7 of the Best Charles Schwab Mutual Funds
Institutional investors have no shortage of portfolio construction models. One of the most well-known is the “Yale Model,” popularized by the late David Swensen, who managed Yale University’s endowment.
This approach emphasized heavy diversification across asset classes like private equity, hedge funds and real assets, suitable for institutions with multigenerational time horizons and complex cash flow needs.
Retail investors, by contrast, typically don’t have those constraints. They’re not managing perpetual capital or large future liabilities, and their goals often include more immediate or personal financial milestones. That difference shapes how portfolios are built.
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A popular approach among individual investors comes from the Bogleheads community, which follows the principles of Vanguard’s late founder John Bogle.
The strategy centers on broad diversification, low costs, passive indexing and staying invested for the long term. At its core is the three-fund portfolio: one fund tracking the total U.S. stock market, one for international stocks (developed and emerging markets), and one for U.S. investment-grade bonds.
Many variations have emerged over time. Some investors add international bonds or real estate exposure through real estate investment trusts. Others include commodities like gold to hedge inflation. But the core idea remains the same: Keep it simple, diversified and inexpensive.
Because of its popularity, this three-fund approach has extended beyond Vanguard’s lineup. Most major asset managers, including Fidelity and Charles Schwab, now offer their own low-cost mutual funds that make it easy to build similar portfolios.
In particular, when using Schwab’s proprietary mutual funds on its own platform, investors can benefit from perks such as no sales loads, no transaction fees, and minimum investments as low as $100 for equity and bond funds.
“A factor that makes Schwab a top fund provider for me is the user-friendly platform they provide for researching, buying and managing funds,” says Jim Penna, senior manager of retirement services and options instructor at VectorVest.
Here are seven of the best Charles Schwab mutual funds to buy today:
| Fund | Expense ratio |
| Schwab S&P 500 Index Fund (ticker: SWPPX) | 0.02% |
| Schwab 1000 Index Fund (SNXFX) | 0.05% |
| Schwab Total Stock Market Index Fund (SWTSX) | 0.03% |
| Schwab International Index Fund (SWISX) | 0.06% |
| Schwab U.S. Aggregate Bond Index Fund (SWAGX) | 0.04% |
| Schwab Treasury Inflation Protected Securities Index Fund (SWRSX) | 0.05% |
| Schwab Short-Term Bond Index Fund (SWSBX) | 0.06% |
Schwab S&P 500 Index Fund (SWPPX)
“As in any fund you may consider, there are certain characteristics to always look for, starting with expense ratios, and the Schwab index funds have a favorable expense for passive funds,” Penna says. “For example, SWPPX has an expense ratio of just 0.02%.” For just $2 in annual fees for a $10,000 investment, investors get passive exposure to the S&P 500 index, a hard-to-beat benchmark.
According to the S&P Indices Versus Active report, 89.5% of U.S. large-cap funds underperformed the S&P 500 over the 15 years ending Dec. 31, 2024. One of the biggest reasons was cost, making SWPPX’s low fee a significant advantage for long-term investors. Over the past decade, SWPPX’s 13.6% annualized return has outperformed the Morningstar large blend category average of 12.1%.
Schwab 1000 Index Fund (SNXFX)
While the S&P 500 is a widely used benchmark, it’s not immune to losses. During bear markets like 2022, it can suffer double-digit drawdowns. These periods can present a tax-loss harvesting opportunity, where an investor sells SWPPX to realize a loss and reinvests in a fund offering similar exposure without being substantially identical. One good candidate for tax-loss harvesting SWPPX is SNXFX.
This fund also tracks U.S. stocks but follows the Schwab 1000 Index, a broader benchmark that includes the 1,000 largest U.S. companies. This benchmark’s rules are more relaxed than the S&P 500’s, but because it is market-cap weighted, SNXFX overlaps with SWPPX when it comes to top holdings. SNXFX charges a 0.05% expense ratio and maintains a tax-efficient turnover rate of just 3%.
Schwab Total Stock Market Index Fund (SWTSX)
A third tax-loss harvesting candidate suitable for swapping out of SWPPX or SNXFX is SWTSX. This fund also tracks U.S. equities but uses a more expansive benchmark. SWTSX tracks the Dow Jones U.S. Total Stock Market Index, which includes large-, mid- and small-cap stocks. As a result, SWTSX’s portfolio holds over 3,000 names and is arguably the best representation of the investable U.S. stock market.
Despite the broader reach, SWTSX still shares a high degree of overlap with SWPPX and SNXFX. Like those funds, it is market-cap weighted, so large-cap stocks continue to dominate the top holdings. The fund charges a low 0.03% expense ratio and maintains a tax-efficient turnover rate of just 2.4%. It is also one of Schwab’s most popular mutual funds, with over $29 billion in assets under management.
Schwab International Index Fund (SWISX)
SWPPX, SNXFX and SWTSX are all solid options for the U.S. equity portion of a three-fund portfolio. To round it out, investors may want to add international equity exposure. For this role, Schwab offers SWISX, which tracks the MSCI EAFE Index, short for Europe, Australasia and the Far East. This fund includes stocks from Japan, Britain, France, Germany, Switzerland, Australia, Spain and Italy.
International investing used to be costly and complicated. Investors were often limited to American depositary receipts, which didn’t cover all stocks, or had to convert currency and buy foreign-listed shares if their brokerage allowed it. SWISX simplifies access by offering exposure to over 700 international stocks in U.S. dollars, all for a low 0.06% expense ratio.
Schwab U.S. Aggregate Bond Index Fund (SWAGX)
The final component of a three-fund portfolio is a domestic bond fund. Ideally, this should include a broad mix of government-issued bonds like U.S. Treasurys and agency mortgage-backed securities, along with investment-grade corporate bonds. It should also span multiple maturities, averaging in the intermediate range to offer a balance between income and interest rate risk.
For this role, Schwab’s SWAGX is a strong fit. The fund tracks the Bloomberg U.S. Aggregate Bond Index, a well-known and diversified benchmark with over 10,000 holdings. SWAGX currently has a 4.3% 30-day SEC yield and is lower risk than equity funds, although it can be sensitive to changes in interest rates. The fund remains cost effective, with a 0.04% expense ratio.
Schwab Treasury Inflation Protected Securities Index Fund (SWRSX)
While a three-fund portfolio is technically complete, some investors choose to make small adjustments to address potential weaknesses. One of the most common concerns is inflation, which can erode the value of stocks and especially regular bonds. Commodities like gold or silver are sometimes used as an inflation hedge, but they’ve been criticized for being speculative and not producing cash flow.
A more targeted solution is Treasury inflation-protected securities, or TIPS. These are government bonds with principal values that adjust based on changes in the consumer price index, helping preserve the real value of interest payments during inflationary periods. Investors can access TIPS at low cost through SWRSX, which charges a 0.05% expense ratio and currently pays a 4.6% 30-day SEC yield.
Schwab Short-Term Bond Index Fund (SWSBX)
Another lesson many three-fund portfolio investors learned in 2022 was the vulnerability of aggregate bond funds like SWAGX to rising interest rates. Bond prices move inversely to interest rates, and because aggregate funds typically hold intermediate-maturity bonds, they experienced some of their steepest losses in decades when rates surged. A more tempered alternative for lower-risk investors is SWSBX.
This fund tracks the Bloomberg US Government/Credit 1-5 Year Index. It holds the same types of high-quality bonds as SWAGX, but with shorter maturities, making it less sensitive to rate changes. The fund trades off some long-term return potential for reduced price volatility and interest rate risk. SWSBX charges a 0.06% expense ratio and currently pays a 4% 30-day SEC yield.
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7 of the Best Charles Schwab Mutual Funds originally appeared on usnews.com
Update 07/23/25: This story was published at an earlier date and has been updated with new information.