DRIHX vs. SWERX

Last updated Jun 23, 2026

DRIHX (Dimensional 2040 Target Date Retirement Income Fund) and SWERX (Schwab Target 2040 Fund) are both Target Retirement Date funds. Over the past 10 years, DRIHX returned 9.63%/yr vs 10.24%/yr for SWERX. With a 0.95 correlation, they move nearly in lockstep. DRIHX charges 0.22%/yr vs 0.00%/yr for SWERX.

Performance

DRIHX vs. SWERX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Dimensional 2040 Target Date Retirement Income Fund (DRIHX) and Schwab Target 2040 Fund (SWERX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, DRIHX achieves a 8.06% return, which is significantly lower than SWERX's 8.92% return. Over the past 10 years, DRIHX has underperformed SWERX with an annualized return of 9.63%, while SWERX has yielded a comparatively higher 10.24% annualized return.

DRIHX

• 1D: 0.77%
• 1M: 1.54%
• YTD: 8.06%
• 6M: 8.06%
• 1Y: 19.40%
• 3Y*: 13.16%
• 5Y*: 7.46%
• 10Y*: 9.63%

SWERX

• 1D: 0.94%
• 1M: 1.18%
• YTD: 8.92%
• 6M: 8.71%
• 1Y: 21.96%
• 3Y*: 15.49%
• 5Y*: 8.28%
• 10Y*: 10.24%

*Multi-year figures are annualized to reflect compound growth (CAGR)

DRIHX vs. SWERX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
DRIHX Dimensional 2040 Target Date Retirement Income Fund	8.06%	14.48%	11.11%	16.06%	-16.20%	16.54%	12.73%	22.12%	-7.66%	19.53%
SWERX Schwab Target 2040 Fund	8.92%	17.71%	12.74%	19.06%	-18.57%	15.65%	14.44%	23.01%	-9.11%	20.48%

Correlation

The correlation between DRIHX and SWERX is 0.96 - these two move nearly in lockstep. At this level, holding both provides almost no diversification benefit. If you already own one, adding the other does little to reduce portfolio risk.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.96
Correlation (3Y) Calculated over the trailing 3-year period	0.94
Correlation (5Y) Calculated over the trailing 5-year period	0.95
Correlation (10Y) Calculated over the trailing 10-year period	0.95
Correlation (All Time) Calculated using the full available price history since Jan 4, 2016	0.95

The correlation between DRIHX and SWERX has been stable across timeframes, ranging from 0.94 to 0.96 - a consistent structural relationship.

Return for Risk

DRIHX vs. SWERX — Risk / Return Rank

Compare risk-adjusted metric ranks to identify better-performing investments over the past 12 months.

DRIHX

DRIHX Risk / Return Rank: 63
DRIHX Sharpe Ratio Rank: 64
DRIHX Sortino Ratio Rank: 63
DRIHX Omega Ratio Rank: 64
DRIHX Calmar Ratio Rank: 58
DRIHX Martin Ratio Rank: 64

SWERX

SWERX Risk / Return Rank: 57
SWERX Sharpe Ratio Rank: 57
SWERX Sortino Ratio Rank: 56
SWERX Omega Ratio Rank: 56
SWERX Calmar Ratio Rank: 54
SWERX Martin Ratio Rank: 63

The rank (0–100) shows how this investment's returns compare to the risk taken. Higher = better. Based on the past 12 months of data, combining Sharpe, Sortino, and other metrics used by quantitative funds and institutional investors.

DRIHX vs. SWERX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Dimensional 2040 Target Date Retirement Income Fund (DRIHX) and Schwab Target 2040 Fund (SWERX). Risk-adjusted metrics are performance indicators that assess an investment's returns in relation to its risk, enabling a more accurate comparison of different investment options.

Values are calculated on a 1-year rolling basis and updated daily. Risk-adjusted metrics are more stable over longer periods — use the period switch above to explore them.

	DRIHX	SWERX	Difference
Sharpe ratio: Return per unit of total volatility	2.16	2.06	+0.10
Sortino ratio: Return per unit of downside risk	3.03	2.87	+0.16
Omega ratio: Gain probability vs. loss probability	1.40	1.38	+0.03
Calmar ratio: Return relative to maximum drawdown	2.78	2.69	+0.09
Martin ratio: Return relative to average drawdown	11.79	11.72	+0.07

DRIHX vs. SWERX - Sharpe Ratio Comparison

The current DRIHX Sharpe Ratio is 2.16, which is comparable to the SWERX Sharpe Ratio of 2.06. The chart below compares the historical Sharpe Ratios of DRIHX and SWERX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Drawdowns

DRIHX vs. SWERX - Drawdown Comparison

The maximum DRIHX drawdown since its inception was -27.96%, smaller than the maximum SWERX drawdown of -48.24%. Use the drawdown chart below to compare losses from any high point for DRIHX and SWERX.

Drawdown Indicators

	DRIHX	SWERX	Difference
Max Drawdown Largest peak-to-trough decline	-27.96%	-48.24%	+20.28%
Max Drawdown (1Y) Largest decline over 1 year	-6.96%	-8.08%	+1.12%
Max Drawdown (3Y) Largest decline over 3 years	-11.75%	-13.05%	+1.30%
Max Drawdown (5Y) Largest decline over 5 years	-22.51%	-30.40%	+7.89%
Max Drawdown (10Y) Largest decline over 10 years	-27.96%	-30.40%	+2.44%
Current Drawdown Current decline from peak	-0.27%	-0.32%	+0.05%
Average Drawdown Average peak-to-trough decline	-4.06%	-7.13%	+3.07%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.63%	1.85%	-0.22%

Volatility

DRIHX vs. SWERX - Volatility Comparison

The current volatility for Dimensional 2040 Target Date Retirement Income Fund (DRIHX) is 3.50%, while Schwab Target 2040 Fund (SWERX) has a volatility of 4.11%. This indicates that DRIHX experiences smaller price fluctuations and is considered to be less risky than SWERX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	DRIHX	SWERX	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.50%	4.11%	-0.61%
Volatility (6M) Calculated over the trailing 6-month period	7.32%	8.66%	-1.34%
Volatility (1Y) Calculated over the trailing 1-year period	8.96%	10.57%	-1.61%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	11.67%	15.07%	-3.40%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	12.81%	14.87%	-2.06%

DRIHX vs. SWERX - Expense Ratio Comparison

DRIHX has a 0.22% expense ratio, which is higher than SWERX's 0.00% expense ratio. However, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

DRIHX vs. SWERX - Dividend Comparison

DRIHX's dividend yield for the trailing twelve months is around 4.66%, less than SWERX's 6.60% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
DRIHX Dimensional 2040 Target Date Retirement Income Fund	4.66%	5.15%	3.42%	3.71%	4.43%	2.58%	3.05%	2.24%	2.34%	1.22%	1.40%	0.00%
SWERX Schwab Target 2040 Fund	6.60%	7.19%	5.00%	3.83%	8.31%	6.96%	3.33%	7.69%	8.57%	4.13%	6.76%	10.85%

Frequently Asked Questions

Can I hold both DRIHX and SWERX in my portfolio?

With a correlation of 0.96, DRIHX and SWERX move almost identically. Holding both adds very little diversification - you're essentially doubling your position in the same market segment. Choosing one is usually more capital-efficient.

Which is riskier, DRIHX or SWERX?

SWERX has higher volatility (4.11%) compared to DRIHX (3.50%). In terms of maximum drawdown, DRIHX dropped -27.96% vs SWERX's -48.24%.

Which has better risk-adjusted returns?

DRIHX currently has the higher Sharpe Ratio (2.16 vs 2.06), meaning it's delivered slightly more return per unit of risk over the trailing 12 months. However, this ranking shifts over time - use the Risk/Return Score above for a more comprehensive view that combines Sharpe, Sortino, and other measures used by quantitative funds.