Schwab offers two actively managed funds that target the long-term growth potential in two specific market sectors–Financial Services and Health Care. These funds offer investors the opportunity to add sector concentration or balance core holdings with a more focused investment.
Both funds seek long-term capital growth by investing primarily in the stocks of U.S. companies within their respective sector–each of which comprises a number of related industries.
Schwab Financial Services Fund™
The Schwab Financial Services Fund pursues its goal of long-term capital growth by investing at least 80% of its assets in equity securities issued by U.S. companies in the financial services sector. The financial services sector comprises asset management firms, brokerage companies, commercial banks, financial services firms, insurance companies, real estate investment trusts (REITs), and savings and loan associations. The Fund may invest in companies of all sizes and seeks to be diversified within the sector.
Schwab Health Care Fund™
The Schwab Health Care Fund pursues its goal of long-term capital growth by investing at least 80% of its assets in equity securities issued by U.S. companies in the health care sector. The health care sector comprises drug and biotechnology companies, health care facilities operators, medical product manufacturers and suppliers, medical providers, and medical services firms. The Fund may invest in companies of all sizes and seeks to be diversified within the sector.
|Share Class||Ticker||Expenses1||Min. Investment|
|Financial Services Fund<br>Investor||SWFFX||0.94%||$100|
|Health Care Fund<br>Investor||SWHFX||0.82%||$100|
Distinguishing Characteristics and Benefits
Driven by Schwab Equity Ratings®
The Schwab Financial Services Fund and the Schwab Health Care Fund use Schwab Equity Ratings to aid their stock selection, representing Schwab's objective point of view on the 12-month performance outlook for approximately 3,000 of the largest U.S.-headquartered stocks (by market capitalization) ranked by a scale of A through F. Schwab Equity Ratings employ 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.
Higher Return Potential
Both funds offer the potential to achieve higher returns (with a corresponding increase in risk) by concentrating investments within a single economic sector.
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 Funds. 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 actively managed funds, the Funds' allocations across industries, market capitalization and specific holdings will often vary from their respective benchmark, seeking to capitalize from selected over- and under-weightings based on market and economic considerations.