SWERX vs. TDIFX

Last updated Jun 24, 2026

SWERX (Schwab Target 2040 Fund) and TDIFX (Dimensional Retirement Income Fund) are both Target Retirement Date funds. Over the past 10 years, SWERX returned 10.51%/yr vs 5.09%/yr for TDIFX. A 0.74 correlation means they provide meaningful diversification when combined. SWERX charges 0.00%/yr vs 0.06%/yr for TDIFX.

Performance

SWERX vs. TDIFX - Performance Comparison

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

Returns By Period

In the year-to-date period, SWERX achieves a 8.77% return, which is significantly higher than TDIFX's 3.21% return. Over the past 10 years, SWERX has outperformed TDIFX with an annualized return of 10.51%, while TDIFX has yielded a comparatively lower 5.09% annualized return.

SWERX

• 1D: -0.14%
• 1M: 1.04%
• YTD: 8.77%
• 6M: 8.20%
• 1Y: 20.96%
• 3Y*: 16.15%
• 5Y*: 8.00%
• 10Y*: 10.51%

TDIFX

• 1D: -0.32%
• 1M: 0.24%
• YTD: 3.21%
• 6M: 3.12%
• 1Y: 7.10%
• 3Y*: 6.79%
• 5Y*: 5.00%
• 10Y*: 5.09%

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

SWERX vs. TDIFX - Yearly Performance Comparison

	2026 (YTD)	2025	2024	2023	2022	2021	2020	2019	2018	2017
SWERX Schwab Target 2040 Fund	8.77%	17.71%	12.74%	19.06%	-18.57%	15.65%	14.44%	23.01%	-9.11%	20.48%
TDIFX Dimensional Retirement Income Fund	3.21%	7.22%	6.21%	7.76%	-9.37%	14.53%	9.33%	9.96%	-1.98%	5.17%

Correlation

The correlation between SWERX and TDIFX is 0.79, which is moderate. They share some common price drivers but move independently often enough to provide real diversification benefit when combined.

	Correlation
Correlation (1Y) Calculated over the trailing 1-year period	0.79
Correlation (3Y) Calculated over the trailing 3-year period	0.79
Correlation (5Y) Calculated over the trailing 5-year period	0.76
Correlation (10Y) Calculated over the trailing 10-year period	0.73
Correlation (All Time) Calculated using the full available price history since Jan 4, 2016	0.74

The correlation between SWERX and TDIFX has been stable across timeframes, ranging from 0.73 to 0.79 - a consistent structural relationship.

Return for Risk

SWERX vs. TDIFX — Risk / Return Rank

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

SWERX

SWERX Risk / Return Rank: 58
SWERX Sharpe Ratio Rank: 58
SWERX Sortino Ratio Rank: 56
SWERX Omega Ratio Rank: 57
SWERX Calmar Ratio Rank: 55
SWERX Martin Ratio Rank: 64

TDIFX

TDIFX Risk / Return Rank: 70
TDIFX Sharpe Ratio Rank: 68
TDIFX Sortino Ratio Rank: 70
TDIFX Omega Ratio Rank: 73
TDIFX Calmar Ratio Rank: 68
TDIFX Martin Ratio Rank: 72

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. TDIFX - Risk-Adjusted Trends Comparison

This table presents a comparison of risk-adjusted performance metrics for Schwab Target 2040 Fund (SWERX) and Dimensional Retirement Income Fund (TDIFX). 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	TDIFX	Difference
Sharpe ratio: Return per unit of total volatility	2.07	2.21	-0.14
Sortino ratio: Return per unit of downside risk	2.89	3.17	-0.27
Omega ratio: Gain probability vs. loss probability	1.38	1.44	-0.06
Calmar ratio: Return relative to maximum drawdown	2.71	3.03	-0.32
Martin ratio: Return relative to average drawdown	11.80	12.89	-1.09

SWERX vs. TDIFX - Sharpe Ratio Comparison

The current SWERX Sharpe Ratio is 2.07, which is comparable to the TDIFX Sharpe Ratio of 2.21. The chart below compares the historical Sharpe Ratios of SWERX and TDIFX, 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. TDIFX - Drawdown Comparison

The maximum SWERX drawdown since its inception was -48.24%, which is greater than TDIFX's maximum drawdown of -12.21%. Use the drawdown chart below to compare losses from any high point for SWERX and TDIFX.

Drawdown Indicators

	SWERX	TDIFX	Difference
Max Drawdown Largest peak-to-trough decline	-48.24%	-12.21%	-36.03%
Max Drawdown (1Y) Largest decline over 1 year	-8.08%	-2.61%	-5.47%
Max Drawdown (3Y) Largest decline over 3 years	-13.05%	-3.51%	-9.54%
Max Drawdown (5Y) Largest decline over 5 years	-30.40%	-12.21%	-18.19%
Max Drawdown (10Y) Largest decline over 10 years	-30.40%	-12.21%	-18.19%
Current Drawdown Current decline from peak	-0.46%	-0.64%	+0.18%
Average Drawdown Average peak-to-trough decline	-7.13%	-1.74%	-5.39%
Ulcer Index Depth and duration of drawdowns from previous peaks	1.85%	0.59%	+1.26%

Volatility

SWERX vs. TDIFX - Volatility Comparison

Schwab Target 2040 Fund (SWERX) has a higher volatility of 3.99% compared to Dimensional Retirement Income Fund (TDIFX) at 1.50%. This indicates that SWERX's price experiences larger fluctuations and is considered to be riskier than TDIFX based on this measure. The chart below showcases a comparison of their rolling one-month volatility.

Volatility by Period

	SWERX	TDIFX	Difference
Volatility (1M) Calculated over the trailing 1-month period	3.99%	1.50%	+2.49%
Volatility (6M) Calculated over the trailing 6-month period	8.63%	2.78%	+5.85%
Volatility (1Y) Calculated over the trailing 1-year period	10.59%	3.58%	+7.01%
Volatility (5Y) Calculated over the trailing 5-year period, annualized	15.07%	5.91%	+9.16%
Volatility (10Y) Calculated over the trailing 10-year period, annualized	14.87%	5.07%	+9.80%

SWERX vs. TDIFX - Expense Ratio Comparison

SWERX has a 0.00% expense ratio, which is lower than TDIFX's 0.06% expense ratio. Despite the difference, both funds are considered low-cost compared to the broader market, where average expense ratios usually range from 0.3% to 0.9%.

Dividends

SWERX vs. TDIFX - Dividend Comparison

SWERX's dividend yield for the trailing twelve months is around 6.61%, more than TDIFX's 2.00% yield.

Position	TTM	2025	2024	2023	2022	2021	2020	2019	2018	2017	2016	2015
SWERX Schwab Target 2040 Fund	6.61%	7.19%	5.00%	3.83%	8.31%	6.96%	3.33%	7.69%	8.57%	4.13%	6.76%	10.85%
TDIFX Dimensional Retirement Income Fund	2.00%	1.77%	3.11%	3.09%	4.66%	9.39%	1.39%	1.98%	2.11%	0.98%	0.89%	0.00%

Frequently Asked Questions

Can I hold both SWERX and TDIFX in my portfolio?

SWERX and TDIFX have a correlation of 0.79, 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 TDIFX?

SWERX has higher volatility (3.99%) compared to TDIFX (1.50%). In terms of maximum drawdown, SWERX dropped -48.24% vs TDIFX's -12.21%.

Which has better risk-adjusted returns?

TDIFX currently has the higher Sharpe Ratio (2.21 vs 2.07), 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.