Schwab U.S. Small-Cap ETF NCSR Certified annual shareholder report (management investment company)

Schwab U.S. Small-Cap ETF (SCHA) N-CSRCertified annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22311

Schwab Strategic Trust

(Exact name of registrant as specified in charter)

211 Main Street, San Francisco, California 94105

(Address of principal executive offices) (Zip code)

Marie Chandoha
Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs

211 Main Street, San Francisco, California 94105

(Name and address of agent for service)

Registrant’s telephone number, including area code: (415) 636-7000

Date of fiscal year end: February 28

Date of reporting period: February 28, 2014

Item 1: Report(s) to Shareholders.

Annual report dated February 28, 2014, enclosed.

Schwab U.S. REIT ETF^tm

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Schwab U.S. REIT ETF^tm

Annual Report

February 28, 2014

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In This Report


Performance at a Glance		2
From the President		3
Fund Management		5
Performance and Fund Facts		6
Fund Expenses		8
Financial Statements and Portfolio Holdings		9
Financial Notes		15
Report of Independent Registered Public Accounting Firm		23
Other Information		24
Investment Advisory Agreement Approval		25
Trustees and Officers		27
Glossary		29

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: SEI Investments Distribution Co. (SIDCO).

The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedule of Portfolio Holdings are sub-categories of Sector classifications.

Performance at a Glance

The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabetfs.com.


Total Returns for the 12 Months Ended February 28, 2014

Schwab U.S. REIT ETF^tm (Ticker Symbol: SCHH)


Market Price Return¹			5.98%
NAV Return¹			6.08%
Dow Jones U.S. Select REIT Index			6.20%
ETF Category: Morningstar Real Estate²			4.43%


Performance Details			pages 6-7

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and you cannot invest in them directly. Performance results less than one year are not annualized.

For index definitions, please see the Glossary.

Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership —“Standard & Poor’s” and “S&P” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and “Dow Jones” is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by CSIM. The “Dow Jones U.S. U.S. Select REIT Index” is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. REIT ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in such product.


¹		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
²		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.

2 Schwab U.S. REIT ETF

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment goals, and for reading this annual report about the Schwab U.S. REIT ETF. This fund is designed to track the Dow Jones U.S. Select REIT Index, while providing the benefits of an ETF, including transparency, intraday trading, and potential tax efficiency.

Turning to the 12-month reporting period ended February 28, 2014, the fund’s returns were in line with the 6.2% total return of the index. U.S. REITs fared well early in the reporting period, helped by generally improving property fundamentals and rising occupancy rates. However, these securities declined shortly thereafter amid concern that the Federal Reserve would announce plans to “taper” its stimulative economic policies. Market sentiment shifted yet again in early 2014, with U.S. REITs rallying amid healthy operating results and generally solid earnings reports, in spite of the Fed beginning to taper its policies.

Within this environment, the performance of U.S. REITs varied considerably from one sub-industry to another. Hotel and Resort REITs were some of the better performers and generated positive overall returns. By comparison, Health Care REITs were some of the worst performers, producing negative overall returns.

Asset Class Performance Comparison % returns during the 12 months ended 2/28/2014

This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.



		25.37%		S&P 500^® Index: measures U.S. large-cap stocks

		6.20%		Dow Jones U.S. Select REIT Index: measures U.S. real estate investment trusts (REITs)

		19.28%		MSCI EAFE^® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East

		0.15%		Barclays U.S. Aggregate Bond Index: measures the U.S. bond market

For index definitions, please see the Glossary.

Data source: Index provider websites and Charles Schwab Investment Management, Inc.

Nothing in this report represents a recommendation of a security by the investment adviser.

Management views and portfolio holdings may have changed since the report date.

Schwab U.S. REIT ETF 3

From the President continued

Turning to the 12-month reporting period ended February 28, 2014, the fund’s returns were in line with the 6.2% total return of the index.

For more information about the Schwab U.S. REIT ETF, please continue reading this report. In addition, you can find further details about this ETF and about ETF investing by visiting www.schwabetfs.com, or by contacting us at 1-800-435-4000.

Sincerely,

Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested. Past performance is not an indication of future results.

4 Schwab U.S. REIT ETF

Fund Management



		Agnes Hong, CFA, Managing Director and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the fund. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients.

		Ferian Juwono, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent over three years as a portfolio manager, managing equity index funds for institutional clients, and nearly two years as a senior business analyst. Prior to that, Mr. Juwono worked for over four years as a senior financial analyst with Union Bank of California.

		Chuck Craig, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2012, Mr. Craig worked at Guggenheim Funds (formerly Claymore Group), where he spent over five years as a managing director of portfolio management and supervision, and three years as vice president of product research and development. Prior to that, he worked as an equity research analyst at First Trust Portfolios (formerly Niké Securities), and a trader and analyst at PMA Securities, Inc.

Schwab U.S. REIT ETF 5

Schwab U.S. REIT ETF™

The Schwab U.S. REIT ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Dow Jones U.S. Select REIT Index (the index). The index is a float-adjusted market capitalization-weighted index comprised of real estate investment trusts (REITs). The index generally includes REITs that own and operate income-producing commercial and/or residential real estate, derive at least 75% of the REIT’s total revenue from the ownership and operation of real estate assets, and have a minimum total market capitalization of $200 million at the time of its inclusion. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.

For the 12-month reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 5.98% and its NAV return was 6.08% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 6.20% for the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. U.S. REITs generated moderate returns for the 12-month reporting period. Concerns about the potential for the Federal Reserve to “taper” its stimulative economic policies, worries about higher U.S. interest rates, and relatively sluggish economic growth kept REITs from rallying as sharply as the broader stock market. Within the index, Hotel and Resort REITs outperformed other sub-industries for the period, while the only sub-industry that generated negative overall returns was Health Care REITs.

Contributors and Detractors. Residential REITs, which include companies or trusts that are involved with residential properties such as multifamily homes, apartments, and student housing were the biggest contributors to the fund’s total return. Residential REITs represented an average weight of approximately 18% of the fund for the reporting period, and returned approximately 7%. One significant contributor in this sub-industry was Equity Residential, a real estate investment trust that acquires, develops, and manages apartment complexes. The fund’s Equity Residential holdings returned approximately 10% for the 12-month reporting period.

Hotel and Resort REITs, which represented an average weight of approximately 6% of the fund, also provided a meaningful total return contribution. The fund’s Hotel and Resort REITs returned approximately 23%, reflecting the overall performance of companies or trusts engaged in activities involving hotel and resort properties. One significant contributor in this sub-industry was Host Hotels and Resorts, which holds controlling interests in upscale hotel lodging properties. The fund’s Host Hotels and Resorts holdings returned roughly 21%.

Health Care REITs were the biggest detractors from the fund’s total return. Health Care REITs include companies or trusts that are engaged in activities concerning properties that serve the health care industry, including assisted living properties, hospitals, and nursing homes. Health Care REITs represented an average weight of approximately 15% of the fund for the reporting period, and returned approximately -10%. One significant detractor within this sub-industry was HCP, Inc., which invests in properties throughout the U.S. that are related to the Health Care sub-industry. The fund’s HCP, Inc. holdings returned approximately -17%.

Industrial REITs, which represented an average weight of approximately 6% of the fund for the 12-month reporting period, returned roughly 11%, and were relatively weak contributors to the fund’s total return as compared to other sub-industries. Industrial REITs include companies or trusts that are involved in the acquisition, development, ownership, leasing, management, and operation of industrial properties. One limited contributor within this sub-industry was EastGroup Properties, Inc., which acquires and develops industrial properties in the U.S. The fund’s EastGroup Properties, Inc. holdings returned approximately 13%.

As of 02/28/14:

Statistics


Number of Holdings			87
Weighted Average Market Cap ($ x 1,000,000)			$15,782
Price/Earnings Ratio (P/E)			49.6
Price/Book Ratio (P/B)			2.3
Portfolio Turnover Rate¹			11%

Sector Weightings % of Investments


Specialized REITs			27.4%
Retail REITs			25.8%
Residential REITs			18.3%
Office REITs			15.2%
Diversified REITs			7.3%
Industrial REITs			5.8%
Other			0.2%
Total			100.0%

Top Equity Holdings % of Net Assets²


Simon Property Group, Inc.			10.7%
Public Storage			5.3%
ProLogis, Inc.			4.4%
Equity Residential			4.2%
Ventas, Inc.			3.9%
HCP, Inc.			3.8%
Boston Properties, Inc.			3.7%
Health Care REIT, Inc.			3.6%
Vornado Realty Trust			3.6%
AvalonBay Communities, Inc.			3.4%
Total			46.6%

Management views and portfolio holdings may have changed since the report date.

An index is a statistical composite of a specified financial market or sector. Unlike the fund, an index does not actually hold a portfolio of securities and its return is not inclusive of trading and management costs incurred by the fund.

Source of Sector Classification: S&P and MSCI.


¹		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
²		This list is not a recommendation of any security by the investment adviser.

6 Schwab U.S. REIT ETF

Schwab U.S. REIT ETF^tm

Performance and Fund Facts as of 02/28/14

January 13, 2011 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Average Annual Total Returns¹


Fund and Inception Date	1 Year			3 Years			Since Inception*


Fund: Schwab U.S. REIT ETF^tm (1/13/11)
Market Price Return²		5.98	%		9.22	%	11.72%
NAV Return²		6.08	%		9.26	%	11.73%
Dow Jones U.S. Select REIT Index		6.20	%		9.41	%	11.89%
ETF Category: Morningstar Real Estate³		4.43	%		8.88	%	11.12%

Fund Expense Ratio⁴: 0.07%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Investing in REITs may pose additional risks such as real estate industry risk, interest rate risk and liquidity risk. The Schwab U.S. REIT ETF^tm is non-diversified and may invest in securities of relatively few issuers. As a result, the fund may experience increased volatility.

Index ownership —“Standard & Poor’s” and “S&P” are registered trademarks of Standard & Poor’s Financial Services LLC (“S&P”) and “Dow Jones” is a registered trademark of Dow Jones Trademark Holdings LLC (“Dow Jones”) and have been licensed for use by S&P Dow Jones Indices LLC and its affiliates and sublicensed for certain purposes by Charles Schwab Investment Management, Inc. (CSIM). The “The Dow Jones U.S. Select REIT Index“ is a product of S&P Dow Jones Indices LLC or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. REIT ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, S&P, or their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, S&P, nor their respective affiliates make any representation regarding the advisability of investing in such product.


*		Inception represents the date that the shares began trading in the secondary market.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab U.S. REIT ETF 7

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

As a fund shareholder, you may incur two types of costs: (1) transaction costs, including brokerage commissions on purchases and sales of fund shares; and, (2) ongoing costs, including management fees and other fund expenses.

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2013 and held through February 28, 2014.

Actual Return line in the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Return line in the table below provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.

You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, including any brokerage commissions you may pay when purchasing or selling shares of the fund. Therefore, the hypothetical return line of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 9/1/13		at 2/28/14		9/1/13–2/28/14

Schwab U.S. REIT ETF^tm
Actual Return		0.07%	$	1,000.00	$	1,115.80	$	0.37
Hypothetical 5% Return		0.07%	$	1,000.00	$	1,024.45	$	0.35


¹		Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights which covers a 12-month period.
²		Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year.

8 Schwab U.S. REIT ETF

Schwab U.S. REIT ETF™

Financial Statements

Financial Highlights


	3/1/13–			3/1/12–			3/1/11–			1/12/11¹–
	2/28/14			2/28/13			2/29/12			2/28/11


Per-Share Data ($)

Net asset value at beginning of period		31.96			28.30			27.28			25.00

Income (loss) from investment operations:
Net investment income (loss)		0.80			0.72			0.65			0.06
Net realized and unrealized gains (losses)		1.08			3.71			0.98			2.22

Total from investment operations		1.88			4.43			1.63			2.28
Less distributions:
Distributions from net investment income		(0.78	)		(0.77	)		(0.61	)		—

Net asset value at end of period		33.06			31.96			28.30			27.28

Total return (%)		6.08			15.83			6.15			9.12	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.07			0.10	³		0.13			0.13	⁴
Net investment income (loss)		2.52			2.43			2.50			3.82	⁴
Portfolio turnover rate⁵		11			7			5			—	²
Net assets, end of period ($ x 1,000)		790,052			466,567			277,370			69,566

¹ Commencement of operations.

² Not annualized.

³ Effective September 20, 2012, the annual operating expense ratio was reduced. The ratio presented for the period ended 2/28/13 is a blended ratio.

⁴ Annualized.

⁵ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

See financial notes 9

Schwab U.S. REIT ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website at www.schwabetfs.com.

Cost

Value

Holdings by Category

($)

.9%

Common Stock

749,517,648

789,395,177

.2%

Other Investment Companies

1,748,900

1,770,145

100

.1%

Total Investments

751,266,548

791,165,322

.1)%

Other Assets and
Liabilities, Net

(1,113,318

)

100

.0%

Net Assets

790,052,004


	Number		Value
Security	of Shares		($)

Common Stock 99.9% of net assets

Diversified REITs 7.3%
Cousins Properties, Inc.		299,706		3,461,604
Duke Realty Corp.		552,308		9,278,774
First Potomac Realty Trust		99,990		1,267,873
Liberty Property Trust		248,560		9,509,906
PS Business Parks, Inc.		33,460		2,811,309
Vornado Realty Trust		294,974		28,403,047
Washington REIT		113,053		2,843,283

				57,575,796

Industrial REITs 5.8%
DCT Industrial Trust, Inc.		540,618		4,281,694
EastGroup Properties, Inc.		51,624		3,202,753
First Industrial Realty Trust, Inc.		168,265		3,237,419
Prologis, Inc.		846,128		34,852,012

				45,573,878

Office REITs 15.2%
Alexandria Real Estate Equities, Inc.		120,934		8,761,668
BioMed Realty Trust, Inc.		324,562		6,711,942
Boston Properties, Inc.		259,347		29,158,383
Brandywine Realty Trust		267,292		3,915,828
CommonWealth REIT		189,693		5,150,165
Corporate Office Properties Trust		147,224		3,926,464
Digital Realty Trust, Inc.		217,490		11,779,259
Douglas Emmett, Inc.		219,880		5,921,368
DuPont Fabros Technology, Inc.		110,418		2,932,702
Franklin Street Properties Corp.		150,570		1,885,136
Highwoods Properties, Inc.		152,960		5,768,122
Kilroy Realty Corp.		138,620		7,973,422
Mack-Cali Realty Corp.		147,702		3,286,370
Parkway Properties, Inc.		113,360		2,089,225
Piedmont Office Realty Trust, Inc., Class A		283,856		4,905,032
SL Green Realty Corp.		160,869		15,979,118

				120,144,204

Residential REITs 18.3%
American Campus Communities, Inc.		177,338		6,550,866
American Homes 4 Rent, Class A		78,320		1,282,882
Apartment Investment & Management Co., Class A		248,009		7,412,989
Associated Estates Realty Corp.		95,122		1,626,586
AvalonBay Communities, Inc.		206,250		26,600,062
BRE Properties, Inc.		130,972		8,090,140
Camden Property Trust		144,834		9,660,428
Education Realty Trust, Inc.		196,936		1,857,106
Equity Lifestyle Properties, Inc.		134,318		5,406,300
Equity Residential		568,520		33,241,364
Essex Property Trust, Inc.		64,360		10,764,210
Home Properties, Inc.		96,078		5,662,837
Mid-America Apartment Communities, Inc.		126,503		8,556,663
Post Properties, Inc.		92,184		4,473,690
Sun Communities, Inc.		56,404		2,597,968
UDR, Inc.		425,806		10,990,053

				144,774,144

Retail REITs 25.8%
Acadia Realty Trust		94,166		2,490,691
CBL & Associates Properties, Inc.		289,111		5,143,285
Cedar Realty Trust, Inc.		112,555		692,213
DDR Corp.		494,650		8,221,083
Equity One, Inc.		106,116		2,461,891
Federal Realty Investment Trust		110,057		12,250,445
General Growth Properties, Inc.		912,448		20,092,105
Glimcher Realty Trust		247,604		2,409,187
Inland Real Estate Corp.		141,488		1,515,336
Kimco Realty Corp.		693,100		15,428,406
Kite Realty Group Trust		222,895		1,377,491
Pennsylvania Real Estate Investment Trust		117,588		2,205,951
Ramco-Gershenson Properties Trust		110,896		1,851,963
Regency Centers Corp.		156,306		7,935,656
Rouse Properties, Inc.		56,116		1,050,491
Saul Centers, Inc.		22,044		1,024,385
Simon Property Group, Inc.		526,172		84,866,282
Tanger Factory Outlet Centers, Inc.		159,652		5,477,660
Taubman Centers, Inc.		107,550		7,576,897
The Macerich Co.		238,613		14,347,800
Weingarten Realty Investors		189,766		5,787,863

				204,207,081

Specialized REITs 27.5%
Ashford Hospitality Prime, Inc.		35,372		592,481
Ashford Hospitality Trust, Inc.		115,676		1,293,258
CubeSmart		220,836		3,866,838
DiamondRock Hospitality Co.		332,688		4,198,523
Extra Space Storage, Inc.		186,645		9,164,270
FelCor Lodging Trust, Inc.		193,594		1,686,204
HCP, Inc.		773,706		29,996,582
Health Care REIT, Inc.		489,651		28,762,100
Healthcare Realty Trust, Inc.		161,569		3,872,809

10 See financial notes

Schwab U.S. REIT ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Hersha Hospitality Trust		325,550		1,829,591
Hospitality Properties Trust		251,906		6,675,509
Host Hotels & Resorts, Inc.		1,281,411		25,205,354
LaSalle Hotel Properties		176,139		5,520,196
LTC Properties, Inc.		58,794		2,215,358
Pebblebrook Hotel Trust		105,160		3,495,518
Public Storage		245,121		41,425,449
Senior Housing Properties Trust		318,348		7,099,160
Sovran Self Storage, Inc.		54,014		3,996,496
Sunstone Hotel Investors, Inc.		308,886		4,176,139
Universal Health Realty Income Trust		21,988		936,249
Ventas, Inc.		498,350		31,111,990

				217,120,074

Total Common Stock
(Cost $749,517,648)				789,395,177




Other Investment Companies 0.2% of net assets

Equity Fund 0.0%
SPDR Dow Jones REIT ETF		3,200		249,312

Money Market Fund 0.2%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (a)		1,520,833		1,520,833

Total Other Investment Companies
(Cost $1,748,900)				1,770,145



End of Investments

At 02/28/14, the tax basis cost of the fund’s investments was $751,977,623 and the unrealized appreciation and depreciation were $48,887,674 and ($9,699,975), respectively, with a net unrealized appreciation of $39,187,699.


(a)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
REIT —		Real Estate Investment Trust

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):

Quoted Prices in

Significant

Active Markets for

Other Significant

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

(Level 1)

(Level 2)

(Level 3)

Total

Common Stock¹

$789,395,177

$—

$789,395,177

Other Investment Companies¹

1,770,145

—

1,770,145

Total

$791,165,322

$—

$791,165,322


¹		As categorized in Portfolio Holdings.

The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no transfers between Level 1, Level 2 and Level 3 for the period ended February 28, 2014.

See financial notes 11

Schwab U.S. REIT ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments, at value (cost $751,266,548)		$791,165,322
Receivables:
Fund shares sold		103,560,249
Dividends	+	324,433

Total assets		895,050,004

Liabilities

Payables:
Investments bought		104,993,845
Investment adviser fees		4,155

Total liabilities		104,998,000

Net Assets

Total assets		895,050,004
Total liabilities	—	104,998,000

Net assets		$790,052,004

Net Assets by Source
Capital received from investors		750,868,375
Net investment income not yet distributed		1,612,310
Net realized capital losses		(2,327,455	)
Net unrealized capital appreciation		39,898,774

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$790,052,004

23,900,000

$33.06

12 See financial notes

Schwab U.S. REIT ETF

Statement of

Operations

For the period March 1, 2013 through February 28, 2014



Investment Income

Dividends		$14,762,365
Interest	+	10

Total investment income		14,762,375

Expenses

Investment adviser fees		398,895

Total expenses	−	398,895

Net investment income		14,363,480

Realized and Unrealized Gains (Losses)

Net realized losses on investments		(1,738,305	)
Net realized gains on in-kind redemptions	+	9,182,610

Net realized gains		7,444,305
Net change in unrealized appreciation (depreciation) on investments	+	7,893,159

Net realized and unrealized gains		15,337,464

Increase in net assets resulting from operations		$29,700,944

See financial notes 13

Schwab U.S. REIT ETF

Statements of

Changes in Net Assets

For the current and prior report periods



Operations


3/1/13-2/28/14				3/1/12-2/28/13
Net investment income		$14,363,480			$8,649,882
Net realized gains		7,444,305			13,507,377
Net change in unrealized appreciation (depreciation)	+	7,893,159			26,002,721

Increase in net assets resulting from operations		29,700,944			48,159,980

Distributions to Shareholders

Distributions from net investment income		($13,544,625	)		($8,847,056	)

Transactions in Fund Shares

3/1/13-2/28/14

3/1/12-2/28/13

SHARES

VALUE

SHARES

VALUE

Shares sold

11,200,000

$367,726,254

8,700,000

$266,668,088

Shares redeemed

(1,900,001

)

(60,397,404

)

(3,900,000

)

(116,783,827

)

Net transactions in fund shares

9,299,999

$307,328,850

4,800,000

$149,884,261

Shares Outstanding and Net Assets

3/1/13-2/28/14

3/1/12-2/28/13

SHARES

NET ASSETS

SHARES

NET ASSETS

Beginning of period

14,600,001

$466,566,835

9,800,001

$277,369,650

Total increase

9,299,999

323,485,169

4,800,000

189,197,185

End of period

23,900,000

$790,052,004

14,600,001

$466,566,835

Net investment income not yet distributed

$1,612,310

$793,455

14 See financial notes

Schwab U.S. REIT ETF

Financial Notes

1. Business Structure of the Fund

Schwab U.S. REIT ETF is a series of Schwab Strategic Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the operational funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:



Schwab Strategic Trust (organized January 27, 2009)		Schwab Emerging Markets Equity ETF
Schwab U.S. REIT ETF		Schwab U.S. TIPS ETF
Schwab U.S. Broad Market ETF		Schwab Short-Term U.S. Treasury ETF
Schwab U.S. Large-Cap ETF		Schwab Intermediate-Term U.S. Treasury ETF
Schwab U.S. Large-Cap Growth ETF		Schwab U.S. Aggregate Bond ETF
Schwab U.S. Large-Cap Value ETF		Schwab Fundamental U.S. Broad Market Index ETF
Schwab U.S. Mid-Cap ETF		Schwab Fundamental U.S. Large Company Index ETF
Schwab U.S. Small-Cap ETF		Schwab Fundamental U.S. Small Company Index ETF
Schwab U.S. Dividend Equity ETF		Schwab Fundamental International Large Company Index ETF
Schwab International Equity ETF		Schwab Fundamental International Small Company Index ETF
Schwab International Small-Cap Equity ETF		Schwab Fundamental Emerging Markets Large Company Index ETF

The fund issues and redeems shares at its net assets value per share (“NAV”) only in large blocks of shares, typically 50,000 shares or more (“Creation Units”). These transactions are usually in exchange for a basket of securities and an amount of cash. As a practical matter, only institutions or large investors purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the fund are not redeemable securities.

Individual shares of the fund trade on national securities exchanges and elsewhere during the trading day and can only be bought and sold at market prices throughout the trading day through a broker-dealer. Because fund shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (premium) or less than NAV (discount).

The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the Securities Exchange Commission (“SEC”).

(a) Security Valuation:

Under procedures approved by the fund’s Board of Trustees (the “Board”), the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:


	•	Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.

	•	Securities for which no quoted value is available: The Board has adopted procedures to fair value the fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):


		price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.


	•	Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value.

	•	Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.

The three levels of the fair value hierarchy are as follows:


	•	Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and ETFs. Investments in mutual funds are valued daily at their NAV, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices.

	•	Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

	•	Level 3 — significant unobservable inputs (including the fund’s own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations.

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The levels associated with valuing the fund’s investments as of February 28, 2014 are disclosed in the Portfolio Holdings.

(b) Accounting Policies for certain Portfolio Investments (if held):

Securities Lending: Under the trust’s Securities Lending Program, the fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to have a value of at least 102% of the prior day’s market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities and is marked to market daily. The lending agent provides the fund with indemnification against borrower default. The fund bears the risk of loss with respect to the investment of cash collateral. The cash collateral of securities loaned is invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in the fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between the fund and the lending agent. Costs and expenses, including agent fees, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agent are approximately 15% of the gross lending revenues.

As of February 28, 2014, the fund did not have any securities on loan.

(c) Security Transactions:

Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.

(d) Real Estate Investment Trusts:

The fund invests in real estate investment trusts (REITs) which report information on the source of their distributions annually. Certain distributions received from REITs during the year, which are known to be a return of capital or realized gains, are recorded as a reduction to the cost of the individual REITs or as realized gains on investments, respectively.

(e) Investment Income:

Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund records certain foreign security dividends on the day it learns of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.

(f) Expenses:

Pursuant to the Investment Advisory Agreement (“Advisory Agreement”) between Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”) and the trust, the investment adviser will pay the operating expenses of the fund, excluding interest expense, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Interest expense, taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to the fund are charged directly to the fund.

(g) Distributions to Shareholders:

The fund generally makes distributions from net investment income, if any, quarterly and from net realized capital gains, if any, once a year.

(h) Accounting Estimates:

The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.

Schwab U.S. REIT ETF

Financial Notes (continued)

2. Significant Accounting Policies (continued):

(i) Federal Income Taxes:

The fund intends to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the fund distributes substantially all of its net investment income and realized net capital gains, if any, to its respective shareholders each year. As long as the fund meets the tax requirements, it is not required to pay federal income tax.

(j) Indemnification:

Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss attributable to these arrangements to be remote.

3. Risk Factors:

Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.

Market Risk. Stock and bond markets and the values of securities held by the fund rise and fall daily. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that the investors could lose money.

Investment Style Risk. The fund is not actively managed. Therefore, the fund follows the securities included in the index during upturns as well as downturns. Because of its indexing strategy, the fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the fund’s expenses, the fund’s performance is normally below that of the index.

Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.

Large-Cap Risk. The fund will invest in large-cap segments of the U.S. stock market. Large-cap stocks tend to go in and out of favor based on market and economic conditions. During a period when large-cap U.S. stocks fall behind other types of investments — mid- or small-cap stocks, for instance — the fund’s large-cap holdings could reduce performance.

Small- and Mid-Cap Risk. REITs and other real estate companies may be small- to medium- sized companies in relation to the equity markets as a whole. Historically, mid- and small-cap stocks have been riskier than large-cap stocks. Mid- and small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established companies. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. During a period when mid- and small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — the fund’s small- and mid-cap holdings could reduce performance.

REITs Risk. In addition to the risks associated with investing in securities of real estate companies and real estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts. Further, REITs are dependent upon specialized management skills and may have their investments in relatively few properties, or in a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses.

Real Estate Investment Risk. The fund has a policy of concentrating its investments in real estate companies and companies related to the real estate industry. As such, the fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets. These risks include, among others, declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds or other limits to accessing the credit or capital markets; defaults by borrowers or tenants, particularly during an economic downturn; and changes in interest rates.

Schwab U.S. REIT ETF

Financial Notes (continued)

3. Risk Factors (continued):

Tracking Error Risk. As an index fund, the fund seeks to track the performance of its benchmark index, although it may not be successful in doing so. The divergence between the performance of the fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.

Non-Diversification Risk. The fund is non-diversified, which means that it may invest in securities of relatively few issuers. As a result, a single adverse economic, political or regulatory occurrence may have a more significant effect on the fund’s investments, and the fund may experience increased volatility.

Derivatives Risk. The fund may invest in derivative instruments. The principal types of derivatives the fund may use are futures contracts. A futures contract is an agreement to buy or sell a financial instrument at a specific price on a specific day. The fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as market risk and liquidity risk, are discussed elsewhere in this section. The fund’s use of derivatives is also subject to leverage risk, credit risk, lack of availability risk, valuation risk, correlation risk and tax risk. Leverage risk is the risk that use of derivatives may magnify the effect of any decrease or increase in the value of the fund’s portfolio securities. Credit risk is the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gain. These risks could cause the fund to lose more than the principal amount invested.

Concentration Risk. To the extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class (including the real estate industry, as described above), the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.

Liquidity Risk. A particular investment may be difficult to purchase or sell. The fund may be unable to sell illiquid securities at an advantageous time or price.

Securities Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.

Market Trading Risk. Although fund shares are listed on national securities exchanges, there can be no assurance that an active trading market for fund shares will develop or be maintained. If an active market is not maintained, investors may find it difficult to buy or sell fund shares.

Shares of the Fund May Trade at Prices Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the fund will approximate the fund’s NAV, there may be times when the market price and the NAV vary significantly. Investors may pay more than NAV when they buy shares of the fund in the secondary market, and may receive less than NAV when they sell those shares in the secondary market. (See “Frequency Distribution of Discounts and Premiums” in the “Other Information” section of this report for an overview showing the frequency at which the daily closing price was at a discount or a premium to the fund’s daily NAV.)

Lack of Government Insurance or Guarantee. An investment in the fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.

4. Affiliates and Affiliated Transactions:

CSIM, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser pursuant to an Advisory Agreement between CSIM and the trust.

For its advisory services to the fund, CSIM is entitled to receive an annual fee, payable monthly, equal to 0.07% of the fund’s average daily net assets.

Schwab U.S. REIT ETF

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):

Certain Schwab funds may own shares of other Schwab Funds. As of February 28, 2014, the percentage of outstanding shares of the fund owned by other Schwab funds is less than 1.0% for each fund.

Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other Schwab Funds including Schwab ETFs. All loans are for temporary or emergency purposes only. The interest rate to be charged on a loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board. The fund had no interfund borrowing or lending activity during the period.

5. Other Service Providers:

SEI Investments Distribution Co. is the principal underwriter and distributor of shares of the fund.

State Street Bank and Trust Company (“State Street”) serves as the fund’s transfer agent. As part of these services, the transfer agent maintains records pertaining to the sale, redemption and transfer of the fund’s shares.

State Street also serves as custodian and accountant for the fund. The custodian is responsible for the daily safekeeping of securities and cash held by the fund. The fund’s accountant maintains all books and records related to the fund’s transactions.

6. Board of Trustees:

The Board may include people who are officers and/or directors of CSIM or its affiliate. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees. For information regarding the trustees please refer to Trustees and Officers table at the end of this report.

7. Borrowing from Banks:

The fund has access to custodian overdraft facilities and to an uncommitted line of credit of $100 million with State Street. The fund pays interest on the amounts it borrows at rates that are negotiated periodically.

There were no borrowings from the line of credit by the fund during the period. However, the fund may have utilized its overdraft facility and incurred interest expense, which is disclosed on the fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

8. Purchases and Sales/Maturities of Investment Securities:

For the period ended February 28, 2014, purchases and sales/maturities of securities (excluding in-kind transactions and short-term obligations) were as follows:

9. In-Kind Transactions:

The consideration for the purchase of Creation Units of the fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the securities involved in a relevant fund’s underlying index, and an amount of cash. Investors purchasing and redeeming Creation Units are subject to a standard creation transaction fee and a standard redemption transaction fee paid to the custodian to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Purchasers and redeemers of Creation Units for cash are subject to an additional variable charge paid to the fund that will offset the transaction costs to the fund of buying or selling portfolio securities. In addition, purchasers and redeemers of shares in Creation Units are responsible for payment of the costs of transferring securities to or out of the fund. From time to time, CSIM may cover the cost of any transaction fees when believed to be in the best interests of the fund.

Schwab U.S. REIT ETF

Financial Notes (continued)

9. In-Kind Transactions (continued):

The in-kind transactions for the period ended February 28, 2014 were as follows:

For the period ended February 28, 2014, the fund realized net capital gains or losses resulting from in-kind redemptions of Creation Units. Because such gains or losses are not taxable to the fund and are not distributed to existing fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to capital received from investors at the end of the fund’s tax year. These reclassifications have no effect on net assets or net asset values per share. The net realized in-kind gains or losses for the period ended February 28, 2014 are disclosed in the fund’s Statement of Operations.

10. Federal Income Taxes

As of February 28, 2014, the components of distributable earnings on a tax-basis were as follows:


	Schwab U.S. REIT ETF

Undistributed ordinary income		$1,612,310
Undistributed long-term capital gains		—
Unrealized appreciation		48,887,674
Unrealized depreciation		(9,699,975	)

Net unrealized appreciation (depreciation)		39,187,699

The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2014, the fund had capital loss carryforwards of $876,325 with no expiration*.


*		As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 may now be carried forward indefinitely, but must retain the character of the original loss. However, such losses must be utilized prior to the pre-enactment capital losses, which may increase the likelihood that the pre-enactment capital losses may expire unused. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital loss, irrespective of the character of the original loss.

For tax purposes, realized net capital losses and late-year ordinary losses incurred after October 31 may be deferred and treated as occurring on the first day of the following fiscal year. For the year ended February 28, 2014, the fund had capital losses deferred in the amount of $740,055.

The tax-basis components of distributions paid during the current and prior fiscal years were:


	Schwab U.S. REIT ETF

Current period distributions
Ordinary Income		$13,544,625
Long-term capital gains		—

Prior period distributions
Ordinary Income		8,847,056
Long-term capital gains		—

Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses, in-kind transactions, capital losses related to wash sales, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the fund for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.

Schwab U.S. REIT ETF

Financial Notes (continued)

10. Federal Income Taxes (continued):

The permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments have no impact on net assets or the results of operations. As of February 28, 2014, the fund made the following reclassifications:


	Schwab U.S. REIT ETF

Capital shares		$9,153,422
Undistributed net investment income		—
Net realized gains and losses		(9,153,422	)

For the period ended February 28, 2014, the fund reclassified $9,182,610 of non-taxable security gains and losses realized on the in-kind redemption of Creation Units (Note 9) as an increase or decrease to capital received from investors in the Statement of Assets and Liabilities.

As of February 28, 2014, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended February 28, 2014, the fund did not incur any interest or penalties.

11. Subsequent Events:

Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of:

Schwab U.S. REIT ETF

In our opinion, the accompanying statement of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab U.S. REIT ETF (one of the funds constituting Schwab Strategic Trust, hereafter referred to as the “Fund”) at February 28, 2014, and the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 28, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

April 17, 2014

Other Information (unaudited)

Frequency Distribution of Discounts and Premiums

Market Price vs. NAV as of February 28, 2014

The following charts are provided to show the frequency at which the daily closing market price on the NYSE Arca, Inc. (“Exchange”), the secondary market for shares of the fund, was at a discount or premium to such fund’s daily NAV. The “Market Price” of the fund generally is determined using the midpoint between the highest bid and lowest offer on the Exchange, as of the time that the fund’s NAV is calculated. The fund’s Market Price may at times be at, above or below its NAV. The discount or premium is the percentage difference between the NAV and the Market Price of a fund. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of NAV. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of NAV. The NAV of the fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of the fund will fluctuate in accordance with changes in its NAV, as well as supply and demand. The data presented below represents past performance and cannot be used to predict future results.

Number of Days

Market Price Above NAV

Market Price Below NAV

0-49

50-99

100-199

>200

0-49

50-99

100-199

>200

Basis

Points

Commencement of trading
1/13/11 through 2/28/14

523

—

161

—

Investment Advisory Agreement Approval

The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.

The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds a meeting each year that is dedicated, in part, to considering whether to renew the investment advisory agreement between Schwab Strategic Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab U.S. REIT ETF (the “Fund”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Fund that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.

The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Fund at a meeting held on September 4, 2013, and approved the renewal of the Agreement with respect to the Fund for an additional one year term. The Board’s approval of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at this meeting and at prior meetings, including:


1.	the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates dedicated to the Fund;

2.	the Fund’s investment performance and how it compared to that of certain other comparable exchange-traded funds;

3.	the Fund’s expenses and how those expenses compared to those of certain other comparable exchange-traded funds;

4.	the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and

5.	the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors.

Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered Schwab’s wide range of products, services, and channel alternatives such as free advice, investment research tools and Internet access and an array of account features that benefit the Fund and its shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Fund’s shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund supported renewal of the Agreement with respect to the Fund.

Fund Performance. The Board considered the Fund’s performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other exchange-traded funds and appropriate indices/benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of the Fund, the Trustees considered both risk and shareholder risk expectations for the Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the Agreement with respect to the Fund.

Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement, and the Fund’s operating expense ratio, in each case, in comparison to those of other comparable exchange-traded funds, such peer groups and comparisons

having been selected and calculated by an independent third party. The Trustees also considered fees charged by CSIM to mutual funds that it manages. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal of the Agreement with respect to the Fund.

Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses. The Trustees also considered any other benefits derived by CSIM from its relationship with the Fund, such as whether, by virtue of its management of the Fund, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability with respect to the Fund under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Fund.

Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to the Fund’s shareholders by way of the relatively low advisory fee and unitary fee structure of the Fund. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefit from economies of scale.

In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Fund and concluded that the compensation under the Agreement with respect to the Fund is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.

Trustees and Officers

The tables below give information about the trustees and officers for the Schwab Strategic Trust which includes the fund covered in this report. The “Fund Complex” includes the Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 97 funds.

The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.

Independent Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009.)	Retired/Private Investor (January 2009 – present); Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds.	21	Director, PS Business Parks, Inc. (2005 – 2012).


Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012.)	CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant (wealth management) (January 2008 – April 2012).	21	None


Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009.)	Advisor (January 2008 – present) and Chief Executive Officer (January 1998 – January 2008), Asset International, Inc. (publisher of financial services information); Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (June 2008 – present).	21	None

Interested Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served)	During the Past Five Years	the Trustee	Other Directorships

Walter W. Bettinger II²1960 Trustee (Trustee of Schwab Strategic Trust since 2009.)	As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services.	97	None

Officers of the Trust


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Strategic Trust since 2010.)		Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010).


George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Strategic Trust since 2009.)		Senior Vice President and Chief Financial Officer (Nov. 2004 – present); Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present).


Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President and Chief Investment Officer — Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009).


Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies, Loomis, Sayles & Company (April 2006 – Jan. 2008).


David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President, Charles Schwab & Co., Inc. (Sept. 2011 – present); Senior Vice President and Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.


Catherine MacGregor 1964 Vice President and Assistant Secretary (Officer of Schwab Strategic Trust since 2009.)		Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present).


¹		Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The Schwab ETF’s retirement policy requires that independent trustees retire by December 31 of the year in which the Trustee turns 72 or the Trustee’s twentieth year of service as an independent trustee, whichever comes first.
²		Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation, the parent company of the investment adviser.
³		The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

Glossary

ask See “offer.”

asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage to help offset risks and rewards, based on your goals, time horizon and risk tolerance.

asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.

authorized participant (AP) A large institutional investor that places orders for creation units with the funds’ distributor.

Barclays U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.

beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500^®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.

bid The highest price at which someone is willing to buy a security.

cap, capitalization See “market cap.”

capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.

commencement of operations The date that the first NAV was calculated.

creation unit (C.U.) A basket of securities that is delivered by an authorized participant (AP) to the fund equal to the current holdings of the ETF, plus a designated cash component. In return, the APs receive a large block of ETF shares (typically 50,000 shares), which investors can then buy and sell in the secondary market.

Dow Jones U.S. Select REIT Index A float-adjusted market capitalization weighted index comprised of real estate investment trusts (REITs).

exchange A marketplace, or any organization or group that provides or maintains a marketplace for trading securities, options, futures, or commodities.

expense ratio The amount that is taken from the fund’s assets each year to cover the operating expenses. An expense ratio of 0.50% means that a fund’s expenses amount to half of one percent of its average net assets a year.

inception date The date that the shares began trading in the secondary market.

indicative optimized portfolio value (IOPV) A calculation disseminated by the stock exchange that approximates the fund’s NAV every 15 seconds throughout the trading day.

liquidity The ability to convert a security or asset quickly into cash.

market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.

market price return The return based on the change in market price per share of the fund over a given time period. Market price returns assume that dividends and capital gain distributions have been reinvested in the fund at market price.

median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for this fund), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.

MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes; returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

net asset value (NAV) The value of one share of a fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.

NAV return The return based on the change in NAV of the fund over a given time period. NAV returns assume that dividends and capital gain distributions have been reinvested in the fund.

offer (ask) The lowest price at which an individual is willing to sell a security.

open The price at which a security opened for trading on a given day.

outstanding shares, shares outstanding When speaking of the fund, indicates all shares currently held by investors.

price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.

price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.

primary market The market that deals with the issuance of new securities.

real estate investment trust (REIT) A real estate company that owns and commonly operates income producing commercial and/or residential real estate.

S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.

sampling If a fund uses a sampling method, the fund will not fully replicate the benchmark index and may hold securities not included in the index. A fund that utilizes a sampling approach may not track the return of the index.

secondary market The market in which investors purchase securities from other investors rather than directly from the issuing companies. Organized exchanges facilitate the trading of securities in the secondary market.

spread The gap between bid and ask prices of a security.

stock A share of ownership, or equity, in the issuing company.

total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.

tracking error The difference between the performance of the fund and its benchmark index, positive or negative.

PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT

A Commitment to Your Privacy

Your Privacy Is Not for Sale

We do not and will not sell your personal information to anyone, for any reason.

We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.

How We Collect Information About You

We collect personal information about you in a number of ways.


•	APPLICATION AND REGISTRATION INFORMATION.

We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.


•	TRANSACTION AND EXPERIENCE INFORMATION.

Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.


•	WEBSITE USAGE.

When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.

How We Share and Use Your Information

We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:


•	to help us process transactions for your account;

•	when we use other companies to provide services for us, such as printing and mailing your account statements;

•	when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control).

State Laws

We will comply with state laws that apply to the disclosure or use of information about you.

Safeguarding Your Information — Security Is a Partnership

We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.

Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested. We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.

We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.

Contact Us

To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.

Schwab ETF^tm direct investors: 1-800-435-4000

Notes

Schwab ETFs^tm are designed to be low-cost, diversified investments. Each fund follows broad market indices and provides exposure to specific segments of the market, making each an investment option for the core portions of an investor portfolio. The list to the right shows all currently available Schwab ETFs.

Investors should carefully consider information contained in the prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-800-435-4000 for a prospectus and brochure for any Schwab ETF. Please read the prospectus carefully before you invest. This report must be preceded or accompanied by a current prospectus.

Proxy Voting Policies, Procedures and Results

A description of the proxy voting policies and procedures used to determine how to vote proxies on behalf of the funds is available without charge, upon request, by visiting the Schwab ETFs’ website at www.schwabetfs.com, the SEC’s website at http://www.sec.gov, or by contacting Schwab ETFs at 1-800-435-4000.

Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabetfs.com or the SEC’s website at http://www.sec.gov.

Schwab ETFs^tm

U.S. ETFs

Schwab U.S. Broad Market ETF^tm

Schwab U.S. Large-Cap ETF^tm

Schwab U.S. Large-Cap Growth ETF^tm

Schwab U.S. Large-Cap Value ETF^tm

Schwab U.S. Mid-Cap ETF^tm

Schwab U.S. Small-Cap ETF^tm

Schwab U.S. Dividend Equity ETF^tm

Schwab U.S. REIT ETF^tm

International ETFs

Schwab International Equity ETF^tm

Schwab International Small-Cap Equity ETF^tm

Schwab Emerging Markets Equity ETF^tm

Fixed Income ETFs

Schwab U.S. Aggregate Bond ETF^tm

Schwab Short-Term U.S. Treasury ETF^tm

Schwab Intermediate-Term U.S. Treasury ETF^tm

Schwab U.S. TIPS ETF^tm

Fundamental Index* ETFs

Schwab Fundamental U.S. Broad Market Index ETF

Schwab Fundamental U.S. Large Company Index ETF

Schwab Fundamental U.S. Small Company Index ETF

Schwab Fundamental International Large Company Index ETF

Schwab Fundamental International Small Company Index ETF

Schwab Fundamental Emerging Markets Large Company Index ETF


*		FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC.

Investment Adviser

Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

Schwab ETFs^tm

1-800-435-4000

This report is not authorized for distribution to prospective investors

unless preceded or accompanied by a current prospectus.

Printed on recycled paper.

MFR60994-03

00113731

Annual report dated February 28, 2014, enclosed.

Schwab Fundamental Index* ETFs

Schwab Fundamental

U.S. Broad Market Index ETF

Schwab Fundamental

U.S. Large Company Index ETF

Schwab Fundamental

U.S. Small Company Index ETF

Schwab Fundamental

International Large Company

Index ETF

Schwab Fundamental

International Small Company Index ETF

Schwab Fundamental

Emerging Markets Large Company Index ETF

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*	SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC.

This wrapper is not part of the shareholder report.

Schwab Fundamental Index* ETFs

Annual Report

February 28, 2014

Schwab Fundamental

U.S. Broad Market Index ETF

Schwab Fundamental

U.S. Large Company Index ETF

Schwab Fundamental

U.S. Small Company Index ETF

Schwab Fundamental

International Large Company

Index ETF

Schwab Fundamental

International Small Company Index ETF

Schwab Fundamental

Emerging Markets Large Company Index ETF


*	SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC.

This page is intentionally left blank.

In This Report


Performance at a Glance		2
From the President		3
Fund Management		5
Performance and Fund Facts
Schwab Fundamental U.S. Broad Market Index ETF		6
Schwab Fundamental U.S. Large Company Index ETF		8
Schwab Fundamental U.S. Small Company Index ETF		10
Schwab Fundamental International Large Company Index ETF		12
Schwab Fundamental International Small Company Index ETF		14
Schwab Fundamental Emerging Markets Large Company Index ETF		16
Fund Expenses		18
Financial Statements and Portfolio Holdings
Schwab Fundamental U.S. Broad Market Index ETF		19
Schwab Fundamental U.S. Large Company Index ETF		26
Schwab Fundamental U.S. Small Company Index ETF		33
Schwab Fundamental International Large Company Index ETF		40
Schwab Fundamental International Small Company Index ETF		47
Schwab Fundamental Emerging Markets Large Company Index ETF		54
Financial Notes		61
Report of Independent Registered Public Accounting Firm		71
Other Federal Tax Information		72
Other Information		73
Investment Advisory Agreement Approval		74
Trustees and Officers		76
Glossary		78

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: SEI Investments Distribution Co. (SIDCO).

The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.

Performance at a Glance


Total Returns From Inception (8/15/13) to February 28, 2014*

Schwab Fundamental U.S. Broad Market Index ETF (Ticker Symbol: FNDB)


Market Price Return¹			10.35%
NAV Return¹			10.47%
Russell Fundamental U.S. Index			10.71%
ETF Category: Morningstar Large Value²			10.01%


Performance Details			pages 6-7




Schwab Fundamental U.S. Large Company Index ETF (Ticker Symbol: FNDX)


Market Price Return¹			10.03%
NAV Return¹			10.08%
Russell Fundamental U.S. Large Company Index			10.27%
ETF Category: Morningstar Large Value²			10.01%


Performance Details			pages 8-9




Schwab Fundamental U.S. Small Company Index ETF (Ticker Symbol: FNDA)


Market Price Return¹			14.76%
NAV Return¹			14.64%
Russell Fundamental U.S. Small Company Index			14.97%
ETF Category: Morningstar Small Blend²			15.74%


Performance Details			pages 10-11




Schwab Fundamental International Large Company Index ETF (Ticker Symbol: FNDF)


Market Price Return¹			13.47%
NAV Return¹			12.88%
Russell Fundamental Developed ex-US Large Company Index (Net)			13.16%
ETF Category: Morningstar Foreign Large Value²			10.77%


Performance Details			pages 12-13




Schwab Fundamental International Small Company Index ETF (Ticker Symbol: FNDC)


Market Price Return¹			11.97%
NAV Return¹			10.94%
Russell Fundamental Developed ex-US Small Company Index (Net)			11.53%
ETF Category: Morningstar Foreign Small/Mid Blend²			14.56%


Performance Details			pages 14-15




Schwab Fundamental Emerging Markets Large Company Index ETF (Ticker Symbol: FNDE)


Market Price Return¹			0.16%
NAV Return¹			0.05%
Russell Fundamental Emerging Markets Large Company Index (Net)			0.19%
ETF Category: Morningstar Diversified Emerging Markets²			-0.35%


Performance Details			pages 16-17

For index definitions, please see the Glossary.

Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership — each of the names identifying a Russell Fundamental Index is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the funds under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental Index ETFs are not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the funds.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
²		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.

2 Schwab Fundamental Index ETFs

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment goals, and for reading this annual report about the new Schwab Fundamental Index ETFs. We launched these funds on August 15, 2013, and we are excited to offer six additional “core” investment solutions as a way to help investors diversify their portfolios.

Fundamentally weighted strategies have enjoyed significant asset growth in recent years, as investors have embraced the value of alternative strategies to traditional index funds. Unlike traditional equity indices that are often weighted by market capitalization, fundamentally weighted indices select and weight stocks by objective non-price measures, such as dividends, cash flow, and sales. By using this weighting methodology, these new funds can serve as an effective complement to cap-weighted and actively managed investment vehicles, potentially helping shareholders create more attractive risk-adjusted portfolios. These core products also provide the benefits of an ETF, including transparency, intraday trading, and potential tax efficiency.

Turning to the reporting period ended February 28, 2014, the funds generated positive returns that were generally aligned with their respective indices. The environment for these returns included improvements in the U.S. economy, which supported stocks and led the Federal Reserve to begin “tapering” its policies aimed at stimulating economic growth. In developed overseas markets, the European Central Bank made progress toward unifying the euro zone’s banking system and kept interest rates low to support economic growth, propping up equities in these markets. Meanwhile, select emerging markets

Asset Class Performance Comparison % returns during the period since inception on 8/15/2013 and ended 2/28/2014

This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.



		11.60%		S&P 500^® Index: measures U.S. large-cap stocks

		13.68%		Russell 2000^® Index: measures U.S. small-cap stocks

		10.02%		MSCI EAFE^® Index (Net): measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East

		2.70%		Barclays U.S. Aggregate Bond Index: measures the U.S. bond market

		0.02%		Barclays U.S. Treasury Bills 1-3 Months Index: measures short-term U.S. Treasury obligations

For index definitions, please see the Glossary.

Data source: Index provider websites and Charles Schwab Investment Management, Inc.

Nothing in this report represents a recommendation of a security by the investment adviser.

Management views and portfolio holdings may have changed since the report date.

Schwab Fundamental Index ETFs 3

From the President continued

Turning to the reporting period ended February 28, 2014, the funds generated positive returns that were generally aligned with their respective indices.

faced concerns about potentially higher U.S. interest rates and political unrest, reducing stock returns from these markets. Reflecting these conditions, returns for the indices tracked by the funds ranged from 15.0% for the Russell Fundamental U.S. Small Company Index to a 0.2% return for the Russell Fundamental Emerging Markets Large Company Index.* The performance of international currencies versus the U.S. dollar also played a role in these results, with European currencies generally strengthening and enhancing returns, while emerging market currencies generally depreciated and reduced returns.

For more information about the Schwab Fundamental Index ETFs, please continue reading this report. In addition, you can find further details about these ETFs and about ETF investing by visiting www.schwabetfs.com, or by contacting us at 1-800-435-4000.

Sincerely,


*		The total return cited for the Russell Fundamental Emerging Markets Large Company Index is net of foreign withholding taxes.

4 Schwab Fundamental Index ETFs

Fund Management



		Agnes Hong, CFA, Managing Director and Head of Passive Equity Strategies, leads the portfolio management teams of Schwab’s index mutual funds and equity ETFs. She also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2009, Ms. Hong spent five years as a portfolio manager at Barclays Global Investors (subsequently acquired by BlackRock), where she managed institutional index funds and quantitative active funds. Prior to that, Ms. Hong worked in management consulting and product management, servicing global financial services clients.

		Chuck Craig, CFA, Managing Director and Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2012, Mr. Craig worked at Guggenheim Funds (formerly Claymore Group), where he spent over five years as a managing director of portfolio management and supervision, and three years as vice president of product research and development. Prior to that, he worked as an equity research analyst at First Trust Portfolios (formerly Niké Securities), and a trader and analyst at PMA Securities, Inc.

		Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2013, Ms. Qin worked at The Bank of New York Mellon Corporation, where she spent more than two years as an associate equity portfolio manager, and nearly two years as a performance analyst. Prior to that, Ms. Qin worked at Wells Fargo Fund Management as a mutual fund analyst and at CIGNA Reinsurance in the Variable Annuity Death Benefits (VADBe) Risk Management group as a risk analyst.

Schwab Fundamental Index ETFs 5

Schwab Fundamental U.S. Broad Market Index ETF

The Schwab Fundamental U.S. Broad Market Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental U.S. Index (the index). This index measures the performance of the companies by fundamental overall company scores that are created using the universe the companies in Russell 3000^{^®} Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index that collectively has a similar investment profile to the index. Due to the use of representative sampling, the fund may not hold all of the securities in the index.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 10.35% and its NAV return was 10.47% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 10.71% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Stocks of U.S. companies performed well for the reporting period, with many major stock market indices finishing at or near record highs. Overall improvements in the U.S. economy helped to make these results possible, as did the low interest rate environment that generally made financing more affordable for businesses and households. Within the index, stocks in the Industrials and Health Care sectors were some of the better performers, while stocks in the Telecommunication Services and Consumer Staples sectors underperformed by comparison.

Contributors and Detractors. The Industrials sector contributed the most to the index’s return, and to the return of the fund. The large average weight of this sector reflected part of the reason for this contribution, with Industrials stocks representing approximately 12% of the fund. The fund’s Industrials stocks performed well, returning roughly 17% and reflecting the overall performance of companies involved in aerospace and defense, construction and engineering, electrical equipment, machinery, transportation, and commercial and professional services. One significant contributor in this sector was General Electric Company, a globally diversified company involved in technology and financial services. General Electric Company holdings represented one of the fund’s largest positions in the Industrials sector and returned approximately 8%.

Health Care stocks, which represented an average weight of approximately 11% of the fund, also provided meaningful contributions to the fund’s total return. The fund’s Health Care stocks returned roughly 17%, reflecting the overall performance of companies involved in health care equipment, supplies, and technology. One example from this sector was McKesson Corporation, which distributes pharmaceuticals, medical and surgical supplies, and health-related products. The fund’s McKesson Corporation holdings returned approximately 44%.

The Telecommunication Services sector was the biggest overall detractor from the fund’s performance. The Telecommunication Services sector represented an average weight of approximately 3% of the fund, while returning roughly -3%. One example from this sector was AT&T, Inc., a communications holding company. The fund’s AT&T holdings represented the fund’s largest position in this sector and returned approximately -6%.

The Utilities sector generated positive returns for the fund, but was a weak overall contributor to the fund’s total return. The Utilities sector represented an average weight of approximately 4% of the fund and returned roughly 6%, reflecting the performance of companies that provide electric, gas, and water utilities, as well as independent power production. The fund’s holdings of FirstEnergy Corp., a public utility holding company, provided one example of a detractor within this sector, returning approximately -15%.

As of 02/28/14:

Statistics


Number of Holdings			1,413
Weighted Average Market Cap ($ x 1,000,000)			$95,321
Price/Earnings Ratio (P/E)			18.5
Price/Book Ratio (P/B)			2.2
Portfolio Turnover Rate^1,2			5%

Sector Weightings % of Investments


Energy			14.3%
Financials			14.1%
Information Technology			13.4%
Consumer Discretionary			12.6%
Industrials			11.5%
Health Care			11.5%
Consumer Staples			10.5%
Materials			4.1%
Utilities			4.1%
Telecommunication Services			3.8%
Other			0.1%
Total			100.0%

Top Equity Holdings % of Net Assets³


Exxon Mobil Corp.			4.3%
Chevron Corp.			2.0%
Microsoft Corp.			1.8%
AT&T, Inc.			1.7%
ConocoPhillips			1.6%
Verizon Communications, Inc.			1.6%
Bank of America Corp.			1.4%
General Electric Co.			1.3%
Hewlett-Packard Co.			1.3%
The Procter & Gamble Co.			1.3%
Total			18.3%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

6 Schwab Fundamental Index ETFs

Schwab Fundamental U.S. Broad Market Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental U.S. Broad Market Index ETF (8/15/13)
Market Price Return²		10.35	%
NAV Return²		10.47	%
Russell Fundamental U.S. Index		10.71	%
ETF Category: Morningstar Large Value³		10.01	%

Fund Expense Ratio⁴: 0.32%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership — “Russell Fundamental U.S. Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental U.S. Broad Market Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 7

Schwab Fundamental U.S. Large Company Index ETF

The Schwab Fundamental U.S. Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental U.S. Large Company Index (the index). This index measures the performance of the large company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell 3000^{^®} Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 10.03% and its NAV return was 10.08% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 10.27% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Stocks of large U.S. companies performed well for the reporting period, with many major stock market indices finishing at or near record highs. Overall improvements in the U.S. economy helped to make these results possible, as did the low interest rate environment that generally made financing more affordable for businesses and households. Within the index, stocks in the Industrials and Health Care sectors were some of the better performers, while stocks in the Telecommunication Services and Consumer Staples sectors underperformed by comparison.

Contributors and Detractors. The Health Care sector contributed the most to the return of the index, and to the return of the fund. The large average weight of this sector reflected part of the reason for this contribution, with Health Care stocks representing approximately 12% of the fund. The fund’s Health Care stocks returned roughly 16%, representing the performance of companies involved in health care equipment, supplies, and technology. One example of a contributor from this sector was McKesson Corporation, which distributes pharmaceuticals, medical and surgical supplies, and health-related products. The fund’s McKesson Corporation holdings returned approximately 44%.

Industrials stocks, which represented an average weight of approximately 11% of the fund, also provided meaningful contributions to the fund’s total return. The fund’s Industrials stocks also performed well, returning approximately 16% and reflecting the overall performance of companies involved in aerospace and defense, construction and engineering, electrical equipment, machinery, transportation, and commercial and professional services. One significant contributor in this sector was General Electric Company, a globally diversified company involved in technology and financial services. General Electric Company holdings represented the fund’s largest position in the Industrials sector and returned roughly 8%.

The Telecommunication Services sector was the biggest overall detractor from the fund’s performance. The Telecommunication Services sector represented an average weight of approximately 4% of the fund, while returning roughly -3%. One example from this sector was AT&T, Inc., a communications holding company. The fund’s AT&T holdings represented the fund’s largest position in this sector and returned approximately -6%.

As of 02/28/14:

Statistics


Number of Holdings			604
Weighted Average Market Cap ($ x 1,000,000)			$104,350
Price/Earnings Ratio (P/E)			17.4
Price/Book Ratio (P/B)			2.2
Portfolio Turnover Rate^1,2			6%

Sector Weightings % of Investments


Energy			15.1%
Financials			13.4%
Information Technology			13.1%
Consumer Discretionary			12.1%
Health Care			11.9%
Consumer Staples			11.3%
Industrials			10.7%
Utilities			4.2%
Telecommunication Services			4.1%
Materials			3.9%
Other			0.2%
Total			100.0%

Top Equity Holdings % of Net Assets³


Exxon Mobil Corp.			4.8%
Chevron Corp.			2.2%
Microsoft Corp.			2.0%
AT&T, Inc.			1.8%
ConocoPhillips			1.8%
Verizon Communications, Inc.			1.7%
Bank of America Corp.			1.5%
General Electric Co.			1.4%
The Procter & Gamble Co.			1.4%
Hewlett-Packard Co.			1.4%
Total			20.0%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

8 Schwab Fundamental Index ETFs

Schwab Fundamental U.S. Large Company Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental U.S. Large Company Index ETF (8/15/13)
Market Price Return²		10.03	%
NAV Return²		10.08	%
Russell Fundamental U.S. Large Company Index		10.27	%
ETF Category: Morningstar Large Value³		10.01	%

Fund Expense Ratio⁴: 0.32%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Index ownership — “Russell Fundamental U.S. Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental U.S. Large Company Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 9

Schwab Fundamental U.S. Small Company Index ETF

The Schwab Fundamental U.S. Small Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental U.S. Small Company Index (the index). This index measures the performance of the small company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell 3000^{^®} Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as does the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 14.76% and its NAV return was 14.64% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 14.97% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Stocks of small U.S. companies generated solid returns for the reporting period, generally outperforming the stocks of large U.S. companies, as many major stock market indices finished at or near record highs. Overall improvements in the U.S. economy helped to make the rally by stocks possible, as did the low interest rate environment that generally made financing more affordable for businesses and households. Within the index, stocks in the Health Care and Industrials sectors were some of the better performers, while stocks in the Utilities and Financials sectors underperformed by comparison.

Contributors and Detractors. The Industrials sector, which represented an average weight of approximately 20% of the index and the fund, provided the biggest contribution to the fund’s performance. The fund’s Industrials stocks also performed well, returning roughly 19% and reflecting the overall performance of companies involved in aerospace and defense, construction and engineering, electrical equipment, machinery, transportation, and commercial and professional services. One significant contributor in this sector was Delta Air Lines, Inc., an air transportation company. Delta Air Lines, Inc. holdings represented one the fund’s larger positions within the Industrials sector and returned approximately 75%.

Information Technology stocks, which represented an average weight of roughly 15% of the fund, also provided meaningful contributions to the fund’s returns. The fund’s Information Technology stocks returned approximately 19%, reflecting the overall performance of companies involved in software and services, technology hardware and equipment, and semiconductors and equipment. One example of a contributor from this sector was SunEdison, Inc., a manufacturer of semiconductors and solar energy technology. SunEdison, Inc. holdings represented the fund’s largest position within this sector and returned approximately 152%.

The Telecommunication Services sector generated positive returns for the fund, but was the weakest contributor to performance. The Telecommunication Services sector represented an average weight of approximately 1% of the fund, while returning roughly 14%. One example of an underperformer from this sector was NTELOS Holdings Corp., a provider of digital wireless communications services. The fund’s NTELOS Holdings Corp. securities returned approximately -21%.

The Utilities sector was another weak overall contributor to the fund’s returns. The Utilities sector represented an average weight of approximately 3% of the fund and returned roughly 5%, reflecting the performance of companies that provide electric, gas, and water utilities, as well as independent power production. The fund’s holdings of Atlantic Power Corporation, which holds indirect interests in non-utility electric generating facilities, provided one example of a detractor within this sector, returning approximately -33%.

As of 02/28/14:

Statistics


Number of Holdings			849
Weighted Average Market Cap ($ x 1,000,000)			$4,820
Price/Earnings Ratio (P/E)			78.9
Price/Book Ratio (P/B)			2.1
Portfolio Turnover Rate^1,2			9%

Sector Weightings % of Investments


Financials			20.3%
Industrials			19.5%
Consumer Discretionary			17.4%
Information Technology			15.3%
Health Care			7.1%
Energy			6.4%
Materials			6.1%
Consumer Staples			3.4%
Utilities			3.2%
Telecommunication Services			1.0%
Other			0.3%
Total			100.0%

Top Equity Holdings % of Net Assets³


IntercontinentalExchange Group, Inc.			0.6%
SunEdison, Inc.			0.5%
Southwest Airlines Co.			0.5%
Endo Health Solutions, Inc			0.4%
Delta Air Lines, Inc			0.4%
Office Depot, Inc.			0.4%
Trinity Industries, Inc			0.3%
Huntington Ingalls Industries, Inc.			0.3%
Kindred Healthcare, Inc			0.3%
Avago Technologies Ltd.			0.3%
Total			4.0%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

10 Schwab Fundamental Index ETFs

Schwab Fundamental U.S. Small Company Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental U.S. Small Company Index ETF (8/15/13)
Market Price Return²		14.76	%
NAV Return²		14.64	%
Russell Fundamental U.S. Small Company Index		14.97	%
ETF Category: Morningstar Small Blend³		15.74	%

Fund Expense Ratio⁴: 0.32%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

Investments in smaller companies typically exhibit higher volatility.

Index ownership — “Russell Fundamental U.S. Small Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental U.S. Small Company Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 11

Schwab Fundamental International Large Company Index ETF

The Schwab Fundamental International Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental Developed ex-U.S. Large Company Index* (the index). This index measures the performance of the large company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell Developed ex-U.S. Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index that collectively has a similar investment profile to the index. Due to the use of representative sampling, the fund may not hold all of the securities in the index.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 13.47% and its NAV return was 12.88% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 13.16% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Stocks of large companies in developed international markets performed well, generating double-digit overall returns in U.S. dollar terms. Policies by central banks in many parts of the world to stimulate economic growth by keeping interest rates low provided an important support for these results, particularly in Europe. Efforts by the European Central Bank to unify the euro zone’s banking system and relative stability in the region also supported stocks. In addition, the appreciation of many developed market currencies versus the U.S. dollar enhanced returns in U.S. dollar terms.

Contributors and Detractors. U.K. stocks were some of the biggest contributors to the returns of both the index and the fund. U.K. companies represented an average weight of approximately 21% of the fund, and returned roughly 15% in U.S. dollar terms. One example from this market was BP plc, a company involved in oil and petrochemicals. BP plc holdings represented the fund’s largest position in U.K. stocks, and returned roughly 25% for the reporting period in U.S. dollar terms.

French stocks, which represented an average weight of approximately 12% for the fund, also provided meaningful contributions to the fund’s returns. Shares of companies from France returned roughly 19% for the fund in U.S. dollar terms. One example of a contributor from this market was Total S.A., a company involved in oil and natural gas. The fund’s holdings of Total S.A. returned approximately 23% in U.S. dollar terms, contributing more to the fund’s return than any other holding from France.

Although stocks from each developed international market held by the fund generated positive overall returns, stocks from Singapore provided one of the smallest contributions. Holdings in this country represented approximately 1% of the fund and returned roughly 1% in U.S. dollar terms. Holdings of Singapore Telecommunications Limited—a communications group—represented one of the biggest detractors for the fund in this market, returning approximately -3% in U.S. dollar terms.

Stocks from Hong Kong also generated a relatively small contribution to the fund’s returns. Shares of companies from Hong Kong represented an average weight of approximately 1% of the fund, and returned roughly 1% in U.S. dollar terms. One detractor within this market was Hong Kong & China Gas Company Limited, which produces, distributes, and markets gas and gas appliances. Hong Kong & China Gas Company Limited holdings represented one of the fund’s larger positions in this market and returned approximately -17% in U.S. dollar terms.

As of 02/28/14:

Statistics


Number of Holdings			777
Weighted Average Market Cap ($ x 1,000,000)			$63,151
Price/Earnings Ratio (P/E)			22.6
Price/Book Ratio (P/B)			1.4
Portfolio Turnover Rate^1,2			8%

Sector Weightings % of Investments


Financials			19.1%
Energy			13.5%
Industrials			13.0%
Consumer Discretionary			10.1%
Materials			9.5%
Consumer Staples			8.6%
Telecommunication Services			7.3%
Health Care			6.7%
Utilities			6.3%
Information Technology			4.9%
Other			1.0%
Total			100.0%

Top Equity Holdings % of Net Assets³


BP plc			2.5%
Total S.A.			2.2%
Royal Dutch Shell plc, A Shares			2.0%
Royal Dutch Shell plc, B Shares			1.3%
HSBC Holdings plc			1.2%
Banco Santander S.A.			1.2%
Nestle S.A. – Reg’d			1.1%
Telefonica S.A.			1.0%
Eni S.p.A.			1.0%
GlaxoSmithKline plc			1.0%
Total			14.5%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


*		The total return cited is for the Russell Fundamental Developed ex-U.S. Large Company Index (Net), which is calculated net of foreign withholding taxes.
¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

12 Schwab Fundamental Index ETFs

Schwab Fundamental International Large Company Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental International Large Company Index ETF (8/15/13)
Market Price Return²		13.47	%
NAV Return²		12.88	%
Russell Fundamental Developed ex-US Large Company Index (Net)		13.16	%
ETF Category: Morningstar Foreign Large Value³		10.77	%

Fund Expense Ratio⁴: 0.32%

Country Weightings % of Investments


Japan			18.5%
United Kingdom			17.4%
France			11.9%
Germany			9.8%
Netherlands			6.0%
Canada			5.9%
Switzerland			5.8%
Italy			4.9%
Australia			4.6%
Spain			4.5%
Other Countries			10.7%
Total			100.0%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.

Index ownership — “Russell Fundamental Developed ex-U.S. Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental International Large Company Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 13

Schwab Fundamental International Small Company Index ETF

The Schwab Fundamental International Small Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental Developed ex-U.S. Small Company Index* (the index). This index measures the performance of the small company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell Developed ex-U.S. Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index that collectively has a similar investment profile to the index. Due to the use of representative sampling, the fund may not hold all of the securities in the index.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 11.97% and its NAV return was 10.94% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 11.53% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Stocks of small companies in developed international markets performed well, generating double-digit overall returns in U.S. dollar terms. Policies by central banks in many parts of the world to stimulate economic growth by keeping interest rates low provided an important support for these results, particularly in Europe. Efforts by the European Central Bank to unify the euro zone’s banking system and relative stability in the region also supported stocks. In addition, the appreciation of many developed market currencies versus the U.S. dollar enhanced returns in U.S. dollar terms.

Contributors and Detractors. U.K. stocks were the biggest contributors to the returns of both the index and the fund. Companies from the U.K. represented an average weight of approximately 13% of the fund, and returned roughly 24% in U.S. dollar terms. One example of a significant contributor from this market was Darty plc, a retailer of consumer electronics and furniture. Darty plc holdings represented one of the fund’s larger positions in the U.K. and returned roughly 71% in U.S. dollar terms.

Japanese stocks, which represented an average weight of approximately 38% for the fund, also provided meaningful contributions to the fund’s returns. Shares of Japanese companies returned approximately 3% in U.S. dollar terms. One example of a contributor from this market was Minebea Company, Limited, which manufactures and markets electronic components. Shares of Minebea Company, Limited returned approximately 97% for the fund in U.S. dollar terms, contributing more to the fund’s return than any other stock from Japan.

Stocks from Singapore were the only overall detractors from the fund’s returns. Shares of companies from Singapore represented an average weight of approximately 2% of the fund, and returned roughly -5% in U.S. dollar terms. One example of a detractor from this market was CapitaLand Limited, a company that operates and manages residential and commercial properties. The fund’s holdings of CapitaLand Limited returned approximately -12% in U.S. dollar terms.

Stocks from Hong Kong provided a narrowly positive contribution to the fund’s return. Holdings in this country represented approximately 3% of the fund and generated a roughly flat return in U.S. dollar terms. VTECH Holdings Limited—a consumer electronics company—provided one example of a detractor from this market, returning approximately -24% for the fund in U.S. dollar terms.

As of 02/28/14:

Statistics


Number of Holdings			1,235
Weighted Average Market Cap ($ x 1,000,000)			$3,734
Price/Earnings Ratio (P/E)			30.8
Price/Book Ratio (P/B)			1.4
Portfolio Turnover Rate^1,2			18%

Sector Weightings % of Investments


Industrials			25.3%
Consumer Discretionary			18.8%
Financials			16.7%
Materials			10.6%
Information Technology			9.6%
Consumer Staples			7.2%
Health Care			4.6%
Energy			4.1%
Utilities			1.8%
Telecommunication Services			1.1%
Other			0.2%
Total			100.0%

Top Equity Holdings % of Net Assets³


Kamigumi Co., Ltd.			0.3%
Gamesa Corp. Tecnologica S.A.			0.3%
Minebea Co., Ltd.			0.3%
USG People N.V.			0.3%
Methanex Corp.			0.3%
Rautaruukki Oyj			0.3%
Toyo Tire & Rubber Co., Ltd.			0.3%
Ebara Corp.			0.2%
Alps Electric Co., Ltd.			0.2%
Toshiba TEC Corp.			0.2%
Total			2.7%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


*		The total return cited is for the Russell Fundamental Developed ex-U.S. Small Company Index (Net), which is calculated net of foreign withholding taxes.
¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

14 Schwab Fundamental Index ETFs

Schwab Fundamental International Small Company Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental International Small Company Index ETF (8/15/13)
Market Price Return²		11.97	%
NAV Return²		10.94	%
Russell Fundamental Developed ex-US Small Company Index (Net)		11.53	%
ETF Category: Morningstar Foreign Small/Mid Blend³		14.56	%

Fund Expense Ratio⁴: 0.46%

Country Weightings % of Investments


Japan			35.8%
United Kingdom			14.1%
Canada			8.2%
France			5.0%
Australia			4.8%
Germany			4.0%
Switzerland			3.2%
Italy			3.1%
Hong Kong			2.6%
Sweden			2.4%
Other Countries			16.8%
Total			100.0%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets.

Small-company stocks are subject to greater volatility than many other asset classes.

Index ownership — “Russell Fundamental Developed ex-U.S. Small Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental International Small Company Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 15

Schwab Fundamental Emerging Markets Large Company Index ETF

The Schwab Fundamental Emerging Markets Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell Fundamental Emerging Markets Large Company Index* (the index). This index measures the performance of the large company size segment by fundamental overall company scores that are created using as the universe the companies in the Russell Emerging Markets Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index that collectively has a similar investment profile to the index. Due to the use of representative sampling, the fund may not hold all of the securities in the index.

For the reporting period ended February 28, 2014, the fund closely tracked the index. The fund’s market price return was 0.16% and its NAV return was 0.05% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 0.19% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.

Market Highlights. Large company stocks in emerging markets generated roughly flat overall returns in U.S. dollar terms. Stocks from the emerging markets of Brazil, Russia, India, China, and Turkey faced challenges that included potentially higher interest rates in the U.S. and uneven economic growth. Political unrest and relatively high inflation were also concerns among some emerging markets. In addition, many emerging market currencies depreciated in this environment, further reducing stock returns in U.S. dollar terms.

Contributors and Detractors. South Korean stocks contributed the most to the performance of the index and the fund. The large average weight of this market represented part of the reason for this contribution, with South Korean stocks representing approximately 22% of the fund. The fund’s South Korean stocks also outperformed most other emerging markets, returning roughly 7% in U.S. dollar terms. One example of a contributor among the fund’s South Korean stocks was Samsung Electronics Company, Limited, a communications equipment company. The fund’s holdings of Samsung Electronics Company, Limited represented the fund’s largest position in this market and returned approximately 10% in U.S. dollar terms.

Stocks from Taiwan also provided meaningful contributions to the fund’s returns. Taiwanese companies represented an average weight of approximately 13% of the fund, and returned roughly 7% in U.S. dollar terms. Hon Hai Precision Industry Company, which provides electronic manufacturing services, was one example of a contributor from among the fund’s Taiwanese stocks. Holdings of this company represented one of the fund’s largest positions in Taiwan and returned approximately 18% in U.S. dollar terms.

Brazilian stocks were some of the biggest overall detractors from the fund’s performance. Stocks from Brazil represented an average weight of approximately 14% of the fund, and returned roughly -8% in U.S. dollar terms. One example of a detractor from this market was Petroleo Brasileiro S.A., a multinational integrated oil company. Preferred shares of Petroleo Brasileiro S.A. represented one of the fund’s largest positions in this market and returned approximately -21% in U.S. dollar terms.

Stocks from China also meaningfully detracted from the fund’s returns. Chinese stocks represented an average weight of approximately 9% of the fund for the 12-month reporting period, while returning roughly -3.9% in U.S. dollar terms. Among the fund’s holdings in this market, Class H shares of China Construction Bank Corporation—a company that provides banking services to individuals and businesses—represented a relatively large position and detracted from the fund’s performance, returning approximately -11% in U.S. dollar terms.

As of 02/28/14:

Statistics


Number of Holdings			272
Weighted Average Market Cap ($ x 1,000,000)			$44,130
Price/Earnings Ratio (P/E)			10.8
Price/Book Ratio (P/B)			1.0
Portfolio Turnover Rate^1,2			6%

Sector Weightings % of Investments


Energy			23.9%
Financials			16.5%
Information Technology			15.7%
Materials			13.1%
Telecommunication Services			10.6%
Consumer Discretionary			6.7%
Industrials			5.5%
Utilities			3.8%
Consumer Staples			2.5%
Other			1.7%
Total			100.0%

Top Equity Holdings % of Net Assets³


Gazprom OAO			4.1%
LUKOIL OAO			4.0%
Samsung Electronics Co., Ltd.			3.8%
China Mobile Ltd.			1.7%
Taiwan Semiconductor Manufacturing Co., Ltd.			1.7%
China Construction Bank Corp., H Shares			1.6%
Petroleo Brasileiro S.A.			1.6%
Hon Hai Precision Industry Co.,Ltd.			1.5%
China Petroleum & Chemical Corp., H Shares			1.4%
Surgutneftegas OAO			1.4%
Total			22.8%

Management views and portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.


*		The total return cited is for the Russell Fundamental Emerging Markets Large Company Index (Net), which is calculated net of foreign withholding taxes.
¹		Not annualized.
²		Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
³		This list is not a recommendation of any security by the investment adviser.

16 Schwab Fundamental Index ETFs

Schwab Fundamental Emerging Markets Large Company Index ETF

Performance and Fund Facts as of 02/28/14

August 15, 2013 – February 28, 2014
Performance of Hypothetical
$10,000 Investment¹

Total Returns¹


Fund and Inception Date	Since Inception*


Fund: Schwab Fundamental Emerging Markets Large Company Index ETF (8/15/13)
Market Price Return²		0.16	%
NAV Return²		0.05	%
Russell Fundamental Emerging Markets Large Company Index (Net)		0.19	%
ETF Category: Morningstar Diversified Emerging Markets³		-0.35	%

Fund Expense Ratio⁴: 0.46%

Country Weightings % of Investments


Republic of Korea			21.0%
Russia			14.8%
Taiwan			13.2%
China			12.2%
Brazil			12.2%
South Africa			7.6%
Mexico			3.5%
Poland			2.5%
Greece			2.2%
India			2.1%
Other Countries			8.7%
Total			100.0%

For index definitions, please see the Glossary.

Shares are bought and sold at market price, which may be higher or lower than the net asset value (NAV). Brokerage commissions will reduce returns.

International investments are subject to additional risks such as currency fluctuation, geopolitical risk and the potential for illiquid markets. Investing in emerging markets may accentuate these risks.

Index ownership — “Russell Fundamental Emerging Markets Large Company Index” is a joint trademark of Russell Investments (“Russell”) and Research Affiliates LLC (“RA”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of RA. Subject to RA’s intellectual property rights in certain content, Russell is the owner of all copyrights related to the Russell Fundamental Index Series. Russell is the owner of the trademarks and copyrights related to the Russell Indexes. Schwab Fundamental Emerging Markets Large Company Index ETF is not sponsored, endorsed, sold or promoted by Russell or RA, and Russell and RA do not make any representation regarding the advisability of investing in shares of the fund.


*		Total returns are since inception date of 8/15/13. Inception represents the date that the shares began trading in the secondary market. These total returns may differ from those disclosed in the Financial Highlights, as the total returns in the Financial Highlights are calculated from the commencement of operations date which is the first day the NAV was determined.
¹		Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
²		Since ETFs are baskets of securities that trade on a stock exchange, ETF performance must be shown based on both a market price and NAV basis. The fund’s per share net asset value (“NAV”) is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (“Market Price”) is determined by using the midpoint between the highest bid and the lowest offer on the primary stock exchange on which the shares of the fund are listed for trading, as of the time that the fund’s NAV is calculated. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³		Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴		As stated in the prospectus.

Schwab Fundamental Index ETFs 17

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2013 and held through February 28, 2014.

Actual Return lines in the table below provide information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ¸ $1,000 = 8.6), then multiply the result by the number given for your fund under the heading entitled “Expenses Paid During Period.”

Hypothetical Return lines in the table below provide information about hypothetical account values and hypothetical expenses based on a fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.

You may use this information to compare the ongoing costs of investing in a fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.

Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, including any brokerage commissions you may pay when purchasing or selling shares of a fund. Therefore, the hypothetical return lines of the table are useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher.


					Ending
			Beginning		Account Value		Expenses Paid
	Expense Ratio¹		Account Value		(Net of Expenses)		During Period²
	(Annualized)		at 9/1/13		at 2/28/14		9/1/13–2/28/14

Schwab Fundamental U.S. Broad Market Index ETF
Actual Return		0.32%	$	1,000.00	$	1,142.40	$	1.70
Hypothetical 5% Return		0.32%	$	1,000.00	$	1,023.21	$	1.61


Schwab Fundamental U.S. Large Company Index ETF
Actual Return		0.32%	$	1,000.00	$	1,137.80	$	1.70
Hypothetical 5% Return		0.32%	$	1,000.00	$	1,023.21	$	1.61


Schwab Fundamental U.S. Small Company Index ETF
Actual Return		0.32%	$	1,000.00	$	1,190.40	$	1.74
Hypothetical 5% Return		0.32%	$	1,000.00	$	1,023.21	$	1.61


Schwab Fundamental International Large Company Index ETF
Actual Return		0.32%	$	1,000.00	$	1,179.90	$	1.73
Hypothetical 5% Return		0.32%	$	1,000.00	$	1,023.21	$	1.61


Schwab Fundamental International Small Company Index ETF
Actual Return		0.46%	$	1,000.00	$	1,158.60	$	2.46
Hypothetical 5% Return		0.46%	$	1,000.00	$	1,022.51	$	2.31


Schwab Fundamental Emerging Markets Large Company Index ETF
Actual Return		0.46%	$	1,000.00	$	1,022.50	$	2.31
Hypothetical 5% Return		0.46%	$	1,000.00	$	1,022.51	$	2.31


¹		Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights.
²		Expenses for each fund are equal to the annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year.

18 Schwab Fundamental Index ETFs

Schwab Fundamental U.S. Broad Market Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.21
Net realized and unrealized gains (losses)		2.28

Total from investment operations		2.49
Less distributions:
Distributions from net investment income		(0.13	)

Net asset value at end of period		27.36

Total return (%)		9.99	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.32	³
Net investment income (loss)		2.11	³
Portfolio turnover rate⁴		5	²
Net assets, end of period ($ x 1,000)		58,823

¹ Commencement of operations.

² Not annualized.

³ Annualized.

⁴ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

See financial notes 19

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings as of February 28, 2014

This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab ETFs^TM at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.

In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website at www.schwabetfs.com.

Cost

Value

Holdings by Category

($)

.6%

Common Stock

55,906,048

58,618,433

.1%

Other Investment Companies

50,507

53,373

.7%

Total Investments

55,956,555

58,671,806

.3%

Other Assets and
Liabilities, Net

151,577

100

.0%

Net Assets

58,823,383


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
Other Securities				1.0		613,019

Banks 2.6%
Wells Fargo & Co.		11,052		0.9		513,034
Other Securities				1.7		1,005,616

				2.6		1,518,650

Capital Goods 8.5%
3M Co.		1,763		0.4		237,529
General Electric Co.		29,674		1.3		755,797
United Technologies Corp.		2,881		0.6		337,135
Other Securities				6.2		3,698,235

				8.5		5,028,696

Commercial & Professional Services 1.1%
Other Securities				1.1		622,945

Consumer Durables & Apparel 1.3%
Other Securities				1.3		750,894

Consumer Services 1.9%
McDonald’s Corp.		3,053		0.5		290,493
Other Securities				1.4		829,387

				1.9		1,119,880

Diversified Financials 6.4%
Bank of America Corp.		49,235		1.4		813,855
Berkshire Hathaway, Inc., Class B *		3,023		0.6		350,003
Citigroup, Inc.		8,772		0.7		426,582
JPMorgan Chase & Co.		11,883		1.1		675,192
The Charles Schwab Corp. (a)		2,064		0.1		54,717
Other Securities				2.5		1,446,778

				6.4		3,767,127

Energy 14.3%
Chevron Corp.		10,320		2.0		1,190,206
ConocoPhillips		14,491		1.6		963,652
Exxon Mobil Corp.		26,452		4.3		2,546,534
Occidental Petroleum Corp.		2,564		0.4		247,477
Phillips 66		5,977		0.8		447,438
Schlumberger Ltd.		2,666		0.4		247,938
Valero Energy Corp.		6,536		0.5		313,597
Other Securities				4.3		2,447,858

				14.3		8,404,700

Food & Staples Retailing 3.9%
Costco Wholesale Corp.		1,904		0.4		222,387
CVS Caremark Corp.		6,665		0.8		487,478
Wal-Mart Stores, Inc.		9,417		1.2		703,450
Walgreen Co.		4,773		0.6		324,325
Other Securities				0.9		577,572

				3.9		2,315,212

Food, Beverage & Tobacco 4.7%
Altria Group, Inc.		6,751		0.4		244,791
Mondelez International, Inc., Class A		7,396		0.4		251,686
PepsiCo, Inc.		4,171		0.6		333,972
Philip Morris International, Inc.		4,128		0.6		333,996
The Coca-Cola Co.		7,224		0.5		275,957
Other Securities				2.2		1,308,298

				4.7		2,748,700

Health Care Equipment & Services 5.9%
Abbott Laboratories		6,536		0.4		260,002
McKesson Corp.		1,419		0.4		251,234
UnitedHealth Group, Inc.		5,419		0.7		418,726
WellPoint, Inc.		4,128		0.6		373,956
Other Securities				3.8		2,153,976

				5.9		3,457,894

Household & Personal Products 1.9%
The Procter & Gamble Co.		9,419		1.3		740,899
Other Securities				0.6		375,279

				1.9		1,116,178

Insurance 3.4%
The Travelers Cos., Inc.		2,968		0.4		248,837
Other Securities				3.0		1,772,892

				3.4		2,021,729

Materials 4.1%
Other Securities				4.1		2,425,995

20 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)

Media 3.9%
Comcast Corp., Class A		5,547		0.5		286,724
The Walt Disney Co.		4,773		0.7		385,706
Time Warner, Inc.		5,117		0.6		343,504
Other Securities				2.1		1,258,702

				3.9		2,274,636

Pharmaceuticals, Biotechnology & Life Sciences 5.6%
Amgen, Inc.		2,279		0.5		282,642
Johnson & Johnson		7,081		1.1		652,302
Merck & Co., Inc.		6,837		0.7		389,641
Pfizer, Inc.		21,328		1.2		684,842
Other Securities				2.1		1,261,040

				5.6		3,270,467

Real Estate 1.6%
Other Securities				1.6		942,924

Retailing 4.5%
Lowe’s Cos., Inc.		5,633		0.5		281,819
Target Corp.		3,956		0.4		247,408
The Home Depot, Inc.		3,870		0.5		317,456
Other Securities				3.1		1,804,750

				4.5		2,651,433

Semiconductors & Semiconductor Equipment 2.6%
Intel Corp.		23,091		1.0		571,733
Other Securities				1.6		947,114

				2.6		1,518,847

Software & Services 6.3%
International Business Machines Corp.		3,569		1.1		660,872
Microsoft Corp.		27,545		1.8		1,055,249
Oracle Corp.		6,235		0.4		243,851
Other Securities				3.0		1,765,564

				6.3		3,725,536

Technology Hardware & Equipment 4.4%
Apple, Inc.		668		0.6		351,528
Cisco Systems, Inc.		15,166		0.6		330,619
Hewlett-Packard Co.		24,854		1.3		742,638
Other Securities				1.9		1,167,173

				4.4		2,591,958

Telecommunication Services 3.8%
AT&T, Inc.		30,520		1.7		974,504
Verizon Communications, Inc.		19,651		1.6		934,994
Other Securities				0.5		330,019

				3.8		2,239,517

Transportation 1.9%
Other Securities				1.9		1,106,895

Utilities 4.0%
Other Securities				4.0		2,384,601

Total Common Stock
(Cost $55,906,048)						58,618,433




Other Investment Companies 0.1% of net assets

Equity Fund 0.1%
Other Securities				0.1		50,477

Money Market Fund 0.0%
Other Securities				0.0		2,896

Total Other Investment Companies
(Cost $50,507)						53,373



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $55,957,312 and the unrealized appreciation and depreciation were $3,321,598 and ($607,104), respectively, with a net unrealized appreciation of $2,714,494.

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

See financial notes 21

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):

Quoted Prices in

Significant

Active Markets for

Other Significant

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

(Level 1)

(Level 2)

(Level 3)

Total

Common Stock¹

$58,618,433

$—

$58,618,433

Other Investment Companies¹

53,373

—

53,373

Total

$58,671,806

$—

$58,671,806


¹		As categorized in the complete schedule of portfolio holdings.

22 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments in affiliated issuers, at value (cost $49,401)		$54,717
Investments in unaffiliated issuers, at value (cost $55,907,154)	+	58,617,089

Total investments, at value (cost $55,956,555)		58,671,806
Cash		8
Receivables:
Investments sold		9,350
Dividends	+	143,803

Total assets		58,824,967

Liabilities

Payables:
Investment adviser fees		1,584

Total liabilities		1,584

Net Assets

Total assets		58,824,967
Total liabilities	—	1,584

Net assets		$58,823,383

Net Assets by Source
Capital received from investors		55,996,319
Net investment income not yet distributed		172,206
Net realized capital losses		(60,393	)
Net unrealized capital appreciation		2,715,251

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$58,823,383

2,150,001

$27.36

See financial notes 23

Schwab Fundamental U.S. Broad Market Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends received from affiliated issuer		$155
Dividends received from unaffiliated issuers (net of foreign withholding tax of $100)	+	362,538

Total investment income		362,693

Expenses

Investment adviser fees		47,690

Total expenses	−	47,690

Net investment income		315,003

Realized and Unrealized Gains (Losses)

Net realized gains on affiliated issuer		39
Net realized losses on unaffiliated investments		(61,729	)

Net realized losses		(61,690	)
Net change in unrealized appreciation (depreciation) on affiliated issuer		5,316
Net change in unrealized appreciation (depreciation) on unaffiliated investments	+	2,709,935

Net change in unrealized appreciation (depreciation)	+	2,715,251

Net realized and unrealized gains		2,653,561

Increase in net assets resulting from operations		$2,968,564


*		Commencement of operations.

24 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$315,003
Net realized losses		(61,690	)
Net change in unrealized appreciation (depreciation)	+	2,715,251

Increase in net assets resulting from operations		2,968,564

Distributions to Shareholders

Distributions from net investment income		($141,500	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			2,150,001	$55,996,319
Shares redeemed	+		—	—

Net transactions in fund shares			2,150,001	$55,996,319

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		2,150,001	58,823,383

End of period			2,150,001	$58,823,383


Net investment income not yet distributed				$172,206


*		Commencement of operations.

See financial notes 25

Schwab Fundamental U.S. Large Company Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.21
Net realized and unrealized gains (losses)		2.18

Total from investment operations		2.39
Less distributions:
Distributions from net investment income		(0.12	)

Net asset value at end of period		27.27

Total return (%)		9.59	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.32	³
Net investment income (loss)		2.20	³
Portfolio turnover rate⁴		6	²
Net assets, end of period ($ x 1,000)		72,259

¹ Commencement of operations.

² Not annualized.

³ Annualized.

⁴ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

26 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings as of February 28, 2014

Cost

Value

Holdings by Category

($)

.6%

Common Stock

69,025,094

71,981,254

.2%

Other Investment Companies

141,993

144,533

.8%

Total Investments

69,167,087

72,125,787

.2%

Other Assets and
Liabilities, Net

132,783

100

.0%

Net Assets

72,258,570


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
Other Securities				1.0		754,934

Banks 2.4%
Wells Fargo & Co.		14,922		1.0		692,679
Other Securities				1.4		1,045,539

				2.4		1,738,218

Capital Goods 8.3%
3M Co.		2,365		0.4		318,636
General Electric Co.		40,039		1.4		1,019,793
United Technologies Corp.		3,854		0.6		450,995
Other Securities				5.9		4,183,440

				8.3		5,972,864

Commercial & Professional Services 0.8%
Other Securities				0.8		547,587

Consumer Durables & Apparel 1.0%
Other Securities				1.0		733,092

Consumer Services 1.6%
McDonald’s Corp.		4,110		0.5		391,067
Other Securities				1.1		753,921

				1.6		1,144,988

Diversified Financials 6.7%
Bank of America Corp.		66,610		1.5		1,101,063
Berkshire Hathaway, Inc., Class B *		4,102		0.7		474,930
Citigroup, Inc.		11,875		0.8		577,481
JPMorgan Chase & Co.		16,027		1.3		910,654
The Charles Schwab Corp. (a)		2,787		0.1		73,883
Other Securities				2.3		1,688,598

				6.7		4,826,609

Energy 15.1%
Chevron Corp.		13,948		2.2		1,608,623
ConocoPhillips		19,557		1.8		1,300,540
Exxon Mobil Corp.		35,766		4.8		3,443,193
Occidental Petroleum Corp.		3,428		0.5		330,871
Phillips 66		8,074		0.8		604,420
Schlumberger Ltd.		3,569		0.5		331,917
Valero Energy Corp.		8,801		0.6		422,272
Other Securities				3.9		2,868,193

				15.1		10,910,029

Food & Staples Retailing 4.2%
Costco Wholesale Corp.		2,567		0.4		299,826
CVS Caremark Corp.		9,027		0.9		660,235
Wal-Mart Stores, Inc.		12,755		1.3		952,798
Walgreen Co.		6,443		0.6		437,802
Other Securities				1.0		711,060

				4.2		3,061,721

Food, Beverage & Tobacco 4.9%
Altria Group, Inc.		9,036		0.5		327,645
Mondelez International, Inc., Class A		10,043		0.5		341,763
PepsiCo, Inc.		5,641		0.6		451,675
Philip Morris International, Inc.		5,542		0.6		448,403
The Coca-Cola Co.		9,692		0.5		370,235
Other Securities				2.2		1,634,368

				4.9		3,574,089

Health Care Equipment & Services 6.0%
Abbott Laboratories		8,745		0.5		347,876
McKesson Corp.		1,876		0.5		332,146
UnitedHealth Group, Inc.		7,377		0.8		570,021
WellPoint, Inc.		5,565		0.7		504,133
Other Securities				3.5		2,583,564

				6.0		4,337,740

Household & Personal Products 2.0%
The Procter & Gamble Co.		12,755		1.4		1,003,308
Other Securities				0.6		475,715

				2.0		1,479,023

Insurance 3.4%
The Travelers Cos., Inc.		3,991		0.5		334,605
Other Securities				2.9		2,102,731

				3.4		2,437,336

Materials 3.9%
Other Securities				3.9		2,812,907

See financial notes 27

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)

Media 4.0%
Comcast Corp., Class A		7,483		0.5		386,796
The Walt Disney Co.		6,477		0.7		523,406
Time Warner, Inc.		6,800		0.6		456,484
Other Securities				2.2		1,539,413

				4.0		2,906,099

Pharmaceuticals, Biotechnology & Life Sciences 5.9%
Amgen, Inc.		3,040		0.5		377,021
Johnson & Johnson		9,699		1.2		893,472
Merck & Co., Inc.		9,308		0.7		530,463
Pfizer, Inc.		28,917		1.3		928,525
Other Securities				2.2		1,513,086

				5.9		4,242,567

Real Estate 0.9%
Other Securities				0.9		677,616

Retailing 4.5%
Lowe’s Cos., Inc.		7,570		0.5		378,727
Target Corp.		5,270		0.5		329,586
The Home Depot, Inc.		5,224		0.6		428,525
Other Securities				2.9		2,082,188

				4.5		3,219,026

Semiconductors & Semiconductor Equipment 2.4%
Intel Corp.		31,280		1.1		774,493
Other Securities				1.3		943,074

				2.4		1,717,567

Software & Services 6.4%
International Business Machines Corp.		4,819		1.2		892,334
Microsoft Corp.		37,428		2.0		1,433,867
Oracle Corp.		8,375		0.5		327,546
Other Securities				2.7		1,953,881

				6.4		4,607,628

Technology Hardware & Equipment 4.4%
Apple, Inc.		894		0.7		470,458
Cisco Systems, Inc.		21,095		0.6		459,871
Hewlett-Packard Co.		33,414		1.4		998,410
Other Securities				1.7		1,226,661

				4.4		3,155,400

Telecommunication Services 4.1%
AT&T, Inc.		41,276		1.8		1,317,943
Verizon Communications, Inc.		26,553		1.7		1,263,392
Other Securities				0.6		373,499

				4.1		2,954,834

Transportation 1.6%
Other Securities				1.6		1,175,310

Utilities 4.1%
Other Securities				4.1		2,994,070

Total Common Stock
(Cost $69,025,094)						71,981,254




Other Investment Companies 0.2% of net assets

Equity Fund 0.1%
Other Securities				0.1		71,189

Money Market Fund 0.1%
Other Securities				0.1		73,344

Total Other Investment Companies
(Cost $141,993)						144,533



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $69,172,234 and the unrealized appreciation and depreciation were $3,751,941 and ($798,388), respectively, with a net unrealized appreciation of $2,953,553.

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

28 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):

Quoted Prices in

Significant

Active Markets for

Other Significant

Unobservable

Identical Assets

Observable Inputs

Inputs

Description

(Level 1)

(Level 2)

(Level 3)

Total

Common Stock¹

$71,981,254

$—

$71,981,254

Other Investment Companies¹

144,533

—

144,533

Total

$72,125,787

$—

$72,125,787


¹		As categorized in the complete schedule of portfolio holdings.

See financial notes 29

Schwab Fundamental U.S. Large Company Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments in affiliated issuers, at value (cost $65,972)		$73,883
Investments in unaffiliated issuers, at value (cost $69,101,115)	+	72,051,904

Total investments, at value (cost $69,167,087)		72,125,787
Receivables:
Dividends	+	178,266

Total assets		72,304,053

Liabilities

Payables:
Investments bought		43,581
Investment adviser fees		1,902

Total liabilities		45,483

Net Assets

Total assets		72,304,053
Total liabilities	—	45,483

Net assets		$72,258,570

Net Assets by Source
Capital received from investors		69,119,382
Net investment income not yet distributed		218,984
Net realized capital losses		(38,496	)
Net unrealized capital appreciation		2,958,700

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$72,258,570

2,650,001

$27.27

30 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends received from affiliated issuer		$233
Dividends received from unaffiliated issuers (net of foreign withholding tax of $126)		458,810

Total investment income		459,043

Expenses

Investment adviser fees		58,279

Total expenses	−	58,279

Net investment income		400,764

Realized and Unrealized Gains (Losses)

Net realized gains on affiliated issuer		337
Net realized losses on unaffiliated investments		(40,373	)

Net realized losses		(40,036	)
Net change in unrealized appreciation (depreciation) on affiliated issuer		7,911
Net change in unrealized appreciation (depreciation) on unaffiliated investments	+	2,950,789

Net change in unrealized appreciation (depreciation)	+	2,958,700

Net realized and unrealized gains		2,918,664

Increase in net assets resulting from operations		$3,319,428


*		Commencement of operations.

See financial notes 31

Schwab Fundamental U.S. Large Company Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$400,764
Net realized losses		(40,036	)
Net change in unrealized appreciation (depreciation)	+	2,958,700

Increase in net assets resulting from operations		3,319,428

Distributions to Shareholders

Distributions from net investment income		($180,240	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			2,650,001	$69,119,382
Shares redeemed	+		—	—

Net transactions in fund shares			2,650,001	$69,119,382

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		2,650,001	72,258,570

End of period			2,650,001	$72,258,570


Net investment income not yet distributed				$218,984


*		Commencement of operations.

32 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.12
Net realized and unrealized gains (losses)		3.41

Total from investment operations		3.53
Less distributions:
Distributions from net investment income		(0.09	)

Net asset value at end of period		28.44

Total return (%)		14.14	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.32	³
Net investment income (loss)		1.16	³
Portfolio turnover rate⁴		9	²
Net assets, end of period ($ x 1,000)		55,465

¹ Commencement of operations.

² Not annualized.

³ Annualized.

⁴ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

See financial notes 33

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings as of February 28, 2014


				Cost		Value
Holdings by Category				($)		($)

	99	.6%	Common Stock		51,846,387		55,202,684
	0	.2%	Other Investment Companies		121,853		125,709
	0	.0%	Short-Term Investment		5,000		5,000


	99	.8%	Total Investments		51,973,240		55,333,393
	0	.2%	Other Assets and Liabilities, Net				131,610


	100	.0%	Net Assets				55,465,003


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
Thor Industries, Inc.		2,262		0.2		126,694
Other Securities				0.8		402,950

				1.0		529,644

Banks 4.5%
Other Securities				4.5		2,488,426

Capital Goods 11.3%
Acuity Brands, Inc.		1,014		0.3		143,025
Carlisle Cos., Inc.		1,638		0.2		129,926
Chicago Bridge & Iron Co. N.V.		1,599		0.2		134,620
GATX Corp.		2,281		0.3		148,014
Huntington Ingalls Industries, Inc.		1,833		0.3		185,738
Lincoln Electric Holdings, Inc.		1,833		0.2		137,420
Trinity Industries, Inc.		2,652		0.3		190,440
Other Securities				9.5		5,180,934

				11.3		6,250,117

Commercial & Professional Services 4.1%
Nielsen Holdings N.V.		2,730		0.2		129,238
Other Securities				3.9		2,123,446

				4.1		2,252,684

Consumer Durables & Apparel 3.8%
Other Securities				3.8		2,127,370

Consumer Services 5.1%
Career Education Corp. *		21,864		0.3		161,575
Chipotle Mexican Grill, Inc. *		234		0.2		132,259
ITT Educational Services, Inc. *		4,095		0.2		127,068
Jack in the Box, Inc. *		2,379		0.2		136,673
Las Vegas Sands Corp.		1,755		0.3		149,614
Other Securities				3.9		2,112,854

				5.1		2,820,043

Diversified Financials 3.8%
IntercontinentalExchange Group, Inc.		1,633		0.6		341,036
TD Ameritrade Holding Corp.		4,446		0.3		148,630
Other Securities				2.9		1,592,549

				3.8		2,082,215

Energy 6.4%
Exterran Holdings, Inc. *		3,432		0.3		140,609
Whiting Petroleum Corp. *		1,872		0.2		128,625
Other Securities				5.9		3,264,426

				6.4		3,533,660

Food & Staples Retailing 0.9%
Other Securities				0.9		514,943

Food, Beverage & Tobacco 2.1%
Other Securities				2.1		1,160,663

Health Care Equipment & Services 4.6%
Kindred Healthcare, Inc.		7,878		0.3		170,638
Other Securities				4.3		2,356,111

				4.6		2,526,749

Household & Personal Products 0.4%
Other Securities				0.4		224,379

Insurance 4.0%
Aspen Insurance Holdings Ltd.		3,354		0.2		125,976
CNO Financial Group, Inc.		8,190		0.3		149,550
Kemper Corp.		3,315		0.2		128,556
Old Republic International Corp.		8,268		0.2		128,650
Primerica, Inc.		2,809		0.2		125,899
Protective Life Corp.		2,730		0.3		142,342
StanCorp Financial Group, Inc.		2,028		0.2		134,213
Other Securities				2.4		1,301,834

				4.0		2,237,020

Materials 6.1%
AK Steel Holding Corp. *		23,712		0.3		147,252
Cabot Corp.		2,586		0.3		140,006
Crown Holdings, Inc. *		2,886		0.2		129,928
Resolute Forest Products, Inc. *		6,747		0.2		138,246
Other Securities				5.1		2,803,323

				6.1		3,358,755

Media 2.2%
Lamar Advertising Co., Class A *		2,535		0.2		135,901

34 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)
Other Securities				2.0		1,102,556

				2.2		1,238,457

Pharmaceuticals, Biotechnology & Life Sciences 2.5%
Charles River Laboratories International, Inc. *		2,147		0.2		127,553
Covance, Inc. *		1,482		0.3		153,476
Endo Health Solutions, Inc. *		2,847		0.4		227,248
PerkinElmer, Inc.		2,925		0.2		132,561
Other Securities				1.4		749,449

				2.5		1,390,287

Real Estate 7.9%
General Growth Properties, Inc.		5,850		0.2		128,817
Jones Lang LaSalle, Inc.		1,092		0.2		134,534
Other Securities				7.5		4,146,983

				7.9		4,410,334

Retailing 5.2%
Office Depot, Inc. *		39,702		0.4		195,731
The Men’s Wearhouse, Inc.		2,964		0.3		159,433
Other Securities				4.5		2,550,259

				5.2		2,905,423

Semiconductors & Semiconductor Equipment 4.6%
Avago Technologies Ltd.		2,730		0.3		168,441
GT Advanced Technologies, Inc. *		9,204		0.2		131,893
SunEdison, Inc. *		14,976		0.5		274,959
Other Securities				3.6		1,971,012

				4.6		2,546,305

Software & Services 6.0%
Convergys Corp.		6,747		0.2		138,111
VeriSign, Inc. *		2,340		0.2		128,957
Other Securities				5.6		3,077,496

				6.0		3,344,564

Technology Hardware & Equipment 4.7%
Diebold, Inc.		3,354		0.2		125,406
SYNNEX Corp. *		2,379		0.3		141,503
Other Securities				4.2		2,366,480

				4.7		2,633,389

Telecommunication Services 1.0%
Other Securities				1.0		551,530

Transportation 4.1%
Alaska Air Group, Inc.		1,482		0.2		128,401
Delta Air Lines, Inc.		6,708		0.4		222,773
Southwest Airlines Co.		12,090		0.5		271,300
United Continental Holdings, Inc. *		3,588		0.3		161,317
Other Securities				2.7		1,486,191

				4.1		2,269,982

Utilities 3.3%
Other Securities				3.3		1,805,745

Total Common Stock
(Cost $51,846,387)						55,202,684




Other Investment Companies 0.2% of net assets

Equity Fund 0.1%
Other Securities				0.1		94,016

Money Market Fund 0.1%
Other Securities				0.1		31,693

Total Other Investment Companies
(Cost $121,853)						125,709



	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)

Short-Term Investment 0.0% of net assets

U.S. Treasury Obligation 0.0%
Other Securities				0.0		5,000

Total Short-Term Investment
(Cost $5,000)						5,000



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $51,983,366 and the unrealized appreciation and depreciation were $4,200,503 and ($850,476), respectively, with a net unrealized appreciation of $3,350,027.

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.
(b)		The rate shown is the purchase yield.
(c)		All or a portion of this security is held as collateral for open futures contracts.


ETF —		Exchange Traded Fund
REIT —		Real Estate Investment Trust

In addition to the above, the fund held the following at 02/28/14:

Contract

Unrealized

Number of

Value

Appreciation

Contracts

($)

Futures Contracts

Russell 2000 Index, e-mini, Long, expires 03/21/14

118,190

1,018

See financial notes 35

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):


	Quoted Prices in				Significant
	Active Markets for		Other Significant		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total

Common Stock¹		$55,202,684		$—		$—		$55,202,684
Other Investment Companies¹		125,709		—		—		125,709
Short-Term Investment¹		—		5,000		—		5,000

Total		$55,328,393		$5,000		$—		$55,333,393

Other Financial Instruments
Futures Contracts²		$1,018		$—		$—		$1,018


¹		As categorized in the complete schedule of portfolio holdings.
²		Futures contracts are not included in Investments in the schedule of portfolio holdings and are valued at unrealized appreciation or depreciation.

36 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments, at value (cost $51,973,240)		$55,333,393
Cash		190
Receivables:
Investments sold		77,646
Fund shares sold		4,242,149
Dividends	+	51,497

Total assets		59,704,875

Liabilities

Payables:
Investments bought		4,237,919
Investment adviser fees		1,423
Variation margin on futures contracts	+	530

Total liabilities		4,239,872

Net Assets

Total assets		59,704,875
Total liabilities	—	4,239,872

Net assets		$55,465,003

Net Assets by Source
Capital received from investors		52,093,700
Net investment income not yet distributed		57,781
Net realized capital losses		(47,649	)
Net unrealized capital appreciation		3,361,171

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$55,465,003

1,950,001

$28.44

See financial notes 37

Schwab Fundamental U.S. Small Company Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends (net of foreign withholding tax of $176)		$198,300

Expenses

Investment adviser fees		42,746

Total expenses	−	42,746

Net investment income		155,554

Realized and Unrealized Gains (Losses)

Net realized losses on investments		(49,766	)
Net realized losses on foreign currency transactions	+	(6	)

Net realized losses		(49,772	)
Net change in unrealized appreciation (depreciation) on investments		3,360,153
Net change in unrealized appreciation (depreciation) on futures contracts	+	1,018

Net change in unrealized appreciation (depreciation)	+	3,361,171

Net realized and unrealized gains		3,311,399

Increase in net assets resulting from operations		$3,466,953


*		Commencement of operations.

38 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$155,554
Net realized losses		(49,772	)
Net change in unrealized appreciation (depreciation)	+	3,361,171

Increase in net assets resulting from operations		3,466,953

Distributions to Shareholders

Distributions from net investment income		($95,650	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			1,950,001	$52,093,700
Shares redeemed	+		—	—

Net transactions in fund shares			1,950,001	$52,093,700

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		1,950,001	55,465,003

End of period			1,950,001	$55,465,003


Net investment income not yet distributed				$57,781


*		Commencement of operations.

See financial notes 39

Schwab Fundamental International Large Company Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.36
Net realized and unrealized gains (losses)		3.04

Total from investment operations		3.40
Less distributions:
Distributions from net investment income		(0.14	)

Net asset value at end of period		28.26

Total return (%)		13.60	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.32	³
Net investment income (loss)		4.00	³
Portfolio turnover rate⁴		8	²
Net assets, end of period ($ x 1,000)		62,164

¹ Commencement of operations.

² Not annualized.

³ Annualized.

⁴ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

40 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings as of February 28, 2014


				Cost		Value
Holdings by Category				($)		($)

	99	.3%	Common Stock		58,934,132		61,705,639
	0	.1%	Other Investment Companies		51,637		53,701
	0	.4%	Preferred Stock		246,305		252,975


	99	.8%	Total Investments		59,232,074		62,012,315
	0	.2%	Other Assets and Liabilities, Net				151,958


	100	.0%	Net Assets				62,164,273


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 99.3% of net assets

Australia 4.6%
BHP Billiton Ltd.		11,572		0.6		397,433
Other Securities				4.0		2,441,741

				4.6		2,839,174

Austria 0.4%
Other Securities				0.4		250,263

Belgium 0.9%
Other Securities				0.9		559,313

Canada 5.9%
Other Securities				5.9		3,635,186

Denmark 0.9%
Other Securities				0.9		588,832

Finland 1.5%
Nokia Oyj *		61,578		0.8		474,996
Other Securities				0.7		486,462

				1.5		961,458

France 11.9%
AXA S.A.		10,626		0.4		277,965
BNP Paribas S.A.		5,170		0.7		424,577
Carrefour S.A.		6,798		0.4		250,876
Compagnie de Saint-Gobain		4,950		0.5		297,396
GDF Suez		13,860		0.6		355,864
Orange S.A.		42,042		0.8		526,604
Sanofi		4,246		0.7		441,763
Societe Generale S.A.		3,784		0.4		252,821
Total S.A.		20,680		2.2		1,343,280
Vivendi S.A.		11,770		0.5		336,746
Other Securities				4.7		2,886,613

				11.9		7,394,505

Germany 9.4%
Allianz SE - Reg’d		2,178		0.6		390,156
BASF SE		4,730		0.9		544,970
Bayer AG - Reg’d		2,398		0.5		340,805
Daimler AG - Reg’d		6,050		0.9		564,195
Deutsche Telekom AG - Reg’d		32,186		0.9		546,558
E.ON SE		25,454		0.8		485,854
RWE AG		6,644		0.4		266,252
Siemens AG - Reg’d		3,410		0.7		455,713
Other Securities				3.7		2,262,081

				9.4		5,856,584

Hong Kong 0.9%
Other Securities				0.9		554,298

Ireland 0.7%
Other Securities				0.7		447,395

Israel 0.3%
Other Securities				0.3		205,341

Italy 4.9%
Enel S.p.A.		83,270		0.7		427,831
Eni S.p.A.		24,860		1.0		600,183
Intesa Sanpaolo S.p.A. (b)		116,072		0.6		360,063
UniCredit S.p.A.		48,400		0.6		385,377
Other Securities				2.0		1,262,679

				4.9		3,036,133

Japan 18.5%
Honda Motor Co., Ltd.		7,100		0.4		253,698
Nippon Telegraph & Telephone Corp.		4,900		0.4		273,697
Panasonic Corp.		20,700		0.4		258,788
Toyota Motor Corp.		8,800		0.8		503,436
Other Securities				16.5		10,183,095

				18.5		11,472,714

Luxembourg 0.6%
ArcelorMittal		16,588		0.4		262,669
Other Securities				0.2		115,994

				0.6		378,663

Netherlands 6.0%
ING Groep N.V. CVA *		18,480		0.4		269,785
Royal Dutch Shell plc, A Shares		33,462		2.0		1,222,646
Royal Dutch Shell plc, B Shares		21,010		1.3		819,328
Other Securities				2.3		1,391,252

				6.0		3,703,011

See financial notes 41

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)

New Zealand 0.1%
Other Securities				0.1		68,994

Norway 0.9%
Statoil A.S.A.		10,230		0.4		270,478
Other Securities				0.5		276,560

				0.9		547,038

Portugal 0.3%
Other Securities				0.3		202,143

Singapore 0.7%
Other Securities				0.7		410,521

Spain 4.4%
Banco Bilbao Vizcaya Argentaria S.A.		29,920		0.6		371,710
Banco Santander S.A.		84,342		1.2		764,867
Telefonica S.A.		41,387		1.0		635,066
Other Securities				1.6		989,555

				4.4		2,761,198

Sweden 2.4%
Other Securities				2.4		1,463,909

Switzerland 5.8%
Nestle S.A. - Reg’d		9,042		1.1		683,694
Novartis AG - Reg’d		5,676		0.8		473,322
Roche Holding AG (b)		1,254		0.6		386,394
Other Securities				3.3		2,052,204

				5.8		3,595,614

United Kingdom 17.3%
Anglo American plc		12,430		0.5		318,920
AstraZeneca plc		8,021		0.9		548,971
Barclays plc		69,300		0.5		292,780
BP plc		186,854		2.5		1,579,475
British American Tobacco plc		5,223		0.5		284,471
BT Group plc		40,381		0.4		277,322
GlaxoSmithKline plc		21,450		1.0		600,854
HSBC Holdings plc		73,130		1.2		771,728
Rio Tinto plc		5,171		0.5		297,454
Tesco plc		54,989		0.5		303,369
Vodafone Group plc		137,891		0.9		575,401
Other Securities				7.9		4,922,607

				17.3		10,773,352

Total Common Stock
(Cost $58,934,132)						61,705,639




Other Investment Companies 0.1% of net assets

United States 0.1%
Equity Fund 0.1%
Other Securities				0.1		47,215

Money Market Fund 0.0%
Other Securities				0.0		6,486

Total Other Investment Companies
(Cost $51,637)						53,701




Preferred Stock 0.4% of net assets

Germany 0.4%
Other Securities				0.4		252,975

Total Preferred Stock
(Cost $246,305)						252,975



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $59,256,387 and the unrealized appreciation and depreciation were $3,912,554 and ($1,156,626), respectively, with a net unrealized appreciation of $2,755,928.

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.
(b)		Securities are traded on separate exchanges for the same entity.


CVA —		Dutch Certificate
ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust
RSP —		Risparmio (Convertible Savings Shares)

42 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):


	Quoted Prices in				Significant
	Active Markets for		Other Significant		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total

Common Stock¹		$61,705,639		$—		$—		$61,705,639
Other Investment Companies¹		53,701		—		—		53,701
Preferred Stock¹		252,975		—		—		252,975

Total		$62,012,315		$—		$—		$62,012,315


¹		As categorized in the complete schedule of portfolio holdings.

See financial notes 43

Schwab Fundamental International Large Company Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments, at value (cost $59,232,074)		$62,012,315
Cash		262
Foreign currency, at value (cost $10,234)		10,262
Receivables:
Dividends		495,436
Foreign tax reclaims	+	6,935

Total assets		62,525,210

Liabilities

Payables:
Investments bought		359,292
Investment adviser fees	+	1,645

Total liabilities		360,937

Net Assets

Total assets		62,525,210
Total liabilities	—	360,937

Net assets		$62,164,273

Net Assets by Source
Capital received from investors		58,938,190
Net investment income not yet distributed		486,413
Net realized capital losses		(41,770	)
Net unrealized capital appreciation		2,781,440

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$62,164,273

2,200,001

$28.26

44 See financial notes

Schwab Fundamental International Large Company Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends (net of foreign withholding tax of $25,000)		$731,330

Expenses

Investment adviser fees		54,130

Total expenses	−	54,130

Net investment income		677,200

Realized and Unrealized Gains (Losses)

Net realized losses on investments		(41,271	)
Net realized losses on foreign currency transactions	+	(2,146	)

Net realized losses		(43,417	)
Net change in unrealized appreciation (depreciation) on investments		2,780,241
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	1,199

Net change in unrealized appreciation (depreciation)	+	2,781,440

Net realized and unrealized gains		2,738,023

Increase in net assets resulting from operations		$3,415,223


*		Commencement of operations.

See financial notes 45

Schwab Fundamental International Large Company Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$677,200
Net realized losses		(43,417	)
Net change in unrealized appreciation (depreciation)	+	2,781,440

Increase in net assets resulting from operations		3,415,223

Distributions to Shareholders

Distributions from net investment income		($189,140	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			2,200,001	$58,938,190
Shares redeemed	+		—	—

Net transactions in fund shares			2,200,001	$58,938,190

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		2,200,001	62,164,273

End of period			2,200,001	$62,164,273


Net investment income not yet distributed				$486,413


*		Commencement of operations.

46 See financial notes

Schwab Fundamental International Small Company Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.15
Net realized and unrealized gains (losses)		2.78

Total from investment operations		2.93
Less distributions:
Distributions from net investment income		(0.18	)

Net asset value at end of period		27.75

Total return (%)		11.73	²

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.46	³
Net investment income (loss)		1.09	³
Portfolio turnover rate⁴		18	²
Net assets, end of period ($ x 1,000)		24,977

¹ Commencement of operations.

² Not annualized.

³ Annualized.

⁴ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

See financial notes 47

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings as of February 28, 2014


				Cost		Value
Holdings by Category				($)		($)

	99	.3%	Common Stock		23,444,827		24,790,171
	0	.1%	Other Investment Companies		31,349		33,664
	0	.4%	Preferred Stock		94,836		110,783


	99	.8%	Total Investments		23,571,012		24,934,618
	0	.2%	Other Assets and Liabilities, Net				42,184


	100	.0%	Net Assets				24,976,802


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 99.3% of net assets

Australia 4.8%
Other Securities				4.8		1,191,753

Austria 0.7%
IMMOFINANZ AG *		9,299		0.2		47,135
Other Securities				0.5		131,522

				0.7		178,657

Belgium 1.2%
Other Securities				1.2		290,780

Canada 8.2%
Methanex Corp.		1,017		0.3		71,294
Precision Drilling Corp.		4,482		0.2		49,357
Other Securities				7.7		1,922,401

				8.2		2,043,052

Denmark 1.6%
D/S Norden A/S		954		0.2		47,055
Other Securities				1.4		363,258

				1.6		410,313

Finland 2.2%
Huhtamaki Oyj		1,755		0.2		50,660
Rautaruukki Oyj		5,859		0.3		68,702
Other Securities				1.7		419,536

				2.2		538,898

France 5.0%
Faurecia *		1,228		0.2		54,749
Neopost S.A.		563		0.2		51,795
Teleperformance		864		0.2		55,012
Zodiac Aerospace		1,305		0.2		46,115
Other Securities				4.2		1,050,957

				5.0		1,258,628

Germany 3.6%
Rhoen Klinikum AG		1,602		0.2		51,709
Wacker Chemie AG		405		0.2		54,734
Wincor Nixdorf AG		594		0.2		47,641
Other Securities				3.0		743,916

				3.6		898,000

Hong Kong 2.6%
Hongkong Land Holdings Ltd.		9,000		0.2		56,430
Other Securities				2.4		599,098

				2.6		655,528

Ireland 0.8%
Other Securities				0.8		197,916

Israel 1.3%
Other Securities				1.3		319,367

Italy 3.0%
Other Securities				3.0		757,475

Japan 35.7%
Alps Electric Co., Ltd. *		4,700		0.2		60,324
Casio Computer Co., Ltd.		4,500		0.2		50,659
Chugai Pharmaceutical Co., Ltd.		1,800		0.2		45,818
Don Quijote Holdings Co., Ltd.		900		0.2		48,675
Ebara Corp.		9,000		0.2		60,667
IT Holdings Corp.		2,700		0.2		46,320
Iwatani Corp.		9,000		0.2		57,140
Kamigumi Co., Ltd.		9,000		0.3		83,153
Minebea Co., Ltd.		9,000		0.3		79,097
Mitsubishi Gas Chemical Co., Inc.		9,000		0.2		57,228
NGK Insulators Ltd.		2,500		0.2		53,887
Rengo Co., Ltd.		9,000		0.2		51,849
Toshiba TEC Corp.		9,000		0.2		59,080
Toyo Tire & Rubber Co., Ltd.		9,000		0.3		65,164
Unicharm Corp.		900		0.2		50,879
Other Securities				32.4		8,048,992

				35.7		8,918,932

Luxembourg 0.6%
Other Securities				0.6		145,959

Netherlands 2.2%
USG People N.V.		3,846		0.3		73,251

48 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)
Other Securities				1.9		462,756

				2.2		536,007

New Zealand 0.5%
Other Securities				0.5		130,482

Norway 1.3%
REC Silicon A.S.A. *		78,759		0.2		58,711
Other Securities				1.1		264,737

				1.3		323,448

Portugal 0.4%
Other Securities				0.4		107,365

Singapore 1.5%
Other Securities				1.5		384,545

Spain 2.4%
Acerinox S.A.		3,150		0.2		45,943
Bankinter S.A.		5,978		0.2		48,491
Gamesa Corp. Tecnologica S.A. *		7,056		0.3		79,542
Other Securities				1.7		414,256

				2.4		588,232

Sweden 2.4%
Other Securities				2.4		607,220

Switzerland 3.2%
Actelion Ltd. - Reg’d *		486		0.2		51,453
Georg Fischer AG - Reg’d *		72		0.2		57,629
Logitech International S.A. - Reg’d		3,654		0.2		58,287
Other Securities				2.6		623,320

				3.2		790,689

United Kingdom 14.1%
Ashtead Group plc		3,160		0.2		46,390
Babcock International Group plc		1,935		0.2		47,701
Bellway plc		1,800		0.2		50,557
Berendsen plc		2,675		0.2		46,936
Booker Group plc		18,165		0.2		53,060
Darty plc		28,165		0.2		54,752
DS Smith plc		9,243		0.2		54,664
Enterprise Inns plc *		22,329		0.2		57,964
London Stock Exchange Group plc		1,675		0.2		56,899
Mitchells & Butlers plc *		5,877		0.2		47,767
Northgate plc		5,097		0.2		50,824
Rentokil Initial plc		23,301		0.2		51,974
UBM plc		3,951		0.2		47,508
Other Securities				11.5		2,849,929

				14.1		3,516,925

Total Common Stock
(Cost $23,444,827)						24,790,171




Other Investment Companies 0.1% of net assets

United States 0.1%
Equity Fund 0.1%
Other Securities				0.1		31,644

Money Market Fund 0.0%
Other Securities				0.0		2,020

Total Other Investment Companies
(Cost $31,349)						33,664




Preferred Stock 0.4% of net assets

Germany 0.3%
Other Securities				0.3		91,539

Italy 0.1%
Other Securities				0.1		19,244

Total Preferred Stock
(Cost $94,836)						110,783



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $23,653,427 and the unrealized appreciation and depreciation were $1,976,578 and ($695,387), respectively, with a net unrealized appreciation of $1,281,191.

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

See financial notes 49

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):


	Quoted Prices in				Significant
	Active Markets for		Other Significant		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total

Common Stock¹		$24,790,171		$—		$—		$24,790,171
Other Investment Companies¹		33,664		—		—		33,664
Preferred Stock¹		110,783		—		—		110,783

Total		$24,934,618		$—		$—		$24,934,618


¹		As categorized in the complete schedule of portfolio holdings.

50 See financial notes

Schwab Fundamental International Small Company Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments, at value (cost $23,571,012)		$24,934,618
Foreign currency, at value (cost $14,935)		14,994
Receivables:
Dividends		27,667
Foreign tax reclaims	+	471

Total assets		24,977,750

Liabilities

Payables:
Investment adviser fees	+	948

Total liabilities		948

Net Assets

Total assets		24,977,750
Total liabilities	—	948

Net assets		$24,976,802

Net Assets by Source
Capital received from investors		23,656,700
Distributions in excess of net investment income		(23,022	)
Net realized capital losses		(20,750	)
Net unrealized capital appreciation		1,363,874

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$24,976,802

900,001

$27.75

See financial notes 51

Schwab Fundamental International Small Company Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends (net of foreign withholding tax of $10,727)		$121,465

Expenses

Investment adviser fees		35,962

Total expenses	−	35,962

Net investment income		85,503

Realized and Unrealized Gains (Losses)

Net realized losses on investments		(18,635	)
Net realized losses on foreign currency transactions	+	(5,040	)

Net realized losses		(23,675	)
Net change in unrealized appreciation (depreciation) on investments		1,363,606
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	268

Net change in unrealized appreciation (depreciation)	+	1,363,874

Net realized and unrealized gains		1,340,199

Increase in net assets resulting from operations		$1,425,702


*		Commencement of operations.

52 See financial notes

Schwab Fundamental International Small Company Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$85,503
Net realized losses		(23,675	)
Net change in unrealized appreciation (depreciation)	+	1,363,874

Increase in net assets resulting from operations		1,425,702

Distributions to Shareholders

Distributions from net investment income		($105,600	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			900,001	$23,656,700
Shares redeemed	+		—	—

Net transactions in fund shares			900,001	$23,656,700

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		900,001	24,976,802

End of period			900,001	$24,976,802


Distributions in excess of net investment income				($23,022	)


*		Commencement of operations.

See financial notes 53

Schwab Fundamental Emerging Markets Large Company Index ETF

Financial Statements

Financial Highlights


	8/14/13¹–
	2/28/14


Per-Share Data ($)

Net asset value at beginning of period		25.00

Income (loss) from investment operations:
Net investment income (loss)		0.12
Net realized and unrealized gains (losses)		(0.00	)²

Total from investment operations		0.12
Less distributions:
Distributions from net investment income		(0.14	)

Net asset value at end of period		24.98

Total return (%)		0.45	³

Ratios/Supplemental Data (%)

Ratios to average net assets:
Total expenses		0.46	⁴
Net investment income (loss)		1.01	⁴
Portfolio turnover rate⁵		6	³
Net assets, end of period ($ x 1,000)		22,482

¹ Commencement of operations.

² Per-share amount was less than $0.01.

³ Not annualized.

⁴ Annualized.

⁵ Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.

54 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings as of February 28, 2014


				Cost		Value
Holdings by Category				($)		($)

	89	.0%	Common Stock		20,354,508		20,012,776
	1	.7%	Other Investment Companies		352,770		371,119
	9	.2%	Preferred Stock		2,269,459		2,072,068
	0	.0%	Rights		—		—


	99	.9%	Total Investments		22,976,737		22,455,963
	0	.1%	Other Assets and Liabilities, Net				25,870


	100	.0%	Net Assets				22,481,833


	Number		% of Net		Value
Security	of Shares		Assets		($)

Common Stock 89.0% of net assets

Brazil 5.2%
Petroleo Brasileiro S.A.		45,995		1.1		255,769
Vale S.A.		17,195		1.1		242,909
Other Securities				3.0		680,145

				5.2		1,178,823

Chile 0.7%
Other Securities				0.7		164,039

China 12.2%
Bank of China Ltd., H Shares		558,000		1.0		234,386
China Construction Bank Corp., H Shares		531,000		1.6		364,671
China Mobile Ltd.		41,000		1.7		389,606
China Petroleum & Chemical Corp., H Shares		365,000		1.4		324,035
CNOOC Ltd.		103,000		0.8		168,812
Industrial & Commercial Bank of China Ltd., H Shares		414,000		1.1		248,046
PetroChina Co., Ltd., H Shares		207,000		1.0		218,174
Other Securities				3.6		788,462

				12.2		2,736,192

Colombia 0.2%
Other Securities				0.2		52,258

Czech Republic 0.5%
Other Securities				0.5		102,331

Egypt 0.2%
Other Securities				0.2		50,175

Greece 2.2%
OPAP S.A.		8,325		0.6		131,078
Other Securities				1.6		356,191

				2.2		487,269

Hungary 0.6%
Other Securities				0.6		134,538

India 2.1%
Reliance Industries Ltd. GDR (a)		7,443		0.9		192,178
Other Securities				1.2		284,071

				2.1		476,249

Indonesia 0.8%
Other Securities				0.8		178,503

Malaysia 1.7%
Other Securities				1.7		387,927

Mexico 3.5%
America Movil S.A.B. de C.V., Series L		238,500		1.0		231,220
Cemex S.A.B. de C.V., Series CPO *		126,000		0.7		164,965
Other Securities				1.8		390,529

				3.5		786,714

Philippines 0.1%
Other Securities				0.1		29,899

Poland 2.5%
Other Securities				2.5		565,070

Republic of Korea 20.1%
Hyundai Heavy Industries Co., Ltd.		558		0.5		114,736
Hyundai Mobis		414		0.5		121,582
Hyundai Motor Co.		1,262		1.3		289,640
Korea Electric Power Corp.		4,680		0.7		162,211
LG Corp.		3,879		0.9		203,488
LG Electronics, Inc.		2,844		0.7		162,248
POSCO		1,089		1.3		289,720
Samsung Electronics Co., Ltd.		679		3.8		858,053
Shinhan Financial Group Co., Ltd.		3,420		0.6		142,407
SK C&C Co., Ltd.		945		0.6		128,361
SK Holdings Co., Ltd.		954		0.8		172,033
SK Innovation Co., Ltd.		1,062		0.6		132,812
SK Telecom Co., Ltd.		558		0.5		113,168
Other Securities				7.3		1,618,051

				20.1		4,508,510

Russia 13.5%
Gazprom OAO		234,420		4.1		913,263

See financial notes 55

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		% of Net		Value
Security	of Shares		Assets		($)
LUKOIL OAO *		16,587		4.0		908,193
MMC Norilsk Nickel OJSC *		1,017		0.8		169,492
Sberbank of Russia *		50,220		0.6		127,312
Surgutneftegas OAO *		405,000		1.4		311,179
Tatneft OAO *		19,260		0.5		113,623
Other Securities				2.1		488,303

				13.5		3,031,365

South Africa 7.6%
MTN Group Ltd.		13,707		1.1		251,254
Sasol Ltd.		6,075		1.4		308,830
Other Securities				5.1		1,147,593

				7.6		1,707,677

Taiwan 13.2%
Asustek Computer, Inc.		14,000		0.6		134,695
China Steel Corp.		135,000		0.5		114,513
Chunghwa Telecom Co., Ltd.		37,500		0.5		113,869
Formosa Chemicals & Fibre Corp.		54,000		0.6		137,415
Formosa Plastics Corp.		46,000		0.5		116,905
Hon Hai Precision Industry Co., Ltd.		119,700		1.5		331,864
Nan Ya Plastics Corp.		54,000		0.5		115,671
Taiwan Semiconductor Manufacturing Co., Ltd.		108,000		1.7		384,976
Other Securities				6.8		1,520,335

				13.2		2,970,243

Thailand 1.1%
Other Securities				1.1		235,724

Trinidad 1.0%
Other Securities				1.0		229,270

Total Common Stock
(Cost $20,354,508)						20,012,776




Other Investment Companies 1.7% of net assets

United States 1.7%
Equity Funds 1.6%
iShares India 50 ETF		5,451		0.6		125,809
WisdomTree India Earnings Fund		11,505		0.9		194,435
Other Securities				0.1		27,636

				1.6		347,880

Money Market Fund 0.1%
Other Securities				0.1		23,239

Total Other Investment Companies
(Cost $352,770)						371,119




Preferred Stock 9.2% of net assets

Brazil 6.9%
Banco Bradesco S.A.		11,700		0.6		136,784
Itau Unibanco Holding S.A.		19,306		1.1		258,102
Petroleo Brasileiro S.A.		62,420		1.6		363,137
Vale S.A.		23,400		1.3		291,398
Other Securities				2.3		503,954

				6.9		1,553,375

Colombia 0.1%
Other Securities				0.1		20,369

Republic of Korea 0.9%
Samsung Electronics Co., Ltd.		119		0.5		118,498
Other Securities				0.4		80,040

				0.9		198,538

Russia 1.3%
AK Transneft OAO *		99		1.0		223,424
Other Securities				0.3		76,362

				1.3		299,786

Total Preferred Stock
(Cost $2,269,459)						2,072,068




Rights 0.0% of net assets

Brazil 0.0%
Other Securities				0.0		—

Total Rights
(Cost $—)						—



End of Investments.

At 02/28/14, the tax basis cost of the fund’s investments was $23,006,507 and the unrealized appreciation and depreciation were $808,175 and ($1,358,719), respectively, with a net unrealized depreciation of ($550,544).

For the following notes, please refer to the complete schedule of portfolio holdings.


*		Non-income producing security.
(a)		Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $192,178 or 0.9% of net assets.
(b)		The rate shown is the 7-day yield.


ADR —		American Depositary Receipt
ETF —		Exchange Traded Fund
GDR —		Global Depositary Receipt
NVDR —		Non-Voting Depositary Receipt
Reg’d —		Registered

56 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2014 (see financial note 2(a) for additional information):


	Quoted Prices in				Significant
	Active Markets for		Other Significant		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total

Common Stock¹		$20,012,776		$—		$—		$20,012,776
Other Investment Companies¹		371,119		—		—		371,119
Preferred Stock¹		2,072,068		—		—		2,072,068
Rights¹		—		—		—		—

Total		$22,455,963		$—		$—		$22,455,963


¹		As categorized in the complete schedule of portfolio holdings.

See financial notes 57

Schwab Fundamental Emerging Markets Large Company Index ETF

Statement of

Assets and Liabilities

As of February 28, 2014



Assets

Investments, at value (cost $22,976,737)		$22,455,963
Foreign currency, at value (cost $9,229)		9,265
Receivables:
Dividends		39,683
Foreign tax reclaims	+	245

Total assets		22,505,156

Liabilities

Payables:
Investments bought		22,457
Investment adviser fees	+	866

Total liabilities		23,323

Net Assets

Total assets		22,505,156
Total liabilities	—	23,323

Net assets		$22,481,833

Net Assets by Source
Capital received from investors		23,056,401
Distributions in excess of net investment income		(8,854	)
Net realized capital losses		(44,630	)
Net unrealized capital depreciation		(521,084	)

Net Asset Value (NAV)

Shares

Net Assets

Outstanding

NAV

$22,481,833

900,001

$24.98

58 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Statement of

Operations

For the period August 14, 2013* through February 28, 2014



Investment Income

Dividends (net of foreign withholding tax of $20,651)		$117,477

Expenses

Investment adviser fees		36,829

Total expenses	−	36,829

Net investment income		80,648

Realized and Unrealized Gains (Losses)

Net realized losses on investments		(34,882	)
Net realized losses on foreign currency transactions	+	(3,656	)

Net realized losses		(38,538	)
Net change in unrealized appreciation (depreciation) on investments		(520,774	)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(310	)

Net change in unrealized appreciation (depreciation)	+	(521,084	)

Net realized and unrealized losses		(559,622	)

Decrease in net assets resulting from operations		($478,974	)


*		Commencement of operations.

See financial notes 59

Schwab Fundamental Emerging Markets Large Company Index ETF

Statements of

Changes in Net Assets

For the current period only. Because the fund commenced operations on August 14, 2013, it has no prior report period.


*8/14/13-2/28/14**
Net investment income		$80,648
Net realized losses		(38,538	)
Net change in unrealized appreciation (depreciation)	+	(521,084	)

Decrease in net assets resulting from operations		(478,974	)

Distributions to Shareholders

Distributions from net investment income		($96,670	)

Transactions in Fund Shares


		*8/14/13-2/28/14**
			SHARES	VALUE
Shares sold			900,001	$23,057,477
Shares redeemed	+		—	—

Net transactions in fund shares			900,001	$23,057,477

Shares Outstanding and Net Assets

		*8/14/13-2/28/14**
			SHARES	NET ASSETS
Beginning of period			—	$—
Total increase	+		900,001	22,481,833

End of period			900,001	$22,481,833


Distributions in excess of net investment income				($8,854	)


*		Commencement of operations.

60 See financial notes

Schwab Fundamental Index ETFs

Financial Notes

1. Business Structure of the Funds

Each of the funds in this report is a series of Schwab Strategic Trust (the “trust”), a no-load, open-end management investment company. The trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the “1940 Act”). The list below shows all the operational funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:



Schwab Strategic Trust (organized January 27, 2009)		Schwab U.S. Mid-Cap ETF
Schwab Fundamental U.S. Broad Market Index ETF		Schwab U.S. Small-Cap ETF
Schwab Fundamental U.S. Large Company Index ETF		Schwab U.S. Dividend Equity ETF
Schwab Fundamental U.S. Small Company Index ETF		Schwab U.S. REIT ETF
Schwab Fundamental International Large Company Index ETF		Schwab International Equity ETF
Schwab Fundamental International Small Company Index ETF		Schwab International Small-Cap Equity ETF
Schwab Fundamental Emerging Markets Large Company Index ETF		Schwab Emerging Markets Equity ETF
Schwab U.S. Broad Market ETF		Schwab U.S. TIPS ETF
Schwab U.S. Large-Cap ETF		Schwab Short-Term U.S. Treasury ETF
Schwab U.S. Large-Cap Growth ETF		Schwab Intermediate-Term U.S. Treasury ETF
Schwab U.S. Large-Cap Value ETF		Schwab U.S. Aggregate Bond ETF

The funds issue and redeem shares at their net assets value per share (“NAV”) only in large blocks of shares, typically 50,000 shares or more (“Creation Units”). These transactions are usually in exchange for a basket of securities and an amount of cash. As a practical matter, only institutions or large investors purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the fund are not redeemable securities.

Individual shares of the funds trade on national securities exchanges and elsewhere during the trading day and can only be bought and sold at market prices throughout the trading day through a broker-dealer. Because fund shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (premium) or less than NAV (discount).

The funds commenced operations on August 14, 2013.

Each fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, each fund may also keep certain assets in segregated accounts, as required by securities law.

2. Significant Accounting Policies:

The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

(a) Security Valuation:

Under procedures approved by the funds’ Board of Trustees (the “Board”), the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair market value. Among other things, these procedures allow the funds to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.

The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:


	•	Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the official closing price or the last sales price on the exchange where the securities are principally traded with these values then translated into U.S. dollars at the current exchange rate, unless these securities are fair valued as discussed below.

	•	Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is

Schwab Fundamental Index ETFs

Financial Notes (continued)

2. Significant Accounting Policies (continued):


		de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.


	•	Futures contracts: Futures are valued at their settlement prices as of the close of their exchanges.

	•	Short-term securities (60 days or less to maturity): Short-term securities are valued at amortized cost, which approximates market value.

	•	Underlying funds: Mutual funds are valued at their respective NAVs. Exchange traded funds (“ETFs”) traded on a recognized securities exchange are valued at the last reported sale price that day or the official closing price, if applicable.

In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If inputs used to measure the financial instruments fall within different levels of the hierarchy, the categorization is based on the lowest level input that is significant to the valuation. If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.

The three levels of the fair value hierarchy are as follows:


	•	Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices.

	•	Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information.

	•	Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

Schwab Fundamental Index ETFs

Financial Notes (continued)

2. Significant Accounting Policies (continued):

The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.

The levels associated with valuing the funds’ investments as of February 28, 2014 are disclosed in the Portfolio Holdings.

(b) Accounting Policies for certain Portfolio Investments (if held):

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value changes daily.

Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to have a value of at least 102% of the prior day’s market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities and is marked to market daily. The lending agent provides the fund with indemnification against borrower default. The fund bears the risk of loss with respect to the investment of cash collateral. The cash collateral of securities loaned is invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between the fund and the lending agent. Costs and expenses, including agent fees, associated with securities lending activities under the trust’s Securities Lending Program paid to the unaffiliated lending agent are approximately 15% of the gross lending revenues.

As of February 28, 2014, the funds did not have any securities on loan.

(c) Security Transactions:

Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.

Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations on the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.

Gains realized by the funds on the sale of securities in certain foreign countries may be subject to non-U.S. taxes. In those instances, the funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.

When a fund closes out a futures position, it calculates the difference between the value of the position at the beginning and at the end of the contract, and records a realized gain or loss accordingly.

Schwab Fundamental Index ETFs

Financial Notes (continued)

2. Significant Accounting Policies (continued):

(d) Investment Income:

Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.

Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.

(e) Expenses:

Pursuant to the Investment Advisory Agreement (“Advisory Agreement”) between Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”) and the trust, the investment adviser will pay the operating expenses of each fund, excluding interest expense, taxes, any brokerage expenses, and extraordinary or non-routine expenses. Interest expense, taxes, any brokerage expenses and extraordinary or non-routine expenses that are specific to a fund are charged directly to the fund.

(f) Distributions to Shareholders:

Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, and Schwab Fundamental U.S. Small Company Index ETF generally make distributions from net investment income, if any, quarterly. Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF generally make distributions from net investment income, if any, annually. All funds generally make distributions from net realized capital gains, if any, once a year.

(g) Accounting Estimates:

(h) Federal Income Taxes:

The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.

(i) Foreign Taxes:

The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of February 28, 2014, if any, are reflected in the funds’ Statements of Assets and Liabilities.

(j) Indemnification:

Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss attributable to these arrangements to be remote.

Schwab Fundamental Index ETFs

Financial Notes (continued)

3. Risk Factors:

Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.

Market Risk. Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of the investment in a fund will fluctuate, which means that the investors could lose money.

Investment Style Risk. The funds are not actively managed. Therefore, a fund follows the securities included in an index during upturns as well as downturns. Because of their indexing strategies, the funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, the fund’s performance is normally below that of the index.

Large Cap Risk. Certain funds invest in large-cap stocks. Large-cap stocks tend to go in and out of favor based on market and economic conditions. During a period when large-cap U.S. stocks fall behind other types of investments — mid- or small-cap stocks, for instance — a fund’s large-cap holdings could reduce performance.

Mid-Cap Risk. Certain funds invest in mid-cap stocks. Mid-cap stocks tend to go in and out of favor based on market and economic conditions. Stocks of mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when mid-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s mid-cap holdings could reduce performance.

Small-Cap Risk. Certain funds invest in small-cap stocks. Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — large-cap and mid-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.

Foreign Investment Risk. A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. Foreign securities also include ADRs, GDRs, and EDRs, which are receipts issued by U.S. and foreign banks that represent shares of foreign-based corporations. Investment in ADRs, GDRs and EDRs may be less liquid than the underlying shares in their primary trading market and GDRs, many of which are issued by companies in emerging markets, may be more volatile. To the extent a fund’s investments in a single country or a limited number of countries represent a larger percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political and social conditions in those countries and the fund may be subject to increased price volatility.

Emerging Markets Risk. Certain funds invest in emerging markets. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Such countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with a fund’s investments in emerging market countries.

Sampling Index Tracking Risk. Certain funds may not fully replicate the index and may hold securities not included in the index. As a result, a fund is subject to the risk that the adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. Because certain funds utilize a sampling approach they may not track the return of their respective index as well as they would if the funds purchased all of the securities in their respective benchmark index.

Schwab Fundamental Index ETFs

Financial Notes (continued)

3. Risk Factors (continued):

Tracking Error Risk. As an index fund, each fund seeks to track the performance of its benchmark index, although it may not be successful in doing so. The divergence between the performance of a fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.

Derivatives Risk. Each fund may invest in derivative instruments. The principal types of derivatives a fund may use are futures contracts. A futures contract is an agreement to buy or sell a financial instrument at a specific price on a specific day. A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as market risk and liquidity risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to leverage risk, credit risk, lack of availability risk, valuation risk, correlation risk and tax risk. Leverage risk is the risk that use of derivatives may magnify the effect of any decrease or increase in the value of the fund’s portfolio securities. Credit risk is the risk that the counterparty to a derivative transaction may not fulfill its contractual obligations. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause a fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.

Liquidity Risk. A particular investment may be difficult to purchase or sell. A fund may be unable to sell illiquid securities at an advantageous time or price.

Concentration Risk. To the extent that a fund’s or an index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class, the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.

Shares of the Fund May Trade at Prices Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of a fund will approximate the fund’s NAV, there may be times when the market price and the NAV vary significantly. Investors may pay more than NAV when they buy shares of a fund in the secondary market, and may receive less than NAV when they sell those shares in the secondary market. (See “Frequency Distribution of Discounts and Premiums” in the “Other Information” section of this report for an overview showing the frequency at which the daily closing price was at a discount or a premium to the funds’ daily NAV.)

Lack of Government Insurance or Guarantee. An investment in a fund is not a bank deposit and it is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.

Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.

4. Affiliates and Affiliated Transactions:

CSIM, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser pursuant to an Advisory Agreement between CSIM and the trust.

Schwab Fundamental Index ETFs

Financial Notes (continued)

4. Affiliates and Affiliated Transactions (continued):

For its advisory services to the funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:

Schwab

Fundamental

International

Emerging

U.S. Broad

U.S. Large

U.S. Small

Large

Small

Markets Large

Market

Company

Index ETF

0.32%

0.46%

The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corporation shares owned by the funds during the report period:

Balance

Realized

Dividends

of Shares

Market

Gains (Losses)

Received

Held at

Gross

Held at

Value at

8/14/13(a) to

Fund

8/14/13(a)

Purchases

Sales

2/28/14

Schwab Fundamental U.S. Broad Market Index ETF

—

2,230

(166

)

2,064

$54,717

$39

$155

Schwab Fundamental U.S. Large Company Index ETF

—

3,108

(321

)

2,787

73,883

337

233


(a)		Commencement of operations.

Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds including Schwab ETFs. All loans are for temporary or emergency purposes only. The interest rate to be charged on a loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board. The funds had no interfund borrowing or lending activity during the period.

5. Other Service Providers:

SEI Investments Distribution Co. is the principal underwriter and distributor of shares of the funds.

State Street Bank and Trust Company (“State Street”) serves as the funds’ transfer agent. As part of these services, the transfer agent maintains records pertaining to the sale, redemption and transfer of the funds’ shares.

State Street also serves as custodian and accountant for the funds. The custodian is responsible for the daily safekeeping of securities and cash held by the funds. The funds’ accountant maintains all books and records related to the funds’ transactions.

6. Board of Trustees:

7. Borrowing from Banks:

The funds have access to custodian overdraft facilities and to an uncommitted line of credit of $100 million with State Street. The funds pay interest on the amounts they borrow at rates that are negotiated periodically.

There were no borrowings from the line of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed on the funds’ Statements of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

Schwab Fundamental Index ETFs

Financial Notes (continued)

8. Derivatives:

The Schwab Fundamental U.S. Small Company Index ETF entered into equity index futures contracts (“futures”) during the report period. The fund invested in futures to equitize available cash. The fair value and variation margin for futures contracts held at February 28, 2014 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized/unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the fund’s accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the month-end average contract values of futures contracts held by the fund was $16,884 and the month-end average number of contracts held was 1.

9. Purchases and Sales/Maturities of Investment Securities:

For the period ended February 28, 2014, purchases and sales/maturities of securities (excluding in-kind transactions and short-term obligations) were as follows:


	Purchases of Securities		Sales/Maturities of Securities

Schwab Fundamental U.S. Broad Market Index ETF		$2,255,754		$1,654,514
Schwab Fundamental U.S. Large Company Index ETF		3,136,147		2,330,479
Schwab Fundamental U.S. Small Company Index ETF		3,038,484		2,487,391
Schwab Fundamental International Large Company Index ETF		16,530,094		2,756,851
Schwab Fundamental International Small Company Index ETF		10,944,457		2,804,458
Schwab Fundamental Emerging Markets Large Company Index ETF		18,266,671		883,159

10. In-Kind Transactions:

The consideration for the purchase of Creation Units of a fund generally consists of the in-kind deposit of a designated portfolio of equity securities, which constitutes an optimized representation of the securities involved in a relevant fund’s underlying index, and an amount of cash. Investors purchasing and redeeming Creation Units are subject to a standard creation transaction fee and a standard redemption transaction fee paid to the custodian to offset transfer and other transaction costs associated with the issuance and redemption of Creation Units. Purchasers and redeemers of Creation Units for cash are subject to an additional variable charge paid to the fund that will offset the transaction costs to the fund of buying or selling portfolio securities. In addition, purchasers and redeemers of shares in Creation Units are responsible for payment of the costs of transferring securities to or out of the fund. From time to time, CSIM may cover the cost of any transaction fees when believed to be in the best interests of the fund.

The in-kind transactions for the period ended February 28, 2014 were as follows:


	In-Kind Purchases of Securities		In-Kind Sales of Securities

Schwab Fundamental U.S. Broad Market Index ETF		$55,524,146		$—
Schwab Fundamental U.S. Large Company Index ETF		68,422,359		—
Schwab Fundamental U.S. Small Company Index ETF		51,700,826		—
Schwab Fundamental International Large Company Index ETF		45,214,931		—
Schwab Fundamental International Small Company Index ETF		15,471,096		—
Schwab Fundamental Emerging Markets Large Company Index ETF		5,605,530		—

For the period ended February 28, 2014, there were no in-kind redemptions. However, if the funds have such transactions, they will realize net capital gains or losses resulting from in-kind redemptions of Creation Units. Because such gains or losses are not taxable to the funds and are not distributed to existing fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to capital received from investors at the end of the funds’ tax year. These reclassifications have no

Schwab Fundamental Index ETFs

Financial Notes (continued)

10. In-Kind Transactions (continued):

effect on net assets or net asset values per share. The net realized in-kind gains or losses will be disclosed in the funds’ Statements of Operations.

11. Federal Income Taxes

As of February 28, 2014, the components of distributable earnings on a tax-basis were as follows:


										Schwab			Schwab			Schwab
	Schwab			Schwab			Schwab			Fundamental			Fundamental			Fundamental
	Fundamental			Fundamental			Fundamental			International			International			Emerging
	U.S. Broad			U.S. Large			U.S. Small			Large			Small			Markets Large
	Market			Company			Company			Company			Company			Company
	Index ETF			Index ETF			Index ETF			Index ETF			Index ETF			Index ETF

Undistributed ordinary income		$172,626			$218,984			$61,790			$510,755			$59,324			$—
Undistributed long-term capital gains		—			—			—			—			—			—
Unrealized appreciation		3,321,598			3,751,941			4,200,503			3,912,554			1,976,578			808,175
Unrealized depreciation		(607,104	)		(798,388	)		(850,476	)		(1,156,626	)		(695,387	)		(1,358,719	)
Other unrealized appreciation (depreciation)		—			—			—			617			268			(310	)

Net unrealized appreciation (depreciation)		2,714,494			2,953,553			3,350,027			2,756,545			1,281,459			(550,854	)

The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales and Real Estate Investment Trusts (REITs).

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2014, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:

Schwab

Fundamental

International

Emerging

U.S. Broad

U.S. Large

U.S. Small

Large

Small

Markets Large

Market

Company

Expiration Date

Index ETF

No expiration*

605

5,462

—

Total

$605

$5,462

$—

* As a result of the passage of the Regulated Investment Company Modernization Act of 2010, capital losses incurred after December 31, 2010 may now be carried forward indefinitely, but must retain the character of the original loss.

Schwab

Fundamental

International

Emerging

U.S. Broad

U.S. Large

U.S. Small

Large

Small

Markets Large

Market

Company

Index ETF

Deferred capital losses

$59,451

$27,887

$40,514

$41,217

$20,681

$23,714

Schwab Fundamental Index ETFs

Financial Notes (continued)

11. Federal Income Taxes (continued):

The tax-basis components of distributions paid during the current period were:

Schwab

Fundamental

International

Emerging

U.S. Broad

U.S. Large

U.S. Small

Large

Small

Markets Large

Market

Company

Index ETF

Current period distributions

Ordinary Income

$141,500

$180,240

$95,650

$189,140

$105,600

$96,670

Long-term capital gains

—

Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as short-term capital gains and losses, in-kind transactions, capital losses related to wash sales, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by a fund for financial reporting purposes. A fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.


										Schwab			Schwab			Schwab
	Schwab			Schwab			Schwab			Fundamental			Fundamental			Fundamental
	Fundamental			Fundamental			Fundamental			International			International			Emerging
	U.S. Broad			U.S. Large			U.S. Small			Large			Small			Markets Large
	Market			Company			Company			Company			Company			Company
	Index ETF			Index ETF			Index ETF			Index ETF			Index ETF			Index ETF

Capital shares		$—			$—			$—			$—			$—			($1,076	)
Undistributed net investment income		(1,297	)		(1,540	)		(2,123	)		(1,647	)		(2,925	)		7,168
Net realized gains and losses		1,297			1,540			2,123			1,647			2,925			(6,092	)

As of February 28, 2014, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended February 28, 2014, the funds did not incur any interest or penalties.

12. Subsequent Events:

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of:

Schwab Fundamental U.S. Broad Market Index ETF

Schwab Fundamental U.S. Large Company Index ETF

Schwab Fundamental U.S. Small Company Index ETF

Schwab Fundamental International Large Company Index ETF

Schwab Fundamental International Small Company Index ETF

Schwab Fundamental Emerging Markets Large Company Index ETF

In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF and Schwab Fundamental Emerging Markets Large Company Index ETF (six of the funds constituting Schwab Strategic Trust, hereafter referred to as the “Funds”) at February, 28, 2014, the results of each of their operations, the changes in each of their net assets and the financial highlights for the period August 14, 2013 (commencement of operations) through February 28, 2014, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at February 28, 2014 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.

PricewaterhouseCoopers LLP

San Francisco, California

April 17, 2014

Other Federal Tax Information (unaudited)

The funds may elect to pass on the benefits of the foreign tax credit to its shareholders for the period ended February 28, 2014, and the respective foreign source income on the funds as follows:


	Foreign Tax Credit		Foreign Source Income

Schwab Fundamental U.S. Broad Market Index ETF		$—		$—
Schwab Fundamental U.S. Large Company Index ETF		—		—
Schwab Fundamental U.S. Small Company Index ETF		—		—
Schwab Fundamental International Large Company Index ETF		24,925		482,101
Schwab Fundamental International Small Company Index ETF		10,570		131,865
Schwab Fundamental Emerging Markets Large Company Index ETF		20,343		137,383

For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the period ended February 28, 2014 qualify for the corporate dividends received deduction:


Schwab Fundamental U.S. Broad Market Index ETF	100.00	%
Schwab Fundamental U.S. Large Company Index ETF	100.00	%
Schwab Fundamental U.S. Small Company Index ETF	93.32	%
Schwab Fundamental International Large Company Index ETF	—	%
Schwab Fundamental International Small Company Index ETF	—	%
Schwab Fundamental Emerging Markets Large Company Index ETF	—	%

For the period ended February 28, 2014, the funds designated the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2015 via IRS form 1099 of the amount for use in preparing their 2014 income tax return.


Schwab Fundamental U.S. Broad Market Index ETF			$141,500
Schwab Fundamental U.S. Large Company Index ETF			180,240
Schwab Fundamental U.S. Small Company Index ETF			93,255
Schwab Fundamental International Large Company Index ETF			211,678
Schwab Fundamental International Small Company Index ETF			68,360
Schwab Fundamental Emerging Markets Large Company Index ETF			93,248

Other Information (unaudited)

Frequency Distribution of Discounts and Premiums

Market Price vs. NAV as of February 28, 2014

The following charts are provided to show the frequency at which the daily closing market price on the NYSE Arca, Inc. (“Exchange”), the secondary market for shares of each fund, was at a discount or premium to such fund’s daily NAV. The “Market Price” of each fund generally is determined using the midpoint between the highest bid and lowest offer on the Exchange, as of the time that the fund’s NAV is calculated. Each fund’s Market Price may at times be at, above or below its NAV. The discount or premium is the percentage difference between the NAV and the Market Price of a fund. A discount is the amount that a fund is trading below the reported NAV, expressed as a percentage of NAV. A premium is the amount that a fund is trading above the reported NAV, expressed as a percentage of NAV. The NAV of each Fund will fluctuate with changes in the market value of its portfolio holdings. The Market Price of each fund will fluctuate in accordance with changes in its NAV, as well as supply and demand. The data presented below represents past performance and can not be used to predict future results.


	Number of Days								Number of Days
	Market Price Above NAV								Market Price Below NAV
	0-49		50-99		100-199		>200		0-49		50-99		100-199		>200
	Basis		Basis		Basis		Basis		Basis		Basis		Basis		Basis
	Points		Points		Points		Points		Points		Points		Points		Points

Schwab Fundamental U.S. Broad Market Index ETF
Commencement of trading 8/15/13 through 2/28/14		120		—		—		—		6		—		—		—

Schwab Fundamental U.S. Large Company Index ETF
Commencement of trading 8/15/13 through 2/28/14		123		—		—		—		7		—		—		—

Schwab Fundamental U.S. Small Company Index ETF
Commencement of trading 8/15/13 through 2/28/14		120		—		—		—		7		—		—		—

Schwab Fundamental International Large Company Index ETF
Commencement of trading 8/15/13 through 2/28/14		16		69		44		1		5		1		—		—

Schwab Fundamental International Small Company Index ETF
Commencement of trading 8/15/13 through 2/28/14		27		59		41		1		5		2		1		—

Schwab Fundamental Emerging Markets Large Company Index ETF
Commencement of trading 8/15/13 through 2/28/14		44		42		26		2		15		4		1		—

Investment Advisory Agreement Approval

The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds a meeting each year that is dedicated, in part, to considering whether to renew the investment advisory agreement between Schwab Strategic Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting, the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. In addition, the Independent Trustees meet in executive session outside the presence of fund management and participate in question and answer sessions with representatives of CSIM.

The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at a meeting held on September 4, 2013, and approved the renewal of the Agreement with respect to the Funds for an additional one year term. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at this meeting and at prior meetings, including:


1.	the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds;

2.	each Fund’s investment performance and how it compared to that of certain other comparable exchange-traded funds;

3.	each Fund’s expenses and how those expenses compared to those of certain other comparable exchange-traded funds;

4.	the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to the Funds, including both direct and indirect benefits accruing to CSIM and its affiliates; and

5.	the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors.

Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered Schwab’s wide range of products, services, and channel alternatives such as free advice, investment research tools and Internet access and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.

Fund Performance. The Board considered each Fund’s performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other exchange-traded funds and appropriate indices/benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of

each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.

Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s operating expense ratio, in comparison to those of other comparable exchange-traded funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees also considered fees charged by CSIM to mutual funds that it manages. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.

Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability with respect to the Funds under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Funds by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.

Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to the Funds’ shareholders by way of the relatively low advisory fee and unitary fee structure of the Funds. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.

In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.

Trustees and Officers

The tables below give information about the trustees and officers for the Schwab Strategic Trust which includes the funds covered in this report. The “Fund Complex” includes the Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 97 funds.

Independent Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served¹)	During the Past Five Years	the Trustee	Other Directorships

Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009.)	Retired/Private Investor (January 2009 – present); Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) and President, PIMCO Funds.	21	Director, PS Business Parks, Inc. (2005 – 2012).


Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012.)	CEO and Owner, Kochis Global (wealth management consulting) (May 2012 – present); Chairman and CEO, Aspiriant (wealth management) (January 2008 – April 2012).	21	None


Charles A. Ruffel 1956 Trustee (Trustee of Schwab Strategic Trust since 2009.)	Advisor (January 2008 – present) and Chief Executive Officer (January 1998 – January 2008), Asset International, Inc. (publisher of financial services information); Managing Partner and Co-Founder, Kudu Advisors, LLC (financial services) (June 2008 – present).	21	None

Interested Trustees


Name, Year of Birth,		Number of
and Position(s) with		Portfolios in
the trust; (Terms of		Fund Complex
office, and length of	Principal Occupations	Overseen by
Time Served)	During the Past Five Years	the Trustee	Other Directorships

Walter W. Bettinger II²1960 Trustee (Trustee of Schwab Strategic Trust since 2009.)	As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services.	97	None

Officers of the Trust


Name, Year of Birth, and Position(s)
with the trust; (Terms of office, and
length of Time Served³)		Principal Occupations During the Past Five Years

Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Strategic Trust since 2010.)		Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer (Dec. 2010 – present), and Chief Investment Officer (Sept. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010).


George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Strategic Trust since 2009.)		Senior Vice President and Chief Financial Officer (Nov. 2004 – present); Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Treasurer and Chief Financial Officer, Laudus Funds (June 2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present).


Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President and Chief Investment Officer — Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009).


Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies, Loomis, Sayles & Company (April 2006 – Jan. 2008).


David Lekich 1964 Chief Legal Officer and Secretary (Officer of Schwab Strategic Trust since 2011.)		Senior Vice President, Charles Schwab & Co., Inc. (Sept. 2011 – present); Senior Vice President and Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.


Catherine MacGregor 1964 Vice President and Assistant Secretary (Officer of Schwab Strategic Trust since 2009.)		Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, Schwab ETFs (Oct. 2009 – present).


¹		Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The Schwab ETF’s retirement policy requires that independent trustees retire by December 31 of the year in which the Trustee turns 72 or the Trustee’s twentieth year of service as an independent trustee, whichever comes first.
²		Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation, the parent company of the investment adviser.
³		The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

Glossary

144A securities These securities may be sold only to qualified institutional buyers under Securities Act Rule 144A.

American Depositary Receipt (ADR) U.S. dollar-denominated receipts issued by U.S. banks or trust companies that represent shares of foreign-based corporations.

ask See “offer.”

asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.

authorized participant (AP) A large institutional investor that places orders for creation units with the funds’ distributor.

Barclays U.S. Treasury Bills 1 − 3 Months Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months and more than 1 month, are rated investment grade, and have $250 million or more of outstanding face value

bid The highest price at which someone is willing to buy a security.

cap, capitalization See “market cap.”

commencement of operations The date that the first NAV was calculated.

European Depositary Receipt (EDR) A negotiable security (receipt) that is issued by a European bank, and that represents shares of foreign-based corporations.

exchange A marketplace, or any organization or group that provides or maintains a marketplace for trading securities, options, futures, or commodities.

Global Depositary Receipt (GDR) A negotiable security (receipt) that is issued by a foreign bank, and that represents shares of foreign-based corporations.

gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.

inception date The date that the shares began trading in the secondary market.

indicative optimized portfolio value (IOPV) A calculation disseminated by the stock exchange that approximates the fund’s NAV every 15 seconds throughout the trading day.

liquidity The ability to convert a security or asset quickly into cash.

market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.

median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.

net asset value (NAV) The value of one share of a fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.

NAV return The return based on the change in NAV of the fund over a given time period. NAV returns assume that dividends and capital gain distributions have been reinvested in the fund.

offer (ask) The lowest price at which an individual is willing to sell a security.

open The price at which a security opened for trading on a given day.

outstanding shares, shares outstanding When speaking of the fund, indicates all shares currently held by investors.

primary market The market that deals with the issuance of new securities.

Russell 2000 Index An index that measures the performance of the small-cap segment of the U.S. equity universe. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership.

Russell Fundamental Developed ex-U.S. Large Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex-U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.

Russell Fundamental Developed ex-U.S. Small Company Index An index that ranks companies in the Russell Developed ex-U.S. Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell Developed ex-U.S. Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Developed ex- U.S. Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.

Russell Fundamental Emerging Markets Large Company Index An index that ranks companies in the Russell Emerging Markets Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell Emerging Markets Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. The Russell Emerging Markets Index measures the performance of the investable securities in emerging countries globally.

Russell Fundamental U.S. Index An index that selects, ranks, and weights securities by fundamental measures of company size as opposed to market capitalization. The fundamental overall company scores are created using as the universe the members of the Russell 3000 Index. Securities are grouped in order of decreasing company score for each index and each company receives a weight as a percentage of the sum of the weights of the individual securities within each index.

Russell Fundamental U.S. Large Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size, and tracks the performance of those companies whose fundamental scores are in the top 87.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.

Russell Fundamental U.S. Small Company Index An index that ranks companies in the Russell 3000 Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the bottom 12.5% of the Russell 3000 Index. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Russell 3000 Index measures the performance of the largest 3000 U.S. companies representing approximately 98% of the investable U.S. equity market.

S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.

spread The gap between bid and ask prices of a security.

stock A share of ownership, or equity, in the issuing company.

total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.

tracking error The difference between the performance of the fund and its benchmark index, positive or negative.

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Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

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This report is not authorized for distribution to prospective investors

unless preceded or accompanied by a current prospectus.

Printed on recycled paper.

MFR79815-00

00113733

Item 2: Code of Ethics.

(a)		Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party.

(c)		During the period covered by the report, no amendments were made to the provisions of this code of ethics.

(d)		During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics.

(f)(1)		Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of Form N-CSR.

Item 3: Audit Committee Financial Expert.

Registrant’s Board of Trustees has determined that Robert W. Burns, currently serving on its audit committee, is an “audit committee financial expert,” as such term is defined in Item 3 of Form N-CSR. Each member of Registrant’s audit committee is “independent” under the standards set forth in Item 3 of Form N-CSR.

The designation of Mr. Burns as an “audit committee financial expert” pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit committee or Board of Trustees.

Item 4: Principal Accountant Fees and Services.

Registrant is composed of twenty-one operational series. Ten series have a fiscal year-end of August 31, four series have a fiscal year-end of December 31, and seven series have a fiscal year-end of February 28 (whose annual financial statements are reported in Item 1). Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to each of the fifteen operational series, based on their respective 2014 and 2013 fiscal years, as applicable.

(a) Below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.

Audit Fees


2013/2014		$	330,018			2012/2013:		$	225,950

(b) Below are the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of Registrant’s financial statements and are not reported under paragraph (a) above.

Audit-Related Fees

For services rendered to Registrant:


2013/2014		$	41,022			2012/2013:		$	31,336

Nature of these services: tax provision review.

In each of the last two fiscal years there were no “Audit-Related Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(c) Below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.

Tax Fees

For services rendered to Registrant:


2013/2014		$	138,775			2012/2013:		$	109,088

Nature of these services: preparation and review of tax returns.

In each of the last two fiscal years there were no “Tax Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X

(d) Below are the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.

All Other Fees

For services rendered to Registrant:


2013/2014			None			2012/2013:			None

In each of the last two fiscal years there were no “All Other Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.

(e)(1) Registrant’s audit committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.

(2) There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.

(f) Not applicable.

(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.


2013/2014		$	179,797			2012/2013:		$	140,424

(h) During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence.

Item 5: Audit Committee of Listed Registrants.

The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has separately-designated standing audit committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit committee members are Robert W. Burns, Stephen Timothy Kochis, and Charles A. Ruffel.

Item 6: Schedule of Investments.

Except as noted below, the schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF are filed under this Item.

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Cost

Value

Holdings by Category

($)

.6%

Common Stock

55,906,048

58,618,433

.1%

Other Investment Companies

50,507

53,373

.7%

Total Investments

55,956,555

58,671,806

.3%

Other Assets and
Liabilities, Net

151,577

100

.0%

Net Assets

58,823,383


	Number		Value
Security	of Shares		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
BorgWarner, Inc.		516		31,708
Dana Holding Corp.		559		12,119
Delphi Automotive plc		731		48,663
Drew Industries, Inc.		86		4,235
Ford Motor Co.		7,697		118,457
General Motors Co. *		2,666		96,509
Gentex Corp.		344		10,791
Harley-Davidson, Inc.		645		42,609
Johnson Controls, Inc.		2,365		116,831
Lear Corp.		387		31,424
Superior Industries International, Inc.		129		2,358
Tenneco, Inc. *		129		7,771
The Goodyear Tire & Rubber Co.		1,075		28,885
Thor Industries, Inc.		258		14,451
TRW Automotive Holdings Corp. *		387		31,858
Visteon Corp. *		172		14,350

				613,019

Banks 2.6%
Associated Banc-Corp.		602		10,047
Astoria Financial Corp.		516		7,069
BancorpSouth, Inc.		301		7,203
Bank of Hawaii Corp.		172		10,053
BankUnited, Inc.		43		1,440
BB&T Corp.		2,193		82,895
BOK Financial Corp.		43		2,783
CapitalSource, Inc.		817		12,010
Capitol Federal Financial, Inc.		258		3,135
Cathay General Bancorp		172		4,371
CIT Group, Inc.		301		14,653
City Holding Co.		43		1,904
City National Corp.		86		6,435
Comerica, Inc.		516		24,861
Commerce Bancshares, Inc.		176		7,860
Community Bank System, Inc.		43		1,567
Cullen/Frost Bankers, Inc.		129		9,629
CVB Financial Corp.		215		3,348
East West Bancorp, Inc.		172		6,139
F.N.B. Corp.		301		3,669
Fifth Third Bancorp		2,580		55,973
First Financial Bancorp		43		733
First Horizon National Corp.		817		9,780
First Midwest Bancorp, Inc.		215		3,584
First Republic Bank		86		4,469
FirstMerit Corp.		344		7,141
Fulton Financial Corp.		516		6,352
Glacier Bancorp, Inc.		172		4,773
Hancock Holding Co.		86		2,964
Hudson City Bancorp, Inc.		2,494		23,693
Huntington Bancshares, Inc.		2,494		23,768
International Bancshares Corp.		172		3,987
KeyCorp		2,924		38,509
M&T Bank Corp.		258		30,080
MB Financial, Inc.		129		3,938
NBT Bancorp, Inc.		86		2,019
New York Community Bancorp, Inc.		1,247		19,927
Northwest Bancshares, Inc.		172		2,468
Old National Bancorp		172		2,413
People’s United Financial, Inc.		688		9,749
Popular, Inc. *		559		15,982
Prosperity Bancshares, Inc.		43		2,722
Provident Financial Services, Inc.		215		3,990
Regions Financial Corp.		5,117		54,445
Signature Bank *		5		655
SunTrust Banks, Inc.		1,892		71,291
Susquehanna Bancshares, Inc.		301		3,293
SVB Financial Group *		43		5,414
Synovus Financial Corp.		3,913		13,617
TCF Financial Corp.		602		9,704
The PNC Financial Services Group, Inc.		1,290		105,496
Trustmark Corp.		172		4,150
U.S. Bancorp		4,429		182,209
UMB Financial Corp.		43		2,681
Umpqua Holdings Corp.		215		3,821
United Bankshares, Inc.		129		3,796
Valley National Bancorp		602		6,068
Washington Federal, Inc.		258		5,784
Webster Financial Corp.		172		5,327
Wells Fargo & Co.		11,052		513,034
Westamerica Bancorp		86		4,324
Wintrust Financial Corp.		43		1,990
Zions Bancorp		688		21,466

				1,518,650

Capital Goods 8.5%
3M Co.		1,763		237,529
A.O. Smith Corp.		129		6,411
AAR Corp.		258		7,456
Actuant Corp., Class A		172		6,030
Acuity Brands, Inc.		86		12,130
AECOM Technology Corp. *		473		15,108
Aegion Corp. *		129		2,986
AGCO Corp.		387		20,310
Aircastle Ltd.		301		5,930

See financial notes 1

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Albany International Corp., Class A		129		4,654
Alliant Techsystems, Inc.		129		17,388
AMETEK, Inc.		258		13,736
Apogee Enterprises, Inc.		129		4,416
Applied Industrial Technologies, Inc.		172		8,777
Armstrong World Industries, Inc. *		129		7,081
Astec Industries, Inc.		86		3,459
B/E Aerospace, Inc. *		129		10,868
Barnes Group, Inc.		172		6,613
Beacon Roofing Supply, Inc. *		129		4,875
Briggs & Stratton Corp.		301		6,857
Carlisle Cos., Inc.		172		13,643
Caterpillar, Inc.		1,806		175,128
Chicago Bridge & Iron Co. N.V.		172		14,481
CIRCOR International, Inc.		43		3,077
CLARCOR, Inc.		129		7,473
Crane Co.		129		9,213
Cubic Corp.		43		2,236
Cummins, Inc.		461		67,269
Curtiss-Wright Corp.		172		11,724
Danaher Corp.		775		59,280
Deere & Co.		1,118		96,070
DigitalGlobe, Inc. *		43		1,336
Donaldson Co., Inc.		258		11,053
Dover Corp.		516		48,659
Dycom Industries, Inc. *		258		7,454
Eaton Corp. plc		860		64,251
EMCOR Group, Inc.		344		16,092
Emerson Electric Co.		2,365		154,340
Encore Wire Corp.		129		6,745
EnerSys, Inc.		129		9,164
EnPro Industries, Inc. *		43		3,080
ESCO Technologies, Inc.		43		1,541
Esterline Technologies Corp. *		86		9,262
Exelis, Inc.		1,634		33,383
Fastenal Co.		344		16,233
Flowserve Corp.		301		24,444
Fluor Corp.		860		66,813
Fortune Brands Home & Security, Inc.		129		6,029
Franklin Electric Co., Inc.		86		3,749
GATX Corp.		215		13,951
Generac Holdings, Inc.		43		2,450
General Cable Corp.		344		10,588
General Dynamics Corp.		1,505		164,858
General Electric Co.		29,674		755,797
Gibraltar Industries, Inc. *		172		3,170
Graco, Inc.		129		10,066
GrafTech International Ltd. *		473		4,588
Granite Construction, Inc.		258		9,484
H&E Equipment Services, Inc. *		129		4,221
Harsco Corp.		602		15,122
HEICO Corp.		45		2,799
Hexcel Corp. *		129		5,805
Honeywell International, Inc.		1,677		158,376
Hubbell, Inc., Class B		129		15,421
Huntington Ingalls Industries, Inc.		172		17,429
IDEX Corp.		129		9,684
Illinois Tool Works, Inc.		1,118		92,235
Ingersoll-Rand plc		1,032		63,096
ITT Corp.		860		37,754
Jacobs Engineering Group, Inc. *		602		36,511
Joy Global, Inc.		348		19,140
Kaman Corp.		86		3,416
KBR, Inc.		872		24,085
Kennametal, Inc.		215		9,404
L-3 Communications Holdings, Inc.		818		94,397
Layne Christensen Co. *		172		3,055
Lennox International, Inc.		215		19,754
Lincoln Electric Holdings, Inc.		215		16,119
Lockheed Martin Corp.		1,247		202,388
Masco Corp.		1,419		33,134
MasTec, Inc. *		86		3,521
Meritor, Inc. *		602		7,471
Moog, Inc., Class A *		129		7,989
MRC Global, Inc. *		301		7,742
MSC Industrial Direct Co., Inc., Class A		86		7,424
Mueller Industries, Inc.		129		8,060
Mueller Water Products, Inc., Class A		688		6,639
National Presto Industries, Inc.		43		3,313
Navistar International Corp. *		215		8,063
Nordson Corp.		86		6,292
Northrop Grumman Corp.		1,806		218,580
Orbital Sciences Corp. *		258		7,332
Oshkosh Corp.		430		24,867
Owens Corning *		516		23,612
PACCAR, Inc.		1,032		67,947
Pall Corp.		172		14,792
Parker Hannifin Corp.		542		65,338
Pentair Ltd. - Reg’d		237		19,152
Precision Castparts Corp.		193		49,771
Quanex Building Products Corp.		172		3,344
Quanta Services, Inc. *		559		19,682
Raven Industries, Inc.		86		3,145
Raytheon Co.		1,849		181,036
Regal-Beloit Corp.		129		9,506
Rockwell Automation, Inc.		258		31,693
Rockwell Collins, Inc.		430		35,492
Roper Industries, Inc.		129		17,495
Rush Enterprises, Inc., Class A *		172		4,919
Simpson Manufacturing Co., Inc.		129		4,560
Snap-on, Inc.		129		14,470
Spirit Aerosystems Holdings, Inc., Class A *		430		12,397
SPX Corp.		258		27,781
Stanley Black & Decker, Inc.		344		28,566
TAL International Group, Inc. *		86		3,810
Teledyne Technologies, Inc. *		86		8,426
Tennant Co.		43		2,634
Terex Corp.		430		19,148
Textron, Inc.		1,032		40,970
The Babcock & Wilcox Co.		215		7,086
The Boeing Co.		1,333		171,850
The Greenbrier Cos., Inc. *		86		3,618
The Manitowoc Co., Inc.		387		11,974
The Middleby Corp. *		23		6,821
The Timken Co.		301		18,168
The Toro Co.		172		11,392
Titan International, Inc.		86		1,631
TransDigm Group, Inc.		86		15,320
TriMas Corp. *		43		1,445
Trinity Industries, Inc.		258		18,527
Triumph Group, Inc.		86		5,607
Tutor Perini Corp. *		516		12,719
United Rentals, Inc. *		258		22,792

2 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
United Technologies Corp.		2,881		337,135
Universal Forest Products, Inc.		215		11,982
URS Corp.		301		13,996
Valmont Industries, Inc.		43		6,262
W.W. Grainger, Inc.		154		39,273
WABCO Holdings, Inc. *		129		13,216
Wabtec Corp.		129		10,239
Watsco, Inc.		86		8,461
Watts Water Technologies, Inc., Class A		86		5,299
WESCO International, Inc. *		215		18,535
Woodward, Inc.		129		5,623
Xylem, Inc.		473		18,613

				5,028,696

Commercial & Professional Services 1.1%
ABM Industries, Inc.		387		10,925
Cintas Corp.		430		26,084
Clean Harbors, Inc. *		86		4,064
Copart, Inc. *		292		10,638
Covanta Holding Corp.		344		6,192
Deluxe Corp.		172		8,683
Equifax, Inc.		258		18,075
FTI Consulting, Inc. *		122		3,561
G&K Services, Inc., Class A		86		5,386
Healthcare Services Group, Inc.		129		3,474
Herman Miller, Inc.		258		7,270
HNI Corp.		258		9,172
Huron Consulting Group, Inc. *		43		2,845
ICF International, Inc. *		86		3,476
IHS, Inc., Class A *		43		5,155
Insperity, Inc.		129		3,765
Interface, Inc.		129		2,485
Iron Mountain, Inc.		559		15,205
KAR Auction Services, Inc.		43		1,340
Kelly Services, Inc., Class A		473		11,901
Kforce, Inc.		172		3,769
Knoll, Inc.		172		2,678
Korn/Ferry International *		172		4,367
Manpowergroup, Inc.		676		52,836
McGrath RentCorp		86		2,784
Mine Safety Appliances Co.		86		4,425
Navigant Consulting, Inc. *		301		5,246
Nielsen Holdings N.V.		258		12,214
Pitney Bowes, Inc.		1,763		44,868
Quad/Graphics, Inc.		215		4,810
R.R. Donnelley & Sons Co.		2,848		54,482
Republic Services, Inc.		863		29,437
Resources Connection, Inc.		301		4,124
Robert Half International, Inc.		688		28,167
Rollins, Inc.		86		2,568
Steelcase, Inc., Class A		559		8,312
Stericycle, Inc. *		86		9,804
Tetra Tech, Inc. *		172		4,967
The ADT Corp.		87		2,672
The Brink’s Co.		344		10,461
The Corporate Executive Board Co.		86		6,431
The Dun & Bradstreet Corp.		172		17,064
Towers Watson & Co., Class A		86		9,383
TrueBlue, Inc. *		258		7,348
UniFirst Corp.		43		4,717
United Stationers, Inc.		387		16,498
Verisk Analytics, Inc., Class A *		86		5,479
Viad Corp.		129		3,102
Waste Connections, Inc.		172		7,442
Waste Management, Inc.		2,236		92,794

				622,945

Consumer Durables & Apparel 1.3%
Arctic Cat, Inc.		43		2,013
Blyth, Inc.		129		1,262
Brunswick Corp.		86		3,852
Callaway Golf Co.		559		4,707
Carter’s, Inc.		86		6,478
Coach, Inc.		817		39,878
Columbia Sportswear Co.		43		3,573
Crocs, Inc. *		172		2,620
D.R. Horton, Inc.		817		20,066
Deckers Outdoor Corp. *		86		6,394
Ethan Allen Interiors, Inc.		129		3,242
Fossil Group, Inc. *		86		9,882
G-III Apparel Group Ltd. *		43		2,988
Garmin Ltd.		430		23,074
Hanesbrands, Inc.		172		12,604
Harman International Industries, Inc.		215		22,517
Hasbro, Inc.		559		30,834
Helen of Troy Ltd.��*		86		5,617
JAKKS Pacific, Inc.		258		1,847
Jarden Corp. *		301		18,502
KB Home		344		7,018
La-Z-Boy, Inc.		258		6,589
Leggett & Platt, Inc.		731		23,429
Lennar Corp., Class A		258		11,321
M.D.C Holdings, Inc.		86		2,682
Mattel, Inc.		817		30,482
Meritage Homes Corp. *		86		4,146
Michael Kors Holdings Ltd. *		43		4,215
Mohawk Industries, Inc. *		172		24,343
NACCO Industries, Inc., Class A		43		2,521
Newell Rubbermaid, Inc.		903		28,995
NIKE, Inc., Class B		1,677		131,309
NVR, Inc. *		20		23,840
Polaris Industries, Inc.		86		11,527
PulteGroup, Inc.		516		10,831
PVH Corp.		86		10,873
Quiksilver, Inc. *		817		6,373
Ralph Lauren Corp.		144		23,196
Skechers U.S.A., Inc., Class A *		215		7,252
Steven Madden Ltd. *		47		1,713
Tempur Sealy International, Inc. *		215		11,152
The Jones Group, Inc.		860		12,848
The Ryland Group, Inc.		86		4,007
Toll Brothers, Inc. *		258		10,065
Tupperware Brands Corp.		129		10,139
Under Armour, Inc., Class A *		43		4,865
VF Corp.		733		42,946
Whirlpool Corp.		354		51,199
Wolverine World Wide, Inc.		344		9,068

				750,894

Consumer Services 1.9%
Apollo Education Group, Inc. *		1,333		44,429

See financial notes 3

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Bally Technologies, Inc. *		86		5,827
Bob Evans Farms, Inc.		172		8,899
Boyd Gaming Corp. *		602		6,995
Brinker International, Inc.		473		26,015
Buffalo Wild Wings, Inc. *		6		870
Burger King Worldwide, Inc.		156		4,146
Caesars Entertainment Corp. *		516		13,395
Capella Education Co.		43		2,859
Career Education Corp. *		1,806		13,346
Carnival Corp.		1,118		44,340
Chipotle Mexican Grill, Inc. *		23		13,000
Choice Hotels International, Inc.		43		2,100
Cracker Barrel Old Country Store, Inc.		86		8,553
Darden Restaurants, Inc.		645		32,934
DeVry Education Group, Inc.		258		10,839
DineEquity, Inc.		43		3,601
Domino’s Pizza, Inc.		172		13,598
Dunkin’ Brands Group, Inc.		43		2,222
Graham Holdings Co., Class B		25		17,968
H&R Block, Inc.		688		21,768
Hillenbrand, Inc.		172		5,139
Hyatt Hotels Corp., Class A *		86		4,486
International Game Technology		632		9,537
International Speedway Corp., Class A		129		4,351
ITT Educational Services, Inc. *		387		12,009
Jack in the Box, Inc. *		258		14,822
Las Vegas Sands Corp.		172		14,663
Life Time Fitness, Inc. *		86		4,059
Marriott International, Inc., Class A		688		37,310
Marriott Vacations Worldwide Corp. *		43		2,255
Matthews International Corp., Class A		129		5,293
McDonald’s Corp.		3,053		290,493
MGM Resorts International *		946		26,062
Panera Bread Co., Class A *		43		7,797
Papa John’s International, Inc.		86		4,377
Penn National Gaming, Inc. *		172		2,210
Pinnacle Entertainment, Inc. *		172		4,180
Red Robin Gourmet Burgers, Inc. *		86		6,702
Regis Corp.		430		6,046
Royal Caribbean Cruises Ltd.		559		29,588
Ruby Tuesday, Inc. *		645		3,954
SeaWorld Entertainment, Inc.		43		1,468
Service Corp. International		774		14,466
Six Flags Entertainment Corp.		86		3,509
Sonic Corp. *		473		9,640
Sotheby’s		129		6,064
Starbucks Corp.		860		61,026
Starwood Hotels & Resorts Worldwide, Inc.		516		42,549
Steiner Leisure Ltd. *		43		1,901
Strayer Education, Inc. *		172		8,216
Texas Roadhouse, Inc.		172		4,549
The Cheesecake Factory, Inc.		215		10,217
The Wendy’s Co.		1,204		11,534
Vail Resorts, Inc.		86		6,048
Wyndham Worldwide Corp.		421		30,683
Wynn Resorts Ltd.		172		41,708
Yum! Brands, Inc.		989		73,265

				1,119,880

Diversified Financials 6.4%
Affiliated Managers Group, Inc. *		43		8,086
American Capital Ltd. *		215		3,345
American Express Co.		2,107		192,327
Ameriprise Financial, Inc.		387		42,179
Ares Capital Corp.		516		9,303
Bank of America Corp.		49,235		813,855
Berkshire Hathaway, Inc., Class B *		3,023		350,003
BlackRock, Inc.		129		39,324
Capital One Financial Corp.		1,635		120,058
Cash America International, Inc.		86		3,442
CBOE Holdings, Inc.		86		4,647
Citigroup, Inc.		8,772		426,582
CME Group, Inc.		430		31,743
Discover Financial Services		903		51,814
ETRADE Financial Corp.		559		12,561
Eaton Vance Corp.		101		3,822
Federated Investors, Inc., Class B		473		12,960
Franklin Resources, Inc.		1,075		57,244
Greenhill & Co., Inc.		86		4,581
IntercontinentalExchange Group, Inc.		172		35,921
Invesco Ltd.		774		26,548
Investment Technology Group, Inc. *		301		5,201
Janus Capital Group, Inc.		1,204		13,473
JPMorgan Chase & Co.		11,883		675,192
Lazard Ltd., Class A		129		5,804
Legg Mason, Inc.		688		31,620
Leucadia National Corp.		215		6,007
LPL Financial Holdings, Inc.		86		4,616
McGraw Hill Financial, Inc.		1,075		85,635
Moody’s Corp.		430		33,970
Morgan Stanley		2,838		87,410
MSCI, Inc. *		215		9,398
Northern Trust Corp.		430		26,596
PHH Corp. *		645		16,789
Raymond James Financial, Inc.		172		9,078
SEI Investments Co.		344		11,548
SLM Corp.		903		21,618
State Street Corp.		731		48,005
Stifel Financial Corp. *		43		2,068
T. Rowe Price Group, Inc.		501		40,666
TD Ameritrade Holding Corp.		516		17,250
The Bank of New York Mellon Corp.		2,236		71,552
The Charles Schwab Corp. (a)		2,064		54,717
The Goldman Sachs Group, Inc.		1,256		209,061
The NASDAQ OMX Group, Inc.		349		13,398
Waddell & Reed Financial, Inc., Class A		172		11,988
World Acceptance Corp. *		43		4,122

				3,767,127

Energy 14.3%
Alpha Natural Resources, Inc. *		606		3,254
Anadarko Petroleum Corp.		1,032		86,853
Apache Corp.		1,247		98,875
Arch Coal, Inc.		2,881		13,137
Atwood Oceanics, Inc. *		86		4,076
Baker Hughes, Inc.		1,677		106,121
Basic Energy Services, Inc. *		172		4,102
Bill Barrett Corp. *		172		4,358
Bristow Group, Inc.		86		6,674

4 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Cabot Oil & Gas Corp.		258		9,030
Cameron International Corp. *		473		30,300
CARBO Ceramics, Inc.		43		5,334
Chesapeake Energy Corp.		2,881		74,647
Chevron Corp.		10,320		1,190,206
Cimarex Energy Co.		172		19,902
Cloud Peak Energy, Inc. *		215		4,171
Comstock Resources, Inc.		172		3,399
Concho Resources, Inc. *		43		5,209
ConocoPhillips		14,491		963,652
CONSOL Energy, Inc.		559		22,416
Crosstex Energy, Inc.		172		7,160
Delek US Holdings, Inc.		86		2,387
Denbury Resources, Inc.		790		12,924
Devon Energy Corp.		1,720		110,802
Diamond Offshore Drilling, Inc.		287		13,575
Dresser-Rand Group, Inc. *		172		9,345
Dril-Quip, Inc. *		43		4,625
Energen Corp.		215		17,295
Energy XXI Bermuda Ltd.		86		1,992
EOG Resources, Inc.		344		65,160
EQT Corp.		172		17,594
EXCO Resources, Inc.		516		2,694
Exterran Holdings, Inc. *		387		15,855
Exxon Mobil Corp.		26,452		2,546,534
FMC Technologies, Inc. *		344		17,283
Green Plains Renewable Energy, Inc.		43		1,137
Gulfmark Offshore, Inc., Class A		43		2,040
Halliburton Co.		2,408		137,256
Helix Energy Solutions Group, Inc. *		430		10,165
Helmerich & Payne, Inc.		215		21,231
Hess Corp.		1,763		141,093
HollyFrontier Corp.		559		25,474
Key Energy Services, Inc. *		946		8,552
Kinder Morgan, Inc.		817		26,021
Marathon Oil Corp.		5,977		200,230
Marathon Petroleum Corp.		1,592		133,728
Matrix Service Co. *		129		4,176
McDermott International, Inc. *		2,021		16,835
Murphy Oil Corp.		1,505		89,352
Nabors Industries Ltd.		1,978		45,534
National Oilwell Varco, Inc.		1,032		79,505
Newfield Exploration Co. *		688		19,395
Newpark Resources, Inc. *		258		2,869
Noble Energy, Inc.		516		35,480
Nordic American Tankers Ltd.		344		3,636
Occidental Petroleum Corp.		2,564		247,477
Oceaneering International, Inc.		172		12,312
Oil States International, Inc. *		129		12,245
ONEOK, Inc.		602		35,602
Parker Drilling Co. *		774		6,246
Patterson-UTI Energy, Inc.		817		23,783
PDC Energy, Inc. *		43		2,672
Peabody Energy Corp.		1,720		30,203
Penn Virginia Corp. *		817		12,378
Phillips 66		5,977		447,438
Pioneer Energy Services Corp. *		301		3,431
Pioneer Natural Resources Co.		91		18,307
QEP Resources, Inc.		602		17,416
Quicksilver Resources, Inc. *		1,247		4,078
Range Resources Corp.		129		11,100
Rosetta Resources, Inc. *		43		1,908
Rowan Cos. plc, Class A *		344		11,476
SandRidge Energy, Inc. *		903		5,824
Schlumberger Ltd.		2,666		247,938
SEACOR Holdings, Inc. *		172		15,215
Seadrill Ltd.		774		28,607
SemGroup Corp., Class A		172		11,579
Ship Finance International Ltd.		172		3,237
SM Energy Co.		129		9,514
Southwestern Energy Co. *		473		19,554
Spectra Energy Corp.		1,612		60,095
Stone Energy Corp. *		215		7,727
Superior Energy Services, Inc.		430		12,724
Swift Energy Co. *		258		2,580
Targa Resources Corp.		86		8,321
Teekay Corp.		172		10,277
Tesoro Corp.		946		48,255
TETRA Technologies, Inc. *		473		5,676
The Williams Cos., Inc.		1,720		71,036
Tidewater, Inc.		133		6,480
Ultra Petroleum Corp. *		258		6,491
Unit Corp. *		172		10,561
Valero Energy Corp.		6,536		313,597
W&T Offshore, Inc.		215		3,240
Western Refining, Inc.		301		10,971
Whiting Petroleum Corp. *		172		11,818
Willbros Group, Inc. *		430		4,248
World Fuel Services Corp.		903		40,653
WPX Energy, Inc. *		1,462		25,760

				8,404,700

Food & Staples Retailing 3.9%
Casey’s General Stores, Inc.		215		14,725
Costco Wholesale Corp.		1,904		222,387
CVS Caremark Corp.		6,665		487,478
PriceSmart, Inc.		43		4,374
Rite Aid Corp. *		1,591		10,485
Safeway, Inc.		4,042		151,373
SUPERVALU, Inc. *		4,988		32,272
Susser Holdings Corp. *		86		5,210
Sysco Corp.		3,397		122,360
The Andersons, Inc.		194		10,612
The Kroger Co.		3,999		167,718
The Pantry, Inc. *		860		12,969
United Natural Foods, Inc. *		172		12,449
Wal-Mart Stores, Inc.		9,417		703,450
Walgreen Co.		4,773		324,325
Whole Foods Market, Inc.		611		33,025

				2,315,212

Food, Beverage & Tobacco 4.7%
Altria Group, Inc.		6,751		244,791
Archer-Daniels-Midland Co.		4,945		200,767
Beam, Inc.		387		32,106
Brown-Forman Corp., Class B		258		21,620
Bunge Ltd.		1,505		119,813
Cal-Maine Foods, Inc.		43		2,261
Campbell Soup Co.		774		33,522
Chiquita Brands International, Inc. *		817		8,938
Coca-Cola Enterprises, Inc.		1,419		66,807
ConAgra Foods, Inc.		1,735		49,274

See financial notes 5

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number			Value
Security	of Shares			($)
Constellation Brands, Inc., Class A *		301			24,390
Darling International, Inc. *		129			2,603
Dean Foods Co. *		616			9,111
Dr. Pepper Snapple Group, Inc.		731			38,092
Flowers Foods, Inc.		473			9,730
Fresh Del Monte Produce, Inc.		301			7,964
General Mills, Inc.		1,591			79,598
Green Mountain Coffee Roasters, Inc.		43			4,721
Hillshire Brands Co.		1,591			59,742
Hormel Foods Corp.		387			18,363
Ingredion, Inc.		215			14,156
J&J Snack Foods Corp.		43			3,994
Kellogg Co.		774			46,974
Kraft Foods Group, Inc.		1,376			76,052
Lancaster Colony Corp.		86			7,757
Lorillard, Inc.		1,204			59,068
McCormick & Co., Inc. Non Voting Shares		215			14,276
Mead Johnson Nutrition Co.		172			14,027
Molson Coors Brewing Co., Class B		387			21,993
Mondelez International, Inc., Class A		7,396			251,686
Monster Beverage Corp. *		172			12,728
PepsiCo, Inc.		4,171			333,972
Philip Morris International, Inc.		4,128			333,996
Pilgrim’s Pride Corp. *		258			4,523
Post Holdings, Inc. *		129			7,368
Reynolds American, Inc.		952			48,390
Sanderson Farms, Inc.		129			9,912
Seaboard Corp. *		1			2,535
Snyder’s-Lance, Inc.		129			3,495
The Coca-Cola Co.		7,224			275,957
The Hain Celestial Group, Inc. *		43			3,840
The Hershey Co.		215			22,751
The J.M. Smucker Co.		301			30,103
The WhiteWave Foods Co., Class A *		258			7,301
TreeHouse Foods, Inc. *		86			6,128
Tyson Foods, Inc., Class A		2,236			88,210
Universal Corp.		172			9,916
Vector Group Ltd.		173			3,379

					2,748,700

Health Care Equipment & Services 5.9%
Abbott Laboratories		6,536			260,002
Aetna, Inc.		2,150	��		156,327
Alere, Inc. *		215			7,899
Allscripts Healthcare Solutions, Inc. *		43			799
Amedisys, Inc. *		387			6,564
AmerisourceBergen Corp.		1,763			119,620
Amsurg Corp. *		86			3,772
Analogic Corp.		43			4,053
Baxter International, Inc.		1,591			110,575
Becton Dickinson & Co.		689			79,387
Boston Scientific Corp. *		4,472			58,583
Brookdale Senior Living, Inc. *		215			7,211
C.R. Bard, Inc.		258			37,193
Cardinal Health, Inc.		2,924			209,154
CareFusion Corp. *		516			20,914
Catamaran Corp. *		86			3,877
Centene Corp. *		172			10,953
Cerner Corp. *		172			10,556
Chemed Corp.		86			7,276
Cigna Corp.		602			47,913
Community Health Systems, Inc. *		629			26,110
CONMED Corp.		86			4,009
Covidien plc		1,062			76,411
DaVita HealthCare Partners, Inc. *		430			29,554
DENTSPLY International, Inc.		301			13,659
Edwards Lifesciences Corp. *		86			5,999
Express Scripts Holding Co. *		1,194			89,920
Greatbatch, Inc. *		86			3,726
Haemonetics Corp. *		86			3,137
Hanger, Inc. *		43			1,524
HCA Holdings, Inc. *		1,634			83,661
Health Net, Inc. *		1,204			40,996
HealthSouth Corp.		129			4,216
Healthways, Inc. *		215			3,216
Henry Schein, Inc. *		258			30,712
Hill-Rom Holdings, Inc.		258			9,760
Hologic, Inc. *		344			7,492
Humana, Inc.		990			111,335
IDEXX Laboratories, Inc. *		86			10,827
Integra LifeSciences Holdings Corp. *		43			2,023
Intuitive Surgical, Inc. *		20			8,897
Invacare Corp.		344			6,818
Kindred Healthcare, Inc.		903			19,559
Laboratory Corp. of America Holdings *		215			20,111
LifePoint Hospitals, Inc. *		258			13,997
Magellan Health Services, Inc. *		215			13,145
Masimo Corp. *		86			2,197
McKesson Corp.		1,419			251,234
MEDNAX, Inc. *		172			10,461
Medtronic, Inc.		2,968			175,884
Molina Healthcare, Inc. *		172			6,481
MWI Veterinary Supply, Inc. *		12			1,955
Omnicare, Inc.		559			32,925
Owens & Minor, Inc.		559			19,408
Patterson Cos., Inc.		387			15,929
PharMerica Corp. *		301			7,254
Quest Diagnostics, Inc.		731			38,743
ResMed, Inc.		129			5,679
Select Medical Holdings Corp.		43			482
Sirona Dental Systems, Inc. *		43			3,030
St. Jude Medical, Inc.		946			63,685
STERIS Corp.		215			9,922
Stryker Corp.		747			59,939
Teleflex, Inc.		129			13,157
Tenet Healthcare Corp. *		344			15,177
The Cooper Cos., Inc.		43			5,513
UnitedHealth Group, Inc.		5,419			418,726
Universal Health Services, Inc., Class B		258			20,712
Varian Medical Systems, Inc. *		258			21,628
VCA Antech, Inc. *		258			7,990
WellCare Health Plans, Inc. *		65			4,018
WellPoint, Inc.		4,128			373,956
West Pharmaceutical Services, Inc.		172			7,840
Zimmer Holdings, Inc.		645			60,527

					3,457,894

Household & Personal Products 1.9%
Avon Products, Inc.		2,021			31,265
Central Garden & Pet Co., Class A *		1,032			7,596
Church & Dwight Co., Inc.		215			14,616

6 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Colgate-Palmolive Co.		1,978		124,278
Elizabeth Arden, Inc. *		43		1,314
Energizer Holdings, Inc.		172		16,742
Herbalife Ltd.		258		17,183
Kimberly-Clark Corp.		1,020		112,557
Spectrum Brands Holdings, Inc.		43		3,354
The Clorox Co.		258		22,518
The Estee Lauder Cos., Inc., Class A		301		20,721
The Procter & Gamble Co.		9,419		740,899
WD-40 Co.		43		3,135

				1,116,178

Insurance 3.4%
ACE Ltd.		732		71,641
Aflac, Inc.		1,204		77,152
Alleghany Corp. *		14		5,397
Allied World Assurance Co. Holdings AG		129		12,864
American Equity Investment Life Holding Co.		258		5,640
American Financial Group, Inc.		344		19,663
American International Group, Inc.		2,709		134,827
Aon plc		559		47,850
Arch Capital Group Ltd. *		473		26,545
Argo Group International Holdings Ltd.		129		5,694
Arthur J. Gallagher & Co.		258		11,920
Aspen Insurance Holdings Ltd.		344		12,921
Assurant, Inc.		559		36,687
Assured Guaranty Ltd.		172		4,223
Axis Capital Holdings Ltd.		516		22,688
Brown & Brown, Inc.		215		6,471
Cincinnati Financial Corp.		516		24,190
CNO Financial Group, Inc.		860		15,704
Endurance Specialty Holdings Ltd.		344		17,936
Everest Re Group Ltd.		177		26,415
Fidelity National Financial, Inc., Class A		962		31,804
First American Financial Corp.		387		10,426
Genworth Financial, Inc., Class A *		2,236		34,747
HCC Insurance Holdings, Inc.		301		13,214
Horace Mann Educators Corp.		129		3,691
Infinity Property & Casualty Corp.		86		6,342
Kemper Corp.		344		13,340
Lincoln National Corp.		774		38,801
Loews Corp.		1,075		46,741
Markel Corp. *		15		8,670
Marsh & McLennan Cos., Inc.		1,204		57,985
Mercury General Corp.		129		5,844
MetLife, Inc.		1,763		89,331
Montpelier Re Holdings Ltd.		172		4,904
Old Republic International Corp.		860		13,382
PartnerRe Ltd.		301		29,763
Platinum Underwriters Holdings Ltd.		259		15,182
Primerica, Inc.		301		13,491
Principal Financial Group, Inc.		602		27,301
ProAssurance Corp.		129		5,864
Protective Life Corp.		301		15,694
Prudential Financial, Inc.		1,333		112,745
Reinsurance Group of America, Inc.		215		16,553
RenaissanceRe Holdings Ltd.		241		23,018
RLI Corp.		172		7,418
Safety Insurance Group, Inc.		43		2,401
StanCorp Financial Group, Inc.		215		14,229
Stewart Information Services Corp.		43		1,590
Symetra Financial Corp.		172		3,388
The Allstate Corp.		2,064		111,993
The Chubb Corp.		1,333		116,611
The Hanover Insurance Group, Inc.		215		12,651
The Hartford Financial Services Group, Inc.		2,408		84,737
The Progressive Corp.		2,781		68,107
The Travelers Cos., Inc.		2,968		248,837
Torchmark Corp.		301		23,330
Unum Group		1,032		35,893
Validus Holdings Ltd.		258		9,497
W.R. Berkley Corp.		473		19,506
White Mountains Insurance Group Ltd.		22		12,750
XL Group plc		774		23,530

				2,021,729

Materials 4.1%
A. Schulman, Inc.		172		5,977
A.M. Castle & Co. *		172		2,515
Air Products & Chemicals, Inc.		645		78,251
Airgas, Inc.		172		18,542
AK Steel Holding Corp. *		2,322		14,420
Albemarle Corp.		215		14,188
Alcoa, Inc.		10,364		121,673
Allegheny Technologies, Inc.		602		19,132
AMCOL International Corp.		86		3,817
AptarGroup, Inc.		215		14,227
Ashland, Inc.		258		24,347
Avery Dennison Corp.		516		25,707
Axiall Corp.		129		5,221
Ball Corp.		602		33,447
Bemis Co., Inc.		430		16,890
Cabot Corp.		258		13,968
Carpenter Technology Corp.		129		7,630
Celanese Corp., Series A		387		20,662
Century Aluminum Co. *		430		5,091
CF Industries Holdings, Inc.		129		32,366
Chemtura Corp. *		344		8,514
Clearwater Paper Corp. *		43		2,746
Cliffs Natural Resources, Inc.		1,075		21,532
Coeur Mining, Inc. *		43		473
Commercial Metals Co.		1,204		23,297
Compass Minerals International, Inc.		86		7,340
Crown Holdings, Inc. *		258		11,615
Cytec Industries, Inc.		182		17,230
Domtar Corp.		344		38,108
E.I. du Pont de Nemours & Co.		2,150		143,233
Eagle Materials, Inc.		86		7,602
Eastman Chemical Co.		446		38,994
Ecolab, Inc.		301		32,433
Ferro Corp. *		645		8,462
FMC Corp.		215		16,594
Freeport-McMoRan Copper & Gold, Inc.		4,515		147,279
Graphic Packaging Holding Co. *		473		4,844
Greif, Inc., Class A		129		6,458
H.B. Fuller Co.		172		8,339
Hecla Mining Co.		172		581
Huntsman Corp.		860		20,950
Innophos Holdings, Inc.		86		4,723

See financial notes 7

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Innospec, Inc.		43		1,871
International Flavors & Fragrances, Inc.		172		16,132
International Paper Co.		1,677		81,989
Kaiser Aluminum Corp.		86		6,071
KapStone Paper & Packaging Corp. *		172		5,468
Koppers Holdings, Inc.		43		1,700
Kraton Performance Polymers, Inc. *		129		3,578
Louisiana-Pacific Corp. *		258		4,848
LyondellBasell Industries N.V., Class A		1,075		94,686
Martin Marietta Materials, Inc.		129		15,735
Materion Corp.		86		2,545
MeadWestvaco Corp.		731		27,361
Minerals Technologies, Inc.		129		6,901
Monsanto Co.		817		89,886
Myers Industries, Inc.		172		3,698
NewMarket Corp.		17		6,284
Newmont Mining Corp.		2,107		49,009
Nucor Corp.		1,720		86,413
Olin Corp.		301		7,883
OM Group, Inc.		215		6,794
Owens-Illinois, Inc. *		731		24,796
P.H. Glatfelter Co.		215		6,525
Packaging Corp. of America		258		18,806
PolyOne Corp.		215		8,062
PPG Industries, Inc.		344		68,050
Praxair, Inc.		688		89,695
Reliance Steel & Aluminum Co.		387		26,811
Resolute Forest Products, Inc. *		688		14,097
Rock-Tenn Co., Class A		129		14,399
Rockwood Holdings, Inc.		129		10,176
RPM International, Inc.		387		16,200
RTI International Metals, Inc. *		86		2,337
Schnitzer Steel Industries, Inc., Class A		387		9,818
Schweitzer-Mauduit International, Inc.		86		4,139
Sealed Air Corp.		688		23,420
Sensient Technologies Corp.		172		9,018
Sigma-Aldrich Corp.		259		24,452
Silgan Holdings, Inc.		172		8,292
Sonoco Products Co.		473		19,857
Southern Copper Corp.		559		17,055
Steel Dynamics, Inc.		1,290		22,498
Stepan Co.		43		2,614
Stillwater Mining Co. *		215		2,911
SunCoke Energy, Inc. *		215		4,790
The Dow Chemical Co.		4,429		215,737
The Mosaic Co.		1,032		50,423
The Scotts Miracle-Gro Co., Class A		172		9,823
The Sherwin-Williams Co.		129		25,862
The Valspar Corp.		215		16,071
Tredegar Corp.		129		3,213
United States Steel Corp.		1,677		40,617
Vulcan Materials Co.		344		23,368
W.R. Grace & Co. *		43		4,358
Wausau Paper Corp.		258		3,418
Westlake Chemical Corp.		43		5,733
Worthington Industries, Inc.		258		10,284

				2,425,995

Media 3.9%
AMC Networks, Inc., Class A *		43		3,269
Cablevision Systems Corp., Class A		1,548		27,245
CBS Corp., Class B Non Voting Shares		1,763		118,262
Charter Communications, Inc., Class A *		172		21,805
Cinemark Holdings, Inc.		301		8,855
Comcast Corp., Class A		5,547		286,724
Dex Media, Inc. *		903		6,583
DIRECTV *		2,623		203,545
Discovery Communications, Inc., Class A *		344		28,662
DISH Network Corp., Class A *		473		27,831
DreamWorks Animation SKG, Inc., Class A *		344		10,289
E.W. Scripps Co., Class A *		301		5,906
Gannett Co., Inc.		1,376		40,936
John Wiley & Sons, Inc., Class A		129		7,486
Lamar Advertising Co., Class A *		258		13,831
Liberty Global plc, Class A *		1,247		107,928
Lions Gate Entertainment Corp.		86		2,645
Live Nation Entertainment, Inc. *		430		9,757
National CineMedia, Inc.		129		1,981
Omnicom Group, Inc.		903		68,339
Regal Entertainment Group, Class A		430		7,912
Scholastic Corp.		258		9,102
Scripps Networks Interactive, Inc., Class A		159		12,917
Sirius XM Holdings, Inc. *		129		466
Starz, Class A *		602		19,252
The Interpublic Group of Cos., Inc.		946		16,763
The Madison Square Garden Co., Class A *		86		4,903
The New York Times Co., Class A		731		12,003
The Walt Disney Co.		4,773		385,706
Thomson Reuters Corp.		1,221		41,929
Time Warner Cable, Inc.		1,032		144,841
Time Warner, Inc.		5,117		343,504
Twenty-First Century Fox, Inc., Class A		4,214		141,338
Viacom, Inc., Class B		1,506		132,121

				2,274,636

Pharmaceuticals, Biotechnology & Life Sciences 5.6%
AbbVie, Inc.		1,849		94,133
Actavis plc *		258		56,971
Agilent Technologies, Inc.		946		53,856
Alexion Pharmaceuticals, Inc. *		11		1,945
Allergan, Inc.		301		38,227
Amgen, Inc.		2,279		282,642
Bio-Rad Laboratories, Inc., Class A *		43		5,578
Biogen Idec, Inc. *		172		58,597
Bristol-Myers Squibb Co.		3,999		215,026
Bruker Corp. *		43		978
Cambrex Corp. *		86		1,726
Celgene Corp. *		172		27,649
Charles River Laboratories International, Inc. *		215		12,773
Covance, Inc. *		172		17,812
Cubist Pharmaceuticals, Inc. *		43		3,419
Eli Lilly & Co.		3,139		187,116
Endo Health Solutions, Inc. *		301		24,026
Forest Laboratories, Inc. *		910		88,789
Gilead Sciences, Inc. *		1,720		142,399
Hospira, Inc. *		430		18,610
Illumina, Inc. *		86		14,748

8 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Impax Laboratories, Inc. *		129		3,324
Johnson & Johnson		7,081		652,302
Merck & Co., Inc.		6,837		389,641
Mettler-Toledo International, Inc. *		47		11,551
Mylan, Inc. *		516		28,674
Myriad Genetics, Inc. *		43		1,557
PAREXEL International Corp. *		86		4,607
PDL BioPharma, Inc.		516		4,422
PerkinElmer, Inc.		301		13,641
Perrigo Co., plc		86		14,142
Pfizer, Inc.		21,328		684,842
QIAGEN N.V. *		258		5,740
Techne Corp.		43		3,820
Thermo Fisher Scientific, Inc.		645		80,328
United Therapeutics Corp. *		43		4,361
Waters Corp. *		172		19,161
Zoetis, Inc.		43		1,334

				3,270,467

Real Estate 1.6%
Alexandria Real Estate Equities, Inc.		86		6,231
American Campus Communities, Inc.		43		1,588
American Capital Agency Corp.		344		7,668
American Tower Corp.		258		21,019
Annaly Capital Management, Inc.		3,956		44,228
Anworth Mortgage Asset Corp.		430		2,227
Apartment Investment & Management Co., Class A		516		15,423
Ashford Hospitality Trust, Inc.		88		984
AvalonBay Communities, Inc.		129		16,637
BioMed Realty Trust, Inc.		215		4,446
Boston Properties, Inc.		215		24,172
Brandywine Realty Trust		473		6,929
BRE Properties, Inc.		86		5,312
Camden Property Trust		129		8,604
Capstead Mortgage Corp.		258		3,326
CBL & Associates Properties, Inc.		301		5,355
CBRE Group, Inc., Class A *		387		10,817
Chimera Investment Corp.		1,892		6,035
CommonWealth REIT		430		11,675
Corporate Office Properties Trust		172		4,587
Corrections Corp. of America		258		8,604
Cousins Properties, Inc.		258		2,980
CYS Investments, Inc.		86		757
DCT Industrial Trust, Inc.		473		3,746
DDR Corp.		430		7,147
DiamondRock Hospitality Co.		430		5,427
Digital Realty Trust, Inc.		215		11,644
Douglas Emmett, Inc.		172		4,632
Duke Realty Corp.		688		11,558
EastGroup Properties, Inc.		43		2,668
EPR Properties		86		4,580
Equity Lifestyle Properties, Inc.		43		1,731
Equity Residential		516		30,171
Essex Property Trust, Inc.		43		7,192
Extra Space Storage, Inc.		86		4,223
Federal Realty Investment Trust		86		9,573
Forest City Enterprises, Inc., Class A *		129		2,513
General Growth Properties, Inc.		516		11,362
Glimcher Realty Trust		172		1,674
Hatteras Financial Corp.		129		2,544
HCP, Inc.		473		18,338
Health Care REIT, Inc.		172		10,103
Healthcare Realty Trust, Inc.		129		3,092
Highwoods Properties, Inc.		215		8,108
Home Properties, Inc.		86		5,069
Hospitality Properties Trust		516		13,674
Host Hotels & Resorts, Inc.		1,462		28,758
Inland Real Estate Corp.		258		2,763
Invesco Mortgage Capital, Inc.		43		724
iStar Financial, Inc. *		860		13,330
Jones Lang LaSalle, Inc.		130		16,016
Kilroy Realty Corp.		86		4,947
Kimco Realty Corp.		559		12,443
LaSalle Hotel Properties		172		5,390
Lexington Realty Trust		344		3,925
Liberty Property Trust		301		11,516
Mack-Cali Realty Corp.		473		10,524
MFA Financial, Inc.		602		4,732
Mid-America Apartment Communities, Inc.		137		9,267
National Retail Properties, Inc.		86		3,087
NorthStar Realty Finance Corp.		344		5,335
Omega Healthcare Investors, Inc.		129		4,123
Pennsylvania Real Estate Investment Trust		172		3,227
Piedmont Office Realty Trust, Inc., Class A		473		8,173
Plum Creek Timber Co., Inc.		430		18,615
Post Properties, Inc.		43		2,087
Potlatch Corp.		172		6,818
Prologis, Inc.		301		12,398
PS Business Parks, Inc.		43		3,613
Public Storage		172		29,068
RAIT Financial Trust		430		3,573
Rayonier, Inc.		215		10,124
Realty Income Corp.		129		5,730
Redwood Trust, Inc.		258		5,186
Regency Centers Corp.		129		6,549
Retail Properties of America, Inc., Class A		328		4,572
RLJ Lodging Trust		129		3,353
Ryman Hospitality Properties, Inc.		86		3,628
Sabra Health Care REIT, Inc.		215		6,121
Senior Housing Properties Trust		172		3,836
Simon Property Group, Inc.		301		48,548
SL Green Realty Corp.		86		8,542
Sovran Self Storage, Inc.		43		3,182
Starwood Property Trust, Inc.		54		1,297
Sun Communities, Inc.		43		1,981
Sunstone Hotel Investors, Inc.		301		4,070
Tanger Factory Outlet Centers, Inc.		86		2,951
Taubman Centers, Inc.		86		6,059
The Geo Group, Inc.		129		4,158
The Macerich Co.		172		10,342
UDR, Inc.		301		7,769
Ventas, Inc.		301		18,791
Vornado Realty Trust		345		33,220
Washington REIT		129		3,244
Weingarten Realty Investors		258		7,869
Weyerhaeuser Co.		3,440		101,514
WP Carey, Inc.		86		5,463

				942,924

See financial notes 9

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Retailing 4.5%
Aaron’s, Inc.		559		17,178
Abercrombie & Fitch Co., Class A		602		23,857
Advance Auto Parts, Inc.		258		32,859
Amazon.com, Inc. *		151		54,677
American Eagle Outfitters, Inc.		1,207		17,538
ANN, Inc. *		301		10,731
Asbury Automotive Group, Inc. *		129		6,558
Ascena Retail Group, Inc. *		258		4,719
AutoNation, Inc. *		215		11,318
AutoZone, Inc. *		43		23,153
Barnes & Noble, Inc. *		387		7,415
Bed Bath & Beyond, Inc. *		731		49,576
Best Buy Co., Inc.		3,225		85,882
Big Lots, Inc. *		688		20,330
Brown Shoe Co., Inc.		301		7,399
Cabela’s, Inc. *		43		2,852
CarMax, Inc. *		430		20,825
Chico’s FAS, Inc.		516		8,529
Core-Mark Holding Co., Inc.		258		20,176
Dick’s Sporting Goods, Inc.		215		11,539
Dillard’s, Inc., Class A		172		15,924
Dollar General Corp. *		645		38,635
Dollar Tree, Inc. *		645		35,327
DSW, Inc., Class A		86		3,309
Expedia, Inc.		346		27,171
Express, Inc. *		172		3,146
Family Dollar Stores, Inc.		387		25,348
Foot Locker, Inc.		714		29,781
Fred’s, Inc., Class A		430		8,570
GameStop Corp., Class A		946		35,295
Genesco, Inc. *		86		6,386
Genuine Parts Co.		646		56,906
GNC Holdings, Inc., Class A		86		4,001
Group 1 Automotive, Inc.		172		11,483
Guess?, Inc.		301		9,132
Hibbett Sports, Inc. *		43		2,465
HSN, Inc.		86		4,932
J.C. Penney Co., Inc. *		3,499		25,473
Jos. A. Bank Clothiers, Inc. *		86		5,339
Kohl’s Corp.		1,892		106,311
L Brands, Inc.		645		36,333
Liberty Interactive Corp., Class A *		2,107		61,524
Lithia Motors, Inc., Class A		86		5,454
LKQ Corp. *		301		8,395
Lowe’s Cos., Inc.		5,633		281,819
Lumber Liquidators Holdings, Inc. *		43		4,613
Macy’s, Inc.		1,591		92,055
Monro Muffler Brake, Inc.		43		2,566
Netflix, Inc. *		19		8,467
Nordstrom, Inc.		604		37,134
Nutrisystem, Inc.		516		7,596
O’Reilly Automotive, Inc. *		215		32,433
Office Depot, Inc. *		4,300		21,199
Outerwall, Inc. *		43		3,041
Penske Automotive Group, Inc.		215		9,307
PetSmart, Inc.		344		23,069
Pier 1 Imports, Inc.		129		2,441
Pool Corp.		86		5,028
priceline.com, Inc. *		14		18,884
RadioShack Corp. *		3,956		10,602
Rent-A-Center, Inc.		430		10,810
Ross Stores, Inc.		388		28,246
Sally Beauty Holdings, Inc. *		86		2,468
Sears Holdings Corp. *		860		38,485
Sears Hometown & Outlet Stores, Inc. *		86		1,992
Select Comfort Corp. *		86		1,553
Signet Jewelers Ltd.		258		24,652
Sonic Automotive, Inc., Class A		301		7,152
Stage Stores, Inc.		258		5,108
Staples, Inc.		6,321		85,902
Target Corp.		3,956		247,408
The Bon-Ton Stores, Inc.		43		467
The Buckle, Inc.		86		3,902
The Cato Corp., Class A		129		3,621
The Children’s Place Retail Stores, Inc. *		129		6,988
The Finish Line, Inc., Class A		258		6,971
The Gap, Inc.		1,721		75,294
The Home Depot, Inc.		3,870		317,456
The Men’s Wearhouse, Inc.		301		16,191
The Pep Boys-Manny, Moe & Jack *		387		4,872
Tiffany & Co.		301		28,068
TJX Cos., Inc.		1,849		113,640
Tractor Supply Co.		221		15,594
TripAdvisor, Inc. *		43		4,310
Ulta Salon, Cosmetics & Fragrance, Inc. *		43		3,857
Urban Outfitters, Inc. *		344		12,879
Vitamin Shoppe, Inc. *		43		2,012
Williams-Sonoma, Inc.		301		17,530

				2,651,433

Semiconductors & Semiconductor Equipment 2.6%
Advanced Micro Devices, Inc. *		2,881		10,689
Altera Corp.		559		20,297
Amkor Technology, Inc. *		903		5,346
Analog Devices, Inc.		860		43,705
Applied Materials, Inc.		5,203		98,649
Atmel Corp. *		1,204		9,704
ATMI, Inc. *		129		4,387
Avago Technologies Ltd.		301		18,572
Broadcom Corp., Class A		1,290		38,339
Brooks Automation, Inc.		344		3,567
Cabot Microelectronics Corp. *		86		3,799
Cree, Inc. *		86		5,283
Cypress Semiconductor Corp. *		430		4,210
Diodes, Inc. *		129		3,071
Entegris, Inc. *		430		5,182
Fairchild Semiconductor International, Inc. *		473		6,660
First Solar, Inc. *		215		12,270
GT Advanced Technologies, Inc. *		903		12,940
Integrated Device Technology, Inc. *		860		10,139
Intel Corp.		23,091		571,733
International Rectifier Corp. *		215		5,794
Intersil Corp., Class A		989		12,580
KLA-Tencor Corp.		473		30,816
Lam Research Corp. *		430		22,244
Linear Technology Corp.		430		20,141
LSI Corp.		2,365		26,228
Marvell Technology Group Ltd.		1,763		26,956
Maxim Integrated Products, Inc.		860		28,131

10 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Micrel, Inc.		215		2,245
Microchip Technology, Inc.		473		21,545
Micron Technology, Inc. *		2,881		69,691
MKS Instruments, Inc.		172		5,170
NVIDIA Corp.		1,290		23,710
OmniVision Technologies, Inc. *		172		2,970
ON Semiconductor Corp. *		1,118		10,442
Photronics, Inc. *		344		2,993
PMC-Sierra, Inc. *		387		2,841
RF Micro Devices, Inc. *		774		5,480
Semtech Corp. *		26		649
Silicon Laboratories, Inc. *		129		6,704
Skyworks Solutions, Inc. *		215		7,624
Spansion, Inc., Class A *		215		3,507
SunEdison, Inc. *		1,591		29,211
Synaptics, Inc. *		86		5,593
Teradyne, Inc. *		430		8,720
Tessera Technologies, Inc.		129		2,802
Texas Instruments, Inc.		4,472		201,061
TriQuint Semiconductor, Inc. *		559		6,842
Veeco Instruments, Inc. *		43		1,701
Xilinx, Inc.		688		35,914

				1,518,847

Software & Services 6.3%
Accenture plc, Class A		1,161		96,769
Activision Blizzard, Inc.		559		10,817
Acxiom Corp. *		258		9,605
Adobe Systems, Inc. *		823		56,466
Akamai Technologies, Inc. *		172		10,514
Alliance Data Systems Corp. *		91		25,945
Amdocs Ltd.		602		26,777
ANSYS, Inc. *		43		3,591
AOL, Inc. *		817		35,768
Autodesk, Inc. *		344		18,046
Automatic Data Processing, Inc.		1,075		83,614
Broadridge Financial Solutions, Inc.		430		16,237
CA, Inc.		946		31,691
CACI International, Inc., Class A *		129		10,169
Cadence Design Systems, Inc. *		215		3,296
Citrix Systems, Inc. *		215		12,911
Cognizant Technology Solutions Corp., Class A *		258		26,847
Computer Sciences Corp.		1,161		73,375
Compuware Corp.		1,075		11,771
Convergys Corp.		645		13,203
CoreLogic, Inc. *		1,290		42,054
CSG Systems International, Inc.		215		6,020
Digital River, Inc. *		43		764
DST Systems, Inc.		172		16,165
EarthLink Holdings Corp.		989		3,877
eBay, Inc. *		1,591		93,503
Electronic Arts, Inc. *		473		13,523
Equinix, Inc. *		43		8,168
Facebook, Inc., Class A *		172		11,775
FactSet Research Systems, Inc.		86		9,055
Fair Isaac Corp.		172		9,242
Fidelity National Information Services, Inc.		860		47,825
Fiserv, Inc. *		688		39,938
FleetCor Technologies, Inc. *		12		1,559
Gartner, Inc. *		86		5,982
Genpact Ltd. *		118		1,968
Global Cash Access Holdings, Inc. *		344		2,890
Global Payments, Inc.		129		9,073
Google, Inc., Class A *		178		216,386
Heartland Payment Systems, Inc.		86		3,478
IAC/InterActiveCorp		430		33,338
Informatica Corp. *		86		3,574
International Business Machines Corp.		3,569		660,872
Intuit, Inc.		486		37,981
j2 Global, Inc.		86		4,420
Jack Henry & Associates, Inc.		129		7,499
Leidos Holdings, Inc.		602		26,885
Manhattan Associates, Inc. *		172		6,517
ManTech International Corp., Class A		172		5,034
MasterCard, Inc., Class A		821		63,808
MAXIMUS, Inc.		129		6,165
Mentor Graphics Corp.		129		2,792
MICROS Systems, Inc. *		86		4,774
Microsoft Corp.		27,545		1,055,249
MicroStrategy, Inc., Class A *		43		5,553
Monster Worldwide, Inc. *		1,734		13,820
Nuance Communications, Inc. *		129		1,972
Oracle Corp.		6,235		243,851
Paychex, Inc.		731		30,527
Progress Software Corp. *		129		3,217
PTC, Inc. *		172		6,761
Red Hat, Inc. *		114		6,725
Rovi Corp. *		129		3,204
Salesforce.com, Inc. *		86		5,364
Sapient Corp. *		215		3,743
Solera Holdings, Inc.		43		2,942
Sykes Enterprises, Inc. *		215		4,231
Symantec Corp.		2,408		51,724
Synopsys, Inc. *		172		6,949
Take-Two Interactive Software, Inc. *		215		4,251
TeleTech Holdings, Inc. *		129		3,106
Teradata Corp. *		215		9,873
The Western Union Co.		2,279		38,128
TIBCO Software, Inc. *		258		5,622
Total System Services, Inc.		559		17,027
Unisys Corp. *		258		8,829
United Online, Inc.		90		1,009
VeriFone Systems, Inc. *		43		1,245
VeriSign, Inc. *		258		14,218
Visa, Inc., Class A		258		58,293
Vistaprint N.V. *		43		2,116
VMware, Inc., Class A *		43		4,130
WEX, Inc. *		43		4,163
Xerox Corp.		6,536		71,831
Yahoo! Inc. *		1,333		51,547

				3,725,536

Technology Hardware & Equipment 4.4%
ADTRAN, Inc.		258		6,760
Amphenol Corp., Class A		259		22,797
Anixter International, Inc.		172		18,395
Apple, Inc.		668		351,528
ARRIS Group, Inc. *		301		8,639
Arrow Electronics, Inc. *		860		48,702
Avnet, Inc.		1,118		48,667

See financial notes 11

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Belden, Inc.		129		9,305
Benchmark Electronics, Inc. *		516		12,301
Brocade Communications Systems, Inc. *		1,161		11,111
Cisco Systems, Inc.		15,166		330,619
Cognex Corp. *		86		3,239
Coherent, Inc. *		86		5,861
Comtech Telecommunications Corp.		129		4,129
Corning, Inc.		3,956		76,232
Diebold, Inc.		301		11,254
Dolby Laboratories, Inc., Class A *		86		3,546
EchoStar Corp., Class A *		129		6,427
Electronics For Imaging, Inc. *		172		7,671
EMC Corp.		3,655		96,382
Emulex Corp. *		473		3,443
F5 Networks, Inc. *		86		9,661
FEI Co.		43		4,414
Finisar Corp. *		172		4,076
FLIR Systems, Inc.		301		10,276
Harris Corp.		516		38,091
Hewlett-Packard Co.		24,854		742,638
Ingram Micro, Inc., Class A *		2,881		84,846
Insight Enterprises, Inc. *		387		8,893
InterDigital, Inc.		86		2,623
Itron, Inc. *		200		7,000
Jabil Circuit, Inc.		1,161		21,490
JDS Uniphase Corp. *		301		4,148
Juniper Networks, Inc. *		1,763		47,143
Lexmark International, Inc., Class A		516		21,744
Littelfuse, Inc.		43		4,058
Motorola Solutions, Inc.		1,290		85,398
MTS Systems Corp.		43		3,051
National Instruments Corp.		172		4,983
NCR Corp. *		387		13,177
NetApp, Inc.		473		19,114
NETGEAR, Inc. *		86		2,940
OSI Systems, Inc. *		43		2,643
Plantronics, Inc.		86		3,817
Plexus Corp. *		215		8,847
Polycom, Inc. *		516		6,894
QLogic Corp. *		817		9,330
QUALCOMM, Inc.		1,806		135,974
Rofin-Sinar Technologies, Inc. *		129		3,028
SanDisk Corp.		344		25,559
Sanmina Corp. *		774		13,127
ScanSource, Inc. *		172		6,753
SYNNEX Corp. *		258		15,346
Tech Data Corp. *		860		49,536
Trimble Navigation Ltd. *		215		8,202
ViaSat, Inc. *		43		2,869
Vishay Intertechnology, Inc.		903		12,768
Western Digital Corp.		559		48,627
Zebra Technologies Corp., Class A *		172		11,866

				2,591,958

Telecommunication Services 3.8%
AT&T, Inc.		30,520		974,504
CenturyLink, Inc.		2,021		63,176
Cincinnati Bell, Inc. *		2,236		7,491
Consolidated Communications Holdings, Inc.		172		3,278
Crown Castle International Corp. *		259		19,658
Frontier Communications Corp.		8,428		41,129
Intelsat S.A. *		194		3,849
Leap Wireless International, Inc. *		645		11,300
Level 3 Communications, Inc. *		301		11,083
NII Holdings, Inc. *		3,913		4,500
SBA Communications Corp., Class A *		86		8,185
Sprint Corp. *		9,718		84,935
T-Mobile US, Inc. *		172		5,246
Telephone & Data Systems, Inc.		768		17,503
tw telecom, Inc. *		215		6,581
United States Cellular Corp.		86		3,104
Verizon Communications, Inc.		19,651		934,994
Windstream Holdings, Inc.		4,863		39,001

				2,239,517

Transportation 1.9%
Alaska Air Group, Inc.		129		11,177
Allegiant Travel Co.		5		496
AMERCO		11		2,562
Arkansas Best Corp.		258		8,581
Avis Budget Group, Inc. *		817		38,391
C.H. Robinson Worldwide, Inc.		647		33,553
Con-way, Inc.		301		11,480
Conversant, Inc. *		215		5,345
Copa Holdings S.A., Class A		43		5,825
CSX Corp.		4,085		113,195
Delta Air Lines, Inc.		688		22,848
Expeditors International of Washington, Inc.		645		25,484
FedEx Corp.		1,333		177,729
Forward Air Corp.		86		3,720
Genesee & Wyoming, Inc., Class A *		43		4,254
Hawaiian Holdings, Inc. *		344		4,142
Heartland Express, Inc.		215		4,382
Hertz Global Holdings, Inc. *		1,204		33,724
Hub Group, Inc., Class A *		172		6,720
J.B. Hunt Transport Services, Inc.		215		15,452
JetBlue Airways Corp. *		1,075		9,492
Kansas City Southern		86		8,077
Kirby Corp. *		86		8,996
Knight Transportation, Inc.		215		4,618
Landstar System, Inc.		172		9,926
Matson, Inc.		387		9,334
Norfolk Southern Corp.		903		82,995
Old Dominion Freight Line, Inc. *		129		6,868
Republic Airways Holdings, Inc. *		688		6,591
Ryder System, Inc.		430		32,388
Saia, Inc. *		129		4,456
SkyWest, Inc.		774		9,830
Southwest Airlines Co.		1,247		27,983
Swift Transportation Co. *		258		6,285
Union Pacific Corp.		946		170,639
United Continental Holdings, Inc. *		387		17,400
United Parcel Service, Inc., Class B		1,548		148,252
UTi Worldwide, Inc.		602		5,924
Werner Enterprises, Inc.		301		7,781

				1,106,895

12 See financial notes

Schwab Fundamental U.S. Broad Market Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Utilities 4.0%
AES Corp.		3,741		51,065
AGL Resources, Inc.		301		14,159
ALLETE, Inc.		129		6,516
Alliant Energy Corp.		458		24,842
Ameren Corp.		1,505		60,817
American Electric Power Co., Inc.		1,978		99,296
American States Water Co.		86		2,583
American Water Works Co., Inc.		387		17,353
Aqua America, Inc.		259		6,524
Atmos Energy Corp.		473		21,805
Avista Corp.		258		7,637
Black Hills Corp.		129		7,316
California Water Service Group		129		3,033
Calpine Corp. *		1,032		19,660
CenterPoint Energy, Inc.		1,606		37,982
Cleco Corp.		129		6,376
CMS Energy Corp.		946		26,895
Consolidated Edison, Inc.		1,204		67,484
Dominion Resources, Inc.		2,365		164,131
DTE Energy Co.		774		55,542
Duke Energy Corp.		1,720		121,914
Edison International		1,419		74,313
El Paso Electric Co.		129		4,547
Entergy Corp.		1,419		90,561
Exelon Corp.		5,160		156,916
FirstEnergy Corp.		2,580		79,412
Great Plains Energy, Inc.		559		14,685
Hawaiian Electric Industries, Inc.		344		8,741
IDACORP, Inc.		129		7,248
Integrys Energy Group, Inc.		473		27,089
ITC Holdings Corp.		87		8,926
MDU Resources Group, Inc.		817		27,745
MGE Energy, Inc.		63		2,431
National Fuel Gas Co.		215		16,151
New Jersey Resources Corp.		172		7,742
NextEra Energy, Inc.		1,247		113,963
NiSource, Inc.		1,118		38,929
Northeast Utilities		630		28,003
Northwest Natural Gas Co.		129		5,530
NorthWestern Corp.		129		5,926
NRG Energy, Inc.		1,634		47,500
OGE Energy Corp.		516		18,576
Otter Tail Corp.		172		5,198
Pepco Holdings, Inc.		1,591		32,440
PG&E Corp.		1,978		87,151
Piedmont Natural Gas Co., Inc.		258		8,726
Pinnacle West Capital Corp.		473		26,322
PNM Resources, Inc.		344		8,996
Portland General Electric Co.		301		9,572
PPL Corp.		2,021		65,258
Public Service Enterprise Group, Inc.		2,623		96,159
Questar Corp.		731		17,361
SCANA Corp.		559		27,670
Sempra Energy		775		73,214
South Jersey Industries, Inc.		86		4,917
Southwest Gas Corp.		172		9,291
TECO Energy, Inc.		1,161		19,482
The Empire District Electric Co.		172		4,083
The Laclede Group, Inc.		129		5,915
The Southern Co.		3,010		127,473
UGI Corp.		473		21,138
UIL Holdings Corp.		129		4,995
UNS Energy Corp.		129		7,806
Vectren Corp.		344		13,234
Westar Energy, Inc.		387		13,243
Wisconsin Energy Corp.		559		24,574
Xcel Energy, Inc.		2,064		62,519

				2,384,601

Total Common Stock
(Cost $55,906,048)				58,618,433




Other Investment Companies 0.1% of net assets

Equity Fund 0.1%
iShares Russell 3000 ETF		450		50,477

Money Market Fund 0.0%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (b)		2,896		2,896

Total Other Investment Companies
(Cost $50,507)				53,373



End of Investments.


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

See financial notes 13

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.

Cost

Value

Holdings by Category

($)

.6%

Common Stock

69,025,094

71,981,254

.2%

Other Investment Companies

141,993

144,533

.8%

Total Investments

69,167,087

72,125,787

.2%

Other Assets and
Liabilities, Net

132,783

100

.0%

Net Assets

72,258,570


	Number		Value
Security	of Shares		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
BorgWarner, Inc.		638		39,205
Delphi Automotive plc		982		65,372
Ford Motor Co.		10,241		157,609
General Motors Co. *		3,629		131,370
Harley-Davidson, Inc.		821		54,235
Johnson Controls, Inc.		3,133		154,770
Lear Corp.		583		47,339
The Goodyear Tire & Rubber Co.		1,450		38,961
TRW Automotive Holdings Corp. *		530		43,630
Visteon Corp. *		269		22,443

				754,934

Banks 2.4%
BB&T Corp.		2,969		112,228
CIT Group, Inc.		424		20,640
Comerica, Inc.		795		38,303
Fifth Third Bancorp		3,507		76,084
Hudson City Bancorp, Inc.		3,445		32,728
Huntington Bancshares, Inc.		3,392		32,326
KeyCorp		3,987		52,509
M&T Bank Corp.		371		43,255
New York Community Bancorp, Inc.		1,870		29,883
Popular, Inc. *		848		24,244
Regions Financial Corp.		6,921		73,639
SunTrust Banks, Inc.		2,521		94,991
The PNC Financial Services Group, Inc.		1,734		141,807
U.S. Bancorp		5,910		243,137
Wells Fargo & Co.		14,922		692,679
Zions Bancorp		954		29,765

				1,738,218

Capital Goods 8.3%
3M Co.		2,365		318,636
AECOM Technology Corp. *		636		20,314
AGCO Corp.		530		27,814
Alliant Techsystems, Inc.		212		28,575
AMETEK, Inc.		371		19,752
Caterpillar, Inc.		2,425		235,152
Cummins, Inc.		602		87,844
Danaher Corp.		1,060		81,079
Deere & Co.		1,510		129,754
Dover Corp.		743		70,065
Eaton Corp. plc		1,131		84,497
EMCOR Group, Inc.		477		22,314
Emerson Electric Co.		3,182		207,657
Exelis, Inc.		2,184		44,619
Fastenal Co.		477		22,510
Flowserve Corp.		424		34,433
Fluor Corp.		1,166		90,587
General Cable Corp.		542		16,683
General Dynamics Corp.		2,037		223,133
General Electric Co.		40,039		1,019,793
Harsco Corp.		848		21,302
Honeywell International, Inc.		2,210		208,712
Hubbell, Inc., Class B		212		25,342
Illinois Tool Works, Inc.		1,538		126,885
Ingersoll-Rand plc		1,432		87,552
ITT Corp.		1,166		51,187
Jacobs Engineering Group, Inc. *		848		51,431
Joy Global, Inc.		477		26,235
KBR, Inc.		1,224		33,807
L-3 Communications Holdings, Inc.		1,114		128,556
Lennox International, Inc.		318		29,218
Lockheed Martin Corp.		1,633		265,036
Masco Corp.		1,926		44,972
Northrop Grumman Corp.		2,375		287,446
Oshkosh Corp.		583		33,715
Owens Corning *		659		30,156
PACCAR, Inc.		1,433		94,349
Pall Corp.		265		22,790
Parker Hannifin Corp.		725		87,399
Pentair Ltd. - Reg’d		371		29,981
Precision Castparts Corp.		266		68,596
Quanta Services, Inc. *		798		28,098
Raytheon Co.		2,460		240,859
Rockwell Automation, Inc.		326		40,046
Rockwell Collins, Inc.		583		48,121
Roper Industries, Inc.		159		21,564
Snap-on, Inc.		159		17,835
SPX Corp.		371		39,949
Stanley Black & Decker, Inc.		457		37,949
Terex Corp.		689		30,681
Textron, Inc.		1,486		58,994
The Boeing Co.		1,780		229,478
The Timken Co.		371		22,394
United Rentals, Inc. *		338		29,859
United Technologies Corp.		3,854		450,995
URS Corp.		742		34,503
W.W. Grainger, Inc.		193		49,219
WESCO International, Inc. *		318		27,415
Xylem, Inc.		636		25,027

				5,972,864

14 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Commercial & Professional Services 0.8%
Cintas Corp.		583		35,365
Equifax, Inc.		371		25,992
Iron Mountain, Inc.		712		19,366
Manpowergroup, Inc.		914		71,438
Pitney Bowes, Inc.		2,235		56,881
R.R. Donnelley & Sons Co.		3,869		74,014
Republic Services, Inc.		1,150		39,227
Robert Half International, Inc.		954		39,057
The ADT Corp.		552		16,952
The Dun & Bradstreet Corp.		215		21,330
United Stationers, Inc.		530		22,594
Waste Management, Inc.		3,021		125,371

				547,587

Consumer Durables & Apparel 1.0%
Coach, Inc.		1,130		55,155
D.R. Horton, Inc.		1,166		28,637
Garmin Ltd.		650		34,879
Harman International Industries, Inc.		318		33,304
Hasbro, Inc.		742		40,929
Jarden Corp. *		424		26,063
Leggett & Platt, Inc.		954		30,576
Mattel, Inc.		1,272		47,458
Mohawk Industries, Inc. *		213		30,146
Newell Rubbermaid, Inc.		1,219		39,142
NIKE, Inc., Class B		2,207		172,808
NVR, Inc. *		27		32,184
Ralph Lauren Corp.		188		30,283
VF Corp.		1,060		62,105
Whirlpool Corp.		480		69,423

				733,092

Consumer Services 1.6%
Apollo Education Group, Inc. *		1,826		60,861
Brinker International, Inc.		636		34,980
Carnival Corp.		1,408		55,841
Darden Restaurants, Inc.		858		43,810
Graham Holdings Co., Class B		36		25,873
H&R Block, Inc.		1,010		31,956
International Game Technology		1,378		20,794
Marriott International, Inc., Class A		954		51,735
McDonald’s Corp.		4,110		391,067
MGM Resorts International *		1,274		35,099
Royal Caribbean Cruises Ltd.		805		42,609
Service Corp. International		1,060		19,811
Starbucks Corp.		1,168		82,881
Starwood Hotels & Resorts Worldwide, Inc.		666		54,918
Wyndham Worldwide Corp.		545		39,720
Wynn Resorts Ltd.		226		54,803
Yum! Brands, Inc.		1,326		98,230

				1,144,988

Diversified Financials 6.7%
American Express Co.		2,839		259,144
Ameriprise Financial, Inc.		537		58,528
Bank of America Corp.		66,610		1,101,063
Berkshire Hathaway, Inc., Class B *		4,102		474,930
BlackRock, Inc.		183		55,786
Capital One Financial Corp.		2,180		160,077
Citigroup, Inc.		11,875		577,481
CME Group, Inc.		597		44,071
Discover Financial Services		1,219		69,946
Eaton Vance Corp.		371		14,039
Franklin Resources, Inc.		1,433		76,307
Invesco Ltd.		1,060		36,358
JPMorgan Chase & Co.		16,027		910,654
Legg Mason, Inc.		919		42,237
McGraw Hill Financial, Inc.		1,448		115,348
Moody’s Corp.		583		46,057
Morgan Stanley		3,870		119,196
Northern Trust Corp.		637		39,399
PHH Corp. *		901		23,453
SLM Corp.		1,221		29,231
State Street Corp.		1,060		69,610
T. Rowe Price Group, Inc.		653		53,004
The Bank of New York Mellon Corp.		3,021		96,672
The Charles Schwab Corp. (a)		2,787		73,883
The Goldman Sachs Group, Inc.		1,683		280,135

				4,826,609

Energy 15.1%
Alpha Natural Resources, Inc. *		3,074		16,507
Anadarko Petroleum Corp.		1,432		120,517
Apache Corp.		1,654		131,146
Arch Coal, Inc.		4,040		18,422
Baker Hughes, Inc.		2,279		144,215
Cameron International Corp. *		639		40,934
Chesapeake Energy Corp.		3,886		100,686
Chevron Corp.		13,948		1,608,623
Cimarex Energy Co.		265		30,663
ConocoPhillips		19,557		1,300,540
CONSOL Energy, Inc.		742		29,754
Devon Energy Corp.		2,326		149,841
Diamond Offshore Drilling, Inc.		541		25,589
Energen Corp.		318		25,580
EOG Resources, Inc.		477		90,353
EQT Corp.		212		21,685
Exxon Mobil Corp.		35,766		3,443,193
FMC Technologies, Inc. *		477		23,964
Halliburton Co.		3,198		182,286
Helmerich & Payne, Inc.		265		26,169
Hess Corp.		2,305		184,469
HollyFrontier Corp.		645		29,393
Kinder Morgan, Inc.		1,121		35,704
Marathon Oil Corp.		7,979		267,296
Marathon Petroleum Corp.		2,098		176,232
McDermott International, Inc. *		2,550		21,242
Murphy Oil Corp.		2,035		120,818
Nabors Industries Ltd.		2,703		62,223
National Oilwell Varco, Inc.		1,390		107,086
Newfield Exploration Co. *		993		27,993
Noble Energy, Inc.		691		47,513
Occidental Petroleum Corp.		3,428		330,871
ONEOK, Inc.		813		48,081
Patterson-UTI Energy, Inc.		1,113		32,399
Peabody Energy Corp.		2,134		37,473
Phillips 66		8,074		604,420
Pioneer Natural Resources Co.		159		31,988

See financial notes 15

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
QEP Resources, Inc.		860		24,880
Rowan Cos. plc, Class A *		477		15,913
Schlumberger Ltd.		3,569		331,917
SEACOR Holdings, Inc. *		265		23,442
Seadrill Ltd.		1,014		37,477
Southwestern Energy Co. *		608		25,135
Spectra Energy Corp.		2,182		81,345
Tesoro Corp.		1,273		64,936
The Williams Cos., Inc.		2,360		97,468
Valero Energy Corp.		8,801		422,272
World Fuel Services Corp.		1,197		53,889
WPX Energy, Inc. *		2,014		35,487

				10,910,029

Food & Staples Retailing 4.2%
Casey’s General Stores, Inc.		318		21,780
Costco Wholesale Corp.		2,567		299,826
CVS Caremark Corp.		9,027		660,235
Safeway, Inc.		5,380		201,481
SUPERVALU, Inc. *		9,191		59,466
Sysco Corp.		4,425		159,388
The Kroger Co.		5,303		222,408
Wal-Mart Stores, Inc.		12,755		952,798
Walgreen Co.		6,443		437,802
Whole Foods Market, Inc.		861		46,537

				3,061,721

Food, Beverage & Tobacco 4.9%
Altria Group, Inc.		9,036		327,645
Archer-Daniels-Midland Co.		6,720		272,832
Beam, Inc.		554		45,960
Brown-Forman Corp., Class B		353		29,581
Bunge Ltd.		1,990		158,424
Campbell Soup Co.		906		39,239
Coca-Cola Enterprises, Inc.		1,908		89,829
ConAgra Foods, Inc.		2,583		73,357
Constellation Brands, Inc., Class A *		380		30,791
Dean Foods Co. *		1,765		26,104
Dr. Pepper Snapple Group, Inc.		972		50,651
General Mills, Inc.		2,180		109,065
Hillshire Brands Co.		2,173		81,596
Hormel Foods Corp.		530		25,149
Ingredion, Inc.		304		20,015
Kellogg Co.		1,063		64,514
Kraft Foods Group, Inc.		1,811		100,094
Lorillard, Inc.		1,665		81,685
McCormick & Co., Inc. Non Voting Shares		318		21,115
Mead Johnson Nutrition Co.		212		17,289
Molson Coors Brewing Co., Class B		532		30,234
Mondelez International, Inc., Class A		10,043		341,763
PepsiCo, Inc.		5,641		451,675
Philip Morris International, Inc.		5,542		448,403
Reynolds American, Inc.		1,325		67,350
The Coca-Cola Co.		9,692		370,235
The Hershey Co.		318		33,651
The J.M. Smucker Co.		424		42,404
Tyson Foods, Inc., Class A		3,129		123,439

				3,574,089

Health Care Equipment & Services 6.0%
Abbott Laboratories		8,745		347,876
Aetna, Inc.		2,825		205,406
AmerisourceBergen Corp.		2,309		156,666
Baxter International, Inc.		2,092		145,394
Becton Dickinson & Co.		964		111,072
Boston Scientific Corp. *		5,889		77,146
C.R. Bard, Inc.		371		53,483
Cardinal Health, Inc.		3,894		278,538
CareFusion Corp. *		689		27,925
Cigna Corp.		803		63,911
Community Health Systems, Inc. *		905		37,566
Covidien plc		1,385		99,651
DaVita HealthCare Partners, Inc. *		530		36,427
DENTSPLY International, Inc.		424		19,241
Express Scripts Holding Co. *		1,609		121,174
HCA Holdings, Inc. *		2,143		109,721
Health Net, Inc. *		1,643		55,944
Henry Schein, Inc. *		318		37,855
Humana, Inc.		1,338		150,471
Laboratory Corp. of America Holdings *		305		28,530
LifePoint Hospitals, Inc. *		371		20,127
Magellan Health Services, Inc. *		318		19,442
McKesson Corp.		1,876		332,146
Medtronic, Inc.		4,042		239,529
Omnicare, Inc.		742		43,704
Owens & Minor, Inc.		742		25,762
Patterson Cos., Inc.		530		21,815
Quest Diagnostics, Inc.		1,028		54,484
St. Jude Medical, Inc.		1,230		82,804
Stryker Corp.		1,007		80,802
Tenet Healthcare Corp. *		477		21,045
UnitedHealth Group, Inc.		7,377		570,021
Universal Health Services, Inc., Class B		371		29,784
Varian Medical Systems, Inc. *		318		26,658
WellCare Health Plans, Inc. *		318		19,659
WellPoint, Inc.		5,565		504,133
Zimmer Holdings, Inc.		872		81,828

				4,337,740

Household & Personal Products 2.0%
Avon Products, Inc.		2,590		40,067
Church & Dwight Co., Inc.		318		21,618
Colgate-Palmolive Co.		2,552		160,342
Energizer Holdings, Inc.		212		20,636
Herbalife Ltd.		371		24,709
Kimberly-Clark Corp.		1,372		151,400
The Clorox Co.		318		27,755
The Estee Lauder Cos., Inc., Class A		424		29,188
The Procter & Gamble Co.		12,755		1,003,308

				1,479,023

Insurance 3.4%
ACE Ltd.		955		93,466
Aflac, Inc.		1,697		108,744
Allied World Assurance Co. Holdings AG		170		16,952
American Financial Group, Inc.		477		27,265
American International Group, Inc.		3,596		178,973

16 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Aon plc		796		68,138
Arch Capital Group Ltd. *		636		35,692
Assurant, Inc.	��	759		49,813
Axis Capital Holdings Ltd.		747		32,846
Cincinnati Financial Corp.		689		32,300
Endurance Specialty Holdings Ltd.		424		22,107
Everest Re Group Ltd.		224		33,430
Fidelity National Financial, Inc., Class A		1,272		42,052
Genworth Financial, Inc., Class A *		3,039		47,226
HCC Insurance Holdings, Inc.		530		23,267
Lincoln National Corp.		1,020		51,133
Loews Corp.		1,486		64,611
Marsh & McLennan Cos., Inc.		1,647		79,320
MetLife, Inc.		2,491		126,219
PartnerRe Ltd.		371		36,685
Platinum Underwriters Holdings Ltd.		318		18,641
Principal Financial Group, Inc.		825		37,414
Prudential Financial, Inc.		1,741		147,254
Reinsurance Group of America, Inc.		280		21,557
RenaissanceRe Holdings Ltd.		318		30,372
The Allstate Corp.		2,815		152,742
The Chubb Corp.		1,741		152,303
The Hartford Financial Services Group, Inc.		3,248		114,297
The Progressive Corp.		3,975		97,348
The Travelers Cos., Inc.		3,991		334,605
Torchmark Corp.		424		32,864
Unum Group		1,381		48,031
W.R. Berkley Corp.		721		29,734
White Mountains Insurance Group Ltd.		25		14,489
XL Group plc		1,166		35,446

				2,437,336

Materials 3.9%
Air Products & Chemicals, Inc.		849		103,001
Airgas, Inc.		212		22,854
Albemarle Corp.		265		17,487
Alcoa, Inc.		13,931		163,550
Allegheny Technologies, Inc.		862		27,394
AptarGroup, Inc.		265		17,535
Ashland, Inc.		335		31,614
Avery Dennison Corp.		689		34,326
Ball Corp.		826		45,892
Bemis Co., Inc.		583		22,900
Celanese Corp., Series A		530		28,297
CF Industries Holdings, Inc.		162		40,646
Cliffs Natural Resources, Inc.		1,443		28,903
Commercial Metals Co.		1,643		31,792
Cytec Industries, Inc.		212		20,070
Domtar Corp.		441		48,854
E.I. du Pont de Nemours & Co.		2,919		194,464
Eastman Chemical Co.		564		49,310
Ecolab, Inc.		424		45,686
FMC Corp.		318		24,543
Freeport-McMoRan Copper & Gold, Inc.		6,053		197,449
Huntsman Corp.		1,166		28,404
International Flavors & Fragrances, Inc.		265		24,854
International Paper Co.		2,332		114,011
LyondellBasell Industries N.V., Class A		1,439		126,747
Martin Marietta Materials, Inc.		159		19,395
MeadWestvaco Corp.		956		35,783
Monsanto Co.		1,079		118,712
Newmont Mining Corp.		2,837		65,989
Nucor Corp.		2,336		117,361
Owens-Illinois, Inc. *		960		32,563
Packaging Corp. of America		371		27,042
PPG Industries, Inc.		441		87,239
Praxair, Inc.		919		119,810
Reliance Steel & Aluminum Co.		531		36,788
RPM International, Inc.		530		22,186
Sealed Air Corp.		914		31,113
Sigma-Aldrich Corp.		318		30,022
Sonoco Products Co.		636		26,699
Southern Copper Corp.		769		23,462
Steel Dynamics, Inc.		1,749		30,503
The Dow Chemical Co.		5,923		288,509
The Mosaic Co.		1,356		66,254
The Sherwin-Williams Co.		177		35,485
The Valspar Corp.		265		19,809
United States Steel Corp.		2,279		55,197
Vulcan Materials Co.		477		32,403

				2,812,907

Media 4.0%
Cablevision Systems Corp., Class A		2,279		40,110
CBS Corp., Class B Non Voting Shares		2,300		154,284
Charter Communications, Inc., Class A *		265		33,594
Comcast Corp., Class A		7,483		386,796
DIRECTV *		3,529		273,850
Discovery Communications, Inc., Class A *		455		37,911
DISH Network Corp., Class A *		636		37,422
Gannett Co., Inc.		1,830		54,443
Liberty Global plc, Class A *		1,671		144,625
Omnicom Group, Inc.		1,290		97,627
Starz, Class A *		806		25,776
The Interpublic Group of Cos., Inc.		1,464		25,942
The Walt Disney Co.		6,477		523,406
Thomson Reuters Corp.		1,696		58,241
Time Warner Cable, Inc.		1,353		189,894
Time Warner, Inc.		6,800		456,484
Twenty-First Century Fox, Inc., Class A		5,596		187,690
Viacom, Inc., Class B		2,029		178,004

				2,906,099

Pharmaceuticals, Biotechnology & Life Sciences 5.9%
AbbVie, Inc.		2,511		127,835
Actavis plc *		350		77,287
Agilent Technologies, Inc.		1,246		70,935
Allergan, Inc.		392		49,784
Amgen, Inc.		3,040		377,021
Biogen Idec, Inc. *		238		81,082
Bristol-Myers Squibb Co.		5,323		286,217
Celgene Corp. *		265		42,599
Eli Lilly & Co.		4,158		247,858
Forest Laboratories, Inc. *		1,272		124,109
Gilead Sciences, Inc. *		2,314		191,576
Hospira, Inc. *		689		29,820
Johnson & Johnson		9,699		893,472
Merck & Co., Inc.		9,308		530,463
Mettler-Toledo International, Inc. *		66		16,220

See financial notes 17

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Mylan, Inc. *		689		38,288
Pfizer, Inc.		28,917		928,525
Thermo Fisher Scientific, Inc.		850		105,859
Waters Corp. *		212		23,617

				4,242,567

Real Estate 0.9%
American Tower Corp.		291		23,708
Annaly Capital Management, Inc.		5,158		57,666
Apartment Investment & Management Co., Class A		742		22,178
AvalonBay Communities, Inc.		159		20,506
Boston Properties, Inc.		300		33,729
Equity Residential		701		40,987
HCP, Inc.		653		25,317
Health Care REIT, Inc.		272		15,977
Hospitality Properties Trust		689		18,259
Host Hotels & Resorts, Inc.		1,961		38,573
Kimco Realty Corp.		795		17,697
Plum Creek Timber Co., Inc.		583		25,238
Prologis, Inc.		447		18,412
Public Storage		212		35,828
Rayonier, Inc.		337		15,869
Simon Property Group, Inc.		379		61,129
Ventas, Inc.		343		21,414
Vornado Realty Trust		477		45,930
Weyerhaeuser Co.		4,717		139,199

				677,616

Retailing 4.5%
Aaron’s, Inc.		641		19,698
Abercrombie & Fitch Co., Class A		689		27,305
Advance Auto Parts, Inc.		371		47,251
Amazon.com, Inc. *		212		76,765
American Eagle Outfitters, Inc.		1,749		25,413
AutoNation, Inc. *		318		16,739
AutoZone, Inc. *		65		34,999
Bed Bath & Beyond, Inc. *		1,060		71,889
Best Buy Co., Inc.		4,940		131,552
Big Lots, Inc. *		1,060		31,323
CarMax, Inc. *		532		25,765
Core-Mark Holding Co., Inc.		371		29,012
Dick’s Sporting Goods, Inc.		322		17,282
Dillard’s, Inc., Class A		239		22,127
Dollar General Corp. *		822		49,238
Dollar Tree, Inc. *		795		43,542
Expedia, Inc.		530		41,621
Family Dollar Stores, Inc.		477		31,243
Foot Locker, Inc.		954		39,791
GameStop Corp., Class A		1,275		47,570
Genuine Parts Co.		849		74,788
J.C. Penney Co., Inc. *		5,113		37,223
Kohl’s Corp.		2,508		140,924
L Brands, Inc.		903		50,866
Liberty Interactive Corp., Class A *		2,658		77,614
Lowe’s Cos., Inc.		7,570		378,727
Macy’s, Inc.		2,122		122,779
Nordstrom, Inc.		860		52,873
O’Reilly Automotive, Inc. *		265		39,975
PetSmart, Inc.		491		32,926
priceline.com, Inc. *		20		26,977
RadioShack Corp. *		4,500		12,060
Rent-A-Center, Inc.		583		14,657
Ross Stores, Inc.		530		38,584
Sears Holdings Corp. *		1,113		49,807
Signet Jewelers Ltd.		371		35,449
Staples, Inc.		8,640		117,418
Target Corp.		5,270		329,586
The Gap, Inc.		2,228		97,475
The Home Depot, Inc.		5,224		428,525
Tiffany & Co.		348		32,451
TJX Cos., Inc.		2,442		150,085
Tractor Supply Co.		318		22,438
Williams-Sonoma, Inc.		424		24,694

				3,219,026

Semiconductors & Semiconductor Equipment 2.4%
Altera Corp.		753		27,341
Analog Devices, Inc.		1,115		56,664
Applied Materials, Inc.		6,838		129,648
Broadcom Corp., Class A		1,651		49,068
Intel Corp.		31,280		774,493
KLA-Tencor Corp.		638		41,566
Lam Research Corp. *		583		30,159
Linear Technology Corp.		742		34,755
LSI Corp.		3,233		35,854
Marvell Technology Group Ltd.		2,226		34,035
Maxim Integrated Products, Inc.		1,122		36,701
Microchip Technology, Inc.		636		28,970
Micron Technology, Inc. *		3,871		93,639
NVIDIA Corp.		1,802		33,121
Texas Instruments, Inc.		5,945		267,287
Xilinx, Inc.		848		44,266

				1,717,567

Software & Services 6.4%
Accenture plc, Class A		1,547		128,943
Adobe Systems, Inc. *		1,124		77,118
Alliance Data Systems Corp. *		120		34,213
Amdocs Ltd.		826		36,741
AOL, Inc. *		1,113		48,727
Autodesk, Inc. *		477		25,023
Automatic Data Processing, Inc.		1,485		115,503
Broadridge Financial Solutions, Inc.		530		20,013
CA, Inc.		1,272		42,612
Citrix Systems, Inc. *		270		16,214
Cognizant Technology Solutions Corp., Class A *		356		37,045
Computer Sciences Corp.		1,507		95,242
CoreLogic, Inc. *		1,749		57,017
DST Systems, Inc.		265		24,905
eBay, Inc. *		2,135		125,474
Fidelity National Information Services, Inc.		1,168		64,953
Fiserv, Inc. *		954		55,380
Google, Inc., Class A *		234		284,462
IAC/InterActiveCorp		546		42,331
International Business Machines Corp.		4,819		892,334
Intuit, Inc.		664		51,892
Leidos Holdings, Inc.		812		36,264

18 See financial notes

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
MasterCard, Inc., Class A		1,060		82,383
Microsoft Corp.		37,428		1,433,867
Oracle Corp.		8,375		327,546
Paychex, Inc.		1,014		42,345
Symantec Corp.		3,392		72,860
Teradata Corp. *		333		15,291
The Western Union Co.		3,104		51,930
Total System Services, Inc.		795		24,216
Visa, Inc., Class A		329		74,334
Xerox Corp.		9,169		100,767
Yahoo! Inc. *		1,802		69,683

				4,607,628

Technology Hardware & Equipment 4.4%
Amphenol Corp., Class A		341		30,015
Anixter International, Inc.		265		28,342
Apple, Inc.		894		470,458
Arrow Electronics, Inc. *		1,166		66,030
Avnet, Inc.		1,486		64,686
Cisco Systems, Inc.		21,095		459,871
Corning, Inc.		5,377		103,615
EMC Corp.		4,938		130,215
Harris Corp.		713		52,634
Hewlett-Packard Co.		33,414		998,410
Ingram Micro, Inc., Class A *		4,081		120,185
Jabil Circuit, Inc.		1,484		27,469
Juniper Networks, Inc. *		2,397		64,096
Lexmark International, Inc., Class A		742		31,268
Motorola Solutions, Inc.		1,698		112,408
NetApp, Inc.		636		25,701
QUALCOMM, Inc.		2,448		184,310
SanDisk Corp.		477		35,441
Tech Data Corp. *		1,175		67,680
Vishay Intertechnology, Inc.		1,219		17,237
Western Digital Corp.		751		65,329

				3,155,400

Telecommunication Services 4.1%
AT&T, Inc.		41,276		1,317,943
CenturyLink, Inc.		2,626		82,089
Crown Castle International Corp. *		382		28,994
Frontier Communications Corp.		11,364		55,456
NII Holdings, Inc. *		7,534		8,664
Sprint Corp. *		13,209		115,447
Telephone & Data Systems, Inc.		1,431		32,612
Verizon Communications, Inc.		26,553		1,263,392
Windstream Holdings, Inc.		6,264		50,237

				2,954,834

Transportation 1.6%
Avis Budget Group, Inc. *		1,082		50,843
C.H. Robinson Worldwide, Inc.		912		47,296
CSX Corp.		5,445		150,881
Expeditors International of Washington, Inc.		920		36,349
FedEx Corp.		1,787		238,261
Hertz Global Holdings, Inc. *		1,855		51,959
J.B. Hunt Transport Services, Inc.		265		19,046
Norfolk Southern Corp.		1,272		116,910
Ryder System, Inc.		545		41,049
Union Pacific Corp.		1,254		226,196
United Parcel Service, Inc., Class B		2,052		196,520

				1,175,310

Utilities 4.1%
AES Corp.		5,143		70,202
AGL Resources, Inc.		424		19,945
Alliant Energy Corp.		583		31,622
Ameren Corp.		2,067		83,527
American Electric Power Co., Inc.		2,760		138,552
American Water Works Co., Inc.		610		27,352
Atmos Energy Corp.		636		29,320
Calpine Corp. *		1,545		29,432
CenterPoint Energy, Inc.		2,178		51,510
CMS Energy Corp.		1,231		34,997
Consolidated Edison, Inc.		1,667		93,435
Dominion Resources, Inc.		3,137		217,708
DTE Energy Co.		1,061		76,137
Duke Energy Corp.		2,295		162,670
Edison International		1,970		103,169
Entergy Corp.		1,916		122,279
Exelon Corp.		6,785		206,332
FirstEnergy Corp.		3,469		106,776
Great Plains Energy, Inc.		795		20,885
Integrys Energy Group, Inc.		652		37,340
MDU Resources Group, Inc.		1,113		37,797
National Fuel Gas Co.		265		19,907
NextEra Energy, Inc.		1,669		152,530
NiSource, Inc.		1,537		53,518
Northeast Utilities		797		35,427
NRG Energy, Inc.		2,120		61,628
OGE Energy Corp.		689		24,804
Pepco Holdings, Inc.		2,067		42,146
PG&E Corp.		2,659		117,156
Pinnacle West Capital Corp.		592		32,945
PPL Corp.		2,655		85,730
Public Service Enterprise Group, Inc.		3,520		129,043
Questar Corp.		1,007		23,916
SCANA Corp.		689		34,106
Sempra Energy		1,061		100,233
TECO Energy, Inc.		1,511		25,355
The Southern Co.		4,072		172,449
UGI Corp.		636		28,423
Vectren Corp.		517		19,889
Westar Energy, Inc.		615		21,045
Wisconsin Energy Corp.		696		30,596
Xcel Energy, Inc.		2,715		82,237

				2,994,070

Total Common Stock
(Cost $69,025,094)				71,981,254




Other Investment Companies 0.2% of net assets

Equity Fund 0.1%
iShares Core S&P 500 ETF		380		71,189

See financial notes 19

Schwab Fundamental U.S. Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Money Market Fund 0.1%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (b)		73,344		73,344

Total Other Investment Companies
(Cost $141,993)				144,533



End of Investments.


*		Non-income producing security.
(a)		Issuer is affiliated with the fund’s adviser.
(b)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

20 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.


				Cost		Value
Holdings by Category				($)		($)

	99	.6%	Common Stock		51,846,387		55,202,684
	0	.2%	Other Investment Companies		121,853		125,709
	0	.0%	Short-Term Investment		5,000		5,000


	99	.8%	Total Investments		51,973,240		55,333,393
	0	.2%	Other Assets and Liabilities, Net				131,610


	100	.0%	Net Assets				55,465,003


	Number		Value
Security	of Shares		($)

Common Stock 99.6% of net assets

Automobiles & Components 1.0%
Cooper Tire & Rubber Co.		2,472		61,627
Dana Holding Corp.		5,382		116,682
Drew Industries, Inc.		624		30,726
Gentex Corp.		3,003		94,204
Superior Industries International, Inc.		1,599		29,230
Tenneco, Inc. *		1,170		70,481
Thor Industries, Inc.		2,262		126,694

				529,644

Banks 4.5%
Associated Banc-Corp.		5,382		89,826
Astoria Financial Corp.		4,524		61,979
BancorpSouth, Inc.		2,808		67,196
Bank of Hawaii Corp.		1,521		88,903
BankUnited, Inc.		780		26,114
BOK Financial Corp.		507		32,818
CapitalSource, Inc.		8,346		122,686
Capitol Federal Financial, Inc.		2,699		32,793
Cathay General Bancorp		1,486		37,759
City Holding Co.		546		24,177
City National Corp.		900		67,347
Commerce Bancshares, Inc.		1,638		73,153
Community Bank System, Inc.		507		18,470
Cullen/Frost Bankers, Inc.		1,015		75,760
CVB Financial Corp.		2,067		32,183
East West Bancorp, Inc.		1,794		64,028
F.N.B. Corp.		3,510		42,787
First Financial Bancorp		1,131		19,272
First Horizon National Corp.		7,800		93,366
First Midwest Bancorp, Inc.		1,911		31,856
First Niagara Financial Group, Inc.		5,589		50,692
First Republic Bank		1,014		52,698
FirstMerit Corp.		3,432		71,248
Fulton Financial Corp.		5,277		64,960
Glacier Bancorp, Inc.		1,365		37,879
Hancock Holding Co.		1,014		34,942
International Bancshares Corp.		1,623		37,621
MB Financial, Inc.		1,131		34,529
NBT Bancorp, Inc.		1,170		27,472
Northwest Bancshares, Inc.		2,365		33,938
Old National Bancorp		1,989		27,906
People’s United Financial, Inc.		7,761		109,973
Prosperity Bancshares, Inc.		585		37,036
Provident Financial Services, Inc.		1,872		34,744
Signature Bank *		186		24,353
Susquehanna Bancshares, Inc.		3,081		33,706
SVB Financial Group *		430		54,141
Synovus Financial Corp.		33,111		115,226
TCF Financial Corp.		5,854		94,367
Trustmark Corp.		1,872		45,171
UMB Financial Corp.		588		36,656
Umpqua Holdings Corp.		2,303		40,924
United Bankshares, Inc.		1,365		40,172
Valley National Bancorp		6,786		68,403
Washington Federal, Inc.		2,614		58,606
Webster Financial Corp.		1,757		54,414
Westamerica Bancorp		702		35,297
Wintrust Financial Corp.		624		28,879

				2,488,426

Capital Goods 11.3%
A.O. Smith Corp.		1,248		62,026
AAR Corp.		2,262		65,372
Actuant Corp., Class A		1,484		52,029
Acuity Brands, Inc.		1,014		143,025
Aegion Corp. *		1,179		27,294
Aircastle Ltd.		3,122		61,503
Albany International Corp., Class A		1,014		36,585
Apogee Enterprises, Inc.		1,170		40,049
Applied Industrial Technologies, Inc.		1,833		93,538
Armstrong World Industries, Inc. *		1,326		72,784
Astec Industries, Inc.		858		34,509
B/E Aerospace, Inc. *		1,131		95,287
Barnes Group, Inc.		1,716		65,980
Beacon Roofing Supply, Inc. *		1,250		47,238
Brady Corp., Class A		2,106		56,336
Briggs & Stratton Corp.		3,046		69,388
Carlisle Cos., Inc.		1,638		129,926
Chart Industries, Inc. *		312		26,071
Chicago Bridge & Iron Co. N.V.		1,599		134,620
CIRCOR International, Inc.		507		36,281
CLARCOR, Inc.		1,209		70,037
Crane Co.		1,290		92,132
Cubic Corp.		624		32,448
Curtiss-Wright Corp.		1,833		124,937
DigitalGlobe, Inc. *		507		15,758
Donaldson Co., Inc.		2,769		118,624
Dycom Industries, Inc. *		1,872		54,082
Encore Wire Corp.		1,170		61,179
EnerSys, Inc.		1,248		88,658
EnPro Industries, Inc. *		468		33,523
ESCO Technologies, Inc.		712		25,518
Esterline Technologies Corp. *		741		79,806

See financial notes 21

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number			Value
Security	of Shares			($)
Fortune Brands Home & Security, Inc.		1,560			72,914
Franklin Electric Co., Inc.		819			35,700
GATX Corp.		2,281			148,014
Generac Holdings, Inc.		585			33,327
Gibraltar Industries, Inc. *		1,989			36,657
Graco, Inc.		1,170			91,295
GrafTech International Ltd. *		5,382			52,205
Granite Construction, Inc.		2,949			108,405
H&E Equipment Services, Inc. *		1,326			43,387
HEICO Corp.		668			41,543
Hexcel Corp. *		1,443			64,935
Huntington Ingalls Industries, Inc.		1,833			185,738
IDEX Corp.		1,482			111,254
Kaman Corp.		1,014			40,276
Kennametal, Inc.		2,340			102,352
Layne Christensen Co. *		1,911			33,939
Lincoln Electric Holdings, Inc.		1,833			137,420
MasTec, Inc. *		1,287			52,690
Meritor, Inc. *		5,187			64,371
Moog, Inc., Class A *		1,170			72,458
MRC Global, Inc. *		2,730			70,216
MSC Industrial Direct Co., Inc., Class A		1,014			87,539
Mueller Industries, Inc.		1,482			92,595
Mueller Water Products, Inc., Class A		6,045			58,334
National Presto Industries, Inc.		314			24,191
Navistar International Corp. *		2,184			81,900
Nordson Corp.		897			65,625
Orbital Sciences Corp. *		2,457			69,828
Polypore International, Inc. *		537			18,586
Quanex Building Products Corp.		2,106			40,941
Raven Industries, Inc.		741			27,098
Regal-Beloit Corp.		1,248			91,965
Rush Enterprises, Inc., Class A *		1,521			43,501
Simpson Manufacturing Co., Inc.		1,170			41,360
Spirit Aerosystems Holdings, Inc., Class A *		4,251			122,556
TAL International Group, Inc. *		741			32,826
Teledyne Technologies, Inc. *		780			76,424
Tennant Co.		511			31,304
The Babcock & Wilcox Co.		2,340			77,126
The Greenbrier Cos., Inc. *		897			37,737
The Manitowoc Co., Inc.		3,864			119,552
The Middleby Corp. *		158			46,856
The Toro Co.		1,872			123,983
Titan International, Inc.		1,288			24,420
TransDigm Group, Inc.		663			118,107
TriMas Corp. *		468			15,729
Trinity Industries, Inc.		2,652			190,440
Triumph Group, Inc.		897			58,484
Tutor Perini Corp. *		4,329			106,710
Universal Forest Products, Inc.		1,913	��		106,611
Valmont Industries, Inc.		468			68,155
WABCO Holdings, Inc. *		1,053			107,880
Wabtec Corp.		1,131			89,767
Watsco, Inc.		820			80,672
Watts Water Technologies, Inc., Class A		936			57,676
Woodward, Inc.		1,560			68,000

					6,250,117

Commercial & Professional Services 4.1%
ABM Industries, Inc.		3,785			106,851
Clean Harbors, Inc. *		936			44,235
Copart, Inc. *		2,847			103,716
Covanta Holding Corp.		3,705			66,690
Deluxe Corp.		1,716			86,624
FTI Consulting, Inc. *		1,498			43,727
G&K Services, Inc., Class A		936			58,622
Healthcare Services Group, Inc.		1,560			42,011
Herman Miller, Inc.		2,340			65,941
HNI Corp.		2,340			83,187
Huron Consulting Group, Inc. *		507			33,548
ICF International, Inc. *		858			34,680
IHS, Inc., Class A *		444			53,227
Insperity, Inc.		1,213			35,407
Interface, Inc.		1,443			27,792
KAR Auction Services, Inc.		1,014			31,596
Kelly Services, Inc., Class A		4,407			110,880
Kforce, Inc.		1,794			39,307
Knoll, Inc.		1,911			29,754
Korn/Ferry International *		1,716			43,569
McGrath RentCorp		780			25,249
Mine Safety Appliances Co.		745			38,330
Navigant Consulting, Inc. *		2,808			48,943
Nielsen Holdings N.V.		2,730			129,238
Quad/Graphics, Inc.		2,340			52,346
Resources Connection, Inc.		3,198			43,813
Rollins, Inc.		858			25,620
Steelcase, Inc., Class A		5,265			78,291
Stericycle, Inc. *		780			88,920
Tetra Tech, Inc. *		1,725			49,818
The Brink’s Co.		3,003			91,321
The Corporate Executive Board Co.		858			64,161
Towers Watson & Co., Class A		819			89,353
TrueBlue, Inc. *		2,301			65,533
UniFirst Corp.		390			42,779
Verisk Analytics, Inc., Class A *		1,209			77,031
Viad Corp.		1,305			31,385
Waste Connections, Inc.		1,599			69,189

					2,252,684

Consumer Durables & Apparel 3.8%
Arctic Cat, Inc.		330			15,451
Blyth, Inc.		1,716			16,782
Brunswick Corp.		1,092			48,911
Callaway Golf Co.		5,499			46,302
Carter’s, Inc.		936			70,509
Columbia Sportswear Co.		507			42,127
Crocs, Inc. *		2,275			34,648
Deckers Outdoor Corp. *		858			63,792
Ethan Allen Interiors, Inc.		1,209			30,382
Fossil Group, Inc. *		956			109,854
G-III Apparel Group Ltd. *		585			40,652
Hanesbrands, Inc.		1,677			122,890
Helen of Troy Ltd. *		741			48,395
JAKKS Pacific, Inc.		4,524			32,392
KB Home		2,340			47,736
La-Z-Boy, Inc.		1,950			49,803
Lennar Corp., Class A		2,262			99,256
M.D.C Holdings, Inc.		1,137			35,463
Meritage Homes Corp. *		741			35,724
Michael Kors Holdings Ltd. *		312			30,585
NACCO Industries, Inc., Class A		663			38,872

22 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Polaris Industries, Inc.		819		109,770
PulteGroup, Inc.		4,446		93,321
PVH Corp.		858		108,477
Quiksilver, Inc. *		5,928		46,238
Skechers U.S.A., Inc., Class A *		1,794		60,512
Steven Madden Ltd. *		942		34,336
Tempur Sealy International, Inc. *		1,993		103,377
The Jones Group, Inc.		8,385		125,272
The Ryland Group, Inc.		952		44,354
Toll Brothers, Inc. *		2,457		95,848
Tupperware Brands Corp.		1,287		101,158
Under Armour, Inc., Class A *		546		61,780
Wolverine World Wide, Inc.		3,126		82,401

				2,127,370

Consumer Services 5.1%
Bally Technologies, Inc. *		1,053		71,341
Bob Evans Farms, Inc.		1,833		94,839
Boyd Gaming Corp. *		4,563		53,022
Buffalo Wild Wings, Inc. *		234		33,930
Burger King Worldwide, Inc.		1,365		36,282
Caesars Entertainment Corp. *		4,602		119,468
Capella Education Co.		390		25,927
Career Education Corp. *		21,864		161,575
Chipotle Mexican Grill, Inc. *		234		132,259
Choice Hotels International, Inc.		546		26,661
Cracker Barrel Old Country Store, Inc.		819		81,450
DeVry Education Group, Inc.		2,925		122,879
DineEquity, Inc.		390		32,662
Domino’s Pizza, Inc.		1,560		123,334
Dunkin’ Brands Group, Inc.		546		28,212
Hillenbrand, Inc.		1,599		47,778
Hyatt Hotels Corp., Class A *		1,014		52,890
International Speedway Corp., Class A		1,131		38,149
ITT Educational Services, Inc. *		4,095		127,068
Jack in the Box, Inc. *		2,379		136,673
Las Vegas Sands Corp.		1,755		149,614
Life Time Fitness, Inc. *		897		42,338
Marriott Vacations Worldwide Corp. *		663		34,768
Matthews International Corp., Class A		1,172		48,087
Panera Bread Co., Class A *		390		70,715
Papa John’s International, Inc.		1,170		59,553
Penn National Gaming, Inc. *		3,159		40,593
Pinnacle Entertainment, Inc. *		1,443		35,065
Red Robin Gourmet Burgers, Inc. *		585		45,589
Regis Corp.		5,070		71,284
Ruby Tuesday, Inc. *		6,085		37,301
SeaWorld Entertainment, Inc.		585		19,972
Six Flags Entertainment Corp.		936		38,189
Sonic Corp. *		3,939		80,277
Sotheby’s		1,014		47,668
Steiner Leisure Ltd. *		546		24,144
Strayer Education, Inc. *		1,599		76,384
Texas Roadhouse, Inc.		1,677		44,357
The Cheesecake Factory, Inc.		2,262		107,490
The Wendy’s Co.		11,310		108,350
Vail Resorts, Inc.		741		52,107
Weight Watchers International, Inc. *		1,872		39,799

				2,820,043

Diversified Financials 3.8%
Affiliated Managers Group, Inc. *		368		69,202
American Capital Ltd. *		752		11,701
Ares Capital Corp.		1,132		20,410
Cash America International, Inc.		1,374		54,987
CBOE Holdings, Inc.		1,161		62,729
DFC Global Corp. *		886		7,292
ETRADE Financial Corp.		5,499		123,563
Ezcorp, Inc., Class A *		2,496		31,549
Federated Investors, Inc., Class B		4,407		120,752
First Cash Financial Services, Inc. *		546		28,845
Greenhill & Co., Inc.		951		50,660
IntercontinentalExchange Group, Inc.		1,633		341,036
Investment Technology Group, Inc. *		2,535		43,805
Janus Capital Group, Inc.		10,803		120,886
Lazard Ltd., Class A		1,434		64,516
Leucadia National Corp.		2,262		63,200
LPL Financial Holdings, Inc.		1,170		62,806
MSCI, Inc. *		2,340		102,281
Nelnet, Inc., Class A		897		35,988
Raymond James Financial, Inc.		1,755		92,629
SEI Investments Co.		3,588		120,449
Stifel Financial Corp. *		702		33,759
TD Ameritrade Holding Corp.		4,446		148,630
The NASDAQ OMX Group, Inc.		3,188		122,387
Waddell & Reed Financial, Inc., Class A		1,482		103,295
World Acceptance Corp. *		468		44,858

				2,082,215

Energy 6.4%
Atwood Oceanics, Inc. *		827		39,192
Basic Energy Services, Inc. *		1,756		41,881
Bill Barrett Corp. *		2,028		51,390
Bristow Group, Inc.		819		63,554
Cabot Oil & Gas Corp.		2,106		73,710
CARBO Ceramics, Inc.		390		48,380
Cloud Peak Energy, Inc. *		2,886		55,988
Comstock Resources, Inc.		2,028		40,073
Concho Resources, Inc. *		585		70,861
Crosstex Energy, Inc.		1,833		76,308
Delek US Holdings, Inc.		1,599		44,388
Denbury Resources, Inc.		6,552		107,191
Dresser-Rand Group, Inc. *		1,872		101,706
Dril-Quip, Inc. *		429		46,143
Energy XXI Bermuda Ltd.		1,404		32,517
EXCO Resources, Inc.		7,410		38,680
Exterran Holdings, Inc. *		3,432		140,609
Forest Oil Corp. *		15,579		31,314
Green Plains Renewable Energy, Inc.		1,170		30,923
Gulfmark Offshore, Inc., Class A		663		31,453
Helix Energy Solutions Group, Inc. *		4,251		100,494
Hercules Offshore, Inc. *		4,506		21,449
Hornbeck Offshore Services, Inc. *		588		25,143
ION Geophysical Corp. *		4,080		16,606
Key Energy Services, Inc. *		10,686		96,601
Matrix Service Co. *		1,404		45,447
Newpark Resources, Inc. *		2,769		30,791
Nordic American Tankers Ltd.		3,499		36,984
Oceaneering International, Inc.		1,521		108,873
Oil States International, Inc. *		1,249		118,555

See financial notes 23

Schwab Fundamental U.S. Small Company Index ETF

��

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Parker Drilling Co. *		7,569		61,082
PDC Energy, Inc. *		441		27,399
Penn Virginia Corp. *		6,747		102,217
Pioneer Energy Services Corp. *		3,471		39,569
Quicksilver Resources, Inc. *		17,784		58,154
Range Resources Corp.		1,092		93,967
Rosetta Resources, Inc. *		624		27,687
SandRidge Energy, Inc. *		11,934		76,974
SemGroup Corp., Class A		1,482		99,768
Ship Finance International Ltd.		2,322		43,700
SM Energy Co.		1,170		86,287
Stone Energy Corp. *		1,989		71,485
Superior Energy Services, Inc.		4,095		121,171
Swift Energy Co. *		3,538		35,380
Targa Resources Corp.		702		67,926
Teekay Corp.		1,794		107,191
TETRA Technologies, Inc. *		4,134		49,608
Tidewater, Inc.		2,044		99,584
Ultra Petroleum Corp. *		3,237		81,443
Unit Corp. *		1,931		118,563
W&T Offshore, Inc.		2,106		31,737
Western Refining, Inc.		2,886		105,195
Whiting Petroleum Corp. *		1,872		128,625
Willbros Group, Inc. *		3,213		31,744

				3,533,660

Food & Staples Retailing 0.9%
PriceSmart, Inc.		312		31,740
Rite Aid Corp. *		15,483		102,033
Roundy’s, Inc.		2,243		13,772
Susser Holdings Corp. *		858		51,978
The Andersons, Inc.		1,404		76,995
The Fresh Market, Inc. *		390		13,065
The Pantry, Inc. *		6,708		101,156
United Natural Foods, Inc. *		1,716		124,204

				514,943

Food, Beverage & Tobacco 2.1%
B&G Foods, Inc.		858		25,706
Cal-Maine Foods, Inc.		702		36,904
Chiquita Brands International, Inc. *		7,488		81,919
Darling International, Inc. *		1,794		36,203
Flowers Foods, Inc.		4,290		88,245
Fresh Del Monte Produce, Inc.		3,159		83,587
Green Mountain Coffee Roasters, Inc.		585		64,221
J&J Snack Foods Corp.		351		32,601
Lancaster Colony Corp.		702		63,321
Monster Beverage Corp. *		1,248		92,352
Pilgrim’s Pride Corp. *		2,106		36,918
Post Holdings, Inc. *		1,248		71,286
Sanderson Farms, Inc.		1,092		83,909
Seaboard Corp. *		13		32,955
Snyder’s-Lance, Inc.		1,326		35,921
The Hain Celestial Group, Inc. *		468		41,792
The WhiteWave Foods Co., Class A *		1,716		48,563
TreeHouse Foods, Inc. *		741		52,804
Universal Corp.		1,911		110,169
Vector Group Ltd.		2,114		41,287

				1,160,663

Health Care Equipment & Services 4.6%
Alere, Inc. *		2,223		81,673
Allscripts Healthcare Solutions, Inc. *		1,404		26,072
Amedisys, Inc. *		4,095		69,451
Amsurg Corp. *		1,133		49,693
Analogic Corp.		315		29,692
Brookdale Senior Living, Inc. *		2,226		74,660
Catamaran Corp. *		1,248		56,260
Centene Corp. *		1,677		106,791
Cerner Corp. *		2,028		124,458
Chemed Corp.		1,053		89,084
CONMED Corp.		858		40,000
Edwards Lifesciences Corp. *		1,092		76,178
Gentiva Health Services, Inc. *		2,032		21,763
Greatbatch, Inc. *		468		20,278
Haemonetics Corp. *		1,053		38,413
Hanger, Inc. *		702		24,886
HealthSouth Corp.		1,287		42,059
Healthways, Inc. *		2,305		34,483
Hill-Rom Holdings, Inc.		2,457		92,948
Hologic, Inc. *		4,095		89,189
IDEXX Laboratories, Inc. *		975		122,753
Integra LifeSciences Holdings Corp. *		624		29,353
Intuitive Surgical, Inc. *		223		99,197
Invacare Corp.		3,280		65,010
Kindred Healthcare, Inc.		7,878		170,638
Masimo Corp. *		1,053		26,904
MEDNAX, Inc. *		1,716		104,367
Molina Healthcare, Inc. *		1,677		63,189
MWI Veterinary Supply, Inc. *		206		33,562
PharMerica Corp. *		3,277		78,976
ResMed, Inc.		1,482		65,238
Select Medical Holdings Corp.		2,028		22,734
Sirona Dental Systems, Inc. *		585		41,219
STERIS Corp.		2,067		95,392
Teleflex, Inc.		1,132		115,453
The Cooper Cos., Inc.		507		65,002
VCA Antech, Inc. *		2,497		77,332
West Pharmaceutical Services, Inc.		1,369		62,399

				2,526,749

Household & Personal Products 0.4%
Central Garden & Pet Co., Class A *		7,460		54,906
Elizabeth Arden, Inc. *		404		12,350
Nu Skin Enterprises, Inc., Class A		987		82,434
Spectrum Brands Holdings, Inc.		549		42,827
WD-40 Co.		437		31,862

				224,379

Insurance 4.0%
Alleghany Corp. *		167		64,379
American Equity Investment Life Holding Co.		1,989		43,480
Argo Group International Holdings Ltd.		1,014		44,758
Arthur J. Gallagher & Co.		2,496		115,315
Aspen Insurance Holdings Ltd.		3,354		125,976
Assured Guaranty Ltd.		2,106		51,702
Brown & Brown, Inc.		2,106		63,391
CNO Financial Group, Inc.		8,190		149,550

24 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
First American Financial Corp.		4,056		109,269
Horace Mann Educators Corp.		1,170		33,474
Infinity Property & Casualty Corp.		911		67,186
Kemper Corp.		3,315		128,556
Markel Corp. *		180		104,040
Mercury General Corp.		1,411		63,918
Montpelier Re Holdings Ltd.		1,716		48,923
Old Republic International Corp.		8,268		128,650
Primerica, Inc.		2,809		125,899
ProAssurance Corp.		1,287		58,507
Protective Life Corp.		2,730		142,342
RLI Corp.		1,640		70,733
Safety Insurance Group, Inc.		546		30,483
Selective Insurance Group, Inc.		2,301		53,015
StanCorp Financial Group, Inc.		2,028		134,213
Stewart Information Services Corp.		741		27,402
Symetra Financial Corp.		1,840		36,248
The Hanover Insurance Group, Inc.		1,794		105,559
Tower Group International Ltd.		3,464		9,561
Validus Holdings Ltd.		2,730		100,491

				2,237,020

Materials 6.1%
A. Schulman, Inc.		1,874		65,122
A.M. Castle & Co. *		1,521		22,237
AK Steel Holding Corp. *		23,712		147,252
AMCOL International Corp.		945		41,939
Axiall Corp.		1,248		50,507
Cabot Corp.		2,586		140,006
Carpenter Technology Corp.		1,482		87,660
Century Aluminum Co. *		4,017		47,561
Chemtura Corp. *		3,783		93,629
Clearwater Paper Corp. *		708		45,206
Coeur Mining, Inc. *		1,911		21,021
Compass Minerals International, Inc.		780		66,573
Crown Holdings, Inc. *		2,886		129,928
Eagle Materials, Inc.		663		58,609
Ferro Corp. *		6,474		84,939
Graphic Packaging Holding Co. *		6,240		63,898
Greif, Inc., Class A		1,521		76,141
H.B. Fuller Co.		1,796		87,070
Hecla Mining Co.		5,928		20,037
Innophos Holdings, Inc.		833		45,748
Innospec, Inc.		585		25,453
Kaiser Aluminum Corp.		897		63,319
KapStone Paper & Packaging Corp. *		1,482		47,113
Koppers Holdings, Inc.		702		27,757
Kraton Performance Polymers, Inc. *		1,621		44,967
Louisiana-Pacific Corp. *		2,301		43,236
Materion Corp.		1,092		32,312
Minerals Technologies, Inc.		1,287		68,854
Myers Industries, Inc.		1,677		36,056
NewMarket Corp.		211		78,000
Olin Corp.		3,120		81,713
OM Group, Inc.		1,755		55,458
P.H. Glatfelter Co.		1,950		59,183
PolyOne Corp.		1,833		68,737
Resolute Forest Products, Inc. *		6,747		138,246
Rock-Tenn Co., Class A		1,092		121,889
Rockwood Holdings, Inc.		1,521		119,976
RTI International Metals, Inc. *		819		22,252
Schnitzer Steel Industries, Inc., Class A		4,173		105,869
Schweitzer-Mauduit International, Inc.		741		35,664
Sensient Technologies Corp.		1,638		85,880
Silgan Holdings, Inc.		1,599		77,088
Stepan Co.		641		38,973
Stillwater Mining Co. *		2,574		34,852
SunCoke Energy, Inc. *		2,106		46,922
The Scotts Miracle-Gro Co., Class A		1,989		113,592
Tredegar Corp.		1,131		28,173
W.R. Grace & Co. *		507		51,379
Walter Energy, Inc.		3,967		42,804
Wausau Paper Corp.		2,691		35,656
Westlake Chemical Corp.		351		46,799
Worthington Industries, Inc.		2,145		85,500

				3,358,755

Media 2.2%
AMC Networks, Inc., Class A *		429		32,613
Cinemark Holdings, Inc.		3,042		89,496
Dex Media, Inc. *		9,243		67,382
DreamWorks Animation SKG, Inc., Class A *		3,081		92,153
E.W. Scripps Co., Class A *		2,184		42,850
John Wiley & Sons, Inc., Class A		1,411		81,880
Lamar Advertising Co., Class A *		2,535		135,901
Lions Gate Entertainment Corp.		663		20,387
Live Nation Entertainment, Inc. *		3,666		83,182
Meredith Corp.		1,638		76,658
National CineMedia, Inc.		1,677		25,759
Regal Entertainment Group, Class A		4,251		78,218
Scholastic Corp.		2,769		97,690
Scripps Networks Interactive, Inc., Class A		1,539		125,028
Sinclair Broadcast Group, Inc., Class A		1,092		32,345
Sirius XM Holdings, Inc. *		4,875		17,599
The Madison Square Garden Co., Class A *		624		35,574
The New York Times Co., Class A		6,318		103,742

				1,238,457

Pharmaceuticals, Biotechnology & Life Sciences 2.5%
Alexion Pharmaceuticals, Inc. *		195		34,476
Bio-Rad Laboratories, Inc., Class A *		438		56,817
Bruker Corp. *		1,092		24,832
Cambrex Corp. *		1,911		38,354
Charles River Laboratories International, Inc. *		2,147		127,553
Covance, Inc. *		1,482		153,476
Cubist Pharmaceuticals, Inc. *		468		37,215
Endo Health Solutions, Inc. *		2,847		227,248
Illumina, Inc. *		624		107,010
Impax Laboratories, Inc. *		1,667		42,959
Myriad Genetics, Inc. *		702		25,419
PAREXEL International Corp. *		780		41,785
PDL BioPharma, Inc.		5,800		49,706
PerkinElmer, Inc.		2,925		132,561
Perrigo Co., plc		702		115,437
QIAGEN N.V. *		2,773		61,699
Techne Corp.		591		52,505
United Therapeutics Corp. *		234		23,732

See financial notes 25

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Zoetis, Inc.		1,209		37,503

				1,390,287

Real Estate 7.9%
Alexandria Real Estate Equities, Inc.		975		70,639
American Campus Communities, Inc.		936		34,576
American Capital Agency Corp.		2,652		59,113
Anworth Mortgage Asset Corp.		6,616		34,271
Ashford Hospitality Trust, Inc.		2,158		24,126
BioMed Realty Trust, Inc.		2,730		56,456
Brandywine Realty Trust		4,915		72,005
BRE Properties, Inc.		1,053		65,044
Camden Property Trust		1,248		83,242
Capstead Mortgage Corp.		3,248		41,867
CBL & Associates Properties, Inc.		3,138		55,825
CBRE Group, Inc., Class A *		3,783		105,735
Chimera Investment Corp.		20,362		64,955
CommonWealth REIT		3,978		108,003
Corporate Office Properties Trust		2,301		61,368
Corrections Corp. of America		3,120		104,052
Cousins Properties, Inc.		2,379		27,477
CYS Investments, Inc.		3,198		28,142
DCT Industrial Trust, Inc.		4,524		35,830
DDR Corp.		4,407		73,244
DiamondRock Hospitality Co.		4,251		53,648
Digital Realty Trust, Inc.		1,443		78,153
Douglas Emmett, Inc.		2,262		60,916
Duke Realty Corp.		6,865		115,332
EastGroup Properties, Inc.		429		26,615
EPR Properties		936		49,851
Equity Lifestyle Properties, Inc.		780		31,395
Essex Property Trust, Inc.		400		66,900
Extra Space Storage, Inc.		742		36,432
Federal Realty Investment Trust		819		91,163
Forest City Enterprises, Inc., Class A *		1,326		25,830
General Growth Properties, Inc.		5,850		128,817
Glimcher Realty Trust		1,989		19,353
Hatteras Financial Corp.		2,301		45,376
Healthcare Realty Trust, Inc.		1,365		32,719
Highwoods Properties, Inc.		1,599		60,298
Home Properties, Inc.		858		50,570
Inland Real Estate Corp.		2,184		23,391
Invesco Mortgage Capital, Inc.		1,677		28,224
iStar Financial, Inc. *		6,513		100,951
Jones Lang LaSalle, Inc.		1,092		134,534
Kilroy Realty Corp.		897		51,595
LaSalle Hotel Properties		1,482		46,446
Lexington Realty Trust		3,794		43,289
Liberty Property Trust		2,691		102,958
Mack-Cali Realty Corp.		4,134		91,981
MFA Financial, Inc.		8,580		67,439
Mid-America Apartment Communities, Inc.		1,365		92,329
National Retail Properties, Inc.		1,131		40,592
NorthStar Realty Finance Corp.		3,510		54,440
Omega Healthcare Investors, Inc.		1,092		34,900
Pennsylvania Real Estate Investment Trust		1,872		35,119
Piedmont Office Realty Trust, Inc., Class A		5,811		100,414
Post Properties, Inc.		638		30,962
Potlatch Corp.		1,326		52,563
PS Business Parks, Inc.		312		26,214
RAIT Financial Trust		4,290		35,650
Realty Income Corp.		1,443		64,098
Redwood Trust, Inc.		2,535		50,953
Regency Centers Corp.		1,443		73,261
Retail Properties of America, Inc., Class A		2,301		32,076
RLJ Lodging Trust		1,131		29,395
Ryman Hospitality Properties, Inc.		624		26,327
Sabra Health Care REIT, Inc.		1,248		35,531
Senior Housing Properties Trust		2,262		50,443
SL Green Realty Corp.		881		87,510
Sovran Self Storage, Inc.		390		28,856
Starwood Property Trust, Inc.		897		21,546
Sun Communities, Inc.		429		19,760
Sunstone Hotel Investors, Inc.		3,355		45,360
Tanger Factory Outlet Centers, Inc.		945		32,423
Taubman Centers, Inc.		780		54,951
The Geo Group, Inc.		1,170		37,709
The Macerich Co.		1,677		100,838
UDR, Inc.		3,705		95,626
Washington REIT		1,627		40,919
Weingarten Realty Investors		2,613		79,696
WP Carey, Inc.		468		29,727

				4,410,334

Retailing 5.2%
Aeropostale, Inc. *		8,034		58,970
ANN, Inc. *		3,198		114,009
Asbury Automotive Group, Inc. *		1,248		63,448
Ascena Retail Group, Inc. *		3,393		62,058
Barnes & Noble, Inc. *		4,641		88,921
Brown Shoe Co., Inc.		2,769		68,062
Cabela’s, Inc. *		626		41,516
Chico’s FAS, Inc.		5,655		93,477
DSW, Inc., Class A		1,170		45,022
Express, Inc. *		1,911		34,952
Fred’s, Inc., Class A		4,453		88,748
Genesco, Inc. *		975		72,394
GNC Holdings, Inc., Class A		1,092		50,800
Group 1 Automotive, Inc.		1,560		104,146
Guess?, Inc.		3,381		102,579
hhgregg, Inc. *		714		7,561
Hibbett Sports, Inc. *		673		38,583
HSN, Inc.		819		46,970
Jos. A. Bank Clothiers, Inc. *		858		53,265
Lithia Motors, Inc., Class A		702		44,521
LKQ Corp. *		3,042		84,841
Lumber Liquidators Holdings, Inc. *		195		20,920
Monro Muffler Brake, Inc.		624		37,234
Netflix, Inc. *		217		96,702
Nutrisystem, Inc.		4,134		60,852
Office Depot, Inc. *		39,702		195,731
Outerwall, Inc. *		808		57,150
Penske Automotive Group, Inc.		2,223		96,234
Pier 1 Imports, Inc.		1,677		31,729
Pool Corp.		1,014		59,278
Sally Beauty Holdings, Inc. *		1,365		39,175
Sears Hometown & Outlet Stores, Inc. *		791		18,320
Select Comfort Corp. *		1,184		21,383

26 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Sonic Automotive, Inc., Class A		2,926		69,522
Stage Stores, Inc.		2,613		51,737
The Bon-Ton Stores, Inc.		628		6,820
The Buckle, Inc.		1,014		46,005
The Cato Corp., Class A		1,443		40,505
The Children’s Place Retail Stores, Inc. *		1,599		86,618
The Finish Line, Inc., Class A		2,847		76,926
The Men’s Wearhouse, Inc.		2,964		159,433
The Pep Boys-Manny, Moe & Jack *		3,510		44,191
The Wet Seal, Inc., Class A *		3,014		5,727
TripAdvisor, Inc. *		429		43,003
Ulta Salon, Cosmetics & Fragrance, Inc. *		485		43,500
Urban Outfitters, Inc. *		2,769		103,671
Vitamin Shoppe, Inc. *		603		28,214

				2,905,423

Semiconductors & Semiconductor Equipment 4.6%
Advanced Micro Devices, Inc. *		30,732		114,016
Amkor Technology, Inc. *		9,752		57,732
Atmel Corp. *		14,040		113,162
ATMI, Inc. *		1,210		41,152
Avago Technologies Ltd.		2,730		168,441
Brooks Automation, Inc.		3,783		39,230
Cabot Microelectronics Corp. *		702		31,007
Cirrus Logic, Inc. *		1,443		27,778
Cree, Inc. *		819		50,311
Cypress Semiconductor Corp. *		6,123		59,944
Diodes, Inc. *		741		17,643
Entegris, Inc. *		4,879		58,792
Fairchild Semiconductor International, Inc. *		5,499		77,426
First Solar, Inc. *		1,950		111,286
GT Advanced Technologies, Inc. *		9,204		131,893
Hittite Microwave Corp.		312		18,402
Integrated Device Technology, Inc. *		7,761		91,502
International Rectifier Corp. *		2,227		60,018
Intersil Corp., Class A		9,789		124,516
Micrel, Inc.		2,145		22,394
Microsemi Corp. *		1,092		25,181
MKS Instruments, Inc.		1,794		53,928
OmniVision Technologies, Inc. *		1,989		34,350
ON Semiconductor Corp. *		11,327		105,794
Photronics, Inc. *		3,549		30,876
PMC-Sierra, Inc. *		5,187		38,073
RF Micro Devices, Inc. *		8,213		58,148
Semtech Corp. *		780		19,461
Silicon Laboratories, Inc. *		1,716		89,180
Skyworks Solutions, Inc. *		2,302		81,629
Spansion, Inc., Class A *		2,574		41,982
SunEdison, Inc. *		14,976		274,959
Synaptics, Inc. *		741		48,195
Teradyne, Inc. *		4,563		92,538
Tessera Technologies, Inc.		1,287		27,954
TriQuint Semiconductor, Inc. *		5,499		67,308
Veeco Instruments, Inc. *		1,014		40,104

				2,546,305

Software & Services 6.0%
Activision Blizzard, Inc.		6,396		123,763
Acxiom Corp. *		2,613		97,282
Akamai Technologies, Inc. *		1,911		116,819
ANSYS, Inc. *		507		42,345
CACI International, Inc., Class A *		1,482		116,826
Cadence Design Systems, Inc. *		1,989		30,491
Compuware Corp.		9,438		103,346
Convergys Corp.		6,747		138,111
Conversant, Inc. *		2,145		53,325
CSG Systems International, Inc.		2,032		56,896
Digital River, Inc. *		1,404		24,949
EarthLink Holdings Corp.		12,402		48,616
Electronic Arts, Inc. *		3,956		113,102
Equinix, Inc. *		312		59,268
Euronet Worldwide, Inc. *		936		35,811
Facebook, Inc., Class A *		1,716		117,477
FactSet Research Systems, Inc.		819		86,233
Fair Isaac Corp.		1,599		85,914
FleetCor Technologies, Inc. *		195		25,336
Gartner, Inc. *		975		67,821
Genpact Ltd. *		2,418		40,332
Global Cash Access Holdings, Inc. *		3,120		26,208
Global Payments, Inc.		1,443		101,486
Heartland Payment Systems, Inc.		1,131		45,738
Informatica Corp. *		702		29,175
j2 Global, Inc.		706		36,288
Jack Henry & Associates, Inc.		1,330		77,313
Manhattan Associates, Inc. *		1,404		53,198
ManTech International Corp., Class A		1,882		55,086
MAXIMUS, Inc.		1,328		63,465
Mentor Graphics Corp.		1,365		29,539
MICROS Systems, Inc. *		1,063		59,007
MicroStrategy, Inc., Class A *		234		30,216
Monster Worldwide, Inc. *		13,845		110,345
NeuStar, Inc., Class A *		977		34,996
Nuance Communications, Inc. *		2,145		32,797
Progress Software Corp. *		1,452		36,213
PTC, Inc. *		1,638		64,390
Rackspace Hosting, Inc. *		702		25,813
Red Hat, Inc. *		858		50,613
Rovi Corp. *		1,404		34,875
Salesforce.com, Inc. *		1,014		63,243
Sapient Corp. *		2,262		39,381
Solera Holdings, Inc.		585		40,026
Sykes Enterprises, Inc. *		2,184		42,981
Synopsys, Inc. *		1,989		80,356
Take-Two Interactive Software, Inc. *		2,301		45,491
TeleTech Holdings, Inc. *		1,287		30,991
TIBCO Software, Inc. *		3,159		68,835
Unisys Corp. *		2,418		82,744
United Online, Inc.		1,716		19,236
VeriFone Systems, Inc. *		975		28,226
VeriSign, Inc. *		2,340		128,957
Vistaprint N.V. *		624		30,713
VMware, Inc., Class A *		234		22,476
WEX, Inc. *		414		40,084

				3,344,564

Technology Hardware & Equipment 4.7%
ADTRAN, Inc.		2,536		66,443
ARRIS Group, Inc. *		3,042		87,305
Belden, Inc.		1,014		73,140

See financial notes 27

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Benchmark Electronics, Inc. *		4,992		119,009
Brocade Communications Systems, Inc. *		13,065		125,032
Cognex Corp. *		1,092		41,125
Coherent, Inc. *		741		50,499
Comtech Telecommunications Corp.		1,248		39,949
Diebold, Inc.		3,354		125,406
Dolby Laboratories, Inc., Class A *		1,131		46,631
EchoStar Corp., Class A *		1,014		50,518
Electronics For Imaging, Inc. *		1,365		60,879
Emulex Corp. *		4,875		35,490
F5 Networks, Inc. *		819		92,006
FEI Co.		351		36,030
Finisar Corp. *		1,833		43,442
FLIR Systems, Inc.		3,082		105,220
Insight Enterprises, Inc. *		4,173		95,896
InterDigital, Inc.		897		27,359
Itron, Inc. *		1,638		57,330
JDS Uniphase Corp. *		3,939		54,279
Littelfuse, Inc.		390		36,804
MTS Systems Corp.		429		30,442
National Instruments Corp.		1,522		44,092
NCR Corp. *		3,471		118,188
NETGEAR, Inc. *		1,053		35,992
OSI Systems, Inc. *		273		16,781
Plantronics, Inc.		975		43,271
Plexus Corp. *		2,262		93,081
Polycom, Inc. *		6,679		89,231
QLogic Corp. *		8,814		100,656
Rofin-Sinar Technologies, Inc. *		1,170		27,460
Sanmina Corp. *		6,747		114,429
ScanSource, Inc. *		1,911		75,026
SYNNEX Corp. *		2,379		141,503
Trimble Navigation Ltd. *		2,109		80,458
ViaSat, Inc. *		438		29,219
Zebra Technologies Corp., Class A *		1,794		123,768

				2,633,389

Telecommunication Services 1.0%
Cincinnati Bell, Inc. *		17,667		59,184
Consolidated Communications Holdings, Inc.		2,028		38,654
Intelsat S.A. *		1,053		20,892
Leap Wireless International, Inc. *		5,265		92,243
Level 3 Communications, Inc. *		3,081		113,442
NTELOS Holdings Corp.		1,677		23,444
SBA Communications Corp., Class A *		702		66,809
T-Mobile US, Inc. *		1,248		38,064
tw telecom, Inc. *		2,262		69,240
United States Cellular Corp.		819		29,558

				551,530

Transportation 4.1%
Alaska Air Group, Inc.		1,482		128,401
Allegiant Travel Co.		195		19,356
AMERCO		176		40,997
Arkansas Best Corp.		2,691		89,503
Atlas Air Worldwide Holdings, Inc. *		1,037		31,245
Con-way, Inc.		2,743		104,618
Copa Holdings S.A., Class A		390		52,829
Delta Air Lines, Inc.		6,708		222,773
Forward Air Corp.		741		32,056
Genesee & Wyoming, Inc., Class A *		312		30,863
Hawaiian Holdings, Inc. *		3,485		41,959
Heartland Express, Inc.		2,496		50,868
Hub Group, Inc., Class A *		1,641		64,114
JetBlue Airways Corp. *		10,843		95,744
Kansas City Southern		907		85,185
Kirby Corp. *		858		89,755
Knight Transportation, Inc.		2,617		56,213
Landstar System, Inc.		1,723		99,434
Matson, Inc.		3,042		73,373
Old Dominion Freight Line, Inc. *		1,209		64,367
Republic Airways Holdings, Inc. *		5,136		49,203
Saia, Inc. *		1,053		36,371
SkyWest, Inc.		7,449		94,602
Southwest Airlines Co.		12,090		271,300
Swift Transportation Co. *		1,755		42,752
United Continental Holdings, Inc. *		3,588		161,317
UTi Worldwide, Inc.		6,048		59,512
Werner Enterprises, Inc.		3,144		81,272

				2,269,982

Utilities 3.3%
ALLETE, Inc.		1,093		55,207
American States Water Co.		780		23,423
Aqua America, Inc.		2,810		70,784
Atlantic Power Corp.		6,108		15,881
Avista Corp.		2,652		78,499
Black Hills Corp.		1,326		75,198
California Water Service Group		1,404		33,008
Cleco Corp.		1,560		77,111
El Paso Electric Co.		1,599		56,365
Hawaiian Electric Industries, Inc.		3,939		100,090
IDACORP, Inc.		1,365		76,699
ITC Holdings Corp.		702		72,025
MGE Energy, Inc.		936		36,111
New Jersey Resources Corp.		1,833		82,503
Northwest Natural Gas Co.		1,209		51,830
NorthWestern Corp.		1,406		64,592
Otter Tail Corp.		1,638		49,500
Piedmont Natural Gas Co., Inc.		2,808		94,967
PNM Resources, Inc.		3,471		90,767
Portland General Electric Co.		3,393		107,897
South Jersey Industries, Inc.		705		40,312
Southwest Gas Corp.		1,794		96,912
The Empire District Electric Co.		1,950		46,293
The Laclede Group, Inc.		1,209		55,433
UIL Holdings Corp.		1,560		60,403
UNS Energy Corp.		1,599		96,756
WGL Holdings, Inc.		2,418		97,179

				1,805,745

Total Common Stock
(Cost $51,846,387)				55,202,684




Other Investment Companies 0.2% of net assets

Equity Fund 0.1%
iShares Russell 2000 ETF		800		94,016

28 See financial notes

Schwab Fundamental U.S. Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Money Market Fund 0.1%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (a)		31,693		31,693

Total Other Investment Companies
(Cost $121,853)				125,709



	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)

Short-Term Investment 0.0% of net assets

U.S. Treasury Obligation 0.0%
U.S. Treasury Bill
0.02%, 03/20/14 (b)(c)		5,000		5,000

Total Short-Term Investment
(Cost $5,000)				5,000



End of Investments.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.
(b)		The rate shown is the purchase yield.
(c)		All or a portion of this security is held as collateral for open futures contracts.


ETF —		Exchange Traded Fund
REIT —		Real Estate Investment Trust

In addition to the above, the fund held the following at 02/28/14:

Contract

Unrealized

Number of

Value

Appreciation

Contracts

($)

Futures Contracts

Russell 2000 Index, e-mini, Long, expires 03/21/14

118,190

1,018

See financial notes 29

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.


				Cost		Value
Holdings by Category				($)		($)

	99	.3%	Common Stock		58,934,132		61,705,639
	0	.1%	Other Investment Companies		51,637		53,701
	0	.4%	Preferred Stock		246,305		252,975


	99	.8%	Total Investments		59,232,074		62,012,315
	0	.2%	Other Assets and Liabilities, Net				151,958


	100	.0%	Net Assets				62,164,273


	Number		Value
Security	of Shares		($)

Common Stock 99.3% of net assets

Australia 4.6%


Banks 1.2%
Australia & New Zealand Banking Group Ltd.		6,160		177,164
Commonwealth Bank of Australia		2,904		194,015
National Australia Bank Ltd.		6,358		197,652
Westpac Banking Corp.		6,160		184,496

				753,327


Capital Goods 0.1%
Leighton Holdings Ltd.		946		15,297
UGL Ltd.		1,914		11,047

				26,344


Commercial & Professional Services 0.1%
Brambles Ltd.		5,500		46,116
Downer EDI Ltd.		4,246		18,694

				64,810


Consumer Services 0.1%
Crown Resorts Ltd.		1,232		19,051
Tabcorp Holdings Ltd.		10,318		32,777
Tatts Group Ltd.		7,700		20,120

				71,948


Diversified Financials 0.1%
Macquarie Group Ltd.		930		46,828


Energy 0.3%
Caltex Australia Ltd.		1,452		27,260
Origin Energy Ltd.		3,300		42,641
Santos Ltd.		2,420		29,538
Woodside Petroleum Ltd.		1,366		46,389
WorleyParsons Ltd.		836		12,575

				158,403


Food & Staples Retailing 0.5%
Metcash Ltd.		8,470		23,496
Wesfarmers Ltd.		4,224		162,345
Woolworths Ltd.		4,686		151,251

				337,092


Food, Beverage & Tobacco 0.0%
Coca-Cola Amatil Ltd.		1,540		15,572


Health Care Equipment & Services 0.0%
Sonic Healthcare Ltd.		1,034		16,072


Insurance 0.3%
AMP Ltd.		8,052		34,802
Insurance Australia Group Ltd.		4,950		24,052
QBE Insurance Group Ltd.		4,708		54,010
Suncorp Group Ltd.		6,468		70,265

				183,129


Materials 1.3%
Amcor Ltd.		3,520		31,845
Arrium Ltd.		26,554		36,712
BHP Billiton Ltd.		11,572		397,433
BlueScope Steel Ltd. *		8,184		45,039
Boral Ltd.		4,576		22,808
CSR Ltd.		5,676		15,745
Incitec Pivot Ltd.		9,570		26,890
Newcrest Mining Ltd.		2,530		25,674
Orica Ltd.		1,650		35,643
Rio Tinto Ltd.		1,914		114,480
Sims Metal Management Ltd. *		2,640		23,057

				775,326


Media 0.0%
Fairfax Media Ltd.		24,310		20,557


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
CSL Ltd.		704		45,484


Real Estate 0.2%
Lend Lease Group		2,750		27,758
Mirvac Group		11,418		18,034
Stockland		9,174		31,688
Westfield Group		7,370		67,731

				145,211


Telecommunication Services 0.2%
Telstra Corp., Ltd.		19,866		89,774


Transportation 0.1%
Asciano Ltd.		3,300		15,917
Qantas Airways Ltd. *		14,608		15,229
Sydney Airport		3,514		12,766
Toll Holdings Ltd.		4,356		20,737

				64,649


Utilities 0.0%
AGL Energy Ltd.		1,760		24,648

				2,839,174

Austria 0.4%


Banks 0.1%
Erste Group Bank AG		2,156		76,558


Capital Goods 0.1%
Andritz AG		220		13,836

30 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Wienerberger AG		1,144		21,623

				35,459


Energy 0.1%
OMV AG		1,298		59,107


Materials 0.1%
Voestalpine AG		1,056		47,627


Telecommunication Services 0.0%
Telekom Austria AG		3,234		31,512

				250,263

Belgium 0.9%


Banks 0.1%
KBC Groep N.V.		880		55,885


Food & Staples Retailing 0.2%
Colruyt S.A.		286		15,889
Delhaize Group S.A.		1,672		120,337

				136,226


Food, Beverage & Tobacco 0.2%
Anheuser-Busch InBev N.V.		1,320		138,466


Insurance 0.1%
Ageas		1,320		60,610


Materials 0.2%
NV Bekaert S.A.		594		23,123
Solvay S.A.		242		37,568
Umicore S.A.		880		43,293

				103,984


Pharmaceuticals, Biotechnology & Life Sciences 0.0%
UCB S.A.		286		22,970


Telecommunication Services 0.1%
Belgacom S.A.		1,364		41,172

				559,313

Canada 5.9%


Automobiles & Components 0.2%
Magna International, Inc.		1,364		121,459


Banks 1.2%
Bank of Montreal		1,694		111,622
Bank of Nova Scotia		2,486		142,205
Canadian Imperial Bank of Commerce		1,012		84,730
National Bank of Canada		792		31,796
Royal Bank of Canada		3,388		220,215
The Toronto-Dominion Bank		3,740		169,473

				760,041


Capital Goods 0.1%
Bombardier, Inc., B Shares		7,392		24,107
Finning International, Inc.		990		26,974
SNC-Lavalin Group, Inc.		440		19,624

				70,705


Consumer Services 0.0%
Tim Hortons, Inc.		330		17,890


Diversified Financials 0.1%
IGM Financial, Inc.		330		16,095
Onex Corp.		440		23,452

				39,547


Energy 1.7%
ARC Resources Ltd.		748		20,184
Baytex Energy Corp.		330		12,035
Bonavista Energy Corp.		990		14,247
Cameco Corp.		814		19,715
Canadian Natural Resources Ltd.		3,300		120,797
Canadian Oil Sands Ltd.		2,706		51,604
Cenovus Energy, Inc.		2,706		71,650
Crescent Point Energy Corp.		462		16,219
Enbridge, Inc.		1,320		55,807
Encana Corp.		9,922		188,231
Enerplus Corp.		1,650		32,688
Husky Energy, Inc.		1,650		50,188
Imperial Oil Ltd.		1,144		51,487
Pengrowth Energy Corp.		3,850		25,946
Penn West Petroleum Ltd.		4,664		38,257
Suncor Energy, Inc.		4,488		148,107
Talisman Energy, Inc.		6,292		64,799
TransCanada Corp.		2,068		91,056

				1,073,017


Food & Staples Retailing 0.3%
Alimentation Couche-Tard, Inc., B Shares		594		46,825
Empire Co., Ltd., A Shares		286		18,295
George Weston Ltd.		330		23,974
Loblaw Cos. Ltd.		638		26,334
Metro, Inc.		594		33,205
Shoppers Drug Mart Corp.		924		50,334

				198,967


Food, Beverage��& Tobacco 0.0%
Saputo, Inc.		506		24,977


Insurance 0.5%
Fairfax Financial Holdings Ltd.		88		36,566
Great-West Lifeco, Inc.		704		19,588
Intact Financial Corp.		308		18,534
Manulife Financial Corp.		5,566		105,643
Power Corp. of Canada		1,914		52,374
Power Financial Corp.		924		29,090
Sun Life Financial, Inc.		1,672		57,911

				319,706


Materials 0.6%
Agrium, Inc.		440		40,540
Barrick Gold Corp.		4,422		90,122
First Quantum Minerals Ltd.		1,210		23,480
Goldcorp, Inc.		1,298		34,908
Kinross Gold Corp.		3,762		19,643
Potash Corp. of Saskatchewan, Inc.		2,530		83,651
Teck Resources Ltd., Class B		2,244		49,930
Yamana Gold, Inc.		1,232		12,332

				354,606


Media 0.1%
Shaw Communications, Inc., B Shares		1,210		27,994


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Valeant Pharmaceuticals International, Inc. *		220		31,414


Real Estate 0.1%
Brookfield Asset Management, Inc., Class A		1,782		72,233

See financial notes 31

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Retailing 0.1%
Canadian Tire Corp. Ltd., Class A		330		29,767
RONA, Inc.		1,716		17,982

				47,749


Software & Services 0.0%
CGI Group, Inc., Class A *		770		25,160


Technology Hardware & Equipment 0.2%
BlackBerry Ltd. *		7,832		78,182
Celestica, Inc. *		2,046		20,036

				98,218


Telecommunication Services 0.3%
BCE, Inc.		1,716		74,875
Rogers Communications, Inc., B Shares		1,518		58,693
TELUS Corp.		756		26,793

				160,361


Transportation 0.2%
Canadian National Railway Co.		1,936		109,414
Canadian Pacific Railway Ltd.		242		37,985

				147,399


Utilities 0.1%
Canadian Utilities Ltd., Class A		286		10,125
Fortis, Inc.		638		17,654
TransAlta Corp.		1,386		15,964

				43,743

				3,635,186

Denmark 0.9%


Banks 0.1%
Danske Bank A/S *		2,640		69,969


Capital Goods 0.1%
FLSmidth & Co. A/S		308		16,206
Vestas Wind Systems A/S *		1,452		52,511

				68,717


Food, Beverage & Tobacco 0.1%
Carlsberg A/S, B Shares		374		39,490


Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Novo Nordisk A/S, B Shares		2,970		141,654


Telecommunication Services 0.1%
TDC A/S		4,532		45,042


Transportation 0.3%
AP Moller - Maersk A/S, A Shares		6		70,348
AP Moller - Maersk A/S, B Shares		11		134,571
DSV A/S		594		19,041

				223,960

				588,832

Finland 1.5%


Capital Goods 0.1%
Kone Oyj, B Shares		528		21,520
Metso Oyj		770		24,949
Wartsila Oyj Abp		550		32,535

				79,004


Energy 0.0%
Neste Oil Oyj		1,386		29,690


Food & Staples Retailing 0.1%
Kesko Oyj, B Shares		1,232		55,165


Insurance 0.1%
Sampo Oyj, A Shares		1,276		64,696


Materials 0.3%
Stora Enso Oyj, R Shares		5,214		59,447
UPM-Kymmene Oyj		5,610		101,967

				161,414


Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Orion Oyj, Class B		572		18,850


Technology Hardware & Equipment 0.8%
Nokia Oyj *		61,578		474,996


Telecommunication Services 0.0%
Elisa Oyj		836		23,416


Utilities 0.1%
Fortum Oyj		2,288		54,227

				961,458

France 11.9%


Automobiles & Components 0.6%
Peugeot S.A. *		9,438		167,503
Renault S.A.		1,364		136,036
Valeo S.A.		440		61,652

				365,191


Banks 1.3%
BNP Paribas S.A.		5,170		424,577
Credit Agricole S.A. *		7,106		113,062
Societe Generale S.A.		3,784		252,821

				790,460


Capital Goods 1.8%
Airbus Group N.V.		792		58,402
Alstom S.A.		1,166		31,492
Bouygues S.A.		2,398		96,743
Compagnie de Saint-Gobain		4,950		297,396
Eiffage S.A.		704		50,425
Legrand S.A.		682		42,321
Nexans S.A.		352		18,669
Rexel S.A.		814		20,568
Safran S.A.		572		40,299
Schneider Electric S.A.		1,804		161,331
Thales S.A.		396		26,308
Vallourec S.A.		990		53,244
Vinci S.A.		3,080		230,266

				1,127,464


Consumer Durables & Apparel 0.3%
Christian Dior S.A.		176		34,834
Kering		264		54,183
LVMH Moet Hennessy Louis Vuitton S.A.		572		106,534

				195,551


Consumer Services 0.2%
Accor S.A.		1,232		63,001
Sodexo		286		30,534

				93,535


Diversified Financials 0.0%
Wendel S.A.		110		16,545

32 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Energy 2.2%
CGG S.A. *		924		14,166
Technip S.A.		330		32,447
Total S.A.		20,680		1,343,280

				1,389,893


Food & Staples Retailing 0.5%
Carrefour S.A.		6,798		250,876
Casino Guichard Perrachon S.A.		462		52,540
Rallye S.A.		550		23,306

				326,722


Food, Beverage & Tobacco 0.3%
Danone		1,540		108,858
Pernod-Ricard S.A.		418		49,240

				158,098


Health Care Equipment & Services 0.1%
Essilor International S.A.		352		36,783


Household & Personal Products 0.1%
L’Oreal S.A.		418		70,866


Insurance 0.5%
AXA S.A.		10,626		277,965
CNP Assurances		1,100		23,731
SCOR SE		704		24,678

				326,374


Materials 0.4%
Air Liquide S.A.		880		121,250
Arkema S.A.		264		28,732
Lafarge S.A.		1,232		92,685

				242,667


Media 0.1%
Eutelsat Communications S.A.		440		14,363
Publicis Groupe S.A.		308		29,267
Solocal Group *		5,500		11,167

				54,797


Pharmaceuticals, Biotechnology & Life Sciences 0.7%
Sanofi		4,246		441,763


Software & Services 0.1%
AtoS		176		17,125
Cap Gemini S.A.		902		70,674

				87,799


Technology Hardware & Equipment 0.1%
Alcatel-Lucent *		14,454		63,084


Telecommunication Services 1.4%
Orange S.A.		42,042		526,604
Vivendi S.A.		11,770		336,746

				863,350


Transportation 0.1%
Air France-KLM *		6,226		86,033


Utilities 1.1%
Electricite de France		2,442		97,186
GDF Suez		13,860		355,864
Suez Environnement Co.		2,684		53,677
Veolia Environnement S.A.		7,964		150,803

				657,530

				7,394,505

Germany 9.4%


Automobiles & Components 1.4%
Bayerische Motoren Werke AG		1,496		173,974
Continental AG		308		75,018
Daimler AG - Reg’d		6,050		564,195
Volkswagen AG		110		28,122

				841,309


Banks 0.1%
Commerzbank AG *		2,640		47,912


Capital Goods 1.0%
Brenntag AG		176		32,755
GEA Group AG		572		27,761
Hochtief AG		198		18,418
Kloeckner & Co. SE *		1,650		25,444
MAN SE		132		17,046
MTU Aero Engines AG		176		14,814
Rheinmetall AG		264		19,974
Siemens AG - Reg’d		3,410		455,713

				611,925


Commercial & Professional Services 0.0%
Bilfinger SE		242		30,446


Consumer Durables & Apparel 0.1%
Adidas AG		594		69,242


Consumer Services 0.1%
TUI AG		1,870		33,782


Diversified Financials 0.4%
Deutsche Bank AG - Reg’d		4,312		209,872
Deutsche Boerse AG		594		48,765

				258,637


Food & Staples Retailing 0.1%
Metro AG *		2,288		94,944


Health Care Equipment & Services 0.3%
Celesio AG		2,354		83,167
Fresenius Medical Care AG & Co. KGaA		594		41,110
Fresenius SE & Co. KGaA		396		61,585

				185,862


Household & Personal Products 0.1%
Beiersdorf AG		176		17,996
Henkel AG & Co. KGaA		264		26,723

				44,719


Insurance 0.9%
Allianz SE - Reg’d		2,178		390,156
Hannover Rueck SE		198		16,873
Muenchener Rueckversicherungs AG - Reg’d		792		173,543

				580,572


Materials 1.5%
Aurubis AG		418		23,283
BASF SE		4,730		544,970
HeidelbergCement AG		814		67,141
K+S AG		1,122		37,959
LANXESS AG		374		27,780
Linde AG		462		95,809
Salzgitter AG		748		31,639

See financial notes 33

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
ThyssenKrupp AG *		4,708		128,488

				957,069


Media 0.0%
Kabel Deutschland Holding AG		132		18,769


Pharmaceuticals, Biotechnology & Life Sciences 0.6%
Bayer AG - Reg’d		2,398		340,805
Merck KGaA		132		23,153

				363,958


Semiconductors & Semiconductor Equipment 0.1%
Infineon Technologies AG		3,190		36,216


Software & Services 0.2%
SAP AG		1,276		103,133


Telecommunication Services 0.9%
Deutsche Telekom AG - Reg’d		32,186		546,558
Freenet AG		440		14,886

				561,444


Transportation 0.4%
Deutsche Lufthansa AG - Reg’d *		2,420		62,804
Deutsche Post AG - Reg’d		5,368		201,735

				264,539


Utilities 1.2%
E.ON SE		25,454		485,854
RWE AG		6,644		266,252

				752,106

				5,856,584

Hong Kong 0.9%


Banks 0.1%
Hang Seng Bank Ltd.		2,200		35,660


Capital Goods 0.2%
Hutchison Whampoa Ltd.		6,000		80,866
Jardine Matheson Holdings Ltd.		400		23,240
Jardine Strategic Holdings Ltd.		200		6,722
Noble Group Ltd.		66,000		53,667

				164,495


Consumer Durables & Apparel 0.1%
Li & Fung Ltd.		44,000		57,601


Diversified Financials 0.0%
Hong Kong Exchanges & Clearing Ltd.		100		1,551


Insurance 0.1%
AIA Group Ltd.		9,200		44,986


Real Estate 0.2%
Cheung Kong (Holdings) Ltd.		3,700		57,972
Sun Hung Kai Properties Ltd.		500		6,397
Swire Pacific Ltd., Class A		3,300		37,056
The Link REIT		800		3,716
Wharf Holdings Ltd.		800		5,582

				110,723


Retailing 0.1%
Esprit Holdings Ltd. *		28,600		53,728


Telecommunication Services 0.0%
PCCW Ltd.		24,000		11,411


Utilities 0.1%
CLP Holdings Ltd.		3,000		23,405
Hong Kong & China Gas Co., Ltd.		22,000		47,396
Power Assets Holdings Ltd.		400		3,342

				74,143

				554,298

Ireland 0.7%


Banks 0.1%
Bank of Ireland *		120,494		64,737


Capital Goods 0.0%
DCC plc		506		26,821


Commercial & Professional Services 0.1%
Experian plc		1,584		28,696


Food, Beverage & Tobacco 0.0%
Kerry Group plc, A Shares		352		26,608


Materials 0.3%
CRH plc		5,391		159,712
Smurfit Kappa Group plc		1,364		38,036

				197,748


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Shire plc		506		28,153


Technology Hardware & Equipment 0.1%
Seagate Technology plc		1,430		74,632

				447,395

Israel 0.3%


Banks 0.0%
Bank Leumi Le-Israel *		4,818		18,387


Materials 0.0%
Israel Chemicals Ltd.		2,486		21,027


Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Teva Pharmaceutical Industries Ltd.		2,728		132,421


Telecommunication Services 0.1%
Bezeq The Israeli Telecommunication Corp., Ltd.		20,658		33,506

				205,341

Italy 4.9%


Automobiles & Components 0.2%
Fiat S.p.A. *		12,738		133,444
Pirelli & C. S.p.A.		968		16,845

				150,289


Banks 1.6%
Banca Monte dei Paschi di Siena S.p.A. *		216,524		54,996
Banca Popolare dell’Emilia Romagna SC *		2,596		30,279
Banca Popolare di Milano Scarl *		21,120		16,772
Banco Popolare SC *		24,024		52,923
Intesa Sanpaolo S.p.A. (b)		116,072		360,063
Intesa Sanpaolo S.p.A. (b)		7,700		19,781
UniCredit S.p.A.		48,400		385,377
Unione di Banche Italiane S.C.p.A.		7,458		64,791

				984,982

34 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Capital Goods 0.2%
CNH Industrial N.V. *		3,234		35,599
Finmeccanica S.p.A. *		7,414		72,959
Prysmian S.p.A.		814		21,069

				129,627


Diversified Financials 0.1%
Exor S.p.A.		616		25,073
Mediobanca S.p.A. *		3,080		30,735

				55,808


Energy 1.0%
Eni S.p.A.		24,860		600,183
Saipem S.p.A.		1,320		31,066

				631,249


Insurance 0.2%
Assicurazioni Generali S.p.A.		5,148		115,825


Materials 0.0%
Italcementi S.p.A.		1,628		18,854


Media 0.1%
Mediaset S.p.A. *		9,988		57,387


Telecommunication Services 0.6%
Telecom Italia S.p.A.		212,366		241,540
Telecom Italia S.p.A. - RSP		124,762		109,420

				350,960


Transportation 0.1%
Atlantia S.p.A.		1,364		34,588


Utilities 0.8%
A2A S.p.A.		15,400		20,004
Enel S.p.A.		83,270		427,831
Snam S.p.A.		6,600		37,593
Terna-Rete Elettrica Nazionale S.p.A.		4,136		21,136

				506,564

				3,036,133

Japan 18.5%


Automobiles & Components 2.3%
Aisin Seiki Co., Ltd.		1,100		38,044
Bridgestone Corp.		2,800		100,599
Daihatsu Motor Co., Ltd.		2,200		35,242
Denso Corp.		2,200		117,259
Fuji Heavy Industries Ltd.		2,200		59,341
Honda Motor Co., Ltd.		7,100		253,698
Isuzu Motors Ltd.		4,200		25,472
Mazda Motor Corp. *		6,000		28,746
NHK Spring Co., Ltd.		2,200		22,805
Nissan Motor Co., Ltd.		15,400		137,455
Stanley Electric Co., Ltd.		200		4,572
Suzuki Motor Corp.		2,200		58,866
Toyota Industries Corp.		400		18,420
Toyota Motor Corp.		8,800		503,436
Yamaha Motor Co., Ltd.		2,200		31,729

				1,435,684


Banks 0.9%
Mitsubishi UFJ Financial Group, Inc.		35,200		202,444
Mizuho Financial Group, Inc.		57,200		117,129
Resona Holdings, Inc.		4,400		22,848
Sumitomo Mitsui Financial Group, Inc.		4,400		195,718
Sumitomo Mitsui Trust Holdings, Inc.		2,000		9,347
The Bank of Yokohama Ltd.		2,000		10,053

				557,539


Capital Goods 2.8%
Asahi Glass Co., Ltd.		7,000		38,338
Daikin Industries Ltd.		700		40,032
FANUC Corp.		300		51,893
Fujikura Ltd.		2,000		9,523
Furukawa Electric Co., Ltd.		5,000		13,521
Hanwa Co., Ltd.		2,000		8,798
IHI Corp.		2,000		9,112
ITOCHU Corp.		8,800		108,982
JGC Corp.		1,000		36,869
JTEKT Corp.		2,200		36,449
Kajima Corp.		3,000		10,523
Kawasaki Heavy Industries Ltd.		2,000		8,152
Komatsu Ltd.		3,100		64,724
Kubota Corp.		2,000		27,884
LIXIL Group Corp.		2,200		64,040
Makita Corp.		200		11,091
Marubeni Corp.		6,000		41,914
Mitsubishi Corp.		8,800		167,870
Mitsubishi Electric Corp.		11,000		129,868
Mitsubishi Heavy Industries Ltd.		22,000		134,718
Mitsui & Co., Ltd.		11,000		168,559
Mitsui Engineering & Shipbuilding Co., Ltd.		4,000		8,230
Nagase & Co., Ltd.		2,200		26,836
Nidec Corp.		300		36,712
Nippon Sheet Glass Co., Ltd. *		22,000		30,823
NSK Ltd.		1,000		10,895
Obayashi Corp.		2,000		12,208
Shimizu Corp.		3,000		16,137
SMC Corp.		100		25,293
Sojitz Corp.		30,800		54,318
Sumitomo Corp.		8,800		115,707
Sumitomo Electric Industries Ltd.		4,800		73,177
Sumitomo Heavy Industries Ltd.		2,000		9,190
Taisei Corp.		2,000		8,877
Toshiba Corp.		22,000		94,842
Toyota Tsusho Corp.		2,200		53,973

				1,760,078


Commercial & Professional Services 0.3%
Dai Nippon Printing Co., Ltd.		4,600		46,061
Secom Co., Ltd.		900		50,588
Toppan Printing Co., Ltd.		8,000		59,178

				155,827


Consumer Durables & Apparel 1.0%
Namco Bandai Holdings, Inc.		2,200		49,081
Nikon Corp.		1,000		18,253
Panasonic Corp.		20,700		258,788
Sega Sammy Holdings, Inc.		500		11,649
Sekisui Chemical Co., Ltd.		2,000		22,711
Sekisui House Ltd.		2,700		33,702
Sharp Corp. *		22,000		70,916
Sony Corp.		7,000		122,079
Yamaha Corp.		2,200		29,983

				617,162


Consumer Services 0.0%
Benesse Holdings, Inc.		200		7,495

See financial notes 35

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Oriental Land Co., Ltd.		100		14,961

				22,456


Diversified Financials 0.1%
Credit Saison Co., Ltd.		200		4,372
Nomura Holdings, Inc.		4,400		29,616
ORIX Corp.		2,400		35,272

				69,260


Energy 0.6%
Cosmo Oil Co., Ltd. *		10,000		18,419
Idemitsu Kosan Co., Ltd.		1,200		24,420
Inpex Corp.		7,200		91,001
JX Holdings, Inc.		39,600		204,470
Showa Shell Sekiyu K.K.		2,400		23,491
TonenGeneral Sekiyu K.K.		2,000		17,596

				379,397


Food & Staples Retailing 0.5%
Aeon Co., Ltd.		8,800		107,257
Lawson, Inc.		100		6,917
Seven & I Holdings Co., Ltd.		4,400		164,378
UNY Group Holdings Co., Ltd.		2,200		13,019

				291,571


Food, Beverage & Tobacco 0.6%
Ajinomoto Co., Inc.		2,500		38,627
Asahi Group Holdings Ltd.		2,200		61,475
Coca-Cola West Co., Ltd.		600		11,081
Japan Tobacco, Inc.		2,200		69,666
Kirin Holdings Co., Ltd.		3,800		51,565
MEIJI Holdings Co., Ltd.		600		39,387
Nippon Meat Packers, Inc.		1,300		20,787
Nisshin Seifun Group, Inc.		2,200		23,624
Yamazaki Baking Co., Ltd.		3,000		34,654

				350,866


Health Care Equipment & Services 0.2%
Alfresa Holdings Corp.		500		29,246
Medipal Holdings Corp.		4,400		67,682
Olympus Corp. *		200		6,917
Suzuken Co., Ltd.		600		22,692
Terumo Corp.		200		8,495

				135,032


Household & Personal Products 0.2%
Kao Corp.		2,200		75,334
Shiseido Co., Ltd.		2,200		38,842

				114,176


Insurance 0.2%
MS&AD Insurance Group Holdings		600		14,156
NKSJ Holdings, Inc.		1,000		25,170
T&D Holdings, Inc.		200		2,442
The Dai-ichi Life Insurance Co., Ltd.		2,200		31,987
Tokio Marine Holdings, Inc.		2,200		64,923

				138,678


Materials 1.5%
Asahi Kasei Corp.		6,000		42,502
Denki Kagaku Kogyo K.K.		2,000		7,681
DIC Corp.		3,000		8,201
JFE Holdings, Inc.		4,800		97,350
JSR Corp.		2,200		37,570
Kaneka Corp.		2,000		13,011
Kobe Steel Ltd. *		27,000		36,771
Kuraray Co. Ltd.		2,200		24,529
Mitsubishi Chemical Holdings Corp.		11,000		49,468
Mitsubishi Materials Corp.		4,000		12,502
Mitsui Chemicals, Inc.		22,000		56,689
Mitsui Mining & Smelting Co., Ltd.		3,000		7,848
Nippon Steel & Sumitomo Metal Corp.		44,000		128,036
Nitto Denko Corp.		400		18,635
Oji Holdings Corp.		4,000		19,086
Shin-Etsu Chemical Co., Ltd.		1,100		62,057
Showa Denko K.K.		22,000		31,686
Sumitomo Chemical Co., Ltd.		22,000		89,668
Sumitomo Metal Mining Co., Ltd.		2,000		26,062
Taiheiyo Cement Corp.		2,000		7,015
Teijin Ltd.		22,000		52,594
Toray Industries, Inc.		4,000		27,473
Tosoh Corp.		2,000		7,701
Toyo Seikan Group Holdings Ltd.		2,200		38,325
Ube Industries Ltd.		9,000		17,107

				919,567


Media 0.1%
Dentsu, Inc.		800		29,981
Hakuhodo DY Holdings, Inc.		4,400		32,763

				62,744


Pharmaceuticals, Biotechnology & Life Sciences 0.7%
Astellas Pharma, Inc.		2,200		142,133
Daiichi Sankyo Co., Ltd.		2,900		49,780
Eisai Co., Ltd.		600		23,338
Ono Pharmaceutical Co., Ltd.		300		29,599
Otsuka Holdings Co., Ltd.		900		27,538
Shionogi & Co., Ltd.		500		10,778
Taisho Pharmaceutical Holdings Co., Ltd.		100		7,583
Takeda Pharmaceutical Co., Ltd.		2,700		128,883

				419,632


Real Estate 0.3%
Daito Trust Construction Co., Ltd.		400		37,094
Daiwa House Industry Co., Ltd.		2,000		36,173
Mitsubishi Estate Co., Ltd.		1,800		42,379
Mitsui Fudosan Co., Ltd.		1,800		53,384
Sumitomo Realty & Development Co., Ltd.		300		12,030

				181,060


Retailing 0.3%
EDION Corp.		3,300		18,268
Fast Retailing Co., Ltd.		100		34,341
Isetan Mitsukoshi Holdings Ltd.		2,200		24,745
J Front Retailing Co., Ltd.		2,000		12,619
K’s Holdings Corp.		200		5,448
Shimamura Co., Ltd.		100		9,004
Takashimaya Co., Ltd.		1,000		8,651
Yamada Denki Co., Ltd.		17,600		58,112

				171,188


Semiconductors & Semiconductor Equipment 0.1%
Rohm Co., Ltd.		860		44,321
Tokyo Electron Ltd.		860		49,224

				93,545


Software & Services 0.5%
Fujitsu Ltd. *		25,000		155,293

36 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Konami Corp.		1,820		45,578
Nintendo Co., Ltd.		800		98,408
NTT Data Corp.		700		28,840

				328,119


Technology Hardware & Equipment 2.0%
Brother Industries Ltd.		2,200		31,298
Canon, Inc.		6,900		213,764
FUJIFILM Holdings Corp.		4,400		126,053
Hitachi Ltd.		27,000		212,423
Hoya Corp.		2,200		65,010
Ibiden Co., Ltd.		2,200		42,894
Konica Minolta, Inc.		3,500		35,423
Kyocera Corp.		2,200		98,959
Murata Manufacturing Co., Ltd.		500		47,475
NEC Corp.		44,000		147,867
Nippon Electric Glass Co., Ltd.		2,000		9,033
Omron Corp.		500		20,943
Ricoh Co., Ltd.		5,700		71,316
Seiko Epson Corp.		2,200		65,958
TDK Corp.		700		30,108

				1,218,524


Telecommunication Services 1.2%
KDDI Corp.		2,900		176,191
Nippon Telegraph & Telephone Corp.		4,900		273,697
NTT DOCOMO, Inc.		8,800		146,659
SoftBank Corp.		2,200		165,283

				761,830


Transportation 0.9%
ANA Holdings, Inc.		1,000		2,224
Central Japan Railway Co.		560		64,935
East Japan Railway Co.		1,100		85,594
Hankyu Hanshin Holdings, Inc.		2,000		10,934
Kawasaki Kisen Kaisha Ltd.		22,000		49,576
Kintetsu Corp.		2,000		7,231
Mitsui OSK Lines Ltd.		22,000		90,962
Nagoya Railroad Co., Ltd.		3,000		9,082
Nippon Express Co., Ltd.		5,000		23,221
Nippon Yusen K.K.		22,000		70,053
Seino Holdings Co., Ltd.		1,000		10,337
Tobu Railway Co., Ltd.		1,000		4,840
Tokyu Corp.		1,000		6,075
West Japan Railway Co.		2,200		89,884
Yamato Holdings Co., Ltd.		2,200		45,416

				570,364


Utilities 1.2%
Chubu Electric Power Co., Inc.		8,800		108,292
Electric Power Development Co., Ltd.		200		6,192
Hokkaido Electric Power Co., Inc. *		2,200		22,352
Hokuriku Electric Power Co.		2,200		28,172
Kyushu Electric Power Co., Inc. *		4,400		56,301
Osaka Gas Co., Ltd.		11,000		45,589
Shikoku Electric Power Co., Inc. *		2,200		33,971
The Chugoku Electric Power Co., Inc.		2,200		31,104
The Kansai Electric Power Co., Inc. *		8,800		97,773
Tohoku Electric Power Co., Inc. *		5,200		60,832
Tokyo Electric Power Co., Inc. *		38,300		177,869
Tokyo Gas Co., Ltd.		10,000		49,968

				718,415

				11,472,714
��
Luxembourg 0.6%


Energy 0.0%
Tenaris S.A.		1,474		30,924


Materials 0.5%
APERAM *		1,056		23,766
ArcelorMittal		16,588		262,669

				286,435


Media 0.1%
SES S.A.		902		31,457


Telecommunication Services 0.0%
Millicom International Cellular S.A.		286		29,847

				378,663

Netherlands 6.0%


Capital Goods 0.3%
Koninklijke BAM Groep N.V.		3,520		21,002
Koninklijke Philips N.V.		4,752		166,444
Royal Imtech N.V. *		3,322		9,144

				196,590


Commercial & Professional Services 0.1%
Randstad Holding N.V.		572		36,060


Diversified Financials 0.4%
ING Groep N.V. CVA *		18,480		269,785


Energy 3.3%
Fugro N.V. CVA		352		20,472
Royal Dutch Shell plc, A Shares		33,462		1,222,646
Royal Dutch Shell plc, B Shares		21,010		819,328

				2,062,446


Food & Staples Retailing 0.3%
Koninklijke Ahold N.V.		9,878		184,385


Food, Beverage & Tobacco 0.5%
Corbion N.V.		682		15,377
Heineken Holding N.V.		374		24,208
Heineken N.V.		506		34,238
Nutreco N.V.		352		16,036
Unilever N.V. CVA		4,620		183,324

				273,183


Insurance 0.2%
Aegon N.V.		10,296		92,845
Delta Lloyd N.V.		1,056		30,169

				123,014


Materials 0.3%
Akzo Nobel N.V.		1,672		138,580
Koninklijke DSM N.V.		858		54,861

				193,441


Media 0.1%
Reed Elsevier N.V.		1,078		23,643
Wolters Kluwer N.V.		1,254		36,250

				59,893


Semiconductors & Semiconductor Equipment 0.1%
ASML Holding N.V.		330		28,737


Technology Hardware & Equipment 0.0%
Gemalto N.V.		110		12,382

See financial notes 37

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Telecommunication Services 0.2%
Koninklijke KPN N.V. *		41,646		148,688


Transportation 0.2%
PostNL N.V. *		18,436		88,254
TNT Express N.V.		2,684		26,153

				114,407

				3,703,011

New Zealand 0.1%


Materials 0.0%
Fletcher Building Ltd.		3,234		25,597


Telecommunication Services 0.1%
Telecom Corp. of New Zealand Ltd.		20,659		43,397

				68,994

Norway 0.9%


Banks 0.1%
DNB A.S.A.		2,838		51,587


Energy 0.5%
Aker Solutions A.S.A.		796		13,406
Petroleum Geo-Services A.S.A.		1,042		11,392
Statoil A.S.A.		10,230		270,478

				295,276


Food, Beverage & Tobacco 0.1%
Marine Harvest A.S.A.		1,548		17,144
Orkla A.S.A.		5,060		40,034

				57,178


Materials 0.1%
Norsk Hydro A.S.A.		8,602		42,644
Yara International A.S.A.		912		37,052

				79,696


Telecommunication Services 0.1%
Telenor A.S.A.		2,860		63,301

				547,038

Portugal 0.3%


Banks 0.1%
Banco Comercial Portugues S.A. - Reg’d *		145,780		39,705
Banco Espirito Santo S.A. - Reg’d *		12,452		24,352

				64,057


Energy 0.0%
Galp Energia, SGPS, S.A.		858		14,434


Telecommunication Services 0.1%
Portugal Telecom, SGPS, S.A. - Reg’d		12,282		55,148


Utilities 0.1%
EDP - Energias de Portugal S.A.		15,796		68,504

				202,143

Singapore 0.7%


Banks 0.2%
DBS Group Holdings Ltd.		2,600		33,908
Oversea-Chinese Banking Corp., Ltd.		3,800		28,679
United Overseas Bank Ltd.		2,600		42,345

				104,932


Capital Goods 0.1%
Keppel Corp., Ltd.		4,500		37,195
Sembcorp Industries Ltd.		2,000		8,542

				45,737


Food, Beverage & Tobacco 0.1%
Wilmar International Ltd.		22,000		59,919


Media 0.0%
Singapore Press Holdings Ltd.		3,800		12,450


Retailing 0.0%
Jardine Cycle & Carriage Ltd.		200		6,196


Technology Hardware & Equipment 0.1%
Flextronics International Ltd. *		6,248		55,920
Venture Corp., Ltd.		1,400		8,344

				64,264


Telecommunication Services 0.1%
Singapore Telecommunications Ltd.		22,000		62,525


Transportation 0.1%
ComfortDelGro Corp., Ltd.		22,000		33,520
Singapore Airlines Ltd.		2,600		20,978

				54,498

				410,521

Spain 4.4%


Banks 2.1%
Banco Bilbao Vizcaya Argentaria S.A.		29,920		371,710
Banco de Sabadell S.A.		14,850		49,101
Banco Popular Espanol S.A.		10,120		73,017
Banco Santander S.A.		84,342		764,867
Bankia S.A. *		15,938		33,481

				1,292,176


Capital Goods 0.2%
ACS, Actividades de Construccion y Servicios S.A.		1,540		55,397
Ferrovial S.A.		1,650		34,867
Fomento de Construcciones y Contratas S.A. *		1,408		32,107

				122,371


Energy 0.4%
Repsol S.A.		9,350		235,095


Food & Staples Retailing 0.0%
Distribuidora Internacional de Alimentacion S.A.		2,640		22,680


Retailing 0.1%
Inditex S.A.		352		50,707


Software & Services 0.0%
Amadeus IT Holding S.A.		616		27,110


Telecommunication Services 1.0%
Telefonica S.A.		41,387		635,066


Transportation 0.1%
Abertis Infraestructuras S.A.		1,540		36,201


Utilities 0.5%
Acciona S.A.		339		27,039
Enagas S.A.		594		17,298

38 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Endesa S.A.		880		28,963
Gas Natural SDG S.A.		1,606		41,246
Iberdrola S.A.		30,250		201,254
Red Electrica Corp. S.A.		308		23,992

				339,792

				2,761,198

Sweden 2.4%


Automobiles & Components 0.1%
Autoliv, Inc.		453		43,642


Banks 0.5%
Nordea Bank AB		7,194		103,154
Skandinaviska Enskilda Banken AB, A Shares		4,730		66,568
Svenska Handelsbanken AB, A Shares		1,474		77,087
Swedbank AB, A Shares		1,672		47,244

				294,053


Capital Goods 0.8%
Alfa Laval AB		814		22,111
Assa Abloy AB, B Shares		682		34,762
Atlas Copco AB, A Shares		2,134		59,999
Atlas Copco AB, B Shares		1,012		26,905
NCC AB, B Shares		704		24,541
Sandvik AB		4,269		59,613
Scania AB, B Shares		1,012		31,123
Skanska AB, B Shares		2,530		54,979
SKF AB, B Shares		1,650		44,228
Trelleborg AB, B Shares		819		16,161
Volvo AB, A Shares		1,650		24,883
Volvo AB, B Shares		5,399		81,335

				480,640


Commercial & Professional Services 0.0%
Securitas AB, B Shares		2,486		27,419


Consumer Durables & Apparel 0.1%
Electrolux AB, Series B		1,408		33,388
Husqvarna AB, B Shares		2,706		18,313

				51,701


Food, Beverage & Tobacco 0.0%
Swedish Match AB		673		21,328


Health Care Equipment & Services 0.0%
Getinge AB, B Shares		352		12,683


Household & Personal Products 0.1%
Svenska Cellulosa AB, B Shares		2,838		86,261


Materials 0.1%
Boliden AB		1,993		31,642
SSAB AB, A Shares		2,994		23,650
SSAB AB, B Shares		1,650		11,630

				66,922


Retailing 0.2%
Hennes & Mauritz AB, B Shares		2,266		102,305


Technology Hardware & Equipment 0.3%
Telefonaktiebolaget LM Ericsson, B Shares		12,034		156,116


Telecommunication Services 0.2%
Tele2 AB		3,554		44,136
TeliaSonera AB		9,944		76,703

				120,839

				1,463,909

Switzerland 5.8%


Capital Goods 0.5%
ABB Ltd. - Reg’d *		6,820		174,139
Geberit AG - Reg’d		88		27,635
Schindler Holding AG		98		14,676
Schindler Holding AG - Reg’d		22		3,337
Wolseley plc		1,375		80,097

				299,884


Commercial & Professional Services 0.4%
Adecco S.A. - Reg’d *		902		77,778
SGS S.A. - Reg’d		5		12,370
Tyco International Ltd.		3,456		145,774

				235,922


Consumer Durables & Apparel 0.2%
Cie Financiere Richemont S.A.		638		63,452
The Swatch Group AG		44		29,324
The Swatch Group AG - Reg’d		66		7,748

				100,524


Diversified Financials 0.3%
Credit Suisse Group AG - Reg’d *		4,510		141,833
GAM Holding AG *		990		17,478
UBS AG - Reg’d *		1,716		36,763

				196,074


Energy 0.3%
Noble Corp. plc		990		30,739
Transocean Ltd.		1,760		74,272
Weatherford International Ltd. *		3,571		59,529

				164,540


Food, Beverage & Tobacco 1.2%
Aryzta AG *		286		23,833
Lindt & Spruengli AG		2		9,841
Nestle S.A. - Reg’d		9,042		683,694

				717,368


Insurance 0.6%
Baloise Holding AG - Reg’d		176		22,659
Swiss Life Holding AG - Reg’d *		132		32,805
Swiss Re AG *		1,056		98,551
Zurich Insurance Group AG *		682		208,673

				362,688


Materials 0.6%
Clariant AG - Reg’d *		1,166		23,855
Givaudan S.A. - Reg’d *		22		34,469
Glencore Xstrata plc		30,800		169,920
Holcim Ltd. - Reg’d *		1,059		85,845
Sika AG		3		11,049
Syngenta AG - Reg’d		182		66,122

				391,260


Media 0.0%
Informa plc		1,632		14,290


Pharmaceuticals, Biotechnology & Life Sciences 1.4%
Lonza Group AG - Reg’d *		220		23,229
Novartis AG - Reg’d		5,676		473,322

See financial notes 39

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Roche Holding AG (b)		46		14,114
Roche Holding AG (b)		1,254		386,394

				897,059


Semiconductors & Semiconductor Equipment 0.1%
STMicroelectronics N.V.		5,315		48,082


Technology Hardware & Equipment 0.1%
TE Connectivity Ltd.		1,496		87,636


Telecommunication Services 0.1%
Swisscom AG - Reg’d		88		52,053


Transportation 0.0%
Kuehne & Nagel International AG - Reg’d		198		28,234

				3,595,614

United Kingdom 17.3%


Automobiles & Components 0.0%
GKN plc		2,806		19,078


Banks 2.3%
Barclays plc		69,300		292,780
HSBC Holdings plc		73,130		771,728
Lloyds Banking Group plc *		133,100		184,088
Royal Bank of Scotland Group plc *		10,739		59,012
Standard Chartered plc		4,840		102,606

				1,410,214


Capital Goods 0.7%
BAE Systems plc		16,610		114,378
Balfour Beatty plc		5,974		31,907
Bunzl plc		1,078		28,417
Carillion plc		3,146		20,003
Cobham plc		3,850		19,246
Foster Wheeler AG *		660		21,199
IMI plc		786		20,088
Meggitt plc		1,980		16,724
Rolls-Royce Holdings plc *		3,938		65,929
SIG plc		5,280		18,715
Smiths Group plc		1,276		29,253
The Weir Group plc		330		14,196
Travis Perkins plc		880		28,831
Vesuvius plc		1,870		14,688

				443,574


Commercial & Professional Services 0.2%
Aggreko plc		492		12,862
Capita plc		1,364		26,059
G4S plc		8,609		34,251
Hays plc		9,328		22,354
Serco Group plc		2,030		15,666

				111,192


Consumer Durables & Apparel 0.2%
Barratt Developments plc		4,053		29,886
Burberry Group plc		748		19,317
Persimmon plc *		1,256		30,436
Taylor Wimpey plc		10,474		21,941

				101,580


Consumer Services 0.5%
Carnival plc		946		39,047
Compass Group plc		6,380		100,985
InterContinental Hotels Group plc		528		17,184
Ladbrokes plc		3,696		10,338
Thomas Cook Group plc *		13,640		42,357
TUI Travel plc		4,950		37,106
Whitbread plc		550		41,357
William Hill plc		2,310		15,392

				303,766


Diversified Financials 0.1%
ICAP plc		2,398		17,622
Man Group plc		27,566		47,906

				65,528


Energy 3.0%
AMEC plc		1,100		20,702
BG Group plc		10,516		191,829
BP plc		186,854		1,579,475
Ensco plc, Class A		462		24,329
John Wood Group plc		1,430		18,285
Tullow Oil plc		904		12,104

				1,846,724


Food & Staples Retailing 0.8%
J Sainsbury plc		13,794		79,197
Tesco plc		54,989		303,369
William Morrison Supermarkets plc		26,411		104,146

				486,712


Food, Beverage & Tobacco 1.4%
Associated British Foods plc		1,166		58,582
British American Tobacco plc		5,223		284,471
Diageo plc		4,466		140,593
Imperial Tobacco Group plc		3,397		138,735
SABMiller plc		1,572		77,110
Tate & Lyle plc		1,760		18,936
Unilever plc		3,303		135,118

				853,545


Health Care Equipment & Services 0.1%
Smith & Nephew plc		2,980		47,518


Household & Personal Products 0.2%
Reckitt Benckiser Group plc		1,320		108,704


Insurance 0.8%
Amlin plc		2,266		17,085
Aviva plc		19,714		156,467
Legal & General Group plc		11,440		46,089
Old Mutual plc		18,656		61,623
Prudential plc		3,520		79,931
Resolution Ltd.		8,602		54,462
RSA Insurance Group plc		24,074		39,235
Standard Life plc		5,302		34,653
Willis Group Holdings plc		462		19,016

				508,561


Materials 1.6%
Anglo American plc		12,430		318,920
Antofagasta plc		1,370		20,675
BHP Billiton plc		6,820		220,414
Johnson Matthey plc		1,056		57,728
Kazakhmys plc		3,432		17,565
Mondi plc		1,980		36,367
Rexam plc		3,894		32,218
Rio Tinto plc		5,171		297,454
Vedanta Resources plc		990		14,019

				1,015,360

40 See financial notes

Schwab Fundamental International Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Media 0.3%
British Sky Broadcasting Group plc		2,689		42,360
ITV plc		4,400		14,887
Pearson plc		2,883		48,943
Reed Elsevier plc		1,804		27,678
WPP plc		3,128		68,566

				202,434


Pharmaceuticals, Biotechnology & Life Sciences 1.8%
AstraZeneca plc		8,021		548,971
GlaxoSmithKline plc		21,450		600,854

				1,149,825


Real Estate 0.1%
British Land Co. plc		1,848		21,586
Land Securities Group plc		2,288		41,641

				63,227


Retailing 0.6%
Dixons Retail plc *		27,040		23,292
Home Retail Group plc		19,743		64,915
Inchcape plc		3,190		33,572
Kingfisher plc		14,718		97,181
Marks & Spencer Group plc		11,968		100,985
Next plc		594		67,044

				386,989


Software & Services 0.0%
The Sage Group plc		3,960		28,649


Telecommunication Services 1.5%
BT Group plc		40,381		277,322
Cable & Wireless Communications plc		37,950		34,693
Inmarsat plc		1,210		14,083
Vodafone Group plc		137,891		575,401

				901,499


Transportation 0.1%
FirstGroup plc *		14,083		33,325
International Consolidated Airlines Group S.A. *		3,586		26,262
National Express Group plc		3,872		19,726

				79,313


Utilities 1.0%
Centrica plc		26,294		140,567
Drax Group plc		2,860		38,631
National Grid plc		15,410		215,508
Pennon Group plc		1,681		20,931
Severn Trent plc		1,100		34,104
SSE plc		5,704		134,113
United Utilities Group plc		4,249		55,506

				639,360

				10,773,352

Total Common Stock
(Cost $58,934,132)				61,705,639




Other Investment Companies 0.1% of net assets

United States 0.1%


Equity Fund 0.1%
iShares MSCI EAFE ETF		700		47,215


Money Market Fund 0.0%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (a)		6,486		6,486

Total Other Investment Companies
(Cost $51,637)				53,701




Preferred Stock 0.4% of net assets

Germany 0.4%


Automobiles & Components 0.3%
Bayerische Motoren Werke AG		242		21,261
Volkswagen AG		660		172,285

				193,546


Household & Personal Products 0.1%
Henkel AG & Co. KGaA		374		41,763


Utilities 0.0%
RWE AG		528		17,666

Total Preferred Stock
(Cost $246,305)				252,975



End of Investments.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.
(b)		Securities are traded on separate exchanges for the same entity.


CVA —		Dutch Certificate
ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust
RSP —		Risparmio (Convertible Savings Shares)

See financial notes 41

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.


				Cost		Value
Holdings by Category				($)		($)

	99	.3%	Common Stock		23,444,827		24,790,171
	0	.1%	Other Investment Companies		31,349		33,664
	0	.4%	Preferred Stock		94,836		110,783


	99	.8%	Total Investments		23,571,012		24,934,618
	0	.2%	Other Assets and Liabilities, Net				42,184


	100	.0%	Net Assets				24,976,802


	Number		Value
Security	of Shares		($)

Common Stock 99.3% of net assets

Australia 4.8%


Banks 0.2%
Bank of Queensland Ltd.		1,989		21,341
Bendigo & Adelaide Bank Ltd.		2,601		25,905

				47,246


Capital Goods 0.3%
Ausdrill Ltd.		7,266		6,339
Boart Longyear Ltd.		60,570		16,531
Bradken Ltd.		2,367		8,854
Cardno Ltd.		666		3,743
GWA Group Ltd.		5,310		13,780
Monadelphous Group Ltd.		891		13,929

				63,176


Commercial & Professional Services 0.3%
ALS Ltd.		2,471		16,783
Programmed Maintenance Services Ltd.		2,947		7,911
Seek Ltd.		855		13,091
Skilled Group Ltd.		3,681		10,178
Transfield Services Ltd.		21,954		17,386
Transpacific Industries Group Ltd. *		17,055		17,933

				83,282


Consumer Durables & Apparel 0.0%
G.U.D. Holdings Ltd.		1,701		8,783


Consumer Services 0.2%
Aristocrat Leisure Ltd.		3,843		17,126
Echo Entertainment Group Ltd.		10,180		24,231
Flight Centre Travel Group Ltd.		261		12,110

				53,467


Diversified Financials 0.3%
ASX Ltd.		738		24,805
Challenger Ltd.		3,528		19,605
IOOF Holdings Ltd.		540		4,349
Perpetual Ltd.		387		17,907

				66,666


Energy 0.1%
AWE Ltd. *		10,469		13,349
Beach Energy Ltd.		10,488		15,392

				28,741


Food, Beverage & Tobacco 0.2%
Goodman Fielder Ltd.		51,690		28,909
GrainCorp Ltd.		1,350		9,701
Treasury Wine Estates Ltd.		5,143		17,810

				56,420


Health Care Equipment & Services 0.4%
Ansell Ltd.		1,215		19,733
Cochlear Ltd.		293		15,024
Primary Health Care Ltd.		4,500		19,490
Ramsay Health Care Ltd.		585		25,258
Sigma Pharmaceuticals Ltd.		53,654		30,488

				109,993


Insurance 0.1%
NIB Holdings Ltd.		4,905		11,412


Materials 0.6%
Adelaide Brighton Ltd.		4,815		18,010
Aquarius Platinum Ltd. *		29,227		18,700
DuluxGroup Ltd.		1,179		5,666
Fortescue Metals Group Ltd.		3,753		18,270
Iluka Resources Ltd.		2,486		20,889
Mount Gibson Iron Ltd.		9,000		6,886
Nufarm Ltd.		4,154		14,497
OZ Minerals Ltd.		9,714		32,597

				135,515


Media 0.1%
Seven West Media Ltd.		5,346		10,572
Southern Cross Media Group Ltd.		5,688		7,177
Ten Network Holdings Ltd. *		43,570		13,451

				31,200


Real Estate 0.7%
Australand Property Group		2,529		8,849
CFS Retail Property Trust Group		12,890		22,723
Charter Hall Retail REIT		1,902		6,127
Commonwealth Property Office Fund		12,971		14,509
Dexus Property Group		37,009		35,436
Goodman Group		5,476		23,521
GPT Group		10,755		35,802
Investa Office Fund		4,393		12,579
Westfield Retail Trust		7,337		20,419

				179,965


Retailing 0.6%
Automotive Holdings Group Ltd.		2,876		9,677
David Jones Ltd.		12,195		36,121
Harvey Norman Holdings Ltd.		7,578		21,768
JB Hi-Fi Ltd.		1,206		19,835
Myer Holdings Ltd.		11,775		27,606
Pacific Brands Ltd.		36,975		18,529
Premier Investments Ltd.		1,737		12,637

				146,173

42 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Software & Services 0.2%
Computershare Ltd.		3,411		36,231


Transportation 0.2%
Aurizon Holdings Ltd.		6,768		30,827
Transurban Group		4,410		27,900

				58,727


Utilities 0.3%
APA Group		4,521		27,025
DUET Group		14,473		27,456
SP AusNet		17,100		20,275

				74,756

				1,191,753

Austria 0.7%


Banks 0.1%
Raiffeisen Bank International AG		909		31,700


Capital Goods 0.1%
Zumtobel AG		882		22,390


Energy 0.0%
Schoeller-Bleckmann Oilfield Equipment AG		36		4,162


Insurance 0.1%
Vienna Insurance Group AG Wiener Versicherung Gruppe		405		20,752


Materials 0.1%
Lenzing AG		117		7,328
RHI AG		252		8,366

				15,694


Real Estate 0.2%
IMMOFINANZ AG *		9,299		47,135


Transportation 0.1%
Oesterreichische Post AG		558		27,856


Utilities 0.0%
Verbund AG		423		8,968

				178,657

Belgium 1.2%


Capital Goods 0.1%
Cie d’Entreprises CFE		162		15,025


Diversified Financials 0.3%
Ackermans & van Haaren N.V.		126		14,782
Gimv N.V.		216		10,910
Groupe Bruxelles Lambert S.A.		288		28,349
Sofina S.A.		99		12,217

				66,258


Materials 0.2%
Nyrstar N.V. *		6,309		25,618
Tessenderlo Chemie N.V.		900		25,395

				51,013


Media 0.1%
Telenet Group Holding N.V.		477		30,463


Real Estate 0.1%
Befimmo S.A.		90		6,464
Cofinimmo		117		14,065

				20,529


Retailing 0.1%
D’Ieteren S.A. N.V.		711		32,111


Technology Hardware & Equipment 0.1%
Barco N.V.		180		14,260
EVS Broadcast Equipment S.A.		117		7,272

				21,532


Telecommunication Services 0.1%
Mobistar S.A.		1,947		32,189


Utilities 0.1%
Elia System Operator S.A. N.V.		450		21,660

				290,780

Canada 8.2%


Automobiles & Components 0.2%
Linamar Corp.		711		30,914
Martinrea International, Inc.		1,413		12,229

				43,143


Banks 0.2%
Canadian Western Bank		315		10,398
Genworth MI Canada, Inc.		684		22,245
Home Capital Group, Inc.		162		12,656
Laurentian Bank of Canada		261		10,926

				56,225


Capital Goods 0.6%
Aecon Group, Inc.		918		13,360
Bird Construction, Inc.		513		6,247
CAE, Inc.		2,169		29,156
MacDonald, Dettwiler & Associates Ltd.		252		18,488
Russel Metals, Inc.		1,224		33,239
Toromont Industries Ltd.		1,053		24,780
Wajax Corp.		387		13,338
WSP Global, Inc.		225		7,419

				146,027


Commercial & Professional Services 0.4%
Newalta Corp.		693		11,901
Progressive Waste Solutions Ltd.		1,152		29,139
Ritchie Bros. Auctioneers, Inc.		549		12,781
Stantec, Inc.		270		16,550
Transcontinental, Inc., Class A		2,016		27,154

				97,525


Consumer Durables & Apparel 0.2%
Dorel Industries, Inc., Class B		612		20,567
Gildan Activewear, Inc.		531		27,232
Lululemon Athletica, Inc. *		63		3,170

				50,969


Consumer Services 0.0%
EnerCare, Inc.		927		8,584


Diversified Financials 0.3%
AGF Management Ltd., Class B		1,953		20,237
CI Financial Corp.		1,242		38,473
Dundee Corp., Class A *		486		7,437
GMP Capital, Inc.		1,548		11,188

				77,335

See financial notes 43

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Energy 2.1%
Advantage Oil & Gas Ltd. *		5,535		22,751
AltaGas Ltd.		747		28,673
Calfrac Well Services Ltd.		306		9,921
Enerflex Ltd.		839		11,968
Ensign Energy Services, Inc.		1,647		26,350
Freehold Royalties Ltd.		315		6,451
Gibson Energy, Inc.		972		23,691
Gran Tierra Energy, Inc. *		1,152		8,211
Keyera Corp.		486		29,324
Lightstream Resources Ltd.		4,646		26,190
Mullen Group Ltd.		1,089		26,985
NuVista Energy Ltd. *		918		7,704
Pacific Rubiales Energy Corp.		1,596		21,987
Parkland Fuel Corp.		1,191		21,153
Pason Systems, Inc.		198		5,112
Pembina Pipeline Corp.		1,107		39,912
Peyto Exploration & Development Corp.		576		18,785
Precision Drilling Corp.		4,482		49,357
Savanna Energy Services Corp.		1,179		8,638
ShawCor Ltd.		504		20,821
Trican Well Service Ltd.		1,597		20,183
Trinidad Drilling Ltd.		2,241		22,452
Veresen, Inc.		2,169		32,801
Vermilion Energy, Inc.		648		36,587

				526,007


Food & Staples Retailing 0.2%
Liquor Stores N.A. Ltd.		387		4,237
The Jean Coutu Group PJC, Inc., A Shares		1,233		23,325
The North West Co., Inc.		774		17,585

				45,147


Food, Beverage & Tobacco 0.2%
Cott Corp.		1,800		14,635
Maple Leaf Foods, Inc.		1,818		26,688

				41,323


Insurance 0.1%
Industrial Alliance Insurance & Financial Services, Inc.		639		26,635


Materials 1.5%
Agnico Eagle Mines Ltd.		837		26,866
Canfor Corp. *		693		18,387
CCL Industries, Inc., Class B		252		20,673
Centerra Gold, Inc.		3,260		14,607
Chemtrade Logistics Income Fund		604		11,426
Dominion Diamond Corp. *		829		11,833
Eldorado Gold Corp.		2,234		14,834
Franco-Nevada Corp.		216		11,043
HudBay Minerals, Inc.		2,702		22,310
IAMGOLD Corp.		5,530		20,532
Lundin Mining Corp. *		5,681		27,046
Major Drilling Group International, Inc.		1,782		14,263
Methanex Corp.		1,017		71,294
New Gold, Inc. *		1,081		6,611
Pan American Silver Corp.		1,119		15,790
Sherritt International Corp.		9,392		25,963
Silver Wheaton Corp.		450		11,484
West Fraser Timber Co., Ltd.		774		39,184

				384,146


Media 0.5%
Aimia, Inc.		1,701		28,659
Cineplex, Inc.		540		20,001
Cogeco Cable, Inc.		225		11,006
Corus Entertainment, Inc.		828		18,745
Quebecor, Inc., Class B		1,773		39,322

				117,733


Real Estate 0.5%
Boardwalk Real Estate Investment Trust		163		8,768
Brookfield Office Properties, Inc.		1,557		29,735
Calloway Real Estate Investment Trust		360		8,407
Canadian Real Estate Investment Trust		189		7,448
First Capital Realty, Inc.		549		8,808
Granite Real Estate Investment Trust		414		14,324
H&R Real Estate Investment Trust		540		10,849
RioCan Real Estate Investment Trust		999		23,699

				112,038


Retailing 0.2%
Dollarama, Inc.		243		18,956
Reitmans (Canada) Ltd., Class A		2,531		13,170
Sears Canada, Inc.		1,767		24,471

				56,597


Software & Services 0.2%
Davis & Henderson Corp.		738		20,521
Open Text Corp.		432		22,034

				42,555


Telecommunication Services 0.1%
Manitoba Telecom Services, Inc.		666		18,308


Transportation 0.1%
TransForce, Inc.		1,143		24,079
Westshore Terminals Investment Corp.		297		10,126

				34,205


Utilities 0.6%
Atco Ltd., Class I		882		41,305
Capital Power Corp.		1,134		23,480
Emera, Inc.		1,017		29,804
Just Energy Group, Inc.		3,036		23,285
Northland Power, Inc.		540		8,001
Superior Plus Corp.		2,943		32,675

				158,550

				2,043,052

Denmark 1.6%


Banks 0.2%
Jyske Bank A/S *		567		34,106
Sydbank A/S *		1,089		29,386

				63,492


Capital Goods 0.3%
NKT Holding A/S		531		35,871
Rockwool International A/S, B Shares		117		23,906
Solar A/S		144		9,595

				69,372


Consumer Durables & Apparel 0.1%
Pandora A/S		261		17,699


Food, Beverage & Tobacco 0.1%
Royal UNIBREW		72		10,860

44 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Schouw & Co.		153		7,023

				17,883


Health Care Equipment & Services 0.2%
Coloplast A/S Class B		351		29,584
GN Store Nord A/S		810		20,043
William Demant Holding A/S *		90		8,107

				57,734


Insurance 0.1%
Topdanmark A/S *		684		19,065
Tryg A/S		216		20,868

				39,933


Materials 0.0%
Chr Hansen Holding A/S		216		8,967


Pharmaceuticals, Biotechnology & Life Sciences 0.3%
H. Lundbeck A/S		990		28,877
Novozymes A/S, B Shares		909		42,311

				71,188


Software & Services 0.1%
SimCorp A/S		432		16,990


Transportation 0.2%
D/S Norden A/S		954		47,055

				410,313

Finland 2.2%


Automobiles & Components 0.2%
Nokian Renkaat Oyj		855		38,379


Capital Goods 0.6%
Cargotec Oyj, B Shares		603		26,934
Cramo Oyj		657		14,065
Konecranes Oyj		639		22,682
Outotec Oyj		1,620		15,975
Ramirent Oyj		1,080		13,693
Uponor Oyj		1,161		20,477
YIT Oyj		2,043		25,240

				139,066


Consumer Durables & Apparel 0.1%
Amer Sports Oyj		1,458		32,944


Diversified Financials 0.1%
Pohjola Bank plc, A Shares		1,369		31,765


Materials 0.8%
Huhtamaki Oyj		1,755		50,660
Kemira Oyj		1,737		26,917
Metsa Board Oyj		5,319		23,582
Outokumpu Oyj *		44,415		26,237
Rautaruukki Oyj		5,859		68,702
Tikkurila Oyj		360		9,522

				205,620


Media 0.1%
Sanoma Oyj		4,023		30,782


Real Estate 0.0%
Sponda Oyj		1,665		9,061


Retailing 0.1%
Stockmann Oyj Abp, B Shares		792		13,542


Software & Services 0.2%
Tieto Oyj		1,485		37,739

				538,898

France 5.0%


Automobiles & Components 0.3%
Faurecia *		1,228		54,749
Plastic Omnium S.A.		370		12,824

				67,573


Banks 0.1%
Natixis		5,153		37,201


Capital Goods 0.4%
Areva S.A. *		945		25,020
Mersen		540		17,094
Saft Groupe S.A.		495		18,657
Zodiac Aerospace		1,305		46,115

				106,886


Commercial & Professional Services 0.6%
Bureau Veritas S.A.		864		23,854
Derichebourg S.A.		2,430		8,626
Edenred		864		27,804
Societe BIC S.A.		252		32,327
Teleperformance		864		55,012

				147,623


Consumer Durables & Apparel 0.2%
Nexity S.A.		675		29,408
SEB S.A.		342		27,699

				57,107


Consumer Services 0.1%
Club Mediterranee S.A. *		711		17,155


Diversified Financials 0.2%
Eurazeo S.A.		540		42,370


Energy 0.1%
Bourbon S.A.		675		19,862
Etablissements Maurel et Prom		630		9,954

				29,816


Food, Beverage & Tobacco 0.1%
Remy Cointreau S.A.		108		9,174
Vilmorin & Cie S.A.		63		8,629

				17,803


Health Care Equipment & Services 0.1%
BIOMERIEUX		135		14,357
Orpea		180		11,119

				25,476


Insurance 0.1%
Euler Hermes S.A.		180		22,623


Materials 0.3%
Eramet		252		24,792
Imerys S.A.		477		44,469

				69,261


Media 0.7%
Havas S.A.		2,421		20,470
IPSOS		324		13,832
JC Decaux S.A.		603		26,642
Metropole Television S.A.		1,611		37,492

See financial notes 45

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Societe Television Francaise 1		2,460		45,800
Technicolor S.A. *		5,976		40,287

				184,523


Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Ipsen S.A.		270		11,611


Real Estate 0.5%
Fonciere Des Regions		387		36,293
Gecina S.A.		153		21,060
ICADE		451		44,488
Klepierre		684		31,213
Mercialys S.A.		234		5,329

				138,383


Software & Services 0.4%
Alten S.A.		315		16,802
Altran Technologies S.A. *		1,620		17,589
Dassault Systemes S.A.		180		20,704
UBISOFT Entertainment *		2,034		33,346

				88,441


Technology Hardware & Equipment 0.3%
Ingenico		171		16,535
Neopost S.A.		563		51,795

				68,330


Telecommunication Services 0.1%
Iliad S.A.		81		19,768


Transportation 0.4%
Aeroports de Paris		360		43,725
Bollore S.A.		45		27,782
Groupe Eurotunnel S.A. - Reg’d		2,925		35,171

				106,678

				1,258,628

Germany 3.6%


Automobiles & Components 0.2%
ElringKlinger AG		234		8,910
Grammer AG		68		3,496
Leoni AG		540		40,946

				53,352


Banks 0.1%
Aareal Bank AG *		522		22,999


Capital Goods 0.8%
Bauer AG		315		8,464
BayWa AG		405		22,766
Deutz AG *		1,926		21,017
DMG MORI SEIKI AG		621		20,319
Duerr AG		131		10,972
Heidelberger Druckmaschinen AG *		8,166		30,001
Indus Holding AG		477		20,081
Krones AG		162		14,024
Nordex SE *		697		11,355
Pfeiffer Vacuum Technology AG		72		8,502
SGL Carbon SE		270		10,926
Vossloh AG		90		8,959

				187,386


Consumer Durables & Apparel 0.1%
Gerry Weber International AG		198		10,009
Hugo Boss AG		108		14,393
Puma SE		45		12,759

				37,161


Food, Beverage & Tobacco 0.1%
Suedzucker AG		1,062		29,556


Health Care Equipment & Services 0.2%
Draegerwerk AG & Co. KGaA		27		2,890
Rhoen Klinikum AG		1,602		51,709

				54,599


Insurance 0.0%
Talanx AG *		154		5,362


Materials 0.4%
Fuchs Petrolub SE		117		10,198
Symrise AG		855		42,028
Wacker Chemie AG		405		54,734

				106,960


Media 0.3%
Axel Springer SE		540		38,193
ProSiebenSat.1 Media AG - Reg’d		648		30,922

				69,115


Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Gerresheimer AG		306		20,886
Stada Arzneimittel AG		669		34,419

				55,305


Real Estate 0.1%
Deutsche Euroshop AG		189		8,498
GAGFAH S.A. *		738		11,233
GSW Immobilien AG		72		3,212

				22,943


Retailing 0.1%
Fielmann AG		117		14,303


Semiconductors & Semiconductor Equipment 0.2%
Aixtron SE *		846		14,226
Kontron AG		1,728		13,291
SMA Solar Technology AG		243		14,568

				42,085


Software & Services 0.3%
Bechtle AG		324		25,758
Software AG		675		26,910
United Internet AG - Reg’d		614		28,591

				81,259


Technology Hardware & Equipment 0.2%
Jenoptik AG		693		12,227
Wincor Nixdorf AG		594		47,641

				59,868


Telecommunication Services 0.1%
Telefonica Deutschland Holding AG		2,007		16,077


Transportation 0.2%
Fraport AG Frankfurt Airport		369		29,442
Hamburger Hafen und Logistik AG		378		10,228

				39,670

				898,000

46 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Hong Kong 2.6%


Automobiles & Components 0.1%
Xinyi Glass Holdings Ltd.		18,000		16,003


Banks 0.2%
Bank of East Asia Ltd.		9,000		37,282
Wing Hang Bank Ltd.		200		2,732

				40,014


Capital Goods 0.2%
Johnson Electric Holdings Ltd.		18,000		17,487
NWS Holdings Ltd.		9,000		14,124
Singamas Container Holdings Ltd.		36,000		8,118

				39,729


Consumer Durables & Apparel 0.1%
Techtronic Industries Co.		9,000		23,889


Consumer Services 0.3%
Cafe de Coral Holdings Ltd.		2,600		8,124
Galaxy Entertainment Group Ltd. *		300		3,009
Sands China Ltd.		3,600		30,104
SJM Holdings Ltd.		9,000		28,875
Wynn Macau Ltd.		3,600		17,348

				87,460


Diversified Financials 0.1%
First Pacific Co., Ltd.		18,000		17,835
Guoco Group Ltd.		200		2,402

				20,237


Food & Staples Retailing 0.0%
Dairy Farm International Holdings Ltd.		900		8,271


Media 0.0%
Television Broadcasts Ltd.		1,800		11,121


Real Estate 0.9%
Great Eagle Holdings Ltd.		1,000		3,389
Hang Lung Group Ltd.		2,000		9,393
Hang Lung Properties Ltd.		9,000		24,990
Henderson Land Development Co., Ltd.		4,000		22,420
Hongkong Land Holdings Ltd.		9,000		56,430
Hysan Development Co., Ltd.		1,000		4,175
Kerry Properties Ltd.		6,000		19,791
New World Development Co., Ltd.		27,000		34,928
Sino Land Co., Ltd.		18,000		25,512
Swire Properties Ltd.		3,600		9,579
Wheelock & Co., Ltd.		3,000		12,234

				222,841


Retailing 0.1%
Chow Sang Sang Holdings International Ltd.		9,000		26,092
Luk Fook Holdings International Ltd.		1,600		5,463

				31,555


Technology Hardware & Equipment 0.1%
VTech Holdings Ltd.		1,800		20,340


Telecommunication Services 0.0%
Hutchison Telecommunications Hong Kong Holdings Ltd.		18,000		6,540


Transportation 0.5%
Cathay Pacific Airways Ltd.		18,000		36,645
MTR Corp., Ltd.		9,000		32,644
Orient Overseas International Ltd.		6,000		29,493
Pacific Basin Shipping Ltd.		46,000		28,746

				127,528

				655,528

Ireland 0.8%


Capital Goods 0.3%
Grafton Group plc		3,910		43,247
Kingspan Group plc		1,773		35,434

				78,681


Consumer Services 0.1%
Paddy Power plc		180		15,075


Food, Beverage & Tobacco 0.1%
C&C Group plc		3,888		26,431
Glanbia plc		882		13,345

				39,776


Health Care Equipment & Services 0.1%
UDG Healthcare plc		4,284		26,528


Insurance 0.1%
FBD Holdings plc		549		14,274


Materials 0.1%
James Hardie Industries plc CDI		1,512		19,619


Transportation 0.0%
Aer Lingus Group plc		1,755		3,963

				197,916

Israel 1.3%


Banks 0.3%
Bank Hapoalim B.M.		7,812		42,445
Israel Discount Bank Ltd., A Shares *		8,478		15,849
Mizrahi Tefahot Bank Ltd.		945		11,651

				69,945


Capital Goods 0.2%
Discount Investment Corp. *		1,962		16,173
Elbit Systems Ltd.		342		19,621

				35,794


Energy 0.2%
Delek Group Ltd.		54		20,236
Oil Refineries Ltd. *		37,512		10,938
Paz Oil Co., Ltd.		108		16,592

				47,766


Food & Staples Retailing 0.0%
Shufersal Ltd.		2,610		10,484


Materials 0.1%
The Israel Corp., Ltd. *		45		23,882


Software & Services 0.2%
Check Point Software Technologies Ltd. *		675		45,509
NICE Systems Ltd.		261		10,671

				56,180


Telecommunication Services 0.3%
Cellcom Israel Ltd.		3,249		41,053

See financial notes 47

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Partner Communications Co., Ltd. *		3,717		34,263

				75,316

				319,367

Italy 3.0%


Automobiles & Components 0.0%
Piaggio & C S.p.A.		3,825		11,813


Banks 0.3%
Banca Carige S.p.A. *		34,465		22,849
Banca Popolare di Sondrio Scarl		3,510		20,671
Credito Valtellinese Scarl *		16,884		28,356

				71,876


Capital Goods 0.3%
Astaldi S.p.A.		990		9,599
C.I.R. S.p.A - Compagnie Industriali Riunite *		16,992		26,754
Danieli & C Officine Meccaniche S.p.A.		396		10,641
Salini Impregilo S.p.A		2,628		16,841

				63,835


Consumer Durables & Apparel 0.4%
De’Longhi S.p.A.		297		5,813
Geox S.p.A.		2,664		11,715
Indesit Co. S.p.A.		1,215		18,123
Luxottica Group S.p.A.		675		37,468
Prada S.p.A.		900		6,761
Safilo Group S.p.A. *		414		9,177
Tod’s S.p.A.		63		8,606

				97,663


Consumer Services 0.2%
Autogrill S.p.A. *		1,746		17,013
Gtech S.p.A.		810		26,805

				43,818


Diversified Financials 0.1%
Azimut Holding S.p.A.		540		18,041


Energy 0.3%
ERG S.p.A.		2,691		37,687
Saras S.p.A. *		19,827		35,052

				72,739


Food, Beverage & Tobacco 0.1%
Davide Campari-Milano S.p.A.		1,890		16,145
Parmalat S.p.A.		6,552		22,406

				38,551


Health Care Equipment & Services 0.0%
Sorin S.p.A. *		3,105		9,666


Insurance 0.3%
Mediolanum S.p.A.		1,422		13,139
Societa Cattolica di Assicurazioni Scarl		675		17,620
Unipol Gruppo Finanziario S.p.A.		5,275		37,448
UnipolSai S.p.A *		5,809		19,747

				87,954


Materials 0.1%
Buzzi Unicem S.p.A.		1,836		38,291


Media 0.0%
RCS MediaGroup S.p.A. *		4,637		10,247


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Recordati S.p.A.		1,152		21,209


Real Estate 0.1%
Beni Stabili S.p.A.		14,184		12,557


Transportation 0.2%
Ansaldo STS S.p.A.		1,026		11,691
ASTM S.p.A.		1,071		18,475
Societa Iniziative Autostradali e Servizi S.p.A.		1,206		13,609

				43,775


Utilities 0.5%
ACEA S.p.A.		1,649		21,352
Enel Green Power S.p.A.		10,152		28,520
Hera S.p.A.		15,192		38,838
Iren S.p.A.		15,545		26,730

				115,440

				757,475

Japan 35.7%


Automobiles & Components 2.9%
Aisan Industry Co., Ltd.		1,200		10,005
Akebono Brake Industry Co., Ltd.		1,800		8,289
Calsonic Kansei Corp.		5,000		24,984
Exedy Corp.		900		26,145
FCC Co., Ltd.		900		15,617
Futaba Industrial Co., Ltd. *		3,600		15,908
Imasen Electric Industrial		500		6,579
Keihin Corp.		1,800		26,965
Koito Manufacturing Co., Ltd.		2,000		37,643
KYB Co., Ltd.		3,000		13,168
Mitsuba Corp.		300		4,891
Mitsubishi Motors Corp. *		1,800		19,858
Musashi Seimitsu Industry Co., Ltd.		900		17,874
NGK Spark Plug Co., Ltd.		1,500		33,655
Nifco, Inc.		900		24,240
Nippon Seiki Co., Ltd.		1,000		17,773
Nissan Shatai Co., Ltd.		2,500		34,414
Nissin Kogyo Co., Ltd.		900		17,415
NOK Corp.		1,800		29,381
Press Kogyo Co., Ltd.		1,000		3,997
Riken Corp.		1,000		4,625
Sanden Corp.		1,000		5,252
Showa Corp.		1,000		12,855
Sumitomo Rubber Industries Ltd.		1,900		25,485
T RAD Co., Ltd.		1,000		2,841
Tachi-S Co., Ltd.		900		13,059
Takata Corp.		900		26,718
The Yokohama Rubber Co., Ltd.		1,500		14,550
Tokai Rika Co., Ltd.		1,800		31,903
Tokai Rubber Industries Ltd.		1,000		9,827
Toyo Tire & Rubber Co., Ltd.		9,000		65,164
Toyoda Gosei Co., Ltd.		1,800		37,882
Toyota Boshoku Corp.		2,700		28,570
TS Tech Co., Ltd.		500		16,264
Unipres Corp.		1,800		32,538
Yorozu Corp.		100		2,012

				718,346


Banks 1.5%
Aozora Bank Ltd.		2,000		5,800

48 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Fukuoka Financial Group, Inc.		9,000		36,153
Hokuhoku Financial Group, Inc.		18,000		33,684
Seven Bank Ltd.		5,400		19,682
Shinsei Bank Ltd.		13,000		26,875
Suruga Bank Ltd.		1,000		17,548
The 77 Bank Ltd.		1,000		4,380
The Awa Bank Ltd.		1,000		4,948
The Bank of Kyoto Ltd.		1,000		7,691
The Chugoku Bank Ltd.		1,300		16,061
The Daishi Bank Ltd.		1,000		3,429
The Gunma Bank Ltd.		2,000		10,483
The Hachijuni Bank Ltd.		2,000		10,699
The Hiroshima Bank Ltd.		9,000		34,125
The Hyakugo Bank Ltd.		1,000		3,792
The Iyo Bank Ltd.		1,800		16,243
The Joyo Bank Ltd.		2,000		9,504
The Juroku Bank Ltd.		1,000		3,312
The Kagoshima Bank Ltd.		1,000		5,771
The Keiyo Bank Ltd.		1,000		4,135
The Kiyo Bank Ltd. *		400		4,969
The Musashino Bank Ltd.		100		3,111
The Nishi-Nippon City Bank Ltd.		9,000		21,251
The Ogaki Kyoritsu Bank Ltd.		9,000		23,632
The San-In Godo Bank Ltd.		1,000		6,594
The Shiga Bank Ltd.		1,000		5,007
The Shizuoka Bank Ltd.		3,000		28,864
Yamaguchi Financial Group, Inc.		1,000		8,690

				376,433


Capital Goods 7.1%
Aica Kogyo Co., Ltd.		900		18,438
Amada Co., Ltd.		4,000		33,195
Asahi Diamond Industrial Co., Ltd.		900		11,049
Central Glass Co., Ltd.		9,000		29,893
Chiyoda Corp.		1,000		15,128
CKD Corp.		1,000		9,876
COMSYS Holdings Corp.		2,700		44,707
Daifuku Co., Ltd.		1,500		20,031
Daihen Corp.		1,000		4,007
DMG Mori Seiki Co., Ltd.		1,200		19,740
Ebara Corp.		9,000		60,667
Fuji Electric Co., Ltd.		9,000		41,091
Fuji Machine Manufacturing Co., Ltd.		1,000		8,632
Fujitec Co., Ltd.		1,000		11,963
Furukawa Co., Ltd.		4,000		7,172
Futaba Corp.		900		14,250
Glory Ltd.		900		23,429
GS Yuasa Corp.		3,000		17,312
Hino Motors Ltd.		2,700		39,707
Hitachi Construction Machinery Co., Ltd.		1,800		34,813
Hitachi Koki Co., Ltd.		900		6,605
Hitachi Zosen Corp.		1,900		10,629
Hoshizaki Electric Co., Ltd.		900		33,420
Inaba Denki Sangyo Co., Ltd.		900		28,394
Inabata & Co., Ltd.		1,900		19,565
Iseki & Co., Ltd.		1,000		2,802
Iwatani Corp.		9,000		57,140
Kamei Corp.		1,900		13,980
Kandenko Co., Ltd.		4,000		20,026
Kanematsu Corp.		18,000		28,217
Keihan Electric Railway Co., Ltd.		9,000		35,183
Kinden Corp.		4,000		41,425
Kitz Corp.		1,800		8,659
Komori Corp.		1,100		14,485
Kurita Water Industries Ltd.		1,800		37,882
Kuroda Electric Co., Ltd.		1,800		29,346
Kyowa Exeo Corp.		2,700		38,755
Mabuchi Motor Co., Ltd.		100		6,653
Maeda Corp.		2,800		16,707
Maeda Road Construction Co., Ltd.		1,000		15,568
Makino Milling Machine Co., Ltd.		1,000		7,750
Meidensha Corp.		1,000		4,213
Minebea Co., Ltd.		9,000		79,097
Mirait Holdings Corp.		1,900		17,722
MISUMI Group, Inc.		900		26,119
Miura Co., Ltd.		900		22,856
Nabtesco Corp.		900		22,477
Nachi-Fujikoshi Corp.		1,000		6,319
NGK Insulators Ltd.		2,500		53,887
Nichias Corp.		600		3,986
Nippo Corp.		500		7,343
Nippon Densetsu Kogyo Co., Ltd.		1,000		13,050
Nippon Signal Co., Ltd.		900		7,804
Nishimatsu Construction Co., Ltd.		9,000		30,686
Nisshinbo Holdings, Inc.		2,000		17,166
Nitta Corp.		100		2,237
Nitto Boseki Co., Ltd.		1,000		4,311
Nitto Kogyo Corp.		100		2,070
Noritake Co., Ltd.		1,000		2,381
Noritz Corp.		900		17,768
NTN Corp. *		10,000		37,721
Oiles Corp.		100		2,205
OKUMA Corp.		1,400		12,565
Okumura Corp.		9,000		38,711
OSG Corp.		900		16,542
Penta-Ocean Construction Co., Ltd.		5,000		18,273
Ryobi Ltd.		3,000		10,493
Sanki Engineering Co., Ltd.		1,000		5,614
Sankyo Tateyama, Inc.		900		20,334
Sanwa Holdings Corp.		4,000		27,982
Shinmaywa Industries Ltd.		400		3,457
Sintokogio Ltd.		900		6,913
Star Micronics Co., Ltd.		900		10,387
Tadano Ltd.		300		3,877
Taikisha Ltd.		100		2,047
Takara Standard Co., Ltd.		400		2,928
Takasago Thermal Engineering Co., Ltd.		1,000		10,111
The Japan Steel Works Ltd.		9,000		43,825
The Nippon Road Co., Ltd.		2,000		9,641
THK Co., Ltd.		1,800		41,109
Toa Corp. *		4,000		8,034
Toda Corp.		9,000		28,394
TOKAI Holdings Corp.		900		2,928
Toshiba Machine Co., Ltd.		1,000		4,938
Toshiba Plant Systems & Services Corp.		1,000		13,051
Totetsu Kogyo Co., Ltd.		400		7,819
TOTO Ltd.		3,000		42,267
Toyo Engineering Corp.		1,000		4,605
Trusco Nakayama Corp.		900		21,092
Tsubakimoto Chain Co.		600		5,114
Ushio, Inc.		1,800		22,539
Yamazen Corp.		1,200		6,937
Yuasa Trading Co., Ltd.		3,000		6,114

				1,778,350

See financial notes 49

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Commercial & Professional Services 0.7%
Aeon Delight Co., Ltd.		900		17,989
Duskin Co., Ltd.		1,000		18,557
Kokuyo Co., Ltd.		2,700		18,650
Kyodo Printing Co., Ltd.		1,000		2,792
Matsuda Sangyo Co., Ltd.		900		11,745
Meitec Corp.		100		2,611
Moshi Moshi Hotline, Inc.		900		8,553
Nissha Printing Co., Ltd. *		900		12,971
Okamura Corp.		1,000		8,113
Park24 Co., Ltd.		900		18,103
Sato Holdings Corp.		100		2,368
Sohgo Security Services Co., Ltd.		1,800		36,383
Temp Holdings Co., Ltd.		100		2,939
Toppan Forms Co., Ltd.		1,800		15,467

				177,241


Consumer Durables & Apparel 1.7%
Alpine Electronics, Inc.		1,000		14,363
Asics Corp.		1,800		35,025
Casio Computer Co., Ltd.		4,500		50,659
Foster Electric Co., Ltd.		500		7,265
Funai Electric Co., Ltd.		1,300		14,291
Gunze Ltd.		9,000		23,632
Haseko Corp. *		3,600		22,927
JVC Kenwood Corp.		8,400		18,600
Kurabo Industries Ltd.		9,000		15,872
Onward Holdings Co., Ltd.		3,000		20,840
PanaHome Corp.		1,400		9,519
Pioneer Corp. *		10,800		24,337
Rinnai Corp.		300		25,102
Sangetsu Co., Ltd.		900		21,771
Sankyo Co., Ltd.		900		37,212
Sanyo Shokai Ltd.		1,000		2,802
Sumitomo Forestry Co., Ltd.		3,600		36,753
Tamron Co., Ltd.		100		2,472
Token Corp.		180		7,892
Tomy Co., Ltd.		1,800		7,883
TSI Holdings Co., Ltd.		1,100		6,456
Unitika Ltd. *		10,000		6,075
Wacoal Holdings Corp.		1,000		10,591

				422,339


Consumer Services 0.6%
Accordia Golf Co., Ltd.		1,000		12,962
Doutor Nichires Holdings Co., Ltd.		900		14,267
HIS Co., Ltd.		400		22,848
McDonald’s Holdings Co. Japan Ltd.		900		23,985
MOS Food Services, Inc.		100		2,026
Plenus Co., Ltd.		900		19,858
Resorttrust, Inc.		200		3,314
Round One Corp.		1,400		10,631
Royal Holdings Co., Ltd.		100		1,389
Saizeriya Co., Ltd.		900		10,564
Tokyo Dome Corp.		1,000		5,830
Yoshinoya Holdings Co., Ltd.		1,000		13,374
Zensho Holdings Co., Ltd.		900		9,620

				150,668


Diversified Financials 0.6%
Acom Co., Ltd. *		5,400		15,449
AEON Financial Service Co., Ltd.		900		21,974
Aiful Corp. *		4,650		14,898
Century Tokyo Leasing Corp.		100		2,852
Daiwa Securities Group, Inc.		3,000		26,924
Hitachi Capital Corp.		900		21,296
Jaccs Co., Ltd.		1,000		4,105
Mitsubishi UFJ Lease & Finance Co., Ltd.		3,600		18,306
Orient Corp. *		8,100		16,269
SBI Holdings, Inc.		1,900		22,525

				164,598


Energy 0.2%
Japan Petroleum Exploration Co.		900		32,802
Shinko Plantech Co., Ltd.		900		6,940

				39,742


Food & Staples Retailing 1.1%
Ain Pharmaciez, Inc.		900		38,975
Arcs Co., Ltd.		900		16,481
Cawachi Ltd.		900		16,428
Cocokara fine, Inc.		400		10,382
Cosmos Pharmaceutical Corp.		100		12,041
FamilyMart Co., Ltd.		900		39,945
Heiwado Co., Ltd.		1,000		13,452
Kato Sangyo Co., Ltd.		900		16,666
Matsumotokiyoshi Holdings Co., Ltd.		900		28,790
Mitsubishi Shokuhin Co., Ltd.		100		2,166
San-A Co., Ltd.		200		5,628
Sugi Holdings Co., Ltd.		900		34,566
Sundrug Co., Ltd.		300		12,036
Tsuruha Holdings, Inc.		100		9,269
Valor Co., Ltd.		900		11,287
Welcia Holdings Co., Ltd.		100		5,585
Yokohama Reito Co., Ltd.		100		793

				274,490


Food, Beverage & Tobacco 2.5%
Calbee, Inc.		900		21,789
Coca-Cola East Japan Co., Ltd.		1,800		41,180
Dydo Drinco, Inc.		100		4,218
Ezaki Glico Co., Ltd.		1,000		13,148
Fuji Oil Co., Ltd.		1,800		24,302
Hokuto Corp.		900		17,327
House Foods Group, Inc.		1,800		28,835
Ito En Ltd.		900		20,131
Itoham Foods, Inc.		9,000		38,711
J-Oil Mills, Inc.		1,000		2,626
Kagome Co., Ltd.		1,800		30,651
Kewpie Corp.		2,000		28,688
Kikkoman Corp.		1,500		29,055
Marudai Food Co., Ltd.		1,000		2,988
Maruha Nichiro Holdings, Inc.		9,000		15,431
Megmilk Snow Brand Co., Ltd.		1,800		23,226
Mitsui Sugar Co., Ltd.		1,000		4,164
Morinaga & Co., Ltd.		9,000		19,752
Morinaga Milk Industry Co., Ltd.		9,000		28,306
Nichirei Corp.		9,000		38,799
Nippon Flour Mills Co., Ltd.		3,000		15,167
Nippon Suisan Kaisha Ltd. *		9,000		19,928
Nissin Foods Holdings Co., Ltd.		900		40,122
Prima Meat Packers Ltd.		5,000		9,553
Sapporo Holdings Ltd.		9,000		33,949
Takara Holdings, Inc.		500		3,836
The Nisshin Oillio Group Ltd.		1,000		3,272

50 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Warabeya Nichiyo Co., Ltd.		900		16,974
Yakult Honsha Co., Ltd.		900		43,031

				619,159


Health Care Equipment & Services 0.5%
Miraca Holdings, Inc.		300		13,638
Nichii Gakkan Co.		1,800		16,243
Nihon Kohden Corp.		100		4,017
Nipro Corp.		2,700		23,676
Ship Healthcare Holdings, Inc.		100		3,562
Sysmex Corp.		300		17,842
Toho Holdings Co., Ltd.		1,800		36,929

				115,907


Household & Personal Products 0.5%
Fancl Corp.		2,000		25,121
Kobayashi Pharmaceutical Co., Ltd.		100		5,643
Kose Corp.		900		29,276
Lion Corp.		1,000		5,526
Mandom Corp.		100		3,390
Pigeon Corp.		100		4,487
Pola Orbis Holdings, Inc.		100		3,983
Unicharm Corp.		900		50,879

				128,305


Insurance 0.1%
Sony Financial Holdings, Inc.		900		14,470


Materials 4.3%
Adeka Corp.		2,000		21,908
Aichi Steel Corp.		1,000		4,007
Air Water, Inc.		1,500		22,148
Asahi Holdings, Inc.		900		15,114
Chugoku Marine Paints Ltd.		1,000		5,781
Daicel Corp.		5,000		43,012
Daido Steel Co., Ltd.		4,000		18,302
Daio Paper Corp.		3,000		30,628
Dowa Holdings Co., Ltd.		4,000		33,038
Earth Chemical Co., Ltd.		900		31,700
FP Corp.		100		5,643
Fuji Seal International, Inc.		900		31,392
Godo Steel Ltd.		9,000		14,814
Hitachi Chemical Co., Ltd.		2,700		37,564
Hitachi Metals Ltd.		2,000		29,765
Hokuetsu Kishu Paper Co., Ltd.		4,500		20,458
Ishihara Sangyo Kaisha Ltd. *		9,000		9,435
Kansai Paint Co., Ltd.		1,000		12,933
Kureha Corp.		4,000		19,086
Kyoei Steel Ltd.		900		16,948
Lintec Corp.		900		17,415
Maruichi Steel Tube Ltd.		900		25,069
Mitsubishi Gas Chemical Co., Inc.		9,000		57,228
Mitsubishi Paper Mills Ltd. *		9,000		8,113
Mitsubishi Steel Manufacturing Co., Ltd.		1,000		2,302
Nihon Parkerizing Co., Ltd.		200		4,301
Nippon Denko Co., Ltd.		1,000		2,802
Nippon Kayaku Co., Ltd.		1,000		12,972
Nippon Paint Co., Ltd.		1,600		24,424
Nippon Shokubai Co., Ltd.		3,000		36,330
Nippon Soda Co., Ltd.		500		2,670
Nissan Chemical Industries Ltd.		1,800		26,754
Nittetsu Mining Co., Ltd.		1,000		4,115
NOF Corp.		1,000		6,800
Pacific Metals Co., Ltd.		1,000		3,331
Rengo Co., Ltd.		9,000		51,849
Sanyo Chemical Industries Ltd.		1,000		6,711
Sanyo Special Steel Co., Ltd.		1,000		4,095
Sumitomo Bakelite Co., Ltd.		9,000		33,861
Sumitomo Osaka Cement Co., Ltd.		9,000		34,566
Taiyo Nippon Sanso Corp.		3,000		22,398
Toagosei Co., Ltd.		9,000		37,388
Toho Zinc Co., Ltd.		1,000		3,321
Tokai Carbon Co., Ltd.		9,000		27,247
Tokuyama Corp.		10,000		36,251
Tokyo Ohka Kogyo Co., Ltd.		900		18,791
Tokyo Steel Manufacturing Co., Ltd. *		5,500		27,860
Topy Industries Ltd.		9,000		15,343
Toyo Ink SC Holdings Co., Ltd.		4,000		18,224
Toyo Kohan Co., Ltd.		500		2,415
Toyobo Co., Ltd.		18,000		31,039
UACJ Corp.		2,000		7,623
Yamato Kogyo Co., Ltd.		900		27,071
Yodogawa Steel Works Ltd.		1,000		4,154
Zeon Corp.		1,000		9,700

				1,078,209


Media 0.4%
Asatsu-DK, Inc.		900		19,426
Avex Group Holdings, Inc.		100		1,825
CyberAgent, Inc.		100		4,385
Daiichikosho Co., Ltd.		900		26,983
Kadokawa Corp.		300		9,803
SKY Perfect JSAT Holdings, Inc.		2,800		14,265
Toho Co., Ltd.		900		17,371
Tokyo Broadcasting System Holdings, Inc.		900		9,964
TV Asahi Corp.		400		7,631
Zenrin Co., Ltd.		300		2,836

				114,489


Pharmaceuticals, Biotechnology & Life Sciences 1.2%
Chugai Pharmaceutical Co., Ltd.		1,800		45,818
Dainippon Sumitomo Pharma Co., Ltd.		1,000		18,439
Hisamitsu Pharmaceutical Co., Inc.		200		9,327
Kaken Pharmaceutical Co., Ltd.		500		7,691
Kissei Pharmaceutical Co., Ltd.		900		24,152
KYORIN Holdings, Inc.		900		19,876
Kyowa Hakko Kirin Co., Ltd.		1,600		17,103
Mitsubishi Tanabe Pharma Corp.		2,700		39,628
Mochida Pharmaceutical Co., Ltd.		200		13,462
Nippon Shinyaku Co., Ltd.		500		9,548
Rohto Pharmaceutical Co., Ltd.		1,000		16,783
Santen Pharmaceutical Co., Ltd.		900		41,929
Sawai Pharmaceutical Co., Ltd.		200		12,737
Tsumura & Co.		900		23,870

				300,363


Real Estate 1.2%
Advance Residence Investment Corp.		9		19,223
Aeon Mall Co., Ltd.		900		24,822
Daikyo, Inc.		3,000		6,584
Japan Excellent, Inc.		5		6,319
Japan Prime Realty Investment Corp.		9		31,083
Japan Real Estate Investment Corp.		5		26,993
Japan Retail Fund Investment Corp.		9		17,706
Kenedix Office Investment Corp.		1		4,948
Leopalace21 Corp. *		4,100		19,884

See financial notes 51

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Nippon Building Fund, Inc.		4		22,809
Nomura Real Estate Holdings, Inc.		900		18,377
Nomura Real Estate Office Fund, Inc.		1		4,213
NTT Urban Development Corp.		1,200		10,311
Orix JREIT, Inc.		9		11,349
Tokyo Tatemono Co., Ltd.		2,000		16,186
Tokyu Fudosan Holdings Corp. *		4,500		35,316
United Urban Investment Corp.		9		13,712

				289,835


Retailing 2.1%
ABC-Mart, Inc.		100		3,948
Adastria Holdings Co., Ltd.		60		1,383
Alpen Co., Ltd.		100		1,693
Aoyama Trading Co., Ltd.		1,000		24,524
Arcland Sakamoto Co., Ltd.		300		5,170
Autobacs Seven Co., Ltd.		1,800		27,882
Bic Camera, Inc.		2,700		15,740
Canon Marketing Japan, Inc.		1,900		24,647
Chiyoda Co., Ltd.		900		17,565
DCM Holdings Co., Ltd.		3,200		20,222
Don Quijote Holdings Co., Ltd.		900		48,675
Doshisha Co., Ltd.		900		13,262
Geo Holdings Corp.		1,800		16,384
Gulliver International Co., Ltd.		900		6,904
H2O Retailing Corp.		4,000		29,589
Hikari Tsushin, Inc.		100		8,622
Izumi Co., Ltd.		900		26,119
Kohnan Shoji Co., Ltd.		1,200		12,110
Komeri Co., Ltd.		900		21,921
Marui Group Co., Ltd.		4,500		36,903
Nitori Holdings Co., Ltd.		900		40,562
Rakuten, Inc.		1,800		25,731
Ryohin Keikaku Co., Ltd.		200		18,067
T-Gaia Corp.		900		8,615
The Daiei, Inc. *		10,050		31,017
United Arrows Ltd.		200		6,594
USS Co., Ltd.		1,800		24,179
Xebio Co., Ltd.		900		16,331

				534,359


Semiconductors & Semiconductor Equipment 0.7%
Advantest Corp.		1,800		19,488
Dainippon Screen Manufacturing Co., Ltd. *		3,000		15,637
Disco Corp.		100		6,712
Renesas Electronics Corp. *		4,900		35,286
Sanken Electric Co., Ltd.		1,000		6,956
Shinko Electric Industries Co., Ltd.		1,800		13,491
Sumco Corp.		2,700		20,634
Tokyo Seimitsu Co., Ltd.		500		10,244
Ulvac, Inc. *		1,800		36,841

				165,289


Software & Services 1.6%
Capcom Co., Ltd.		900		17,160
Dena Co., Ltd.		900		19,399
DTS Corp.		300		5,849
Fuji Soft, Inc.		300		6,111
Gree, Inc.		900		9,929
IT Holdings Corp.		2,700		46,320
Itochu Techno-Solutions Corp.		900		41,576
NEC Networks & System Integration Corp.		900		19,532
NET One Systems Co., Ltd.		2,700		17,698
Nexon Co., Ltd.		100		846
Nihon Unisys Ltd.		1,800		20,652
Nomura Research Institute Ltd.		1,000		32,626
NS Solutions Corp.		100		2,606
NSD Co., Ltd.		900		11,560
Obic Co., Ltd.		500		15,701
Otsuka Corp.		160		20,489
SCSK Corp.		400		12,012
Square Enix Holdings Co., Ltd.		1,000		22,652
Transcosmos, Inc.		900		19,488
Trend Micro, Inc.		900		30,069
Yahoo Japan Corp.		4,600		29,070

				401,345


Technology Hardware & Equipment 2.6%
Alps Electric Co., Ltd. *		4,700		60,324
Amano Corp.		1,000		9,974
Anritsu Corp.		900		10,264
Azbil Corp.		1,000		24,328
Canon Electronics, Inc.		100		1,791
Citizen Holdings Co., Ltd.		5,400		44,072
Daiwabo Holdings Co., Ltd.		9,000		17,107
Eizo Corp.		500		13,682
Hamamatsu Photonics K.K.		900		36,418
Hirose Electric Co., Ltd.		200		28,413
Hitachi High-Technologies Corp.		1,800		43,314
Hitachi Kokusai Electric, Inc.		1,000		13,501
Horiba Ltd.		500		19,203
Hosiden Corp.		5,400		25,872
Japan Aviation Electronics Industry Ltd.		1,000		15,970
Macnica, Inc.		100		2,884
Melco Holdings, Inc.		100		1,519
Mitsumi Electric Co., Ltd. *		5,000		39,191
Nichicon Corp.		900		7,389
Nippon Chemi-Con Corp. *		1,000		3,214
Oki Electric Industry Co., Ltd. *		9,000		21,339
Riso Kagaku Corp.		500		10,973
Ryosan Co., Ltd.		1,800		37,988
Shimadzu Corp.		2,000		16,519
Taiyo Yuden Co., Ltd.		1,800		22,133
Toshiba TEC Corp.		9,000		59,080
UKC Holdings Corp.		400		6,827
Yaskawa Electric Corp.		1,600		23,703
Yokogawa Electric Corp.		2,700		41,929

				658,921


Transportation 1.5%
Fukuyama Transporting Co., Ltd.		1,000		5,810
Hitachi Transport System, Ltd.		1,800		28,711
Japan Airport Terminal Co., Ltd.		900		20,784
Kamigumi Co., Ltd.		9,000		83,153
Keikyu Corp.		2,600		21,729
Keio Corp.		5,000		35,223
Keisei Electric Railway Co., Ltd.		600		5,244
Kintetsu World Express, Inc.		500		21,481
Mitsubishi Logistics Corp.		500		6,912
Mitsui-Soko Co., Ltd.		1,000		4,056
Nankai Electric Railway Co., Ltd.		2,300		8,541
Nippon Konpo Unyu Soko Co., Ltd.		900		15,757
Nishi-Nippon Railroad Co., Ltd.		9,000		35,272

52 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)
Odakyu Electric Railway Co., Ltd.		3,000		26,748
Sankyu, Inc.		9,000		39,504
Senko Co., Ltd.		1,000		4,899
Sotetsu Holdings, Inc.		1,000		3,566
The Sumitomo Warehouse Co., Ltd.		1,000		4,987

				372,377


Utilities 0.1%
Shizuoka Gas Co., Ltd.		1,800		10,352
The Okinawa Electric Power Co., Inc.		400		13,345

				23,697

				8,918,932

Luxembourg 0.6%


Banks 0.1%
Espirito Santo Financial Group S.A. *		5,058		33,874


Commercial & Professional Services 0.1%
Regus plc		6,831		26,696


Consumer Durables & Apparel 0.0%
Samsonite International S.A.		2,700		7,445


Household & Personal Products 0.1%
Oriflame Cosmetics S.A.		630		16,021


Materials 0.2%
AZ Electronic Materials S.A.		1,719		11,506
Ternium S.A.		1,198		35,485

				46,991


Media 0.1%
RTL Group S.A. *		90		11,615


Semiconductors & Semiconductor Equipment 0.0%
Magnachip Semiconductor Corp. *		225		3,317

				145,959

Netherlands 2.2%


Capital Goods 0.7%
Aalberts Industries N.V.		1,125		38,060
AerCap Holdings N.V. *		810		34,830
Arcadis N.V.		648		24,523
Koninklijke Boskalis Westminster N.V.		873		43,726
Sensata Technologies Holding N.V. *		315		12,802
TKH Group N.V.		540		18,944

				172,885


Commercial & Professional Services 0.3%
USG People N.V.		3,846		73,251


Consumer Durables & Apparel 0.1%
TomTom N.V. *		2,934		18,940


Diversified Financials 0.0%
BinckBank N.V.		270		3,095


Energy 0.3%
Core Laboratories N.V.		54		10,155
Koninklijke Vopak N.V.		351		20,574
SBM Offshore N.V. *		2,197		34,046

				64,775


Food & Staples Retailing 0.1%
X5 Retail Group N.V. *		1,080		19,170


Food, Beverage & Tobacco 0.0%
Koninklijke Wessanen N.V.		1,674		8,208


Materials 0.1%
Koninklijke Ten Cate N.V.		720		23,866


Real Estate 0.3%
Corio N.V.		666		31,284
Eurocommercial Properties N.V.		270		12,161
VastNed Retail N.V.		306		15,468
Wereldhave N.V.		234		20,086

				78,999


Semiconductors & Semiconductor Equipment 0.2%
ASM International N.V.		396		15,322
NXP Semiconductor N.V. *		378		21,255

				36,577


Software & Services 0.0%
Unit 4 N.V.		216		11,517


Telecommunication Services 0.1%
Ziggo N.V.		540		24,724

				536,007

New Zealand 0.5%


Consumer Services 0.1%
SKYCITY Entertainment Group Ltd.		5,850		19,318


Health Care Equipment & Services 0.1%
Fisher & Paykel Healthcare Corp., Ltd.		4,500		15,162


Materials 0.0%
Nuplex Industries Ltd.		4,698		13,303


Media 0.1%
Sky Network Television Ltd.		3,150		16,198


Real Estate 0.0%
Kiwi Income Property Trust		4,014		3,794


Telecommunication Services 0.0%
Chorus Ltd.		4,500		5,766


Transportation 0.1%
Air New Zealand Ltd.		7,452		11,115
Auckland International Airport Ltd.		4,302		13,519
Mainfreight Ltd.		540		5,826

				30,460


Utilities 0.1%
Contact Energy Ltd.		3,474		15,617
Infratil Ltd.		5,877		10,864

				26,481

				130,482

Norway 1.3%


Banks 0.1%
SpareBank 1 SR Bank A.S.A.		1,278		13,333
Sparebanken 1 SMN		1,242		11,920

				25,253


Capital Goods 0.1%
Vard Holdings Ltd. *		9,000		6,501
Veidekke A.S.A.		2,079		18,306

				24,807

See financial notes 53

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Commercial & Professional Services 0.1%
Tomra Systems A.S.A.		1,170		10,936


Diversified Financials 0.0%
Aker A.S.A., A Shares		270		8,901


Energy 0.2%
Fred. Olsen Energy A.S.A.		387		12,725
Kvaerner A.S.A.		4,843		10,428
TGS Nopec Geophysical Co. A.S.A.		973		30,777

				53,930


Food, Beverage & Tobacco 0.1%
Austevoll Seafood A.S.A.		738		4,385
Cermaq A.S.A.		810		8,957
Leroy Seafood Group A.S.A.		153		4,776

				18,118


Insurance 0.2%
Gjensidige Forsikring A.S.A.		1,611		33,855
Storebrand A.S.A. *		3,222		20,437

				54,292


Media 0.1%
Schibsted A.S.A.		495		32,678


Semiconductors & Semiconductor Equipment 0.2%
REC Silicon A.S.A. *		78,759		58,711


Software & Services 0.1%
Atea A.S.A.		1,215		13,030


Transportation 0.1%
Golden Ocean Group Ltd.		10,368		22,792

				323,448

Portugal 0.4%


Banks 0.1%
Banco BPI S.A. - Reg’d *		8,973		21,192


Food & Staples Retailing 0.2%
Jeronimo Martins, SGPS, S.A.		1,134		19,288
Sonae		22,770		41,041

				60,329


Media 0.1%
ZON OPTIMUS, SGPS, S.A.		1,981		15,514


Utilities 0.0%
REN - Redes Energeticas Nacionais SGPS S.A.		2,709		10,330

				107,365

Singapore 1.5%


Capital Goods 0.3%
Cosco Corp. Singapore Ltd.		18,000		9,805
Sembcorp Marine Ltd.		9,000		29,202
Singapore Technologies Engineering Ltd.		9,000		26,999
United Engineers Ltd.		9,000		12,931

				78,937


Consumer Services 0.1%
Genting Singapore plc		18,000		19,113


Diversified Financials 0.1%
Singapore Exchange Ltd.		2,600		14,122


Food & Staples Retailing 0.1%
Olam International Ltd.		12,000		16,815


Food, Beverage & Tobacco 0.1%
Golden Agri-Resources Ltd.		63,000		27,603


Real Estate 0.4%
Ascendas Real Estate Investment Trust		9,000		15,347
CapitaCommercial Trust		9,000		10,409
CapitaLand Ltd.		18,000		40,499
CapitaMall Trust		9,000		13,500
City Developments Ltd.		2,000		14,826
Global Logistic Properties Ltd.		1,000		2,234
Keppel Land Ltd.		3,000		7,602
Suntec Real Estate Investment Trust		9,000		11,830
UOL Group Ltd.		1,000		4,831

				121,078


Telecommunication Services 0.1%
M1 Ltd.		800		2,148
StarHub Ltd.		9,000		29,699

				31,847


Transportation 0.3%
Hutchison Port Holdings Trust		27,000		16,875
Neptune Orient Lines Ltd. *		27,000		20,249
SATS Ltd.		9,000		21,244
Singapore Post Ltd.		9,000		9,379
SMRT Corp., Ltd.		9,000		7,283

				75,030

				384,545

Spain 2.4%


Banks 0.2%
Bankinter S.A.		5,978		48,491


Capital Goods 0.8%
Abengoa S.A.		8,501		40,366
Construcciones y Auxiliar de Ferrocarriles S.A.		19		10,128
Elecnor S.A.		306		4,518
Gamesa Corp. Tecnologica S.A. *		7,056		79,542
Obrascon Huarte Lain S.A.		522		23,027
Sacyr S.A. *		3,655		22,161
Zardoya Otis S.A.		1,566		27,123

				206,865


Commercial & Professional Services 0.1%
Prosegur Cia de Seguridad S.A. - Reg’d		1,692		9,955


Diversified Financials 0.1%
Bolsas y Mercados Espanoles S.A.		729		30,422


Energy 0.1%
Tecnicas Reunidas S.A.		234		12,999


Food, Beverage & Tobacco 0.2%
Ebro Foods S.A.		1,170		25,799
Viscofan S.A.		360		18,526

				44,325


Insurance 0.2%
Grupo Catalana Occidente S.A.		355		14,258
Mapfre S.A.		10,692		44,302

				58,560

54 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Materials 0.2%
Acerinox S.A.		3,150		45,943


Media 0.2%
Atresmedia Corp de Medios de Comunicaion S.A. *		859		15,305
Mediaset Espana Comunicacion S.A. *		3,186		38,177

				53,482


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Almirall S.A.		765		13,461
Grifols S.A.		396		20,745

				34,206


Software & Services 0.2%
Indra Sistemas S.A.		2,340		42,984

				588,232

Sweden 2.4%


Capital Goods 0.4%
Haldex AB		540		5,458
Indutrade AB		306		14,618
Lindab International AB *		1,692		21,752
Nibe Industrier AB		495		13,438
Peab AB		4,392		29,963
Saab AB, Class B		873		24,177

				109,406


Commercial & Professional Services 0.2%
Intrum Justitia AB		630		18,392
Loomis AB, B Shares		999		24,563

				42,955


Consumer Durables & Apparel 0.2%
JM AB		1,251		41,168
Nobia AB		1,683		15,239

				56,407


Diversified Financials 0.2%
L E Lundbergforetagen AB, B Shares		378		17,750
Ratos AB, B Shares		3,735		34,810

				52,560


Energy 0.0%
Lundin Petroleum AB *		603		12,115


Food & Staples Retailing 0.1%
Axfood AB		333		18,954


Food, Beverage & Tobacco 0.1%
AarhusKarlshamn AB		198		13,291


Health Care Equipment & Services 0.1%
Elekta AB, B Shares		963		12,816


Materials 0.3%
BillerudKorsnas AB		1,539		21,479
Hexpol AB		72		6,497
Holmen AB, B Shares		1,080		40,498

				68,474


Media 0.2%
Eniro AB *		1,440		14,725
Modern Times Group AB, B Shares		657		31,303

				46,028


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Meda AB, A Shares		2,097		31,689


Real Estate 0.2%
Castellum AB		900		15,778
Fabege AB		1,170		16,274
Kungsleden AB		2,619		22,590

				54,642


Retailing 0.1%
Bilia AB		711		22,310
Clas Ohlson AB, B Shares		540		10,264
KappAhl AB *		774		5,075

				37,649


Technology Hardware & Equipment 0.1%
Hexagon AB, B Shares		855		30,366


Transportation 0.1%
SAS AB *		7,110		19,868

				607,220

Switzerland 3.2%


Banks 0.1%
Banque Cantonale Vaudoise - Reg’d		18		10,586
Valiant Holding AG - Reg’d		117		11,869

				22,455


Capital Goods 0.8%
AFG Arbonia-Forster Holding AG *		378		12,188
Belimo Holding AG - Reg’d		1		2,725
Bucher Industries AG - Reg’d		27		8,254
Daetwyler Holding AG		45		6,923
Georg Fischer AG - Reg’d *		72		57,629
Implenia AG - Reg’d *		162		12,268
Meyer Burger Technology AG *		549		10,378
OC Oerlikon Corp. AG - Reg’d *		1,278		21,837
Rieter Holding AG - Reg’d *		63		14,291
Sulzer AG - Reg’d		225		31,803
Zehnder Group AG		189		9,001

				187,297


Commercial & Professional Services 0.2%
DKSH Holding AG		198		14,286
Gategroup Holding AG *		648		21,004
Kaba Holding AG, B Shares - Reg’d *		27		13,426

				48,716


Consumer Durables & Apparel 0.1%
Forbo Holding AG - Reg’d *		18		16,144


Consumer Services 0.1%
Kuoni Reisen Holding AG - Reg’d *		63		26,769


Diversified Financials 0.2%
Julius Baer Group Ltd. *		864		40,434
Partners Group Holding AG		45		11,705

				52,139


Food, Beverage & Tobacco 0.1%
Barry Callebaut AG - Reg’d *		18		22,418
Emmi AG *		18		6,335

				28,753


Health Care Equipment & Services 0.3%
Nobel Biocare Holding AG - Reg’d *		1,593		23,331
Sonova Holding AG - Reg’d *		207		29,235
Straumann Holding AG - Reg’d		63		13,547

				66,113

See financial notes 55

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Insurance 0.1%
Helvetia Holding AG - Reg’d		54		27,972


Materials 0.1%
Ems-Chemie Holding AG - Reg’d		54		20,783
Schmolz + Bickenbach AG - Reg’d *		6,894		9,862

				30,645


Pharmaceuticals, Biotechnology & Life Sciences 0.4%
Actelion Ltd. - Reg’d *		486		51,453
Galenica AG - Reg’d		36		38,215

				89,668


Real Estate 0.1%
Allreal Holding AG - Reg’d *		54		7,541
Swiss Prime Site AG - Reg’d *		180		15,102

				22,643


Retailing 0.2%
Dufry AG - Reg’d *		117		19,819
Valora Holding AG - Reg’d		99		28,077

				47,896


Software & Services 0.0%
Temenos Group AG - Reg’d		180		6,345


Technology Hardware & Equipment 0.2%
Logitech International S.A. - Reg’d		3,654		58,287


Transportation 0.2%
Flughafen Zuerich AG - Reg’d		27		17,105
Panalpina Welttransport Holding AG - Reg’d		252		41,742

				58,847

				790,689

United Kingdom 14.1%


Banks 0.0%
Paragon Group Cos. plc		1,620		11,115


Capital Goods 1.6%
Ashtead Group plc		3,160		46,390
Bodycote plc		2,439		30,901
Chemring Group plc		3,366		15,513
Fenner plc		1,647		11,719
Galliford Try plc		1,296		27,779
Interserve plc		2,480		25,248
Keller Group plc		1,584		33,713
Kier Group plc		702		22,258
Lavendon Group plc		1,557		5,434
Melrose Industries plc		4,028		22,155
Morgan Crucible Co. plc		3,987		23,045
Morgan Sindall Group plc		810		10,283
Qinetiq Group plc		10,251		39,392
Rotork plc		369		16,585
Senior plc		3,222		15,529
Speedy Hire plc		6,273		7,648
Spirax-Sarco Engineering plc		459		23,853
Ultra Electronics Holdings plc		531		17,130

				394,575


Commercial & Professional Services 1.6%
Babcock International Group plc		1,935		47,701
Berendsen plc		2,675		46,936
Cape plc		3,069		14,671
De La Rue plc		2,052		28,130
Homeserve plc		3,519		19,455
Intertek Group plc		603		29,720
Mears Group plc		1,296		11,077
Michael Page International plc		4,500		38,234
Mitie Group plc		6,300		36,488
Rentokil Initial plc		23,301		51,974
RPS Group plc		3,285		19,048
Shanks Group plc		10,557		20,832
WS Atkins plc		1,008		25,035

				389,301


Consumer Durables & Apparel 0.6%
Bellway plc		1,800		50,557
Bovis Homes Group plc		1,368		21,378
Guinness Peat Group plc *		45,963		27,034
Redrow plc		2,174		12,453
The Berkeley Group Holdings plc		810		37,208

				148,630


Consumer Services 1.0%
Betfair Group plc		873		16,810
Enterprise Inns plc *		22,329		57,964
Greene King plc		2,934		45,211
J.D. Wetherspoon plc		1,674		22,892
Marston’s plc		11,250		28,186
Mitchells & Butlers plc *		5,877		47,767
Spirit Pub Co. plc		7,920		11,016
The Restaurant Group plc		1,703		19,122

				248,968


Diversified Financials 1.6%
3i Group plc		2,611		18,421
Aberdeen Asset Management plc		3,843		25,156
Ashmore Group plc		1,998		10,601
Close Brothers Group plc		1,530		37,589
F&C Asset Management plc		3,600		7,632
Henderson Group plc		9,497		40,569
IG Group Holdings plc		2,718		28,833
Intermediate Capital Group plc		1,800		13,577
International Personal Finance plc		2,646		23,724
Investec plc		4,770		35,548
Jupiter Fund Management plc		1,899		13,901
London Stock Exchange Group plc		1,675		56,899
Provident Financial plc		1,314		41,333
Schroders plc		588		26,734
Schroders plc, Non-Voting Shares		270		9,425
Tullett Prebon plc		3,717		20,868

				410,810


Energy 0.5%
Asia Resource Minerals plc *		2,712		10,567
EnQuest plc *		4,734		11,591
Hargreaves Services plc		180		2,639
Hunting plc		1,341		19,046
Petrofac Ltd.		1,332		30,537
Premier Oil plc		2,529		13,372
Subsea 7 S.A.		1,710		32,681

				120,433


Food & Staples Retailing 0.3%
Booker Group plc		18,165		53,060
Greggs plc		2,736		23,086

				76,146

56 See financial notes

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Food, Beverage & Tobacco 0.4%
Britvic plc		2,138		27,857
Cranswick plc		963		20,254
Dairy Crest Group plc		3,852		34,310
Greencore Group plc		5,382		24,082

				106,503


Health Care Equipment & Services 0.1%
Synergy Health plc		630		14,221


Household & Personal Products 0.1%
PZ Cussons plc		2,925		18,014


Insurance 0.9%
Admiral Group plc		1,485		35,712
Beazley plc		5,193		22,975
Catlin Group Ltd.		4,635		41,246
Direct Line Insurance Group plc		2,358		10,452
Hiscox Ltd.		3,888		42,482
Jardine Lloyd Thompson Group plc		900		15,988
Lancashire Holdings Ltd.		2,673		32,858
Phoenix Group Holdings		2,196		27,601

				229,314


Materials 1.0%
African Barrick Gold plc		2,927		13,793
Alent plc		1,071		5,564
Croda International plc		558		23,762
DS Smith plc		9,243		54,664
Elementis plc		3,330		16,083
Essentra plc		1,413		21,075
Evraz plc *		14,373		16,873
Hill & Smith Holdings plc		621		5,802
Lonmin plc *		7,020		35,458
Petropavlovsk plc		8,487		13,227
Randgold Resources Ltd.		171		13,604
RPC Group plc		2,160		22,407
Synthomer plc		1,152		5,120
Victrex plc		450		14,419

				261,851


Media 0.3%
Cineworld Group plc		1,800		9,562
Trinity Mirror plc *		7,679		29,373
UBM plc		3,951		47,508

				86,443


Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Genus plc		108		2,114
Hikma Pharmaceuticals plc		630		15,140

				17,254


Real Estate 0.7%
Derwent London plc		261		12,120
Hammerson plc		4,428		42,632
Intu Properties plc		4,635		25,221
Savills plc		1,764		18,062
SEGRO plc		7,650		45,756
Songbird Estates plc *		6,165		19,088

				162,879


Retailing 1.0%
Darty plc		28,165		54,752
Debenhams plc		22,473		28,510
Halfords Group plc		5,256		41,496
Howden Joinery Group plc		1,225		7,793
John Menzies plc		792		9,085
Lookers plc		6,417		13,953
Mothercare plc *		2,304		9,634
N Brown Group plc		1,566		15,484
Sports Direct International plc *		1,197		16,178
WH Smith plc		2,241		43,978

				240,863


Semiconductors & Semiconductor Equipment 0.2%
ARM Holdings plc		1,755		29,705
CSR plc		1,800		22,850

				52,555


Software & Services 0.3%
Aveva Group plc		180		6,513
Computacenter plc		2,547		29,239
Fidessa Group plc		135		5,805
Micro Focus International plc		983		12,907
Xchanging plc		4,770		14,109

				68,573


Technology Hardware & Equipment 0.8%
Domino Printing Sciences plc		900		12,126
Electrocomponents plc		7,551		34,028
Halma plc		2,349		24,013
Laird plc		5,598		29,505
Pace plc		3,150		21,934
Premier Farnell plc		4,320		16,651
Spectris plc		783		32,241
Spirent Communications plc		6,759		11,893
TT electronics plc		4,275		15,958
Xyratex Ltd.		1,080		14,245

				212,594


Telecommunication Services 0.2%
Kcom Group plc		6,534		10,632
TalkTalk Telecom Group plc		5,958		31,602

				42,234


Transportation 0.8%
BBA Aviation plc		6,093		34,339
easyJet plc		1,278		36,859
Go-Ahead Group plc		765		27,769
Northgate plc		5,097		50,824
Stagecoach Group plc		4,320		28,235
Stobart Group Ltd.		2,547		6,499
Stolt-Nielsen Ltd.		621		19,124

				203,649

				3,516,925

Total Common Stock
(Cost $23,444,827)				24,790,171




Other Investment Companies 0.1% of net assets

United States 0.1%


Equity Fund 0.1%
iShares MSCI EAFE Small Cap ETF		600		31,644

See financial notes 57

Schwab Fundamental International Small Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Money Market Fund 0.0%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.01% (a)		2,020		2,020

Total Other Investment Companies
(Cost $31,349)				33,664




Preferred Stock 0.4% of net assets

Germany 0.3%


Automobiles & Components 0.1%
Porsche Automobil Holding SE		369		38,830


Capital Goods 0.1%
Jungheinrich AG		234		17,281


Health Care Equipment & Services 0.0%
Draegerwerk AG & Co. KGaA		90		12,061


Materials 0.1%
Fuchs Petrolub SE		234		23,367

				91,539

Italy 0.1%


Insurance 0.1%
Unipol Gruppo Finanziario S.p.A.		3,033		19,244

Total Preferred Stock
(Cost $94,836)				110,783



End of Investments.


*		Non-income producing security.
(a)		The rate shown is the 7-day yield.


ETF —		Exchange Traded Fund
Reg’d —		Registered
REIT —		Real Estate Investment Trust

58 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings as of February 28, 2014

This section shows all the securities in the fund’s portfolio and their values as of the report date.


				Cost		Value
Holdings by Category				($)		($)

	89	.0%	Common Stock		20,354,508		20,012,776
	1	.7%	Other Investment Companies		352,770		371,119
	9	.2%	Preferred Stock		2,269,459		2,072,068
	0	.0%	Rights		—		—


	99	.9%	Total Investments		22,976,737		22,455,963
	0	.1%	Other Assets and Liabilities, Net				25,870


	100	.0%	Net Assets				22,481,833


	Number		Value
Security	of Shares		($)

Common Stock 89.0% of net assets

Brazil 5.2%


Banks 0.8%
Banco Bradesco S.A.		5,400		67,384
Banco do Brasil S.A.		9,964		88,294
Itau Unibanco Holding S.A.		1,800		22,424

				178,102


Capital Goods 0.2%
Embraer S.A.		4,500		40,358


Diversified Financials 0.1%
BM&FBovespa S.A.		6,300		27,158


Energy 1.3%
Petroleo Brasileiro S.A.		45,995		255,769
Ultrapar Participacoes S.A.		2,217		49,493

				305,262


Food, Beverage & Tobacco 0.6%
AMBEV S.A.		9,031		65,258
BRF S.A.		2,089		38,382
JBS S.A.		9,995		32,090

				135,730


Materials 1.5%
Companhia Siderurgica Nacional S.A.		18,000		78,827
Usinas Siderurgicas de Minas Gerais S.A. *		2,700		10,726
Vale S.A.		17,195		242,909

				332,462


Software & Services 0.1%
Cielo S.A.		1,125		30,581


Telecommunication Services 0.2%
Oi S.A.		3,600		6,195
Tim Participacoes S.A.		7,200		35,322

				41,517


Utilities 0.4%
Centrais Eletricas Brasileiras S.A.		12,600		26,969
Cia Energetica de Minas Gerais		900		5,213
Companhia de Saneamento Basico do Estado de Sao Paulo		3,214		29,581
CPFL Energia S.A.		3,600		25,890

				87,653

				1,178,823

Chile 0.7%


Energy 0.2%
Empresas COPEC S.A.		3,042		40,664


Food & Staples Retailing 0.1%
Cencosud S.A.		7,236		22,052


Utilities 0.4%
Empresa Nacional de Electricidad S.A.		21,600		29,346
Enersis S.A.		251,046		71,977

				101,323

				164,039

China 12.2%


Automobiles & Components 0.1%
Dongfeng Motor Group Co., Ltd., H Shares		19,500		26,583


Banks 4.4%
Agricultural Bank of China Ltd., H Shares		117,000		49,598
Bank of China Ltd., H Shares		558,000		234,386
Bank of Communications Co., Ltd., H Shares		37,000		23,742
BOC Hong Kong Holdings Ltd.		15,500		47,033
China Construction Bank Corp., H Shares		531,000		364,671
China Merchants Bank Co., Ltd., H Shares		15,500		27,201
Industrial & Commercial Bank of China Ltd., H Shares		414,000		248,046

				994,677


Capital Goods 0.3%
China Communications Construction Co., Ltd., H Shares		47,000		32,823
China Railway Group Ltd., H Shares		47,000		20,408

				53,231


Consumer Durables & Apparel 0.1%
Yue Yuen Industrial Holdings Ltd.		9,000		27,541


Energy 3.4%
China Petroleum & Chemical Corp., H Shares		365,000		324,035
China Shenhua Energy Co., Ltd., H Shares		20,500		55,734
CNOOC Ltd.		103,000		168,812
PetroChina Co., Ltd., H Shares		207,000		218,174

				766,755

See financial notes 59

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Food & Staples Retailing 0.1%
China Resources Enterprise Ltd.		8,000		22,523


Insurance 0.7%
China Life Insurance Co., Ltd., H Shares		28,000		81,896
China Pacific Insurance (Group) Co., Ltd., H Shares		7,200		24,723
People’s Insurance Co. Group of China Ltd., H Shares		45,000		19,424
Ping An Insurance Group Co. of China Ltd., H Shares		4,500		36,558

				162,601


Materials 0.1%
China National Building Material Co., Ltd., H Shares		22,000		20,977


Real Estate 0.1%
China Overseas Land & Investment Ltd.		8,200		22,029


Retailing 0.3%
Belle International Holdings Ltd.		18,000		22,195
GOME Electrical Appliances Holdings Ltd.		234,000		39,196

				61,391


Technology Hardware & Equipment 0.2%
Lenovo Group Ltd.		36,000		38,407


Telecommunication Services 2.4%
China Mobile Ltd.		41,000		389,606
China Telecom Corp., Ltd., H Shares		180,000		77,927
China Unicom (Hong Kong) Ltd.		54,000		71,944

				539,477

				2,736,192

Colombia 0.2%


Banks 0.1%
Bancolombia S.A.		1,125		13,242


Energy 0.1%
Ecopetrol S.A.		22,824		39,016

				52,258

Czech Republic 0.5%

��
Telecommunication Services 0.2%
Telefonica Czech Republic A/S		2,304		35,042


Utilities 0.3%
CEZ A/S		2,493		67,289

				102,331

Egypt 0.2%


Telecommunication Services 0.2%
Global Telecom Holding GDR *		15,660		50,175

Greece 2.2%


Banks 0.9%
Alpha Bank AE *		67,662		68,500
National Bank of Greece S.A. *		12,204		60,006
Piraeus Bank S.A. *		24,939		68,889

				197,395


Consumer Services 0.6%
OPAP S.A.		8,325		131,078


Telecommunication Services 0.4%
Hellenic Telecommunications Organization S.A. *		5,634		98,824


Utilities 0.3%
Public Power Corp. S.A.		3,753		59,972

				487,269

Hungary 0.6%


Banks 0.2%
OTP Bank plc		2,754		48,937


Energy 0.2%
MOL Hungarian Oil & Gas plc		918		53,959


Telecommunication Services 0.2%
Magyar Telekom Telecommunications plc		21,204		31,642

				134,538

India 2.1%


Automobiles & Components 0.3%
Mahindra & Mahindra Ltd. GDR		1,611		25,132
Tata Motors Ltd. ADR		1,008		35,159

				60,291


Banks 0.3%
ICICI Bank Ltd. ADR		1,188		42,388
State Bank of India GDR - Reg’d		612		30,630

				73,018


Energy 0.8%
Reliance Industries Ltd. GDR (a)		7,443		192,178


Materials 0.2%
Tata Steel Ltd. GDR		7,335		39,756


Software & Services 0.5%
Infosys Ltd. ADR		1,800		111,006

				476,249

Indonesia 0.8%


Automobiles & Components 0.3%
PT Astra International Tbk		99,000		59,269


Banks 0.1%
PT Bank Rakyat Indonesia (Persero) Tbk		36,800		29,401


Energy 0.1%
PT Bumi Resources Tbk *		472,500		13,228


Telecommunication Services 0.3%
PT Telekomunikasi Indonesia (Persero) Tbk		382,500		76,605

				178,503

60 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)

Malaysia 1.7%


Banks 0.6%
CIMB Group Holdings Berhad		16,200		35,401
Malayan Banking Berhad		13,500		40,296
Public Bank Berhad		9,000		52,410

				128,107


Capital Goods 0.2%
Sime Darby Berhad		17,100		47,545


Consumer Services 0.1%
Genting Berhad		10,800		33,292


Food, Beverage & Tobacco 0.1%
IOI Corp. Berhad		16,200		22,793


Telecommunication Services 0.4%
Axiata Group Berhad		21,600		43,180
Telekom Malaysia Berhad		23,400		40,494

				83,674


Utilities 0.3%
Tenaga Nasional Berhad		19,800		72,516

				387,927

Mexico 3.5%


Banks 0.3%
Grupo Financiero Banorte S.A.B. de C.V., O Shares		4,500		29,231
Grupo Financiero Santander Mexico S.A.B. de C.V. ADR		3,181		35,118

				64,349


Capital Goods 0.1%
Alfa S.A.B. de C.V., A Shares		11,700		28,172


Food & Staples Retailing 0.3%
Wal-Mart de Mexico S.A.B. de C.V., Series V		27,000		57,265


Food, Beverage & Tobacco 0.5%
Coca-Cola Femsa S.A.B. de C.V., Series L		1,800		17,455
Fomento Economico Mexicano S.A.B. de C.V.		7,300		62,554
Grupo Bimbo S.A.B. de C.V., Series A		9,900		25,975

				105,984


Materials 1.0%
Cemex S.A.B. de C.V., Series CPO *		126,000		164,965
Grupo Mexico S.A.B. de C.V., Series B		18,000		55,355

				220,320


Media 0.3%
Grupo Televisa S.A.B., Series CPO		13,500		79,404


Telecommunication Services 1.0%
America Movil S.A.B. de C.V., Series L		238,500		231,220

				786,714

Philippines 0.1%


Telecommunication Services 0.1%
Philippine Long Distance Telephone Co.		495		29,899

Poland 2.5%


Banks 0.5%
Bank Pekao S.A.		630		40,255
Powszechna Kasa Oszczednosci Bank Polski S.A.		4,437		64,855

				105,110


Energy 0.5%
Polski Koncern Naftowy Orlen S.A.		7,650		110,679


Insurance 0.2%
Powszechny Zaklad Ubezpieczen S.A.		369		53,869


Materials 0.4%
KGHM Polska Miedz S.A.		2,448		94,743


Telecommunication Services 0.4%
Orange Polska S.A.		28,602		95,734


Utilities 0.5%
PGE S.A.		10,566		64,435
Tauron Polska Energia S.A.		25,380		40,500

				104,935

				565,070

Republic of Korea 20.1%


Automobiles & Components 2.3%
Hyundai Mobis		414		121,582
Hyundai Motor Co.		1,262		289,640
Kia Motors Corp.		1,899		98,552

				509,774


Banks 1.6%
Hana Financial Group, Inc.		1,980		77,345
KB Financial Group, Inc.		2,340		87,462
Shinhan Financial Group Co., Ltd.		3,420		142,407
Woori Finance Holdings Co., Ltd. *		4,680		52,828

				360,042


Capital Goods 3.6%
Daelim Industrial Co., Ltd.		360		29,711
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		990		30,465
Doosan Corp.		225		29,087
Doosan Heavy Industries & Construction Co., Ltd.		630		21,364
Hyundai Engineering & Construction Co., Ltd.		513		28,065
Hyundai Heavy Industries Co., Ltd.		558		114,736
LG Corp.		3,879		203,488
Samsung C&T Corp.		1,422		83,788
Samsung Heavy Industries Co., Ltd.		1,260		37,652
SK Holdings Co., Ltd.		954		172,033
SK Networks Co., Ltd. *		7,020		54,779

				805,168


Consumer Durables & Apparel 0.7%
LG Electronics, Inc.		2,844		162,248


Energy 1.1%
GS Holdings		1,464		67,954
S-Oil Corp.		657		40,251
SK Innovation Co., Ltd.		1,062		132,812

				241,017

See financial notes 61

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Food & Staples Retailing 0.1%
E-Mart Co., Ltd.		135		32,122


Food, Beverage & Tobacco 0.3%
KT&G Corp.		900		65,930


Insurance 0.4%
Samsung Fire & Marine Insurance Co., Ltd.		225		49,637
Samsung Life Insurance Co., Ltd.		387		36,615

				86,252


Materials 2.5%
Cheil Industries, Inc.		396		25,559
Hanwha Corp.		1,530		51,597
Hyosung Corp.		495		33,758
Hyundai Steel Co.		666		42,424
LG Chem Ltd.		369		87,972
Lotte Chemical Corp. *		180		34,230
POSCO		1,089		289,720

				565,260


Retailing 0.3%
Lotte Shopping Co., Ltd.		90		28,454
Shinsegae Co., Ltd.		198		41,826

				70,280


Semiconductors & Semiconductor Equipment 4.3%
Samsung Electronics Co., Ltd.		679		858,053
SK Hynix, Inc. *		2,970		107,810

				965,863


Software & Services 0.8%
NAVER Corp.		63		48,216
SK C&C Co., Ltd.		945		128,361

				176,577


Technology Hardware & Equipment 0.7%
LG Display Co., Ltd. *		4,230		96,488
Samsung Electro-Mechanics Co., Ltd.		369		23,436
Samsung SDI Co., Ltd.		261		36,552

				156,476


Telecommunication Services 0.7%
LG Uplus Corp.		3,690		36,122
SK Telecom Co., Ltd.		558		113,168

				149,290


Utilities 0.7%
Korea Electric Power Corp.		4,680		162,211

				4,508,510

Russia 13.5%


Banks 0.6%
Sberbank of Russia *		50,220		127,312


Energy 10.7%
Gazprom OAO		234,420		913,263
LUKOIL OAO *		16,587		908,193
NovaTek OAO GDR - Reg’d		479		60,641
Rosneft OJSC GDR - Reg’d		14,931		100,784
Surgutneftegas OAO *		405,000		311,179
Tatneft OAO *		19,260		113,623

				2,407,683


Materials 1.1%
Mechel ADR *		2,700		5,130
MMC Norilsk Nickel OJSC *		1,017		169,492
Severstal OAO GDR - Reg’d		4,442		36,824
Uralkali OJSC GDR - Reg’d		1,064		24,174

				235,620


Telecommunication Services 0.9%
Mobile TeleSystems OJSC ADR		5,679		97,792
Rostelecom OJSC ADR		3,150		51,944
Sistema JSFC GDR - Reg’d		2,484		61,479

				211,215


Utilities 0.2%
RusHydro JSC ADR		18,072		27,289
Russian Grids OAO *		1,215,000		22,246

				49,535

				3,031,365

South Africa 7.6%


Banks 0.8%
Barclays Africa Group Ltd.		2,781		34,327
Nedbank Group Ltd.		1,620		31,822
Standard Bank Group Ltd.		9,612		110,251

				176,400


Capital Goods 0.7%
Aveng Ltd. *		14,175		29,296
Barloworld Ltd.		4,770		47,763
Bidvest Group Ltd.		3,330		78,633

				155,692


Consumer Durables & Apparel 0.3%
Steinhoff International Holdings Ltd.		12,582		60,791


Diversified Financials 0.4%
FirstRand Ltd.		19,350		61,554
Remgro Ltd.		1,530		26,477

				88,031


Energy 1.4%
Sasol Ltd.		6,075		308,830


Food & Staples Retailing 0.1%
Shoprite Holdings Ltd.		1,827		23,961


Food, Beverage & Tobacco 0.1%
Tiger Brands Ltd.		1,143		26,010


Insurance 0.2%
Sanlam Ltd.		11,160		54,960


Materials 1.5%
Anglo American Platinum Ltd. *		837		35,805
AngloGold Ashanti Ltd.		2,844		50,450
ArcelorMittal South Africa Ltd. *		10,872		40,708
Gold Fields Ltd.		12,991		49,476
Impala Platinum Holdings Ltd.		8,091		85,868
Kumba Iron Ore Ltd.		837		34,721
Sappi Ltd. *		11,430		36,657

				333,685


Media 0.3%
Naspers Ltd., N Shares		612		73,997


Retailing 0.1%
Imperial Holdings Ltd.		2,052		32,380

62 See financial notes

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Telecommunication Services 1.7%
MTN Group Ltd.		13,707		251,254
Telkom S.A. SOC Ltd. *		32,958		95,636
Vodacom Group Ltd.		2,340		26,050

				372,940

				1,707,677

Taiwan 13.2%


Banks 0.3%
CTBC Financial Holding Co., Ltd.		51,980		33,540
Mega Financial Holding Co., Ltd.		40,990		32,740

				66,280


Capital Goods 0.3%
Far Eastern New Century Corp.		40,000		42,049
Walsin Lihwa Corp. *		108,000		33,614

				75,663


Consumer Durables & Apparel 0.2%
Pou Chen Corp.		30,000		40,052


Diversified Financials 0.2%
Fubon Financial Holding Co., Ltd.		30,000		41,933


Energy 0.2%
Formosa Petrochemical Corp.		18,000		46,221


Food, Beverage & Tobacco 0.2%
Uni-President Enterprises Corp.		22,000		36,742


Insurance 0.1%
Cathay Financial Holding Co., Ltd.		22,016		32,481


Materials 2.4%
China Steel Corp.		135,000		114,513
Formosa Chemicals & Fibre Corp.		54,000		137,415
Formosa Plastics Corp.		46,000		116,905
Nan Ya Plastics Corp.		54,000		115,671
Taiwan Cement Corp.		28,000		44,637

				529,141


Semiconductors & Semiconductor Equipment 3.0%
Advanced Semiconductor Engineering, Inc.		47,000		46,538
MediaTek, Inc.		7,000		102,812
Siliconware Precision Industries Co.		45,000		56,736
Taiwan Semiconductor Manufacturing Co., Ltd.		108,000		384,976
United Microelectronics Corp.		189,000		76,728

				667,790


Technology Hardware & Equipment 5.6%
Acer, Inc. *		110,000		65,532
Asustek Computer, Inc.		14,000		134,695
AU Optronics Corp. *		306,000		104,027
Compal Electronics, Inc.		144,000		97,432
Delta Electronics, Inc.		10,400		57,839
Hon Hai Precision Industry Co., Ltd.		119,700		331,864
HTC Corp.		19,000		85,286
Innolux Corp. *		90,000		32,081
Inventec Corp.		72,000		75,926
Lite-On Technology Corp.		30,000		44,112
Pegatron Corp.		36,000		48,360
Quanta Computer, Inc.		32,000		78,685
Synnex Technology International Corp.		20,000		34,194
Wistron Corp.		56,000		46,577
WPG Holdings Ltd.		27,000		32,081

				1,268,691


Telecommunication Services 0.7%
Chunghwa Telecom Co., Ltd.		37,500		113,869
Far EasTone Telecommunications Co., Ltd.		12,000		24,319
Taiwan Mobile Co., Ltd.		9,000		27,061

				165,249

				2,970,243

Thailand 1.1%


Energy 0.7%
PTT Exploration & Production PCL NVDR		8,100		38,235
PTT PCL NVDR		11,700		105,076
Thai Oil PCL NVDR		15,300		24,386

				167,697


Materials 0.2%
PTT Global Chemical PCL NVDR		14,400		33,103


Telecommunication Services 0.2%
Advanced Info Service PCL NVDR		5,400		34,924

				235,724

Trinidad 1.0%


Banks 0.4%
Akbank T.A.S.		8,699		22,562
Turkiye Garanti Bankasi A/S		10,170		27,945
Turkiye Halk Bankasi A/S		4,239		20,855
Turkiye Is Bankasi, C Shares		10,158		18,838

				90,200


Capital Goods 0.1%
KOC Holding A/S		9,684		35,919


Diversified Financials 0.1%
Haci Omer Sabanci Holding A/S		7,425		26,362


Energy 0.2%
Tupras-Turkiye Petrol Rafinerileri A/S		2,088		36,829


Telecommunication Services 0.2%
Turkcell Iletisim Hizmetleri A/S *		7,650		39,960

				229,270

Total Common Stock
(Cost $20,354,508)				20,012,776




Other Investment Companies 1.7% of net assets

United States 1.7%


Equity Funds 1.6%
iShares India 50 ETF		5,451		125,809
iShares MSCI Emerging Markets ETF		700		27,636
WisdomTree India Earnings Fund		11,505		194,435

				347,880

See financial notes 63

Schwab Fundamental Emerging Markets Large Company Index ETF

Portfolio Holdings continued


	Number		Value
Security	of Shares		($)


Money Market Fund 0.1%
State Street Institutional U.S. Government Money Market Fund, Institutional Class 0.00% (b)		23,239		23,239

Total Other Investment Companies
(Cost $352,770)				371,119




Preferred Stock 9.2% of net assets

Brazil 6.9%


Banks 1.9%
Banco Bradesco S.A.		11,700		136,784
Itau Unibanco Holding S.A.		19,306		258,102
Itausa - Investimentos Itau S.A.		8,100		29,439

				424,325


Energy 1.6%
Petroleo Brasileiro S.A.		62,420		363,137


Materials 2.3%
Bradespar S.A.		2,610		23,809
Gerdau S.A.		15,364		94,973
Metalurgica Gerdau S.A.		10,800		82,803
Usinas Siderurgicas de Minas Gerais S.A., A Shares *		8,100		33,877
Vale S.A.		23,400		291,398

				526,860


Telecommunication Services 0.4%
Oi S.A.		17,100		26,279
Telefonica Brasil S.A.		3,150		57,957

				84,236


Utilities 0.7%
Centrais Eletricas Brasileiras S.A., B Shares		9,900		38,524
Companhia Energetica de Minas Gerais		10,868		62,479
Companhia Paranaense de Energia - Copel, B Shares		1,800		19,456
Eletropaulo Metropolitana Eletricidade de Sao Paulo S.A.		9,995		34,358

				154,817

				1,553,375

Colombia 0.1%


Banks 0.1%
Bancolombia S.A.		1,638		20,369

Republic of Korea 0.9%


Automobiles & Components 0.3%
Hyundai Motor Co.		180		23,269
Hyundai Motor Co. 2nd		270		36,675

				59,944


Consumer Durables & Apparel 0.1%
LG Electronics, Inc.		460		11,096


Materials 0.0%
LG Chem Ltd.		63		9,000


Semiconductors & Semiconductor Equipment 0.5%
Samsung Electronics Co., Ltd.		119		118,498

				198,538

Russia 1.3%


Banks 0.1%
Sberbank of Russia *		5,400		11,345


Energy 1.2%
AK Transneft OAO *		99		223,423
Surgutneftegas OAO *		80,100		59,768

				283,191


Telecommunication Services 0.0%
Rostelecom OJSC *		2,700		5,250

				299,786

Total Preferred Stock
(Cost $2,269,459)				2,072,068




Rights 0.0% of net assets

Brazil 0.0%


Banks 0.0%
Itausa - Investimentos Itau S.A. *		—		—

Total Rights
(Cost $—)				—



End of Investments.


*		Non-income producing security.
(a)		Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $192,178 or 0.9% of net assets.
(b)		The rate shown is the 7-day yield.


ADR —		American Depositary Receipt
ETF —		Exchange Traded Fund
GDR —		Global Depositary Receipt
NVDR —		Non-Voting Depositary Receipt
Reg’d —		Registered

64 See financial notes

Report of Independent Registered Public Accounting Firm

To the Board of Trustees and Shareholders of:
Schwab Fundamental U.S. Broad Market Index ETF
Schwab Fundamental U.S. Large Company Index ETF
Schwab Fundamental U.S. Small Company Index ETF
Schwab Fundamental International Large Company Index ETF
Schwab Fundamental International Small Company Index ETF
Schwab Fundamental Emerging Markets Large Company Index ETF

We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the financial statements of Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF and Schwab Fundamental Emerging Markets Large Company Index ETF (six of the funds constituting Schwab Strategic Trust, hereafter referred to as the “Funds”) as of February 28, 2014, and for the period August 14, 2013 (commencement of operations) through February 28, 2014 and have issued our unqualified report thereon dated April 17, 2014 (which report and financial statements are included in Item 1 of this Certified Shareholder Report on Form N-CSR). Our audits included the audits of the Funds’ portfolio holdings (the “Portfolios”) as of February 28, 2014 appearing in Item 6 of this Form N-CSR. These Portfolios are the responsibility of the Funds’ management. Our responsibility is to express an opinion on these Portfolios based on our audits.

In our opinion, the Portfolios referred to above, when read in conjunction with the financial statements of the Funds referred to above, presents fairly, in all material respects, the information set forth therein.

April 17, 2014

PricewaterhouseCoopers LLP, Three Embarcadero Center, San Francisco, CA 94111-4004
T: (415)498 5000, F: (415) 498 7000, www.pwc.com/us

Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.

Not applicable.

Item 8: Portfolio Managers of Closed-End Management Investment Companies.

Not applicable.

Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.

Not applicable.

Item 10: Submission of Matters to a Vote of Security Holders.

Not applicable.

Item 11: Controls and Procedures.

(a)		Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Principal Financial Officer, George Pereira, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above.

(b)		During the second fiscal quarter of the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting.

Item 12: Exhibits.

(a) (1)		Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached.

(2)		Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached.

(3)		Not applicable.

(b)

A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission.

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.


(Registrant) Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs

By:		/s/ Marie Chandoha
		Marie Chandoha
		Chief Executive Officer

Date:		April 14, 2014

Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


By:		/s/ Marie Chandoha
		Marie Chandoha
		Chief Executive Officer

Date:		April 14, 2014

By:		/s/ George Pereira
		George Pereira
		Principal Financial Officer

Date:		April 14, 2014

Purchases of Securities

Sales/Maturities of Securities

$72,158,761

$63,863,601