On Jan. 13, 2022, Schwab announced changes to the glide path of the Schwab Target series. The firm is raising equity weightings across the glide path by roughly 2 to 5 percentage points as it expects fixed income to continue to generate weak yields and total returns. Early in the glide path, most of that increase will go to REITs. The bond allocation will be reduced accordingly, with one exception: The allocation to Treasury Inflation-Protected Securities (which phases in about 10 years before the target date) will stay at the same absolute level as the firm anticipates higher inflation on a long-term basis. The firm is also replacing MetWest Total Return Bond MWTIX with Western Asset Core Plus Bond WAPSX as the active core bond holding because of personnel changes at the former. Finally, the series will allocate more assets to its underlying large-growth and large-value holdings and less to large-blend holding Schwab Core Equity SWANX. We have placed this target-date series' ratings under review as we assess these changes, which will be implemented by Feb. 1, 2022.
Schwab Target 2040 SWERX
Adjusted Expense Ratio excludes certain variable investment-related expenses, such as interest from borrowings and dividends on borrowed securities, allowing for more consistent cost comparisons across funds.
Morningstar’s Analysis
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
The Morningstar Analysis section contains a thorough evaluation of an investment’s merits and drawbacks and often discusses the most important or decisive factors leading to the fund’s overall rating.
Will SWERX outperform in future?
Get our overall rating based on a fundamental assessment of the pillars below.
Process Pillar
The Process Pillar is our assessment of how sensible, clearly defined, and repeatable SWERX’s performance objective and investment process is for both security selection and portfolio construction.
People Pillar
The People Pillar is our evaluation of the SWERX management team’s experience and ability. We find that high-quality management teams deliver superior performance relative to their benchmarks and/or peers.
Parent Pillar
The Parent Pillar is our rating of SWERX’s parent organization’s priorities and whether they’re in line with investors’ interests.
Schwab Announces Changes to Glide Path; Target-Date Series Is Under Review
