Fund Evaluator:

Schwab® Monthly Income Income Payout Overview

Schwab® Monthly Income Income Payout (SWLRX) is an actively managed Allocation Conservative Allocation fund. Schwab Funds launched the fund in 2008.

The investment seeks to provide current income and, as a secondary investment objective, capital appreciation. The fund invests primarily in a combination of Schwab Funds® and Schwab® ETFs (the underlying funds) in accordance with its target asset allocation. It has the flexibility to move within the following asset allocation ranges at the discretion of the investment adviser: 10-50% equity; 50-90% fixed income; and 0-12% cash and cash equivalents. The fund’s anticipated annual payout is expected to be 0-3% during a low interest rate environment, 3-5% during a normal interest rate environment, and 5+% during a high interest rate environment.

About Schwab® Monthly Income Income Payout (SWLRX)

There are 2 members of the management team with an average tenure of 10.85 years: Zifan Tang (2012), Patrick Kwok (2019). Management tenure is more important for actively managed funds than passive index funds.

The fund has 2 primary benchmarks: S&P 500 (TR) (1970) index with a weighting of 100% and Bloomberg US Agg Bond TR USD index with a weighting of 100%. Schwab® Monthly Income Income Payout has 12 securities in its portfolio. The top 10 holdings constitute 98.1% of the fund’s assets. The fund meets the SEC requirement of being classified as a diversified fund. The fund is not considered to have an ESG focus with its investment selection and management.

Schwab® Monthly Income Income Payout is part of the Allocation global asset class and is within the Allocation fund group. Schwab® Monthly Income Income Payout has 21.4% of its portfolio invested in foreign issues. The overall assets allocated to domestic stock is 15.2%. There is 12.5% allocated to foreign stock, and 2.0% is allocated to preferred stocks. The bond allocation as a percentage of total assets is 66.9% (58.0% domestic bond, 8.9% foreign bond and 0.4% convertible bond). Schwab® Monthly Income Income Payout has 3.1% of the portfolio in cash.

Assets Under Management

The fund has $75 million in total assets, which is below the $107 million average for the Conservative Allocation category. Normally, lower assets under management translates to higher average expense ratios, and greater total assets are desired. However, for some investment categories, such as small-cap investing, it may be difficult for the manager to fully employ the desired active strategy if assets grow too large or too quickly.

SWLRX Performance and Fees

The expense ratio measures how much of a fund’s assets are used for administrative expenses and operating expenses, including adviser fees and fees for the transfer agent and custodial services. The Schwab® Monthly Income Income Payout expense ratio is low compared to funds in the Conservative Allocation category. Schwab® Monthly Income Income Payout has an expense ratio of 0.18%, which is 85% lower than its category average, making the fund expense ratio grade a A. While it is difficult to predict returns, it is known that high annual expense ratios reduce your rate of return, and excessive fees are difficult to overcome. Active management normally comes with higher expense ratios than passive index management. Certain investment categories such as small company and foreign also normally have higher expense ratios. It is best to compare fund expense ratios against the category averages for meaningful assessments.

High portfolio turnover can translate to higher expenses and lower aftertax returns. Schwab® Monthly Income Income Payout has a portfolio turnover rate of 25%, indicating that holds its assets around 0.0 years. By way of comparison, the average portfolio turnover is 100% for the Conservative Allocation category.

Recently, in the month of July 2026, Schwab® Monthly Income Income Payout returned 0.7%, which earned it a grade of A, as the Conservative Allocation category had an average return of -0.8%. The letter grades of A, B, C, D and F are based upon relative rankings within the investment category. A grade of A, for example, would indicate that the return is in the highest 20% for that time period compared to all funds in that category.

Schwab® Monthly Income Income Payout has a trailing yield of 4.57%, which is above the 3.43% category average. The fund normally distributes its income monthly and its capital gains annually.

It’s natural to seek the best-performing investments, but you must consider the relationship between risk and return and the impact of costs and taxes on your realized returns.

Schwab® Monthly Income Income Payout Grades

Year to date, the fund has returned 5.1%, 2.3 percentage points better than the category, which translates into a grade of A. The fund has returned 10.0% over the past year (grade of A), 7.5% over the past three years (grade of C) and 2.5% per year over the past five years (grade of C) and 3.4% per year over the past 10 years (grade of F).

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