SWERX vs. SWDSX

Last updated Aug 4, 2026

SWERX (Schwab Target 2040 Fund) and SWDSX (Schwab Dividend Equity Fund™) are both mutual funds - SWERX is a Target Retirement Date fund managed by Charles Schwab, while SWDSX is a Large Cap Value Equities fund actively managed by Charles Schwab. Over the past 10 years, SWERX returned 9.83%/yr vs 9.47%/yr for SWDSX. Their correlation of 0.89 means they have usually moved in the same direction. SWERX charges 0.00%/yr vs 0.89%/yr for SWDSX.

Performance

SWERX vs. SWDSX - Performance Comparison

The chart below illustrates the hypothetical performance of a $10,000 investment in Schwab Target 2040 Fund (SWERX) and Schwab Dividend Equity Fund™ (SWDSX). The values are adjusted to include any dividend payments, if applicable.

Returns By Period

In the year-to-date period, SWERX achieves a 8.16% return, which is significantly lower than SWDSX's 11.68% return. Both investments have delivered pretty close results over the past 10 years, with SWERX having a 9.83% annualized return and SWDSX not far behind at 9.47%.

SWERX

• 1D: 0.19%
• 1M: -0.23%
• 6M: 5.07%
• YTD: 8.16%
• 1Y: 17.99%
• 3Y*: 14.31%
• 5Y*: 7.51%
• 10Y*: 9.83%
• ALL TIME*: 8.28%

SWDSX

• 1D: 0.35%
• 1M: 1.95%
• 6M: 6.51%
• YTD: 11.68%
• 1Y: 17.87%
• 3Y*: 14.73%
• 5Y*: 9.71%
• 10Y*: 9.47%
• ALL TIME*: 8.67%

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

Liquidity Comparison

Position	Avg. Volume Value (2W)	Avg. Volume Value (1M)	Avg. Volume Value (3M)
SWDSX Schwab Dividend Equity Fund™	$0.00	$0.00	$0.00
SWERX Schwab Target 2040 Fund	$0.00	$0.00	$0.00

SWERX vs. SWDSX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
SWERX Schwab Target 2040 Fund	8.16%	17.71%	12.74%	19.06%	-18.57%	15.65%	14.44%	23.01%	-9.11%	20.48%
SWDSX Schwab Dividend Equity Fund™	11.68%	12.31%	17.06%	6.92%	-5.84%	28.24%	-4.33%	24.32%	-12.18%	15.40%

Correlation

The correlation between SWERX and SWDSX is 0.55, which is moderate. They have sometimes moved together and sometimes differently, sharing some price drivers without tracking each other closely.

	Correlation
Correlation (1Y) Focuses on recent behavior, but can change the most.	0.55
Correlation (3Y) Balances recent behavior with more history.	0.70
Correlation (5Y) Shows whether the relationship held over a longer period.	0.77
Correlation (10Y) Provides a long-term view across more market conditions.	0.82
Correlation (All Time) Calculated using the full available price history since Jul 1, 2005	0.89

Over the past year, the correlation between SWERX and SWDSX has dropped to 0.55 - well below their long-term average of 0.89, suggesting their price drivers have been diverging.

Return for Risk

SWERX vs. SWDSX — Risk / Return Rank

Compare historical risk-adjusted metric ranks over the past 12 months.

SWERX

SWERX Risk / Return Rank: 60
SWERX Sharpe Ratio Rank: 60
SWERX Sortino Ratio Rank: 59
SWERX Omega Ratio Rank: 58
SWERX Calmar Ratio Rank: 56
SWERX Martin Ratio Rank: 68

SWDSX

SWDSX Risk / Return Rank: 75
SWDSX Sharpe Ratio Rank: 75
SWDSX Sortino Ratio Rank: 71
SWDSX Omega Ratio Rank: 73
SWDSX Calmar Ratio Rank: 81
SWDSX Martin Ratio Rank: 73

The rank (0–100) uses a weighted average of the Sharpe, Sortino, Omega, Calmar, and Martin percentile ranks for the trailing 12 months. Higher means stronger historical risk-adjusted performance within the peer group.

SWERX vs. SWDSX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Schwab Target 2040 Fund (SWERX) and Schwab Dividend Equity Fund™ (SWDSX). 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.

	SWERX	SWDSX	Difference
Sharpe ratio: Return per unit of total volatility	1.58	1.81	-0.23
Sortino ratio: Return per unit of downside risk	2.23	2.51	-0.27
Omega ratio: Gain probability vs. loss probability	1.29	1.33	-0.05
Calmar ratio: Return relative to maximum drawdown	2.12	2.78	-0.66
Martin ratio: Return relative to average drawdown	9.05	9.47	-0.41

SWERX vs. SWDSX - Sharpe Ratio Comparison

The current SWERX Sharpe Ratio is 1.58, which is comparable to the SWDSX Sharpe Ratio of 1.81. The chart below compares the historical Sharpe Ratios of SWERX and SWDSX, 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

SWERX vs. SWDSX - Drawdown Comparison

The maximum SWERX drawdown since its inception was -48.24%, roughly equal to the maximum SWDSX drawdown of -50.01%. Use the drawdown chart below to compare losses from any high point for SWERX and SWDSX.

Drawdown Indicators

	SWERX	SWDSX	Difference
Max Drawdown Largest peak-to-trough decline	-48.24%	-50.01%	+1.77%
Max Drawdown (1Y) Largest decline over 1 year	-8.08%	-6.16%	-1.92%
Max Drawdown (3Y) Largest decline over 3 years	-13.05%	-11.67%	-1.38%
Max Drawdown (5Y) Largest decline over 5 years	-30.40%	-17.94%	-12.46%
Max Drawdown (10Y) Largest decline over 10 years	-30.40%	-40.20%	+9.80%
Current Drawdown Current decline from peak	-1.02%	-0.70%	-0.32%
Average Drawdown Average peak-to-trough decline	-7.10%	-6.73%	-0.37%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.89%	1.81%	+0.08%

Volatility

SWERX vs. SWDSX - Volatility Comparison

Schwab Target 2040 Fund (SWERX) and Schwab Dividend Equity Fund™ (SWDSX) have volatilities of 2.94% and 3.05%, respectively, indicating that both stocks experience similar levels of price fluctuations. This suggests that the risk associated with both stocks, as measured by volatility, is nearly the same. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SWERX	SWDSX	Difference
Volatility (1M) Calculated over the trailing 1-month period	2.94%	3.05%	-0.11%
Volatility (6M) Calculated over the trailing 6-month period	8.93%	6.62%	+2.31%
Volatility (1Y) Calculated over the trailing 1-year period	10.85%	9.52%	+1.33%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.08%	13.07%	+2.01%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	14.79%	16.80%	-2.01%

SWERX vs. SWDSX - Expense Ratio Comparison

SWERX has a 0.00% expense ratio, which is lower than SWDSX's 0.89% expense ratio.

Dividends

SWERX vs. SWDSX - Dividend Comparison

SWERX's dividend yield for the trailing twelve months is around 6.64%, more than SWDSX's 1.10% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SWDSX Schwab Dividend Equity Fund™	1.10%	1.22%	2.59%	2.25%	6.83%	16.25%	2.09%	6.86%	11.63%	10.24%	1.68%	14.46%
SWERX Schwab Target 2040 Fund	6.64%	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 SWDSX in my portfolio?

SWERX and SWDSX have a correlation of 0.55, 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 SWDSX?

SWDSX has higher volatility (3.05%) compared to SWERX (2.94%). In terms of maximum drawdown, SWERX dropped -48.24% vs SWDSX's -50.01%.

Which has better risk-adjusted returns?

SWDSX currently has the higher Sharpe Ratio (1.81 vs 1.58), 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.