SWERX vs. FIRMX

Last updated Jun 4, 2026

SWERX (Schwab Target 2040 Fund) and FIRMX (Fidelity Managed Retirement Income Fund) are both Target Retirement Date funds. Over the past 10 years, SWERX returned 10.19%/yr vs 4.21%/yr for FIRMX. Their correlation of 0.87 suggests significant overlap in exposure. SWERX charges 0.00%/yr vs 0.45%/yr for FIRMX.

Performance

SWERX vs. FIRMX - Performance Comparison

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

Returns By Period

In the year-to-date period, SWERX achieves a 9.28% return, which is significantly higher than FIRMX's 4.04% return. Over the past 10 years, SWERX has outperformed FIRMX with an annualized return of 10.19%, while FIRMX has yielded a comparatively lower 4.21% annualized return.

SWERX

• 1D: 0.19%
• 1M: 3.86%
• YTD: 9.28%
• 6M: 9.85%
• 1Y: 22.49%
• 3Y*: 16.60%
• 5Y*: 8.20%
• 10Y*: 10.19%

FIRMX

• 1D: 0.20%
• 1M: 1.54%
• YTD: 4.04%
• 6M: 4.26%
• 1Y: 10.41%
• 3Y*: 7.59%
• 5Y*: 2.91%
• 10Y*: 4.21%

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

SWERX vs. FIRMX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
SWERX Schwab Target 2040 Fund	9.28%	17.71%	12.74%	19.06%	-18.57%	15.65%	14.44%	23.01%	-9.11%	20.48%
FIRMX Fidelity Managed Retirement Income Fund	4.04%	9.95%	4.29%	8.07%	-11.66%	2.77%	8.57%	10.57%	-1.80%	7.08%

Correlation

The correlation between SWERX and FIRMX is 0.83, indicating a strong positive relationship between their price movements. Combining them offers limited diversification - they tend to fall together during downturns.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.83
Correlation (3Y) Calculated over the trailing 3-year period	0.76
Correlation (5Y) Calculated over the trailing 5-year period	0.73
Correlation (10Y) Calculated over the trailing 10-year period	0.74
Correlation (All Time) Calculated using the full available price history since Aug 31, 2007	0.87

The correlation between SWERX and FIRMX shifts across timeframes, from 0.73 (5 years) to 0.87 (all time), reflecting how their relationship changes across market environments.

Return for Risk

SWERX vs. FIRMX — Risk / Return Rank

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

SWERX

SWERX Risk / Return Rank: 59
SWERX Sharpe Ratio Rank: 60
SWERX Sortino Ratio Rank: 58
SWERX Omega Ratio Rank: 57
SWERX Calmar Ratio Rank: 54
SWERX Martin Ratio Rank: 64

FIRMX

FIRMX Risk / Return Rank: 72
FIRMX Sharpe Ratio Rank: 76
FIRMX Sortino Ratio Rank: 78
FIRMX Omega Ratio Rank: 77
FIRMX Calmar Ratio Rank: 63
FIRMX Martin Ratio Rank: 66

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.

SWERX vs. FIRMX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Schwab Target 2040 Fund (SWERX) and Fidelity Managed Retirement Income Fund (FIRMX). 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.

	SWERX	FIRMX	Difference
Sharpe ratio: Return per unit of total volatility	2.28	2.52	-0.24
Sortino ratio: Return per unit of downside risk	3.21	3.71	-0.50
Omega ratio: Gain probability vs. loss probability	1.42	1.50	-0.08
Calmar ratio: Return relative to maximum drawdown	2.82	3.04	-0.22
Martin ratio: Return relative to average drawdown	12.49	12.98	-0.50
Data is calculated on a 1-year rolling basis and updated daily. The trend shows the change in the indicator over the past month.

SWERX vs. FIRMX - Sharpe Ratio Comparison

The current SWERX Sharpe Ratio is 2.28, which is comparable to the FIRMX Sharpe Ratio of 2.52. The chart below compares the historical Sharpe Ratios of SWERX and FIRMX, calculated using daily returns over the previous 12 months. A higher Sharpe Ratio indicates better risk-adjusted performance relative to the risk-free rate.

Sharpe Ratios by Period

	SWERX	FIRMX	Difference
Sharpe Ratio (1Y) Calculated over the trailing 1-year period	2.28	2.52	-0.24
Sharpe Ratio (5Y) Calculated over the trailing 5-year period	0.55	0.55	0.00
Sharpe Ratio (10Y) Calculated over the trailing 10-year period	0.69	0.94	-0.25
Sharpe Ratio (All Time) Calculated using the full available price history	0.53	0.55	-0.02

Drawdowns

SWERX vs. FIRMX - Drawdown Comparison

The maximum SWERX drawdown since its inception was -48.24%, which is greater than FIRMX's maximum drawdown of -33.73%. Use the drawdown chart below to compare losses from any high point for SWERX and FIRMX.

Drawdown Indicators

	SWERX	FIRMX	Difference
Max Drawdown Largest peak-to-trough decline	-48.24%	-33.73%	-14.51%
Max Drawdown (1Y) Largest decline over 1 year	-8.08%	-3.44%	-4.64%
Max Drawdown (3Y) Largest decline over 3 years	-13.05%	-4.96%	-8.09%
Max Drawdown (5Y) Largest decline over 5 years	-30.40%	-16.11%	-14.29%
Max Drawdown (10Y) Largest decline over 10 years	-30.40%	-16.11%	-14.29%
Current Drawdown Current decline from peak	0.00%	0.00%	0.00%
Average Drawdown Average peak-to-trough decline	-7.15%	-3.71%	-3.44%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.82%	0.81%	+1.01%

Volatility

SWERX vs. FIRMX - Volatility Comparison

Schwab Target 2040 Fund (SWERX) has a higher volatility of 2.93% compared to Fidelity Managed Retirement Income Fund (FIRMX) at 1.65%. This indicates that SWERX's price experiences larger fluctuations and is considered to be riskier than FIRMX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SWERX	FIRMX	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.93%	1.65%	+1.28%
Volatility (6M) Calculated over the trailing 6-month period	7.92%	3.42%	+4.50%
Volatility (1Y) Calculated over the trailing 1-year period	10.00%	4.16%	+5.84%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	14.99%	5.28%	+9.71%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	14.84%	4.51%	+10.33%

SWERX vs. FIRMX - Expense Ratio Comparison

SWERX has a 0.00% expense ratio, which is lower than FIRMX's 0.45% expense ratio.

Dividends

SWERX vs. FIRMX - Dividend Comparison

SWERX's dividend yield for the trailing twelve months is around 6.58%, more than FIRMX's 3.09% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
FIRMX Fidelity Managed Retirement Income Fund	3.09%	3.13%	3.02%	2.81%	4.54%	3.56%	2.48%	2.59%	4.65%	8.57%	1.67%	1.68%
SWERX Schwab Target 2040 Fund	6.58%	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 SWERX and FIRMX in my portfolio?

SWERX and FIRMX have a correlation of 0.83, meaning they provide meaningful diversification benefit when combined. Depending on your allocation goals, holding both could reduce overall portfolio risk.

Which is riskier, SWERX or FIRMX?

SWERX has higher volatility (2.93%) compared to FIRMX (1.65%). In terms of maximum drawdown, SWERX dropped -48.24% vs FIRMX's -33.73%.

Which has better risk-adjusted returns?

FIRMX currently has the higher Sharpe Ratio (2.52 vs 2.28), 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.