Some asset managers recognize that their ever-expanding lineups of mutual funds can be intimidating, especially for investors who are new to fund selection.
To make the process easier, Charles Schwab offers curated guidance through what it calls the OneSource Select List, described in its own words as a “pre-screened, no-load, no-transaction-fee list of mutual funds with a focus on performance, risk, income and expense.”
Each of these factors plays an important role in identifying quality funds. Strong performance helps highlight funds that have delivered competitive returns over time. Risk considers how a fund behaves during market downturns and helps ensure investors stay within their comfort zone.
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Income matters for those seeking regular cash flow, while low expenses are crucial for maximizing net returns. Schwab’s focus on “no-load” and “no-transaction-fee” funds also helps investors avoid upfront sales charges or trading costs, meaning more of their money stays invested and works for them.
The lineup is broad enough for investors to build a complete portfolio. From this curated selection, Schwab has options for large-cap stock funds, small- and mid-cap U.S. stock funds, international stock funds, specialty funds, taxable bond funds, and tax-free bond funds.
For investors, Schwab’s approach provides a practical framework that can be applied across other fund families as well. Even if you invest through Vanguard, Fidelity or another provider, focusing on the same factors — performance, risk, income and expenses — can help you identify funds that are well suited for a buy-and-hold portfolio.
“Before investing in any fund, investors should carefully review the fund’s prospectus and consider factors such as the fund’s investment strategy, fees and expenses, historical performance, and risk profile,” says Sean August, CEO of the August Wealth Management Group. “Additionally, investors should be aware of any tax implications associated, and consult with a financial advisor as needed.”
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 International Index Fund (SWISX) | 0.06% |
| Schwab Small-Cap Index Fund (SWSSX) | 0.04% |
| Schwab U.S. Aggregate Bond Index Fund (SWAGX) | 0.04% |
| Schwab Tax-Free Bond Fund (SWNTX) | 0.38% |
| Schwab Balanced Fund (SWOBX) | 0.51% |
| Schwab Target 2065 Index Fund (SWYOX) | 0.08% |
Schwab S&P 500 Index Fund (SWPPX)
“A Charles Schwab mutual fund that hit the twin sweet spots of low cost and significant size is SWPPX,” says Michael Ashley Schulman, partner and chief investment officer at Running Point Capital Advisors, a multi-family office. This fund is well capitalized, with $131 billion in total assets under management (AUM), and charges a 0.02% expense ratio, or $2 annually in fee drag per $10,000 investment.
“The expense ratio is quite competitive, offering one of the lowest-cost core choices in the retail mutual fund space — in institutional terms, you are getting low-cost market beta with this fund,” Schulman explains. “It can be a long-term core holding for retirement accounts, automated savings plans, and anyone prioritizing cost and simplicity over chasing the next chart-topping single.”
Schwab International Index Fund (SWISX)
“Even with low-fee funds, you still need to consider tax efficiency in your portfolios (especially in taxable accounts) and how the fund fits with your overall financial plan, asset allocation, risk budget and any overlay strategies,” Schulman explains. “If you want niche equity exposure (e.g. international, emerging markets, private markets or specific themes), you may want additional complementary funds.”
For additional diversification, investors can pair SWPPX with SWISX. This Schwab mutual fund tracks the MSCI EAFE Index, which spans countries in the Europe, Australasia and Far East regions. SWISX charges a reasonable 0.06% expense ratio, which is competitive for international funds. It is also fairly tax-efficient when it comes to year-end capital gains distributions due to a low 10% portfolio turnover rate.
Schwab Small-Cap Index Fund (SWSSX)
“At our firm, we only utilize mutual funds within 401(k) plans that do not permit index funds or individual securities through a self-directed brokerage window,” August explains. “In these cases, we focus on selecting institutional-quality mutual funds that demonstrate strong long-term performance, competitive expense ratios and broad diversification within their universe.”
SWSSX is an example of a small-cap fund that hits most of these marks. It owns just shy of 2,000 equities designed to replicate the Russell 2000 Index at a highly competitive 0.04% expense ratio. The fund has managed to slightly beat the index by lending securities, which generates additional income. However, investors should expect more volatility with SWSSX compared to large-cap funds.
Schwab U.S. Aggregate Bond Index Fund (SWAGX)
A time-tested way to lower portfolio volatility is by complementing equity-only funds like SWPPX with a high-quality bond fund. For this role, SWAGX is a well-rounded candidate. It tracks the Bloomberg US Aggregate Bond Index, a popular benchmark of more than 10,000 investment-grade U.S. Treasurys, agency bonds, mortgage-backed securities and corporate bonds.
This index is designed as a one-size-fits-all bond holding, offering broad diversification across sectors and maturities. It doesn’t tilt toward any specific duration, holding both long- and short-term bonds that average out to an intermediate interest rate sensitivity. Investors also get moderate income generation, with a 4% 30-day SEC yield and a competitive 0.04% expense ratio.
[Read: 9 of the Best Bond ETFs to Buy Now.]
Schwab Tax-Free Bond Fund (SWNTX)
While SWAGX’s 4% yield looks appealing on the surface, the actual after-tax income can be lower if the fund isn’t held in a tax-sheltered account. That’s because the interest earned from the corporate bonds inside the fund is taxed as ordinary income, a drawback for investors in higher tax brackets. For those prioritizing after-tax yield, SWNTX is a strong alternative to consider.
SWNTX tracks the Bloomberg Municipal 3-15 Year Blend Index. The income from these bonds is exempt from federal income tax and the alternative minimum tax, making them especially appealing to investors in high-tax states or brackets. While its 3.3% 30-day SEC yield appears lower on paper, its after-tax return can surpass SWAGX for some investors. The trade-off is a higher 0.38% expense ratio.
Schwab Balanced Fund (SWOBX)
Investors can pair SWPPX and SWAGX in a 60/40 mix to build a balanced U.S. stock-and-bond portfolio, or they can outsource the work to SWOBX. This fund automatically allocates 55% to 65% in stocks and 35% to 45% in bonds, rebalancing periodically to stay within that range. SWOBX achieves this through a “fund of funds” structure, investing in underlying Schwab mutual funds.
The equity sleeve is currently focused on core U.S. stocks with tilts toward growth, small caps and a modest international allocation, while the 36% bond portion is invested in SWAGX for simplicity. The all-in cost, inclusive of underlying fund expenses, comes to 0.51%. Historical risk-adjusted returns have been competitive, aside from rare years like 2022 when stocks and bonds fell in tandem.
Schwab Target 2065 Index Fund (SWYOX)
Another hands-off option from Schwab, alongside balanced funds like SWOBX, is its lineup of target-date funds. SWYOX follows the same “fund of funds” model but adjusts its mix of stocks and bonds over time using what’s called a glide path. This means the fund’s allocation between stocks and bonds automatically shifts over time based on the investor’s expected retirement date.
Early in an investor’s career, a fund like SWYOX is heavily weighted toward equities to maximize long-term growth potential. As the target year approaches, the portfolio gradually becomes more conservative, tilting toward bonds to prioritize capital preservation and income generation during retirement. SWYOX charges a 0.08% net expense ratio, waived down from 0.15%.
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7 of the Best Charles Schwab Mutual Funds originally appeared on usnews.com
Update 11/04/25: This story was published at an earlier date and has been updated with new information.
