that of the stock market as a whole. The Fund seeks long-term capital growth.
U.S. Large-Cap Orientation
To pursue its goals, the Fund invests primarily in U.S. stocks, normally investing at least 80% of its net assets in equity securities of U.S. companies–generally those with market caps of approximately $500 million or more.
Driven by Schwab Equity Ratings®
The Fund uses Schwab Equity Ratings to aid its stock selection, which represents Schwab's point of view on the 12-month performance outlook for approximately 3,000 of the largest U.S.-headquartered stocks (by market capitalization) using a scale of A through F. It employs a disciplined methodology that evaluates each stock on the basis of investment criteria from four broad categories: fundamentals, valuation, momentum and risk. Generally, the Fund seeks to invest in stocks that are rated A or B at the time of purchase, but may purchase C-rated stocks for purposes of sector diversification.
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Distinguishing Characteristics and Benefits
- The fund has the potential for above-average long-term growth, with investment risks that resembles those of the stock market as a whole
- A moderate-risk choice for the large-cap portion of your asset allocation plan
- A convenient, cost-efficient way to gain exposure to large-cap U.S. stocks
Investment Management Process
The portfolio management team employs a multifactor approach to finding what it believes is the right blend of risk and reward, not only within each individual stock but also with regard to how such stocks fit together to satisfy the investment style and risk profile of the Fund. As such, Schwab Equity Ratings is just one component of stock evaluation; other essential factors also constitute the basis for portfolio construction and optimization. As an actively managed fund, the Schwab Core Equity Fund's allocations across sectors and specific holdings may vary from its benchmark, seeking to capitalize from selected over- and under-weightings based on market and economic considerations.