Schwab U.S. Large-Cap ETF NCSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORMN-CSRS

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)

Jonathan de St. Paer

Schwab Strategic Trust

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: August 31

Date of reporting period: February 28, 2019

Item 1:

Report(s) to Shareholders.

Semiannual Report | February 28, 2019

Schwab International Equity ETFs

Schwab International Equity ETF	SCHF
Schwab International Small-Cap Equity ETF	SCHC
Schwab Emerging Markets Equity ETF	SCHE

New Notice Regarding Shareholder Report Delivery Options

Beginning on January 1, 2021, paper copies of a fund’s shareholder reports will no longer be sent by mail, unless you specifically request paper copies of the reports from your financial intermediary (such as a bank or broker-dealer). Instead, the reports will be made available on a fund’s websitewww.schwabfunds.com/schwabetfs_prospectus, and you will be notified by mail each time a report is posted and the mailing will provide a website link to access the report. You will continue to receive other fund regulatory documents (such as prospectuses or supplements) in paper unless you have elected to receive all fund documents electronically as described below.

If you would like to continue to receive a fund’s future shareholder reports in paper free of charge after January 1, 2021, you can make that request by contacting your financial intermediary.

If you already receive shareholder reports and other fund documents electronically, you will not be affected by this change and you need not take any action. If you do not receive shareholder reports and other fund documents electronically but would like to do so, contact your financial intermediary.

This page is intentionally left blank.

In This Report

Performance at a Glance	2
From the President	3
The Investment Environment	5
Fund Management	7
Performance and Fund Facts
Schwab International Equity ETF	8
Schwab International Small-Cap Equity ETF	10
Schwab Emerging Markets Equity ETF	12
Fund Expenses	14
Financial Statements and Condensed Portfolio Holdings
Schwab International Equity ETF	15
Schwab International Small-Cap Equity ETF	22
Schwab Emerging Markets Equity ETF	29
Financial Notes	36
Trustees and Officers	46
Glossary	50

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 MSCI 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.

₁

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

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 visitwww.schwabfunds.com/schwabetfs_prospectus.

Total Returns for the 6 Months Ended February 28, 2019
Schwab International Equity ETF (Ticker Symbol: SCHF)
Market Price Return¹	-3.60%
NAV Return¹	-3.69%
FTSE Developed ex US Index (Net)^*	-3.70%
ETF Category: Morningstar Foreign Large Blend²	-3.94%
Performance Details	pages 8-9

Schwab International Small-Cap Equity ETF (Ticker Symbol: SCHC)
Market Price Return¹	-7.64%
NAV Return¹	-7.48%
FTSE Developed Small Cap ex US Liquid Index (Net)^*	-7.54%
ETF Category: Morningstar Foreign Small/Mid Blend²	-7.77%
Performance Details	pages 10-11

Schwab Emerging Markets Equity ETF (Ticker Symbol: SCHE)
Market Price Return¹	1.46%
NAV Return¹	1.51%
FTSE Emerging Index (Net)^*	1.47%
ETF Category: Morningstar Diversified Emerging Markets²	-0.15%
Performance Details	pages 12-13

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 cannot be invested in 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 or sale 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 — FTSE is a trademark of the London Stock Exchange Group companies (LSEG) and is used by the Schwab International Equity ETFs under license. The Schwab International Equity ETFs are not sponsored, endorsed, sold or promoted by FTSE nor LSEG and neither FTSE nor LSEG makes any representation regarding the advisability of investing in shares of the funds. Fees payable under the license are paid by the investment adviser.

^*	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
¹	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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 International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

From the President

Jonathan de St. Paer
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.

Dear Shareholder,

Sometimes, ending right back where you started can seem like a victory in itself. The stock market’s rebound from the significant declines of late last year has likely brought relief to those investors who stayed the course. But the journey hasn’t been easy, and most stock funds, among other categories, still have ground left to make up.

At Charles Schwab Investment Management, we often talk about the importance of diversification. But, we also recognize that maintaining a long-term perspective and setting aside emotions can be tough when market conditions are challenging. We seek to provide the products that investors can use to achieve their long-term financial goals—and to help weather the market volatility that may come along the way.

Since the launch of our first ETFs in 2009, we have focused on offering a straightforward set of core investment products that deliver both quality and value. The Schwab International Equity ETFs are a key part of that approach, giving investors the ability to add exposure to non-U.S. stocks to their portfolio mix. Whether you are looking to capture the performance of international large-cap, small-cap, or emerging markets stocks, the Schwab International Equity ETFs are designed to be part of the foundation of a diversified portfolio—providing a convenient, low-cost way to gain international stock market access.

No matter how you choose to invest with us, we believe you’re going to find solutions to your investing needs. Charles Schwab Investment Management has become one of the nation’s largest and fastest-growing ETF managers not by offering more choices than our competitors, but by providing carefully developed products that can help simplify decision-making. This is a cornerstone of our investing philosophy—and will continue to be.

On April 1, 2019, I transitioned into the role of Chief Executive Officer of Charles Schwab Investment Management, replacing Marie Chandoha upon her retirement. Looking back at how Charles Schwab Investment Management has grown into the market leader it is today, I believe Marie deserves particular credit. As Chief Executive Officer for over eight years, Marie provided the vision and leadership that has helped us stay focused on the goal of providing cost-effective funds to support investors in meeting their investment objectives. It’s been my privilege to be part of the great team Marie built.

₃

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

From the President(continued)

“On April 1, 2019, I transitioned into the role of Chief Executive Officer of Charles Schwab Investment Management, replacing Marie Chandoha upon her retirement.”

I look forward to furthering our organization’s important mission. As we encounter ups and downs in the investment environment, it becomes even more important to serve our investors to the best of our ability. At Charles Schwab Investment Management, we seek to offer high quality products that help investors build portfolios that serve their needs, even during the more difficult stretches in the market.

Thank you for investing with Charles Schwab Investment Management. For more information about the Schwab International Equity ETFs, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.

Sincerely,

Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.

Management views may have changed since the report date.

₄

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

The Investment Environment

For the six-month reporting period ended February 28, 2019, international equity markets were mostly lower as economic momentum slowed, dampened by uncertainties from several fronts, including trade, inflation, and geopolitical concerns. After rising in September, international developed markets drifted lower through the last quarter of 2018 before recovering somewhat in January and February, when investor sentiment was buoyed by a combination of seemingly constructive trade talks between the U.S. and China, a more patient stance by the Federal Reserve (Fed), and stimulus measures implemented in China to boost growth. In the U.S., stocks followed a similar trajectory, but with a steeper decline in December and a more robust recovery in the first two months of 2019. For the reporting period, the MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, returned -3.58%, while the MSCI Emerging Markets Index (Net)* returned 0.33%. For comparison, the S&P 500^® Index, a bellwether for the overall U.S. stock market, returned –3.04% for the reporting period.

Economic growth across the globe generally softened over the reporting period. In the final quarter of 2018, the eurozone economy expanded by 0.2%, down from 0.7% a year earlier, subdued by political tensions as well as a sharp decline in the manufacturing sector’s new export orders. Japan’s economy contracted in the third quarter of 2018 but exhibited growth in the fourth quarter, albeit at a slower rate than in the second quarter. The United Kingdom’s economy grew modestly in the third quarter but contracted in the fourth quarter amid ongoing Brexit-related economic and political uncertainty as well as rapidly growing wage pressures. Several Asian economies, including China and India, also exhibited signs of slowing but still outpaced many developed economies.

Globally, monetary policy measures remained generally accommodative during the reporting period with most central banks maintaining accommodative monetary policies or, in some cases, in the face of signs of rising inflation, tightened their policies. The European Central Bank has held interest rates unchanged since March 2016 and in December reiterated that it would likely maintain those rates through the summer of 2019, but ended its monthly asset purchase program in December. In January, the Bank of Japan upheld its short-term interest rate target of –0.1%, unchanged since 2016, and maintained its pledge to keep interest rates extremely low for an extended period. After raising its key

Asset Class Performance Comparison % returns during the 6 months ended February 28, 2019

Index figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and cannot be invested in directly. Performance results less than one year are not annualized. Past performance is not an indication of future results.

For index definitions, please see the Glossary.

Data source: Index provider websites and CSIM.

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

Management views may have changed since the report date.

*	The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.

₅

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

The Investment Environment(continued)

official bank rate in August amid rising inflation projections and higher energy and import prices, the Bank of England maintained its rate of 0.75% during the reporting period despite ongoing uncertainties over the United Kingdom economy’s wider direction and intensifying uncertainties surrounding the impact of Brexit. Central banks in several emerging market economies—including India, Indonesia, Mexico, Turkey, and Russia—raised policy rates during the reporting period in response to inflation and exchange-rate pressures. In February, however, India subsequently reduced its policy rate, and in December, the People’s Bank of China (PBOC) maintained its prudent, but no longer neutral, policy stance, indicating it would place a greater focus on flexibility in the face of continued headwinds.

₆

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Fund Management

Christopher Bliss, CFA, Vice President and Head of the Passive Equity Team, leads the portfolio management team for Schwab’s passive equity mutual funds and ETFs. He also has overall responsibility for all aspects of the management of the funds. Prior to joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a Managing Director and Head of Americas Institutional Index team. Prior to BlackRock, he worked as an equity analyst and portfolio manager for Harris Bretall and before that, as a research analyst for JP Morgan.

Chuck Craig, CFA, 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 more than 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 2012, Ms. Qin spent more than four years at The Bank of New York Mellon Corporation. During that time, Ms. Qin spent more than two years as an associate equity portfolio manager and nearly two years as a performance analyst. She also worked at Wells Fargo Funds Management as a mutual fund analyst and at CIGNA Reinsurance in the Risk Management group as a risk analyst.

David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the funds. He joined CSIM in 2008 and became a Portfolio Manager in 2014. Prior to this role, Mr. Rios served as an Associate Portfolio Manager on the Schwab Equity Index Strategies team for four years. His first role with CSIM was as a trade operation specialist. He also previously worked as a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation).

₇

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab International Equity ETF (11/3/09)
Market Price Return²	-3.60%	-5.26%	2.34%	5.07%
NAV Return²	-3.69%	-5.76%	2.35%	5.08%
FTSE Developed ex US Index (Net)³	-3.70%	-5.85%	2.28%	5.10%
ETF Category: Morningstar Foreign Large Blend⁴	-3.94%	-6.45%	1.86%	N/A
Fund Expense Ratio⁵: 0.06%

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 investing may involve risk of capital loss from unfavorable fluctuations in currency values, from differences in generally accepted accounting principles, or from economic or political instability in other nations.

Index ownership — FTSE is a trademark of the London Stock Exchange Group companies (LSEG) and is used by the fund under license. The Schwab International Equity ETF is not sponsored, endorsed, sold or promoted by FTSE nor LSEG, and neither FTSE nor LSEG makes any representation regarding the advisability of investing in shares of the fund. Fees payable under the license are paid by the investment adviser.

^*	Inception (11/3/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	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.
⁵	As stated in the prospectus.

₈

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	1,452
Weighted Average Market Cap (millions)	$58,085
Price/Earnings Ratio (P/E)	14.2
Price/Book Ratio (P/B)	1.5
Portfolio Turnover Rate	4%^2,3

Sector Weightings % of Investments¹

Top Equity Holdings % of Net Assets⁴

Country Weightings % of Investments⁵

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	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	This list is not a recommendation of any security by the investment adviser.
⁵	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.

₉

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Small-Cap Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab International Small-Cap Equity ETF (1/14/10)
Market Price Return²	-7.64%	-9.61%	2.02%	5.56%
NAV Return²	-7.48%	-9.60%	2.00%	5.61%
FTSE Developed Small Cap ex US Liquid Index (Net)³	-7.54%	-9.77%	1.85%	5.66%
ETF Category: Morningstar Foreign Small/Mid Blend⁴	-7.77%	-10.93%	2.92%	N/A
Fund Expense Ratio⁵: 0.12%

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.

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

Index ownership — FTSE is a trademark of the London Stock Exchange Group companies (LSEG) and is used by the fund under license. The Schwab International Small-Cap Equity ETF is not sponsored, endorsed, sold or promoted by FTSE nor LSEG, and neither FTSE nor LSEG makes any representation regarding the advisability of investing in shares of the fund. Fees payable under the license are paid by the investment adviser.

^*	Inception (1/14/10) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	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.
⁵	As stated in the prospectus.

₁₀

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Small-Cap Equity ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	2,107
Weighted Average Market Cap (millions)	$2,292
Price/Earnings Ratio (P/E)	14.2
Price/Book Ratio (P/B)	1.4
Portfolio Turnover Rate	9%^2,3

Sector Weightings % of Investments¹

Top Equity Holdings % of Net Assets⁴

Country Weightings % of Investments⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	This list is not a recommendation of any security by the investment adviser.
⁵	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.

₁₁

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab Emerging Markets Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab Emerging Markets Equity ETF (1/14/10)
Market Price Return²	1.46%	-8.83%	4.57%	2.56%
NAV Return²	1.51%	-9.65%	4.48%	2.58%
FTSE Emerging Index (Net)³	1.47%	-9.60%	4.62%	2.81%
ETF Category: Morningstar Diversified Emerging Markets⁴	-0.15%	-11.03%	2.86%	N/A
Fund Expense Ratio⁵: 0.13%

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.

Emerging markets involve heightened risks related to the same factors as international investing, as well as increased volatility and lower trading volume.

Index ownership — FTSE is a trademark of the London Stock Exchange Group companies (LSEG) and is used by the fund under license. The Schwab Emerging Markets Equity ETF is not sponsored, endorsed, sold or promoted by FTSE nor LSEG, and neither FTSE nor LSEG makes any representation regarding the advisability of investing in shares of the fund. Fees payable under the license are paid by the investment adviser.

^*	Inception (1/14/10) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	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.
⁵	As stated in the prospectus.

₁₂

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab Emerging Markets Equity ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	960
Weighted Average Market Cap (millions)	$89,551
Price/Earnings Ratio (P/E)	13.4
Price/Book Ratio (P/B)	1.8
Portfolio Turnover Rate	6%^2,3

Sector Weightings % of Investments¹

Top Equity Holdings % of Net Assets⁴

Country Weightings % of Investments⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	This list is not a recommendation of any security by the investment adviser.
⁵	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.

₁₃

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

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.

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, 2018 and held through February 28, 2019.

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.

	Expense Ratio (Annualized)¹	Beginning Account Value at 9/1/18	Ending Account Value (Net of Expenses) at 2/28/19	Expenses Paid During Period 9/1/18-2/28/19²
Schwab International Equity ETF
Actual Return	0.06%	$1,000.00	$963.10	$0.29
Hypothetical 5% Return	0.06%	$1,000.00	$1,024.50	$0.30
Schwab International Small-Cap Equity ETF
Actual Return	0.12%	$1,000.00	$925.20	$0.57
Hypothetical 5% Return	0.12%	$1,000.00	$1,024.20	$0.60
Schwab Emerging Markets Equity ETF
Actual Return	0.13%	$1,000.00	$1,015.10	$0.65
Hypothetical 5% Return	0.13%	$1,000.00	$1,024.16	$0.65

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

₁₄

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$33.25	$32.51	$28.32	$28.55	$32.37	$28.32
Income (loss) from investment operations:
Net investment income (loss)	0.33¹	0.98¹	0.88¹	0.84¹	0.87¹	0.88
Net realized and unrealized gains (losses)	(1.61)	0.56	4.02	(0.45)	(3.85)	3.87
Total from investment operations	(1.28)	1.54	4.90	0.39	(2.98)	4.75
Less distributions:
Distributions from net investment income	(0.87)	(0.80)	(0.71)	(0.62)	(0.84)	(0.70)
Net asset value at end of period	$31.10	$33.25	$32.51	$28.32	$28.55	$32.37
Total return	(3.69%)²	4.70%	17.76%	1.47%	(9.27%)	16.90%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.06%³	0.06%	0.06%⁴	0.08%	0.08%	0.09%⁵
Net investment income (loss)	2.17%³	2.91%	2.95%	3.06%	2.86%	3.44%
Portfolio turnover rate⁶	4%²	5%	5%	5%	4%	7%
Net assets, end of period (x 1,000)	$16,848,514	$16,294,052	$11,413,011	$6,168,595	$4,042,603	$2,654,016

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective October 7, 2016 and March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

Effective April 18, 2014, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/14 is a blended ratio.

⁶

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

₁₅

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

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 at 1-877-824-5615. This complete schedule, filed on the fund’s Form N-CSR(S), is also available on the U.S. Securities and Exchange Commission (SEC)’s website atwww.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. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website atwww.schwabfunds.com/schwabetfs_prospectus.

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock98.7% of net assets

Australia 6.2%
Australia & New Zealand Banking Group Ltd.	3,009,812	0.4	59,957,267
BHP Group Ltd.	3,276,615	0.5	86,788,640
Commonwealth Bank of Australia	1,802,627	0.6	94,839,331
CSL Ltd.	461,648	0.4	63,638,439
Westpac Banking Corp.	3,508,814	0.4	67,301,488
Other Securities		3.9	662,555,784
		6.2	1,035,080,949

Austria 0.2%
Other Securities		0.2	34,594,868

Belgium 0.9%
Anheuser-Busch InBev S.A.	788,030	0.4	61,511,985
Other Securities		0.5	82,123,447
		0.9	143,635,432

Canada 7.7%
Canadian National Railway Co.	759,208	0.4	65,094,736
Enbridge, Inc.	2,035,369	0.5	75,232,925
Royal Bank of Canada	1,475,806	0.7	115,251,820
Suncor Energy, Inc.	1,676,053	0.3	57,726,472
The Bank of Nova Scotia	1,252,745	0.4	69,571,579
The Toronto-Dominion Bank	1,885,387	0.6	108,026,806
Other Securities		4.8	808,336,608
		7.7	1,299,240,946

Denmark 1.5%
Novo Nordisk A/S, B Shares	1,738,015	0.5	85,371,569
Other Securities		1.0	163,772,306
		1.5	249,143,875

Finland 1.1%
Other Securities		1.1	188,950,686

France 9.0%
Airbus SE	562,083	0.4	72,709,024
BNP Paribas S.A.	1,123,070	0.3	57,618,156
L'Oreal S.A.	246,047	0.4	62,170,579
LVMH Moet Hennessy Louis Vuitton SE	252,988	0.5	86,999,428

Security	Number of Shares	% of Net Assets	Value ($)
Sanofi	1,107,663	0.6	92,705,291
Total S.A.	2,570,317	0.9	146,311,802
Other Securities		5.9	1,000,139,437
		9.0	1,518,653,717

Germany 7.0%
Allianz SE	431,310	0.6	96,065,603
BASF SE	936,102	0.4	71,407,312
Bayer AG	954,484	0.5	76,385,327
SAP SE	1,000,758	0.6	107,346,900
Siemens AG	784,534	0.5	85,877,669
Other Securities		4.4	746,056,324
		7.0	1,183,139,135

Hong Kong 3.6%
AIA Group Ltd.	12,407,429	0.8	124,077,451
Other Securities		2.8	482,436,228
		3.6	606,513,679

Ireland 0.2%
Other Securities		0.2	36,712,142

Israel 0.4%
Other Securities		0.4	74,587,445

Italy 2.1%
Other Securities		2.1	356,790,689

Japan 22.1%
Mitsubishi UFJ Financial Group, Inc.	12,874,521	0.4	66,697,236
SoftBank Group Corp.	871,480	0.5	80,478,031
Sony Corp.	1,293,740	0.4	62,072,093
Takeda Pharmaceutical Co., Ltd.	1,548,125	0.4	62,150,293
Toyota Motor Corp.	2,580,436	0.9	155,238,770
Other Securities		19.5	3,300,663,434
		22.1	3,727,299,857

Netherlands 2.9%
ASML Holding N.V.	413,174	0.5	75,803,974
Unilever N.V. CVA	1,545,713	0.5	83,719,359
Other Securities		1.9	334,737,285
		2.9	494,260,618

New Zealand 0.3%
Other Securities		0.3	41,277,825

₁₆

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Norway 0.6%
Other Securities		0.6	105,004,954

Poland 0.3%
Other Securities		0.3	53,502,389

Portugal 0.1%
Other Securities		0.1	22,528,576

Republic of Korea 4.0%
Samsung Electronics Co., Ltd. GDR	193,400	1.2	192,916,500
Other Securities		2.8	478,654,013
		4.0	671,570,513

Singapore 1.1%
Other Securities		1.1	185,282,992

Spain 2.6%
Banco Santander S.A.	16,461,618	0.5	80,527,891
Other Securities		2.1	356,973,646
		2.6	437,501,537

Sweden 2.2%
Other Securities		2.2	373,893,333

Switzerland 7.4%
Nestle S.A.	3,089,135	1.7	280,198,995
Novartis AG	2,237,267	1.2	204,457,727
Roche Holding AG	713,320	1.2	198,558,157
Other Securities		3.3	561,289,158
		7.4	1,244,504,037

United Kingdom 15.2%
AstraZeneca plc	1,295,425	0.6	105,777,744
BP plc	19,951,005	0.9	141,812,861
British American Tobacco plc	2,332,795	0.5	85,592,154
Diageo plc	2,464,016	0.6	95,486,712
GlaxoSmithKline plc	4,981,174	0.6	99,209,654
HSBC Holdings plc	20,546,223	1.0	167,496,606
Lloyds Banking Group plc	72,663,219	0.4	61,411,009
Prudential plc	2,690,514	0.3	56,900,590
Rio Tinto plc	1,155,788	0.4	66,657,934
Royal Dutch Shell plc, A Shares	4,696,203	0.9	146,759,662
Royal Dutch Shell plc, B Shares	3,811,271	0.7	119,865,318
Unilever plc	1,116,655	0.4	59,529,347
Other Securities		7.9	1,347,773,258
		15.2	2,554,272,849
Total Common Stock
(Cost $15,789,573,120)			16,637,943,043

Security	Number of Shares	% of Net Assets	Value ($)
Preferred Stock0.7% of net assets

Germany 0.5%
Other Securities		0.5	74,776,763

Republic of Korea 0.2%
Other Securities		0.2	33,241,791

Spain 0.0%
Other Securities		0.0	4,674,889
Total Preferred Stock
(Cost $109,416,013)			112,693,443

Other Investment Companies0.6% of net assets

United States 0.6%
Money Market Fund 0.2%
Other Securities		0.2	36,102,300
Securities Lending Collateral 0.4%
Wells Fargo Government Money Market Fund, Select Class 2.34%(c)		0.4	68,060,156
Total Other Investment Companies
(Cost $104,162,456)			104,162,456

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
MSCI EAFE Index, expires 03/15/19	838	78,311,100	1,888,353

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $64,725,815.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

ADR —	American Depositary Receipt
CVA —	Dutch Certificate
GDR —	Global Depositary Receipt
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares)

₁₇

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of February 28, 2019 and reflects the complete schedule of portfolio holdings (see financial note 2(a) for additional information):

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$16,008,900,788	$—	$—	$16,008,900,788
Hong Kong	606,513,679	—	—^*	606,513,679
Portugal	22,528,576	—	—^*	22,528,576
Preferred Stock¹	79,451,652	—	—	79,451,652
Republic of Korea	33,174,632	—	67,159	33,241,791
Other Investment Companies¹	104,162,456	—	—	104,162,456
Futures Contracts²	1,888,353	—	—	1,888,353
Total	$16,856,620,136	$—	$67,159	$16,856,687,295

*	Level 3 amount shown includes securities determined to have no value at February 28, 2019.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

Fund investments in underlying mutual funds are classified as Level 1, without consideration to the classification level of the investments held by the underlying mutual funds, which could be Level 1, Level 2 or Level 3.

₁₈

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $15,935,091,433) including securities on loan of $64,725,815		$16,786,738,786
Collateral invested for securities on loan, at value (cost $68,060,156)		68,060,156
Deposit with broker for futures contracts		5,566,500
Foreign currency, at value (cost $3,263,299)		3,260,664
Receivables:
Dividends		41,984,984
Foreign tax reclaims		11,860,232
Income from securities on loan	+	111,647
Total assets		16,917,582,969
Liabilities
Collateral held for securities on loan		68,060,156
Payables:
Investments bought		73,875
Management fees		755,115
Variation margin on futures contracts	+	180,170
Total liabilities		69,069,316
Net Assets
Total assets		16,917,582,969
Total liabilities	–	69,069,316
Net assets		$16,848,513,653
Net Assets by Source
Capital received from investors		16,498,116,864
Total distributable earnings¹		350,396,789

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$16,848,513,653		541,700,000		$31.10

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₁₉

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends (net of foreign withholding tax of $14,814,464)		$171,261,416
Securities on loan, net	+	839,233
Total investment income		172,100,649
Expenses
Management fees		4,613,239
Total expenses	–	4,613,239
Net investment income		167,487,410
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(199,157,855)
Net realized losses on futures contracts		(3,740,283)
Net realized losses on foreign currency transactions	+	(248,135)
Net realized losses		(203,146,273)
Net change in unrealized appreciation (depreciation) on investments		(524,458,134)
Net change in unrealized appreciation (depreciation) on futures contracts		1,630,393
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(520,038)
Net change in unrealized appreciation (depreciation)	+	(523,347,779)
Net realized and unrealized losses		(726,494,052)
Decrease in net assets resulting from operations		($559,006,642)

₂₀

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$167,487,410	$414,988,466
Net realized losses		(203,146,273)	(59,555,035)
Net change in unrealized appreciation (depreciation)	+	(523,347,779)	141,092,417
Increase (decrease) in net assets resulting from operations		(559,006,642)	496,525,848
Distributions to Shareholders1
Total distributions		($445,181,400)	($308,067,760)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		51,700,000	$1,558,649,447	138,900,000	$4,692,583,434
Shares redeemed	+	—	—	—	—
Net transactions in fund shares		51,700,000	$1,558,649,447	138,900,000	$4,692,583,434
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		490,000,000	$16,294,052,248	351,100,000	$11,413,010,726
Total increase	+	51,700,000	554,461,405	138,900,000	4,881,041,522
End of period²		541,700,000	$16,848,513,653	490,000,000	$16,294,052,248

¹	For the period ended August 31, 2018, the fund distributed to shareholders $308,067,760 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $292,309,858 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₂₁

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$35.86	$34.80	$29.96	$29.46	$33.32	$28.61
Income (loss) from investment operations:
Net investment income (loss)	0.28¹	0.84¹	0.73¹	0.67¹	0.73¹	0.71
Net realized and unrealized gains (losses)	(3.02)	1.22	4.70	0.50	(3.84)	4.90
Total from investment operations	(2.74)	2.06	5.43	1.17	(3.11)	5.61
Less distributions:
Distributions from net investment income	(0.73)	(1.00)	(0.59)	(0.67)	(0.75)	(0.90)
Net asset value at end of period	$32.39	$35.86	$34.80	$29.96	$29.46	$33.32
Total return	(7.48%)²	5.93%	18.52%	4.12%	(9.29%)	19.84%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.12%³	0.12%	0.14%⁴	0.17%⁵	0.18%⁶	0.19%
Net investment income (loss)	1.78%³	2.31%	2.31%	2.34%	2.40%	2.21%
Portfolio turnover rate⁷	9%²	16%	12%	23%	23%	16%
Net assets, end of period (x 1,000)	$2,092,253	$2,280,998	$1,538,038	$787,951	$609,773	$403,229

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

Effective March 1, 2016, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁶

Effective March 4, 2015, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/15 is a blended ratio.

⁷

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

₂₂

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock98.9% of net assets

Australia 6.4%
Northern Star Resources Ltd.	696,721	0.2	4,585,060
Other Securities		6.2	129,152,987
		6.4	133,738,047

Austria 0.9%
Other Securities		0.9	20,034,795

Belgium 1.5%
Other Securities		1.5	30,570,719

Canada 17.5%
Air Canada *	153,236	0.2	3,852,425
Algonquin Power & Utilities Corp.	528,410	0.3	5,857,848
Allied Properties Real Estate Investment Trust	113,407	0.2	4,134,146
AltaGas Ltd.	313,875	0.2	4,213,599
Aurora Cannabis, Inc. *(a)	853,863	0.3	6,431,527
Bombardier, Inc., B Shares *	2,398,943	0.2	5,100,258
CAE, Inc.	307,798	0.3	6,485,493
Cameco Corp.	457,322	0.3	5,302,435
Canadian Apartment Properties REIT	162,264	0.3	6,191,166
Canopy Growth Corp. *	198,730	0.5	9,412,891
CCL Industries, Inc., Class B	164,572	0.3	6,717,837
Empire Co., Ltd., A Shares	192,708	0.2	4,473,108
First Quantum Minerals Ltd.	770,329	0.4	8,826,321
Gildan Activewear, Inc.	232,382	0.4	8,303,642
H&R Real Estate Investment Trust	319,172	0.3	5,503,718
IA Financial Corp., Inc. *	123,743	0.2	4,743,951
Keyera Corp.	228,578	0.3	5,607,711
Kinross Gold Corp. *	1,396,303	0.2	4,654,343
Kirkland Lake Gold Ltd.	210,992	0.4	7,709,138
Methanex Corp.	88,914	0.2	5,000,653
Onex Corp.	92,139	0.3	5,537,435
Open Text Corp.	289,207	0.5	10,953,413
Parkland Fuel Corp.	147,897	0.2	4,134,827
PrairieSky Royalty Ltd.	264,489	0.2	3,849,851
Ritchie Bros. Auctioneers, Inc.	122,366	0.2	4,528,564
TMX Group Ltd.	66,155	0.2	4,150,134
Toromont Industries Ltd.	88,436	0.2	4,599,746
Vermilion Energy, Inc.	156,809	0.2	4,007,738
WSP Global, Inc.	117,120	0.3	6,197,489
Other Securities		9.5	199,375,443
		17.5	365,856,850

Security	Number of Shares	% of Net Assets	Value ($)
Denmark 1.3%
Royal Unibrew A/S	56,262	0.2	4,164,503
SimCorp A/S	44,790	0.2	4,036,521
Other Securities		0.9	18,491,319
		1.3	26,692,343

Finland 1.5%
Amer Sports Oyj	130,751	0.3	5,933,117
Other Securities		1.2	24,575,718
		1.5	30,508,835

France 2.7%
Euronext N.V.	83,758	0.3	5,116,884
Other Securities		2.4	51,359,344
		2.7	56,476,228

Germany 4.6%
Other Securities		4.6	96,449,026

Hong Kong 2.1%
Vitasoy International Holdings Ltd.	898,974	0.2	3,882,292
Other Securities		1.9	39,505,639
		2.1	43,387,931

Ireland 0.4%
Other Securities		0.4	8,550,443

Israel 0.5%
Other Securities		0.5	11,113,095

Italy 2.8%
Other Securities		2.8	59,728,992

Japan 18.5%
Other Securities		18.5	386,792,071

Netherlands 2.4%
Galapagos N.V. *	52,435	0.2	5,149,197
IMCD N.V.	63,354	0.2	4,977,745
Other Securities		2.0	40,129,284
		2.4	50,256,226

New Zealand 1.0%
Other Securities		1.0	22,045,939

₂₃

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Norway 2.1%
Storebrand A.S.A.	525,282	0.2	4,180,670
Other Securities		1.9	39,150,023
		2.1	43,330,693

Poland 0.8%
Other Securities		0.8	16,621,201

Portugal 0.5%
Other Securities		0.5	10,091,185

Republic of Korea 6.0%
ViroMed Co., Ltd. *	15,619	0.2	3,857,881
Other Securities		5.8	122,628,177
		6.0	126,486,058

Singapore 1.8%
Other Securities		1.8	38,275,899

Spain 1.8%
Other Securities		1.8	36,829,712

Sweden 4.5%
Castellum AB	311,977	0.3	5,686,473
Fabege AB	303,046	0.2	4,073,575
Other Securities		4.0	84,623,570
		4.5	94,383,618

Switzerland 3.7%
Other Securities		3.7	76,624,627

United Kingdom 13.6%
Beazley plc	580,910	0.2	4,230,360
BTG plc *	440,635	0.2	4,882,119
HomeServe plc	310,967	0.2	3,941,773
Intermediate Capital Group plc	312,462	0.2	4,355,549
Spectris plc	133,382	0.2	4,681,888
SSP Group plc	513,945	0.2	4,539,093
Tullow Oil plc *	1,545,276	0.2	4,532,095
Other Securities		12.2	254,418,529
		13.6	285,581,406
Total Common Stock
(Cost $2,066,879,380)			2,070,425,939

Preferred Stock0.3% of net assets

Germany 0.3%
Other Securities		0.3	4,914,835

Republic of Korea 0.0%
Other Securities		0.0	116,165

Security	Number of Shares	% of Net Assets	Value ($)
Sweden 0.0%
Other Securities		0.0	677,333
Total Preferred Stock
(Cost $6,066,180)			5,708,333

Rights0.0% of net assets

Australia 0.0%
Other Securities		0.0	2,057

Norway 0.0%
Other Securities		0.0	89,178
Total Rights
(Cost $215,319)			91,235

Warrants0.0% of net assets

Singapore 0.0%
Other Securities		0.0	5,937
Total Warrants
(Cost $—)			5,937

Other Investment Companies3.2% of net assets

Switzerland 0.3%
BB Biotech AG	58,837	0.2	4,149,066
Other Securities		0.1	1,020,909
		0.3	5,169,975

United Kingdom 0.1%
Other Securities		0.1	1,659,515

United States 2.8%
Money Market Fund 0.1%
Other Securities		0.1	2,523,460
Securities Lending Collateral 2.7%
Wells Fargo Government Money Market Fund, Select Class 2.34%(c)		2.7	56,996,226
		2.8	59,519,686
Total Other Investment Companies
(Cost $65,450,831)			66,349,176

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
MSCI EAFE Index, expires 03/15/19	96	8,971,200	141,361

₂₄

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $52,701,385.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

ADR —	American Depositary Receipt
CVA —	Dutch Certificate
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$1,065,545,429	$—	$—	$1,065,545,429
Australia	133,658,952	—	79,095^*	133,738,047
Canada	365,447,393	—	409,457	365,856,850
Hong Kong	43,387,931	—	—^*	43,387,931
Japan	386,599,016	—	193,055	386,792,071
Singapore	38,275,899	—	—^*	38,275,899
Spain	36,829,712	—	—^*	36,829,712
Preferred Stock¹	5,708,333	—	—	5,708,333
Rights¹	89,178	—	—	89,178
Australia	—	—	2,057	2,057
Warrants¹
Singapore	—	—	5,937	5,937
Other Investment Companies¹	66,349,176	—	—	66,349,176
Futures Contracts²	141,361	—	—	141,361
Total	$2,142,032,380	$—	$689,601	$2,142,721,981

*	Level 3 amount shown includes securities determined to have no value at February 28, 2019.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₂₅

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $2,081,615,484) including securities on loan of $52,701,385		$2,085,584,394
Collateral invested for securities on loan, at value (cost $56,996,226)		56,996,226
Deposit with broker for futures contracts		580,500
Foreign currency, at value (cost $2,510,871)		2,518,275
Receivables:
Dividends		2,990,457
Foreign tax reclaims		868,452
Income from securities on loan	+	212,902
Total assets		2,149,751,206
Liabilities
Collateral held for securities on loan		56,996,226
Payables:
Investments bought		256,234
Management fees		195,551
Foreign capital gains tax		29,586
Variation margin on futures contracts	+	20,864
Total liabilities		57,498,461
Net Assets
Total assets		2,149,751,206
Total liabilities	–	57,498,461
Net assets		$2,092,252,745
Net Assets by Source
Capital received from investors		2,141,524,275
Total distributable loss¹		(49,271,530)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$2,092,252,745		64,600,000		$32.39

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₂₆

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends (net of foreign withholding tax of $1,783,377)		$18,177,948
Securities on loan, net	+	1,402,564
Total investment income		19,580,512
Expenses
Management fees		1,233,377
Total expenses	–	1,233,377
Net investment income		18,347,135
Realized and Unrealized Gains (Losses)
Net realized losses on investments (net of foreign capital gains tax of $10,355)		(46,036,872)
Net realized gains on in-kind redemptions		79,664,618
Net realized losses on futures contracts		(651,944)
Net realized losses on foreign currency transactions	+	(127,534)
Net realized gains		32,848,268
Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $3,737)		(213,355,185)
Net change in unrealized appreciation (depreciation) on futures contracts		182,750
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(20,444)
Net change in unrealized appreciation (depreciation)	+	(213,192,879)
Net realized and unrealized losses		(180,344,611)
Decrease in net assets resulting from operations		($161,997,476)

₂₇

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$18,347,135	$43,918,155
Net realized gains		32,848,268	47,132,418
Net change in unrealized appreciation (depreciation)	+	(213,192,879)	636,039
Increase (decrease) in net assets resulting from operations		(161,997,476)	91,686,612
Distributions to Shareholders1
Total distributions		($48,034,000)	($47,913,600)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		8,600,000	$273,339,937	22,700,000	$818,810,444
Shares redeemed	+	(7,600,000)	(252,053,793)	(3,300,000)	(119,623,285)
Net transactions in fund shares		1,000,000	$21,286,144	19,400,000	$699,187,159
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		63,600,000	$2,280,998,077	44,200,000	$1,538,037,906
Total increase or decrease	+	1,000,000	(188,745,332)	19,400,000	742,960,171
End of period²		64,600,000	$2,092,252,745	63,600,000	$2,280,998,077

¹	For the period ended August 31, 2018, the fund distributed to shareholders $47,913,600 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $13,971,989 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₂₈

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$25.89	$26.99	$22.56	$20.83	$27.34	$22.94
Income (loss) from investment operations:
Net investment income (loss)	0.19¹	0.68¹	0.71¹	0.58¹	0.66¹	0.63
Net realized and unrealized gains (losses)	0.15	(1.13)	4.21	1.64	(6.49)	4.40
Total from investment operations	0.34	(0.45)	4.92	2.22	(5.83)	5.03
Less distributions:
Distributions from net investment income	(0.63)	(0.65)	(0.49)	(0.49)	(0.68)	(0.63)
Net asset value at end of period	$25.60	$25.89	$26.99	$22.56	$20.83	$27.34
Total return	1.51%²	(1.79%)	22.40%	11.02%	(21.62%)	22.31%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.13%³	0.13%	0.13%⁴	0.14%	0.14%	0.14%
Net investment income (loss)	1.58%³	2.48%	2.96%	2.85%	2.66%	2.89%
Portfolio turnover rate⁵	6%²	18%	7%	10%	8%	9%
Net assets, end of period (x 1,000)	$5,599,302	$4,900,591	$4,248,821	$2,009,874	$1,276,740	$1,273,840

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective October 7, 2016, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

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

₂₉

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock97.0% of net assets

Brazil 6.8%
Ambev S.A. ADR	5,389,434	0.4	24,414,136
B3 S.A. - Brasil Bolsa Balcao	2,439,970	0.4	21,333,675
Itau Unibanco Holding S.A. ADR	5,711,564	1.0	53,688,702
Petroleo Brasileiro S.A.	3,581,477	0.5	28,516,207
Vale S.A.	4,226,375	1.0	53,079,731
Other Securities		3.5	201,128,830
		6.8	382,161,281

Chile 1.3%
Other Securities		1.3	71,776,763

China 34.5%
Agricultural Bank of China Ltd., H Shares	37,662,624	0.3	18,040,137
Alibaba Group Holding Ltd. ADR *	1,476,484	4.8	270,240,866
Baidu, Inc. ADR *	338,042	1.0	54,945,347
Bank of China Ltd., H Shares	92,611,312	0.8	43,180,387
China Construction Bank Corp., H Shares	108,884,699	1.7	96,819,690
China Life Insurance Co., Ltd., H Shares	9,101,965	0.5	25,045,535
China Merchants Bank Co., Ltd., H Shares	4,661,152	0.4	21,376,528
China Mobile Ltd.	6,460,937	1.2	67,985,604
China Petroleum & Chemical Corp., H Shares	31,688,113	0.5	27,369,539
CNOOC Ltd.	19,640,571	0.6	33,877,721
Industrial & Commercial Bank of China Ltd., H Shares	95,287,753	1.3	73,318,814
JD.com, Inc. ADR *	974,472	0.5	27,002,619
NetEase, Inc. ADR	88,935	0.4	19,852,071
Ping An Insurance Group Co. of China Ltd., H Shares	6,090,298	1.2	64,124,325
Tencent Holdings Ltd.	6,960,982	5.3	297,778,001
Other Securities		14.0	791,402,869
		34.5	1,932,360,053

Colombia 0.5%
Other Securities		0.5	25,224,583

Czech Republic 0.2%
Other Securities		0.2	12,470,747

Egypt 0.1%
Other Securities		0.1	7,356,095

Security	Number of Shares	% of Net Assets	Value ($)
Greece 0.3%
Other Securities		0.3	18,932,714

Hungary 0.4%
Other Securities		0.4	22,464,030

India 10.8%
Axis Bank Ltd. *	2,203,192	0.4	21,978,874
Hindustan Unilever Ltd.	855,252	0.4	20,834,114
Housing Development Finance Corp., Ltd.	2,094,310	1.0	54,214,071
Infosys Ltd.	4,649,056	0.9	47,996,370
Reliance Industries Ltd.	3,796,726	1.2	65,713,566
Tata Consultancy Services Ltd.	1,101,423	0.6	30,714,644
Other Securities		6.3	364,965,554
		10.8	606,417,193

Indonesia 2.4%
PT Bank Central Asia Tbk	11,839,108	0.4	23,206,924
PT Bank Rakyat Indonesia (Persero) Tbk	65,036,747	0.3	17,799,287
Other Securities		1.7	94,457,514
		2.4	135,463,725

Kuwait 0.5%
Other Securities		0.5	29,208,226

Malaysia 3.1%
Public Bank Berhad	3,754,254	0.4	23,080,376
Other Securities		2.7	152,569,837
		3.1	175,650,213

Mexico 3.3%
America Movil S.A.B. de C.V., Series L	33,816,578	0.4	24,358,332
Fomento Economico Mexicano S.A.B. de C.V.	2,606,501	0.4	23,656,544
Grupo Financiero Banorte S.A.B. de C.V., O Shares	3,465,144	0.3	18,854,636
Other Securities		2.2	118,471,900
		3.3	185,341,412

Peru 0.5%
Credicorp Ltd.	83,848	0.4	20,382,610
Other Securities		0.1	4,934,592
		0.5	25,317,202

₃₀

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Philippines 1.3%
Other Securities		1.3	71,138,171

Qatar 1.2%
Qatar National Bank SAQ	540,971	0.5	27,962,302
Other Securities		0.7	39,171,191
		1.2	67,133,493

Russia 4.1%
Gazprom PAO ADR	6,549,796	0.6	31,072,232
LUKOIL PJSC	594,105	0.9	49,595,714
NovaTek PJSC	1,331,430	0.4	21,829,421
Sberbank of Russia PJSC	12,282,890	0.7	38,733,381
Tatneft PJSC	1,850,880	0.4	21,798,934
Other Securities		1.1	66,892,773
		4.1	229,922,455

South Africa 7.6%
FirstRand Ltd.	3,884,667	0.3	17,765,582
Naspers Ltd., N Shares	522,790	2.0	113,236,091
Sasol Ltd.	680,750	0.4	20,813,713
Standard Bank Group Ltd.	1,562,573	0.4	21,533,723
Other Securities		4.5	249,647,579
		7.6	422,996,688

Taiwan 12.6%
Formosa Plastics Corp.	5,789,560	0.3	19,281,916
Hon Hai Precision Industry Co., Ltd.	14,511,092	0.6	34,277,984
Taiwan Semiconductor Manufacturing Co., Ltd.	29,346,500	4.1	227,895,099
Other Securities		7.6	423,201,509
		12.6	704,656,508

Thailand 3.7%
PTT PCL NVDR	17,593,800	0.5	27,078,121
Other Securities		3.2	178,153,106
		3.7	205,231,227

Turkey 0.9%
Other Securities		0.9	48,981,600

United Arab Emirates 0.9%
Other Securities		0.9	52,690,667
Total Common Stock
(Cost $4,927,577,853)			5,432,895,046

Preferred Stock2.8% of net assets

Brazil 2.5%
Banco Bradesco S.A.	4,061,838	0.8	46,865,070
Petroleo Brasileiro S.A.	4,793,430	0.6	34,587,085
Other Securities		1.1	60,279,969
		2.5	141,732,124

Security	Number of Shares	% of Net Assets	Value ($)
Chile 0.0%
Other Securities		0.0	834,916

Colombia 0.1%
Other Securities		0.1	3,038,750

Russia 0.2%
Other Securities		0.2	11,900,545

Taiwan 0.0%
Other Securities		0.0	368,575
Total Preferred Stock
(Cost $120,839,820)			157,874,910

Other Investment Companies0.6% of net assets

United States 0.6%
Money Market Fund 0.1%
Other Securities		0.1	4,380,233
Securities Lending Collateral 0.5%
Wells Fargo Government Money Market Fund, Select Class 2.34%(c)		0.5	28,689,060
Total Other Investment Companies
(Cost $33,069,293)			33,069,293

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
MSCI Emerging Markets Index, expires 03/15/19	230	12,037,050	(85,626)

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings..

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $26,680,446.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

ADR —	American Depositary Receipt
DVR —	Differential Voting Rights
GDR —	Global Depositary Receipt
NVDR —	Non-Voting Depositary Receipt
REIT —	Real Estate Investment Trust

₃₁

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$3,481,602,279	$—	$—	$3,481,602,279
China	1,932,360,053	—	—^*	1,932,360,053
Greece	18,891,362	—	41,352	18,932,714
Preferred Stock¹	157,874,910	—	—	157,874,910
Other Investment Companies¹	33,069,293	—	—	33,069,293
Liabilities
Futures Contracts²	(85,626)	—	—	(85,626)
Total	$5,623,712,271	$—	$41,352	$5,623,753,623

*	Level 3 amount shown includes securities determined to have no value at February 28, 2019.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₃₂

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $5,052,797,906) including securities on loan of $26,680,446		$5,595,150,189
Collateral invested for securities on loan, at value (cost $28,689,060)		28,689,060
Deposit with broker for futures contracts		1,097,200
Foreign currency, at value (cost $2,729,517)		2,730,684
Receivables:
Dividends		7,815,793
Income from securities on loan		114,980
Foreign tax reclaims	+	12,416
Total assets		5,635,610,322
Liabilities
Collateral held for securities on loan		28,689,060
Payables:
Investments bought		436,416
Management fees		537,524
Foreign capital gains tax		6,483,470
Variation margin on futures contracts	+	162,150
Total liabilities		36,308,620
Net Assets
Total assets		5,635,610,322
Total liabilities	–	36,308,620
Net assets		$5,599,301,702
Net Assets by Source
Capital received from investors		5,426,120,024
Total distributable earnings¹		173,181,678

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$5,599,301,702		218,700,000		$25.60

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₃₃

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends (net of foreign withholding tax of $3,097,815)		$37,197,007
Income from non-cash dividends		2,925,129
Securities on loan, net	+	553,232
Total investment income		40,675,368
Expenses
Management fees		3,080,523
Total expenses	–	3,080,523
Net investment income		37,594,845
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(50,571,002)
Net realized gains on in-kind redemptions		23,547,896
Net realized gains on futures contracts		1,368,911
Net realized losses on foreign currency transactions	+	(519,670)
Net realized losses		(26,173,865)
Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of ($4,193,482))		95,089,562
Net change in unrealized appreciation (depreciation) on futures contracts		58,543
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	344,326
Net change in unrealized appreciation (depreciation)	+	95,492,431
Net realized and unrealized gains		69,318,566
Increase in net assets resulting from operations		$106,913,411

₃₄

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab Emerging Markets Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$37,594,845	$120,916,490
Net realized losses		(26,173,865)	(81,491,649)
Net change in unrealized appreciation (depreciation)	+	95,492,431	(193,893,853)
Increase (decrease) in net assets resulting from operations		106,913,411	(154,469,012)
Distributions to Shareholders1
Total distributions		($123,939,100)	($107,285,800)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		31,100,000	$759,686,287	32,900,000	$940,429,372
Shares redeemed	+	(1,700,000)	(43,949,430)	(1,000,000)	(26,904,868)
Net transactions in fund shares		29,400,000	$715,736,857	31,900,000	$913,524,504
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		189,300,000	$4,900,590,534	157,400,000	$4,248,820,842
Total increase	+	29,400,000	698,711,168	31,900,000	651,769,692
End of period²		218,700,000	$5,599,301,702	189,300,000	$4,900,590,534

¹	For the period ended August 31, 2018, the fund distributed to shareholders $107,285,800 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $77,987,465 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₃₅

Schwab International Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited

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 International Equity ETF	Schwab U.S. REIT ETF
Schwab International Small-Cap Equity ETF	Schwab U.S. TIPS ETF
Schwab Emerging Markets Equity ETF	Schwab Short-Term U.S. Treasury ETF
Schwab U.S. Broad Market ETF	Schwab Intermediate-Term U.S. Treasury ETF
Schwab 1000 Index^® ETF	Schwab U.S. Aggregate Bond ETF
Schwab U.S. Large-Cap ETF	Schwab Fundamental U.S. Broad Market Index ETF
Schwab U.S. Large-Cap Growth ETF	Schwab Fundamental U.S. Large Company Index ETF
Schwab U.S. Large-Cap Value ETF	Schwab Fundamental U.S. Small Company Index ETF
Schwab U.S. Mid-Cap ETF	Schwab Fundamental International Large Company Index ETF
Schwab U.S. Small-Cap ETF	Schwab Fundamental International Small Company Index ETF
Schwab U.S. Dividend Equity ETF	Schwab Fundamental Emerging Markets Large Company Index ETF

The funds issue and redeem shares at their net asset value per share (NAV) only in large blocks of shares, typically 100,000 shares or more (Creation Units). These transactions are usually in exchange for a basket of securities and/or 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 funds 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).

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 funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard CodificationTopic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).

The funds may invest in certain other investment companies (underlying funds). For specific investments in underlying funds, please refer to the complete schedule of portfolio holdings on Form N-CSR(S) for this reporting period, which is filed with the U.S. Securities and Exchange Commission (SEC). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the SEC.

Effective November 5, 2018, the funds adopted SEC Regulation S-X disclosure requirement changes. The adopted changes are reflected throughout this report.

(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:

₃₆

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

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

• Underlying funds: Mutual funds are valued at their respective NAVs.

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 significant 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 and futures contracts. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.

• 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.

• 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.

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

₃₇

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

The levels associated with valuing the funds’ investments as of February 28, 2019 are disclosed in the Condensed 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 appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change 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 be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each 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 a fund and the lending agent. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agent start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%. Any expenses charged by the cash collateral fund are in addition to these fees.

As of February 28, 2019, the funds had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of February 28, 2019, if any, are disclosed in each fund’s Condensed Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.

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 appreciation or depreciation arises 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 contract 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.

₃₈

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

(d) Investment Income:

Interest income is recorded as it accrues. Dividends, in the form of cash or non-cash income such as in the form of additional securities, 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 rate 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 Amended and Restated 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 taxes, any brokerage expenses, and extraordinary or non-routine expenses. 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:

The funds make distributions from net investment income and net realized capital gains, if any, once a year.

(g) 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.

(h) Federal Income Taxes:

The funds intend to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the funds distribute substantially all of their net investment income and net realized 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, 2019, if any, are reflected in each fund’s Statement 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.

(k) Recent Accounting Standards:

₃₉

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between levels upon issuance of ASU 2018-13, and have delayed adoption of the additional disclosures until their effective date. At this time, management is currently evaluating the impact that the adoption of the additional disclosures will have on the funds’ financial statements.

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. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.

Investment Style Risk. The funds are index funds. Therefore, each fund follows the securities included in its respective 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 the funds’ expenses, the funds’ performance may be below that of their respective 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.

Market Capitalization Risk. Securities issued by companies of different market capitalizations tend to go in and out of favor based on market and economic conditions. During a period when securities of a particular market capitalization fall behind other types of investments, a fund’s performance could be impacted.

Large-Cap Company Risk.Certain funds invest in large-cap company stocks. Large-cap companies are generally more mature and the securities issued by these companies may not be able to reach the same levels of growth as the securities issued by small- or mid-cap companies.

Mid-Cap Company Risk.Certain funds invest in mid-cap company stocks. Mid-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies and the value of securities issued by these companies may move sharply.

Small-Cap Company Risk.Certain funds invest in small-cap company stocks. Securities issued by small-cap companies may be riskier than those issued by larger companies, and their prices may move sharply, especially during market upturns and downturns.

Foreign Investment Risk.A fund’s investments in securities of foreign issuers involve certain risks that may be 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); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. There is a risk that investments in securities denominated in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. Foreign securities also include American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European Depositary Receipts (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 large percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political, regulatory and social conditions in those countries and the fund’s price may be more volatile than the price of a fund that is geographically diversified.

Emerging Markets Risk.Certain funds invest in emerging markets. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In

₄₀

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

3. Risk Factors (continued):

addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.

Sampling Index Tracking Risk.Each fund uses statistical sampling techniques, and as a result, a fund may not fully replicate its respective index and may hold securities not included in the index. As a result, a fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. Because each fund utilizes a sampling approach, it may not track the return of its respective index as well as it would if a fund purchased all of the securities in its index.

Tracking Error Risk. As index funds, each fund seeks to track the performance of its respective index, although it may not be successful in doing so. The divergence between the performance of a fund and the 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 gains. A fund’s use of derivatives could reduce the fund’s performance, increase the fund’s volatility, and cause the fund to lose more than the initial amount invested. Furthermore, the use of derivatives subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause the fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.

Liquidity Risk.A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.

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

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, country 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 vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.

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 a fund will approximate the fund’s NAV, there may be times when the market price and the NAV vary significantly. An investor may pay more than NAV when buying shares of a fund in the secondary market, and an investor may receive less than NAV when selling those shares in the secondary market. The market price of fund shares may deviate, sometimes significantly, from NAV during periods of market volatility or market disruption, or as a result of other factors impacting foreign securities, including liquidity, irregular trading activity and timing differences between foreign markets where securities trade and the secondary market where fund shares are sold.

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

₄₁

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

4. Affiliates and Affiliated Transactions:

Investment Adviser

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

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

Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
0.06%	0.12%	0.13%

Investment from Affiliates

Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of February 28, 2019, as applicable:

	Underlying Funds
	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Schwab VIT Balanced Portfolio	0.0%*	0.1%	0.1%
Schwab VIT Balanced with Growth Portfolio	0.1%	0.2%	0.2%
Schwab VIT Growth Portfolio	0.2%	0.4%	0.2%
Schwab Target 2010 Index Fund	0.0%*	-%	-%
Schwab Target 2015 Index Fund	0.0%*	-%	-%
Schwab Target 2020 Index Fund	0.1%	-%	0.0%*
Schwab Target 2025 Index Fund	0.1%	-%	0.1%
Schwab Target 2030 Index Fund	0.2%	-%	0.1%
Schwab Target 2035 Index Fund	0.1%	-%	0.1%
Schwab Target 2040 Index Fund	0.2%	-%	0.1%
Schwab Target 2045 Index Fund	0.1%	-%	0.1%
Schwab Target 2050 Index Fund	0.1%	-%	0.1%
Schwab Target 2055 Index Fund	0.1%	-%	0.1%
Schwab Target 2060 Index Fund	0.1%	-%	0.1%

*	Less than 0.05%

Interfund Transactions

The funds may engage in direct transactions with certain other funds in the Fund Complex when permitted by applicable law. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended February 28, 2019, each fund’s total aggregate security transactions with other funds in the Fund Complex as well as any realized gains (losses) were as follows:

	Total Aggregate Transactions	Realized Gains (Losses)
Schwab International Equity ETF	$148,001,095	($26,336,227)
Schwab International Small-Cap Equity ETF	69,084,507	(7,594,874)
Schwab Emerging Markets Equity ETF	67,312,022	(10,994,495)

₄₂

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

4. Affiliates and Affiliated Transactions (continued):

Interfund Borrowing and Lending

Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. 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:

The Board may include people who are officers and/or directors of CSIM or its affiliates. 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 does not pay any interested or non-interested trustees (independent trustees). The independent trustees are paid by CSIM. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.

7. Borrowing from Banks:

During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, syndicated, committed $605 million line of credit (the Syndicated Credit Facility), which matured on October 4, 2018. On October 4, 2018, the Syndicated Credit Facility was amended to run for a new 364 day period with an increased line of $750 million, maturing on October 3, 2019. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by a fund, CSIM paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.

During the period, the funds were participants with other U.S. registered investment companies managed by CSIM in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which matured on November 30, 2018. On November 30, 2018, the Uncommitted Credit Facility was amended to run for a new 364 day period, maturing on November 29, 2019. Under the terms of the Uncommitted Credit Facility, CSIM pays interest on the amount a fund borrows. There were no borrowings from either line of credit during the period.

The funds also have access to custodian overdraft facilities. A fund may have utilized the overdraft facility and incurred an interest expense, which is paid by CSIM. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.

8. Derivatives:

₄₃

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

8. Derivatives (continued):

policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended February 28, 2019, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:

	Notional Amounts	Number of Contracts
Schwab International Equity ETF	$62,609,676	677
Schwab International Small-Cap Equity ETF	8,122,622	88
Schwab Emerging Markets Equity ETF	8,239,335	161

9. Purchases and Sales of Investment Securities:

For the period ended February 28, 2019, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab International Equity ETF	$697,522,862	$852,990,092
Schwab International Small-Cap Equity ETF	196,583,151	222,522,065
Schwab Emerging Markets Equity ETF	708,213,905	274,930,726

10. In-Kind Transactions:

The consideration for the purchase of Creation Units of a fund often 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 a fund.

The in-kind transactions for the period ended February 28, 2019, were as follows:

	In-Kind Purchases of Securities	In-Kind Sales of Securities
Schwab International Equity ETF	$1,437,905,666	$—
Schwab International Small-Cap Equity ETF	249,872,925	229,400,205
Schwab Emerging Markets Equity ETF	238,428,388	41,874,328

For the period ended February 28, 2019, where applicable, the funds realized 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 effect on net assets or net asset values per share. The net realized in-kind gains or losses for the period ended February 28, 2019 are disclosed in the funds’ Statements of Operations, if any.

₄₄

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Financial Notes, unaudited(continued)

11. Federal Income Taxes

As of February 28, 2019, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:

	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Tax cost	$16,047,336,553	$2,145,540,671	$5,172,803,399
Gross unrealized appreciation	$1,825,190,009	$226,900,482	$791,398,376
Gross unrealized depreciation	(1,015,839,267)	(229,719,172)	(340,448,152)
Net unrealized appreciation (depreciation)	$809,350,742	($2,818,690)	$450,950,224

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of August 31, 2018, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:

Expiration Date	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
August 31, 2019	$2,345,874	$215,545	$1,091,404
No expiration	297,898,698	67,520,352	263,169,195
Total	$300,244,572	$67,735,897	$264,260,599

The tax-basis components of distributions and components of distributable earnings on a tax basis are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of February 28, 2019. The tax-basis components of distributions paid during the year ended August 31, 2018 were as follows:

	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Ordinary income	$308,067,760	$47,913,600	$107,285,800
Long-term capital gains	—	—	—

As of August 31, 2018, 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 August 31, 2018, the funds did not incur any interest or penalties.

12. 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.

₄₅

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Trustees and Officers

The tables below give information about the trustees and officers of 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 and Laudus Trust. The Fund Complex includes 98 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 1-877-824-5615.

Independent Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds.	98	None
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Senior Fellow (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University.	98	Director (2005 – present), Gilead Sciences, Inc.
Nancy F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services).	98	None
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	CEO and Owner (May 2012 – present), Kochis Global (wealth management consulting).	98	None

₄₆

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Independent Trustees (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Private Investor.	98	Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc.
Jane P. Moncreiff 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare).	98	None
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses).	98	Director (2008 – present), KLA-Tencor Corporation
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Consultant (2008 – present), Patmore Management Consulting (management consulting).	98	None
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Chairman, Chief Executive Officer and Founder (Mar. 1990 – present), Smith Graham & Co. (investment advisors).	98	Director (2012 – present), Eaton

₄₇

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Interested Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Walter W. Bettinger II² 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010)	Director, President and Chief Executive Officer (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc.	98	Director (2008 – present), The Charles Schwab Corporation
Jonathan de St. Paer² 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Director and Chief Executive Officer (Apr. 2019 – present) and President (Oct. 2018 – present) Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.	98	None
Joseph R. Martinetto² 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	98	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
Jonathan de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Director and Chief Executive Officer (Apr. 2019 – present) and President (Oct. 2018 – present) Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.

₄₈

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Officers of the Trust (continued)
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
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013)	Treasurer and Chief Financial Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management.
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009)	Senior Vice President and Chief Financial Officer (Nov. 2004 – present) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited.
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management.
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President and Chief Investment Officer – Fixed Income (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm).
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President (Sept. 2011 – present) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009)	Vice President (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary (Oct. 2009 – present), Schwab ETFs.

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 retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.
²	Mr. Bettinger, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
³	The President, Treasurer and Secretary/Clerk 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.

₄₉

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

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 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.

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.

Bloomberg Barclays US Aggregate Bond Index An index that is a broad-based benchmark measuring the performance of the U.S. investment grade, taxable bond market, including U.S. Treasuries, government-related and corporate bonds, mortgage pass-through securities, commercial mortgage-backed securities, and asset-backed securities that are publicly available for sale in the United States. To be eligible for inclusion in the index, securities must be fixed rate, non-convertible, U.S. dollar denominated with at least $300 million or more of outstanding face value and have one or more years remaining to maturity. The index excludes certain types of securities, including tax-exempt state and local government series bonds, structured notes embedded with swaps or other special features, private placements, floating rate securities, inflation-linked bonds and Eurobonds. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.

Bloomberg Barclays US Treasury Bills 1–3 Month Index An index that includes all publicly issued zero-coupon U.S. Treasury Bills that have a remaining maturity of less than 3 months but more than 1 month, are rated investment grade and have $250 million or more of outstanding face value. It excludes zero-coupon STRIPS.

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.

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.

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.

FTSE Developed ex US Index (Net) An index that is comprised of large- and mid-capitalization companies in developed countries outside the United States, as defined by the index provider. The index defines the large- and mid-capitalization universe as approximately the top 90% of the eligible universe. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.

FTSE Developed Small Cap ex US Liquid Index (Net) An index comprised of small-capitalization companies in developed countries outside the United States, as defined by the index provider. The index defines the small-capitalization universe as approximately the bottom 10% of the eligible universe with a minimum free float capitalization of $150 million. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.

FTSE Emerging Index (Net) An index that is comprised of large- and mid-capitalization companies in emerging market countries, as defined by the index provider. The index defines the large- and mid-capitalization universe as approximately the top 90% of the eligible universe. The Net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.

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. Free-float market capitalization is a variation of market capitalization that only includes shares generally available to the public, and excludes shares of a company held by entities such as the government. Modified market capitalization weighting represents a mix between conventional market capitalization weighting and equal weighting.

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.

₅₀

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

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.

MSCI EAFE Index (Net) A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets in Europe, Australasia, and the Far East. 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.

MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The 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.

rights and warrants Rights and warrants are types of securities that entitle the holder to purchase a proportionate amount of common stock at a specified price for a specific period of time. Rights allow a shareholder to buy more shares directly from the company, usually at a price somewhat lower than the current market price of the outstanding shares. Warrants are usually issued with bonds and preferred stock. Rights and warrants can trade on the market separately from the company’s stock. The prices of rights and warrants do not necessarily move parallel to the prices of the underlying common stock. Rights usually expire within a few weeks of issuance, while warrants may not expire for several years. If a right or warrant is not exercised within the specified time period, it will become worthless and a fund will lose the purchase price it paid for the right or warrant and the right to purchase the underlying security.

Russell 2000 Index An index that measures the performance of the 2,000 smallest companies in the Russell 3000 Index. The Russell 3000 Index measures the performance of the largest 3,000 U.S. companies representing approximately 98% of the investable U.S. equity market.

S&P 500 Index An index that is designed to measure the performance of 500 leading publicly traded companies from a broad range of industries.

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.

₅₁

Schwab International Equity ETFs | Semiannual Report

Table of Contents

Schwab International Equity ETFs

Schwab ETFs

Schwab ETFs are designed to serve as simple low-cost core investment products for a diversified portfolio. These ETFs seek to provide consistent, repeatable performance through a variety of investment strategies that span the equity and fixed income spectrum. The list below shows all currently available Schwab ETFs.

Investors should carefully consider information contained in the prospectus, or if available, the summary prospectus, including investment objectives, risks, charges and expenses before investing. Please call 1-877-824-5615 for a prospectus 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 atwww.schwabfunds.com/schwabetfs_prospectus, the SEC’s website atwww.sec.gov, or by contacting Schwab ETFs at 1-877-824-5615.

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 atwww.schwabfunds.com/schwabetfs_prospectus or the SEC’s website atwww.sec.gov.

Schwab ETFs

U.S. ETFs

Schwab U.S. Broad Market ETF

Schwab 1000 Index^® ETF

Schwab U.S. Large-Cap ETF

Schwab U.S. Large-Cap Growth ETF

Schwab U.S. Large-Cap Value ETF

Schwab U.S. Mid-Cap ETF

Schwab U.S. Small-Cap ETF

Schwab U.S. Dividend Equity ETF

Schwab U.S. REIT ETF

International ETFs

Schwab International Equity ETF

Schwab International Small-Cap Equity ETF

Schwab Emerging Markets Equity ETF

Fixed Income ETFs

Schwab U.S. TIPS ETF

Schwab Short-Term U.S. Treasury ETF

Schwab Intermediate-Term U.S. Treasury ETF

Schwab U.S. Aggregate Bond ETF

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

Investment Adviser

Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

Schwab ETFs

1-877-824-5615

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

Table of Contents

This page is intentionally left blank.

Table of Contents

MFR54790-09
00227484

Semiannual Report | February 28, 2019

Schwab U.S. Equity ETFs

Schwab U.S. Broad Market ETF	SCHB
Schwab 1000 Index^® ETF	SCHK
Schwab U.S. Large-Cap ETF	SCHX
Schwab U.S. Large-Cap Growth ETF	SCHG
Schwab U.S. Large-Cap Value ETF	SCHV
Schwab U.S. Mid-Cap ETF	SCHM
Schwab U.S. Small-Cap ETF	SCHA
Schwab U.S. Dividend Equity ETF	SCHD

New Notice Regarding Shareholder Report Delivery Options

If you would like to continue to receive a fund’s future shareholder reports in paper free of charge after January 1, 2021, you can make that request by contacting your financial intermediary.

This page is intentionally left blank.

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM)

Distributor: SEI Investments Distribution Co. (SIDCO)

₁

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Performance at a Glance

Total Returns for the 6 Months Ended February 28, 2019
Schwab U.S. Broad Market ETF (Ticker Symbol: SCHB)
Market Price Return¹	-3.46%
NAV Return¹	-3.51%
Dow Jones U.S. Broad Stock Market Index	-3.52%
ETF Category: Morningstar Large Blend²	-3.37%
Performance Details	pages 8-9

Schwab 1000 Index ETF (Ticker Symbol: SCHK)
Market Price Return¹	-3.21%
NAV Return¹	-3.14%
Schwab 1000 Index^®	-3.11%
ETF Category: Morningstar Large Blend²	-3.37%
Performance Details	pages 10-11

Schwab U.S. Large-Cap ETF (Ticker Symbol: SCHX)
Market Price Return¹	-2.94%
NAV Return¹	-3.00%
Dow Jones U.S. Large-Cap Total Stock Market Index	-2.99%
ETF Category: Morningstar Large Blend²	-3.37%
Performance Details	pages 12-13

Schwab U.S. Large-Cap Growth ETF (Ticker Symbol: SCHG)
Market Price Return¹	-4.32%
NAV Return¹	-4.31%
Dow Jones U.S. Large-Cap Growth Total Stock Market Index	-4.32%
ETF Category: Morningstar Large Growth²	-3.90%
Performance Details	pages 14-15

Total Returns for the 6 Months Ended February 28, 2019
Schwab U.S. Large-Cap Value ETF (Ticker Symbol: SCHV)
Market Price Return¹	-1.55%
NAV Return¹	-1.56%
Dow Jones U.S. Large-Cap Value Total Stock Market Index	-1.53%
ETF Category: Morningstar Large Value²	-2.89%
Performance Details	pages 16-17

Schwab U.S. Mid-Cap ETF (Ticker Symbol: SCHM)
Market Price Return¹	-4.20%
NAV Return¹	-4.22%
Dow Jones U.S. Mid-Cap Total Stock Market Index	-4.18%
ETF Category: Morningstar Mid-Cap Blend²	-5.23%
Performance Details	pages 18-19

Schwab U.S. Small-Cap ETF (Ticker Symbol: SCHA)
Market Price Return¹	-8.02%
NAV Return¹	-7.99%
Dow Jones U.S. Small-Cap Total Stock Market Index	-8.00%
ETF Category: Morningstar Small Blend²	-8.67%
Performance Details	pages 20-21

Schwab U.S. Dividend Equity ETF (Ticker Symbol: SCHD)
Market Price Return¹	-0.17%
NAV Return¹	-0.19%
Dow Jones U.S. Dividend 100^TM Index	-0.14%
ETF Category: Morningstar Large Value²	-2.89%
Performance Details	pages 22-23

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 or sale 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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones Indices are products of S& P Dow Jones Indices LLC and/or its affiliates, and have been licensed for use by CSIM. The Schwab U.S. Equity ETFs, based on their respective Dow Jones Indices, are not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such products.

ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.

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. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

From the President

Jonathan de St. Paer
President and CEO of
Charles Schwab Investment
Management, Inc. and the
funds covered in this report.

Dear Shareholder,

At Charles Schwab Investment Management, we often talk about the importance of diversification. But, we also recognize that maintaining a long-term perspective and setting aside emotions can be tough when market conditions become challenging. We seek to provide the products that investors can use to achieve their long-term financial goals—and to help weather the market volatility that may come along the way.

Since the launch of our first ETFs in 2009, we have focused on offering a straightforward set of core investment products that deliver both quality and value. The Schwab U.S. Equity ETFs are a key part of that approach. Whether you are looking to capture the performance of large-cap, small-cap, dividend yielding, value or growth stocks, the Schwab U.S. Equity ETFs are designed to be part of the foundation of a diversified portfolio—providing a convenient, low-cost way to gain U.S. stock market access. And, aligned with our continued commitment to low-cost investing, we were excited to announce that effective March 11, 2019, the expense ratios for the Schwab U.S. Mid-Cap ETF, Schwab U.S. Small-Cap ETF, and Schwab U.S. Dividend Equity ETF were reduced.

No matter how you choose to invest with us, we believe you’re going to find solutions to your investing needs. Charles Schwab Investment Management has become one of the nation’s largest and fastest-growing ETF managers not by offering more choices than our competitors, but by providing carefully developed products that can help simplify decision-making. This is cornerstone of our investing philosophy—and will continue to be.

₃

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

From the President(continued)

“And, aligned with our continued commitment to low-cost investing, we were excited to announce that effective March 11, 2019, the expense ratios for the Schwab U.S. Mid-Cap ETF, Schwab U.S. Small-Cap ETF, and Schwab U.S. Dividend Equity ETF were reduced.”

Thank you for investing with Charles Schwab Investment Management. For more information about the Schwab U.S. Equity ETFs, please continue reading this report. In addition, you can find further details about these funds by visiting our website at www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.

Sincerely,

Diversification and asset allocation strategies do not ensure a profit and cannot protect against losses in a declining market.

Management views may have changed since the report date.

₄

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

The Investment Environment

For the six-month reporting period ended February 28, 2019, U.S. equity markets lost ground. Despite major market indices posting record highs in late September and early October, over the final three months of 2018, investor anxiety rose on concerns about the future pace of interest rate hikes, falling oil prices, slowing international growth, and concerns about trade negotiations with China. During the fourth quarter of 2018, volatility spiked and stocks fell steeply, particularly in December, more than erasing the year’s earlier gains and driving major indices to near–bear market territory. In January and February, a strong rebound brought major indices nearly back to their early-December levels but below their earlier October highs. In this environment, the S&P 500^® Index, a bellwether for the overall U.S. stock market, returned –3.04% for the reporting period. Smaller stocks were weaker, with the Dow Jones U.S. Mid-Cap Total Stock Market Index and the Russell 2000^® Index returning –4.18% and –8.86%, respectively. Markets outside the U.S. were mixed. The MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, returned –3.58%, while the MSCI Emerging Markets Index (Net)* returned 0.33%.

Entering its tenth year of expansion, the U.S. economy continued to exhibit steady growth for most of the period, even as multiple economies around the globe showed growing weakness. U.S. gross domestic product (GDP) grew at an annual rate of 2.2% in the fourth quarter of 2018, down from 3.4% in the third quarter. Nonfarm payrolls were steady, and the unemployment rate remained low, although it ticked up slightly from its low of 3.7% in September, October, and November to 4.0% in January. Inflation remained in check, while pressure on wage growth began to rise toward the end of 2018. Consumer confidence, which hit an 18-year high in October, the highest since 2000, fell for the subsequent three months before rebounding in February against the backdrop of the market’s rally and the end of the 35-day partial government shutdown that began in late December and extended through late January.

Asset Class Performance Comparison % returns during the 6 months ended February 28, 2019

For index definitions, please see the Glossary.

Data source: Index provider websites and CSIM.

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

Management views may have changed since the report date.

*	The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes.

₅

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

The Investment Environment(continued)

Outside the U.S., conditions continued to soften. Despite reaching a nearly three-year high in October, oil prices fell precipitously over the last three months of 2018, ending the year down 25% amid concerns of economic slowing and a global oil glut. Demand was impacted particularly by poor economic performance in China, Brazil, and Europe, while supply has risen, notably due to the growth of shale in the U.S. and strong increases in Russian oil production. In the final quarter of 2018, the eurozone’s economic expansion was subdued by political tensions as well as a sharp decline in the manufacturing sector’s new export orders. Japan’s economy contracted in the third quarter of 2018 but exhibited growth in the fourth quarter, albeit at a slower rate than in the second quarter. The United Kingdom’s economy grew modestly in the third quarter but contracted in the fourth quarter amid ongoing Brexit-related economic and political uncertainty as well as rapidly growing wage pressures. Several Asian economies, including China and India, also exhibited signs of slowing but still outpaced many developed economies.

Despite continuing low levels of inflation, the Federal Reserve (Fed) raised the federal funds rate by 0.25% twice during the reporting period—in September and December. Fed rates ended the reporting period in a target range of 2.25% to 2.50%, bringing them closer to what the Fed considers a neutral level, according to Fed Chairman Jerome Powell. In January, he stated that “the case for raising rates has weakened somewhat,” and that the Fed had “the luxury of patience” regarding possible future rate hikes, easing investors’ concerns about the likelihood and pace of future rate hikes. The Fed also continued its program to reduce the size of its balance sheet by allowing securities to mature without reinvesting the proceeds. As of the end of the reporting period, the Fed’s balance sheet stood at just over $4 trillion, down from $4.5 trillion when the program was announced in June 2017.

From a sector standpoint, Utilities was the strongest performer, as this sector is generally less susceptible to market volatility. The Real Estate sector was also strong for the period, benefiting from the ongoing strength of the U.S. economy and solid fundamentals such as stable office leasing activity and steady increases in rental values. The weakest sectors for the reporting period were Energy, due in large part to weakness in oil and natural gas prices, and Materials, which was dampened by global growth concerns and trade dispute worries.

₆

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Fund Management

Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a Senior Analyst in the ETF Portfolio Management and Research Team where he performed portfolio management, trading and analytics/research functions of ALPS ETFs and passive funds. Additionally, Mr. Brown led a number of investment research, commentary, industry trend analysis and sales and marketing support initiatives.

Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent more than 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 more than four years as a senior financial analyst with Union Bank of California.

Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2015, Mr. Sinha spent a year at F-Squared Investments on the product development and analytics team. Prior to F-Squared, he worked at IndexIQ Advisors as a senior index portfolio manager for three years and for Bank of America’s Columbia Management subsidiary as a portfolio manager for three years.

₇

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Broad Market ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Broad Market ETF (11/3/09)
Market Price Return²	-3.46%	5.05%	10.14%	13.55%
NAV Return²	-3.51%	5.01%	10.14%	13.54%
Dow Jones U.S. Broad Stock Market Index	-3.52%	5.00%	10.13%	13.56%
ETF Category: Morningstar Large Blend³	-3.37%	3.15%	8.80%	N/A
Fund Expense Ratio⁴: 0.03%

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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Broad Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Broad Market ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (11/3/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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.

₈

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Broad Market ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	2,466
Weighted Average Market Cap (millions)	$181,249
Price/Earnings Ratio (P/E)	19.4
Price/Book Ratio (P/B)	3.0
Portfolio Turnover Rate	2%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₉

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab 1000 Index ETF

Average Annual Returns¹

Fund and Inception Date	6 Months	1 Year	Since Inception^*
Fund: Schwab 1000 Index ETF (10/11/17)
Market Price Return²	-3.21%	4.74%	8.55%
NAV Return²	-3.14%	4.86%	8.58%
Schwab 1000 Index^®	-3.11%	4.92%	8.65%
Russell 1000^® Index	-3.07%	4.99%	8.70%
ETF Category: Morningstar Large Blend³	-3.37%	3.15%	N/A
Fund Expense Ratio⁴: 0.05%

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.

^*	Inception (10/11/17) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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.

₁₀

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab 1000 Index ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	998
Weighted Average Market Cap (millions)	$193,175
Price/Earnings Ratio (P/E)	19.6
Price/Book Ratio (P/B)	3.1
Portfolio Turnover Rate	3%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₁₁

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Large-Cap ETF (11/3/09)
Market Price Return²	-2.94%	4.99%	10.49%	13.46%
NAV Return²	-3.00%	4.95%	10.48%	13.46%
Dow Jones U.S. Large-Cap Total Stock Market Index	-2.99%	4.96%	10.50%	13.53%
ETF Category: Morningstar Large Blend³	-3.37%	3.15%	8.80%	N/A
Fund Expense Ratio⁴: 0.03%

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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Large-Cap Total Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Large-Cap ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (11/3/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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.

₁₂

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	755
Weighted Average Market Cap (millions)	$200,973
Price/Earnings Ratio (P/E)	19.6
Price/Book Ratio (P/B)	3.1
Portfolio Turnover Rate	3%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₁₃

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Large-Cap Growth ETF (12/11/09)
Market Price Return²	-4.32%	6.60%	12.09%	14.17%
NAV Return²	-4.31%	6.60%	12.10%	14.17%
Dow Jones U.S. Large-Cap Growth Total Stock Market Index	-4.32%	6.61%	12.14%	14.26%
ETF Category: Morningstar Large Growth³	-3.90%	5.89%	10.31%	N/A
Fund Expense Ratio⁴: 0.04%

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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Large-Cap Growth Total Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Large-Cap Growth ETF is not sponsored, endorsed, sold or promoted by S& P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (12/11/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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.

₁₄

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	410
Weighted Average Market Cap (millions)	$262,840
Price/Earnings Ratio (P/E)	23.8
Price/Book Ratio (P/B)	4.5
Portfolio Turnover Rate	13%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₁₅

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap Value ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Large-Cap Value ETF (12/11/09)
Market Price Return²	-1.55%	3.42%	8.92%	11.62%
NAV Return²	-1.56%	3.46%	8.93%	11.62%
Dow Jones U.S. Large-Cap Value Total Stock Market Index	-1.53%	3.50%	8.99%	11.75%
ETF Category: Morningstar Large Value³	-2.89%	1.98%	7.51%	N/A
Fund Expense Ratio⁴: 0.04%

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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Large-Cap Value Total Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Large-Cap Value ETF is not sponsored, endorsed, sold or promoted by S& P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (12/11/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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.

₁₆

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Large-Cap Value ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	347
Weighted Average Market Cap (millions)	$126,598
Price/Earnings Ratio (P/E)	16.1
Price/Book Ratio (P/B)	2.2
Portfolio Turnover Rate	5%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₁₇

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Mid-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Mid-Cap ETF (1/13/11)
Market Price Return²	-4.20%	6.67%	8.99%	11.80%
NAV Return²	-4.22%	6.51%	8.98%	11.80%
Dow Jones U.S. Mid-Cap Total Stock Market Index	-4.18%	6.57%	9.01%	11.85%
ETF Category: Morningstar Mid-Cap Blend³	-5.23%	2.44%	6.46%	N/A
Fund Expense Ratio⁴: 0.05%

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 — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Mid-Cap Total Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Mid-Cap ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (1/13/11) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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 December 14, 2018 prospectus. Effective March 11, 2019, the management fee was reduced to 0.04%. For more information, see financial note 4 or refer to the prospectus supplement dated March 11, 2019.

₁₈

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Mid-Cap ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	501
Weighted Average Market Cap (millions)	$8,053
Price/Earnings Ratio (P/E)	19.7
Price/Book Ratio (P/B)	2.4
Portfolio Turnover Rate	16%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₁₉

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Small-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Small-Cap ETF (11/3/09)
Market Price Return²	-8.02%	5.22%	7.26%	13.86%
NAV Return²	-7.99%	5.31%	7.26%	13.86%
Dow Jones U.S. Small-Cap Total Stock Market Index	-8.00%	5.28%	7.22%	13.89%
ETF Category: Morningstar Small Blend³	-8.67%	3.37%	6.19%	N/A
Fund Expense Ratio⁴: 0.05%

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.

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

Index ownership — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Small-Cap Total Stock Market Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Small-Cap ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (11/3/09) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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 December 14, 2018 prospectus. Effective March 11, 2019, the management fee was reduced to 0.04%. For more information, see financial note 4 or refer to the prospectus supplement dated March 11, 2019.

₂₀

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Small-Cap ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	1,738
Weighted Average Market Cap (millions)	$3,207
Price/Earnings Ratio (P/E)	17.5
Price/Book Ratio (P/B)	2.1
Portfolio Turnover Rate	8%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₂₁

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Dividend Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Dividend Equity ETF (10/20/11)
Market Price Return²	-0.17%	5.62%	10.46%	13.58%
NAV Return²	-0.19%	5.62%	10.46%	13.58%
Dow Jones U.S. Dividend 100^TM Index	-0.14%	5.70%	10.57%	13.72%
ETF Category: Morningstar Large Value³	-2.89%	1.98%	7.51%	N/A
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.

Index ownership — Dow Jones^® is a registered trademark of Dow Jones Trademark Holdings LLC (Dow Jones). The Dow Jones U.S. Dividend 100^TM Index is a product of S&P Dow Jones Indices LLC and/or its affiliates, and has been licensed for use by CSIM. The Schwab U.S. Dividend Equity ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, or any of their respective affiliates and neither S&P Dow Jones Indices LLC, Dow Jones, nor any of their respective affiliates make any representation regarding the advisability of investing in such product.

^*	Inception (10/20/11) 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 or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share 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 using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. 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 December 14, 2018 prospectus. Effective March 11, 2019, the management fee was reduced to 0.06%. For more information, see financial note 4 or refer to the prospectus supplement dated March 11, 2019.

₂₂

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Dividend Equity ETF

Performance and Fund Factsas of February 28, 2019

Statistics¹

Number of Holdings	100
Weighted Average Market Cap (millions)	$127,574
Price/Earnings Ratio (P/E)	17.6
Price/Book Ratio (P/B)	4.1
Portfolio Turnover Rate	5%^2,3

Sector Weightings % of Investments⁴

Top Equity Holdings % of Net Assets⁵

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

¹	Excludes derivatives.
²	Not annualized.
³	Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
⁴	The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, excluding derivatives, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
⁵	This list is not a recommendation of any security by the investment adviser.

₂₃

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Fund Expenses(Unaudited)

Examples for a $1,000 Investment

	Expense Ratio (Annualized)¹	Beginning Account Value at 9/1/18	Ending Account Value (Net of Expenses) at 2/28/19	Expenses Paid During Period 9/1/18-2/28/19²
Schwab U.S. Broad Market ETF
Actual Return	0.03%	$1,000.00	$964.90	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.65	$0.15
Schwab 1000 Index ETF
Actual Return	0.05%	$1,000.00	$968.60	$0.24
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.55	$0.25
Schwab U.S. Large-Cap ETF
Actual Return	0.03%	$1,000.00	$970.00	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.65	$0.15
Schwab U.S. Large-Cap Growth ETF
Actual Return	0.04%	$1,000.00	$956.90	$0.19
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.60	$0.20
Schwab U.S. Large-Cap Value ETF
Actual Return	0.04%	$1,000.00	$984.40	$0.20
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.60	$0.20
Schwab U.S. Mid-Cap ETF
Actual Return	0.05%	$1,000.00	$957.80	$0.24
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.55	$0.25
Schwab U.S. Small-Cap ETF
Actual Return	0.05%	$1,000.00	$920.10	$0.24
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.55	$0.25
Schwab U.S. Dividend Equity ETF
Actual Return	0.07%	$1,000.00	$998.10	$0.35
Hypothetical 5% Return	0.07%	$1,000.00	$1,024.45	$0.35

Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. Effective March 11, 2019, the management fee of the Schwab U.S. Mid-Cap ETF, Schwab U.S. Small-Cap ETF and Schwab U.S. Dividend Equity ETF were reduced to 0.04%, 0.04% and 0.06%, respectively. If the fund expense changes had been in place throughout the entire most recent fiscal half-year the expenses paid during period under the actual return and hypothetical 5% return example would have been the following; For Schwab U.S. Mid-Cap ETF, $0.19 and $0.20, respectively, for Schwab U.S. Small-Cap ETF, $0.19 and $0.20, respectively, and for Schwab U.S. Dividend Equity ETF, $0.30 and $0.30, respectively. (See financial note 4)

Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 181 days of the period, and divided by 365 days of the fiscal year.

₂₄

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Broad Market ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$70.55	$59.72	$52.42	$48.02	$48.75	$39.79
Income (loss) from investment operations:
Net investment income (loss)¹	0.66	1.18	1.12	1.03	0.99	0.85
Net realized and unrealized gains (losses)	(3.16)	10.77	7.20	4.34	(0.79)	8.93
Total from investment operations	(2.50)	11.95	8.32	5.37	0.20	9.78
Less distributions:
Distributions from net investment income	(0.72)	(1.12)	(1.02)	(0.97)	(0.93)	(0.82)
Net asset value at end of period	$67.33	$70.55	$59.72	$52.42	$48.02	$48.75
Total return	(3.51%)²	20.20%	16.03%	11.35%	0.33%	24.77%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03%³	0.03%	0.03%	0.03%⁴	0.04%	0.04%
Net investment income (loss)	2.07%³	1.81%	1.99%	2.09%	1.98%	1.90%
Portfolio turnover rate⁵	2%²	4%	4%	5%	3%	4%
Net assets, end of period (x 1,000)	$14,112,203	$13,326,391	$10,215,289	$6,858,980	$4,919,185	$3,654,037

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective November 17, 2015, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁵

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

₂₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.7% of net assets

Automobiles & Components 0.8%
Other Securities		0.8	114,043,858

Banks 6.1%
Bank of America Corp.	4,571,768	1.0	132,947,013
Citigroup, Inc.	1,223,285	0.6	78,265,774
JPMorgan Chase & Co.	1,666,337	1.3	173,898,929
Wells Fargo & Co.	2,121,554	0.8	105,844,329
Other Securities		2.4	363,017,038
		6.1	853,973,083

Capital Goods 7.3%
3M Co.	291,239	0.4	60,400,056
Honeywell International, Inc.	371,265	0.4	57,200,799
The Boeing Co.	264,343	0.8	116,300,346
Other Securities		5.7	798,253,520
		7.3	1,032,154,721

Commercial & Professional Services 1.0%
Other Securities		1.0	147,413,879

Consumer Durables & Apparel 1.4%
NIKE, Inc., Class B	638,118	0.4	54,705,856
Other Securities		1.0	137,521,795
		1.4	192,227,651

Consumer Services 2.2%
McDonald's Corp.	386,055	0.5	70,972,351
Other Securities		1.7	246,375,554
		2.2	317,347,905

Diversified Financials 5.1%
Berkshire Hathaway, Inc., Class B *	973,441	1.4	195,953,673
The Charles Schwab Corp.(b)	601,769	0.2	27,687,392
Other Securities		3.5	496,397,660
		5.1	720,038,725

Energy 5.0%
Chevron Corp.	957,160	0.8	114,457,193
Exxon Mobil Corp.	2,120,183	1.2	167,558,062
Other Securities		3.0	427,807,435
		5.0	709,822,690

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.3%
Walmart, Inc.	713,095	0.5	70,589,274
Other Securities		0.8	118,889,431
		1.3	189,478,705

Food, Beverage & Tobacco 3.5%
PepsiCo, Inc.	707,029	0.6	81,760,834
Philip Morris International, Inc.	777,685	0.5	67,611,934
The Coca-Cola Co.	1,918,890	0.6	87,002,473
Other Securities		1.8	250,495,091
		3.5	486,870,332

Health Care Equipment & Services 6.2%
Abbott Laboratories	879,009	0.5	68,228,679
Medtronic plc	672,186	0.4	60,832,833
UnitedHealth Group, Inc.	481,628	0.8	116,659,934
Other Securities		4.5	623,640,082
		6.2	869,361,528

Household & Personal Products 1.6%
The Procter & Gamble Co.	1,246,763	0.9	122,868,494
Other Securities		0.7	100,329,631
		1.6	223,198,125

Insurance 2.6%
Other Securities		2.6	372,351,058

Materials 3.0%
DowDuPont, Inc.	1,146,128	0.4	61,008,393
Other Securities		2.6	359,467,226
		3.0	420,475,619

Media & Entertainment 7.4%
Alphabet, Inc., Class A *	149,567	1.2	168,494,704
Alphabet, Inc., Class C *	153,913	1.2	172,370,247
Comcast Corp., Class A	2,272,906	0.6	87,893,275
Facebook, Inc., Class A *	1,202,129	1.4	194,083,727
Netflix, Inc. *	218,186	0.6	78,132,407
The Walt Disney Co.	745,761	0.6	84,151,671
Other Securities		1.8	255,474,162
		7.4	1,040,600,193

Pharmaceuticals, Biotechnology & Life Sciences 8.1%
AbbVie, Inc.	752,960	0.4	59,664,550
Amgen, Inc.	318,301	0.5	60,502,654
Eli Lilly & Co.	471,493	0.4	59,544,851
Johnson & Johnson	1,342,048	1.3	183,377,439

₂₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Merck & Co., Inc.	1,300,893	0.8	105,749,592
Pfizer, Inc.	2,891,800	0.9	125,359,530
Other Securities		3.8	551,500,929
		8.1	1,145,699,545

Real Estate 3.9%
Other Securities		3.9	552,569,872

Retailing 5.8%
Amazon.com, Inc. *	205,571	2.4	337,101,493
The Home Depot, Inc.	565,597	0.8	104,714,629
Other Securities		2.6	376,553,784
		5.8	818,369,906

Semiconductors & Semiconductor Equipment 3.6%
Broadcom, Inc.	207,024	0.4	57,006,129
Intel Corp.	2,283,947	0.9	120,957,833
Other Securities		2.3	330,485,434
		3.6	508,449,396

Software & Services 11.5%
Adobe, Inc. *	244,337	0.5	64,138,462
International Business Machines Corp.	454,692	0.5	62,806,606
Mastercard, Inc., Class A	454,760	0.7	102,216,405
Microsoft Corp.	3,868,486	3.1	433,386,487
Oracle Corp.	1,275,816	0.5	66,508,288
PayPal Holdings, Inc. *	588,730	0.4	57,736,751
salesforce.com, Inc. *	382,568	0.5	62,607,253
Visa, Inc., Class A	879,678	0.9	130,297,905
Other Securities		4.4	642,320,151
		11.5	1,622,018,308

Technology Hardware & Equipment 5.3%
Apple, Inc.	2,256,808	2.8	390,766,305
Cisco Systems, Inc.	2,248,620	0.8	116,411,057
Other Securities		1.7	237,298,453
		5.3	744,475,815

Telecommunication Services 1.9%
AT&T, Inc.	3,640,246	0.8	113,284,455
Verizon Communications, Inc.	2,067,098	0.9	117,659,218
Other Securities		0.2	30,545,154
		1.9	261,488,827

Transportation 2.0%
Union Pacific Corp.	368,946	0.4	61,872,244
Other Securities		1.6	225,849,783
		2.0	287,722,027

Security	Number of Shares	% of Net Assets	Value ($)
Utilities 3.1%
Other Securities		3.1	443,090,686
Total Common Stock
(Cost $10,984,724,456)			14,073,242,454

Rights0.0% of net assets

Materials 0.0%
Other Securities		0.0	6,693

Media 0.0%
Other Securities		0.0	3,586
Total Rights
(Cost $6,693)			10,279

Other Investment Companies0.2% of net assets

Money Market Fund 0.1%
Other Securities		0.1	11,573,668

Securities Lending Collateral 0.1%
Other Securities		0.1	17,807,698
Total Other Investment Companies
(Cost $29,381,366)			29,381,366

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/15/19	245	34,112,575	397,820

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $17,064,164.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(d)	The rate shown is the 7-day yield.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

₂₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

The fund owns shares of an affiliate, The Charles Schwab Corp., since that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corp. shares owned by the fund during the period ended February 28, 2019:

	Balance of Shares Held at 8/31/18	Gross Purchases	Gross Sales	Balance of Shares Held at 2/28/19	Market Value at 2/28/19	Net change in unrealized appreciation (depreciation)	Realized Gains(Losses)	Dividends Received
The Charles Schwab Corp.	534,013	90,690	(22,934)	601,769	$27,687,392	($2,879,774)	$350,691	$171,361

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$14,073,242,454	$—	$—	$14,073,242,454
Rights¹
Materials	—	—	6,693	6,693
Media	—	—	3,586	3,586
Other Investment Companies¹	29,381,366	—	—	29,381,366
Futures Contracts²	397,820	—	—	397,820
Total	$14,103,021,640	$—	$10,279	$14,103,031,919

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₂₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in affiliated issuers, at value (cost $21,018,174)		$27,687,392
Investments in unaffiliated issuers, at value (cost $10,975,286,643) including securities on loan of $17,064,164		14,057,139,009
Collateral invested for securities on loan, at value (cost $17,807,698)		17,807,698
Cash		10,500
Deposit with broker for futures contracts		1,980,000
Receivables:
Investments sold		37,015
Dividends		25,584,948
Fund shares sold		6,751,310
Income from securities on loan	+	50,370
Total assets		14,137,048,242
Liabilities
Collateral held for securities on loan		17,807,698
Payables:
Investments bought		6,599,800
Management fees		310,836
Variation margin on futures contracts	+	127,400
Total liabilities		24,845,734
Net Assets
Total assets		14,137,048,242
Total liabilities	–	24,845,734
Net assets		$14,112,202,508
Net Assets by Source
Capital received from investors		10,843,589,166
Total distributable earnings¹		3,268,613,342

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$14,112,202,508		209,600,000		$67.33

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₂₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends received from affiliated issuer		$171,361
Dividends received from unaffiliated issuers (net of foreign withholding tax of $8,528)		131,406,255
Securities on loan, net	+	1,881,713
Total investment income		133,459,329
Expenses
Management fees		1,891,840
Total expenses	–	1,891,840
Net investment income		131,567,489
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(88,701)
Net realized losses on unaffiliated investments		(11,469,098)
Net realized gains on in-kind redemptions on affiliated issuer		439,392
Net realized gains on in-kind redemptions on unaffiliated investments		208,054,255
Net realized losses on futures contracts	+	(2,020,520)
Net realized gains		194,915,328
Net change in unrealized appreciation (depreciation) on affiliated issuer		(2,879,774)
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(750,315,747)
Net change in unrealized appreciation (depreciation) on futures contracts	+	198,661
Net change in unrealized appreciation (depreciation)	+	(752,996,860)
Net realized and unrealized losses		(558,081,532)
Decrease in net assets resulting from operations		($426,514,043)

₃₀

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Broad Market ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$131,567,489	$211,077,403
Net realized gains		194,915,328	192,178,495
Net change in unrealized appreciation (depreciation)	+	(752,996,860)	1,744,691,993
Increase (decrease) in net assets resulting from operations		(426,514,043)	2,147,947,891
Distributions to Shareholders1
Total distributions		($140,681,460)	($199,698,380)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		28,300,000	$1,835,480,099	23,600,000	$1,536,444,895
Shares redeemed	+	(7,600,000)	(482,472,799)	(5,750,000)	(373,592,989)
Net transactions in fund shares		20,700,000	$1,353,007,300	17,850,000	$1,162,851,906
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		188,900,000	$13,326,390,711	171,050,000	$10,215,289,294
Total increase	+	20,700,000	785,811,797	17,850,000	3,111,101,417
End of period²		209,600,000	$14,112,202,508	188,900,000	$13,326,390,711

¹	For the period ended August 31, 2018, the fund distributed to shareholders $199,698,380 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $44,482,540 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₃₁

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	10/11/17¹– 8/31/18
Per-Share Data
Net asset value at beginning of period	$28.62	$25.00
Income (loss) from investment operations:
Net investment income (loss)²	0.27	0.44
Net realized and unrealized gains (losses)	(1.17)	3.47
Total from investment operations	(0.90)	3.91
Less distributions:
Distributions from net investment income	(0.24)	(0.29)
Net asset value at end of period	$27.48	$28.62
Total return	(3.14%)³	15.72%³
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05%⁴	0.05%⁴
Net investment income (loss)	2.08%⁴	1.87%⁴
Portfolio turnover rate⁵	3%³	3%³
Net assets, end of period (x 1,000)	$736,447	$486,487

*	Unaudited.

Commencement of operations.

Calculated based on the average shares outstanding during the period.

Not annualized.

⁴

Annualized.

⁵

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

₃₂

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.8% of net assets

Automobiles & Components 0.7%
Other Securities		0.7	5,458,622

Banks 5.8%
Bank of America Corp.	254,360	1.0	7,396,789
Citigroup, Inc.	68,099	0.6	4,356,974
JPMorgan Chase & Co.	92,687	1.3	9,672,815
Wells Fargo & Co.	118,081	0.8	5,891,061
Other Securities		2.1	15,301,730
		5.8	42,619,369

Capital Goods 7.1%
3M Co.	16,235	0.5	3,366,977
Honeywell International, Inc.	20,653	0.4	3,182,008
The Boeing Co.	14,719	0.9	6,475,771
Other Securities		5.3	39,260,885
		7.1	52,285,641

Commercial & Professional Services 0.8%
Other Securities		0.8	6,158,606

Consumer Durables & Apparel 1.3%
NIKE, Inc., Class B	35,421	0.4	3,036,642
Other Securities		0.9	6,189,374
		1.3	9,226,016

Consumer Services 2.1%
McDonald's Corp.	21,495	0.6	3,951,641
Other Securities		1.5	11,866,621
		2.1	15,818,262

Diversified Financials 5.2%
Berkshire Hathaway, Inc., Class B *	54,210	1.5	10,912,473
The Charles Schwab Corp.(a)	33,343	0.2	1,534,111
Other Securities		3.5	25,597,678
		5.2	38,044,262

Energy 5.0%
Chevron Corp.	53,273	0.9	6,370,385
Exxon Mobil Corp.	118,023	1.3	9,327,358
Other Securities		2.8	21,275,317
		5.0	36,973,060

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Walmart, Inc.	39,696	0.6	3,929,507
Other Securities		0.8	6,333,963
		1.4	10,263,470

Food, Beverage & Tobacco 3.6%
PepsiCo, Inc.	39,353	0.6	4,550,781
Philip Morris International, Inc.	43,368	0.5	3,770,414
The Coca-Cola Co.	106,774	0.7	4,841,133
Other Securities		1.8	13,145,527
		3.6	26,307,855

Health Care Equipment & Services 6.2%
Abbott Laboratories	48,888	0.5	3,794,687
Medtronic plc	37,400	0.5	3,384,700
UnitedHealth Group, Inc.	26,809	0.9	6,493,676
Other Securities		4.3	32,054,854
		6.2	45,727,917

Household & Personal Products 1.6%
The Procter & Gamble Co.	69,444	0.9	6,843,706
Other Securities		0.7	5,084,892
		1.6	11,928,598

Insurance 2.7%
Other Securities		2.7	19,508,171

Materials 2.9%
DowDuPont, Inc.	63,998	0.5	3,406,614
Other Securities		2.4	17,604,820
		2.9	21,011,434

Media & Entertainment 7.7%
Alphabet, Inc., Class A *	8,336	1.3	9,390,921
Alphabet, Inc., Class C *	8,580	1.3	9,608,914
Comcast Corp., Class A	126,577	0.7	4,894,733
Facebook, Inc., Class A *	66,957	1.5	10,810,208
Netflix, Inc. *	12,157	0.6	4,353,422
The Walt Disney Co.	41,517	0.6	4,684,778
Other Securities		1.7	12,757,859
		7.7	56,500,835

Pharmaceuticals, Biotechnology & Life Sciences 8.1%
AbbVie, Inc.	41,954	0.5	3,324,435
Amgen, Inc.	17,776	0.5	3,378,862
Eli Lilly & Co.	26,269	0.5	3,317,512
Johnson & Johnson	74,750	1.4	10,213,840

₃₃

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Merck & Co., Inc.	72,470	0.8	5,891,086
Pfizer, Inc.	161,090	1.0	6,983,252
Other Securities		3.4	26,616,183
		8.1	59,725,170

Real Estate 3.7%
Other Securities		3.7	26,978,917

Retailing 5.9%
Amazon.com, Inc. *	11,450	2.6	18,776,054
The Home Depot, Inc.	31,495	0.8	5,830,984
Other Securities		2.5	18,891,309
		5.9	43,498,347

Semiconductors & Semiconductor Equipment 3.7%
Broadcom, Inc.	11,519	0.4	3,171,872
Intel Corp.	127,212	0.9	6,737,147
Other Securities		2.4	17,246,550
		3.7	27,155,569

Software & Services 11.8%
Adobe, Inc. *	13,593	0.5	3,568,162
International Business Machines Corp.	25,345	0.5	3,500,905
Mastercard, Inc., Class A	25,320	0.8	5,691,176
Microsoft Corp.	215,389	3.3	24,130,030
Oracle Corp.	71,049	0.5	3,703,784
PayPal Holdings, Inc. *	32,796	0.4	3,216,304
salesforce.com, Inc. *	21,307	0.5	3,486,891
Visa, Inc., Class A	48,964	1.0	7,252,548
Other Securities		4.3	32,605,727
		11.8	87,155,527

Technology Hardware & Equipment 5.3%
Apple, Inc.	125,629	3.0	21,752,661
Cisco Systems, Inc.	125,252	0.9	6,484,296
Other Securities		1.4	11,033,641
		5.3	39,270,598

Telecommunication Services 1.9%
AT&T, Inc.	202,880	0.9	6,313,626
Verizon Communications, Inc.	115,177	0.9	6,555,875
Other Securities		0.1	1,348,038
		1.9	14,217,539

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.1%
Union Pacific Corp.	20,552	0.5	3,446,570
Other Securities		1.6	11,811,383
		2.1	15,257,953

Utilities 3.2%
Other Securities		3.2	23,691,775
Total Common Stock
(Cost $704,665,383)			734,783,513

Other Investment Company0.0% of net assets

Money Market Fund 0.0%
Other Securities		0.0	164,239
Total Other Investment Company
(Cost $164,239)			164,239

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/15/19	10	1,392,350	14,893

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

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

REIT —

Real Estate Investment Trust

	Balance of Shares Held at 8/31/18	Gross Purchases	Gross Sales	Balance of Shares Held at 2/28/19	Market Value at 2/28/19	Net change in unrealized appreciation (depreciation)	Realized Gains(Losses)	Dividends Received
The Charles Schwab Corp.	20,848	16,195	(3,700)	33,343	$1,534,111	($72,027)	($65)	$8,708

₃₄

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$734,783,513	$—	$—	$734,783,513
Other Investment Company¹	164,239	—	—	164,239
Futures Contracts²	14,893	—	—	14,893
Total	$734,962,645	$—	$—	$734,962,645

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₃₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in affiliated issuers, at value (cost $1,590,721)		$1,534,111
Investments in unaffiliated issuers, at value (cost $703,238,901)		733,413,641
Deposit with broker for futures contracts		90,000
Receivables:
Investments sold		1,562
Dividends	+	1,449,551
Total assets		736,488,865
Liabilities
Payables:
Investments bought		7,910
Management fees		28,558
Variation margin on futures contracts	+	5,200
Total liabilities		41,668
Net Assets
Total assets		736,488,865
Total liabilities	–	41,668
Net assets		$736,447,197
Net Assets by Source
Capital received from investors		697,989,093
Total distributable earnings¹		38,458,104

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$736,447,197		26,800,000		$27.48

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₃₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends received from affiliated issuer		$8,708
Dividends received from unaffiliated issuers (net of foreign withholding tax of $303)	+	6,131,118
Total investment income		6,139,826
Expenses
Management fees		143,629
Total expenses	–	143,629
Net investment income		5,996,197
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(9,474)
Net realized losses on unaffiliated investments		(3,020,392)
Net realized gains on in-kind redemptions on affiliated issuer		9,409
Net realized gains on in-kind redemptions on unaffiliated investments		9,266,825
Net realized losses on futures contracts	+	(62,002)
Net realized gains		6,184,366
Net change in unrealized appreciation (depreciation) on affiliated issuer		(72,027)
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(8,162,347)
Net change in unrealized appreciation (depreciation) on futures contracts	+	125
Net change in unrealized appreciation (depreciation)	+	(8,234,249)
Net realized and unrealized losses		(2,049,883)
Increase in net assets resulting from operations		$3,946,314

₃₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab 1000 Index ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		10/11/17*-8/31/18
Net investment income		$5,996,197	$5,143,368
Net realized gains (losses)		6,184,366	(365,496)
Net change in unrealized appreciation (depreciation)	+	(8,234,249)	38,367,272
Increase in net assets resulting from operations		3,946,314	43,145,144
Distributions to Shareholders1
Total distributions		($4,803,610)	($3,615,715)

Transactions in Fund Shares
		9/1/18-2/28/19		10/11/17*-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		13,300,000	$340,401,756	17,100,001	$449,565,045
Shares redeemed	+	(3,500,000)	(89,584,758)	(100,001)	(2,606,979)
Net transactions in fund shares		9,800,000	$250,816,998	17,000,000	$446,958,066
Shares Outstanding and Net Assets
		9/1/18-2/28/19		10/11/17*-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		17,000,000	$486,487,495	—	$—
Total increase	+	9,800,000	249,959,702	17,000,000	486,487,495
End of period²		26,800,000	$736,447,197	17,000,000	$486,487,495

*	Commencement of operations.
¹	For the period ended August 31, 2018, the fund distributed to shareholders $3,615,715 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period — Net assets include net investment income not yet distributed of $1,521,163 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₃₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$69.53	$59.10	$51.75	$47.30	$47.99	$39.06
Income (loss) from investment operations:
Net investment income (loss)	0.67¹	1.19¹	1.15¹	1.03¹	1.01¹	0.83
Net realized and unrealized gains (losses)	(2.77)	10.39	7.24	4.41	(0.77)	8.92
Total from investment operations	(2.10)	11.58	8.39	5.44	0.24	9.75
Less distributions:
Distributions from net investment income	(0.73)	(1.15)	(1.04)	(0.99)	(0.93)	(0.82)
Net asset value at end of period	$66.70	$69.53	$59.10	$51.75	$47.30	$47.99
Total return	(3.00%)²	19.79%	16.39%	11.66%	0.43%	25.16%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03%³	0.03%	0.03%	0.03%⁴	0.04%	0.04%
Net investment income (loss)	2.09%³	1.86%	2.07%	2.13%	2.04%	1.95%
Portfolio turnover rate⁵	3%²	3%	4%	4%	4%	5%
Net assets, end of period (x 1,000)	$15,063,864	$14,989,877	$9,824,643	$6,218,346	$4,329,918	$3,191,644

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective November 12, 2015, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁵

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

₃₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.7% of net assets

Automobiles & Components 0.7%
Other Securities		0.7	112,696,735

Banks 5.5%
Bank of America Corp.	5,421,354	1.0	157,652,974
Citigroup, Inc.	1,448,551	0.6	92,678,293
JPMorgan Chase & Co.	1,974,388	1.4	206,047,132
Wells Fargo & Co.	2,516,230	0.8	125,534,715
Other Securities		1.7	248,177,494
		5.5	830,090,608

Capital Goods 7.0%
3M Co.	345,711	0.5	71,697,004
Honeywell International, Inc.	440,334	0.5	67,842,259
The Boeing Co.	313,528	0.9	137,939,779
Other Securities		5.1	780,139,310
		7.0	1,057,618,352

Commercial & Professional Services 0.8%
Other Securities		0.8	123,711,106

Consumer Durables & Apparel 1.2%
NIKE, Inc., Class B	755,323	0.4	64,753,841
Other Securities		0.8	121,901,482
		1.2	186,655,323

Consumer Services 2.1%
McDonald's Corp.	457,675	0.6	84,138,972
Other Securities		1.5	226,844,595
		2.1	310,983,567

Diversified Financials 5.2%
Berkshire Hathaway, Inc., Class B *	1,154,309	1.5	232,362,402
The Charles Schwab Corp.(b)	710,045	0.2	32,669,170
Other Securities		3.5	521,670,966
		5.2	786,702,538

Energy 5.2%
Chevron Corp.	1,134,053	0.9	135,610,058
Exxon Mobil Corp.	2,513,513	1.3	198,642,932
Other Securities		3.0	447,268,095
		5.2	781,521,085

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Walmart, Inc.	844,873	0.6	83,633,978
Other Securities		0.8	128,560,075
		1.4	212,194,053

Food, Beverage & Tobacco 3.7%
PepsiCo, Inc.	837,658	0.6	96,866,771
Philip Morris International, Inc.	922,756	0.5	80,224,407
The Coca-Cola Co.	2,273,301	0.7	103,071,467
Other Securities		1.9	272,313,140
		3.7	552,475,785

Health Care Equipment & Services 6.1%
Abbott Laboratories	1,041,900	0.5	80,872,278
Medtronic plc	797,484	0.5	72,172,302
UnitedHealth Group, Inc.	570,967	0.9	138,299,627
Other Securities		4.2	635,785,411
		6.1	927,129,618

Household & Personal Products 1.7%
The Procter & Gamble Co.	1,479,940	1.0	145,848,087
Other Securities		0.7	106,466,406
		1.7	252,314,493

Insurance 2.6%
Other Securities		2.6	396,796,205

Materials 2.8%
DowDuPont, Inc.	1,361,171	0.5	72,455,132
Other Securities		2.3	350,202,618
		2.8	422,657,750

Media & Entertainment 7.9%
Alphabet, Inc., Class A *	177,474	1.3	199,933,335
Alphabet, Inc., Class C *	182,631	1.4	204,532,110
Comcast Corp., Class A	2,695,332	0.7	104,228,488
Facebook, Inc., Class A *	1,426,257	1.5	230,269,193
Netflix, Inc. *	258,714	0.6	92,645,483
The Walt Disney Co.	883,542	0.7	99,698,879
Other Securities		1.7	256,644,056
		7.9	1,187,951,544

Pharmaceuticals, Biotechnology & Life Sciences 8.2%
AbbVie, Inc.	892,051	0.5	70,686,121
Amgen, Inc.	378,021	0.5	71,854,232
Eli Lilly & Co.	559,772	0.5	70,693,606
Johnson & Johnson	1,592,223	1.5	217,561,351

₄₀

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Merck & Co., Inc.	1,543,825	0.8	125,497,534
Pfizer, Inc.	3,432,438	1.0	148,796,187
Other Securities		3.4	536,302,058
		8.2	1,241,391,089

Real Estate 3.4%
Other Securities		3.4	511,542,052

Retailing 6.0%
Amazon.com, Inc. *	243,824	2.7	399,829,910
The Home Depot, Inc.	670,382	0.8	124,114,523
Other Securities		2.5	381,255,555
		6.0	905,199,988

Semiconductors & Semiconductor Equipment 3.7%
Broadcom, Inc.	245,568	0.4	67,619,605
Intel Corp.	2,709,468	1.0	143,493,425
Other Securities		2.3	340,301,787
		3.7	551,414,817

Software & Services 11.8%
Adobe, Inc. *	289,637	0.5	76,029,712
International Business Machines Corp.	539,205	0.5	74,480,387
Mastercard, Inc., Class A	539,584	0.8	121,282,296
Microsoft Corp.	4,588,339	3.4	514,031,618
Oracle Corp.	1,513,195	0.5	78,882,855
PayPal Holdings, Inc. *	699,307	0.5	68,581,037
salesforce.com, Inc. *	453,969	0.5	74,292,027
Visa, Inc., Class A	1,043,570	1.0	154,573,588
Other Securities		4.1	613,088,354
		11.8	1,775,241,874

Technology Hardware & Equipment 5.4%
Apple, Inc.	2,676,171	3.1	463,379,009
Cisco Systems, Inc.	2,670,298	0.9	138,241,328
Other Securities		1.4	209,444,642
		5.4	811,064,979

Telecommunication Services 2.0%
AT&T, Inc.	4,319,871	0.9	134,434,386
Verizon Communications, Inc.	2,452,067	0.9	139,571,654
Other Securities		0.2	26,142,860
		2.0	300,148,900

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.1%
Union Pacific Corp.	437,123	0.5	73,305,527
Other Securities		1.6	239,941,713
		2.1	313,247,240

Utilities 3.2%
Other Securities		3.2	476,623,363
Total Common Stock
(Cost $12,248,027,256)			15,027,373,064

Other Investment Companies0.1% of net assets

Money Market Fund 0.0%
Other Securities		0.0	5,200,782

Securities Lending Collateral 0.1%
Other Securities		0.1	6,097,600
Total Other Investment Companies
(Cost $11,298,382)			11,298,382

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/15/19	226	31,467,110	344,735

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $5,899,412.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	The rate shown is the 7-day yield.

	Balance of Shares Held at 8/31/18	Gross Purchases	Gross Sales	Balance of Shares Held at 2/28/19	Market Value at 2/28/19	Net change in unrealized appreciation (depreciation)	Realized Gains(Losses)	Dividends Received
The Charles Schwab Corp.	669,366	76,632	(35,953)	710,045	$32,669,170	($4,013,174)	$816,575	$208,886

₄₁

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$15,027,373,064	$—	$—	$15,027,373,064
Other Investment Companies¹	11,298,382	—	—	11,298,382
Futures Contracts²	344,735	—	—	344,735
Total	$15,039,016,181	$—	$—	$15,039,016,181

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₄₂

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in affiliated issuers, at value (cost $26,834,534)		$32,669,170
Investments in unaffiliated issuers, at value (cost $12,226,393,504) including securities on loan of $5,899,412		14,999,904,676
Collateral invested for securities on loan, at value (cost $6,097,600)		6,097,600
Deposit with broker for futures contracts		2,070,000
Receivables:
Investments sold		33,728
Dividends		29,511,284
Fund shares sold		26,714,681
Income from securities on loan	+	13,273
Total assets		15,097,014,412
Liabilities
Collateral held for securities on loan		6,097,600
Payables:
Investments bought		26,596,844
Management fees		338,637
Variation margin on futures contracts	+	117,520
Total liabilities		33,150,601
Net Assets
Total assets		15,097,014,412
Total liabilities	–	33,150,601
Net assets		$15,063,863,811
Net Assets by Source
Capital received from investors		12,004,372,518
Total distributable earnings¹		3,059,491,293

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$15,063,863,811		225,850,000		$66.70

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₄₃

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends received from affiliated issuer		$208,886
Dividends received from unaffiliated issuers (net of foreign withholding tax of $5,465)		147,670,528
Securities on loan, net	+	1,909,506
Total investment income		149,788,920
Expenses
Management fees		2,106,644
Total expenses	–	2,106,644
Net investment income		147,682,276
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(47,720)
Net realized losses on unaffiliated investments		(30,661,241)
Net realized gains on in-kind redemptions on affiliated issuer		864,295
Net realized gains on in-kind redemptions on unaffiliated investments		344,161,908
Net realized losses on futures contracts	+	(1,372,476)
Net realized gains		312,944,766
Net change in unrealized appreciation (depreciation) on affiliated issuer		(4,013,174)
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(905,654,930)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(234,956)
Net change in unrealized appreciation (depreciation)	+	(909,903,060)
Net realized and unrealized losses		(596,958,294)
Decrease in net assets resulting from operations		($449,276,018)

₄₄

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$147,682,276	$223,037,825
Net realized gains		312,944,766	158,977,935
Net change in unrealized appreciation (depreciation)	+	(909,903,060)	1,787,408,701
Increase (decrease) in net assets resulting from operations		(449,276,018)	2,169,424,461
Distributions to Shareholders1
Total distributions		($160,715,245)	($208,413,000)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		23,550,000	$1,526,296,672	56,450,000	$3,665,022,620
Shares redeemed	+	(13,300,000)	(842,319,009)	(7,100,000)	(460,799,703)
Net transactions in fund shares		10,250,000	$683,977,663	49,350,000	$3,204,222,917
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		215,600,000	$14,989,877,411	166,250,000	$9,824,643,033
Total increase	+	10,250,000	73,986,400	49,350,000	5,165,234,378
End of period²		225,850,000	$15,063,863,811	215,600,000	$14,989,877,411

¹	For the period ended August 31, 2018, the fund distributed to shareholders $208,413,000 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $50,766,094 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₄₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$81.69	$65.55	$55.25	$51.93	$50.11	$39.60
Income (loss) from investment operations:
Net investment income (loss)	0.40¹	0.68¹	0.75¹	0.59¹	0.66¹	0.56
Net realized and unrealized gains (losses)	(3.95)	16.17	10.17	3.30	1.79	10.50
Total from investment operations	(3.55)	16.85	10.92	3.89	2.45	11.06
Less distributions:
Distributions from net investment income	(0.56)	(0.71)	(0.62)	(0.57)	(0.63)	(0.55)
Net asset value at end of period	$77.58	$81.69	$65.55	$55.25	$51.93	$50.11
Total return	(4.31%)²	25.88%	19.89%	7.56%	4.87%	28.11%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%	0.05%⁴	0.07%⁵	0.07%	0.07%
Net investment income (loss)	1.10%³	0.93%	1.25%	1.14%	1.25%	1.29%
Portfolio turnover rate⁶	13%²	5%	5%	7%	10%	7%
Net assets, end of period (x 1,000)	$6,892,727	$6,886,721	$4,470,809	$2,980,475	$2,246,101	$1,485,805

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective December 29, 2016, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

Effective November 17, 2015, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁶

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

₄₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.8% of net assets

Automobiles & Components 0.4%
Other Securities		0.4	27,795,792

Banks 0.4%
Other Securities		0.4	25,319,328

Capital Goods 7.1%
3M Co.	290,017	0.8	60,146,626
Lockheed Martin Corp.	123,192	0.5	38,116,837
The Boeing Co.	262,846	1.7	115,641,726
Other Securities		4.1	278,565,639
		7.1	492,470,828

Commercial & Professional Services 1.0%
Other Securities		1.0	67,639,378

Consumer Durables & Apparel 1.6%
NIKE, Inc., Class B	633,670	0.8	54,324,529
Other Securities		0.8	56,344,996
		1.6	110,669,525

Consumer Services 1.9%
Starbucks Corp.	617,888	0.6	43,412,811
Other Securities		1.3	87,772,277
		1.9	131,185,088

Diversified Financials 6.5%
Berkshire Hathaway, Inc., Class B *	968,492	2.8	194,957,440
CME Group, Inc.	177,907	0.5	32,363,062
The Charles Schwab Corp.(b)	596,961	0.4	27,466,176
Other Securities		2.8	191,005,369
		6.5	445,792,047

Energy 1.8%
Schlumberger Ltd.	688,728	0.4	30,345,356
Other Securities		1.4	96,257,955
		1.8	126,603,311

Food & Staples Retailing 1.2%
Costco Wholesale Corp.	218,165	0.7	47,721,412
Walgreens Boots Alliance, Inc.	399,630	0.4	28,449,660
Other Securities		0.1	3,805,074
		1.2	79,976,146

Security	Number of Shares	% of Net Assets	Value ($)
Food, Beverage & Tobacco 1.0%
Other Securities		1.0	66,476,545

Health Care Equipment & Services 9.0%
Anthem, Inc.	128,786	0.5	38,729,814
Becton Dickinson & Co.	133,385	0.5	33,184,854
Cigna Corp.	189,589	0.5	33,071,905
Danaher Corp.	306,663	0.5	38,952,334
Intuitive Surgical, Inc. *	56,882	0.4	31,149,152
Medtronic plc	668,729	0.9	60,519,975
Stryker Corp.	154,742	0.4	29,170,414
UnitedHealth Group, Inc.	478,863	1.7	115,990,196
Other Securities		3.6	243,410,784
		9.0	624,179,428

Household & Personal Products 0.6%
Other Securities		0.6	40,638,153

Insurance 0.9%
Other Securities		0.9	64,236,883

Materials 2.2%
Linde plc	274,129	0.7	47,490,108
Other Securities		1.5	102,961,345
		2.2	150,451,453

Media & Entertainment 13.3%
Alphabet, Inc., Class A *	148,786	2.4	167,614,868
Alphabet, Inc., Class C *	153,143	2.5	171,507,909
Charter Communications, Inc., Class A *	87,628	0.4	30,223,774
Comcast Corp., Class A	2,260,245	1.3	87,403,674
Facebook, Inc., Class A *	1,196,003	2.8	193,094,684
Netflix, Inc. *	217,113	1.1	77,748,165
The Walt Disney Co.	741,014	1.2	83,616,020
Other Securities		1.6	105,068,629
		13.3	916,277,723

Pharmaceuticals, Biotechnology & Life Sciences 6.0%
Amgen, Inc.	317,192	0.9	60,291,855
Biogen, Inc. *	100,320	0.5	32,905,963
Celgene Corp. *	348,199	0.4	28,942,301
Thermo Fisher Scientific, Inc.	200,345	0.8	52,003,552
Other Securities		3.4	238,426,210
		6.0	412,569,881

₄₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Real Estate 3.7%
American Tower Corp.	219,312	0.6	38,631,809
Other Securities		3.1	214,731,521
		3.7	253,363,330

Retailing 10.2%
Amazon.com, Inc. *	204,466	4.8	335,289,481
Booking Holdings, Inc. *	23,046	0.6	39,109,984
Lowe's Cos., Inc.	399,955	0.6	42,031,271
The Home Depot, Inc.	562,197	1.5	104,085,153
The TJX Cos., Inc.	615,201	0.4	31,553,659
Other Securities		2.3	148,680,241
		10.2	700,749,789

Semiconductors & Semiconductor Equipment 2.3%
Broadcom, Inc.	205,858	0.8	56,685,059
NVIDIA Corp.	303,764	0.7	46,858,635
Other Securities		0.8	54,376,079
		2.3	157,919,773

Software & Services 19.0%
Accenture plc, Class A	317,426	0.7	51,226,208
Adobe, Inc. *	243,069	0.9	63,805,612
Automatic Data Processing, Inc.	218,072	0.5	33,371,558
Intuit, Inc.	129,273	0.4	31,947,236
Mastercard, Inc., Class A	452,327	1.5	101,669,540
Microsoft Corp.	3,847,492	6.2	431,034,529
PayPal Holdings, Inc. *	586,772	0.8	57,544,730
salesforce.com, Inc. *	381,041	0.9	62,357,360
Visa, Inc., Class A	874,822	1.9	129,578,635
Other Securities		5.2	350,365,704
		19.0	1,312,901,112

Technology Hardware & Equipment 6.5%
Apple, Inc.	2,244,050	5.6	388,557,257
Other Securities		0.9	57,733,610
		6.5	446,290,867

Telecommunication Services 0.2%
Other Securities		0.2	15,626,964

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.3%
Union Pacific Corp.	366,920	0.9	61,532,484
Other Securities		1.4	98,682,783
		2.3	160,215,267

Utilities 0.7%
NextEra Energy, Inc.	238,054	0.6	44,687,497
Other Securities		0.1	6,036,723
		0.7	50,724,220
Total Common Stock
(Cost $5,262,473,692)			6,880,072,831

Other Investment Companies0.1% of net assets

Money Market Fund 0.1%
Other Securities		0.1	4,988,815

Securities Lending Collateral 0.0%
Other Securities		0.0	3,234,325
Total Other Investment Companies
(Cost $8,223,140)			8,223,140

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
Russell 1000 Index, e-mini, expires 03/15/19	155	11,480,075	198,363

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $3,100,196.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	The rate shown is the 7-day yield.

	Balance of Shares Held at 8/31/18	Gross Purchases	Gross Sales	Balance of Shares Held at 2/28/19	Market Value at 2/28/19	Net change in unrealized appreciation (depreciation)	Realized Gains(Losses)	Dividends Received
The Charles Schwab Corp.	612,730	76,571	(92,340)	596,961	$27,466,176	($2,838,778)	$233,481	$173,354

₄₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$6,880,072,831	$—	$—	$6,880,072,831
Other Investment Companies¹	8,223,140	—	—	8,223,140
Futures Contracts²	198,363	—	—	198,363
Total	$6,888,494,334	$—	$—	$6,888,494,334

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₄₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in affiliated issuers, at value (cost $21,493,954)		$27,466,176
Investments in unaffiliated issuers, at value (cost $5,245,968,553) including securities on loan of $3,100,196		6,857,595,470
Collateral invested for securities on loan, at value (cost $3,234,325)		3,234,325
Deposit with broker for futures contracts		969,600
Receivables:
Investments sold		27,609
Fund shares sold		15,527,416
Dividends		6,895,028
Income from securities on loan	+	4,169
Total assets		6,911,719,793
Liabilities
Collateral held for securities on loan		3,234,325
Payables:
Investments bought		15,522,215
Management fees		205,718
Variation margin on futures contracts	+	30,835
Total liabilities		18,993,093
Net Assets
Total assets		6,911,719,793
Total liabilities	–	18,993,093
Net assets		$6,892,726,700
Net Assets by Source
Capital received from investors		5,186,343,603
Total distributable earnings¹		1,706,383,097

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$6,892,726,700		88,850,000		$77.58

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₅₀

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends received from affiliated issuer		$173,354
Dividends received from unaffiliated issuers (net of foreign withholding tax of $4,489)		34,150,623
Securities on loan, net	+	1,545,311
Total investment income		35,869,288
Expenses
Management fees		1,256,850
Total expenses	–	1,256,850
Net investment income		34,612,438
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(277,703)
Net realized losses on unaffiliated investments		(17,899,179)
Net realized gains on in-kind redemptions on affiliated issuer		511,184
Net realized gains on in-kind redemptions on unaffiliated investments		187,040,467
Net realized gains on futures contracts	+	306,621
Net realized gains		169,681,390
Net change in unrealized appreciation (depreciation) on affiliated issuer		(2,838,778)
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(491,918,800)
Net change in unrealized appreciation (depreciation) on futures contracts	+	35,817
Net change in unrealized appreciation (depreciation)	+	(494,721,761)
Net realized and unrealized losses		(325,040,371)
Decrease in net assets resulting from operations		($290,427,933)

₅₁

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$34,612,438	$51,511,997
Net realized gains		169,681,390	70,580,945
Net change in unrealized appreciation (depreciation)	+	(494,721,761)	1,161,185,205
Increase (decrease) in net assets resulting from operations		(290,427,933)	1,283,278,147
Distributions to Shareholders1
Total distributions		($47,519,495)	($52,664,675)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		9,700,000	$740,821,496	21,550,000	$1,561,031,674
Shares redeemed	+	(5,150,000)	(396,868,463)	(5,450,000)	(375,733,139)
Net transactions in fund shares		4,550,000	$343,953,033	16,100,000	$1,185,298,535
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		84,300,000	$6,886,721,095	68,200,000	$4,470,809,088
Total increase	+	4,550,000	6,005,605	16,100,000	2,415,912,007
End of period²		88,850,000	$6,892,726,700	84,300,000	$6,886,721,095

¹	For the period ended August 31, 2018, the fund distributed to shareholders $52,664,675 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $10,314,360 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₅₂

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$56.37	$50.65	$46.01	$40.89	$43.54	$36.49
Income (loss) from investment operations:
Net investment income (loss)	0.85¹	1.47¹	1.36¹	1.29¹	1.20¹	1.00
Net realized and unrealized gains (losses)	(1.74)	5.63	4.56	5.01	(2.75)	7.03
Total from investment operations	(0.89)	7.10	5.92	6.30	(1.55)	8.03
Less distributions:
Distributions from net investment income	(0.81)	(1.38)	(1.28)	(1.18)	(1.10)	(0.98)
Net asset value at end of period	$54.67	$56.37	$50.65	$46.01	$40.89	$43.54
Total return	(1.56%)²	14.20%	13.01%	15.70%	(3.71%)	22.25%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%	0.05%⁴	0.07%⁵	0.07%	0.07%
Net investment income (loss)	3.27%³	2.72%	2.79%	3.00%	2.75%	2.54%
Portfolio turnover rate⁶	5%²	8%	7%	6%	15%	9%
Net assets, end of period (x 1,000)	$5,727,019	$4,692,419	$3,532,689	$2,491,664	$1,435,194	$1,162,576

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective December 29, 2016, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

Effective November 17, 2015, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁶

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

₅₃

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.6% of net assets

Automobiles & Components 1.2%
General Motors Co.	652,402	0.4	25,756,831
Other Securities		0.8	40,862,555
		1.2	66,619,386

Banks 11.7%
Bank of America Corp.	4,531,316	2.3	131,770,669
Citigroup, Inc.	1,212,540	1.4	77,578,309
JPMorgan Chase & Co.	1,650,850	3.0	172,282,706
The PNC Financial Services Group, Inc.	229,156	0.5	28,878,239
U.S. Bancorp	753,190	0.7	38,932,391
Wells Fargo & Co.	2,103,115	1.8	104,924,407
Other Securities		2.0	114,783,727
		11.7	669,150,448

Capital Goods 6.9%
Caterpillar, Inc.	293,063	0.7	40,249,272
General Electric Co.	4,318,219	0.8	44,866,295
Honeywell International, Inc.	367,704	1.0	56,652,155
United Technologies Corp.	402,892	0.9	50,631,438
Other Securities		3.5	200,881,602
		6.9	393,280,762

Commercial & Professional Services 0.6%
Other Securities		0.6	35,889,543

Consumer Durables & Apparel 0.8%
Other Securities		0.8	45,726,856

Consumer Services 2.2%
McDonald's Corp.	382,748	1.2	70,364,392
Other Securities		1.0	58,835,033
		2.2	129,199,425

Diversified Financials 3.7%
American Express Co.	347,268	0.7	37,414,654
The Goldman Sachs Group, Inc.	171,804	0.6	33,793,847
Other Securities		2.4	141,861,437
		3.7	213,069,938

Energy 9.2%
Chevron Corp.	948,768	2.0	113,453,677
ConocoPhillips	571,918	0.7	38,804,636

Security	Number of Shares	% of Net Assets	Value ($)
Exxon Mobil Corp.	2,102,101	2.9	166,129,042
Other Securities		3.6	208,809,269
		9.2	527,196,624

Food & Staples Retailing 1.7%
Walmart, Inc.	706,854	1.2	69,971,478
Other Securities		0.5	27,660,911
		1.7	97,632,389

Food, Beverage & Tobacco 6.9%
Altria Group, Inc.	933,016	0.8	48,899,369
Mondelez International, Inc., Class A	720,972	0.6	34,001,040
PepsiCo, Inc.	700,872	1.4	81,048,838
Philip Morris International, Inc.	771,805	1.2	67,100,727
The Coca-Cola Co.	1,901,976	1.5	86,235,592
Other Securities		1.4	78,574,453
		6.9	395,860,019

Health Care Equipment & Services 2.7%
Abbott Laboratories	872,168	1.2	67,697,680
CVS Health Corp.	642,010	0.7	37,127,438
Other Securities		0.8	47,927,416
		2.7	152,752,534

Household & Personal Products 3.0%
Colgate-Palmolive Co.	430,759	0.5	28,374,095
The Procter & Gamble Co.	1,236,861	2.1	121,892,652
Other Securities		0.4	20,056,790
		3.0	170,323,537

Insurance 4.7%
Chubb Ltd.	228,951	0.5	30,656,539
Other Securities		4.2	237,050,913
		4.7	267,707,452

Materials 3.5%
DowDuPont, Inc.	1,139,283	1.0	60,644,034
Other Securities		2.5	142,953,964
		3.5	203,597,998

Media & Entertainment 1.4%
Twenty-First Century Fox, Inc., Class A	525,790	0.5	26,515,590
Other Securities		0.9	52,930,212
		1.4	79,445,802

₅₄

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pharmaceuticals, Biotechnology & Life Sciences 10.9%
AbbVie, Inc.	746,765	1.1	59,173,659
Bristol-Myers Squibb Co.	810,333	0.7	41,861,803
Eli Lilly & Co.(a)	468,064	1.0	59,111,802
Gilead Sciences, Inc.	642,228	0.7	41,757,665
Johnson & Johnson	1,331,392	3.2	181,921,403
Merck & Co., Inc.	1,290,907	1.8	104,937,830
Pfizer, Inc.	2,869,567	2.2	124,395,729
Other Securities		0.2	13,543,476
		10.9	626,703,367

Real Estate 3.1%
Other Securities		3.1	175,195,250

Retailing 1.0%
Other Securities		1.0	58,040,477

Semiconductors & Semiconductor Equipment 5.3%
Intel Corp.	2,266,136	2.1	120,014,563
QUALCOMM, Inc.	602,089	0.5	32,145,532
Texas Instruments, Inc.	477,325	0.9	50,491,438
Other Securities		1.8	100,937,279
		5.3	303,588,812

Software & Services 3.0%
International Business Machines Corp.	451,408	1.1	62,352,987
Oracle Corp.	1,265,503	1.1	65,970,671
Other Securities		0.8	46,760,177
		3.0	175,083,835

Technology Hardware & Equipment 4.1%
Cisco Systems, Inc.	2,232,510	2.0	115,577,043
Other Securities		2.1	117,572,726
		4.1	233,149,769

Telecommunication Services 4.1%
AT&T, Inc.	3,613,354	2.0	112,447,576
Verizon Communications, Inc.	2,051,354	2.0	116,763,070
Other Securities		0.1	6,234,069
		4.1	235,444,715

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 1.8%
CSX Corp.	398,633	0.5	28,968,660
United Parcel Service, Inc., Class B	345,343	0.7	38,056,799
Other Securities		0.6	35,168,411
		1.8	102,193,870

Utilities 6.1%
Dominion Energy, Inc.	378,802	0.5	28,065,440
Duke Energy Corp.	353,513	0.6	31,695,976
Other Securities		5.0	288,213,687
		6.1	347,975,103
Total Common Stock
(Cost $5,165,011,772)			5,704,827,911

Other Investment Companies1.0% of net assets

Money Market Fund 0.1%
Other Securities		0.1	2,048,210

Securities Lending Collateral 0.9%
Wells Fargo Government Money Market Fund, Select Class 2.34%(b)		0.9	51,776,280
Total Other Investment Companies
(Cost $53,824,490)			53,824,490

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
Russell 1000 Index, e-mini, expires 03/15/19	320	19,371,200	328,516

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $51,010,174.
(b)	The rate shown is the 7-day yield.

₅₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$5,704,827,911	$—	$—	$5,704,827,911
Other Investment Companies¹	53,824,490	—	—	53,824,490
Futures Contracts²	328,516	—	—	328,516
Total	$5,758,980,917	$—	$—	$5,758,980,917

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₅₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $5,167,059,982) including securities on loan of $51,010,174		$5,706,876,121
Collateral invested for securities on loan, at value (cost $51,776,280)		51,776,280
Deposit with broker for futures contracts		787,200
Receivables:
Investments sold		1,746,266
Dividends		17,787,839
Fund shares sold		5,478,792
Income from securities on loan	+	10,695
Total assets		5,784,463,193
Liabilities
Collateral held for securities on loan		51,776,280
Payables:
Investments bought		5,441,145
Management fees		171,423
Variation margin on futures contracts	+	55,680
Total liabilities		57,444,528
Net Assets
Total assets		5,784,463,193
Total liabilities	–	57,444,528
Net assets		$5,727,018,665
Net Assets by Source
Capital received from investors		4,967,024,929
Total distributable earnings¹		759,993,736

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$5,727,018,665		104,750,000		$54.67

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₅₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends		$79,739,199
Securities on loan, net	+	21,637
Total investment income		79,760,836
Expenses
Management fees		959,645
Total expenses	–	959,645
Net investment income		78,801,191
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(29,414,537)
Net realized gains on in-kind redemptions		253,752,423
Net realized losses on futures contracts	+	(504,066)
Net realized gains		223,833,820
Net change in unrealized appreciation (depreciation) on investments		(313,628,298)
Net change in unrealized appreciation (depreciation) on futures contracts	+	231,326
Net change in unrealized appreciation (depreciation)	+	(313,396,972)
Net realized and unrealized losses		(89,563,152)
Decrease in net assets resulting from operations		($10,761,961)

₅₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$78,801,191	$112,518,681
Net realized gains		223,833,820	32,484,695
Net change in unrealized appreciation (depreciation)	+	(313,396,972)	395,469,632
Increase (decrease) in net assets resulting from operations		(10,761,961)	540,473,008
Distributions to Shareholders1
Total distributions		($70,421,510)	($104,891,835)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		33,450,000	$1,782,553,184	17,450,000	$937,684,002
Shares redeemed	+	(11,950,000)	(666,770,484)	(3,950,000)	(213,534,949)
Net transactions in fund shares		21,500,000	$1,115,782,700	13,500,000	$724,149,053
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		83,250,000	$4,692,419,436	69,750,000	$3,532,689,210
Total increase	+	21,500,000	1,034,599,229	13,500,000	1,159,730,226
End of period²		104,750,000	$5,727,018,665	83,250,000	$4,692,419,436

¹	For the period ended August 31, 2018, the fund distributed to shareholders $104,891,835 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $25,500,760 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₅₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$58.44	$48.77	$43.67	$40.70	$40.56	$32.94
Income (loss) from investment operations:
Net investment income (loss)	0.47¹	0.76¹	0.71¹	0.74¹	0.59¹	0.56
Net realized and unrealized gains (losses)	(2.95)	9.59	5.09	2.84	0.12	7.62
Total from investment operations	(2.48)	10.35	5.80	3.58	0.71	8.18
Less distributions:
Distributions from net investment income	(0.45)	(0.68)	(0.70)	(0.61)	(0.57)	(0.56)
Net asset value at end of period	$55.51	$58.44	$48.77	$43.67	$40.70	$40.56
Total return	(4.22%)²	21.36%	13.38%	8.94%	1.71%	24.97%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05%³	0.05%	0.06%⁴	0.07%	0.07%	0.07%
Net investment income (loss)	1.79%³	1.42%	1.54%	1.83%	1.42%	1.53%
Portfolio turnover rate⁵	16%²	13%	17%	21%	12%	9%
Net assets, end of period (x 1,000)	$5,767,958	$5,358,783	$3,555,096	$2,532,590	$1,841,785	$1,190,517

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective October 7, 2016 and March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

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

₆₀

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.8% of net assets

Automobiles & Components 1.6%
Other Securities		1.6	95,038,197

Banks 4.7%
Other Securities		4.7	268,860,037

Capital Goods 11.4%
IDEX Corp.	143,385	0.4	20,661,779
Spirit AeroSystems Holdings, Inc., Class A	198,535	0.3	19,615,258
United Rentals, Inc. *	151,564	0.4	20,398,999
Xylem, Inc.	335,867	0.4	25,374,752
Other Securities		9.9	569,854,317
		11.4	655,905,105

Commercial & Professional Services 1.7%
Other Securities		1.7	96,013,656

Consumer Durables & Apparel 3.5%
Other Securities		3.5	201,488,416

Consumer Services 3.2%
Domino's Pizza, Inc.	77,829	0.3	19,530,409
Other Securities		2.9	163,301,154
		3.2	182,831,563

Diversified Financials 4.7%
Cboe Global Markets, Inc.	209,468	0.3	20,090,076
Raymond James Financial, Inc.	241,179	0.3	19,916,562
Other Securities		4.1	232,356,346
		4.7	272,362,984

Energy 2.9%
Diamondback Energy, Inc.	288,246	0.5	29,669,161
Other Securities		2.4	135,893,665
		2.9	165,562,826

Food & Staples Retailing 0.4%
Other Securities		0.4	23,493,238

Food, Beverage & Tobacco 1.3%
Other Securities		1.3	75,282,197

Security	Number of Shares	% of Net Assets	Value ($)
Health Care Equipment & Services 5.1%
DexCom, Inc. *	166,176	0.4	23,153,302
STERIS plc	158,093	0.3	19,122,929
Teleflex, Inc.	85,821	0.4	24,874,359
Varian Medical Systems, Inc. *	170,466	0.4	22,903,812
Veeva Systems, Inc., Class A *	227,892	0.5	26,870,746
Other Securities		3.1	175,115,108
		5.1	292,040,256

Household & Personal Products 0.5%
Other Securities		0.5	31,115,047

Insurance 4.7%
Arthur J. Gallagher & Co.	343,677	0.5	27,590,390
Other Securities		4.2	246,431,878
		4.7	274,022,268

Materials 6.2%
FMC Corp.	252,174	0.4	22,569,573
International Flavors & Fragrances, Inc.	189,174	0.4	24,119,685
The Mosaic Co.	663,961	0.4	20,762,060
Other Securities		5.0	292,199,557
		6.2	359,650,875

Media & Entertainment 3.1%
Other Securities		3.1	179,081,990

Pharmaceuticals, Biotechnology & Life Sciences 5.2%
Exact Sciences Corp. *	230,041	0.4	20,933,731
PerkinElmer, Inc.	207,497	0.3	19,537,917
Other Securities		4.5	256,802,746
		5.2	297,274,394

Real Estate 10.6%
Duke Realty Corp.	671,105	0.3	19,844,575
Extra Space Storage, Inc.	236,184	0.4	22,659,493
Regency Centers Corp.	317,223	0.4	20,698,801
UDR, Inc.	515,735	0.4	22,908,949
WP Carey, Inc.	301,533	0.4	22,274,243
Other Securities		8.7	504,915,737
		10.6	613,301,798

Retailing 4.7%
Advance Auto Parts, Inc.	136,374	0.4	22,062,586
Burlington Stores, Inc. *	125,852	0.4	21,362,118
Kohl's Corp.	308,301	0.4	20,819,567

₆₁

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Tractor Supply Co.	227,871	0.4	21,727,500
Wayfair, Inc., Class A *	115,643	0.3	19,159,732
Other Securities		2.8	168,699,149
		4.7	273,830,652

Semiconductors & Semiconductor Equipment 2.0%
Marvell Technology Group Ltd.	1,107,576	0.4	22,096,141
Other Securities		1.6	94,751,030
		2.0	116,847,171

Software & Services 10.5%
Akamai Technologies, Inc. *	304,083	0.4	21,182,422
Cadence Design Systems, Inc. *	527,769	0.5	30,214,775
Fortinet, Inc. *	270,575	0.4	23,483,204
Gartner, Inc. *	169,985	0.4	24,188,865
GoDaddy, Inc., Class A *	312,992	0.4	23,364,853
Jack Henry & Associates, Inc.	144,344	0.3	19,144,345
SS&C Technologies Holdings, Inc.	402,374	0.4	24,778,191
The Ultimate Software Group, Inc. *	58,378	0.3	19,352,307
Twilio, Inc., Class A *	175,836	0.4	21,397,483
Other Securities		7.0	398,739,819
		10.5	605,846,264

Technology Hardware & Equipment 5.1%
CDW Corp.	280,562	0.5	26,341,966
F5 Networks, Inc. *	113,464	0.3	19,077,837
Keysight Technologies, Inc. *	350,522	0.5	29,587,562
Zebra Technologies Corp., Class A *	100,644	0.4	20,180,128
Other Securities		3.4	196,360,404
		5.1	291,547,897

Telecommunication Services 0.3%
Other Securities		0.3	14,973,111

Transportation 2.5%
Expeditors International of Washington, Inc.	322,885	0.4	24,200,231
Other Securities		2.1	121,884,278
		2.5	146,084,509

Security	Number of Shares	% of Net Assets	Value ($)
Utilities 3.9%
AES Corp.	1,239,528	0.4	21,357,067
Alliant Energy Corp.	441,439	0.3	20,248,807
Atmos Energy Corp.	218,139	0.4	21,563,040
NRG Energy, Inc.	542,414	0.4	22,607,816
Pinnacle West Capital Corp.	209,675	0.3	19,654,934
Vistra Energy Corp. *	736,089	0.3	19,167,758
Other Securities		1.8	100,947,205
		3.9	225,546,627
Total Common Stock
(Cost $5,108,331,790)			5,758,001,078

Other Investment Companies0.3% of net assets

Money Market Fund 0.0%
Other Securities		0.0	2,393,995

Securities Lending Collateral 0.3%
Other Securities		0.3	14,786,025
Total Other Investment Companies
(Cost $17,180,020)			17,180,020

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/15/19	42	8,025,360	(42,628)

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $14,172,460.
(b)	The rate shown is the 7-day yield.

₆₂

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$5,758,001,078	$—	$—	$5,758,001,078
Other Investment Companies¹	17,180,020	—	—	17,180,020
Liabilities
Futures Contracts²	(42,628)	—	—	(42,628)
Total	$5,775,138,470	$—	$—	$5,775,138,470

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₆₃

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $5,110,725,785) including securities on loan of $14,172,460		$5,760,395,073
Collateral invested for securities on loan, at value (cost $14,786,025)		14,786,025
Deposit with broker for futures contracts		1,123,400
Receivables:
Investments sold		105,006
Fund shares sold		22,295,344
Dividends		7,007,088
Income from securities on loan	+	7,046
Total assets		5,805,718,982
Liabilities
Collateral held for securities on loan		14,786,025
Payables:
Investments bought		22,728,087
Management fees		212,803
Variation margin on futures contracts	+	34,020
Total liabilities		37,760,935
Net Assets
Total assets		5,805,718,982
Total liabilities	–	37,760,935
Net assets		$5,767,958,047
Net Assets by Source
Capital received from investors		4,964,550,751
Total distributable earnings¹		803,407,296

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$5,767,958,047		103,900,000		$55.51

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₆₄

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends (net of foreign withholding tax of $24,721)		$46,282,861
Securities on loan, net	+	150,255
Total investment income		46,433,116
Expenses
Management fees		1,254,816
Total expenses	–	1,254,816
Net investment income		45,178,300
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(95,689,793)
Net realized gains on in-kind redemptions		362,022,593
Net realized losses on futures contracts	+	(1,131,337)
Net realized gains		265,201,463
Net change in unrealized appreciation (depreciation) on investments		(514,706,041)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(100,176)
Net change in unrealized appreciation (depreciation)	+	(514,806,217)
Net realized and unrealized losses		(249,604,754)
Decrease in net assets resulting from operations		($204,426,454)

₆₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$45,178,300	$61,992,328
Net realized gains		265,201,463	114,807,880
Net change in unrealized appreciation (depreciation)	+	(514,806,217)	660,791,539
Increase (decrease) in net assets resulting from operations		(204,426,454)	837,591,747
Distributions to Shareholders1
Total distributions		($42,786,640)	($53,918,230)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		27,800,000	$1,542,835,601	24,750,000	$1,321,549,843
Shares redeemed	+	(15,600,000)	(886,447,355)	(5,950,000)	(301,536,961)
Net transactions in fund shares		12,200,000	$656,388,246	18,800,000	$1,020,012,882
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		91,700,000	$5,358,782,895	72,900,000	$3,555,096,496
Total increase	+	12,200,000	409,175,152	18,800,000	1,803,686,399
End of period²		103,900,000	$5,767,958,047	91,700,000	$5,358,782,895

¹	For the period ended August 31, 2018, the fund distributed to shareholders $53,918,230 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $13,616,626 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₆₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$78.24	$64.03	$57.42	$53.54	$54.53	$45.71
Income (loss) from investment operations:
Net investment income (loss)	0.62¹	0.98¹	0.90¹	0.93¹	0.80¹	0.73
Net realized and unrealized gains (losses)	(6.89)	14.10	6.64	3.75	(1.07)	8.84
Total from investment operations	(6.27)	15.08	7.54	4.68	(0.27)	9.57
Less distributions:
Distributions from net investment income	(0.60)	(0.87)	(0.93)	(0.80)	(0.72)	(0.75)
Net asset value at end of period	$71.37	$78.24	$64.03	$57.42	$53.54	$54.53
Total return	(7.99%)²	23.71%	13.21%	8.89%	(0.54%)	21.01%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05%³	0.05%	0.06%⁴	0.08%⁵	0.08%	0.08%
Net investment income (loss)	1.84%³	1.38%	1.46%	1.76%	1.44%	1.41%
Portfolio turnover rate⁶	8%²	9%	11%	11%	9%	13%
Net assets, end of period (x 1,000)	$8,000,618	$8,853,388	$5,490,843	$3,772,207	$2,893,741	$2,104,717

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective October 7, 2016 and March 1, 2017, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/17 is a blended ratio.

⁵

Effective May 2, 2016, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/16 is a blended ratio.

⁶

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

₆₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.8% of net assets

Automobiles & Components 1.3%
Gentex Corp.	746,280	0.1	15,179,335
Other Securities		1.2	92,304,399
		1.3	107,483,734

Banks 10.9%
Popular, Inc.	285,493	0.2	16,096,095
Synovus Financial Corp.	471,985	0.2	18,728,365
Webster Financial Corp.	261,925	0.2	15,039,733
Other Securities		10.3	823,997,578
		10.9	873,861,771

Capital Goods 10.0%
BWX Technologies, Inc.	281,422	0.2	14,732,442
Curtiss-Wright Corp.	124,713	0.2	15,375,866
Hexcel Corp.	244,879	0.2	17,665,571
Oshkosh Corp.	204,521	0.2	15,913,779
Woodward, Inc.	158,296	0.2	15,250,237
Other Securities		9.0	720,278,680
		10.0	799,216,575

Commercial & Professional Services 3.1%
Other Securities		3.1	245,899,788

Consumer Durables & Apparel 2.5%
Other Securities		2.5	199,224,450

Consumer Services 3.9%
Grand Canyon Education, Inc. *	136,777	0.2	15,822,363
Planet Fitness, Inc., Class A *	251,596	0.2	14,788,813
Other Securities		3.5	283,829,918
		3.9	314,441,094

Diversified Financials 4.1%
LPL Financial Holdings, Inc.	246,278	0.2	18,571,824
New Residential Investment Corp.	1,040,244	0.2	17,205,636
Other Securities		3.7	287,734,911
		4.1	323,512,371

Energy 3.6%
Other Securities		3.6	289,498,407

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 0.7%
Other Securities		0.7	59,333,227

Food, Beverage & Tobacco 1.5%
Other Securities		1.5	118,362,751

Health Care Equipment & Services 6.3%
Chemed Corp.	45,638	0.2	15,037,721
Hill-Rom Holdings, Inc.	191,086	0.3	20,264,670
Insulet Corp. *	167,903	0.2	15,767,771
Masimo Corp. *	138,362	0.2	18,164,163
Other Securities		5.4	431,633,747
		6.3	500,868,072

Household & Personal Products 0.8%
Other Securities		0.8	59,937,864

Insurance 2.7%
First American Financial Corp.	317,141	0.2	16,107,591
Primerica, Inc.	121,809	0.2	15,230,997
Other Securities		2.3	185,348,872
		2.7	216,687,460

Materials 4.5%
AptarGroup, Inc.	179,061	0.2	18,215,876
Other Securities		4.3	344,325,331
		4.5	362,541,207

Media & Entertainment 2.8%
Other Securities		2.8	223,404,652

Pharmaceuticals, Biotechnology & Life Sciences 7.1%
Catalent, Inc. *	412,465	0.2	17,826,737
Charles River Laboratories International, Inc. *	136,819	0.3	19,451,557
Exact Sciences Corp. *	349,404	0.4	31,795,764
Other Securities		6.2	494,649,504
		7.1	563,723,562

Real Estate 8.6%
CubeSmart	530,400	0.2	16,251,456
EPR Properties	211,499	0.2	15,540,946
Hudson Pacific Properties, Inc.	445,492	0.2	14,799,244
Medical Properties Trust, Inc.	1,039,117	0.2	18,943,103

₆₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
STORE Capital Corp.	538,179	0.2	17,474,672
Other Securities		7.6	605,174,952
		8.6	688,184,373

Retailing 3.9%
Etsy, Inc. *	342,351	0.3	24,399,356
Five Below, Inc. *	158,409	0.2	19,064,523
Pool Corp.	114,699	0.2	18,299,078
Other Securities		3.2	252,092,760
		3.9	313,855,717

Semiconductors & Semiconductor Equipment 3.1%
Cree, Inc. *	290,845	0.2	15,824,876
Cypress Semiconductor Corp.	1,030,108	0.2	15,894,566
Integrated Device Technology, Inc. *	366,276	0.2	17,702,119
Monolithic Power Systems, Inc.	111,013	0.2	14,887,953
Universal Display Corp.	120,676	0.2	18,009,686
Versum Materials, Inc.	310,304	0.2	15,204,896
Other Securities		1.9	150,529,232
		3.1	248,053,328

Software & Services 8.9%
Euronet Worldwide, Inc. *	146,642	0.3	19,696,953
Fair Isaac Corp. *	82,438	0.3	20,429,785
HubSpot, Inc. *	104,111	0.2	17,530,210
Okta, Inc. *	221,594	0.2	18,808,899
Proofpoint, Inc. *	155,182	0.2	18,325,442
RingCentral, Inc., Class A *	195,025	0.3	20,534,182
The Trade Desk, Inc., Class A *	103,000	0.3	20,346,620
Twilio, Inc., Class A *	266,997	0.4	32,490,865
Zendesk, Inc. *	304,948	0.3	24,096,991
Other Securities		6.4	518,824,823
		8.9	711,084,770

Technology Hardware & Equipment 4.3%
ARRIS International plc *	465,113	0.2	14,734,780
Ciena Corp. *	403,744	0.2	17,223,719
Other Securities		3.9	311,937,279
		4.3	343,895,778

Telecommunication Services 0.6%
Other Securities		0.6	47,950,105

Transportation 1.7%
Other Securities		1.7	135,050,623

Utilities 2.9%
MDU Resources Group, Inc.	557,881	0.2	14,739,216
Other Securities		2.7	220,524,702
		2.9	235,263,918
Total Common Stock
(Cost $7,284,863,227)			7,981,335,597

Security	Number of Shares	% of Net Assets	Value ($)
Rights0.0% of net assets

Materials 0.0%
Other Securities		0.0	35,598

Media 0.0%
Other Securities		0.0	15,131
Total Rights
(Cost $35,598)			50,729

Other Investment Companies1.2% of net assets

Money Market Fund 0.1%
Other Securities		0.1	9,634,102

Securities Lending Collateral 1.1%
Wells Fargo Government Money Market Fund, Select Class 2.34%(c)		1.1	89,624,976
Total Other Investment Companies
(Cost $99,259,078)			99,259,078

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
Russell 2000 Index, e-mini, expires 03/15/19	218	17,172,950	53,532

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $83,174,915.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

₆₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$7,981,335,597	$—	$—	$7,981,335,597
Rights¹
Materials	—	—	35,598	35,598
Media & Entertainment	—	—	15,131	15,131
Other Investment Companies¹	99,259,078	—	—	99,259,078
Futures Contracts²	53,532	—	—	53,532
Total	$8,080,648,207	$—	$50,729	$8,080,698,936

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₇₀

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $7,294,532,927) including securities on loan of $83,174,915		$7,991,020,428
Collateral invested for securities on loan, at value (cost $89,624,976)		89,624,976
Deposit with broker for futures contracts		1,669,500
Foreign currency, at value (cost $142)		142
Receivables:
Investments sold		1,785,923
Dividends		6,271,192
Income from securities on loan	+	230,648
Total assets		8,090,602,809
Liabilities
Collateral held for securities on loan		89,624,976
Payables:
Management fees		301,210
Variation margin on futures contracts	+	58,299
Total liabilities		89,984,485
Net Assets
Total assets		8,090,602,809
Total liabilities	–	89,984,485
Net assets		$8,000,618,324
Net Assets by Source
Capital received from investors		6,956,080,158
Total distributable earnings¹		1,044,538,166

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$8,000,618,324		112,100,000		$71.37

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₇₁

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends (net of foreign withholding tax of $25,065)		$69,164,086
Securities on loan, net	+	2,082,020
Total investment income		71,246,106
Expenses
Management fees		1,875,753
Total expenses	–	1,875,753
Net investment income		69,370,353
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(92,043,389)
Net realized gains on in-kind redemptions		462,589,962
Net realized losses on futures contracts	+	(1,669,835)
Net realized gains		368,876,738
Net change in unrealized appreciation (depreciation) on investments		(1,142,544,050)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(33,510)
Net change in unrealized appreciation (depreciation)	+	(1,142,577,560)
Net realized and unrealized losses		(773,700,822)
Decrease in net assets resulting from operations		($704,330,469)

₇₂

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$69,370,353	$97,958,435
Net realized gains		368,876,738	201,304,101
Net change in unrealized appreciation (depreciation)	+	(1,142,577,560)	1,205,726,156
Increase (decrease) in net assets resulting from operations		(704,330,469)	1,504,988,692
Distributions to Shareholders1
Total distributions		($66,231,885)	($84,332,535)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		14,650,000	$1,053,480,360	34,350,000	$2,409,489,819
Shares redeemed	+	(15,700,000)	(1,135,687,387)	(6,950,000)	(467,601,727)
Net transactions in fund shares		(1,050,000)	($82,207,027)	27,400,000	$1,941,888,092
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		113,150,000	$8,853,387,705	85,750,000	$5,490,843,456
Total increase or decrease	+	(1,050,000)	(852,769,381)	27,400,000	3,362,544,249
End of period²		112,100,000	$8,000,618,324	113,150,000	$8,853,387,705

¹	For the period ended August 31, 2018, the fund distributed to shareholders $84,332,535 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $17,859,200 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₇₃

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Financial Statements

Financial Highlights

	9/1/18– 2/28/19*	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15	9/1/13– 8/31/14
Per-Share Data
Net asset value at beginning of period	$52.71	$45.83	$42.47	$36.52	$38.90	$33.00
Income (loss) from investment operations:
Net investment income (loss)	0.81¹	1.49¹	1.40¹	1.29¹	1.19¹	1.04
Net realized and unrealized gains (losses)	(0.93)	6.75	3.26	5.85	(2.46)	5.86
Total from investment operations	(0.12)	8.24	4.66	7.14	(1.27)	6.90
Less distributions:
Distributions from net investment income	(0.77)	(1.36)	(1.30)	(1.19)	(1.11)	(1.00)
Net asset value at end of period	$51.82	$52.71	$45.83	$42.47	$36.52	$38.90
Total return	(0.19%)²	18.21%	11.12%	19.89%	(3.47%)	21.15%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.07%³	0.07%	0.07%	0.07%	0.07%	0.07%
Net investment income (loss)	3.30%³	2.99%	3.17%	3.27%	3.03%	3.01%
Portfolio turnover rate⁴	5%²	23%	15%	22%	19%	26%
Net assets, end of period (x 1,000)	$8,824,958	$8,092,908	$6,040,705	$4,300,443	$2,497,808	$2,075,331

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

₇₄

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock99.7% of net assets

Automobiles & Components 0.2%
Other Securities		0.2	19,198,909

Banks 0.4%
Other Securities		0.4	36,988,673

Capital Goods 11.7%
3M Co.	1,817,532	4.3	376,937,961
Cummins, Inc.	465,723	0.8	71,763,257
Eaton Corp. plc	1,342,510	1.2	107,092,023
Emerson Electric Co.	1,947,171	1.5	132,699,703
Fastenal Co.	889,287	0.6	55,971,724
Lockheed Martin Corp.	767,673	2.7	237,525,703
Other Securities		0.6	54,245,389
		11.7	1,036,235,760

Commercial & Professional Services 0.4%
Other Securities		0.4	30,586,823

Consumer Durables & Apparel 2.4%
Garmin Ltd.	374,188	0.4	31,420,566
Hasbro, Inc.	362,247	0.3	30,754,770
VF Corp.	1,007,782	1.0	88,039,836
Other Securities		0.7	61,811,346
		2.4	212,026,518

Consumer Services 0.6%
Darden Restaurants, Inc.	384,148	0.5	43,066,832
Other Securities		0.1	12,024,680
		0.6	55,091,512

Diversified Financials 1.5%
T. Rowe Price Group, Inc.	753,793	0.8	75,703,431
Other Securities		0.7	59,269,646
		1.5	134,973,077

Energy 6.8%
Exxon Mobil Corp.	4,970,063	4.5	392,784,079
ONEOK, Inc.	1,273,673	0.9	81,846,227
Valero Energy Corp.	1,324,379	1.2	108,016,351
Other Securities		0.2	18,253,964
		6.8	600,900,621

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 4.6%
Walmart, Inc.	4,057,472	4.6	401,649,153

Food, Beverage & Tobacco 10.7%
Altria Group, Inc.	5,840,915	3.5	306,122,355
General Mills, Inc.	1,845,616	1.0	86,983,882
Hormel Foods Corp.	842,470	0.4	36,529,499
Kellogg Co.	784,809	0.5	44,153,354
PepsiCo, Inc.	3,229,039	4.2	373,406,070
The Hershey Co.	433,264	0.5	47,953,660
Other Securities		0.6	47,628,724
		10.7	942,777,544

Health Care Equipment & Services 3.3%
Cardinal Health, Inc.	957,561	0.6	52,033,864
CVS Health Corp.	4,003,354	2.6	231,513,962
Other Securities		0.1	4,628,428
		3.3	288,176,254

Household & Personal Products 6.7%
Kimberly-Clark Corp.	1,077,235	1.4	125,853,365
The Clorox Co.	396,640	0.7	62,681,019
The Procter & Gamble Co.	4,017,819	4.5	395,956,063
Other Securities		0.1	10,347,576
		6.7	594,838,023

Insurance 2.7%
Fidelity National Financial, Inc.	850,917	0.3	29,858,678
Principal Financial Group, Inc.	820,263	0.5	43,178,644
Prudential Financial, Inc.	1,292,250	1.4	123,862,163
Other Securities		0.5	43,656,293
		2.7	240,555,778

Materials 1.6%
Eastman Chemical Co.	437,912	0.4	36,210,943
International Paper Co.	1,266,303	0.7	58,022,003
Other Securities		0.5	49,545,761
		1.6	143,778,707

Media & Entertainment 0.7%
Omnicom Group, Inc.	695,305	0.6	52,634,588
Other Securities		0.1	7,093,405
		0.7	59,727,993

Pharmaceuticals, Biotechnology & Life Sciences 4.2%
Pfizer, Inc.	8,555,065	4.2	370,862,068

₇₅

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Condensed Portfolio Holdings as of February 28, 2019 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Retailing 7.7%
Genuine Parts Co.	454,388	0.6	49,428,327
Target Corp.	1,630,776	1.3	118,459,568
The Home Depot, Inc.	2,168,485	4.6	401,473,313
Other Securities		1.2	105,903,202
		7.7	675,264,410

Semiconductors & Semiconductor Equipment 12.9%
Intel Corp.	7,898,281	4.8	418,292,962
KLA-Tencor Corp.	483,832	0.6	55,877,758
Maxim Integrated Products, Inc.	862,068	0.5	46,922,361
QUALCOMM, Inc.	3,755,541	2.3	200,508,334
Texas Instruments, Inc.	3,011,894	3.6	318,598,147
Xilinx, Inc.	783,807	1.1	98,211,017
		12.9	1,138,410,579

Software & Services 7.9%
Automatic Data Processing, Inc.	1,357,320	2.3	207,710,680
International Business Machines Corp.	2,828,058	4.4	390,639,651
Paychex, Inc.	991,883	0.9	76,394,829
Other Securities		0.3	24,762,477
		7.9	699,507,637

Technology Hardware & Equipment 0.0%
Other Securities		0.0	2,642,167

Telecommunication Services 4.3%
Verizon Communications, Inc.	6,598,945	4.3	375,611,949

Transportation 7.5%
C.H. Robinson Worldwide, Inc.	429,195	0.4	38,790,644
Union Pacific Corp.	2,291,192	4.4	384,232,898
United Parcel Service, Inc., Class B	2,148,328	2.7	236,745,746
		7.5	659,769,288

Security	Number of Shares	% of Net Assets	Value ($)
Utilities 0.9%
WEC Energy Group, Inc.	977,270	0.9	74,546,156
Total Common Stock
(Cost $8,125,688,092)			8,794,119,599

Other Investment Company0.0% of net assets

Money Market Fund 0.0%
Other Securities		0.0	3,175,973
Total Other Investment Company
(Cost $3,175,973)			3,175,973

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Appreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/15/19	185	25,758,475	400,484

The following footnotes may not be applicable to the Condensed Portfolio Holdings. Please refer to the complete schedule of portfolio holdings.

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

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$8,794,119,599	$—	$—	$8,794,119,599
Other Investment Company¹	3,175,973	—	—	3,175,973
Futures Contracts²	400,484	—	—	400,484
Total	$8,797,696,056	$—	$—	$8,797,696,056

¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

₇₆

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Statement of Assets and Liabilities

As of February 28, 2019; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $8,128,864,065)		$8,797,295,572
Deposit with broker for futures contracts		1,722,000
Receivables:
Investments sold		7,728,549
Dividends		34,547,640
Fund shares sold	+	2,592,189
Total assets		8,843,885,950
Liabilities
Payables:
Investments bought		10,579,280
Management fees		462,335
Fund shares redeemed		7,773,011
Variation margin on futures contracts	+	113,081
Total liabilities		18,927,707
Net Assets
Total assets		8,843,885,950
Total liabilities	–	18,927,707
Net assets		$8,824,958,243
Net Assets by Source
Capital received from investors		8,185,303,385
Total distributable earnings¹		639,654,858

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$8,824,958,243		170,300,000		$51.82

¹	The SEC eliminated the requirement to disclose total distributable earnings (loss) by each of its components as previously disclosed as the previous presentation did not provide insight into the tax implications of distributions (see financial note 11 for additional information).

₇₇

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Statement of Operations

For the period September 1, 2018 through February 28, 2019; unaudited

Investment Income
Dividends		$133,871,760
Expenses
Management fees		2,763,676
Total expenses	–	2,763,676
Net investment income		131,108,084
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(23,125,298)
Net realized gains on in-kind redemptions		46,535,020
Net realized losses on futures contracts	+	(1,238,299)
Net realized gains		22,171,423
Net change in unrealized appreciation (depreciation) on investments		(142,925,642)
Net change in unrealized appreciation (depreciation) on futures contracts	+	28,475
Net change in unrealized appreciation (depreciation)	+	(142,897,167)
Net realized and unrealized losses		(120,725,744)
Increase in net assets resulting from operations		$10,382,340

₇₈

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Dividend Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/18-2/28/19		9/1/17-8/31/18
Net investment income		$131,108,084	$214,128,766
Net realized gains		22,171,423	664,488,840
Net change in unrealized appreciation (depreciation)	+	(142,897,167)	248,013,420
Increase in net assets resulting from operations		10,382,340	1,126,631,026
Distributions to Shareholders1
Total distributions		($122,241,160)	($202,365,750)

Transactions in Fund Shares
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	VALUE	SHARES	VALUE
Shares sold		22,650,000	$1,116,751,048	85,900,000	$4,318,218,272
Shares redeemed	+	(5,900,000)	(272,842,046)	(64,150,000)	(3,190,280,837)
Net transactions in fund shares		16,750,000	$843,909,002	21,750,000	$1,127,937,435
Shares Outstanding and Net Assets
		9/1/18-2/28/19		9/1/17-8/31/18
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		153,550,000	$8,092,908,061	131,800,000	$6,040,705,350
Total increase	+	16,750,000	732,050,182	21,750,000	2,052,202,711
End of period²		170,300,000	$8,824,958,243	153,550,000	$8,092,908,061

¹	For the period ended August 31, 2018, the fund distributed to shareholders $202,365,750 from net investment income. The SEC eliminated the requirement to disclose distributions to shareholders from net investment income and from net realized gains in 2018 (see financial note 11 for additional information).
²	End of period - Net assets include net investment income not yet distributed of $42,044,359 at August 31, 2018. The SEC eliminated the requirement to disclose undistributed net investment income in 2018.

₇₉

Schwab U.S. Equity ETFs | Semiannual Report

See financial notes

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited

1. Business Structure of the Funds:

SCHWAB STRATEGIC TRUST (ORGANIZED JANUARY 27, 2009)
Schwab U.S. Broad Market ETF	Schwab Emerging Markets Equity ETF
Schwab 1000 Index 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
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

The funds issue and redeem shares at their net asset 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/or 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 funds are not redeemable securities.

2. Significant Accounting Policies:

Effective November 5, 2018, the funds adopted SEC Regulation S-X disclosure requirement changes. The adopted changes are reflected throughout this report.

(a) Security Valuation:

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

₈₀

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

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

• Underlying funds: Mutual funds are valued at their respective NAVs.

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

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

₈₁

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

The levels associated with valuing the funds’ investments as of February 28, 2019 are disclosed in the Condensed Portfolio Holdings.

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

As of February 28, 2019, the funds, except Schwab 1000 Index ETF and Schwab U.S. Dividend Equity ETF had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of February 28, 2019, if any, are disclosed in each fund’s Condensed Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.

(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.

(e) Expenses:

(f) Distributions to Shareholders:

The funds make distributions from net investment income, if any, quarterly and from net realized capital gains, if any, once a year.

₈₂

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

2. Significant Accounting Policies (continued):

(g) Accounting Estimates:

(h) Federal Income Taxes:

(i) Indemnification:

(j) Recent Accounting Standards:

In August 2018, the FASB issued Accounting Standards Update “Fair Value Measurement (Topic 820)” (ASU 2018-13) which modifies the disclosure requirements for fair value measurement by removing, modifying, or adding certain disclosures. The amendments are effective for annual periods beginning after December 15, 2019, and interim periods within those annual periods. The funds are permitted to early adopt any removed or modified disclosures upon issuance of this update and delay adoption of the additional disclosures until their effective date. The funds have early adopted certain removed or modified disclosures, including the amount of and reasons for transfers between Level 1 and Level 2 of the fair value hierarchy and the policy for timing of transfers between levels upon issuance of ASU 2018-13, and have delayed adoption of the additional disclosures until their effective date. At this time, management is currently evaluating the impact that the adoption of the additional disclosures will have on the funds’ financial statements.

3. Risk Factors:

Schwab U.S. Dividend Equity ETF primarily invests in dividend paying stocks. As a result, fund performance will correlate with the performance of the dividend paying stock segment of the stock market, and a fund may underperform funds that do not limit their investments to dividend paying stocks. If stocks held by a fund reduce or stop paying dividends, the fund’s ability to generate income may be affected.

₈₃

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

3. Risk Factors (continued):

Growth Investing Risk. Certain funds invest in growth stocks. Growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks.

Value Investing Risk. Certain funds emphasize a “value” style of investing, which targets undervalued companies with characteristics for improved valuations. This style of investing is subject to the risk that the valuations never improve or that the returns on “value” securities may not move in tandem with the returns on other styles of investing or the stock market in general.

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 investment 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 index.

Liquidity Risk.A fund may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the fund may have to sell them at a loss.

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 vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.

₈₄

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

3. Risk Factors (continued):

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:

Investment Adviser

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

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

Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
0.03%	0.05%	0.03%	0.04%	0.04%	0.05%*	0.05%*	0.07%*

* Subsequent to the reporting period ended February 28, 2019, and effective March 11, 2019, the management fees of Schwab U.S. Mid-Cap ETF, Schwab U.S. Small-Cap ETF and Schwab U.S. Dividend Equity ETF have been reduced to 0.04%, 0.04% and 0.06%, respectively.

Investment from Affiliates

	Underlying Funds
	Schwab U.S. Large-Cap ETF	Schwab U.S. Small-Cap ETF
Schwab VIT Balanced Portfolio	0.1%	0.0%*
Schwab VIT Balanced with Growth Portfolio	0.2%	0.1%
Schwab VIT Growth Portfolio	0.3%	0.1%
Schwab Target 2010 Index Fund	0.0%*	0.0%*
Schwab Target 2015 Index Fund	0.1%	0.0%*
Schwab Target 2020 Index Fund	0.2%	0.0%*
Schwab Target 2025 Index Fund	0.3%	0.1%
Schwab Target 2030 Index Fund	0.5%	0.1%
Schwab Target 2035 Index Fund	0.3%	0.1%
Schwab Target 2040 Index Fund	0.4%	0.1%
Schwab Target 2045 Index Fund	0.2%	0.1%
Schwab Target 2050 Index Fund	0.3%	0.1%
Schwab Target 2055 Index Fund	0.1%	0.0%*
Schwab Target 2060 Index Fund	0.2%	0.0%*

*	Less than 0.05%

₈₅

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

4. Affiliates and Affiliated Transactions (continued):

Interfund Transactions

	Total Aggregate Transactions	Realized Gains (Losses)
Schwab U.S. Broad Market ETF	$96,046,810	($13,227,309)
Schwab 1000 Index ETF	2,386,241	(148,461)
Schwab U.S. Large-Cap ETF	251,070,981	(16,593,923)
Schwab U.S. Large-Cap Growth ETF	413,776,393	(23,839,340)
Schwab U.S. Large-Cap Value ETF	211,352,687	(2,787,994)
Schwab U.S. Mid-Cap ETF	266,718,638	(40,806,199)
Schwab U.S. Small-Cap ETF	359,697,522	(34,299,669)
Schwab U.S. Dividend Equity ETF	94,223,439	(1,798,084)

Interfund Borrowing and Lending

5. Other Service Providers:

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

6. Board of Trustees:

7. Borrowing from Banks:

₈₆

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

7. Borrowing from Banks (continued):

8. Derivatives:

Certain funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The current value and variation margin for futures contracts held at February 28, 2019 are presented on the Condensed Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended February 28, 2019, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:

	Notional Amounts	Number of Contracts
Schwab U.S. Broad Market ETF	$23,568,031	173
Schwab 1000 Index ETF	1,074,779	8
Schwab U.S. Large-Cap ETF	26,824,289	196
Schwab U.S. Large-Cap Growth ETF	5,767,114	79
Schwab U.S. Large-Cap Value ETF	12,824,149	217
Schwab U.S. Mid-Cap ETF	8,434,824	47
Schwab U.S. Small-Cap ETF	15,870,100	208
Schwab U.S. Dividend Equity ETF	20,282,722	147

9. Purchases and Sales of Investment Securities:

For the period ended February 28, 2019, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab U.S. Broad Market ETF	$398,351,681	$301,306,598
Schwab 1000 Index ETF	33,148,062	20,651,545
Schwab U.S. Large-Cap ETF	489,346,061	419,365,277
Schwab U.S. Large-Cap Growth ETF	910,143,355	878,347,412
Schwab U.S. Large-Cap Value ETF	244,621,738	233,130,020
Schwab U.S. Mid-Cap ETF	918,901,679	862,589,239
Schwab U.S. Small-Cap ETF	763,484,920	610,167,916
Schwab U.S. Dividend Equity ETF	414,352,613	407,705,034

10. In-Kind Transactions:

₈₇

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

10. In-Kind Transactions (continued):

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 a fund.

The in-kind transactions for the period ended February 28, 2019, were as follows:

	In-Kind Purchases of Securities	In-Kind Sales of Securities
Schwab U.S. Broad Market ETF	$1,703,691,616	$381,289,137
Schwab 1000 Index ETF	304,178,038	61,608,455
Schwab U.S. Large-Cap ETF	1,348,230,247	671,048,088
Schwab U.S. Large-Cap Growth ETF	698,663,166	355,931,102
Schwab U.S. Large-Cap Value ETF	1,687,820,501	578,151,159
Schwab U.S. Mid-Cap ETF	1,495,089,567	828,622,392
Schwab U.S. Small-Cap ETF	1,011,241,037	1,081,752,489
Schwab U.S. Dividend Equity ETF	1,093,342,454	251,773,850

11. Federal Income Taxes

As of February 28, 2019, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:

	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF
Tax cost	$11,030,917,670	$705,844,797	$12,288,275,569	$5,280,907,488	$5,233,649,757
Gross unrealized appreciation	$3,497,812,985	$50,858,922	$3,203,619,931	$1,735,020,145	$727,385,857
Gross unrealized depreciation	(425,698,736)	(21,741,074)	(452,879,319)	(127,433,299)	(202,054,697)
Net unrealized appreciation (depreciation)	$3,072,114,249	$29,117,848	$2,750,740,612	$1,607,586,846	$525,331,160

	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
Tax cost	$5,136,982,772	$7,414,894,933	$8,146,965,533
Gross unrealized appreciation	$894,656,010	$1,351,606,608	$918,919,864
Gross unrealized depreciation	(256,500,312)	(685,802,605)	(268,189,341)
Net unrealized appreciation (depreciation)	$638,155,698	$665,804,003	$650,730,523

₈₈

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Financial Notes, unaudited(continued)

11. Federal Income Taxes (continued):

Expiration Date	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
August 31, 2019	$—	$—	$721,062	$631,601	$295,384	$218,695	$927,631	$—
No expiration	51,103,671	350,259	63,791,241	75,464,442	33,141,574	120,221,174	25,564,179	100,069,915
Total	$51,103,671	$350,259	$64,512,303	$76,096,043	$33,436,958	$120,439,869	$26,491,810	$100,069,915

	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
Ordinary income	$199,698,380	$3,615,715	$208,413,000	$52,664,675	$104,891,835	$53,918,230	$84,332,535	$202,365,750
Long-term capital gains	—	—	—	—	—	—	—	—

12. Subsequent Events:

₈₉

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Trustees and Officers

Independent Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds.	98	None
John F. Cogan 1947 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Senior Fellow (Oct. 1979 – present), The Hoover Institution at Stanford University (public policy think tank); Senior Fellow (2000 – present), Stanford Institute for Economic Policy Research; Professor of Public Policy (1994 – 2015), Stanford University.	98	Director (2005 – present), Gilead Sciences, Inc.
Nancy F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services).	98	None
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	CEO and Owner (May 2012 – present), Kochis Global (wealth management consulting).	98	None

₉₀

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Independent Trustees (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
David L. Mahoney 1954 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Private Investor.	98	Director (2003 – present), Symantec Corporation Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc.
Jane P. Moncreiff 1961 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Chief Investment Officer (2009-2017), CareGroup Healthcare System, Inc. (healthcare).	98	None
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses).	98	Director (2008 – present), KLA-Tencor Corporation
Kimberly S. Patmore 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Consultant (2008 – present), Patmore Management Consulting (management consulting).	98	None
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Chairman, Chief Executive Officer and Founder (Mar. 1990 – present), Smith Graham & Co. (investment advisors).	98	Director (2012 – present), Eaton

₉₁

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Interested Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Walter W. Bettinger II² 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010)	Director, President and Chief Executive Officer (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc.	98	Director (2008 – present), The Charles Schwab Corporation
Jonathan de St. Paer² 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Director and Chief Executive Officer (Apr. 2019 – present) and President (Oct. 2018 – present) Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.	98	None
Joseph R. Martinetto² 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	98	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
Jonathan de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Director and Chief Executive Officer (Apr. 2019 – present) and President (Oct. 2018 – present) Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.

₉₂

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Officers of the Trust (continued)
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
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013)	Treasurer and Chief Financial Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; Vice President (Oct. 2013 – present), Charles Schwab Investment Management, Inc.; Executive Director (Apr. 2011 – Sept. 2013), J.P. Morgan Investor Services; Assistant Treasurer (May 2005 – Mar. 2011), Massachusetts Financial Service Investment Management.
George Pereira 1964 Senior Vice President and Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2004; Laudus Trust since 2006; Schwab Strategic Trust since 2009)	Senior Vice President and Chief Financial Officer (Nov. 2004 – present) and Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Operating Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Treasurer and Chief Financial Officer (June 2006 – Dec. 2015), Laudus Funds; Treasurer and Principal Financial Officer (Nov. 2004 – Dec. 2015), Schwab Funds; Treasurer and Principal Financial Officer (Oct. 2009 – Dec. 2015), Schwab ETFs; Director (Apr. 2005 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited.
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Equities and Multi-Asset Strategies (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Head of the Portfolio Management Group and Vice President of Portfolio Management (May 2009 – Apr. 2011), Financial Engines, Inc. (investment management firm); Head of Quantitative Equity (July 2004 – Jan. 2009), ING Investment Management.
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President and Chief Investment Officer – Fixed Income (Apr. 2011 – present), Charles Schwab Investment Management, Inc.; Senior Vice President and Chief Investment Officer – Fixed Income (June 2011 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Senior Managing Director, Global Head of Active Fixed-Income Strategies (Jan. 2008 – Oct. 2010), State Street Global Advisors; Director of Alpha Strategies (Apr. 2006 – Jan. 2008), Loomis, Sayles & Company (investment management firm).
David Lekich 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Vice President and Assistant Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011)	Senior Vice President (Sept. 2011 – present) and Vice President (Mar. 2004 – Sept. 2011), Charles Schwab & Co., Inc.; Senior Vice President and Chief Counsel (Sept. 2011 – present) and Vice President (Jan. 2011 – Sept. 2011), Charles Schwab Investment Management, Inc.; Secretary (Apr. 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk (Apr. 2011 – present), Laudus Funds; Secretary (May 2011 – present) and Chief Legal Officer (Nov. 2011 – present), Schwab ETFs.
Catherine MacGregor 1964 Vice President and Assistant Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Funds (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2005; Schwab Strategic Trust since 2009)	Vice President (July 2005 – present), Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Charles Schwab Investment Management, Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Funds; Vice President (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary (Oct. 2009 – present), Schwab ETFs.

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 retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.
²	Mr. Bettinger, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
³	The President, Treasurer and Secretary/Clerk 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.

₉₃

Schwab U.S. Equity ETFs | Semiannual Report

Table of Contents

Schwab U.S. Equity ETFs

Glossary

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.

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.

dividend yield A stock’s indicated annual dividend divided by current price. At the portfolio level, it is the value-weighted average of the dividend yield of the securities in the portfolio.

Dow Jones U.S. Broad Stock Market Index An index that is a subset of the Dow Jones U.S. Total Stock Market Index, which includes the largest 2,500 publicly traded U.S. companies and is designed to measure the performance of large- and small-cap U.S. equity securities. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.

Dow Jones U.S. Dividend 100 Index An index that is designed to measure the performance of high-dividend-yielding stocks issued by U.S. companies that have a record of consistently paying dividends, selected for fundamental strength relative to their peers, based on financial ratios. The 100-component index is a subset of the Dow Jones U.S. Broad Market Index, which includes the 2,500 largest U.S. stocks based on full market capitalization and excludes real estate investment trusts (REITs). It is modified market capitalization weighted.

Dow Jones U.S. Large-Cap Growth Total Stock Market Index An index, which is a subset of the Dow Jones U.S. Total Stock Market Index, that is designed to measure the performance of large-cap U.S. equity securities that are classified as "growth" based on a multi-factor analysis. The index is a float-adjusted market capitalization weighted index.

Dow Jones U.S. Large-Cap Total Stock Market Index An index that is a subset of the Dow Jones U.S. Total Stock Market Index, and is designed to measure the performance of large-cap U.S. equity securities. The index is a float-adjusted market capitalization weighted index.

Dow Jones U.S. Large-Cap Value Total Stock Market Index An index that is a subset of the Dow Jones U.S. Total Stock Market Index, and is designed to measure the performance of large-cap U.S. equity securities that are classified as "value" based on a multi-factor analysis. The index is a float-adjusted market capitalization weighted index.

Dow Jones U.S. Mid-Cap Total Stock Market Index An index that is a subset of the Dow Jones U.S. Total Stock Market Index, and is designed to measure the performance of mid-cap U.S. equity securities. The index is a float-adjusted market capitalization weighted index.

Dow Jones U.S. Small-Cap Total Stock Market Index An index that is a subset of the Dow Jones U.S. Total Stock Market Index, and is designed to measure the performance of small-cap U.S. equity securities. The index is a float-adjusted market capitalization weighted index.

Dow Jones U.S. Total Stock Market Index An index which includes all publicly traded stocks of companies headquartered in the United States for which pricing information is readily available. The index is a float-adjusted market capitalization weighted index that reflects the shares of securities actually available to investors in the marketplace.

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

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.

₉₄