UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-22311
Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs
(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 – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: February 28
Date of reporting period: February 28, 2021
Item 1: Report(s) to Shareholders.
Annual Report | February 28, 2021
Schwab U.S. REIT ETF
Ticker Symbol SCHH
This page is intentionally left blank.
In This Report
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. The Industry classifications used in the schedule of Portfolio Holdings are sub-categories of Sector classifications.
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
| Total Returns for the 12 Months Ended February 28, 2021 | |
| Schwab U.S. REIT ETF (Ticker Symbol: SCHH) | |
| Market Price Return1 | -5.19% |
| NAV Return1 | -4.98% |
| Dow Jones Equity All REIT Capped Index2 | N/A |
| REIT Spliced Index | -5.01% |
| ETF Category: Morningstar Real Estate3 | 5.02% |
| Performance Details | pages 7-9 |
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.
Small-company stocks are subject to greater volatility than many other asset classes.
The fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets.
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 Equity All REIT Capped Index (the Index) is a product of S&P Dow Jones Indices LLC, and the trademark and Index have been licensed for use by CSIM. The Schwab U.S. REIT ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, 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.
| 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 | Effective June 22, 2020, the fund changed its index from the Dow Jones U.S. Select REIT IndexTM to the Dow Jones Equity All REIT Capped Index (index) in connection with a change to the fund’s investment objective and investment strategies to invest its assets in accordance with the index. The inception date of the Dow Jones Equity All REIT Capped Index is April 13, 2020. |
| 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. |
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Schwab U.S. REIT ETF
From the President
Jonathan de St. Paer
President of Charles Schwab
Investment Management, Inc.
and the fund covered
in this report.
President of Charles Schwab
Investment Management, Inc.
and the fund covered
in this report.
Dear Shareholder,
On March 1, 2020, with barely more than 200 cases of COVID-19 identified in the U.S., the outbreak had yet to be declared a pandemic by the World Health Organization. At that time, few could have foreseen the dramatic ways COVID-19 would affect our daily lives over the next 12 months as businesses shut down, travel was limited, and market volatility soared. Although most broad equity markets ended the reporting period in strongly positive territory, the first three weeks of March 2020 saw the sharpest drop in stock prices since the Great Recession of 2008. In this time period, the S&P 500® Index, a bellwether for the overall U.S. stock market, fell by nearly 30%. However, extensive emergency fiscal and monetary stimulus prompted a quick recovery. By early June, the S&P 500® Index had regained all the ground it lost in March and went on to set a series of successive new record highs. International equities gained ground as well. On the other hand, the real estate sector lagged, hampered by COVID-19 pandemic-related declines. For the 12-month reporting period ended February 28, 2021, the S&P 500® Index returned 31.3%, while the Dow Jones U.S. Select REIT IndexTM returned 1.5%.
At Charles Schwab Investment Management, we believe that recent market volatility is a reminder of the importance of having a long-term investing plan and a diversified portfolio. We also believe that maintaining exposure to a mix of asset classes that perform differently over time is one of the best ways to help weather market cycles. Since real estate securities tend to be influenced by a different combination of factors than other stocks and bonds, the Schwab U.S. REIT ETF may add another layer of diversification to a portfolio when combined with more traditional asset classes in a portfolio. The Schwab U.S. REIT ETF offers a simple, low-cost way to capture the performance of U.S. REITs.
Thank you for investing with Charles Schwab Investment Management. For more information about the Schwab U.S. REIT ETF, please continue reading this report. In addition, you can find further details about this fund by visiting our website at www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
“ At Charles Schwab Investment Management, we believe that recent market volatility is a reminder of the importance of having a long-term investing plan and a diversified portfolio. ”
Past performance is no guarantee of future results.
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.
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Schwab U.S. REIT ETF
The Investment Environment
For the 12-month reporting period ended February 28, 2021, U.S. equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. Major market indices achieved repeated record highs over the second half of the reporting period. After falling steeply early in the reporting period, U.S. real estate investment trusts (REITs) recovered to some degree throughout the reporting period, although not to the extent of other equities. For the reporting period, the Dow Jones U.S. Select REIT IndexTM returned 1.50%. The FTSE EPRA Nareit Global Index (Net)*, which represents general trends in eligible real estate securities worldwide, returned 0.67%. The overall U.S. stock market, as measured by the S&P 500® Index, returned 31.29% for the same period.
Despite low interest rates, U.S. REITs fell under severe pressure during the first half of the reporting period as funding for development waned and demand in multiple sectors fell. U.S. REITs began to recover as the reporting period progressed—some sub-industries much more than others. Among REIT sub-industries in the Dow Jones U.S. Select REIT IndexTM, returns for the reporting period spanned a wide range. Industrial REITs benefitted from a surge in e-commerce that boosted demand for facilities. Specialized REITs benefited from positive performance of data centers and infrastructure REITs as a result of increased demand for online and mobile communications. Office REITs fell on waning demand due to the shift to remote work and the expectation that the trend may continue beyond the end of the COVID-19 pandemic. Retail REITs were also hard-hit amid diminished consumer spending and prolonged stay-at-home orders.
Asset Class Performance Comparison % returns during the 12 months ended February 28, 2021
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. |
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Schwab U.S. REIT ETF
The Investment Environment (continued)
In March 2020, amid the fallout of the growing COVID-19 pandemic, the U.S. economy entered recessionary territory at record speed. Bolstered by the extensive emergency rescue and fiscal stimulus measures passed by the U.S. Federal Reserve (Fed) and U.S. Congress, the U.S. economy has held up relatively well, especially given the intensity of the COVID-19 pandemic’s economic impact. After falling by an annualized rate of 31.4% in the second quarter of 2020, U.S. gross domestic product (GDP) jumped by an annualized rate of 33.4% for the third quarter of 2020, reflecting pent-up consumer demand and government support. GDP grew at an annualized rate of 4.3% in the fourth quarter of 2020. For the full year of 2020, GDP decreased by 3.5%. Unemployment skyrocketed in April, rising to the highest level since the Great Depression, but declined over the remainder of the reporting period, dropping below double digits beginning in August. Inflation remained well below the Fed’s traditional target of 2%, although inflation concerns rose toward the end of the reporting period when the yield on the 10-year U.S. Treasury spiked to its highest level in more than a year.
Central banks around the world, including the Fed, enacted or maintained low—and for some international central banks, negative—interest rates in response to the COVID-19 pandemic. In the U.S., the Fed cut interest rates by 0.50% in early March and by 1.00% in mid-March, resulting in a federal funds rate of 0.00% to 0.25%, which it upheld throughout the reporting period. In addition, the Fed also announced extensive emergency measures to support the economy in light of the COVID-19 pandemic, which remained in effect throughout the period, including large purchases of U.S. Treasuries and other securities to support smooth market function, facilitating the flow of credit to municipalities, new financing for employers, consumers, and businesses, and the establishment of facilities to support credit to businesses and consumers alike. In August, the Fed announced that it was shifting its interest rate policy approach to allow inflation to rise above its previous 2% target for periods of time, even in times of rising employment.
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Schwab U.S. REIT ETF
Fund Management
 | Christopher Bliss, CFA, Vice President and Head of Passive Equity Strategies, 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 fund. Before 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 the head of the 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. |
 | Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the fund. Prior to joining CSIM in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a senior analyst on the ETF portfolio management and research team where he performed portfolio management, trading, and analytics/research functions for 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 fund. 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 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 fund. 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. Mr. Sinha also spent time as a software consultant at DPM Mellon, LLC and an equity trader at Jane Street Capital. |
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF as of February 28, 2021
The Schwab U.S. REIT ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of an index composed of U.S. real estate investment trusts (REITs) classified as equities. To pursue its goal, the fund generally invests in securities included in the Dow Jones Equity All REIT Capped Index (the index). The index is a float-adjusted market capitalization weighted index that is subject to capping constraints at each quarterly rebalancing. The index generally includes all publicly traded equity REITs with a minimum float-adjusted market capitalization of $200 million and a three-month median daily value traded of at least $5 million. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended February 28, 2021, U.S. equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. However, despite low interest rates, U.S. REITs fell under severe pressure as funding for development waned and demand in multiple sectors fell. In spite of a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. Major market indices achieved repeated record highs over the second half of the reporting period. U.S. REITs recovered to some degree—some sub-industries much more than others—throughout the reporting period, although not to the extent of other equities.
Performance. For the 12-month reporting period ended February 28, 2021, the fund’s market price return was -5.19% and its NAV return was -4.98% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). On June 22, 2020, the fund transitioned from tracking the Dow Jones U.S. Select REIT IndexTM, which returned 1.50% for the 12-month reporting period, to the new index, the Dow Jones Equity All REIT Capped Index. The Dow Jones Equity All REIT Capped Index has not been in operation for a full calendar year, and therefore has no performance data to present. The REIT Spliced Index returned -5.01% for the same period.
Contributors and Detractors. The industrial REITs sub-industry contributed the most to the total return of the fund over the reporting period. Industrial REITs represented an average weight of approximately 13% of the fund’s investments and returned approximately 20% for the reporting period. One example from this sub-industry is Prologis, Inc. The fund’s holdings of Prologis, Inc. represented an average weight of approximately 8% of the fund’s investments and returned approximately 21% for the reporting period.
The diversified REITs sub-industry also contributed to the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately -4% for the reporting period.
The residential REITs sub-industry detracted the most from the total return of the fund over the reporting period. Residential REITs represented an average weight of 18% of the fund’s investments and returned approximately -2% for the reporting period. One example from this sub-industry is AvalonBay Communities, Inc. The fund’s holdings of AvalonBay Communities, Inc. represented an average weight of approximately 3% of the fund’s investments and returned approximately -9% for the reporting period.
The retail REITs sub-industry also detracted from the total return of the fund, representing an average weight of approximately 10% of the fund’s investments and returning approximately -13% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (February 28, 2011 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | 10 Years |
| Fund: Schwab U.S. REIT ETF (1/13/11) | |||
| Market Price Return2 | -5.19% | 3.62% | 6.43% |
| NAV Return2 | -4.98% | 3.61% | 6.44% |
| Dow Jones Equity All REIT Capped Index3 | N/A | N/A | N/A |
| REIT Spliced Index | -5.01% | 3.68% | 6.53% |
| Dow Jones U.S. Select REIT IndexTM | 1.50% | 5.06% | 7.24% |
| ETF Category: Morningstar Real Estate4 | 5.02% | 6.99% | 7.61% |
| Fund Expense Ratio5: 0.07% | |||
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.
Small-company stocks may be subject to greater volatility than many other asset classes.
The fund is subject to risks associated with the direct ownership of real estate securities, and an investment in the fund will be closely linked to the performance of the real estate markets.
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 Equity All REIT Capped Index (the Index) is a product of S&P Dow Jones Indices LLC, and the trademark and Index have been licensed for use by CSIM. The Schwab U.S. REIT ETF is not sponsored, endorsed, sold or promoted by S&P Dow Jones Indices LLC, Dow Jones, 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.
| 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 | Effective June 22, 2020, the fund changed its index from the Dow Jones U.S. Select REIT IndexTM to the Dow Jones Equity All REIT Capped Index (index) in connection with a change to the fund’s investment objective and investment strategies to invest its assets in accordance with the index. The inception date of the Dow Jones Equity All REIT Capped Index is April 13, 2020. |
| 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. |
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 142 |
| Weighted Average Market Cap (millions) | $30,711 |
| Price/Earnings Ratio (P/E) | 41.8 |
| Price/Book Ratio (P/B) | 2.6 |
| Portfolio Turnover Rate | 59% 2 |
Industry Weightings % of Investments3
Top Equity Holdings % of Net Assets5
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 Industry Classification: S&P and MSCI.
| 1 | Excludes derivatives. |
| 2 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | 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. |
| 4 | Amount is less than 0.05%. |
| 5 | This list is not a recommendation of any security by the investment adviser. |
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
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 the fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2020 and held through February 28, 2021.
Actual Return line in the table below provides information about actual account values and actual expenses. You may use this information, together with the amount you invested, to estimate the expenses that you paid over the period. To do so, simply divide your account value by $1,000 (for example, an $8,600 account value ÷ $1,000 = 8.6), then multiply the result by the number given for the fund under the heading entitled “Expenses Paid During Period.”
Hypothetical Return line in the table below provides information about hypothetical account values and hypothetical expenses based on the fund’s actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, including any brokerage commissions you may pay when purchasing or selling shares of 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 9/1/20 | Ending Account Value (Net of Expenses) at 2/28/21 | Expenses Paid During Period 9/1/20-2/28/212 | |
| Schwab U.S. REIT ETF | ||||
| Actual Return | 0.07% | $1,000.00 | $1,085.50 | $0.36 |
| Hypothetical 5% Return | 0.07% | $1,000.00 | $1,024.45 | $0.35 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
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Schwab U.S. REIT ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $42.29 | $43.29 | $37.08 | $42.08 | $37.71 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.84 | 1.32 | 1.29 | 1.20 | 1.04 | |
| Net realized and unrealized gains (losses) | (3.08) | (1.00) | 6.33 | (5.28) | 4.48 | |
| Total from investment operations | (2.24) | 0.32 | 7.62 | (4.08) | 5.52 | |
| Less distributions: | ||||||
| Distributions from net investment income | (1.09) | (1.32) | (1.41) | (0.92) | (1.15) | |
| Net asset value at end of period | $38.96 | $42.29 | $43.29 | $37.08 | $42.08 | |
| Total return | (4.98%) | 0.59% | 20.85% | (9.91%) | 14.74% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.07% | 0.07% | 0.07% | 0.07% | 0.07% | |
| Net investment income (loss) | 2.33% | 2.88% | 3.17% | 2.93% | 2.50% | |
| Portfolio turnover rate2 | 59% | 6% | 7% | 8% | 14% | |
| Net assets, end of period (x 1,000) | $4,891,906 | $5,717,395 | $5,127,268 | $3,691,377 | $3,037,968 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
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Schwab U.S. REIT ETF | Annual Report
See financial notes
Schwab U.S. REIT ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 99.9% of net assets | ||
| Diversified REITs 4.0% | ||
| Alexander & Baldwin, Inc. | 302,885 | 5,291,401 |
| American Assets Trust, Inc. | 210,103 | 6,530,001 |
| Broadstone Net Lease, Inc., Class A | 155,701 | 2,816,631 |
| Colony Capital, Inc. | 2,017,416 | 11,943,103 |
| Empire State Realty Trust, Inc., Class A | 586,721 | 6,459,798 |
| Essential Properties Realty Trust, Inc. | 438,668 | 10,177,098 |
| Global Net Lease, Inc. | 375,655 | 6,979,670 |
| iStar, Inc. | 309,842 | 5,490,400 |
| PS Business Parks, Inc. | 84,161 | 12,191,563 |
| STORE Capital Corp. | 990,703 | 33,129,108 |
| VEREIT, Inc. | 915,266 | 35,695,374 |
| Washington Real Estate Investment Trust | 345,456 | 7,779,669 |
| WP Carey, Inc. | 735,241 | 50,393,418 |
| 194,877,234 | ||
| Health Care REITs 9.6% | ||
| CareTrust REIT, Inc. | 400,981 | 8,893,759 |
| Community Healthcare Trust, Inc. | 92,207 | 4,041,433 |
| Diversified Healthcare Trust | 998,306 | 4,492,377 |
| Global Medical REIT, Inc. | 182,054 | 2,452,267 |
| Healthcare Realty Trust, Inc. | 570,141 | 16,454,269 |
| Healthcare Trust of America, Inc., Class A | 916,359 | 24,888,310 |
| Healthpeak Properties, Inc. | 2,256,827 | 65,651,097 |
| LTC Properties, Inc. | 164,713 | 6,738,409 |
| Medical Properties Trust, Inc. | 2,380,975 | 51,405,250 |
| National Health Investors, Inc. | 187,599 | 12,807,384 |
| Omega Healthcare Investors, Inc. | 951,607 | 35,342,684 |
| Physicians Realty Trust | 872,940 | 14,839,980 |
| Sabra Health Care REIT, Inc. | 867,483 | 14,938,057 |
| Universal Health Realty Income Trust | 53,631 | 3,322,441 |
| Ventas, Inc. | 1,570,210 | 83,064,109 |
| Welltower, Inc. | 1,749,363 | 118,781,748 |
| 468,113,574 | ||
| Hotel & Resort REITs 3.5% | ||
| Apple Hospitality REIT, Inc. | 871,070 | 12,412,748 |
| Chatham Lodging Trust * | 197,579 | 2,752,275 |
| DiamondRock Hospitality Co. * | 836,794 | 8,468,355 |
| Hersha Hospitality Trust * | 152,143 | 1,691,830 |
| Host Hotels & Resorts, Inc. | 2,956,833 | 49,053,859 |
| Park Hotels & Resorts, Inc. | 987,374 | 21,475,385 |
| Pebblebrook Hotel Trust | 549,304 | 12,447,229 |
| RLJ Lodging Trust | 691,154 | 10,851,118 |
| Ryman Hospitality Properties, Inc. | 230,479 | 17,813,722 |
| Service Properties Trust | 691,161 | 8,874,507 |
| Summit Hotel Properties, Inc. * | 443,125 | 4,586,344 |
| Sunstone Hotel Investors, Inc. | 903,055 | 11,929,357 |
| Xenia Hotels & Resorts, Inc. | 476,984 | 9,525,370 |
| 171,882,099 | ||
| Security | Number of Shares | Value ($) |
| Industrial REITs 11.2% | ||
| Americold Realty Trust | 858,797 | 30,092,247 |
| Duke Realty Corp. | 1,559,206 | 61,198,835 |
| EastGroup Properties, Inc. | 165,844 | 22,573,027 |
| First Industrial Realty Trust, Inc. | 541,158 | 23,112,858 |
| Industrial Logistics Properties Trust | 273,163 | 5,810,177 |
| Innovative Industrial Properties, Inc. | 92,990 | 18,133,050 |
| Lexington Realty Trust | 1,161,683 | 12,453,242 |
| Monmouth Real Estate Investment Corp. | 411,499 | 7,127,163 |
| Prologis, Inc. | 3,064,956 | 303,645,191 |
| Rexford Industrial Realty, Inc. | 547,172 | 26,111,048 |
| STAG Industrial, Inc. | 625,208 | 19,725,312 |
| Terreno Realty Corp. | 286,539 | 16,057,646 |
| 546,039,796 | ||
| Office REITs 7.9% | ||
| Alexandria Real Estate Equities, Inc. | 519,064 | 82,889,330 |
| Boston Properties, Inc. | 593,798 | 58,863,196 |
| Brandywine Realty Trust | 715,352 | 8,748,755 |
| Columbia Property Trust, Inc. | 480,377 | 6,782,923 |
| Corporate Office Properties Trust | 470,540 | 12,234,040 |
| Cousins Properties, Inc. | 623,117 | 20,899,344 |
| Douglas Emmett, Inc. | 691,447 | 22,644,889 |
| Easterly Government Properties, Inc. | 340,808 | 7,490,960 |
| Equity Commonwealth | 509,508 | 14,373,221 |
| Highwoods Properties, Inc. | 435,425 | 17,399,583 |
| Hudson Pacific Properties, Inc. | 637,802 | 16,321,353 |
| JBG SMITH Properties | 466,475 | 14,810,581 |
| Kilroy Realty Corp. | 439,663 | 27,901,014 |
| Mack-Cali Realty Corp. | 360,990 | 5,043,030 |
| Office Properties Income Trust | 202,299 | 5,116,142 |
| Paramount Group, Inc. | 702,660 | 6,513,658 |
| Piedmont Office Realty Trust, Inc., Class A | 528,405 | 9,014,590 |
| SL Green Realty Corp. | 304,034 | 20,999,629 |
| Vornado Realty Trust | 657,479 | 28,232,148 |
| 386,278,386 | ||
| Residential REITs 14.4% | ||
| American Campus Communities, Inc. | 577,062 | 23,636,459 |
| American Homes 4 Rent, Class A | 1,124,583 | 35,019,514 |
| Apartment Income REIT Corp. | 624,135 | 25,514,639 |
| Apartment Investment & Management Co., Class A | 624,417 | 2,972,225 |
| AvalonBay Communities, Inc. | 585,243 | 102,856,457 |
| Camden Property Trust | 408,272 | 42,521,529 |
| Centerspace | 54,333 | 3,728,874 |
| Equity LifeStyle Properties, Inc. | 710,391 | 43,795,605 |
| Equity Residential | 1,435,678 | 93,907,698 |
| Essex Property Trust, Inc. | 273,339 | 69,644,044 |
| Independence Realty Trust, Inc. | 397,005 | 5,573,950 |
| Invitation Homes, Inc. | 2,349,720 | 68,470,841 |
| Mid-America Apartment Communities, Inc. | 479,419 | 64,592,122 |
| NexPoint Residential Trust, Inc. | 92,779 | 3,807,650 |
| Preferred Apartment Communities, Inc., Class A | 207,913 | 1,711,124 |
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Schwab U.S. REIT ETF | Annual Report
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Schwab U.S. REIT ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Sun Communities, Inc. | 450,901 | 68,514,407 |
| UDR, Inc. | 1,234,470 | 50,823,130 |
| 707,090,268 | ||
| Retail REITs 10.7% | ||
| Acadia Realty Trust | 361,066 | 6,827,758 |
| Agree Realty Corp. | 244,697 | 15,797,638 |
| Alexander's, Inc. | 8,970 | 2,431,857 |
| American Finance Trust, Inc. | 456,006 | 4,040,213 |
| Brixmor Property Group, Inc. | 1,243,263 | 24,467,416 |
| Federal Realty Investment Trust | 288,570 | 29,194,627 |
| Getty Realty Corp. | 150,613 | 4,214,152 |
| Kimco Realty Corp. | 1,813,002 | 33,232,327 |
| Kite Realty Group Trust | 352,392 | 6,755,355 |
| National Retail Properties, Inc. | 728,254 | 31,926,655 |
| NETSTREIT Corp. | 59,345 | 1,042,692 |
| Realty Income Corp. | 1,471,350 | 88,663,551 |
| Regency Centers Corp. | 661,512 | 36,237,627 |
| Retail Opportunity Investments Corp. | 494,966 | 7,825,412 |
| Retail Properties of America, Inc., Class A | 898,218 | 9,458,235 |
| RPT Realty | 339,439 | 3,723,646 |
| Seritage Growth Properties, Class A * | 151,223 | 3,053,192 |
| Simon Property Group, Inc. | 1,374,526 | 155,211,476 |
| SITE Centers Corp. | 632,218 | 8,433,788 |
| Spirit Realty Capital, Inc. | 478,686 | 20,593,072 |
| Tanger Factory Outlet Centers, Inc. | 391,521 | 6,162,541 |
| The Macerich Co. | 469,107 | 6,060,862 |
| Urban Edge Properties | 460,308 | 7,595,082 |
| Weingarten Realty Investors | 505,317 | 12,829,999 |
| 525,779,173 | ||
| Security & Alarm Services 0.1% | ||
| CoreCivic, Inc. | 501,403 | 3,600,074 |
| Specialized REITs 38.5% | ||
| American Tower Corp. | 1,841,789 | 398,065,857 |
| CoreSite Realty Corp. | 179,339 | 21,827,350 |
| Crown Castle International Corp. | 1,788,251 | 278,520,093 |
| CubeSmart | 818,516 | 30,252,351 |
| CyrusOne, Inc. | 504,823 | 33,131,533 |
| Digital Realty Trust, Inc. | 1,174,469 | 158,236,208 |
| EPR Properties | 312,954 | 14,139,262 |
| Equinix, Inc. | 312,692 | 202,730,731 |
| Extra Space Storage, Inc. | 541,745 | 68,097,346 |
| Security | Number of Shares | Value ($) |
| Four Corners Property Trust, Inc. | 307,842 | 8,339,440 |
| Gaming & Leisure Properties, Inc. | 905,913 | 40,222,537 |
| Iron Mountain, Inc. | 1,208,019 | 42,026,981 |
| Lamar Advertising Co., Class A | 362,295 | 31,371,124 |
| Life Storage, Inc. | 305,565 | 25,636,904 |
| National Storage Affiliates Trust | 260,820 | 10,054,611 |
| Outfront Media, Inc. | 605,939 | 12,288,443 |
| PotlatchDeltic Corp. | 280,365 | 14,228,524 |
| Public Storage | 637,586 | 149,156,869 |
| QTS Realty Trust, Inc., Class A | 269,482 | 16,740,222 |
| Rayonier, Inc. | 572,000 | 18,670,080 |
| Safehold, Inc. | 59,959 | 4,571,874 |
| SBA Communications Corp. | 465,796 | 118,838,533 |
| The GEO Group, Inc. | 508,182 | 3,658,910 |
| Uniti Group, Inc. | 976,577 | 11,631,032 |
| VICI Properties, Inc. | 2,249,704 | 64,116,564 |
| Weyerhaeuser Co. | 3,129,018 | 105,979,840 |
| 1,882,533,219 | ||
| Total Common Stock | ||
| (Cost $4,692,503,127) | 4,886,193,823 | |
| Other Investment Company 0.0% of net assets | ||
| Money Market Fund 0.0% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (a) | 1,460,211 | 1,460,211 |
| Total Other Investment Company | ||
| (Cost $1,460,211) | 1,460,211 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| Dow Jones U.S. Real Estate Index, expires 03/19/21 | 165 | 5,623,200 | (106,448) | |||
| * | Non-income producing security. |
| (a) | The rate shown is the 7-day yield. |
| REIT — | Real Estate Investment Trust |
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Schwab U.S. REIT ETF | Annual Report
See financial notes
Schwab U.S. REIT ETF
Portfolio Holdings as of February 28, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $4,886,193,823 | $— | $— | $4,886,193,823 | |
| Other Investment Company1 | 1,460,211 | — | — | 1,460,211 | |
| Liabilities | |||||
| Futures Contracts2 | (106,448) | — | — | (106,448) | |
| Total | $4,887,547,586 | $— | $— | $4,887,547,586 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab U.S. REIT ETF | Annual Report
See financial notes
Schwab U.S. REIT ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in unaffiliated issuers, at value (cost $4,693,963,338) | $4,887,654,034 | |
| Deposit with broker for futures contracts | 1,633,000 | |
| Receivables: | ||
| Fund shares sold | 3,896,381 | |
| Dividends | 2,937,674 | |
| Income from securities on loan | + | 7,519 |
| Total assets | 4,896,128,608 | |
| Liabilities | ||
| Payables: | ||
| Investments bought | 3,883,284 | |
| Management fees | 263,876 | |
| Variation margin on futures contracts | + | 75,680 |
| Total liabilities | 4,222,840 | |
| Net Assets | ||
| Total assets | 4,896,128,608 | |
| Total liabilities | – | 4,222,840 |
| Net assets | $4,891,905,768 | |
| Net Assets by Source | ||
| Capital received from investors | 5,688,418,921 | |
| Total distributable loss | (796,513,153) | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $4,891,905,768 | 125,550,000 | $38.96 | ||
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Schwab U.S. REIT ETF | Annual Report
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Schwab U.S. REIT ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends | $108,617,688 | |
| Securities on loan, net | + | 459,035 |
| Total investment income | 109,076,723 | |
| Expenses | ||
| Management fees | 3,170,096 | |
| Total expenses | – | 3,170,096 |
| Net investment income | 105,906,627 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on investments | (982,911,495) | |
| Net realized gains on in-kind redemptions | 366,132,965 | |
| Net realized gains on futures contracts | + | 2,786,547 |
| Net realized losses | (613,991,983) | |
| Net change in unrealized appreciation (depreciation) on investments | 150,110,534 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 333,725 |
| Net change in unrealized appreciation (depreciation) | + | 150,444,259 |
| Net realized and unrealized losses | (463,547,724) | |
| Decrease in net assets resulting from operations | ($357,641,097) | |
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Schwab U.S. REIT ETF | Annual Report
See financial notes
Schwab U.S. REIT ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $105,906,627 | $166,469,258 | ||
| Net realized gains (losses) | (613,991,983) | 151,705,325 | ||
| Net change in unrealized appreciation (depreciation) | + | 150,444,259 | (323,093,028) | |
| Decrease in net assets resulting from operations | (357,641,097) | (4,918,445) | ||
| Distributions to Shareholders | ||||
| Total distributions | ($134,110,850) | ($166,671,820) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 40,350,000 | $1,438,051,306 | 31,500,000 | $1,434,130,373 | ||||
| Shares redeemed | + | (50,000,000) | (1,771,789,053) | (14,750,000) | (672,412,627) | |||
| Net transactions in fund shares | (9,650,000) | ($333,737,747) | 16,750,000 | $761,717,746 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 135,200,000 | $5,717,395,462 | 118,450,000 | $5,127,267,981 | ||||
| Total increase (decrease) | + | (9,650,000) | (825,489,694) | 16,750,000 | 590,127,481 | |||
| End of period | 125,550,000 | $4,891,905,768 | 135,200,000 | $5,717,395,462 | ||||
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Schwab U.S. REIT ETF | Annual Report
See financial notes
Schwab U.S. REIT ETF
Financial Notes
1. Business Structure of the Fund:
Schwab U.S. REIT ETF is a series of Schwab Strategic Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the operational funds in the trust as of the end of the period, including the fund discussed in this report, which is highlighted:
| SCHWAB STRATEGIC TRUST (ORGANIZED JANUARY 27, 2009) | |
| Schwab U.S. REIT 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 Long-Term U.S. Treasury ETF |
| Schwab U.S. Large-Cap ETF | Schwab U.S. Aggregate Bond ETF |
| Schwab U.S. Large-Cap Growth ETF | Schwab 1-5 Year Corporate Bond ETF |
| Schwab U.S. Large-Cap Value ETF | Schwab 5-10 Year Corporate 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 International Equity ETF | Schwab Fundamental International Large Company Index ETF |
| Schwab International Small-Cap Equity ETF | Schwab Fundamental International Small Company Index ETF |
| Schwab Emerging Markets Equity ETF | Schwab Fundamental Emerging Markets Large Company Index ETF |
| Schwab U.S. TIPS ETF | |
The fund issues and redeems shares at its 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 institutional investors who have entered into an authorized participant agreement purchase or redeem Creation Units. Except when aggregated in Creation Units, shares of the fund are not redeemable securities.
Individual shares of the fund trade on national securities exchanges and elsewhere during the trading day and can only be bought and sold at market prices throughout the trading day through a broker-dealer. Because fund shares trade at market prices rather than NAV, shares may trade at a price greater than NAV (premium) or less than NAV (discount). A chart showing the frequency at which the fund’s daily closing market price was at a discount or premium to the fund’s NAV can be found at www.schwabfunds.com.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The fund follows the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The fund may invest in certain mutual funds and exchange-traded funds (ETFs) referred to as “underlying funds”. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.
(a) Security Valuation:
Under procedures approved by the fund’s Board of Trustees (the Board), the investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. Among other things, these procedures allow the fund to utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Financial Notes (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 the fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. The fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that the fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the fund pursuant to the valuation procedures.
• Futures contracts: Futures contracts are valued at their settlement prices as of the close of their exchanges.
• Mutual funds: Mutual funds are valued at their respective NAVs.
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the 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 fund determines that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities, mutual funds and futures contracts. Investments in mutual funds are valued daily at their NAV, which are classified as Level 1 prices, without consideration to the classification level of the specific underlying securities 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 fund’s own assumptions in determining the fair value of investments)—Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The levels associated with valuing the fund’s investments as of February 28, 2021 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. The 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 the 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 fair value may change daily.
Securities Lending: Under the trust’s Securities Lending Program, the fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to 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 the 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 pursuant to Rule 2a-7 under the 1940 Act. The fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the fund 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 agreements. Securities lending income, as disclosed in the fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between the fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of the fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%. In this context, the gross lending revenue equals the income received from the investment of cash collateral and fees paid by borrowers less any rebates paid to the borrowers. Any expenses charged by the cash collateral fund are in addition to these fees. All remaining revenue is retained by the fund, as applicable. No portion of lending revenue is paid to or retained by Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) or any affiliate of CSIM.
As of February 28, 2021, the fund had no securities on loan.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
When the 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.
The fund invests in real estate investment trusts (REITs) which report information on the source of their distributions annually. The fund policy is to record all REIT distributions initially as dividend income on the ex-dividend date and then re-designate them as return of capital and/or capital gain distributions at the end of the reporting period based on information provided annually by each REIT, and management estimates such re-designations when actual information has not yet been reported.
(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 fund records certain foreign security dividends on the date the ex-dividend is confirmed. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
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Schwab U.S. REIT ETF | Annual Report
Schwab U.S. REIT ETF
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(e) Expenses:
Pursuant to the Amended and Restated Advisory Agreement (Advisory Agreement) between CSIM and the trust, the investment adviser will pay the operating expenses of the 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 the fund are charged directly to the fund.
(f) Distributions to Shareholders:
The fund makes distributions from net investment income, if any, quarterly and from 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 fund intends to meet federal income and excise tax requirements for regulated investment companies under subchapter M of the Internal Revenue Code, as amended. Accordingly, the fund distributes substantially all of its net investment income and net realized capital gains, if any, to its shareholders each year. As long as the fund meets the tax requirements, it is not required to pay federal income tax.
(i) Indemnification:
Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss attributable to these arrangements to be remote.
3. Risk Factors:
Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictable. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The fund is an index fund. Therefore, the fund follows the securities included in the index during upturns as well as downturns. Because of its indexing strategy, the fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of the fund’s expenses, the fund’s performance may be below that of the index. Market disruptions could cause delays in the index’s rebalancing schedule which may result in the index and, in turn, the fund experiencing returns different than those that would have been achieved under a normal rebalancing schedule.
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, the fund’s performance could be impacted.
Large-Cap Company Risk. 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.
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Financial Notes (continued)
3. Risk Factors (continued):
Mid-Cap Company Risk. 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. 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.
Real Estate Investment Risk. Due to the composition of the index, the fund concentrates its investments in real estate companies and companies related to the real estate industry. As such, the fund is subject to risks associated with the direct ownership of real estate securities and an investment in the fund will be closely linked to the performance of the real estate markets. These risks include, among others: declines in the value of real estate; risks related to general and local economic conditions; possible lack of availability of mortgage funds or other limits to accessing the credit or capital markets; defaults by borrowers or tenants, particularly during an economic downturn; and changes in interest rates.
REITs Risk. In addition to the risks associated with investing in securities of real estate companies and real estate related companies, REITs are subject to certain additional risks. Equity REITs may be affected by changes in the value of the underlying properties owned by the trusts. Further, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, or in a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences to the fund. In addition, REITs have their own expenses, and the fund will bear a proportionate share of those expenses.
Tracking Error Risk. As an index fund, the fund seeks to track the performance of its index, although it may not be successful in doing so. The divergence between the performance of the 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. The principal types of derivatives used by the fund are futures contracts. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. The fund’s use of derivatives that are 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.
The fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, leverage risk and market risk, are discussed elsewhere in this section. The fund’s use of derivatives is also subject to counterparty risk, lack of availability risk, valuation risk, correlation risk and tax risk. Counterparty risk is the risk that the counterparty to a derivatives transaction may not fulfill its contractual obligations either because the financial condition of the counterparty declines, or because the counterparty is otherwise unable or unwilling to perform under the contract. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gains. The 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.
Concentration Risk. To the extent that the fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector or asset class (including the real estate industry, as described above), the fund may be adversely affected by the performance of those securities, may be subject to increased price volatility and may be more vulnerable to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector or asset class.
Liquidity Risk. The 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.
Leverage Risk. Certain fund transactions, such as derivatives transactions, may give rise to a form of leverage and may expose the fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of the fund’s portfolio securities. The use of leverage may cause the fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.
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.
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Financial Notes (continued)
3. Risk Factors (continued):
Market Trading Risk. Although fund shares are listed on national securities exchanges, there can be no assurance that an active trading market for fund shares will develop or be maintained. If an active market is not maintained, investors may find it difficult to buy or sell fund shares.
Shares of the Fund May Trade at Prices Other Than NAV. Fund shares may be bought and sold in the secondary market at market prices. Although it is expected that the market price of the shares of the fund will approximate the fund’s NAV, there may be times when the market price and the NAV vary significantly. An investor may pay more than NAV when buying shares of the 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.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Investment Adviser
CSIM, a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser pursuant to the Advisory Agreement between CSIM and the trust.
For its advisory services to the fund, CSIM is entitled to receive an annual management fee, payable monthly, equal to 0.07% of the fund’s average daily net assets.
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 percentage of shares of the fund that are owned by other funds in the Fund Complex as of February 28, 2021.
| Schwab MarketTrack All Equity Portfolio | 0.8% |
| Schwab MarketTrack Balanced Portfolio | 0.4% |
| Schwab MarketTrack Conservative Portfolio | 0.1% |
| Schwab MarketTrack Growth Portfolio | 0.7% |
| Schwab VIT Balanced Portfolio | 0.1% |
| Schwab VIT Balanced with Growth Portfolio | 0.2% |
| Schwab VIT Growth Portfolio | 0.2% |
| Schwab Target 2010 Index Fund | 0.0%* |
| Schwab Target 2015 Index Fund | 0.0%* |
| Schwab Target 2020 Index Fund | 0.1% |
| Schwab Target 2025 Index Fund | 0.2% |
| Schwab Target 2030 Index Fund | 0.4% |
| Schwab Target 2035 Index Fund | 0.3% |
| Schwab Target 2040 Index Fund | 0.4% |
| Schwab Target 2045 Index Fund | 0.2% |
| Schwab Target 2050 Index Fund | 0.3% |
| Schwab Target 2055 Index Fund | 0.2% |
| Schwab Target 2060 Index Fund | 0.2% |
| Schwab Target 2065 Index Fund | 0.0%* |
| * | Less than 0.05% |
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Transactions
The fund may engage in direct transactions with certain other funds in the Fund Complex in accordance with procedures adopted by the Board under Rule 17a-7 of the 1940 Act. 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, 2021, the fund’s total aggregate security transactions with other funds in the Fund Complex was $223,222,089 and includes realized losses of $78,019,161.
Interfund Borrowing and Lending
Pursuant to an exemptive order issued by the SEC, the fund 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 fund had no interfund borrowing or lending activity during the period.
5. Other Service Providers:
SEI Investments Distribution Co. is the principal underwriter and distributor of shares of the fund.
State Street Bank and Trust Company (State Street) serves as the fund’s transfer agent. As part of these services, the transfer agent maintains records pertaining to the sale, redemption and transfer of the fund’s shares. The transfer agent is also responsible for the order-taking function for the fund’s shares.
State Street also serves as custodian and accountant for the fund. The custodian is responsible for the daily safekeeping of securities and cash held by the fund. The fund’s accountant maintains all books and records related to the fund’s transactions.
6. Board of Trustees:
The Board may include people who are officers and/or directors of CSIM or its 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 fund was a participant with other funds in the Fund Complex in a joint, syndicated, committed $750 million line of credit (the Syndicated Credit Facility), which matured on October 1, 2020. On October 1, 2020, the Syndicated Credit Facility was amended to run for a new 364 day period with a line of credit of $850 million, maturing on September 30, 2021. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by the fund, CSIM paid a commitment fee of 0.15% per annum on the fund’s proportionate share of the unused portion of the Syndicated Credit Facility.
During the period, the fund was a participant with other funds in the Fund Complex in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which was scheduled to mature on November 27, 2020. However, on October 1, 2020, the Uncommitted Credit Facility was amended to run for a new 364 day period with a line of credit of $400 million, maturing on September 30, 2021. Under the terms of the Uncommitted Credit Facility, CSIM pays interest on the amount the fund borrows. There were no borrowings from either line of credit during the period.
The fund also has access to custodian overdraft facilities. The 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:
The fund entered into equity index futures contracts during the report period. The fund invested in futures contracts to equitize available cash. The current value and variation margin for futures contracts held at February 28, 2021 are presented on the Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures
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Financial Notes (continued)
8. Derivatives (continued):
contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the fund’s accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended February 28, 2021, the month-end average notional amounts of futures contracts held by the fund was $9,187,156 and the month-end average number of contracts held was 296.
9. Purchases and Sales of Investment Securities:
For the period ended February 28, 2021, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:
| Purchases of Securities | Sales of Securities |
| $2,743,474,094 | $2,714,693,140 |
10. In-Kind Transactions:
The consideration for the purchase of Creation Units of the 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 the fund.
The in-kind transactions for the period ended February 28, 2021, were as follows:
| In-Kind Purchases of Securities | In-Kind Sales of Securities |
| $1,319,725,658 | $1,646,015,717 |
For the period ended February 28, 2021, the fund realized net capital gains or losses resulting from in-kind redemptions of Creation Units. Because such gains or losses are not taxable to the fund and are not distributed to existing fund shareholders, the gains or losses are reclassified from accumulated net realized gains or losses to capital received from investors at the end of the fund’s tax year. These reclassifications have no effect on net assets or net asset values per share. The net realized in-kind gains or losses for the period ended February 28, 2021 are disclosed in the fund’s Statement of Operations.
11. Federal Income Taxes
As of February 28, 2021, the tax basis cost of the fund’s investments and gross unrealized appreciation and depreciation were as follows:
| Tax cost | $4,743,322,173 |
| Gross unrealized appreciation | $459,173,164 |
| Gross unrealized depreciation | (314,947,751) |
| Net unrealized appreciation (depreciation) | $144,225,413 |
As of February 28, 2021, the components of distributable earnings on a tax basis were as follows:
| Net unrealized appreciation (depreciation) on investments | $144,225,413 |
| Capital loss carryforwards and other losses | (940,738,566) |
| Total | ($796,513,153) |
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Financial Notes (continued)
11. Federal Income Taxes (continued):
The primary difference between book basis and tax basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales and realization for tax purposes of unrealized appreciation or depreciation on futures contracts. The tax cost of the fund’s investments, disclosed above, have been adjusted from its book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2021, the fund had capital loss carryforwards of $925,636,622 with no expiration available to offset future net capital gains.
For tax purposes, late-year ordinary losses may be deferred and treated as occurring on the first day of the following fiscal year. For the fiscal year ended February 28, 2021, the fund had ordinary losses deferred of $15,101,944 and had no capital loss carryforwards utilized.
The tax basis components of distributions paid during the current and prior fiscal years were:
| Current fiscal year end distributions | |
| Ordinary income | $134,110,850 |
| Prior fiscal year end distributions | |
| Ordinary income | $166,671,820 |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments have no impact on net assets or the results of operations.
As of February 28, 2021, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended February 28, 2021, the fund did not incur any interest or penalties.
12. Independent Registered Public Accounting Firm:
On June 8, 2020, the Audit, Compliance and Valuation Committee of the Board approved, and on June 9, 2020, the Board approved, Deloitte & Touche LLP as the independent registered accounting firm of the Schwab Funds Complex for fiscal periods ending after June 8, 2020.
On June 8, 2020, PricewaterhouseCoopers LLP (the “Prior Auditor”) resigned as the independent registered public accounting firm of the Schwab Funds Complex. The Prior Auditor’s reports on the financial statements of the fund for the past two fiscal years, the years ended February 28, 2019 and February 29, 2020, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the last two fiscal year-ends and through June 8, 2020, there were no (1) disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its reports on the fund’s financial statements for such periods; or (2) “reportable events,” as that term is defined in Item 304 (a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934.
13. 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.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Strategic Trust and Shareholders of Schwab U.S. REIT ETF:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statement of assets and liabilities, including the portfolio holdings, of Schwab U.S. REIT ETF (the “Fund”), one of the funds constituting Schwab Strategic Trust, as of February 28, 2021, the related statement of operations, statement of changes in net assets, and the financial highlights for the year then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of the Fund as of February 28, 2021, and the results of its operations, the changes in its net assets, and the financial highlights for the year then ended in conformity with accounting principles generally accepted in the United States of America. The statement of changes in net assets for the year ended February 29, 2020 and the financial highlights for each of the four years in the period ended February 29, 2020 were audited by other auditors, whose report, dated April 16, 2020, expressed an unqualified opinion on such statement of changes in net assets and financial highlights.
Basis for Opinion
These financial statements are the responsibility of the Fund’s management. Our responsibility is to express an opinion on the Fund’s financial statements and financial highlights based on our audit. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Fund in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Fund is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion.
Our audit included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audit also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of February 28, 2021 by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audit provides a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
April 16, 2021
Denver, Colorado
April 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
For the fiscal year ended February 28, 2021, the fund designated $1,964,860 of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS Form 1099 of the amounts for use in preparing their 2021 income tax return.
For the fiscal year ended February 28, 2021, the fund designates $117,274,868 as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
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Liquidity Risk Management Program (Unaudited)
The Fund has adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Fund’s Board of Trustees (the “Board”) has designated the Fund’s investment adviser, Charles Schwab Investment Management, Inc. (“CSIM”) as the administrator of the program. Personnel of CSIM or its affiliates conduct the day-to-day operation of the program.
Under the program, CSIM manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. CSIM’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Fund’s Board reviewed a report at its meeting held on September 22, 2020 prepared by CSIM regarding the operation and effectiveness of the program for the period June 1, 2019, through May 31, 2020. No significant liquidity events impacting the Fund were noted in the report. In addition, CSIM provided its assessment that the program had been operating effectively in managing the Fund’s liquidity risk.
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Trustees and Officers
The tables below give information about the trustees and officers of Schwab Strategic Trust, which includes the fund covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust. The Fund Complex includes 103 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. | 103 | 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. | 103 | Director (2005 – 2020), 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) | Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 103 | None |
| 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. | 103 | Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. Director (2003 – 2019), Symantec Corporation |
| 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) | Consultant (2018 – present), Fulham Advisers LLC (management consulting); Chief Investment Officer (2009 – 2017), CareGroup Healthcare System, Inc. (healthcare). | 103 | None |
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| 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 |
| 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). | 103 | 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). | 103 | None |
| 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, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 103 | Director (2008 – present), The Charles Schwab Corporation |
| 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, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; 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.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation. | 103 | None |
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| 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 (Apr. 2019 – present), President (Oct. 2018 – present), Chief Operating Officer (Jan. 2020 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020 – present) and Chief Operating Officer (Jan. 2020 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019 – present), President (Nov. 2018 – present) and Trustee (Apr. 2019 – Dec. 2020), 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. |
| Mark Fischer 1970 Treasurer, Chief Financial Officer and Chief Operating 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) and Chief Operating Officer (Dec. 2020 – 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; Chief Financial Officer (Mar. 2020 – present) and 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. |
| 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 (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 (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 and 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 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. 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. |
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Glossary
ask See “offer.”
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage to help offset risks and rewards, based on your goals, time horizon and risk tolerance.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
authorized participant (AP) A large institutional investor that places orders for creation units with the funds’ distributor.
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.
cap, capitalization See “market cap.”
capital gain, capital loss The difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
commencement of operations The date that the first NAV was calculated.
creation unit (C.U.) A basket of securities that is delivered by an authorized participant (AP) to the fund equal to the current holdings of the ETF, plus a designated cash component. In return, the APs receive a large block of ETF shares (typically 50,000 shares), which investors can then buy and sell in the secondary market.
Dow Jones Equity All REIT Capped Index A float-adjusted market cap weighted index that is designed to measure all equity real estate investment trusts (REITs) in the Dow Jones U.S. Total Stock Market Index, as defined by the S&P Dow Jones Indices REIT/RESI Industry Classification Hierarchy, that meet the minimum float market capitalization (FMC) and liquidity thresholds. The aggregate weight of all companies weighing more than 4.5% cannot exceed 22.5%, and no single company’s weight can exceed 10%. The index is reviewed daily based on each company’s capped market capitalization weight. Daily capping is only performed when the sum of companies with weights great than 5% exceeds 25%.
Dow Jones U.S. Select REIT Index An index that is a float-adjusted market-capitalization weighted index comprised of income-producing commercial and/or residential real estate investment trusts (REITs). The index excludes mortgage REITs, net-lease REITs, real estate finance companies, mortgage brokers and bankers, commercial and residential real estate brokers and estate agents, homebuilders, large landowners and sub-dividers of unimproved land, hybrid REITs, timber REITs and companies that have more than 25% of their assets in direct mortgage investments.
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 EPRA Nareit Global Index (Net) An index that provides a diverse representation of publicly traded equity real estate investment trusts (REITs) and listed property companies worldwide. The index constituents are free-float adjusted, and screened on liquidity, size and revenue. The index is comprised of countries in developed and emerging markets. The Net of Tax Index is calculated based on the maximum withholding tax rates applicable to dividends received by institutional investors who are not resident in the same country as the remitting company and who do not benefit from double taxation treaties.
inception date The date that the shares began trading in the secondary market.
indicative optimized portfolio value (IOPV) A calculation disseminated by the stock exchange that approximates the fund’s NAV every 15 seconds throughout the trading day.
liquidity The ability to convert a security or asset quickly into cash.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
market price return The return based on the change in market price per share of the fund over a given time period. Market price returns assume that dividends and capital gain distributions have been reinvested in the fund at market price.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for 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.
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.
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Schwab U.S. REIT ETF
NAV return The return based on the change in NAV of the fund over a given time period. NAV returns assume that dividends and capital gain distributions have been reinvested in the fund.
offer (ask) The lowest price at which an individual is willing to sell a security.
open The price at which a security opened for trading on a given day.
outstanding shares, shares outstanding When speaking of the fund, indicates all shares currently held by investors.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
primary market The market that deals with the issuance of new securities.
real estate investment trust (REIT) Real estate companies that own and commonly operate income producing commercial and/or residential real estate.
REIT Spliced Index An internally calculated index, compromised of the Dow Jones U.S. Select REIT Index from the inception of the Schwab U.S. REIT ETF until the close of business on June 19, 2020, and the Dow Jones Equity All REIT Capped Index thereafter. The REIT Spliced Index is published with the permission of S&P Dow Jones Indices LLC, but is not calculated, sponsored or endorsed by S&P Dow Jones Indices LLC.
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.
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.
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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 at www.schwabfunds.com/schwabetfs_prospectus, the SEC’s website at www.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 at www.schwabfunds.com/schwabetfs_prospectus or the SEC’s website at www.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 Long-Term U.S. Treasury ETF
Schwab U.S. Aggregate Bond ETF
Schwab 1-5 Year Corporate Bond ETF
Schwab 5-10 Year Corporate 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
Index ETF
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Schwab ETFs
1-877-824-5615
© 2021 Charles Schwab Investment Management, Inc. All rights reserved.
Printed on recycled paper.
Printed on recycled paper.
| * | FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
Annual Report | February 28, 2021
Schwab Fundamental Index* ETFs
| Schwab Fundamental U.S. Broad Market Index ETF | FNDB |
| Schwab Fundamental U.S. Large Company Index ETF | FNDX |
| Schwab Fundamental U.S. Small Company Index ETF | FNDA |
| Schwab Fundamental International Large Company Index ETF | FNDF |
| Schwab Fundamental International Small Company Index ETF | FNDC |
| Schwab Fundamental Emerging Markets Large Company Index ETF | FNDE |
| * | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
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In This Report
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. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
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Schwab Fundamental Index 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 visit www.schwabfunds.com/schwabetfs_prospectus.
| Total Returns for the 12 Months Ended February 28, 2021 | |
| Schwab Fundamental U.S. Broad Market Index ETF (Ticker Symbol: FNDB) | |
| Market Price Return1 | 32.62% |
| NAV Return1 | 33.35% |
| Russell RAFITM US Index | 33.61% |
| Russell 3000® Index | 35.33% |
| ETF Category: Morningstar Large Value2 | 22.52% |
| Performance Details | pages 8-10 |
| Schwab Fundamental U.S. Large Company Index ETF (Ticker Symbol: FNDX) | |
| Market Price Return1 | 32.06% |
| NAV Return1 | 32.40% |
| Russell RAFITM US Large Company Index | 32.68% |
| Russell 1000® Index | 34.28% |
| ETF Category: Morningstar Large Value2 | 22.52% |
| Performance Details | pages 11-13 |
| Schwab Fundamental U.S. Small Company Index ETF (Ticker Symbol: FNDA) | |
| Market Price Return1 | 42.80% |
| NAV Return1 | 42.73% |
| Russell RAFITM US Small Company Index | 42.76% |
| Russell 2000® Index | 51.00% |
| ETF Category: Morningstar Small Blend2 | 41.65% |
| Performance Details | pages 14-16 |
| Total Returns for the 12 Months Ended February 28, 2021 | |
| Schwab Fundamental International Large Company Index ETF (Ticker Symbol: FNDF) | |
| Market Price Return1 | 25.49% |
| NAV Return1 | 25.47% |
| Russell RAFITM Developed ex US Large Company Index (Net)* | 25.59% |
| MSCI EAFE® Index (Net)* | 22.46% |
| ETF Category: Morningstar Foreign Large Value2 | 17.86% |
| Performance Details | pages 17-19 |
| Schwab Fundamental International Small Company Index ETF (Ticker Symbol: FNDC) | |
| Market Price Return1 | 29.54% |
| NAV Return1 | 28.97% |
| Russell RAFITM Developed ex US Small Company Index (Net)* | 29.22% |
| S&P Developed ex-U.S. Small Cap Index (Net)* | 33.68% |
| ETF Category: Morningstar Foreign Small/Mid Blend2 | 29.18% |
| Performance Details | pages 20-22 |
| Schwab Fundamental Emerging Markets Large Company Index ETF (Ticker Symbol: FNDE) | |
| Market Price Return1 | 18.38% |
| NAV Return1 | 19.12% |
| Russell RAFITM Emerging Markets Large Company Index (Net)* | 20.02% |
| MSCI Emerging Markets Index (Net)* | 36.05% |
| ETF Category: Morningstar Diversified Emerging Markets2 | 34.85% |
| Performance Details | pages 23-25 |
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.
The first index listed for each fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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 — The Schwab Fundamental Index ETFs are not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Index Series (the Indices) or otherwise. The Indices are compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Indices and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Indices. For full disclaimer please see the funds’ statement of additional information.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 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. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Index ETFs
From the President
Jonathan de St. Paer
President of Charles Schwab
Investment Management, Inc.
and the funds covered
in this report.
President of Charles Schwab
Investment Management, Inc.
and the funds covered
in this report.
Dear Shareholder,
On March 1, 2020, with just over 200 cases of COVID-19 identified in the U.S., the outbreak had yet to be declared a pandemic by the World Health Organization. At that time, few could have foreseen the dramatic ways COVID-19 would affect our daily lives over the next 12 months as businesses shut down, travel was limited, and market volatility soared. Although most broad equity markets ended the reporting period in strongly positive territory, the first three weeks of March 2020 saw the sharpest drop in stock prices since the Great Recession of 2008. In this time period, the S&P 500® Index, a bellwether for the overall U.S. stock market, fell nearly 30%. However, extensive emergency fiscal and monetary stimulus prompted a quick recovery. By early June, the S&P 500® Index had regained all the ground it lost in March. Market speculation produced additional volatility later in the reporting period as investors sharply bid up prices of a few stocks widely covered on popular message boards, so-called “meme stocks,” causing them to rise and fall sharply. Nevertheless, rising corporate earnings and investor’s hopes for rapid vaccine development and deployment drove the S&P 500® Index to a series of successive new record highs. International equities gained ground as well. For the 12-month reporting period ended February 28, 2021, the S&P 500® Index returned 31.3% and the MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, returned 22.5%.
At Charles Schwab Investment Management, we believe that recent market volatility is a reminder of the importance of having a long-term investing plan and a diversified portfolio. While it may be tempting to ride a speculative wave, such waves can crash as quickly as they build. That’s why we are committed to providing products like the Schwab Fundamental Index ETFs that can help make it easier for investors to build diversified portfolios. By weighting fund holdings based on objective financial measures of company size, Fundamental Index strategies tend to perform differently over time than traditional market-cap index strategies that use market capitalization to weight the same set of stocks. When the two approaches are combined, we believe a portfolio has the potential for better diversification and more attractive risk-adjusted returns. Offering simple, low-cost access to small- and large-company stocks within the U.S., and developed international and emerging markets, the Schwab Fundamental Index ETFs can serve as part of the core of a diversified portfolio.
Thank you for investing with Charles Schwab Investment Management. For more information about the Schwab Fundamental Index 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,
“ At Charles Schwab Investment Management, we believe that recent market volatility is a reminder of the importance of having a long-term investing plan and a diversified portfolio. ”
Past performance is no guarantee of future results.
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.
| * | The net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
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Schwab Fundamental Index ETFs
The Investment Environment
For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period. The U.S. dollar strengthened against a basket of foreign currencies in March when the COVID-19 pandemic began before generally weakening throughout the remainder of the reporting period, generally enhancing the return of overseas investments in U.S. dollar terms. For the reporting period, the S&P 500® Index, a bellwether for the overall U.S. stock market, returned 31.29%. Small-cap stocks outperformed large-cap stocks, with the Russell 2000® Index and Russell RAFI™ US Small Company Index returning 51.00% and 42.76%, respectively, and the Russell RAFI™ US Large Company Index returning 32.68%. International equities also posted strong gains. The MSCI EAFE® Index (Net)*, a broad measure of developed international equity performance, and the Russell RAFI™ Developed ex US Large Company Index (Net)* returned 22.46% and 25.59%, respectively, and the MSCI Emerging Markets Index (Net)* and the Russell RAFI™ Emerging Markets Large Company Index (Net)* returned 36.05% and 20.02%, respectively.
In March 2020, amid the fallout of the growing COVID-19 pandemic, the U.S. economy entered recessionary territory at record speed. Bolstered by the extensive emergency rescue and fiscal stimulus measures passed by the U.S. Federal Reserve (Fed) and U.S. Congress, the U.S. economy has held up relatively well, especially given the intensity of the COVID-19 pandemic’s economic impact. After falling by an annualized rate of 31.4% in the second quarter of 2020, U.S. gross domestic product (GDP) jumped by an annualized rate of 33.4% for the third quarter of 2020, reflecting
Asset Class Performance Comparison % returns during the 12 months ended February 28, 2021
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. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Index ETFs
The Investment Environment (continued)
pent-up consumer demand and government support. GDP grew at an annualized rate of 4.3% in the fourth quarter of 2020. For the full year of 2020, GDP decreased by 3.5%. Unemployment skyrocketed in April, rising to the highest level since the Great Depression, but declined over the remainder of the reporting period, dropping below double digits beginning in August. Inflation remained well below the Fed’s traditional target of 2%, although inflation concerns rose toward the end of the reporting period when the yield on the 10-year U.S. Treasury spiked to its highest level in more than a year.
Outside the U.S., conditions were similar as global economies wrestled with dramatically slowing growth amid stay-at-home orders, supply chain disruptions, and broadly diminishing demand. Oil prices deteriorated early in the reporting period amid significantly reduced demand, coupled with rising U.S. crude production and a price war between Russia and Saudi Arabia. Oil prices recovered by the end of the reporting period, ending the reporting period at a level unseen since prior to the onset of the COVID-19 pandemic. For the first and second quarters of 2020, GDP contracted in most major economies, including the eurozone, the United Kingdom, and Japan. The eurozone and Japan subsequently recovered much of their losses, but the United Kingdom, which has been particularly hard-hit by the COVID-19 pandemic, suffered its biggest slump in more than three centuries over the course of 2020, effectively wiping out its growth over the past seven years. Over 2020, China was the only major economy to avoid contraction in the face of COVID-19-related shocks and maintained positive GDP growth in the last three quarters of 2020, approaching pre-pandemic growth rates on rising industrial output, strong manufacturing, and a robust real estate market. India, after plunging into one of the worst recessions of any major economy, saw its first positive gain in GDP in the fourth quarter of 2020.
Central banks around the world, including the Fed, enacted or maintained low—and for some international central banks, negative—interest rates in response to the COVID-19 pandemic. In the U.S., the Fed cut interest rates by 0.50% in early March and by 1.00% in mid-March, resulting in a federal funds rate of 0.00% to 0.25%, which it upheld throughout the reporting period. In addition, the Fed also announced extensive emergency measures to support the economy in light of the COVID-19 pandemic, which remained in effect throughout the period, including large purchases of U.S. Treasuries and other securities to support smooth market function, facilitating the flow of credit to municipalities, new financing for employers, consumers, and businesses, and the establishment of facilities to support credit to businesses and consumers alike. In August, the Fed announced that it was shifting its interest rate policy approach to allow inflation to rise above its previous 2% target for periods of time, even in times of rising employment. Outside the U.S., the European Central Bank held its policy rate at 0.00%, unchanged since March 2016, and maintained its asset purchase program to help counter the impact of the COVID-19 pandemic. The Bank of Japan upheld its short-term interest rate target of -0.1%, also unchanged since 2016. The Bank of England maintained its key official bank rate at 0.10% and also reiterated its commitment to its bond-buying program. Central banks in key emerging market economies—including China, India, Russia, and Thailand—also maintained low rates to counter the effects of the COVID-19 pandemic. Mexico reduced its benchmark interest rate by 0.25% in February.
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Index ETFs
Fund Management
 | Christopher Bliss, CFA, Vice President and Head of Passive Equity Strategies, 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. Before 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 the head of the 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. |
 | Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, and Schwab Fundamental U.S. Small Company Index ETF. Prior to joining CSIM in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a senior analyst on the ETF portfolio management and research team where he performed portfolio management, trading, and analytics/research functions for ALPS ETFs and passive funds. Additionally, Mr. Brown led a number of investment research, commentary, industry trend analysis, and sales and marketing support initiatives. |
 | Chuck Craig, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF. 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. |
 | Ferian Juwono, CFA, Senior Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, and Schwab Fundamental U.S. Small Company Index ETF. 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 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. |
 | Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF. 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 Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF. Prior to this role, Mr. Rios was an associate portfolio manager on the Schwab equity index strategies team for four years. His first role with CSIM was as a trade operations specialist. Prior to joining CSIM in 2008, Mr. Rios was a senior fund accountant at Investors Bank & Trust (subsequently acquired by State Street Corporation). |
 | Sabya Sinha, Portfolio Manager, is responsible for the day-to-day co-management of the Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, and Schwab Fundamental U.S. Small Company Index ETF. 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. Mr. Sinha also spent time as a software consultant at DPM Mellon, LLC and an equity trader at Jane Street Capital. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Broad Market Index ETF as of February 28, 2021
The Schwab Fundamental U.S. Broad Market Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM US Index (the index). The index measures the performance of the constituent companies by fundamental overall company scores, which are created using as the universe the U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period.
Performance. For the 12-month reporting period ended February 28, 2021, the fund generally tracked the index. The fund’s market price return was 32.62% and its NAV return was 33.35% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 33.61% during the same period.
Contributors and Detractors. The information technology sector contributed the most to the total return of the fund. Stocks in the information technology sector represented an average weight of approximately 19% of the fund’s investments and returned approximately 51% for the reporting period. One example from this sector is Apple Inc. The fund’s holdings of Apple Inc. represented an average weight of approximately 5% of the fund’s investments and returned approximately 79% for the reporting period.
The consumer discretionary sector also contributed to the total return of the fund, representing an average weight of approximately 11% of the fund’s investments and returning approximately 64% for the reporting period.
The utilities sector detracted the most from the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 4% of the fund’s investments and returned approximately -4% for the reporting period. One example from this sector is PG&E Corp., a natural gas and electric service provider. The fund’s holdings of PG&E Corp. represented an average weight of less than 1% of the fund’s investments and returned approximately -32% for the reporting period.
The real estate sector also detracted from the total return of the fund, representing an average weight of approximately 2% of the fund’s investments and returning approximately 8% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Broad Market Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental U.S. Broad Market Index ETF (8/15/13) | |||
| Market Price Return2 | 32.62% | 14.56% | 11.51% |
| NAV Return2 | 33.35% | 14.61% | 11.50% |
| Russell RAFITM US Index | 33.61% | 14.86% | 11.79% |
| Russell 3000® Index | 35.33% | 17.41% | 13.72% |
| ETF Category: Morningstar Large Value3 | 22.52% | 11.52% | N/A |
| Fund Expense Ratio4: 0.25% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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 — The Schwab Fundamental U.S. Broad Market Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ US Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Broad Market Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 1,625 |
| Weighted Average Market Cap (millions) | $232,667 |
| Price/Earnings Ratio (P/E) | 21.9 |
| Price/Book Ratio (P/B) | 2.3 |
| Portfolio Turnover Rate | 14% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | 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. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Large Company Index ETF as of February 28, 2021
The Schwab Fundamental U.S. Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM US Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. U.S. large-cap stocks underperformed U.S. small-cap stocks over the reporting period. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period.
Performance. For the 12-month reporting period ended February 28, 2021, the fund generally tracked the index. The fund’s market price return was 32.06% and its NAV return was 32.40% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 32.68% during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.
Contributors and Detractors. The utilities sector detracted from the total return of the fund. Stocks in the utilities sector represented an average weight of approximately 4% of the fund’s investments and returned approximately -5% for the reporting period. One example from this sector is PG&E Corp., a natural gas and electric service provider. The fund’s holdings of PG&E Corp. represented an average weight of less than 1% of the fund’s investments and returned approximately -32% for the reporting period.
While there were no additional sectors that detracted from the total return of the fund over the reporting period, the real estate sector was the smallest contributor to the total return of the fund, representing an average weight of approximately 2% of the fund’s investments and returning 10% for the reporting period.
The information technology sector contributed the most to the total return of the fund. Stocks in the information technology sector represented an average weight of approximately 19% of the fund’s investments and returned approximately 51% for the reporting period. One example from this sector is Apple Inc. The fund’s holdings of Apple Inc. represented an average weight of approximately 6% of the fund’s investments and returned approximately 79% for the reporting period.
The consumer discretionary sector also contributed to the total return of the fund, representing an average weight of approximately 11% of the fund’s investments and returning approximately 62% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Large Company Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental U.S. Large Company Index ETF (8/15/13) | |||
| Market Price Return2 | 32.06% | 14.56% | 11.53% |
| NAV Return2 | 32.40% | 14.56% | 11.53% |
| Russell RAFITM US Large Company Index | 32.68% | 14.81% | 11.83% |
| Russell 1000® Index | 34.28% | 17.37% | 13.89% |
| ETF Category: Morningstar Large Value3 | 22.52% | 11.52% | N/A |
| Fund Expense Ratio4: 0.25% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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 — The Schwab Fundamental U.S. Large Company Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ US Large Company Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Large Company Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 705 |
| Weighted Average Market Cap (millions) | $254,839 |
| Price/Earnings Ratio (P/E) | 22.0 |
| Price/Book Ratio (P/B) | 2.4 |
| Portfolio Turnover Rate | 13% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | 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. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Small Company Index ETF as of February 28, 2021
The Schwab Fundamental U.S. Small Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM US Small Company Index (the index). The index measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund uses a replication investment approach and generally gives the same weight to a given stock as the index does. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. U.S. small-cap stocks outperformed U.S. large-cap stocks over the reporting period. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period.
Performance. For the 12-month reporting period ended February 28, 2021, the fund generally tracked the index. The fund’s market price return was 42.80% and the fund’s NAV return was 42.73% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 42.76% during the same period.
Contributors and Detractors. The consumer discretionary sector contributed the most to the total return of the fund. Stocks in the consumer discretionary sector represented an average weight of approximately 15% of the fund’s investments and returned approximately 74% for the reporting period. One example from this sector is Tupperware Brands Corp. The fund’s holdings of Tupperware Brands Corp. represented an average weight of less than 1% of the fund’s investments and returned approximately 973% for the reporting period.
The industrials sector also contributed to the total return of the fund, representing an average weight of approximately 19% of the fund’s investments and returning approximately 44% for the reporting period.
The real estate sector detracted the most from the total return of the fund. Stocks in the real estate sector represented an average weight of approximately 10% of the fund’s investments and returned approximately 2% for the reporting period. One example from this sector is Apple Hospitality REIT, Inc., a REIT that owns a portfolio of upscale, select service hotels. The fund’s holdings of Apple Hospitality REIT, Inc. represented an average weight of less than 1% of the fund’s investments and returned approximately -59% for the reporting period.
The utilities sector also detracted from the total return of the fund, representing an average weight of approximately 3% of the fund’s investments and returning approximately -1% for the reporting period.
Management views and portfolio holdings may have changed since the report date.
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Small Company Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental U.S. Small Company Index ETF (8/15/13) | |||
| Market Price Return2 | 42.80% | 14.67% | 10.79% |
| NAV Return2 | 42.73% | 14.64% | 10.78% |
| Russell RAFITM US Small Company Index | 42.76% | 14.84% | 11.02% |
| Russell 2000® Index | 51.00% | 17.92% | 11.85% |
| ETF Category: Morningstar Small Blend3 | 41.65% | 14.46% | N/A |
| Fund Expense Ratio4: 0.25% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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 — The Schwab Fundamental U.S. Small Company Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ US Small Company Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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 Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Small Company Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 921 |
| Weighted Average Market Cap (millions) | $7,811 |
| Price/Earnings Ratio (P/E) | 20.9 |
| Price/Book Ratio (P/B) | 1.9 |
| Portfolio Turnover Rate | 24% 2 |
Sector Weightings % of Investments3
Top Equity Holdings % of Net Assets4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | 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. |
| 4 | This list is not a recommendation of any security by the investment adviser. |
15
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Large Company Index ETF as of February 28, 2021
The Schwab Fundamental International Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM Developed ex US Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Total Global Cap Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. Overall, stocks of large companies in developed international markets generated positive returns for the reporting period. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period. International equities also posted strong gains. The U.S. dollar strengthened against a basket of foreign currencies in March when the COVID-19 pandemic began before generally weakening throughout the remainder of the reporting period, generally enhancing the return of overseas investments in U.S. dollar terms.
Performance. For the 12-month reporting period ended February 28, 2021, the fund’s market price return was 25.49% and its NAV return was 25.47% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 25.59%1 during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.
Contributors and Detractors. Stocks from Singapore detracted from the total return of the fund. Stocks from Singapore represented an average weight of less than 1% of the fund’s investments and returned approximately 7% in U.S. dollar terms for the reporting period. One example from this market is Singapore Telecommunications Ltd., a telecommunications company that offers a diverse range of services including fixed, mobile, data, internet, TV, and digital solutions. The fund’s holdings of Singapore Telecommunications Ltd. represented less than 1% of the fund’s investments and returned approximately -14% in U.S. dollar terms for the reporting period.
While there we no additional countries that detracted from the total return of the fund over the reporting period, stocks from Ireland contributed the least to the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately 12% in U.S. dollar terms for the reporting period.
Stocks from Japan contributed the most to the total return of the fund. Japanese stocks represented an average weight of 25% of the fund’s investments and returned approximately 24% in U.S. dollar terms for the reporting period. One example from this market is SoftBank Group Corp., a multinational conglomerate holding company. The fund’s holdings of SoftBank Group Corp. represented an average weight of less than 1% of the fund’s investments and returned approximately 102% in U.S. dollar terms for the reporting period.
Stocks from South Korea also contributed to the total return of the fund, representing an average weight of approximately 7% of the fund’s investments and returning approximately 72% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
16
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Large Company Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental International Large Company Index ETF (8/15/13) | |||
| Market Price Return2 | 25.49% | 10.05% | 5.27% |
| NAV Return2 | 25.47% | 9.93% | 5.26% |
| Russell RAFITM Developed ex US Large Company Index (Net)3 | 25.59% | 9.98% | 5.38% |
| MSCI EAFE® Index (Net)3 | 22.46% | 9.73% | 5.37% |
| ETF Category: Morningstar Foreign Large Value4 | 17.86% | 7.68% | N/A |
| Fund Expense Ratio5: 0.25% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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 — The Schwab Fundamental International Large Company Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Developed ex US Large Company Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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 net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 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. |
17
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Large Company Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 927 |
| Weighted Average Market Cap (millions) | $66,156 |
| Price/Earnings Ratio (P/E) | 16.8 |
| Price/Book Ratio (P/B) | 1.1 |
| Portfolio Turnover Rate | 15% 2 |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets3
Country Weightings % of Investments4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 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. |
18
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Small Company Index ETF as of February 28, 2021
The Schwab Fundamental International Small Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM Developed ex US Small Company Index (the index). The index measures the performance of the small company size segment by fundamental overall company scores, which are created using as the universe the developed ex U.S. companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. Overall, stocks of small companies in developed international markets generated positive returns for the reporting period. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period. International equities also posted strong gains. The U.S. dollar strengthened against a basket of foreign currencies in March when the COVID-19 pandemic began before generally weakening throughout the remainder of the reporting period, generally enhancing the return of overseas investments in U.S. dollar terms.
Performance. For the 12-month reporting period ended February 28, 2021, the fund’s market price return was 29.54% and its NAV return was 28.97% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 29.22%1 during the same period.
Contributors and Detractors. Stocks from Japan contributed the most to the total return of the fund. Japanese stocks represented an average weight of approximately 34% of the fund’s investments and returned approximately 22% in U.S. dollar terms for the reporting period. One example from this market is Ibiden Co., Ltd., an electronics company. The fund’s holdings of Ibiden, Co., Ltd. represented an average weight of less than 1% of the fund’s investments and returned approximately 149% in U.S. dollar terms for the reporting period.
Stocks from South Korea also contributed to the total return of the fund, representing an average weight of approximately 6% of the fund’s investments and returning approximately 73% in U.S. dollar terms for the reporting period.
Stocks from Singapore detracted from the total return of the fund. Stocks from Singapore represented an average weight of approximately 2% of the fund’s investments and returned approximately 6% in U.S. dollar terms for the reporting period. One example from this market is Sembcorp Marine Ltd., a global marine and offshore engineering group. The fund’s holdings of Sembcorp Marine Ltd. represented an average weight of less than 1% of the fund’s investments and returned approximately -77% in U.S. dollar terms for the reporting period.
While there were no additional countries that detracted from the total return of the fund over the reporting period, stocks from Israel contributed the least to the total return of the fund, representing an average weight of approximately 1% of the fund’s investments and returning approximately 8% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
19
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Small Company Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental International Small Company Index ETF (8/15/13) | |||
| Market Price Return2 | 29.54% | 10.36% | 6.96% |
| NAV Return2 | 28.97% | 10.22% | 6.96% |
| Russell RAFITM Developed ex US Small Company Index (Net)3 | 29.22% | 10.44% | 7.33% |
| S&P Developed ex-U.S. Small Cap Index (Net)3 | 33.68% | 11.61% | 8.04% |
| ETF Category: Morningstar Foreign Small/Mid Blend4 | 29.18% | 10.22% | N/A |
| Fund Expense Ratio5: 0.39% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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.
Small-company stocks may be subject to greater volatility than many other asset classes.
Index ownership — The Schwab Fundamental International Small Company Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Developed ex US Small Company Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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 net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 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. |
20
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental International Small Company Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 1,591 |
| Weighted Average Market Cap (millions) | $4,071 |
| Price/Earnings Ratio (P/E) | 15.8 |
| Price/Book Ratio (P/B) | 1.1 |
| Portfolio Turnover Rate | 24% 2 |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets3
Country Weightings % of Investments4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 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. |
21
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Emerging Markets Large Company Index ETF as of February 28, 2021
The Schwab Fundamental Emerging Markets Large Company Index ETF (the fund) seeks to track as closely as possible, before fees and expenses, the total return of the Russell RAFITM Emerging Markets Large Company Index (the index). The index measures the performance of the large company size segment by fundamental overall company scores, which are created using as the universe the emerging markets companies in the FTSE Global Total Cap Index. To pursue its investment objective, the fund invests in a representative sample of the securities included in the index which, when taken together, are expected to perform similarly to the index as a whole. Due to the use of sampling techniques, the fund may not hold all of the securities in the index. For more information concerning the fund’s investment objective, strategies, and risks, please see the fund’s prospectus.
Market Highlights. Stocks in emerging markets produced positive returns for the reporting period. For the 12-month reporting period ended February 28, 2021, U.S. and international equity markets generated strong returns amid historic volatility driven by the COVID-19 pandemic, which began impacting global economies in the week prior to the start of the reporting period, prompting dramatic social distancing restrictions and shuttering businesses. As equity markets fell steeply in late February and March 2020, governments and central banks around the world began passing extensive emergency rescue and fiscal stimulus measures in an effort to support their economies. The extraordinary response prompted a rally in global equity markets from their March lows, particularly in the U.S. Despite a resurgence of COVID-19 cases in the fall and into winter, markets were buoyed by the initial distribution of COVID-19 vaccines in December 2020 and the expanded rollout in 2021. The COVID-19 vaccine rollout helped to fuel the early stages of a shift in the market towards cyclical sectors, beginning in November and December and continuing through the remainder of the reporting period. Major market indices achieved repeated record highs over the second half of the reporting period. International equities also posted strong gains. The U.S. dollar strengthened against a basket of foreign currencies in March when the COVID-19 pandemic began before generally weakening throughout the remainder of the reporting period, generally enhancing the return of overseas investments in U.S. dollar terms.
Performance. For the 12-month reporting period ended February 28, 2021, the fund’s market price return was 18.38% and its NAV return was 19.12% (for an explanation of the market price and NAV returns, please refer to footnote 2 on the following page). The index returned 20.02%1 during the same period. Differences between the return of the fund and the return of the index may be attributable to, among other things, the trading and management costs incurred by the fund and not the index.
Contributors and Detractors. Stocks from Brazil detracted the most from the total return of the fund. Brazilian stocks represented an average weight of approximately 9% of the fund’s investments and returned approximately -16% in U.S. dollar terms for the reporting period. One example from this market is Itau Unibanco Holding S.A., a financial products and services company. The fund’s holdings of Itau Unibanco Holdings S.A. represented an average weight of approximately 1% of the fund’s investments and returned approximately -34% in U.S. dollar terms for the reporting period.
Stocks from Greece also detracted from the total return of the fund, representing an average weight of less than 1% of the fund’s investments and returning approximately -29% in U.S. dollar terms for the reporting period.
Stocks from Taiwan contributed the most to the total return of the fund. Taiwanese stocks represented an average weight of approximately 20% of the fund’s investments and returned approximately 68% in U.S. dollar terms for the reporting period. One example from this market is Taiwan Semiconductor Manufacturing Co., Ltd. The fund’s holdings of Taiwan Semiconductor Manufacturing Co., Ltd. represented an average weight of approximately 5% of the fund’s investments and returned approximately 114% in U.S. dollar terms for the reporting period.
Stocks from China also contributed to the total return of the fund, representing an average weight of approximately 30% of the fund’s investments and returning approximately 15% in U.S. dollar terms for the reporting period.
Management views and portfolio holdings may have changed since the report date.
| 1 | The total return cited for the index is calculated net of foreign withholding taxes. |
22
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Emerging Markets Large Company Index ETF
Performance and Fund Facts as of February 28, 2021
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment return and principal value of an investment will fluctuate so that an investor’s shares, when sold or redeemed, may be worth more or less than the original cost. Current performance may be lower or higher than the performance quoted. To obtain performance information current to the most recent month end, please visit www.schwabfunds.com/schwabetfs_prospectus.
Performance of Hypothetical $10,000 Investment (August 15, 2013 – February 28, 2021)1
Average Annual Total Returns1
| Fund and Inception Date | 1 Year | 5 Years | Since Inception* |
| Fund: Schwab Fundamental Emerging Markets Large Company Index ETF (8/15/13) | |||
| Market Price Return2 | 18.38% | 13.55% | 4.48% |
| NAV Return2 | 19.12% | 13.65% | 4.52% |
| Russell RAFITM Emerging Markets Large Company Index (Net)3 | 20.02% | 14.32% | 5.15% |
| MSCI Emerging Markets Index (Net)3 | 36.05% | 15.24% | 6.83% |
| ETF Category: Morningstar Diversified Emerging Markets4 | 34.85% | 14.19% | N/A |
| Fund Expense Ratio5: 0.39% | |||
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.
The first index listed for the fund is the fund’s primary benchmark, as shown in the prospectus. Additional indices shown are provided for comparative purposes.
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.
Emerging markets involve heightened risks related to the same factors as international investing, as well as increased volatility and lower trading volume.
Index ownership — The Schwab Fundamental Emerging Markets Large Company Index ETF is not in any way sponsored, endorsed, sold or promoted by Frank Russell Company (Russell), by the London Stock Exchange Group companies (LSEG), or by Research Affiliates LLC (RA) (collectively the Licensor Parties), and none of the Licensor Parties make any warranty or representation whatsoever, expressly or impliedly, either as to the results to be obtained from the use of the Russell RAFI™ Emerging Markets Large Company Index (the Index) or otherwise. The Index is compiled and calculated by Russell in conjunction with RA. None of the Licensor Parties shall be liable (whether in negligence or otherwise) to any person for any error in the Index and none of the Licensor Parties shall be under any obligation to advise any person of any error therein. “Russell®” is a trademark of Russell. The trade names “Research Affiliates®”, “Fundamental Index®” and “RAFI®” are registered trademarks of RA. CSIM has obtained full license from Russell to use the Index. For full disclaimer please see the fund’s statement of additional information.
| * | Inception (8/15/13) 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 net version of the index reflects reinvested dividends net of withholding taxes, but reflects no deductions for expenses or other taxes. |
| 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. |
23
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Emerging Markets Large Company Index ETF
Performance and Fund Facts as of February 28, 2021 (continued)
Statistics1
| Number of Holdings | 313 |
| Weighted Average Market Cap (millions) | $91,926 |
| Price/Earnings Ratio (P/E) | 8.9 |
| Price/Book Ratio (P/B) | 0.9 |
| Portfolio Turnover Rate | 25% 2 |
Sector Weightings % of Investments1
Top Equity Holdings % of Net Assets3
Country Weightings % of Investments4
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 | Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions. |
| 3 | This list is not a recommendation of any security by the investment adviser. |
| 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. |
24
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Index 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, 2020 and held through February 28, 2021.
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 9/1/20 | Ending Account Value (Net of Expenses) at 2/28/21 | Expenses Paid During Period 9/1/20-2/28/212 | |
| Schwab Fundamental U.S. Broad Market Index ETF | ||||
| Actual Return | 0.25% | $1,000.00 | $1,225.60 | $1.38 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.56 | $1.25 |
| Schwab Fundamental U.S. Large Company Index ETF | ||||
| Actual Return | 0.25% | $1,000.00 | $1,209.60 | $1.37 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.56 | $1.25 |
| Schwab Fundamental U.S. Small Company Index ETF | ||||
| Actual Return | 0.25% | $1,000.00 | $1,413.70 | $1.50 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.56 | $1.25 |
| Schwab Fundamental International Large Company Index ETF | ||||
| Actual Return | 0.25% | $1,000.00 | $1,234.60 | $1.39 |
| Hypothetical 5% Return | 0.25% | $1,000.00 | $1,023.56 | $1.25 |
| Schwab Fundamental International Small Company Index ETF | ||||
| Actual Return | 0.39% | $1,000.00 | $1,211.40 | $2.14 |
| Hypothetical 5% Return | 0.39% | $1,000.00 | $1,022.87 | $1.96 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | ||||
| Actual Return | 0.39% | $1,000.00 | $1,236.80 | $2.16 |
| Hypothetical 5% Return | 0.39% | $1,000.00 | $1,022.87 | $1.96 |
| 1 | Based on the most recent six-month expense ratio. |
| 2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 181 days of the period, and divided by 365 days of the fiscal year. |
25
Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental U.S. Broad Market Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $37.17 | $37.60 | $36.95 | $33.82 | $27.37 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.92 | 0.94 | 0.84 | 0.75 | 0.67 | |
| Net realized and unrealized gains (losses) | 11.13 | (0.43) | 0.62 | 3.09 | 6.45 | |
| Total from investment operations | 12.05 | 0.51 | 1.46 | 3.84 | 7.12 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.96) | (0.94) | (0.81) | (0.71) | (0.67) | |
| Net asset value at end of period | $48.26 | $37.17 | $37.60 | $36.95 | $33.82 | |
| Total return | 33.35% | 1.25% | 3.98% | 11.51% | 26.32% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.32% | |
| Net investment income (loss) | 2.36% | 2.38% | 2.26% | 2.14% | 2.17% | |
| Portfolio turnover rate2 | 14% | 13% | 11% | 10% | 10% | |
| Net assets, end of period (x 1,000) | $284,726 | $262,018 | $276,382 | $260,469 | $263,785 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
26
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 99.7% of net assets | ||
| Automobiles & Components 2.3% | ||
| Adient plc * | 4,957 | 183,806 |
| American Axle & Manufacturing Holdings, Inc. * | 5,917 | 57,809 |
| Aptiv plc * | 2,494 | 373,701 |
| Autoliv, Inc. * | 1,402 | 126,180 |
| BorgWarner, Inc. | 5,142 | 231,390 |
| Cooper Tire & Rubber Co. | 1,616 | 92,500 |
| Cooper-Standard Holding, Inc. * | 2,004 | 71,783 |
| Dana, Inc. | 3,736 | 88,954 |
| Dorman Products, Inc. * | 251 | 25,027 |
| Ford Motor Co. * | 159,651 | 1,867,917 |
| Fox Factory Holding Corp. * | 91 | 11,571 |
| General Motors Co. | 39,383 | 2,021,529 |
| Gentex Corp. | 2,524 | 89,299 |
| Gentherm, Inc. * | 382 | 27,042 |
| Harley-Davidson, Inc. | 3,080 | 109,864 |
| LCI Industries | 280 | 39,463 |
| Lear Corp. | 1,691 | 280,858 |
| Modine Manufacturing Co. * | 2,122 | 29,432 |
| Patrick Industries, Inc. | 228 | 17,996 |
| Standard Motor Products, Inc. | 359 | 15,082 |
| Stoneridge, Inc. * | 346 | 10,608 |
| Tenneco, Inc., Class A * | 4,736 | 52,759 |
| Tesla, Inc. * | 125 | 84,437 |
| The Goodyear Tire & Rubber Co. * | 21,463 | 360,793 |
| Thor Industries, Inc. | 941 | 110,153 |
| Veoneer, Inc. * | 1,748 | 48,035 |
| Visteon Corp. * | 1,252 | 159,217 |
| Winnebago Industries, Inc. | 271 | 18,862 |
| 6,606,067 | ||
| Banks 7.1% | ||
| Associated Banc-Corp. | 1,749 | 35,242 |
| Atlantic Union Bankshares Corp. | 399 | 14,655 |
| Axos Financial, Inc. * | 322 | 14,899 |
| BancorpSouth Bank | 857 | 25,761 |
| Bank of America Corp. | 72,558 | 2,518,488 |
| Bank of Hawaii Corp. | 337 | 29,488 |
| Bank OZK | 979 | 40,354 |
| BankUnited, Inc. | 1,351 | 54,297 |
| Banner Corp. | 295 | 15,275 |
| Berkshire Hills Bancorp, Inc. | 532 | 10,725 |
| BOK Financial Corp. | 273 | 23,494 |
| Boston Private Financial Holdings, Inc. | 1,261 | 17,351 |
| Brookline Bancorp, Inc. | 670 | 9,534 |
| Cadence BanCorp | 751 | 15,411 |
| Capitol Federal Financial, Inc. | 1,165 | 15,506 |
| Cathay General Bancorp | 663 | 24,955 |
| Central Pacific Financial Corp. | 445 | 10,070 |
| CIT Group, Inc. | 4,155 | 188,429 |
| Citigroup, Inc. | 41,911 | 2,761,097 |
| Citizens Financial Group, Inc. | 6,918 | 300,518 |
| Columbia Banking System, Inc. | 557 | 24,670 |
| Security | Number of Shares | Value ($) |
| Comerica, Inc. | 2,397 | 163,236 |
| Commerce Bancshares, Inc. | 481 | 35,608 |
| Community Bank System, Inc. | 223 | 15,875 |
| Credicorp Ltd. | 598 | 95,686 |
| Cullen/Frost Bankers, Inc. | 387 | 40,403 |
| CVB Financial Corp. | 595 | 12,739 |
| Eagle Bancorp, Inc. | 210 | 10,267 |
| East West Bancorp, Inc. | 1,099 | 79,304 |
| Essent Group Ltd. | 418 | 17,234 |
| F.N.B. Corp. | 3,498 | 41,381 |
| Federal Agricultural Mortgage Corp., Class C | 106 | 9,143 |
| Fifth Third Bancorp | 11,929 | 413,817 |
| First BanCorp | 1,747 | 18,326 |
| First Citizens BancShares, Inc., Class A | 44 | 32,467 |
| First Commonwealth Financial Corp. | 856 | 11,479 |
| First Financial Bancorp | 686 | 15,387 |
| First Financial Bankshares, Inc. | 350 | 15,631 |
| First Hawaiian, Inc. | 1,279 | 35,671 |
| First Horizon Corp. | 4,685 | 75,897 |
| First Interstate BancSystem, Inc., Class A | 221 | 10,038 |
| First Merchants Corp. | 281 | 11,816 |
| First Midwest Bancorp, Inc. | 850 | 16,813 |
| First Republic Bank | 475 | 78,256 |
| Flagstar Bancorp, Inc. | 298 | 12,930 |
| Fulton Financial Corp. | 1,980 | 30,591 |
| Glacier Bancorp, Inc. | 403 | 21,843 |
| Great Western Bancorp, Inc. | 862 | 23,127 |
| Hancock Whitney Corp. | 982 | 37,071 |
| Heartland Financial USA, Inc. | 212 | 9,909 |
| Hilltop Holdings, Inc. | 573 | 18,932 |
| Home BancShares, Inc. | 1,062 | 25,955 |
| Hope Bancorp, Inc. | 1,495 | 19,674 |
| Huntington Bancshares, Inc. | 10,138 | 155,517 |
| Independent Bank Corp. | 127 | 10,860 |
| International Bancshares Corp. | 453 | 19,742 |
| Investors Bancorp, Inc. | 2,042 | 27,240 |
| JPMorgan Chase & Co. | 30,553 | 4,496,485 |
| KeyCorp | 10,185 | 205,126 |
| M&T Bank Corp. | 1,723 | 260,070 |
| MGIC Investment Corp. | 3,750 | 45,675 |
| National Bank Holdings Corp., Class A | 253 | 9,804 |
| NBT Bancorp, Inc. | 322 | 11,666 |
| New York Community Bancorp, Inc. | 5,961 | 72,784 |
| Northwest Bancshares, Inc. | 1,039 | 14,671 |
| OFG Bancorp | 708 | 13,671 |
| Old National Bancorp | 1,202 | 21,792 |
| PacWest Bancorp | 2,041 | 73,966 |
| Park National Corp. | 102 | 12,648 |
| People's United Financial, Inc. | 3,600 | 64,584 |
| Pinnacle Financial Partners, Inc. | 319 | 25,893 |
| Popular, Inc. | 906 | 60,539 |
| Prosperity Bancshares, Inc. | 438 | 32,180 |
| Provident Financial Services, Inc. | 635 | 12,846 |
| Radian Group, Inc. | 2,094 | 42,718 |
| Regions Financial Corp. | 11,720 | 241,784 |
| Renasant Corp. | 353 | 13,866 |
| S&T Bancorp, Inc. | 315 | 9,097 |
| Sandy Spring Bancorp, Inc. | 268 | 10,071 |
27
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Signature Bank | 290 | 63,319 |
| Simmons First National Corp., Class A | 555 | 16,250 |
| South State Corp. | 236 | 18,611 |
| Sterling Bancorp | 1,162 | 25,366 |
| SVB Financial Group * | 178 | 89,954 |
| Synovus Financial Corp. | 1,694 | 71,673 |
| TCF Financial Corp. | 497 | 22,276 |
| Texas Capital Bancshares, Inc. * | 417 | 31,775 |
| The Bank of NT Butterfield & Son Ltd. | 482 | 17,588 |
| The PNC Financial Services Group, Inc. | 4,815 | 810,653 |
| Towne Bank | 428 | 12,344 |
| Truist Financial Corp. | 8,080 | 460,237 |
| Trustmark Corp. | 600 | 18,096 |
| U.S. Bancorp | 17,716 | 885,800 |
| UMB Financial Corp. | 282 | 23,792 |
| Umpqua Holdings Corp. | 2,683 | 45,799 |
| United Bankshares, Inc. | 787 | 29,080 |
| United Community Banks, Inc. | 500 | 16,530 |
| Valley National Bancorp | 2,676 | 32,781 |
| Walker & Dunlop, Inc. | 307 | 30,596 |
| Washington Federal, Inc. | 1,002 | 30,280 |
| Webster Financial Corp. | 850 | 47,014 |
| Wells Fargo & Co. | 97,347 | 3,521,041 |
| WesBanco, Inc. | 389 | 12,557 |
| Westamerica BanCorp | 126 | 7,574 |
| Western Alliance Bancorp | 400 | 36,604 |
| Wintrust Financial Corp. | 466 | 34,326 |
| WSFS Financial Corp. | 227 | 12,063 |
| Zions Bancorp NA | 1,619 | 86,082 |
| 20,082,081 | ||
| Capital Goods 8.5% | ||
| 3M Co. | 6,046 | 1,058,413 |
| A.O. Smith Corp. | 1,152 | 68,394 |
| AAON, Inc. | 157 | 12,105 |
| AAR Corp. | 1,001 | 39,820 |
| Acuity Brands, Inc. | 594 | 73,240 |
| Advanced Drainage Systems, Inc. | 138 | 15,183 |
| AECOM * | 2,500 | 144,725 |
| Aegion Corp. * | 853 | 22,050 |
| AerCap Holdings N.V. * | 2,960 | 142,613 |
| Aerojet Rocketdyne Holdings, Inc. * | 264 | 13,535 |
| AGCO Corp. | 1,307 | 169,230 |
| Air Lease Corp. | 1,070 | 49,070 |
| Alamo Group, Inc. | 111 | 16,942 |
| Albany International Corp., Class A | 231 | 18,261 |
| Allegion plc | 345 | 37,529 |
| Allison Transmission Holdings, Inc. | 1,929 | 73,148 |
| Altra Industrial Motion Corp. | 351 | 20,330 |
| American Woodmark Corp. * | 172 | 16,066 |
| AMETEK, Inc. | 1,112 | 131,183 |
| Apogee Enterprises, Inc. | 743 | 27,788 |
| Applied Industrial Technologies, Inc. | 534 | 45,588 |
| Arcosa, Inc. | 767 | 43,512 |
| Argan, Inc. | 253 | 12,655 |
| Armstrong World Industries, Inc. | 285 | 24,390 |
| Astec Industries, Inc. | 354 | 24,044 |
| Astronics Corp. * | 619 | 9,780 |
| Atkore, Inc. * | 491 | 33,216 |
| AZZ, Inc. | 399 | 20,385 |
| Barnes Group, Inc. | 603 | 31,567 |
| Beacon Roofing Supply, Inc. * | 1,192 | 57,013 |
| Boise Cascade Co. | 973 | 48,592 |
| Builders FirstSource, Inc. * | 2,196 | 95,010 |
| BWX Technologies, Inc. | 506 | 29,353 |
| CAI International, Inc. | 320 | 14,080 |
| Carlisle Cos., Inc. | 549 | 79,742 |
| Security | Number of Shares | Value ($) |
| Carrier Global Corp. | 5,592 | 204,276 |
| Caterpillar, Inc. | 5,304 | 1,145,027 |
| Chart Industries, Inc. * | 181 | 25,899 |
| CIRCOR International, Inc. * | 316 | 11,253 |
| Colfax Corp. * | 1,165 | 51,668 |
| Columbus McKinnon Corp. | 238 | 11,981 |
| Comfort Systems USA, Inc. | 453 | 28,059 |
| Crane Co. | 576 | 48,303 |
| Cubic Corp. | 310 | 21,529 |
| Cummins, Inc. | 1,959 | 496,019 |
| Curtiss-Wright Corp. | 415 | 45,853 |
| Deere & Co. | 2,670 | 932,150 |
| Donaldson Co., Inc. | 1,093 | 64,389 |
| Douglas Dynamics, Inc. | 208 | 10,021 |
| Dover Corp. | 1,215 | 149,761 |
| DXP Enterprises, Inc. * | 467 | 14,029 |
| Dycom Industries, Inc. * | 658 | 50,390 |
| Eaton Corp. plc | 4,845 | 630,771 |
| EMCOR Group, Inc. | 967 | 94,157 |
| Emerson Electric Co. | 6,873 | 590,391 |
| Encore Wire Corp. | 378 | 24,770 |
| Enerpac Tool Group Corp. | 803 | 19,834 |
| EnerSys | 559 | 50,466 |
| EnPro Industries, Inc. | 283 | 22,736 |
| ESCO Technologies, Inc. | 123 | 12,997 |
| Fastenal Co. | 3,035 | 140,733 |
| Federal Signal Corp. | 444 | 16,166 |
| Flowserve Corp. | 1,958 | 72,446 |
| Fluor Corp. * | 15,108 | 259,253 |
| Fortive Corp. | 1,335 | 87,870 |
| Fortune Brands Home & Security, Inc. | 1,349 | 112,156 |
| Franklin Electric Co., Inc. | 339 | 25,445 |
| GATX Corp. | 688 | 65,656 |
| Generac Holdings, Inc. * | 171 | 56,355 |
| General Dynamics Corp. | 3,473 | 567,731 |
| General Electric Co. | 199,005 | 2,495,523 |
| Gibraltar Industries, Inc. * | 228 | 19,916 |
| GMS, Inc. * | 722 | 26,425 |
| Graco, Inc. | 815 | 56,520 |
| Granite Construction, Inc. | 1,608 | 55,283 |
| Griffon Corp. | 769 | 18,917 |
| H&E Equipment Services, Inc. | 826 | 25,548 |
| HEICO Corp. | 84 | 10,565 |
| HEICO Corp., Class A | 160 | 18,522 |
| Herc Holdings, Inc. * | 464 | 40,721 |
| Hexcel Corp. * | 1,186 | 63,759 |
| Hillenbrand, Inc. | 876 | 40,699 |
| Honeywell International, Inc. | 4,855 | 982,409 |
| Howmet Aerospace, Inc. * | 5,623 | 158,063 |
| Hubbell, Inc. | 515 | 91,418 |
| Huntington Ingalls Industries, Inc. | 582 | 102,380 |
| Hyster-Yale Materials Handling, Inc. | 294 | 25,152 |
| IDEX Corp. | 367 | 71,627 |
| Illinois Tool Works, Inc. | 2,501 | 505,652 |
| Ingersoll Rand, Inc. * | 483 | 22,382 |
| Insteel Industries, Inc. | 411 | 12,692 |
| ITT, Inc. | 710 | 58,916 |
| JELD-WEN Holding, Inc. * | 1,079 | 31,992 |
| John Bean Technologies Corp. | 152 | 22,431 |
| Johnson Controls International plc | 8,860 | 494,299 |
| Kadant, Inc. | 71 | 12,354 |
| Kaman Corp. | 437 | 21,264 |
| Kennametal, Inc. | 930 | 34,745 |
| L3Harris Technologies, Inc. | 627 | 114,058 |
| Lennox International, Inc. | 189 | 52,877 |
| Lincoln Electric Holdings, Inc. | 638 | 75,354 |
| Lindsay Corp. | 117 | 18,749 |
| Lockheed Martin Corp. | 1,473 | 486,458 |
28
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Lydall, Inc. * | 475 | 16,544 |
| Masco Corp. | 1,850 | 98,457 |
| Masonite International Corp. * | 317 | 34,781 |
| MasTec, Inc. * | 891 | 77,294 |
| Matrix Service Co. * | 1,319 | 17,899 |
| Maxar Technologies, Inc. | 691 | 33,064 |
| McGrath RentCorp | 213 | 16,542 |
| Meritor, Inc. * | 920 | 27,940 |
| Moog, Inc., Class A | 587 | 45,586 |
| MRC Global, Inc. * | 3,817 | 33,361 |
| MSC Industrial Direct Co., Inc., Class A | 725 | 62,444 |
| Mueller Industries, Inc. | 1,056 | 42,916 |
| Mueller Water Products, Inc., Class A | 1,463 | 18,858 |
| MYR Group, Inc. * | 422 | 24,877 |
| National Presto Industries, Inc. | 90 | 9,210 |
| Navistar International Corp. * | 324 | 14,275 |
| Nordson Corp. | 262 | 50,411 |
| Northrop Grumman Corp. | 1,296 | 377,991 |
| NOW, Inc. * | 4,566 | 48,537 |
| nVent Electric plc | 2,007 | 52,704 |
| Oshkosh Corp. | 1,087 | 115,222 |
| Otis Worldwide Corp. | 3,215 | 204,828 |
| Owens Corning | 1,696 | 137,410 |
| PACCAR, Inc. | 3,961 | 360,411 |
| Parker-Hannifin Corp. | 1,073 | 307,908 |
| Pentair plc | 1,584 | 88,593 |
| Primoris Services Corp. | 1,080 | 36,148 |
| Proto Labs, Inc. * | 69 | 10,052 |
| Quanex Building Products Corp. | 738 | 17,956 |
| Quanta Services, Inc. | 2,409 | 201,995 |
| Raven Industries, Inc. | 369 | 14,465 |
| Raytheon Technologies Corp. | 16,984 | 1,222,678 |
| RBC Bearings, Inc. * | 97 | 19,309 |
| Regal Beloit Corp. | 584 | 79,815 |
| Resideo Technologies, Inc. * | 4,450 | 106,889 |
| REV Group, Inc. | 993 | 12,333 |
| Rexnord Corp. | 721 | 32,409 |
| Rockwell Automation, Inc. | 770 | 187,326 |
| Roper Technologies, Inc. | 269 | 101,580 |
| Rush Enterprises, Inc., Class A | 1,242 | 52,698 |
| Sensata Technologies Holding plc * | 1,296 | 74,248 |
| Simpson Manufacturing Co., Inc. | 274 | 26,704 |
| SiteOne Landscape Supply, Inc. * | 100 | 15,851 |
| Snap-on, Inc. | 647 | 131,412 |
| Spirit AeroSystems Holdings, Inc., Class A | 3,840 | 164,467 |
| SPX FLOW, Inc. * | 454 | 27,948 |
| Standex International Corp. | 177 | 17,357 |
| Stanley Black & Decker, Inc. | 1,226 | 214,354 |
| Teledyne Technologies, Inc. * | 121 | 44,891 |
| Tennant Co. | 144 | 10,973 |
| Terex Corp. | 1,807 | 74,412 |
| Textron, Inc. | 4,453 | 224,164 |
| The Boeing Co. * | 6,368 | 1,350,080 |
| The Greenbrier Cos., Inc. | 1,433 | 67,423 |
| The Manitowoc Co., Inc. * | 744 | 12,120 |
| The Middleby Corp. * | 404 | 59,150 |
| The Timken Co. | 887 | 69,496 |
| The Toro Co. | 624 | 62,880 |
| Titan Machinery, Inc. * | 749 | 18,350 |
| Trane Technologies plc | 2,116 | 324,256 |
| TransDigm Group, Inc. * | 248 | 143,014 |
| Trex Co., Inc. * | 224 | 20,527 |
| TriMas Corp. * | 413 | 13,873 |
| Trinity Industries, Inc. | 2,339 | 75,082 |
| Triton International Ltd. | 692 | 39,984 |
| Tutor Perini Corp. * | 2,867 | 42,145 |
| UFP Industries, Inc. | 868 | 52,948 |
| United Rentals, Inc. * | 1,185 | 352,395 |
| Security | Number of Shares | Value ($) |
| Univar Solutions, Inc. * | 2,897 | 57,679 |
| Valmont Industries, Inc. | 364 | 86,097 |
| Vectrus, Inc. * | 177 | 9,664 |
| W.W. Grainger, Inc. | 470 | 175,174 |
| Wabash National Corp. | 2,024 | 33,558 |
| Watsco, Inc. | 306 | 74,389 |
| Watts Water Technologies, Inc., Class A | 197 | 22,476 |
| Welbilt, Inc. * | 1,450 | 23,171 |
| WESCO International, Inc. * | 2,418 | 194,117 |
| Westinghouse Air Brake Technologies Corp. | 805 | 58,306 |
| Woodward, Inc. | 387 | 44,203 |
| Xylem, Inc. | 905 | 90,102 |
| 24,159,918 | ||
| Commercial & Professional Services 1.2% | ||
| ABM Industries, Inc. | 1,242 | 53,630 |
| ACCO Brands Corp. | 2,609 | 21,133 |
| ADT, Inc. | 1,376 | 10,471 |
| ASGN, Inc. * | 481 | 44,719 |
| Booz Allen Hamilton Holding Corp. | 726 | 56,004 |
| Brady Corp., Class A | 414 | 21,698 |
| CACI International, Inc., Class A * | 187 | 41,391 |
| CBIZ, Inc. * | 429 | 12,934 |
| Cimpress plc * | 118 | 11,691 |
| Cintas Corp. | 379 | 122,925 |
| Clean Harbors, Inc. * | 547 | 46,577 |
| Copart, Inc. * | 395 | 43,118 |
| CoreCivic, Inc. | 4,732 | 33,976 |
| CoreLogic, Inc. | 584 | 49,441 |
| CoStar Group, Inc. * | 29 | 23,889 |
| Covanta Holding Corp. | 2,288 | 32,146 |
| Deluxe Corp. | 1,519 | 60,046 |
| Equifax, Inc. | 514 | 83,206 |
| Exponent, Inc. | 129 | 12,445 |
| FTI Consulting, Inc. * | 261 | 29,898 |
| Harsco Corp. * | 1,326 | 21,693 |
| Healthcare Services Group, Inc. | 1,089 | 30,982 |
| Herman Miller, Inc. | 1,105 | 42,382 |
| HNI Corp. | 892 | 31,746 |
| Huron Consulting Group, Inc. * | 207 | 10,536 |
| IAA, Inc. * | 473 | 27,732 |
| ICF International, Inc. | 213 | 17,775 |
| IHS Markit Ltd. | 1,059 | 95,479 |
| Insperity, Inc. | 223 | 19,780 |
| Interface, Inc. | 1,545 | 19,189 |
| Jacobs Engineering Group, Inc. | 1,400 | 161,112 |
| KAR Auction Services, Inc. | 1,456 | 20,253 |
| KBR, Inc. | 1,573 | 48,763 |
| Kelly Services, Inc., Class A * | 2,330 | 48,511 |
| Kforce, Inc. | 436 | 22,389 |
| Knoll, Inc. | 1,069 | 17,435 |
| Korn Ferry | 707 | 43,516 |
| Leidos Holdings, Inc. | 1,152 | 101,894 |
| ManpowerGroup, Inc. | 2,262 | 213,623 |
| ManTech International Corp., Class A | 260 | 20,322 |
| Matthews International Corp., Class A | 661 | 23,598 |
| MSA Safety, Inc. | 129 | 20,768 |
| Nielsen Holdings plc | 8,989 | 201,443 |
| Pitney Bowes, Inc. | 12,005 | 101,802 |
| Quad/Graphics, Inc. * | 5,034 | 22,049 |
| R.R. Donnelley & Sons Co. * | 14,336 | 48,742 |
| Republic Services, Inc. | 1,512 | 134,704 |
| Resources Connection, Inc. | 1,007 | 12,849 |
| Robert Half International, Inc. | 1,832 | 142,511 |
| Rollins, Inc. | 559 | 18,542 |
| Science Applications International Corp. | 527 | 45,391 |
| SP Plus Corp. * | 566 | 18,763 |
29
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Steelcase, Inc., Class A | 2,283 | 31,825 |
| Stericycle, Inc. * | 621 | 40,284 |
| Team, Inc. * | 1,263 | 14,007 |
| Tetra Tech, Inc. | 343 | 47,461 |
| The Brink's Co. | 348 | 26,737 |
| TransUnion | 395 | 33,263 |
| TriNet Group, Inc. * | 150 | 12,041 |
| TrueBlue, Inc. * | 1,667 | 34,724 |
| UniFirst Corp. | 145 | 35,132 |
| US Ecology, Inc. * | 197 | 7,527 |
| Verisk Analytics, Inc. | 370 | 60,625 |
| Viad Corp. | 608 | 25,439 |
| Waste Management, Inc. | 3,006 | 333,335 |
| 3,320,012 | ||
| Consumer Durables & Apparel 1.9% | ||
| Acushnet Holdings Corp. | 311 | 13,130 |
| American Outdoor Brands, Inc. * | 295 | 5,903 |
| Beazer Homes USA, Inc. * | 897 | 15,850 |
| Brunswick Corp. | 954 | 84,305 |
| Callaway Golf Co. | 814 | 22,751 |
| Capri Holdings Ltd. * | 6,091 | 284,267 |
| Carter's, Inc. | 696 | 58,095 |
| Cavco Industries, Inc. * | 53 | 11,178 |
| Century Communities, Inc. * | 251 | 13,888 |
| Columbia Sportswear Co. | 267 | 27,520 |
| Crocs, Inc. * | 273 | 20,945 |
| D.R. Horton, Inc. | 2,795 | 214,852 |
| Deckers Outdoor Corp. * | 207 | 67,505 |
| Ethan Allen Interiors, Inc. | 984 | 25,210 |
| Fossil Group, Inc. * | 6,678 | 101,105 |
| G-III Apparel Group Ltd. * | 2,046 | 58,904 |
| Garmin Ltd. | 845 | 104,797 |
| Hanesbrands, Inc. | 6,121 | 108,280 |
| Hasbro, Inc. | 1,120 | 104,955 |
| Helen of Troy Ltd. * | 180 | 39,024 |
| iRobot Corp. * | 218 | 27,056 |
| KB Home | 830 | 33,515 |
| Kontoor Brands, Inc. | 1,499 | 63,333 |
| La-Z-Boy, Inc. | 879 | 37,454 |
| Leggett & Platt, Inc. | 1,863 | 80,612 |
| Lennar Corp., Class A | 2,028 | 168,263 |
| LGI Homes, Inc. * | 108 | 11,799 |
| Lululemon Athletica, Inc. * | 218 | 67,946 |
| M.D.C Holdings, Inc. | 610 | 34,508 |
| M/I Homes, Inc. * | 417 | 20,808 |
| Mattel, Inc. * | 5,844 | 118,049 |
| Meritage Homes Corp. * | 403 | 33,977 |
| Mohawk Industries, Inc. * | 1,181 | 206,663 |
| Movado Group, Inc. | 654 | 14,911 |
| Newell Brands, Inc. | 5,312 | 123,079 |
| NIKE, Inc., Class B | 5,683 | 765,955 |
| NVR, Inc. * | 28 | 126,024 |
| Oxford Industries, Inc. | 343 | 26,150 |
| Polaris, Inc. | 794 | 93,501 |
| PulteGroup, Inc. | 3,342 | 150,758 |
| PVH Corp. | 2,130 | 212,915 |
| Ralph Lauren Corp. | 1,127 | 131,949 |
| Skechers U.S.A., Inc., Class A * | 1,503 | 55,010 |
| Smith & Wesson Brands, Inc. | 977 | 16,814 |
| Steven Madden Ltd. | 1,333 | 49,308 |
| Sturm Ruger & Co., Inc. | 256 | 17,459 |
| Tapestry, Inc. | 6,170 | 260,004 |
| Taylor Morrison Home Corp., Class A * | 2,339 | 64,346 |
| Tempur Sealy International, Inc. | 1,161 | 38,789 |
| Toll Brothers, Inc. | 1,878 | 100,323 |
| TopBuild Corp. * | 175 | 33,322 |
| Security | Number of Shares | Value ($) |
| Tri Pointe Homes, Inc. * | 2,322 | 44,118 |
| Tupperware Brands Corp. * | 4,307 | 131,665 |
| Under Armour, Inc., Class A * | 1,997 | 43,714 |
| Under Armour, Inc., Class C * | 2,040 | 37,128 |
| Universal Electronics, Inc. * | 192 | 11,172 |
| VF Corp. | 2,799 | 221,485 |
| Vista Outdoor, Inc. * | 1,798 | 56,835 |
| Whirlpool Corp. | 1,259 | 239,311 |
| Wolverine World Wide, Inc. | 1,330 | 46,484 |
| 5,398,976 | ||
| Consumer Services 2.3% | ||
| Adtalem Global Education, Inc. * | 981 | 38,553 |
| American Public Education, Inc. * | 289 | 8,508 |
| Aramark | 3,822 | 141,873 |
| Arcos Dorados Holdings, Inc., Class A | 2,898 | 15,272 |
| BJ's Restaurants, Inc. * | 595 | 33,040 |
| Bloomin' Brands, Inc. * | 2,211 | 54,921 |
| Boyd Gaming Corp. * | 896 | 52,595 |
| Bright Horizons Family Solutions, Inc. * | 221 | 35,285 |
| Brinker International, Inc. | 1,124 | 77,095 |
| Caesars Entertainment, Inc. * | 842 | 78,676 |
| Carnival Corp. * | 16,373 | 437,978 |
| Chipotle Mexican Grill, Inc. * | 84 | 121,128 |
| Choice Hotels International, Inc. | 126 | 13,214 |
| Churchill Downs, Inc. | 185 | 42,667 |
| Cracker Barrel Old Country Store, Inc. | 364 | 56,373 |
| Darden Restaurants, Inc. | 1,269 | 174,272 |
| Dave & Buster's Entertainment, Inc. * | 974 | 39,554 |
| Denny's Corp. * | 696 | 12,215 |
| Dine Brands Global, Inc. | 210 | 16,613 |
| Domino's Pizza, Inc. | 196 | 67,916 |
| Extended Stay America, Inc. | 4,055 | 65,245 |
| Fiesta Restaurant Group, Inc. * | 735 | 11,216 |
| frontdoor, Inc. * | 254 | 13,302 |
| Graham Holdings Co., Class B | 89 | 53,474 |
| Grand Canyon Education, Inc. * | 268 | 28,057 |
| H&R Block, Inc. | 3,495 | 67,209 |
| Hilton Grand Vacations, Inc. * | 1,032 | 40,774 |
| Hilton Worldwide Holdings, Inc. * | 1,237 | 152,992 |
| Houghton Mifflin Harcourt Co. * | 7,097 | 43,292 |
| Hyatt Hotels Corp., Class A * | 592 | 52,066 |
| International Game Technology plc | 3,261 | 59,644 |
| Jack in the Box, Inc. | 514 | 52,608 |
| Las Vegas Sands Corp. | 3,949 | 247,207 |
| Laureate Education, Inc., Class A * | 1,725 | 23,719 |
| Marriott International, Inc., Class A * | 1,699 | 251,571 |
| Marriott Vacations Worldwide Corp. * | 348 | 59,059 |
| McDonald's Corp. | 5,001 | 1,030,906 |
| MGM Resorts International | 6,355 | 240,155 |
| Norwegian Cruise Line Holdings Ltd. * | 5,239 | 154,865 |
| Papa John's International, Inc. | 183 | 16,505 |
| Penn National Gaming, Inc. * | 751 | 86,951 |
| Perdoceo Education Corp. * | 638 | 8,211 |
| Planet Fitness, Inc., Class A * | 128 | 11,020 |
| Red Robin Gourmet Burgers, Inc. * | 1,041 | 31,948 |
| Red Rock Resorts, Inc., Class A | 878 | 26,489 |
| Regis Corp. * | 1,333 | 15,663 |
| Royal Caribbean Cruises Ltd. | 2,781 | 259,384 |
| Ruth's Hospitality Group, Inc. | 623 | 14,208 |
| Scientific Games Corp., Class A * | 787 | 36,855 |
| SeaWorld Entertainment, Inc. * | 541 | 26,866 |
| Service Corp. International | 1,067 | 50,960 |
| Six Flags Entertainment Corp. | 1,949 | 86,925 |
| Starbucks Corp. | 6,996 | 755,778 |
| Strategic Education, Inc. | 87 | 7,910 |
| Stride, Inc. * | 735 | 17,677 |
30
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Terminix Global Holdings, Inc. * | 622 | 27,996 |
| Texas Roadhouse, Inc. | 561 | 50,984 |
| The Cheesecake Factory, Inc. | 1,272 | 69,896 |
| The Wendy's Co. | 2,257 | 46,111 |
| Travel & Leisure Co. | 1,564 | 94,513 |
| Vail Resorts, Inc. | 179 | 55,343 |
| WW International, Inc. * | 350 | 10,322 |
| Wyndham Hotels & Resorts, Inc. | 516 | 33,684 |
| Wynn Resorts Ltd. * | 933 | 122,904 |
| Yum China Holdings, Inc. | 2,412 | 144,334 |
| Yum! Brands, Inc. | 2,608 | 270,006 |
| 6,544,552 | ||
| Diversified Financials 5.6% | ||
| Affiliated Managers Group, Inc. | 891 | 124,713 |
| AGNC Investment Corp. | 2,568 | 41,165 |
| Ally Financial, Inc. | 11,370 | 471,855 |
| American Express Co. | 7,404 | 1,001,465 |
| Ameriprise Financial, Inc. | 1,804 | 399,117 |
| Annaly Capital Management, Inc. | 9,025 | 74,998 |
| Apollo Commercial Real Estate Finance, Inc. | 1,236 | 16,426 |
| Artisan Partners Asset Management, Inc., Class A | 474 | 22,515 |
| Berkshire Hathaway, Inc., Class B * | 13,371 | 3,215,859 |
| BGC Partners, Inc., Class A | 4,091 | 18,328 |
| BlackRock, Inc. | 611 | 424,339 |
| Blackstone Mortgage Trust, Inc., Class A | 814 | 23,769 |
| Brightsphere Investment Group, Inc. | 774 | 14,009 |
| Cannae Holdings, Inc. * | 551 | 20,580 |
| Capital One Financial Corp. | 10,963 | 1,317,643 |
| Capstead Mortgage Corp. | 1,930 | 11,059 |
| Cboe Global Markets, Inc. | 414 | 40,969 |
| Chimera Investment Corp. | 4,230 | 48,814 |
| CME Group, Inc. | 1,019 | 203,494 |
| Cohen & Steers, Inc. | 120 | 7,726 |
| Compass Diversified Holdings | 948 | 22,420 |
| Credit Acceptance Corp. * | 59 | 21,418 |
| Discover Financial Services | 7,888 | 742,024 |
| Donnelley Financial Solutions, Inc. * | 980 | 25,470 |
| Eaton Vance Corp. | 873 | 63,790 |
| Encore Capital Group, Inc. * | 276 | 9,224 |
| Enova International, Inc. * | 661 | 20,293 |
| Equitable Holdings, Inc. | 4,614 | 136,436 |
| Evercore, Inc., Class A | 654 | 78,330 |
| FactSet Research Systems, Inc. | 97 | 29,479 |
| Federated Hermes, Inc. | 1,245 | 33,266 |
| FirstCash, Inc. | 357 | 22,605 |
| Franklin Resources, Inc. | 9,356 | 244,847 |
| Green Dot Corp., Class A * | 253 | 11,957 |
| Greenhill & Co., Inc. | 819 | 12,359 |
| Houlihan Lokey, Inc. | 207 | 13,157 |
| Intercontinental Exchange, Inc. | 1,722 | 189,954 |
| Invesco Ltd. | 10,582 | 237,248 |
| Invesco Mortgage Capital, Inc. | 4,090 | 15,910 |
| Janus Henderson Group plc | 1,851 | 54,105 |
| Jefferies Financial Group, Inc. | 3,371 | 97,894 |
| Ladder Capital Corp., Class A | 1,579 | 18,064 |
| Lazard Ltd., Class A | 1,807 | 69,913 |
| LPL Financial Holdings, Inc. | 770 | 101,286 |
| MarketAxess Holdings, Inc. | 41 | 22,794 |
| MFA Financial, Inc. | 7,879 | 31,674 |
| Moelis & Co., Class A | 419 | 21,637 |
| Moody's Corp. | 450 | 123,700 |
| Morgan Stanley | 12,128 | 932,279 |
| Morningstar, Inc. | 76 | 17,043 |
| MSCI, Inc. | 155 | 64,251 |
| Nasdaq, Inc. | 432 | 59,741 |
| Security | Number of Shares | Value ($) |
| Navient Corp. | 10,018 | 124,023 |
| Nelnet, Inc., Class A | 241 | 17,497 |
| New Residential Investment Corp. | 7,398 | 76,051 |
| New York Mortgage Trust, Inc. | 3,687 | 15,375 |
| Northern Trust Corp. | 1,463 | 139,175 |
| OneMain Holdings, Inc. | 1,177 | 55,213 |
| PennyMac Mortgage Investment Trust | 984 | 18,666 |
| Piper Sandler Cos. | 127 | 13,503 |
| PRA Group, Inc. * | 457 | 16,845 |
| PROG Holdings, Inc. | 1,108 | 55,400 |
| Raymond James Financial, Inc. | 819 | 95,610 |
| Redwood Trust, Inc. | 1,736 | 17,082 |
| S&P Global, Inc. | 653 | 215,072 |
| Santander Consumer USA Holdings, Inc. | 2,583 | 64,575 |
| SEI Investments Co. | 980 | 54,880 |
| SLM Corp. | 3,380 | 53,370 |
| Starwood Property Trust, Inc. | 2,851 | 65,088 |
| State Street Corp. | 3,428 | 249,456 |
| Stifel Financial Corp. | 600 | 36,648 |
| Synchrony Financial | 16,187 | 626,113 |
| T. Rowe Price Group, Inc. | 1,938 | 314,227 |
| The Bank of New York Mellon Corp. | 11,709 | 493,651 |
| The Charles Schwab Corp. (a) | 6,004 | 370,567 |
| The Goldman Sachs Group, Inc. | 4,473 | 1,429,034 |
| Two Harbors Investment Corp. | 3,273 | 23,631 |
| Virtus Investment Partners, Inc. | 63 | 15,807 |
| Voya Financial, Inc. | 2,795 | 168,483 |
| Waddell & Reed Financial, Inc., Class A | 2,862 | 71,808 |
| WisdomTree Investments, Inc. | 2,132 | 11,300 |
| World Acceptance Corp. * | 170 | 21,514 |
| 15,973,075 | ||
| Energy 8.4% | ||
| Antero Resources Corp. * | 23,382 | 210,438 |
| APA Corp. | 9,575 | 188,915 |
| Arch Resources, Inc. | 838 | 40,157 |
| Archrock, Inc. | 2,142 | 22,084 |
| Baker Hughes Co. | 20,028 | 490,285 |
| Cabot Oil & Gas Corp. | 2,626 | 48,607 |
| Callon Petroleum Co. * | 946 | 24,189 |
| Centennial Resource Development, Inc., Class A * | 10,311 | 40,832 |
| ChampionX Corp. * | 1,659 | 35,287 |
| Cheniere Energy, Inc. * | 582 | 39,221 |
| Chevron Corp. | 35,670 | 3,567,000 |
| Cimarex Energy Co. | 990 | 57,410 |
| CNX Resources Corp. * | 4,251 | 53,605 |
| ConocoPhillips | 22,429 | 1,166,532 |
| CONSOL Energy, Inc. * | 3,627 | 39,208 |
| Continental Resources, Inc. * | 1,301 | 31,458 |
| Core Laboratories N.V. | 804 | 28,574 |
| Cosan Ltd., A Shares | 1,785 | 32,898 |
| CVR Energy, Inc. | 1,040 | 22,963 |
| Delek US Holdings, Inc. | 3,279 | 80,532 |
| Devon Energy Corp. | 10,765 | 231,878 |
| Diamondback Energy, Inc. | 690 | 47,803 |
| Dril-Quip, Inc. * | 632 | 21,463 |
| EOG Resources, Inc. | 6,206 | 400,659 |
| EQT Corp. * | 2,841 | 50,541 |
| Equitrans Midstream Corp. | 2,552 | 18,451 |
| Exterran Corp. * | 2,697 | 14,753 |
| Exxon Mobil Corp. | 116,341 | 6,325,460 |
| Forum Energy Technologies, Inc. * | 759 | 16,205 |
| Frank's International N.V. * | 3,958 | 17,930 |
| GasLog Ltd. | 2,150 | 12,664 |
| Green Plains, Inc. * | 2,400 | 60,768 |
| Halliburton Co. | 17,812 | 388,836 |
31
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Helix Energy Solutions Group, Inc. * | 3,104 | 15,210 |
| Helmerich & Payne, Inc. | 4,008 | 115,150 |
| Hess Corp. | 3,218 | 210,876 |
| HollyFrontier Corp. | 7,284 | 275,918 |
| International Seaways, Inc. | 537 | 9,312 |
| Kinder Morgan, Inc. | 27,229 | 400,266 |
| Kosmos Energy Ltd. | 7,190 | 22,145 |
| Liberty Oilfield Services, Inc., Class A | 1,102 | 12,882 |
| Magnolia Oil & Gas Corp., Class A * | 1,215 | 14,653 |
| Marathon Oil Corp. | 27,865 | 309,302 |
| Marathon Petroleum Corp. | 21,277 | 1,162,150 |
| Matador Resources Co. * | 831 | 17,360 |
| Murphy Oil Corp. | 6,582 | 107,484 |
| Nabors Industries Ltd. | 1,337 | 148,420 |
| Newpark Resources, Inc. * | 5,120 | 17,715 |
| NexTier Oilfield Solutions, Inc. * | 2,888 | 13,429 |
| Nordic American Tankers Ltd. | 3,176 | 9,433 |
| NOV, Inc. | 18,189 | 274,654 |
| Occidental Petroleum Corp. | 30,925 | 822,914 |
| Oceaneering International, Inc. * | 7,921 | 93,468 |
| Oil States International, Inc. * | 5,321 | 39,003 |
| ONEOK, Inc. | 5,216 | 231,017 |
| Par Pacific Holdings, Inc. * | 1,111 | 19,631 |
| Patterson-UTI Energy, Inc. | 11,800 | 87,320 |
| PBF Energy, Inc., Class A * | 12,823 | 182,087 |
| PDC Energy, Inc. * | 1,381 | 48,266 |
| Peabody Energy Corp. * | 19,700 | 84,710 |
| Phillips 66 | 16,702 | 1,387,101 |
| Pioneer Natural Resources Co. | 1,474 | 218,992 |
| ProPetro Holding Corp. * | 1,709 | 19,602 |
| QEP Resources, Inc. | 19,668 | 67,658 |
| Range Resources Corp. * | 5,766 | 55,584 |
| Renewable Energy Group, Inc. * | 663 | 51,562 |
| REX American Resources Corp. * | 138 | 12,982 |
| RPC, Inc. * | 3,244 | 20,599 |
| Schlumberger N.V. | 36,545 | 1,019,971 |
| Scorpio Tankers, Inc. | 855 | 12,620 |
| SFL Corp., Ltd. | 1,637 | 12,343 |
| SM Energy Co. | 11,912 | 165,100 |
| Southwestern Energy Co. * | 4,719 | 19,112 |
| Targa Resources Corp. | 5,536 | 171,228 |
| Teekay Tankers Ltd., Class A * | 675 | 8,498 |
| The Williams Cos., Inc. | 12,387 | 282,919 |
| Tidewater, Inc. * | 1,684 | 20,983 |
| Transocean Ltd. * | 45,779 | 158,853 |
| US Silica Holdings, Inc. | 3,743 | 49,819 |
| Valero Energy Corp. | 19,158 | 1,474,783 |
| Whiting Petroleum Corp. * | 521 | 17,870 |
| World Fuel Services Corp. | 6,879 | 213,799 |
| 24,034,359 | ||
| Food & Staples Retailing 2.5% | ||
| BJ's Wholesale Club Holdings, Inc. * | 428 | 17,197 |
| Casey's General Stores, Inc. | 465 | 93,911 |
| Costco Wholesale Corp. | 3,122 | 1,033,382 |
| Ingles Markets, Inc., Class A | 594 | 30,864 |
| Performance Food Group Co. * | 2,107 | 114,284 |
| PriceSmart, Inc. | 456 | 43,981 |
| Rite Aid Corp. * | 7,090 | 138,822 |
| SpartanNash Co. | 3,184 | 58,044 |
| Sprouts Farmers Market, Inc. * | 2,351 | 49,630 |
| Sysco Corp. | 5,125 | 408,104 |
| The Andersons, Inc. | 1,633 | 42,687 |
| The Chefs' Warehouse, Inc. * | 436 | 13,577 |
| The Kroger Co. | 23,036 | 741,990 |
| United Natural Foods, Inc. * | 7,590 | 200,755 |
| US Foods Holding Corp. * | 6,448 | 235,094 |
| Security | Number of Shares | Value ($) |
| Walgreens Boots Alliance, Inc. | 27,503 | 1,318,219 |
| Walmart, Inc. | 20,381 | 2,647,899 |
| Weis Markets, Inc. | 362 | 19,349 |
| 7,207,789 | ||
| Food, Beverage & Tobacco 3.5% | ||
| Altria Group, Inc. | 23,232 | 1,012,915 |
| Archer-Daniels-Midland Co. | 18,320 | 1,036,546 |
| B&G Foods, Inc. | 1,213 | 36,790 |
| Brown-Forman Corp., Class B | 966 | 69,146 |
| Bunge Ltd. | 7,017 | 537,362 |
| Cal-Maine Foods, Inc. * | 551 | 20,993 |
| Calavo Growers, Inc. | 197 | 14,824 |
| Campbell Soup Co. | 1,415 | 64,354 |
| Coca-Cola Consolidated, Inc. | 31 | 7,956 |
| Coca-Cola European Partners plc | 2,376 | 121,057 |
| Conagra Brands, Inc. | 3,575 | 121,300 |
| Constellation Brands, Inc., Class A | 828 | 177,308 |
| Darling Ingredients, Inc. * | 1,519 | 95,758 |
| Flowers Foods, Inc. | 2,292 | 49,851 |
| Fresh Del Monte Produce, Inc. | 1,506 | 38,764 |
| General Mills, Inc. | 5,225 | 287,427 |
| Hormel Foods Corp. | 2,064 | 95,708 |
| Hostess Brands, Inc. * | 715 | 10,289 |
| Ingredion, Inc. | 1,338 | 120,688 |
| J&J Snack Foods Corp. | 126 | 20,004 |
| John B Sanfilippo & Son, Inc. | 123 | 10,635 |
| Kellogg Co. | 2,212 | 127,655 |
| Keurig Dr Pepper, Inc. | 1,171 | 35,739 |
| Lamb Weston Holdings, Inc. | 470 | 37,492 |
| Lancaster Colony Corp. | 130 | 22,707 |
| McCormick & Co., Inc. Non-Voting Shares | 793 | 66,834 |
| Molson Coors Beverage Co., Class B | 3,222 | 143,218 |
| Mondelez International, Inc., Class A | 12,316 | 654,719 |
| Monster Beverage Corp. * | 1,293 | 113,448 |
| Nomad Foods Ltd. * | 1,197 | 28,273 |
| PepsiCo, Inc. | 9,085 | 1,173,691 |
| Philip Morris International, Inc. | 14,270 | 1,198,965 |
| Pilgrim's Pride Corp. * | 1,273 | 28,502 |
| Post Holdings, Inc. * | 419 | 40,249 |
| Sanderson Farms, Inc. | 439 | 66,947 |
| The Boston Beer Co., Inc., Class A * | 28 | 28,804 |
| The Coca-Cola Co. | 22,230 | 1,089,048 |
| The Hain Celestial Group, Inc. * | 830 | 35,009 |
| The Hershey Co. | 861 | 125,405 |
| The J.M. Smucker Co. | 1,411 | 158,032 |
| The Kraft Heinz Co. | 9,037 | 328,766 |
| TreeHouse Foods, Inc. * | 948 | 47,419 |
| Tyson Foods, Inc., Class A | 5,669 | 383,621 |
| Universal Corp. | 849 | 43,146 |
| Vector Group Ltd. | 1,692 | 23,096 |
| 9,950,460 | ||
| Health Care Equipment & Services 5.1% | ||
| Abbott Laboratories | 5,953 | 713,050 |
| ABIOMED, Inc. * | 53 | 17,201 |
| Acadia Healthcare Co., Inc. * | 865 | 47,783 |
| Align Technology, Inc. * | 124 | 70,322 |
| Allscripts Healthcare Solutions, Inc. * | 1,843 | 28,437 |
| Amedisys, Inc. * | 86 | 21,813 |
| AmerisourceBergen Corp. | 2,222 | 224,911 |
| AMN Healthcare Services, Inc. * | 379 | 27,618 |
| Anthem, Inc. | 3,452 | 1,046,612 |
| Avanos Medical, Inc. * | 332 | 15,265 |
| Baxter International, Inc. | 2,494 | 193,759 |
| Becton Dickinson & Co. | 908 | 218,964 |
32
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Boston Scientific Corp. * | 3,063 | 118,783 |
| Brookdale Senior Living, Inc. * | 7,157 | 41,654 |
| Cantel Medical Corp. * | 235 | 17,456 |
| Cardinal Health, Inc. | 8,682 | 447,297 |
| Centene Corp. * | 4,284 | 250,785 |
| Cerner Corp. | 1,972 | 136,344 |
| Chemed Corp. | 70 | 31,165 |
| Cigna Corp. | 1,829 | 383,907 |
| Community Health Systems, Inc. * | 5,375 | 46,010 |
| CONMED Corp. | 137 | 16,859 |
| Covetrus, Inc. * | 2,372 | 88,144 |
| CVS Health Corp. | 25,411 | 1,731,251 |
| Danaher Corp. | 1,606 | 352,790 |
| DaVita, Inc. * | 1,741 | 177,808 |
| DENTSPLY SIRONA, Inc. | 1,654 | 87,778 |
| Edwards Lifesciences Corp. * | 884 | 73,460 |
| Encompass Health Corp. | 736 | 59,204 |
| Globus Medical, Inc., Class A * | 247 | 15,438 |
| Haemonetics Corp. * | 163 | 20,619 |
| HCA Healthcare, Inc. | 3,218 | 553,593 |
| Henry Schein, Inc. * | 1,721 | 106,444 |
| Hill-Rom Holdings, Inc. | 344 | 36,694 |
| HMS Holdings Corp. * | 378 | 13,905 |
| Hologic, Inc. * | 1,119 | 80,669 |
| Humana, Inc. | 1,504 | 570,994 |
| ICU Medical, Inc. * | 66 | 13,695 |
| IDEXX Laboratories, Inc. * | 68 | 35,372 |
| Integer Holdings Corp. * | 167 | 14,728 |
| Integra LifeSciences Holdings Corp. * | 214 | 14,625 |
| Intuitive Surgical, Inc. * | 172 | 126,730 |
| Invacare Corp. | 992 | 9,027 |
| Laboratory Corp. of America Holdings * | 739 | 177,293 |
| LENSAR, Inc. * | 389 | 3,517 |
| LHC Group, Inc. * | 81 | 14,719 |
| LivaNova plc * | 207 | 16,051 |
| Magellan Health, Inc. * | 663 | 61,871 |
| Masimo Corp. * | 93 | 23,318 |
| McKesson Corp. | 4,345 | 736,564 |
| MEDNAX, Inc. * | 3,718 | 90,831 |
| Medtronic plc | 9,270 | 1,084,312 |
| Merit Medical Systems, Inc. * | 212 | 11,813 |
| ModivCare, Inc. * | 162 | 20,778 |
| Molina Healthcare, Inc. * | 407 | 88,221 |
| National HealthCare Corp. | 197 | 13,701 |
| Neogen Corp. * | 120 | 9,830 |
| NextGen Healthcare, Inc. * | 672 | 12,566 |
| NuVasive, Inc. * | 274 | 16,530 |
| Omnicell, Inc. * | 116 | 14,720 |
| Owens & Minor, Inc. | 4,267 | 145,121 |
| Patterson Cos., Inc. | 2,534 | 78,706 |
| Premier, Inc., Class A | 465 | 15,726 |
| Quest Diagnostics, Inc. | 1,393 | 161,017 |
| ResMed, Inc. | 345 | 66,509 |
| Select Medical Holdings Corp. * | 1,296 | 41,018 |
| STERIS plc | 331 | 57,859 |
| Stryker Corp. | 1,195 | 290,015 |
| Teleflex, Inc. | 106 | 42,201 |
| Tenet Healthcare Corp. * | 2,969 | 151,478 |
| The Cooper Cos., Inc. | 146 | 56,375 |
| The Ensign Group, Inc. | 306 | 25,098 |
| Tivity Health, Inc. * | 764 | 18,183 |
| Triple-S Management Corp., Class B * | 912 | 23,074 |
| UnitedHealth Group, Inc. | 6,753 | 2,243,482 |
| Universal Health Services, Inc., Class B * | 1,289 | 161,550 |
| Varex Imaging Corp. * | 645 | 14,790 |
| Varian Medical Systems, Inc. * | 457 | 80,098 |
| Veeva Systems, Inc., Class A * | 57 | 15,966 |
| Security | Number of Shares | Value ($) |
| West Pharmaceutical Services, Inc. | 151 | 42,378 |
| Zimmer Biomet Holdings, Inc. | 965 | 157,353 |
| 14,583,595 | ||
| Household & Personal Products 1.2% | ||
| Central Garden & Pet Co. * | 101 | 4,606 |
| Central Garden & Pet Co., Class A * | 423 | 17,559 |
| Church & Dwight Co., Inc. | 1,224 | 96,390 |
| Colgate-Palmolive Co. | 4,746 | 356,899 |
| Coty, Inc., Class A * | 7,244 | 55,561 |
| Edgewell Personal Care Co. | 1,208 | 36,953 |
| Energizer Holdings, Inc. | 373 | 15,591 |
| Herbalife Nutrition Ltd. * | 874 | 39,313 |
| Kimberly-Clark Corp. | 1,853 | 237,795 |
| Medifast, Inc. | 60 | 15,179 |
| Nu Skin Enterprises, Inc., Class A | 1,207 | 61,774 |
| Spectrum Brands Holdings, Inc. | 405 | 31,408 |
| The Clorox Co. | 569 | 103,017 |
| The Estee Lauder Cos., Inc., Class A | 751 | 214,681 |
| The Procter & Gamble Co. | 15,830 | 1,955,480 |
| USANA Health Sciences, Inc. * | 197 | 19,121 |
| WD-40 Co. | 50 | 15,588 |
| 3,276,915 | ||
| Insurance 3.4% | ||
| Aflac, Inc. | 10,125 | 484,886 |
| Alleghany Corp. | 138 | 89,207 |
| Ambac Financial Group, Inc. * | 828 | 14,035 |
| American Equity Investment Life Holding Co. | 1,586 | 43,821 |
| American Financial Group, Inc. | 789 | 84,186 |
| American International Group, Inc. | 33,527 | 1,473,512 |
| American National Group, Inc. | 95 | 8,552 |
| AMERISAFE, Inc. | 178 | 10,417 |
| Aon plc, Class A | 1,527 | 347,713 |
| Arch Capital Group Ltd. * | 2,031 | 72,750 |
| Argo Group International Holdings Ltd. | 473 | 21,857 |
| Arthur J. Gallagher & Co. | 810 | 97,038 |
| Assurant, Inc. | 480 | 59,146 |
| Assured Guaranty Ltd. | 3,124 | 138,143 |
| Athene Holding Ltd., Class A * | 1,334 | 60,817 |
| Axis Capital Holdings Ltd. | 1,202 | 60,737 |
| Brighthouse Financial, Inc. * | 842 | 33,587 |
| Brown & Brown, Inc. | 963 | 44,202 |
| Chubb Ltd. | 3,389 | 550,984 |
| Cincinnati Financial Corp. | 1,215 | 118,912 |
| CNA Financial Corp. | 438 | 18,632 |
| CNO Financial Group, Inc. | 3,644 | 87,675 |
| Employers Holdings, Inc. | 308 | 10,253 |
| Everest Re Group Ltd. | 455 | 110,023 |
| Fidelity National Financial, Inc. | 3,160 | 120,965 |
| First American Financial Corp. | 1,259 | 66,148 |
| Genworth Financial, Inc., Class A * | 17,127 | 53,436 |
| Globe Life, Inc. | 952 | 88,917 |
| Horace Mann Educators Corp. | 309 | 11,909 |
| James River Group Holdings Ltd. | 341 | 15,655 |
| Kemper Corp. | 399 | 30,172 |
| Lincoln National Corp. | 4,206 | 239,195 |
| Loews Corp. | 4,476 | 213,998 |
| Markel Corp. * | 60 | 65,328 |
| Marsh & McLennan Cos., Inc. | 2,855 | 328,953 |
| MBIA, Inc. * | 2,416 | 17,637 |
| Mercury General Corp. | 411 | 24,002 |
| MetLife, Inc. | 13,170 | 758,592 |
| Old Republic International Corp. | 3,951 | 76,373 |
| Primerica, Inc. | 360 | 50,843 |
| Principal Financial Group, Inc. | 3,791 | 214,495 |
33
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| ProAssurance Corp. | 2,071 | 51,257 |
| Prudential Financial, Inc. | 7,755 | 672,514 |
| Reinsurance Group of America, Inc. | 924 | 112,940 |
| RenaissanceRe Holdings Ltd. | 256 | 42,747 |
| RLI Corp. | 198 | 20,659 |
| Safety Insurance Group, Inc. | 145 | 11,467 |
| Selective Insurance Group, Inc. | 414 | 28,082 |
| Stewart Information Services Corp. | 553 | 26,102 |
| The Allstate Corp. | 4,642 | 494,837 |
| The Hanover Insurance Group, Inc. | 393 | 45,333 |
| The Hartford Financial Services Group, Inc. | 4,772 | 241,893 |
| The Progressive Corp. | 3,087 | 265,328 |
| The Travelers Cos., Inc. | 6,268 | 911,994 |
| United Fire Group, Inc. | 317 | 9,336 |
| Universal Insurance Holdings, Inc. | 691 | 10,289 |
| Unum Group | 5,335 | 141,271 |
| W.R. Berkley Corp. | 1,215 | 84,236 |
| White Mountains Insurance Group Ltd. | 42 | 50,192 |
| Willis Towers Watson plc | 516 | 113,850 |
| 9,752,030 | ||
| Materials 3.9% | ||
| AdvanSix, Inc. * | 1,097 | 30,497 |
| Air Products and Chemicals, Inc. | 916 | 234,148 |
| Albemarle Corp. | 877 | 137,873 |
| Alcoa Corp. * | 9,677 | 237,570 |
| Allegheny Technologies, Inc. * | 2,523 | 49,602 |
| Alpha Metallurgical Resources, Inc. * | 2,782 | 41,730 |
| AptarGroup, Inc. | 385 | 50,077 |
| Arconic Corp. * | 1,291 | 28,299 |
| Ashland Global Holdings, Inc. | 672 | 56,529 |
| Avery Dennison Corp. | 673 | 117,916 |
| Avient Corp. | 1,218 | 52,642 |
| Axalta Coating Systems Ltd. * | 1,690 | 46,205 |
| Balchem Corp. | 135 | 16,114 |
| Ball Corp. | 1,239 | 105,798 |
| Berry Global Group, Inc. * | 1,266 | 70,136 |
| Cabot Corp. | 969 | 47,704 |
| Carpenter Technology Corp. | 1,238 | 50,337 |
| Celanese Corp. | 1,350 | 187,528 |
| Century Aluminum Co. * | 1,424 | 19,552 |
| CF Industries Holdings, Inc. | 3,478 | 157,484 |
| Clearwater Paper Corp. * | 590 | 20,656 |
| Cleveland-Cliffs, Inc. | 6,604 | 88,097 |
| Commercial Metals Co. | 2,916 | 73,337 |
| Compass Minerals International, Inc. | 458 | 28,895 |
| Constellium SE * | 1,346 | 17,821 |
| Corteva, Inc. | 4,413 | 199,247 |
| Crown Holdings, Inc. * | 806 | 77,021 |
| Domtar Corp. | 2,826 | 104,703 |
| Dow, Inc. | 4,118 | 244,239 |
| DuPont de Nemours, Inc. | 12,446 | 875,203 |
| Eagle Materials, Inc. | 416 | 52,158 |
| Eastman Chemical Co. | 2,471 | 269,981 |
| Ecolab, Inc. | 1,232 | 257,932 |
| Element Solutions, Inc. | 1,538 | 27,761 |
| Ferro Corp. * | 862 | 13,680 |
| FMC Corp. | 336 | 34,168 |
| Freeport-McMoRan, Inc. * | 11,459 | 388,575 |
| GCP Applied Technologies, Inc. * | 640 | 15,866 |
| Glatfelter Corp. | 888 | 14,252 |
| Graphic Packaging Holding Co. | 4,344 | 68,939 |
| Greif, Inc., Class A | 560 | 27,048 |
| H.B. Fuller Co. | 520 | 29,156 |
| Hecla Mining Co. | 3,104 | 20,269 |
| Huntsman Corp. | 4,723 | 128,938 |
| Ingevity Corp. * | 262 | 18,204 |
| Security | Number of Shares | Value ($) |
| Innospec, Inc. | 245 | 24,610 |
| International Flavors & Fragrances, Inc. | 573 | 77,647 |
| International Paper Co. | 7,715 | 383,050 |
| Kaiser Aluminum Corp. | 302 | 34,458 |
| Kraton Corp. * | 1,007 | 37,450 |
| Linde plc | 2,501 | 610,919 |
| Livent Corp. * | 895 | 16,665 |
| Louisiana-Pacific Corp. | 1,439 | 68,511 |
| LyondellBasell Industries N.V., Class A | 6,846 | 705,754 |
| Martin Marietta Materials, Inc. | 415 | 139,801 |
| Materion Corp. | 311 | 21,297 |
| Mercer International, Inc. | 1,076 | 16,538 |
| Minerals Technologies, Inc. | 493 | 35,116 |
| Myers Industries, Inc. | 504 | 11,159 |
| Neenah, Inc. | 292 | 16,153 |
| NewMarket Corp. | 72 | 27,287 |
| Newmont Corp. | 2,589 | 140,790 |
| Nucor Corp. | 7,413 | 443,446 |
| O-I Glass, Inc. * | 6,156 | 71,902 |
| Olin Corp. | 4,565 | 141,241 |
| Orion Engineered Carbons S.A. | 1,241 | 21,966 |
| Packaging Corp. of America | 1,090 | 143,902 |
| PPG Industries, Inc. | 2,665 | 359,295 |
| Quaker Chemical Corp. | 50 | 14,119 |
| Rayonier Advanced Materials, Inc. * | 3,906 | 36,131 |
| Reliance Steel & Aluminum Co. | 1,468 | 194,070 |
| Royal Gold, Inc. | 140 | 14,519 |
| RPM International, Inc. | 849 | 67,614 |
| Schnitzer Steel Industries, Inc., Class A | 1,263 | 43,624 |
| Schweitzer-Mauduit International, Inc. | 523 | 24,424 |
| Sealed Air Corp. | 2,570 | 107,683 |
| Sensient Technologies Corp. | 443 | 34,488 |
| Silgan Holdings, Inc. | 979 | 36,771 |
| Sonoco Products Co. | 1,321 | 78,692 |
| Southern Copper Corp. | 591 | 42,156 |
| Steel Dynamics, Inc. | 4,571 | 190,062 |
| Stepan Co. | 221 | 26,672 |
| Summit Materials, Inc., Class A * | 1,321 | 36,605 |
| SunCoke Energy, Inc. | 3,189 | 20,378 |
| The Chemours Co. | 3,596 | 84,614 |
| The Mosaic Co. | 12,322 | 362,267 |
| The Scotts Miracle-Gro Co. | 229 | 48,811 |
| The Sherwin-Williams Co. | 276 | 187,774 |
| TimkenSteel Corp. * | 3,059 | 24,717 |
| Trinseo S.A. | 1,452 | 93,959 |
| Tronox Holdings plc, Class A | 1,590 | 29,161 |
| United States Steel Corp. | 12,871 | 213,787 |
| US Concrete, Inc. * | 365 | 18,783 |
| Valvoline, Inc. | 912 | 22,764 |
| Verso Corp., Class A | 1,745 | 21,813 |
| Vulcan Materials Co. | 696 | 116,225 |
| W.R. Grace & Co. | 600 | 35,556 |
| Warrior Met Coal, Inc. | 2,462 | 47,197 |
| Westlake Chemical Corp. | 555 | 47,502 |
| Westrock Co. | 6,633 | 289,132 |
| Worthington Industries, Inc. | 780 | 49,834 |
| 11,044,748 | ||
| Media & Entertainment 4.7% | ||
| Activision Blizzard, Inc. | 2,369 | 226,500 |
| Alphabet, Inc., Class A * | 799 | 1,615,506 |
| Alphabet, Inc., Class C * | 799 | 1,627,451 |
| Altice USA, Inc., Class A * | 3,663 | 123,113 |
| AMC Entertainment Holdings, Inc., Class A (b) | 4,572 | 36,622 |
| AMC Networks, Inc., Class A * | 1,294 | 84,873 |
| Cable One, Inc. | 12 | 22,978 |
34
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Cars.com, Inc. * | 2,022 | 23,597 |
| Charter Communications, Inc., Class A * | 803 | 492,576 |
| Cinemark Holdings, Inc. | 2,917 | 65,487 |
| Comcast Corp., Class A | 40,995 | 2,161,256 |
| Discovery, Inc., Class A * | 1,732 | 91,848 |
| Discovery, Inc., Class C * | 3,850 | 173,250 |
| DISH Network Corp., Class A * | 2,675 | 84,289 |
| Electronic Arts, Inc. | 1,247 | 167,061 |
| Facebook, Inc., Class A * | 4,585 | 1,181,188 |
| Fox Corp., Class A | 4,158 | 138,503 |
| Fox Corp., Class B | 1,893 | 60,444 |
| Gannett Co., Inc. * | 9,154 | 45,312 |
| Gray Television, Inc. * | 973 | 17,660 |
| IAC/InterActiveCorp * | 261 | 63,901 |
| iHeartMedia, Inc., Class A * | 2,023 | 28,464 |
| John Wiley & Sons, Inc., Class A | 805 | 42,407 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 584 | 25,638 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 1,657 | 73,587 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 3,117 | 137,522 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 2,750 | 15,483 |
| Lions Gate Entertainment Corp., Class A * | 821 | 11,921 |
| Lions Gate Entertainment Corp., Class B * | 1,858 | 23,299 |
| Live Nation Entertainment, Inc. * | 460 | 40,876 |
| Madison Square Garden Entertainment Corp. * | 78 | 8,406 |
| Madison Square Garden Sports Corp. * | 73 | 14,042 |
| Meredith Corp. * | 1,199 | 29,711 |
| MSG Networks, Inc., Class A * | 708 | 12,008 |
| National CineMedia, Inc. | 2,876 | 13,575 |
| Netflix, Inc. * | 144 | 77,594 |
| News Corp., Class A | 5,765 | 135,189 |
| News Corp., Class B | 1,823 | 41,783 |
| Nexstar Media Group, Inc., Class A | 340 | 46,767 |
| Omnicom Group, Inc. | 2,837 | 194,987 |
| Scholastic Corp. | 824 | 23,731 |
| Sinclair Broadcast Group, Inc., Class A | 1,550 | 47,942 |
| Sirius XM Holdings, Inc. | 5,079 | 29,712 |
| Spotify Technology S.A. * | 66 | 20,287 |
| Take-Two Interactive Software, Inc. * | 217 | 40,028 |
| TEGNA, Inc. | 3,170 | 57,789 |
| The E.W. Scripps Co., Class A | 707 | 13,306 |
| The Interpublic Group of Cos., Inc. | 4,519 | 118,036 |
| The Marcus Corp. * | 522 | 10,252 |
| The New York Times Co., Class A | 519 | 26,557 |
| The Walt Disney Co. * | 13,625 | 2,575,670 |
| TripAdvisor, Inc. * | 1,133 | 56,219 |
| Twitter, Inc. * | 870 | 67,042 |
| ViacomCBS, Inc., Class B | 11,602 | 748,213 |
| Yandex N.V., Class A * | 613 | 39,223 |
| Yelp, Inc. * | 551 | 20,778 |
| Zynga, Inc., Class A * | 2,251 | 25,099 |
| 13,396,558 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 4.9% | ||
| AbbVie, Inc. | 14,161 | 1,525,706 |
| Agilent Technologies, Inc. | 1,156 | 141,113 |
| Alexion Pharmaceuticals, Inc. * | 823 | 125,713 |
| Alkermes plc * | 456 | 8,682 |
| Amgen, Inc. | 4,973 | 1,118,527 |
| Bio-Rad Laboratories, Inc., Class A * | 51 | 29,809 |
| Bio-Techne Corp. | 68 | 24,595 |
| Biogen, Inc. * | 1,262 | 344,375 |
| BioMarin Pharmaceutical, Inc. * | 146 | 11,305 |
| Bristol-Myers Squibb Co. | 8,710 | 534,184 |
| Security | Number of Shares | Value ($) |
| Bruker Corp. | 425 | 25,916 |
| Catalent, Inc. * | 329 | 37,411 |
| Charles River Laboratories International, Inc. * | 134 | 38,343 |
| Elanco Animal Health, Inc. * | 1,645 | 54,055 |
| Eli Lilly and Co. | 2,821 | 577,995 |
| Emergent BioSolutions, Inc. * | 124 | 11,904 |
| Gilead Sciences, Inc. | 20,205 | 1,240,587 |
| Horizon Therapeutics plc * | 147 | 13,364 |
| ICON plc * | 268 | 48,422 |
| Illumina, Inc. * | 213 | 93,594 |
| Incyte Corp. * | 160 | 12,586 |
| IQVIA Holdings, Inc. * | 1,077 | 207,635 |
| Jazz Pharmaceuticals plc * | 414 | 69,569 |
| Johnson & Johnson | 17,615 | 2,791,273 |
| Lannett Co., Inc. * | 1,169 | 7,084 |
| Merck & Co., Inc. | 19,135 | 1,389,584 |
| Mettler-Toledo International, Inc. * | 81 | 90,400 |
| Myriad Genetics, Inc. * | 1,455 | 44,363 |
| Nektar Therapeutics * | 453 | 10,279 |
| PDL BioPharma, Inc. *(c) | 5,139 | 12,693 |
| PerkinElmer, Inc. | 385 | 48,545 |
| Perrigo Co., plc | 1,133 | 45,728 |
| Pfizer, Inc. | 60,905 | 2,039,708 |
| PRA Health Sciences, Inc. * | 207 | 30,514 |
| Prestige Consumer Healthcare, Inc. * | 360 | 15,016 |
| Regeneron Pharmaceuticals, Inc. * | 195 | 87,861 |
| Syneos Health, Inc. * | 256 | 19,802 |
| Taro Pharmaceutical Industries Ltd. * | 157 | 11,225 |
| Thermo Fisher Scientific, Inc. | 1,025 | 461,332 |
| United Therapeutics Corp. * | 636 | 106,326 |
| Vertex Pharmaceuticals, Inc. * | 79 | 16,791 |
| Viatris, Inc. * | 16,036 | 238,135 |
| Waters Corp. * | 399 | 109,278 |
| Zoetis, Inc. | 863 | 133,972 |
| 14,005,299 | ||
| Real Estate 2.6% | ||
| Acadia Realty Trust | 813 | 15,374 |
| Alexander & Baldwin, Inc. | 1,473 | 25,733 |
| Alexandria Real Estate Equities, Inc. | 283 | 45,192 |
| American Assets Trust, Inc. | 301 | 9,355 |
| American Campus Communities, Inc. | 1,101 | 45,097 |
| American Finance Trust, Inc. | 1,209 | 10,712 |
| American Homes 4 Rent, Class A | 842 | 26,220 |
| American Tower Corp. | 924 | 199,704 |
| Americold Realty Trust | 414 | 14,507 |
| Apartment Income REIT Corp. | 1,045 | 42,720 |
| Apartment Investment & Management Co., Class A | 950 | 4,522 |
| Apple Hospitality REIT, Inc. | 4,195 | 59,779 |
| Ashford Hospitality Trust, Inc. * | 4,170 | 14,303 |
| AvalonBay Communities, Inc. | 657 | 115,468 |
| Boston Properties, Inc. | 1,236 | 122,525 |
| Brandywine Realty Trust | 2,145 | 26,233 |
| Brixmor Property Group, Inc. | 4,160 | 81,869 |
| Brookfield Property REIT, Inc., Class A | 1,128 | 19,740 |
| Camden Property Trust | 507 | 52,804 |
| CBRE Group, Inc., Class A * | 2,854 | 216,248 |
| Centerspace | 124 | 8,510 |
| Chatham Lodging Trust * | 1,219 | 16,981 |
| Colony Capital, Inc. | 19,346 | 114,528 |
| Columbia Property Trust, Inc. | 1,757 | 24,809 |
| CorePoint Lodging, Inc. | 2,429 | 22,128 |
| CoreSite Realty Corp. | 101 | 12,293 |
| Corporate Office Properties Trust | 883 | 22,958 |
| Cousins Properties, Inc. | 502 | 16,837 |
35
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Crown Castle International Corp. | 1,335 | 207,926 |
| CubeSmart | 878 | 32,451 |
| Cushman & Wakefield plc * | 678 | 10,495 |
| CyrusOne, Inc. | 337 | 22,117 |
| DiamondRock Hospitality Co. * | 4,057 | 41,057 |
| Digital Realty Trust, Inc. | 2,785 | 375,223 |
| Diversified Healthcare Trust | 11,888 | 53,496 |
| Douglas Emmett, Inc. | 917 | 30,032 |
| Duke Realty Corp. | 1,360 | 53,380 |
| EastGroup Properties, Inc. | 103 | 14,019 |
| Empire State Realty Trust, Inc., Class A | 2,212 | 24,354 |
| EPR Properties | 716 | 32,349 |
| Equinix, Inc. | 203 | 131,613 |
| Equity Commonwealth | 722 | 20,368 |
| Equity LifeStyle Properties, Inc. | 499 | 30,763 |
| Equity Residential | 2,217 | 145,014 |
| Essex Property Trust, Inc. | 269 | 68,539 |
| Extra Space Storage, Inc. | 464 | 58,325 |
| Federal Realty Investment Trust | 450 | 45,527 |
| First Industrial Realty Trust, Inc. | 436 | 18,622 |
| Franklin Street Properties Corp. | 2,528 | 12,539 |
| Gaming & Leisure Properties, Inc. | 981 | 43,556 |
| Global Net Lease, Inc. | 643 | 11,947 |
| Healthcare Realty Trust, Inc. | 735 | 21,212 |
| Healthcare Trust of America, Inc., Class A | 990 | 26,888 |
| Healthpeak Properties, Inc. | 3,343 | 97,248 |
| Hersha Hospitality Trust * | 1,732 | 19,260 |
| Highwoods Properties, Inc. | 871 | 34,805 |
| Host Hotels & Resorts, Inc. | 13,195 | 218,905 |
| Hudson Pacific Properties, Inc. | 949 | 24,285 |
| Invitation Homes, Inc. | 1,445 | 42,107 |
| Iron Mountain, Inc. | 3,978 | 138,395 |
| iStar, Inc. | 789 | 13,981 |
| JBG SMITH Properties | 557 | 17,685 |
| Jones Lang LaSalle, Inc. * | 788 | 137,096 |
| Kennedy-Wilson Holdings, Inc. | 1,057 | 19,829 |
| Kilroy Realty Corp. | 527 | 33,443 |
| Kimco Realty Corp. | 4,019 | 73,668 |
| Kite Realty Group Trust | 1,423 | 27,279 |
| Lamar Advertising Co., Class A | 642 | 55,591 |
| Lexington Realty Trust | 2,043 | 21,901 |
| Life Storage, Inc. | 358 | 30,036 |
| LTC Properties, Inc. | 220 | 9,000 |
| Mack-Cali Realty Corp. | 1,138 | 15,898 |
| Marcus & Millichap, Inc. * | 248 | 9,392 |
| Medical Properties Trust, Inc. | 1,522 | 32,860 |
| Mid-America Apartment Communities, Inc. | 513 | 69,116 |
| National Health Investors, Inc. | 199 | 13,586 |
| National Retail Properties, Inc. | 734 | 32,179 |
| New Senior Investment Group, Inc. | 2,773 | 16,943 |
| Newmark Group, Inc., Class A | 1,518 | 15,210 |
| Office Properties Income Trust | 605 | 15,300 |
| Omega Healthcare Investors, Inc. | 1,217 | 45,199 |
| Outfront Media, Inc. | 2,599 | 52,708 |
| Paramount Group, Inc. | 2,425 | 22,480 |
| Park Hotels & Resorts, Inc. | 6,377 | 138,700 |
| Pebblebrook Hotel Trust | 1,423 | 32,245 |
| Pennsylvania Real Estate Investment Trust | 7,469 | 14,938 |
| Physicians Realty Trust | 743 | 12,631 |
| Piedmont Office Realty Trust, Inc., Class A | 1,774 | 30,264 |
| PotlatchDeltic Corp. | 404 | 20,503 |
| Preferred Apartment Communities, Inc., Class A | 942 | 7,753 |
| Prologis, Inc. | 1,392 | 137,905 |
| PS Business Parks, Inc. | 96 | 13,907 |
| Public Storage | 560 | 131,006 |
| QTS Realty Trust, Inc., Class A | 196 | 12,176 |
| Rayonier, Inc. | 1,183 | 38,613 |
| Security | Number of Shares | Value ($) |
| Realogy Holdings Corp. * | 9,111 | 137,394 |
| Realty Income Corp. | 982 | 59,175 |
| Regency Centers Corp. | 904 | 49,521 |
| Retail Opportunity Investments Corp. | 960 | 15,178 |
| Retail Properties of America, Inc., Class A | 4,098 | 43,152 |
| RLJ Lodging Trust | 3,706 | 58,184 |
| RPT Realty | 1,632 | 17,903 |
| Ryman Hospitality Properties, Inc. | 505 | 39,031 |
| Sabra Health Care REIT, Inc. | 1,137 | 19,579 |
| SBA Communications Corp. | 124 | 31,636 |
| Seritage Growth Properties, Class A * | 642 | 12,962 |
| Service Properties Trust | 7,014 | 90,060 |
| Simon Property Group, Inc. | 3,336 | 376,701 |
| SITE Centers Corp. | 3,537 | 47,184 |
| SL Green Realty Corp. | 1,261 | 87,097 |
| Spirit Realty Capital, Inc. | 760 | 32,695 |
| STAG Industrial, Inc. | 385 | 12,147 |
| STORE Capital Corp. | 694 | 23,207 |
| Summit Hotel Properties, Inc. * | 2,026 | 20,969 |
| Sun Communities, Inc. | 244 | 37,076 |
| Sunstone Hotel Investors, Inc. | 4,156 | 54,901 |
| Tanger Factory Outlet Centers, Inc. | 2,798 | 44,041 |
| The GEO Group, Inc. | 3,462 | 24,926 |
| The Howard Hughes Corp. * | 241 | 22,864 |
| The Macerich Co. | 5,847 | 75,543 |
| UDR, Inc. | 1,253 | 51,586 |
| Uniti Group, Inc. | 4,065 | 48,414 |
| Urban Edge Properties | 1,245 | 20,543 |
| Ventas, Inc. | 4,004 | 211,812 |
| VEREIT, Inc. | 2,129 | 83,031 |
| VICI Properties, Inc. | 1,285 | 36,623 |
| Vornado Realty Trust | 1,783 | 76,562 |
| Washington Prime Group, Inc. | 4,172 | 25,992 |
| Washington Real Estate Investment Trust | 699 | 15,741 |
| Weingarten Realty Investors | 1,277 | 32,423 |
| Welltower, Inc. | 3,506 | 238,057 |
| Weyerhaeuser Co. | 8,791 | 297,751 |
| WP Carey, Inc. | 673 | 46,127 |
| Xenia Hotels & Resorts, Inc. | 2,563 | 51,183 |
| 7,533,958 | ||
| Retailing 6.1% | ||
| Abercrombie & Fitch Co., Class A | 3,700 | 101,269 |
| Advance Auto Parts, Inc. | 752 | 120,583 |
| Amazon.com, Inc. * | 389 | 1,203,150 |
| American Eagle Outfitters, Inc. | 5,682 | 146,027 |
| Asbury Automotive Group, Inc. * | 480 | 81,336 |
| At Home Group, Inc. * | 958 | 24,132 |
| AutoNation, Inc. * | 1,521 | 114,105 |
| AutoZone, Inc. * | 91 | 105,553 |
| Bed Bath & Beyond, Inc. | 18,044 | 484,662 |
| Best Buy Co., Inc. | 3,537 | 354,938 |
| Big Lots, Inc. | 1,740 | 110,560 |
| Booking Holdings, Inc. * | 257 | 598,427 |
| Burlington Stores, Inc. * | 213 | 55,129 |
| Caleres, Inc. | 3,003 | 47,628 |
| CarMax, Inc. * | 1,706 | 203,884 |
| Chico's FAS, Inc. | 25,197 | 67,780 |
| Conn's, Inc. * | 1,150 | 16,318 |
| Core-Mark Holding Co., Inc. | 2,792 | 90,963 |
| Designer Brands, Inc., Class A | 5,412 | 67,596 |
| Dick's Sporting Goods, Inc. | 1,964 | 140,171 |
| Dillard's, Inc., Class A | 1,149 | 91,575 |
| Dollar General Corp. | 2,029 | 383,461 |
| Dollar Tree, Inc. * | 2,076 | 203,863 |
| eBay, Inc. | 7,500 | 423,150 |
| Expedia Group, Inc. | 1,243 | 200,123 |
36
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Express, Inc. * | 18,961 | 51,005 |
| Five Below, Inc. * | 151 | 28,104 |
| Floor & Decor Holdings, Inc., Class A * | 139 | 13,217 |
| Foot Locker, Inc. | 4,185 | 201,257 |
| GameStop Corp., Class A *(b) | 19,258 | 1,959,309 |
| Genesco, Inc. * | 1,494 | 67,140 |
| Genuine Parts Co. | 1,860 | 195,951 |
| Group 1 Automotive, Inc. | 678 | 103,354 |
| Groupon, Inc. * | 754 | 32,724 |
| GrubHub, Inc. * | 190 | 12,173 |
| Guess?, Inc. | 1,979 | 49,891 |
| Haverty Furniture Cos., Inc. | 659 | 23,836 |
| Hibbett Sports, Inc. * | 741 | 47,617 |
| Kohl's Corp. | 12,705 | 701,951 |
| L Brands, Inc. * | 6,104 | 333,645 |
| Lithia Motors, Inc., Class A | 331 | 123,777 |
| LKQ Corp. * | 3,453 | 136,014 |
| Lowe's Cos., Inc. | 5,941 | 949,075 |
| Lumber Liquidators Holdings, Inc. * | 609 | 15,085 |
| Macy's, Inc. | 38,649 | 587,851 |
| MarineMax, Inc. * | 417 | 18,619 |
| MercadoLibre, Inc. * | 13 | 21,295 |
| Monro, Inc. | 341 | 21,139 |
| Murphy USA, Inc. | 762 | 94,983 |
| National Vision Holdings, Inc. * | 417 | 19,803 |
| Nordstrom, Inc. | 6,026 | 219,648 |
| O'Reilly Automotive, Inc. * | 480 | 214,718 |
| Ollie's Bargain Outlet Holdings, Inc. * | 177 | 14,634 |
| Party City Holdco, Inc. * | 9,455 | 72,425 |
| Penske Automotive Group, Inc. | 1,108 | 75,322 |
| Pool Corp. | 126 | 42,181 |
| Qurate Retail, Inc., Class A | 22,233 | 276,134 |
| Rent-A-Center, Inc. | 399 | 23,046 |
| RH * | 32 | 15,692 |
| Ross Stores, Inc. | 2,230 | 260,107 |
| Sally Beauty Holdings, Inc. * | 3,640 | 58,604 |
| Shoe Carnival, Inc. | 379 | 18,556 |
| Signet Jewelers Ltd. * | 3,902 | 194,241 |
| Sleep Number Corp. * | 368 | 50,464 |
| Sonic Automotive, Inc., Class A | 871 | 40,162 |
| Stamps.com, Inc. * | 62 | 11,280 |
| Target Corp. | 6,500 | 1,192,360 |
| The Aaron's Co., Inc. * | 566 | 12,429 |
| The Buckle, Inc. | 914 | 35,134 |
| The Cato Corp., Class A | 1,693 | 20,892 |
| The Children's Place, Inc. * | 620 | 42,935 |
| The Gap, Inc. * | 11,365 | 283,557 |
| The Home Depot, Inc. | 6,093 | 1,574,066 |
| The Michaels Cos., Inc. * | 4,494 | 67,410 |
| The ODP Corp. * | 3,658 | 139,992 |
| The TJX Cos., Inc. | 10,334 | 681,941 |
| Tractor Supply Co. | 1,043 | 165,795 |
| Ulta Beauty, Inc. * | 335 | 107,980 |
| Urban Outfitters, Inc. * | 2,549 | 86,411 |
| Williams-Sonoma, Inc. | 916 | 120,262 |
| Zumiez, Inc. * | 470 | 21,188 |
| 17,384,764 | ||
| Semiconductors & Semiconductor Equipment 3.9% | ||
| Advanced Energy Industries, Inc. | 214 | 22,352 |
| Advanced Micro Devices, Inc. * | 329 | 27,804 |
| Ambarella, Inc. * | 130 | 14,624 |
| Amkor Technology, Inc. | 2,043 | 48,807 |
| Analog Devices, Inc. | 1,315 | 204,903 |
| Applied Materials, Inc. | 6,577 | 777,336 |
| Broadcom, Inc. | 1,519 | 713,733 |
| Brooks Automation, Inc. | 223 | 18,545 |
| Security | Number of Shares | Value ($) |
| Cirrus Logic, Inc. * | 494 | 40,399 |
| CMC Materials, Inc. | 91 | 15,515 |
| Cree, Inc. * | 636 | 72,161 |
| Diodes, Inc. * | 272 | 21,357 |
| Entegris, Inc. | 344 | 36,192 |
| First Solar, Inc. * | 703 | 56,957 |
| Intel Corp. | 46,852 | 2,847,665 |
| KLA Corp. | 757 | 235,601 |
| Kulicke & Soffa Industries, Inc. | 656 | 32,708 |
| Lam Research Corp. | 692 | 392,495 |
| Marvell Technology Group Ltd. | 1,747 | 84,345 |
| Maxim Integrated Products, Inc. | 1,415 | 131,836 |
| Microchip Technology, Inc. | 842 | 128,514 |
| Micron Technology, Inc. * | 11,622 | 1,063,762 |
| MKS Instruments, Inc. | 304 | 50,130 |
| Monolithic Power Systems, Inc. | 51 | 19,101 |
| NVIDIA Corp. | 696 | 381,812 |
| NXP Semiconductor N.V. | 2,087 | 380,982 |
| ON Semiconductor Corp. * | 3,602 | 145,053 |
| Photronics, Inc. * | 1,011 | 12,041 |
| Power Integrations, Inc. | 235 | 20,767 |
| Qorvo, Inc. * | 852 | 148,870 |
| QUALCOMM, Inc. | 10,477 | 1,426,863 |
| Semtech Corp. * | 253 | 18,547 |
| Silicon Laboratories, Inc. * | 151 | 23,517 |
| Skyworks Solutions, Inc. | 1,187 | 211,072 |
| Synaptics, Inc. * | 348 | 46,642 |
| Teradyne, Inc. | 685 | 88,098 |
| Texas Instruments, Inc. | 5,727 | 986,590 |
| Ultra Clean Holdings, Inc. * | 330 | 15,305 |
| Xilinx, Inc. | 1,187 | 154,666 |
| 11,117,667 | ||
| Software & Services 5.4% | ||
| Accenture plc, Class A | 2,766 | 693,989 |
| ACI Worldwide, Inc. * | 670 | 25,634 |
| Adobe, Inc. * | 507 | 233,053 |
| Akamai Technologies, Inc. * | 791 | 74,749 |
| Alliance Data Systems Corp. | 1,985 | 191,552 |
| Amdocs Ltd. | 1,603 | 121,523 |
| ANSYS, Inc. * | 170 | 57,968 |
| Aspen Technology, Inc. * | 186 | 27,995 |
| Autodesk, Inc. * | 210 | 57,960 |
| Automatic Data Processing, Inc. | 1,881 | 327,332 |
| Black Knight, Inc. * | 408 | 31,290 |
| Blackbaud, Inc. * | 155 | 10,667 |
| Broadridge Financial Solutions, Inc. | 551 | 78,512 |
| Cadence Design Systems, Inc. * | 555 | 78,305 |
| Cardtronics plc, Class A * | 432 | 16,654 |
| CDK Global, Inc. | 1,188 | 59,566 |
| Cerence, Inc. * | 303 | 33,700 |
| Check Point Software Technologies Ltd. * | 636 | 70,113 |
| Citrix Systems, Inc. | 786 | 104,994 |
| Cognizant Technology Solutions Corp., Class A | 5,365 | 394,220 |
| Cognyte Software Ltd. * | 301 | 8,690 |
| CommVault Systems, Inc. * | 307 | 19,565 |
| Concentrix Corp. * | 671 | 82,875 |
| Conduent, Inc. * | 15,054 | 80,991 |
| CSG Systems International, Inc. | 327 | 15,091 |
| DXC Technology Co. | 12,370 | 311,971 |
| Ebix, Inc. | 339 | 8,265 |
| EPAM Systems, Inc. * | 85 | 31,757 |
| Euronet Worldwide, Inc. * | 257 | 38,630 |
| EVERTEC, Inc. | 330 | 12,837 |
| ExlService Holdings, Inc. * | 174 | 14,724 |
| Fair Isaac Corp. * | 61 | 27,911 |
37
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Fidelity National Information Services, Inc. | 1,490 | 205,620 |
| Fiserv, Inc. * | 1,657 | 191,168 |
| FleetCor Technologies, Inc. * | 279 | 77,369 |
| Fortinet, Inc. * | 142 | 23,977 |
| Gartner, Inc. * | 292 | 52,280 |
| Genpact Ltd. | 1,402 | 56,697 |
| Global Payments, Inc. | 385 | 76,226 |
| GoDaddy, Inc., Class A * | 164 | 13,304 |
| InterDigital, Inc. | 400 | 25,348 |
| International Business Machines Corp. | 14,979 | 1,781,452 |
| Intuit, Inc. | 651 | 253,981 |
| j2 Global, Inc. * | 327 | 36,421 |
| Jack Henry & Associates, Inc. | 309 | 45,868 |
| LiveRamp Holdings, Inc. * | 550 | 34,738 |
| Manhattan Associates, Inc. * | 270 | 33,197 |
| Mastercard, Inc., Class A | 1,600 | 566,160 |
| MAXIMUS, Inc. | 646 | 52,507 |
| Microsoft Corp. | 20,118 | 4,675,021 |
| MicroStrategy, Inc., Class A * | 58 | 43,524 |
| NIC, Inc. | 396 | 13,745 |
| NortonLifeLock, Inc. | 8,500 | 165,835 |
| Nuance Communications, Inc. * | 660 | 29,436 |
| Oracle Corp. | 21,114 | 1,362,064 |
| Palo Alto Networks, Inc. * | 37 | 13,257 |
| Paychex, Inc. | 1,568 | 142,798 |
| Paycom Software, Inc. * | 25 | 9,356 |
| PayPal Holdings, Inc. * | 1,627 | 422,776 |
| Pegasystems, Inc. | 71 | 9,397 |
| Perficient, Inc. * | 216 | 12,029 |
| Perspecta, Inc. | 2,045 | 59,714 |
| Progress Software Corp. | 325 | 13,826 |
| PTC, Inc. * | 224 | 30,675 |
| Sabre Corp. | 5,796 | 85,143 |
| salesforce.com, Inc. * | 527 | 114,095 |
| Square, Inc., Class A * | 78 | 17,942 |
| SS&C Technologies Holdings, Inc. | 520 | 34,466 |
| Sykes Enterprises, Inc. * | 601 | 24,557 |
| Synopsys, Inc. * | 302 | 74,053 |
| Teradata Corp. * | 2,654 | 106,425 |
| The Western Union Co. | 5,080 | 117,958 |
| Tyler Technologies, Inc. * | 46 | 21,317 |
| Unisys Corp. * | 711 | 17,455 |
| Verint Systems, Inc. * | 301 | 14,836 |
| VeriSign, Inc. * | 227 | 44,045 |
| Visa, Inc., Class A | 3,754 | 797,312 |
| VMware, Inc., Class A * | 268 | 37,040 |
| WEX, Inc. * | 137 | 28,544 |
| Xperi Holding Corp. | 1,765 | 37,241 |
| 15,445,278 | ||
| Technology Hardware & Equipment 7.2% | ||
| 3D Systems Corp. * | 990 | 35,482 |
| ADTRAN, Inc. | 1,257 | 21,168 |
| Amphenol Corp., Class A | 1,347 | 169,291 |
| Apple Inc. | 94,600 | 11,471,196 |
| Arista Networks, Inc. * | 90 | 25,186 |
| Arrow Electronics, Inc. * | 2,476 | 248,244 |
| Avnet, Inc. | 8,057 | 306,730 |
| Badger Meter, Inc. | 124 | 13,465 |
| Belden, Inc. | 721 | 31,875 |
| Benchmark Electronics, Inc. | 1,629 | 46,264 |
| CDW Corp. | 949 | 148,889 |
| Ciena Corp. * | 723 | 37,719 |
| Cisco Systems, Inc. | 44,729 | 2,006,990 |
| Cognex Corp. | 399 | 32,953 |
| Coherent, Inc. * | 193 | 46,694 |
| CommScope Holding Co., Inc. * | 4,947 | 72,177 |
| Security | Number of Shares | Value ($) |
| Comtech Telecommunications Corp. | 447 | 12,015 |
| Corning, Inc. | 15,652 | 598,533 |
| CTS Corp. | 349 | 11,227 |
| Dell Technologies, Inc., Class C * | 900 | 72,963 |
| Diebold Nixdorf, Inc. * | 1,235 | 17,932 |
| Dolby Laboratories, Inc., Class A | 302 | 29,484 |
| EchoStar Corp., Class A * | 724 | 16,435 |
| ePlus, Inc. * | 219 | 20,709 |
| F5 Networks, Inc. * | 643 | 122,157 |
| Fabrinet * | 248 | 21,906 |
| Flex Ltd. * | 12,017 | 218,589 |
| FLIR Systems, Inc. | 1,069 | 57,085 |
| Hewlett Packard Enterprise Co. | 52,458 | 763,789 |
| HP, Inc. | 18,334 | 531,136 |
| II-VI, Inc. * | 373 | 31,444 |
| Insight Enterprises, Inc. * | 767 | 64,114 |
| IPG Photonics Corp. * | 161 | 36,603 |
| Itron, Inc. * | 226 | 26,496 |
| Jabil, Inc. | 3,732 | 161,111 |
| Juniper Networks, Inc. | 7,766 | 180,793 |
| Keysight Technologies, Inc. * | 387 | 54,768 |
| Knowles Corp. * | 960 | 19,958 |
| Littelfuse, Inc. | 122 | 31,747 |
| Lumentum Holdings, Inc. * | 163 | 14,670 |
| Methode Electronics, Inc. | 534 | 20,789 |
| Motorola Solutions, Inc. | 1,310 | 229,879 |
| MTS Systems Corp. | 329 | 19,200 |
| National Instruments Corp. | 868 | 38,539 |
| NCR Corp. * | 2,369 | 82,346 |
| NetApp, Inc. | 3,719 | 232,809 |
| NETGEAR, Inc. * | 481 | 19,240 |
| NetScout Systems, Inc. * | 1,181 | 33,328 |
| OSI Systems, Inc. * | 178 | 16,842 |
| PC Connection, Inc. | 321 | 14,769 |
| Plantronics, Inc. * | 1,140 | 46,159 |
| Plexus Corp. * | 432 | 36,279 |
| Rogers Corp. * | 121 | 21,959 |
| Sanmina Corp. * | 2,211 | 78,756 |
| ScanSource, Inc. * | 1,269 | 36,090 |
| Seagate Technology plc | 5,019 | 367,541 |
| Stratasys Ltd. * | 564 | 19,452 |
| SYNNEX Corp. | 665 | 59,291 |
| TE Connectivity Ltd. | 2,899 | 376,957 |
| Trimble, Inc. * | 1,023 | 75,845 |
| TTM Technologies, Inc. * | 2,086 | 29,454 |
| ViaSat, Inc. * | 541 | 27,667 |
| Viavi Solutions, Inc. * | 740 | 11,977 |
| Vishay Intertechnology, Inc. | 2,165 | 51,679 |
| Vontier Corp. * | 558 | 17,521 |
| Western Digital Corp. | 6,886 | 471,898 |
| Xerox Holdings Corp. | 5,090 | 129,693 |
| Zebra Technologies Corp., Class A * | 125 | 62,429 |
| 20,458,375 | ||
| Telecommunication Services 2.7% | ||
| AT&T, Inc. | 121,860 | 3,398,675 |
| ATN International, Inc. | 145 | 7,059 |
| Cincinnati Bell, Inc. * | 945 | 14,440 |
| Cogent Communications Holdings, Inc. | 185 | 11,072 |
| Consolidated Communications Holdings, Inc. * | 3,417 | 17,973 |
| Iridium Communications, Inc. * | 328 | 12,566 |
| Liberty Global plc, Class A * | 3,926 | 96,678 |
| Liberty Global plc, Class C * | 9,249 | 224,751 |
| Liberty Latin America Ltd., Class A * | 853 | 9,357 |
| Liberty Latin America Ltd., Class C * | 2,232 | 24,463 |
| Lumen Technologies, Inc. | 46,285 | 568,843 |
38
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Shenandoah Telecommunications Co. | 219 | 9,713 |
| T-Mobile US, Inc. * | 2,737 | 328,358 |
| Telephone and Data Systems, Inc. | 3,582 | 64,082 |
| United States Cellular Corp. * | 350 | 10,300 |
| Verizon Communications, Inc. | 53,587 | 2,963,361 |
| Vonage Holdings Corp. * | 1,215 | 16,062 |
| 7,777,753 | ||
| Transportation 2.4% | ||
| Air Transport Services Group, Inc. * | 582 | 15,446 |
| Alaska Air Group, Inc. * | 707 | 45,969 |
| Allegiant Travel Co. * | 68 | 17,149 |
| AMERCO | 96 | 55,173 |
| American Airlines Group, Inc. * | 8,973 | 187,895 |
| ArcBest Corp. | 1,100 | 64,889 |
| Atlas Air Worldwide Holdings, Inc. * | 181 | 9,979 |
| Atlas Corp. | 1,823 | 24,483 |
| Avis Budget Group, Inc. * | 3,717 | 206,479 |
| C.H. Robinson Worldwide, Inc. | 1,865 | 169,435 |
| Copa Holdings S.A., Class A * | 158 | 14,484 |
| Costamare, Inc. | 1,357 | 13,095 |
| CSX Corp. | 6,193 | 566,969 |
| Delta Air Lines, Inc. * | 4,096 | 196,362 |
| Echo Global Logistics, Inc. * | 609 | 16,967 |
| Expeditors International of Washington, Inc. | 1,823 | 167,424 |
| FedEx Corp. | 4,034 | 1,026,653 |
| Forward Air Corp. | 385 | 33,021 |
| Hawaiian Holdings, Inc. * | 555 | 14,885 |
| Heartland Express, Inc. | 533 | 9,701 |
| Hub Group, Inc., Class A * | 668 | 38,463 |
| J.B. Hunt Transport Services, Inc. | 773 | 113,530 |
| JetBlue Airways Corp. * | 2,432 | 44,822 |
| Kansas City Southern | 587 | 124,644 |
| Kirby Corp. * | 881 | 55,115 |
| Knight-Swift Transportation Holdings, Inc. | 1,250 | 54,000 |
| Landstar System, Inc. | 432 | 69,180 |
| Macquarie Infrastructure Corp. | 1,536 | 48,138 |
| Marten Transport Ltd. | 656 | 10,614 |
| Norfolk Southern Corp. | 2,104 | 530,334 |
| Old Dominion Freight Line, Inc. | 379 | 81,398 |
| Ryder System, Inc. | 2,795 | 189,417 |
| Saia, Inc. * | 177 | 35,494 |
| Schneider National, Inc., Class B | 919 | 21,256 |
| SEACOR Holdings, Inc. * | 301 | 12,796 |
| SkyWest, Inc. | 290 | 16,347 |
| Southwest Airlines Co. | 2,932 | 170,437 |
| Spirit Airlines, Inc. * | 587 | 21,062 |
| Uber Technologies, Inc. * | 333 | 17,233 |
| Union Pacific Corp. | 5,981 | 1,231,847 |
| United Airlines Holdings, Inc. * | 2,729 | 143,764 |
| United Parcel Service, Inc., Class B | 4,378 | 690,980 |
| Werner Enterprises, Inc. | 655 | 28,113 |
| XPO Logistics, Inc. * | 1,036 | 120,798 |
| Yellow Corp. * | 4,030 | 24,059 |
| 6,750,299 | ||
| Utilities 2.9% | ||
| ALLETE, Inc. | 577 | 35,849 |
| Alliant Energy Corp. | 1,578 | 72,841 |
| Ameren Corp. | 2,041 | 143,421 |
| American Electric Power Co., Inc. | 4,554 | 340,867 |
| American States Water Co. | 169 | 12,345 |
| American Water Works Co., Inc. | 777 | 110,241 |
| Atlantica Sustainable Infrastructure plc | 576 | 20,822 |
| Atmos Energy Corp. | 764 | 64,642 |
| Avangrid, Inc. | 515 | 23,566 |
| Security | Number of Shares | Value ($) |
| Avista Corp. | 844 | 33,937 |
| Black Hills Corp. | 535 | 31,651 |
| California Water Service Group | 278 | 15,276 |
| CenterPoint Energy, Inc. | 7,551 | 146,791 |
| Chesapeake Utilities Corp. | 102 | 10,785 |
| Clearway Energy, Inc., Class A | 166 | 4,341 |
| Clearway Energy, Inc., Class C | 330 | 9,062 |
| CMS Energy Corp. | 2,259 | 122,235 |
| Consolidated Edison, Inc. | 3,883 | 254,919 |
| Dominion Energy, Inc. | 5,274 | 360,320 |
| DTE Energy Co. | 1,742 | 205,068 |
| Duke Energy Corp. | 7,955 | 680,868 |
| Edison International | 3,984 | 215,096 |
| Entergy Corp. | 1,862 | 161,640 |
| Essential Utilities, Inc. | 724 | 30,451 |
| Evergy, Inc. | 2,908 | 155,956 |
| Eversource Energy | 2,318 | 184,235 |
| Exelon Corp. | 15,155 | 584,983 |
| FirstEnergy Corp. | 7,094 | 235,095 |
| Hawaiian Electric Industries, Inc. | 1,100 | 38,456 |
| IDACORP, Inc. | 372 | 32,081 |
| MDU Resources Group, Inc. | 2,569 | 72,189 |
| MGE Energy, Inc. | 213 | 13,568 |
| National Fuel Gas Co. | 850 | 38,624 |
| New Jersey Resources Corp. | 865 | 33,986 |
| NextEra Energy, Inc. | 8,417 | 618,481 |
| NiSource, Inc. | 3,356 | 72,490 |
| Northwest Natural Holding Co. | 261 | 12,525 |
| NorthWestern Corp. | 527 | 30,819 |
| NRG Energy, Inc. | 1,958 | 71,487 |
| OGE Energy Corp. | 1,976 | 57,838 |
| ONE Gas, Inc. | 409 | 27,391 |
| Ormat Technologies, Inc. | 217 | 18,590 |
| Otter Tail Corp. | 397 | 16,086 |
| PG&E Corp. * | 19,496 | 204,903 |
| Pinnacle West Capital Corp. | 1,250 | 87,413 |
| PNM Resources, Inc. | 682 | 32,743 |
| Portland General Electric Co. | 1,042 | 43,931 |
| PPL Corp. | 9,697 | 253,964 |
| Public Service Enterprise Group, Inc. | 5,264 | 283,361 |
| Sempra Energy | 1,870 | 216,883 |
| SJW Group | 139 | 8,713 |
| South Jersey Industries, Inc. | 803 | 20,163 |
| Southwest Gas Holdings, Inc. | 635 | 39,592 |
| Spire, Inc. | 484 | 32,147 |
| The AES Corp. | 12,170 | 323,235 |
| The Southern Co. | 9,326 | 528,971 |
| UGI Corp. | 3,035 | 116,271 |
| Unitil Corp. | 186 | 7,782 |
| Vistra Corp. | 6,360 | 109,710 |
| WEC Energy Group, Inc. | 1,914 | 154,345 |
| Xcel Energy, Inc. | 3,912 | 229,204 |
| 8,115,245 | ||
| Total Common Stock | ||
| (Cost $213,592,521) | 283,919,773 | |
| Other Investment Companies 0.8% of net assets | ||
| Equity Fund 0.1% | ||
| iShares Core S&P Total U.S. Stock Market ETF | 3,000 | 266,130 |
39
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Money Market Fund 0.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (d) | 262,494 | 262,494 |
| Securities Lending Collateral 0.6% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (d) | 1,841,600 | 1,841,600 |
| Total Other Investment Companies | ||
| (Cost $2,360,848) | 2,370,224 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| S&P 500 Index, e-mini, expires 03/19/21 | 3 | 571,380 | (12,884) | |||
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund’s investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $1,688,800. |
| (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. |
| ETF — | Exchange-traded fund |
| REIT — | Real Estate Investment Trust |
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, 2021:
Value at 2/29/20 | Gross Purchases | Gross Sales | Realized Gains(Losses) | Net change in unrealized appreciation (depreciation) | Value at 2/28/21 | Balance of Shares Held at 2/28/21 | Dividends Received | |
| The Charles Schwab Corp. | $159,373 | $117,673 | ($34,080) | $5,208 | $122,393 | $370,567 | 6,004 | $3,538 |
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $269,914,474 | $— | $— | $269,914,474 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 13,992,606 | — | 12,693 | 14,005,299 | |
| Other Investment Companies1 | 2,370,224 | — | — | 2,370,224 | |
| Liabilities | |||||
| Futures Contracts2 | (12,884) | — | — | (12,884) | |
| Total | $286,264,420 | $— | $12,693 | $286,277,113 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds and ETFs are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds and ETFs, which could be Level 1, Level 2 or Level 3.
40
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in affiliated issuer, at value (cost $224,086) | $370,567 | |
| Investments in unaffiliated issuers, at value (cost $213,887,683) including securities on loan of $1,688,800 | 284,077,830 | |
| Collateral invested for securities on loan, at value (cost $1,841,600) | 1,841,600 | |
| Deposit with broker for futures contracts | 44,000 | |
| Receivables: | ||
| Investments sold | 26,099 | |
| Dividends | 579,032 | |
| Income from securities on loan | + | 4,525 |
| Total assets | 286,943,653 | |
| Liabilities | ||
| Collateral held for securities on loan | 1,841,600 | |
| Payables: | ||
| Investments bought | 319,245 | |
| Management fees | 54,247 | |
| Variation margin on futures contracts | + | 2,820 |
| Total liabilities | 2,217,912 | |
| Net Assets | ||
| Total assets | 286,943,653 | |
| Total liabilities | – | 2,217,912 |
| Net assets | $284,725,741 | |
| Net Assets by Source | ||
| Capital received from investors | 227,396,481 | |
| Total distributable earnings | 57,329,260 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $284,725,741 | 5,900,000 | $48.26 | ||
41
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from affiliated issuer | $3,538 | |
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $983) | 6,195,919 | |
| Securities on loan, net | + | 89,351 |
| Total investment income | 6,288,808 | |
| Expenses | ||
| Management fees | 600,045 | |
| Total expenses | – | 600,045 |
| Net investment income | 5,688,763 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on affiliated issuer | (2,120) | |
| Net realized losses on unaffiliated issuers | (7,798,906) | |
| Net realized gains on in-kind redemptions on affiliated issuer | 7,328 | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 21,887,954 | |
| Net realized gains on futures contracts | + | 17,863 |
| Net realized gains | 14,112,119 | |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | 122,393 | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 48,048,436 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 65,694 |
| Net change in unrealized appreciation (depreciation) | + | 48,236,523 |
| Net realized and unrealized gains | 62,348,642 | |
| Increase in net assets resulting from operations | $68,037,405 | |
42
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Broad Market Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $5,688,763 | $6,810,274 | ||
| Net realized gains | 14,112,119 | 8,716,290 | ||
| Net change in unrealized appreciation (depreciation) | + | 48,236,523 | (10,833,909) | |
| Increase in net assets resulting from operations | 68,037,405 | 4,692,655 | ||
| Distributions to Shareholders | ||||
| Total distributions | ($6,024,890) | ($6,831,860) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 500,000 | $20,303,160 | 450,000 | $17,693,623 | ||||
| Shares redeemed | + | (1,650,000) | (59,607,587) | (750,000) | (29,918,728) | |||
| Net transactions in fund shares | (1,150,000) | ($39,304,427) | (300,000) | ($12,225,105) | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 7,050,000 | $262,017,653 | 7,350,000 | $276,381,963 | ||||
| Total increase (decrease) | + | (1,150,000) | 22,708,088 | (300,000) | (14,364,310) | |||
| End of period | 5,900,000 | $284,725,741 | 7,050,000 | $262,017,653 | ||||
43
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $37.67 | $37.83 | $37.20 | $33.91 | $27.57 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.98 | 0.99 | 0.87 | 0.78 | 0.70 | |
| Net realized and unrealized gains (losses) | 10.88 | (0.20) | 0.57 | 3.21 | 6.29 | |
| Total from investment operations | 11.86 | 0.79 | 1.44 | 3.99 | 6.99 | |
| Less distributions: | ||||||
| Distributions from net investment income | (1.04) | (0.95) | (0.81) | (0.70) | (0.65) | |
| Net asset value at end of period | $48.49 | $37.67 | $37.83 | $37.20 | $33.91 | |
| Total return | 32.40% | 1.98% | 3.92% | 11.91% | 25.66% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.32% | |
| Net investment income (loss) | 2.49% | 2.47% | 2.33% | 2.22% | 2.26% | |
| Portfolio turnover rate2 | 13% | 12% | 11% | 9% | 10% | |
| Net assets, end of period (x 1,000) | $5,862,523 | $5,557,983 | $4,596,260 | $4,016,040 | $2,197,623 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
44
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 99.8% of net assets | ||
| Automobiles & Components 2.4% | ||
| Adient plc * | 112,306 | 4,164,306 |
| American Axle & Manufacturing Holdings, Inc. * | 134,214 | 1,311,271 |
| Aptiv plc * | 56,496 | 8,465,361 |
| Autoliv, Inc. * | 32,078 | 2,887,020 |
| BorgWarner, Inc. | 116,380 | 5,237,100 |
| Cooper Tire & Rubber Co. | 36,589 | 2,094,354 |
| Dana, Inc. | 85,131 | 2,026,969 |
| Ford Motor Co. * | 3,617,719 | 42,327,312 |
| General Motors Co. | 892,414 | 45,807,611 |
| Gentex Corp. | 57,173 | 2,022,781 |
| Harley-Davidson, Inc. | 69,068 | 2,463,656 |
| Lear Corp. | 38,306 | 6,362,243 |
| The Goodyear Tire & Rubber Co. * | 485,641 | 8,163,625 |
| Thor Industries, Inc. | 21,536 | 2,521,004 |
| Visteon Corp. * | 28,558 | 3,631,721 |
| 139,486,334 | ||
| Banks 6.9% | ||
| Bank of America Corp. | 1,643,657 | 57,051,334 |
| CIT Group, Inc. | 94,349 | 4,278,727 |
| Citigroup, Inc. | 949,823 | 62,574,339 |
| Citizens Financial Group, Inc. | 156,879 | 6,814,824 |
| Comerica, Inc. | 54,868 | 3,736,511 |
| Credicorp Ltd. | 13,520 | 2,163,335 |
| Fifth Third Bancorp | 269,878 | 9,362,068 |
| First Republic Bank | 10,662 | 1,756,565 |
| Huntington Bancshares, Inc. | 232,060 | 3,559,800 |
| JPMorgan Chase & Co. | 692,250 | 101,878,433 |
| KeyCorp | 230,462 | 4,641,505 |
| M&T Bank Corp. | 38,949 | 5,878,962 |
| New York Community Bancorp, Inc. | 135,134 | 1,649,986 |
| PacWest Bancorp | 46,369 | 1,680,413 |
| People's United Financial, Inc. | 81,446 | 1,461,141 |
| Regions Financial Corp. | 265,379 | 5,474,769 |
| The PNC Financial Services Group, Inc. | 109,218 | 18,387,942 |
| Truist Financial Corp. | 183,296 | 10,440,540 |
| U.S. Bancorp | 401,191 | 20,059,550 |
| Wells Fargo & Co. | 2,206,265 | 79,800,605 |
| Zions Bancorp NA | 36,679 | 1,950,222 |
| 404,601,571 | ||
| Capital Goods 8.1% | ||
| 3M Co. | 137,119 | 24,004,052 |
| A.O. Smith Corp. | 25,855 | 1,535,011 |
| Acuity Brands, Inc. | 13,661 | 1,684,401 |
| AECOM * | 57,202 | 3,311,424 |
| AerCap Holdings N.V. * | 67,041 | 3,230,035 |
| AGCO Corp. | 29,824 | 3,861,611 |
| Allison Transmission Holdings, Inc. | 43,656 | 1,655,436 |
| AMETEK, Inc. | 25,396 | 2,995,966 |
| Carlisle Cos., Inc. | 12,397 | 1,800,664 |
| Security | Number of Shares | Value ($) |
| Carrier Global Corp. | 126,544 | 4,622,652 |
| Caterpillar, Inc. | 120,247 | 25,958,922 |
| Cummins, Inc. | 44,324 | 11,222,837 |
| Curtiss-Wright Corp. | 9,351 | 1,033,192 |
| Deere & Co. | 60,482 | 21,115,476 |
| Donaldson Co., Inc. | 24,729 | 1,456,785 |
| Dover Corp. | 27,686 | 3,412,576 |
| Eaton Corp. plc | 109,676 | 14,278,718 |
| EMCOR Group, Inc. | 22,052 | 2,147,203 |
| Emerson Electric Co. | 155,674 | 13,372,397 |
| Fastenal Co. | 69,222 | 3,209,824 |
| Flowserve Corp. | 44,346 | 1,640,802 |
| Fluor Corp. * | 342,394 | 5,875,481 |
| Fortive Corp. | 30,735 | 2,022,978 |
| Fortune Brands Home & Security, Inc. | 30,818 | 2,562,208 |
| GATX Corp. | 15,647 | 1,493,193 |
| General Dynamics Corp. | 78,629 | 12,853,483 |
| General Electric Co. | 4,509,659 | 56,551,124 |
| Graco, Inc. | 18,196 | 1,261,893 |
| Hexcel Corp. * | 26,882 | 1,445,176 |
| Honeywell International, Inc. | 109,885 | 22,235,230 |
| Howmet Aerospace, Inc. * | 128,174 | 3,602,971 |
| Hubbell, Inc. | 11,762 | 2,087,873 |
| Huntington Ingalls Industries, Inc. | 13,318 | 2,342,769 |
| IDEX Corp. | 8,199 | 1,600,199 |
| Illinois Tool Works, Inc. | 56,604 | 11,444,197 |
| ITT, Inc. | 16,321 | 1,354,317 |
| Johnson Controls International plc | 200,627 | 11,192,980 |
| L3Harris Technologies, Inc. | 14,327 | 2,606,225 |
| Lennox International, Inc. | 4,297 | 1,202,172 |
| Lincoln Electric Holdings, Inc. | 14,344 | 1,694,170 |
| Lockheed Martin Corp. | 33,380 | 11,023,745 |
| Masco Corp. | 41,939 | 2,231,994 |
| MSC Industrial Direct Co., Inc., Class A | 16,556 | 1,425,968 |
| Nordson Corp. | 5,847 | 1,125,021 |
| Northrop Grumman Corp. | 29,354 | 8,561,388 |
| Oshkosh Corp. | 24,608 | 2,608,448 |
| Otis Worldwide Corp. | 72,716 | 4,632,736 |
| Owens Corning | 38,744 | 3,139,039 |
| PACCAR, Inc. | 89,992 | 8,188,372 |
| Parker-Hannifin Corp. | 24,284 | 6,968,537 |
| Pentair plc | 35,794 | 2,001,958 |
| Quanta Services, Inc. | 55,002 | 4,611,918 |
| Raytheon Technologies Corp. | 385,147 | 27,726,733 |
| Regal Beloit Corp. | 13,193 | 1,803,087 |
| Resideo Technologies, Inc. * | 100,855 | 2,422,537 |
| Rockwell Automation, Inc. | 17,410 | 4,235,505 |
| Roper Technologies, Inc. | 6,080 | 2,295,930 |
| Sensata Technologies Holding plc * | 29,141 | 1,669,488 |
| Snap-on, Inc. | 14,602 | 2,965,812 |
| Spirit AeroSystems Holdings, Inc., Class A | 86,781 | 3,716,830 |
| Stanley Black & Decker, Inc. | 27,727 | 4,847,789 |
| Textron, Inc. | 100,823 | 5,075,430 |
| The Boeing Co. * | 144,269 | 30,586,471 |
| The Timken Co. | 20,031 | 1,569,429 |
| The Toro Co. | 14,212 | 1,432,143 |
| Trane Technologies plc | 48,002 | 7,355,826 |
| TransDigm Group, Inc. * | 5,644 | 3,254,725 |
45
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Trinity Industries, Inc. | 52,962 | 1,700,080 |
| UFP Industries, Inc. | 20,153 | 1,229,333 |
| United Rentals, Inc. * | 26,860 | 7,987,627 |
| Univar Solutions, Inc. * | 65,464 | 1,303,388 |
| Valmont Industries, Inc. | 8,245 | 1,950,190 |
| W.W. Grainger, Inc. | 10,670 | 3,976,816 |
| Watsco, Inc. | 6,946 | 1,688,573 |
| WESCO International, Inc. * | 54,681 | 4,389,791 |
| Westinghouse Air Brake Technologies Corp. | 18,066 | 1,308,520 |
| Xylem, Inc. | 20,446 | 2,035,604 |
| 478,025,404 | ||
| Commercial & Professional Services 0.8% | ||
| ABM Industries, Inc. | 27,884 | 1,204,031 |
| Booz Allen Hamilton Holding Corp. | 16,191 | 1,248,974 |
| CACI International, Inc., Class A * | 4,309 | 953,754 |
| Cintas Corp. | 8,652 | 2,806,190 |
| CoreCivic, Inc. | 107,404 | 771,161 |
| Equifax, Inc. | 11,813 | 1,912,288 |
| IHS Markit Ltd. | 23,954 | 2,159,693 |
| Jacobs Engineering Group, Inc. | 31,501 | 3,625,135 |
| Leidos Holdings, Inc. | 26,234 | 2,320,397 |
| ManpowerGroup, Inc. | 51,233 | 4,838,445 |
| Nielsen Holdings plc | 203,775 | 4,566,598 |
| Pitney Bowes, Inc. | 272,207 | 2,308,315 |
| Republic Services, Inc. | 34,593 | 3,081,890 |
| Robert Half International, Inc. | 41,862 | 3,256,445 |
| Science Applications International Corp. | 11,878 | 1,023,052 |
| Verisk Analytics, Inc. | 8,349 | 1,367,984 |
| Waste Management, Inc. | 67,799 | 7,518,231 |
| 44,962,583 | ||
| Consumer Durables & Apparel 1.6% | ||
| Brunswick Corp. | 21,561 | 1,905,345 |
| Capri Holdings Ltd. * | 138,047 | 6,442,653 |
| Carter's, Inc. | 15,785 | 1,317,574 |
| D.R. Horton, Inc. | 63,697 | 4,896,388 |
| Garmin Ltd. | 19,041 | 2,361,465 |
| Hanesbrands, Inc. | 138,363 | 2,447,641 |
| Hasbro, Inc. | 25,198 | 2,361,305 |
| Leggett & Platt, Inc. | 42,145 | 1,823,614 |
| Lennar Corp., Class A | 46,254 | 3,837,694 |
| Lululemon Athletica, Inc. * | 4,959 | 1,545,621 |
| Mattel, Inc. * | 132,347 | 2,673,409 |
| Mohawk Industries, Inc. * | 26,722 | 4,676,083 |
| Newell Brands, Inc. | 120,293 | 2,787,189 |
| NIKE, Inc., Class B | 128,646 | 17,338,908 |
| NVR, Inc. * | 633 | 2,849,032 |
| Polaris, Inc. | 18,021 | 2,122,153 |
| PulteGroup, Inc. | 76,682 | 3,459,125 |
| PVH Corp. | 48,203 | 4,818,372 |
| Ralph Lauren Corp. | 25,809 | 3,021,718 |
| Skechers U.S.A., Inc., Class A * | 34,097 | 1,247,950 |
| Tapestry, Inc. | 139,643 | 5,884,556 |
| Taylor Morrison Home Corp., Class A * | 52,960 | 1,456,930 |
| Toll Brothers, Inc. | 42,441 | 2,267,198 |
| Under Armour, Inc., Class A * | 45,576 | 997,659 |
| Under Armour, Inc., Class C * | 45,890 | 835,198 |
| VF Corp. | 63,552 | 5,028,870 |
| Whirlpool Corp. | 28,373 | 5,393,140 |
| 95,796,790 | ||
| Security | Number of Shares | Value ($) |
| Consumer Services 1.9% | ||
| Aramark | 86,578 | 3,213,775 |
| Carnival Corp. * | 369,846 | 9,893,381 |
| Chipotle Mexican Grill, Inc. * | 1,924 | 2,774,408 |
| Cracker Barrel Old Country Store, Inc. | 8,247 | 1,277,213 |
| Darden Restaurants, Inc. | 28,731 | 3,945,628 |
| Domino's Pizza, Inc. | 4,478 | 1,551,672 |
| Extended Stay America, Inc. | 91,958 | 1,479,604 |
| H&R Block, Inc. | 79,333 | 1,525,574 |
| Hilton Worldwide Holdings, Inc. * | 28,318 | 3,502,370 |
| Las Vegas Sands Corp. | 89,533 | 5,604,766 |
| Marriott International, Inc., Class A * | 38,475 | 5,696,993 |
| McDonald's Corp. | 113,251 | 23,345,561 |
| MGM Resorts International | 143,978 | 5,440,929 |
| Norwegian Cruise Line Holdings Ltd. * | 118,409 | 3,500,170 |
| Royal Caribbean Cruises Ltd. | 63,015 | 5,877,409 |
| Service Corp. International | 24,270 | 1,159,135 |
| Six Flags Entertainment Corp. | 44,220 | 1,972,212 |
| Starbucks Corp. | 158,584 | 17,131,830 |
| The Wendy's Co. | 50,841 | 1,038,682 |
| Travel & Leisure Co. | 35,208 | 2,127,619 |
| Wynn Resorts Ltd. * | 20,900 | 2,753,157 |
| Yum China Holdings, Inc. | 54,619 | 3,268,401 |
| Yum! Brands, Inc. | 59,053 | 6,113,757 |
| 114,194,246 | ||
| Diversified Financials 5.8% | ||
| Affiliated Managers Group, Inc. | 20,167 | 2,822,775 |
| Ally Financial, Inc. | 257,888 | 10,702,352 |
| American Express Co. | 167,974 | 22,720,163 |
| Ameriprise Financial, Inc. | 40,977 | 9,065,752 |
| Annaly Capital Management, Inc. | 203,804 | 1,693,611 |
| Berkshire Hathaway, Inc., Class B * | 303,010 | 72,876,935 |
| BlackRock, Inc. | 13,848 | 9,617,436 |
| Capital One Financial Corp. | 248,380 | 29,852,792 |
| Chimera Investment Corp. | 95,558 | 1,102,739 |
| CME Group, Inc. | 23,065 | 4,606,081 |
| Discover Financial Services | 178,820 | 16,821,597 |
| Equitable Holdings, Inc. | 105,599 | 3,122,562 |
| Evercore, Inc., Class A | 14,757 | 1,767,446 |
| Franklin Resources, Inc. | 211,995 | 5,547,909 |
| Intercontinental Exchange, Inc. | 39,004 | 4,302,531 |
| Invesco Ltd. | 239,960 | 5,379,903 |
| Jefferies Financial Group, Inc. | 76,346 | 2,217,088 |
| Lazard Ltd., Class A | 40,914 | 1,582,963 |
| LPL Financial Holdings, Inc. | 17,293 | 2,274,721 |
| Moody's Corp. | 10,303 | 2,832,192 |
| Morgan Stanley | 286,494 | 22,022,794 |
| MSCI, Inc. | 3,508 | 1,454,136 |
| Nasdaq, Inc. | 9,793 | 1,354,274 |
| Navient Corp. | 227,486 | 2,816,277 |
| New Residential Investment Corp. | 170,553 | 1,753,285 |
| Northern Trust Corp. | 33,452 | 3,182,289 |
| PROG Holdings, Inc. | 24,917 | 1,245,850 |
| Raymond James Financial, Inc. | 18,527 | 2,162,842 |
| S&P Global, Inc. | 14,767 | 4,863,659 |
| Santander Consumer USA Holdings, Inc. | 58,191 | 1,454,775 |
| SEI Investments Co. | 22,166 | 1,241,296 |
| Starwood Property Trust, Inc. | 64,413 | 1,470,549 |
| State Street Corp. | 77,680 | 5,652,774 |
| Synchrony Financial | 367,088 | 14,198,964 |
| T. Rowe Price Group, Inc. | 43,901 | 7,118,108 |
| The Bank of New York Mellon Corp. | 265,359 | 11,187,535 |
| The Charles Schwab Corp. (a) | 136,150 | 8,403,178 |
46
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| The Goldman Sachs Group, Inc. | 101,407 | 32,397,508 |
| Voya Financial, Inc. | 63,908 | 3,852,374 |
| 338,742,015 | ||
| Energy 8.8% | ||
| Antero Resources Corp. * | 529,820 | 4,768,380 |
| APA Corp. | 216,453 | 4,270,618 |
| Baker Hughes Co. | 454,492 | 11,125,964 |
| Cabot Oil & Gas Corp. | 61,227 | 1,133,312 |
| Chevron Corp. | 808,419 | 80,841,900 |
| ConocoPhillips | 507,751 | 26,408,129 |
| Delek US Holdings, Inc. | 74,331 | 1,825,569 |
| Devon Energy Corp. | 244,016 | 5,256,105 |
| EOG Resources, Inc. | 140,660 | 9,081,010 |
| Exxon Mobil Corp. | 2,636,722 | 143,358,575 |
| Halliburton Co. | 403,039 | 8,798,341 |
| Helmerich & Payne, Inc. | 91,868 | 2,639,368 |
| Hess Corp. | 72,908 | 4,777,661 |
| HollyFrontier Corp. | 164,873 | 6,245,389 |
| Kinder Morgan, Inc. | 617,905 | 9,083,203 |
| Marathon Oil Corp. | 631,453 | 7,009,128 |
| Marathon Petroleum Corp. | 482,195 | 26,337,491 |
| Murphy Oil Corp. | 149,302 | 2,438,102 |
| Nabors Industries Ltd. (b) | 30,571 | 3,393,687 |
| NOV, Inc. | 411,960 | 6,220,596 |
| Occidental Petroleum Corp. | 701,021 | 18,654,169 |
| Oceaneering International, Inc. * | 179,613 | 2,119,433 |
| ONEOK, Inc. | 118,161 | 5,233,351 |
| Patterson-UTI Energy, Inc. | 267,504 | 1,979,530 |
| PBF Energy, Inc., Class A * | 290,571 | 4,126,108 |
| Peabody Energy Corp. * | 446,547 | 1,920,152 |
| Phillips 66 | 378,232 | 31,412,168 |
| Pioneer Natural Resources Co. | 33,252 | 4,940,250 |
| Schlumberger N.V. | 829,435 | 23,149,531 |
| SM Energy Co. | 269,881 | 3,740,551 |
| Targa Resources Corp. | 125,278 | 3,874,848 |
| The Williams Cos., Inc. | 280,564 | 6,408,082 |
| Transocean Ltd. * | 1,037,054 | 3,598,577 |
| Valero Energy Corp. | 434,243 | 33,428,026 |
| World Fuel Services Corp. | 155,836 | 4,843,383 |
| 514,440,687 | ||
| Food & Staples Retailing 2.7% | ||
| Casey's General Stores, Inc. | 10,515 | 2,123,609 |
| Costco Wholesale Corp. | 70,753 | 23,419,243 |
| Performance Food Group Co. * | 47,639 | 2,583,939 |
| Rite Aid Corp. * | 160,551 | 3,143,589 |
| SpartanNash Co. | 72,154 | 1,315,367 |
| Sprouts Farmers Market, Inc. * | 52,925 | 1,117,247 |
| Sysco Corp. | 115,875 | 9,227,126 |
| The Kroger Co. | 521,980 | 16,812,976 |
| United Natural Foods, Inc. * | 172,302 | 4,557,388 |
| US Foods Holding Corp. * | 146,110 | 5,327,171 |
| Walgreens Boots Alliance, Inc. | 623,389 | 29,879,035 |
| Walmart, Inc. | 461,898 | 60,009,788 |
| 159,516,478 | ||
| Food, Beverage & Tobacco 3.6% | ||
| Altria Group, Inc. | 527,074 | 22,980,426 |
| Archer-Daniels-Midland Co. | 415,274 | 23,496,203 |
| Brown-Forman Corp., Class B | 22,191 | 1,588,432 |
| Bunge Ltd. | 158,973 | 12,174,152 |
| Campbell Soup Co. | 32,036 | 1,456,997 |
| Coca-Cola European Partners plc | 53,271 | 2,714,157 |
| Conagra Brands, Inc. | 81,011 | 2,748,703 |
| Security | Number of Shares | Value ($) |
| Constellation Brands, Inc., Class A | 18,752 | 4,015,553 |
| Darling Ingredients, Inc. * | 34,853 | 2,197,133 |
| Flowers Foods, Inc. | 51,843 | 1,127,585 |
| General Mills, Inc. | 118,361 | 6,511,039 |
| Hormel Foods Corp. | 46,736 | 2,167,148 |
| Ingredion, Inc. | 30,421 | 2,743,974 |
| Kellogg Co. | 50,066 | 2,889,309 |
| McCormick & Co., Inc. Non-Voting Shares | 17,960 | 1,513,669 |
| Molson Coors Beverage Co., Class B | 73,022 | 3,245,828 |
| Mondelez International, Inc., Class A | 279,055 | 14,834,564 |
| Monster Beverage Corp. * | 29,294 | 2,570,256 |
| PepsiCo, Inc. | 205,671 | 26,570,637 |
| Philip Morris International, Inc. | 323,447 | 27,176,017 |
| Sanderson Farms, Inc. | 9,943 | 1,516,308 |
| The Coca-Cola Co. | 503,913 | 24,686,698 |
| The Hershey Co. | 19,477 | 2,836,825 |
| The J.M. Smucker Co. | 31,929 | 3,576,048 |
| The Kraft Heinz Co. | 204,824 | 7,451,497 |
| Tyson Foods, Inc., Class A | 128,423 | 8,690,384 |
| 213,479,542 | ||
| Health Care Equipment & Services 5.2% | ||
| Abbott Laboratories | 134,866 | 16,154,250 |
| AmerisourceBergen Corp. | 50,186 | 5,079,827 |
| Anthem, Inc. | 78,307 | 23,741,899 |
| Baxter International, Inc. | 56,454 | 4,385,911 |
| Becton Dickinson & Co. | 20,566 | 4,959,491 |
| Boston Scientific Corp. * | 69,393 | 2,691,061 |
| Cardinal Health, Inc. | 196,680 | 10,132,954 |
| Centene Corp. * | 97,043 | 5,680,897 |
| Cerner Corp. | 45,098 | 3,118,076 |
| Cigna Corp. | 41,424 | 8,694,898 |
| CVS Health Corp. | 575,763 | 39,226,733 |
| Danaher Corp. | 36,484 | 8,014,440 |
| DaVita, Inc. * | 39,383 | 4,022,186 |
| DENTSPLY SIRONA, Inc. | 37,463 | 1,988,161 |
| Edwards Lifesciences Corp. * | 20,172 | 1,676,293 |
| Encompass Health Corp. | 16,460 | 1,324,042 |
| HCA Healthcare, Inc. | 72,917 | 12,543,912 |
| Henry Schein, Inc. * | 39,399 | 2,436,828 |
| Hologic, Inc. * | 25,416 | 1,832,239 |
| Humana, Inc. | 34,069 | 12,934,296 |
| Intuitive Surgical, Inc. * | 3,883 | 2,860,994 |
| Laboratory Corp. of America Holdings * | 16,679 | 4,001,459 |
| Magellan Health, Inc. * | 14,835 | 1,384,402 |
| McKesson Corp. | 98,307 | 16,665,003 |
| MEDNAX, Inc. * | 84,256 | 2,058,374 |
| Medtronic plc | 210,170 | 24,583,585 |
| Molina Healthcare, Inc. * | 9,226 | 1,999,828 |
| Owens & Minor, Inc. | 97,679 | 3,322,063 |
| Patterson Cos., Inc. | 57,427 | 1,783,683 |
| Quest Diagnostics, Inc. | 31,533 | 3,644,900 |
| ResMed, Inc. | 7,785 | 1,500,792 |
| STERIS plc | 7,519 | 1,314,321 |
| Stryker Corp. | 27,061 | 6,567,434 |
| Tenet Healthcare Corp. * | 67,203 | 3,428,697 |
| The Cooper Cos., Inc. | 3,310 | 1,278,090 |
| UnitedHealth Group, Inc. | 152,993 | 50,827,334 |
| Universal Health Services, Inc., Class B * | 29,108 | 3,648,106 |
| Varian Medical Systems, Inc. * | 10,296 | 1,804,580 |
| Zimmer Biomet Holdings, Inc. | 22,054 | 3,596,125 |
| 306,908,164 | ||
| Household & Personal Products 1.2% | ||
| Church & Dwight Co., Inc. | 27,721 | 2,183,029 |
| Colgate-Palmolive Co. | 107,755 | 8,103,176 |
47
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Kimberly-Clark Corp. | 41,903 | 5,377,412 |
| Nu Skin Enterprises, Inc., Class A | 27,383 | 1,401,462 |
| The Clorox Co. | 12,991 | 2,352,021 |
| The Estee Lauder Cos., Inc., Class A | 16,997 | 4,858,762 |
| The Procter & Gamble Co. | 358,510 | 44,286,740 |
| 68,562,602 | ||
| Insurance 3.6% | ||
| Aflac, Inc. | 229,715 | 11,001,051 |
| Alleghany Corp. | 3,154 | 2,038,840 |
| American Financial Group, Inc. | 17,983 | 1,918,786 |
| American International Group, Inc. | 759,837 | 33,394,836 |
| Aon plc, Class A | 34,584 | 7,875,123 |
| Arch Capital Group Ltd. * | 46,018 | 1,648,365 |
| Arthur J. Gallagher & Co. | 18,534 | 2,220,373 |
| Assurant, Inc. | 10,595 | 1,305,516 |
| Assured Guaranty Ltd. | 70,841 | 3,132,589 |
| Athene Holding Ltd., Class A * | 30,074 | 1,371,074 |
| Axis Capital Holdings Ltd. | 27,244 | 1,376,639 |
| Chubb Ltd. | 76,761 | 12,479,803 |
| Cincinnati Financial Corp. | 27,211 | 2,663,141 |
| CNO Financial Group, Inc. | 82,571 | 1,986,658 |
| Everest Re Group Ltd. | 10,427 | 2,521,353 |
| Fidelity National Financial, Inc. | 71,551 | 2,738,972 |
| First American Financial Corp. | 28,492 | 1,496,970 |
| Genworth Financial, Inc., Class A * | 388,293 | 1,211,474 |
| Globe Life, Inc. | 21,520 | 2,009,968 |
| Lincoln National Corp. | 95,480 | 5,429,948 |
| Loews Corp. | 101,621 | 4,858,500 |
| Markel Corp. * | 1,368 | 1,489,478 |
| Marsh & McLennan Cos., Inc. | 64,932 | 7,481,465 |
| MetLife, Inc. | 298,546 | 17,196,250 |
| Old Republic International Corp. | 88,993 | 1,720,235 |
| Primerica, Inc. | 8,255 | 1,165,854 |
| Principal Financial Group, Inc. | 85,935 | 4,862,202 |
| Prudential Financial, Inc. | 175,987 | 15,261,593 |
| Reinsurance Group of America, Inc. | 20,919 | 2,556,929 |
| RenaissanceRe Holdings Ltd. | 5,783 | 965,645 |
| The Allstate Corp. | 105,100 | 11,203,660 |
| The Hartford Financial Services Group, Inc. | 107,982 | 5,473,608 |
| The Progressive Corp. | 69,900 | 6,007,905 |
| The Travelers Cos., Inc. | 141,841 | 20,637,865 |
| Unum Group | 120,920 | 3,201,962 |
| W.R. Berkley Corp. | 27,208 | 1,886,331 |
| Willis Towers Watson plc | 11,747 | 2,591,858 |
| 208,382,819 | ||
| Materials 3.5% | ||
| Air Products and Chemicals, Inc. | 20,728 | 5,298,491 |
| Albemarle Corp. | 19,708 | 3,098,295 |
| Alcoa Corp. * | 219,712 | 5,393,930 |
| AptarGroup, Inc. | 8,669 | 1,127,577 |
| Arconic Corp. * | 29,709 | 651,221 |
| Ashland Global Holdings, Inc. | 15,230 | 1,281,148 |
| Avery Dennison Corp. | 15,398 | 2,697,884 |
| Ball Corp. | 28,407 | 2,425,674 |
| Berry Global Group, Inc. * | 28,474 | 1,577,460 |
| Celanese Corp. | 30,700 | 4,264,537 |
| CF Industries Holdings, Inc. | 78,740 | 3,565,347 |
| Commercial Metals Co. | 65,964 | 1,658,995 |
| Corteva, Inc. | 100,027 | 4,516,219 |
| Crown Holdings, Inc. * | 18,229 | 1,741,963 |
| Domtar Corp. | 63,998 | 2,371,126 |
| Dow, Inc. | 93,378 | 5,538,249 |
| DuPont de Nemours, Inc. | 281,862 | 19,820,536 |
| Security | Number of Shares | Value ($) |
| Eastman Chemical Co. | 56,129 | 6,132,655 |
| Ecolab, Inc. | 27,903 | 5,841,772 |
| Freeport-McMoRan, Inc. * | 259,912 | 8,813,616 |
| Graphic Packaging Holding Co. | 97,829 | 1,552,546 |
| Huntsman Corp. | 107,636 | 2,938,463 |
| International Flavors & Fragrances, Inc. | 12,978 | 1,758,649 |
| International Paper Co. | 174,993 | 8,688,402 |
| Linde plc | 56,552 | 13,813,957 |
| LyondellBasell Industries N.V., Class A | 154,932 | 15,971,940 |
| Martin Marietta Materials, Inc. | 9,402 | 3,167,252 |
| Newmont Corp. | 58,068 | 3,157,738 |
| Nucor Corp. | 167,899 | 10,043,718 |
| O-I Glass, Inc. * | 139,552 | 1,629,967 |
| Olin Corp. | 103,468 | 3,201,300 |
| Packaging Corp. of America | 24,911 | 3,288,750 |
| PPG Industries, Inc. | 60,610 | 8,171,440 |
| Reliance Steel & Aluminum Co. | 33,320 | 4,404,904 |
| RPM International, Inc. | 19,189 | 1,528,212 |
| Sealed Air Corp. | 58,240 | 2,440,256 |
| Sonoco Products Co. | 29,769 | 1,773,339 |
| Steel Dynamics, Inc. | 103,483 | 4,302,823 |
| The Chemours Co. | 81,363 | 1,914,471 |
| The Mosaic Co. | 279,288 | 8,211,067 |
| The Sherwin-Williams Co. | 6,262 | 4,260,289 |
| United States Steel Corp. | 291,650 | 4,844,306 |
| Vulcan Materials Co. | 15,740 | 2,628,423 |
| Westrock Co. | 150,144 | 6,544,777 |
| 208,053,684 | ||
| Media & Entertainment 4.8% | ||
| Activision Blizzard, Inc. | 53,675 | 5,131,867 |
| Alphabet, Inc., Class A * | 18,096 | 36,588,483 |
| Alphabet, Inc., Class C * | 18,117 | 36,901,793 |
| Altice USA, Inc., Class A * | 83,076 | 2,792,184 |
| Charter Communications, Inc., Class A * | 18,195 | 11,161,177 |
| Cinemark Holdings, Inc. | 66,176 | 1,485,651 |
| Comcast Corp., Class A | 929,052 | 48,979,621 |
| Discovery, Inc., Class A * | 39,213 | 2,079,465 |
| Discovery, Inc., Class C * | 86,845 | 3,908,025 |
| DISH Network Corp., Class A * | 60,354 | 1,901,755 |
| Electronic Arts, Inc. | 28,356 | 3,798,853 |
| Facebook, Inc., Class A * | 104,009 | 26,794,799 |
| Fox Corp., Class A | 94,169 | 3,136,769 |
| Fox Corp., Class B | 42,890 | 1,369,478 |
| IAC/InterActiveCorp * | 5,902 | 1,444,987 |
| Liberty Media Corp. - Liberty SiriusXM, Class A * | 38,644 | 1,716,180 |
| Liberty Media Corp. - Liberty SiriusXM, Class C * | 70,063 | 3,091,180 |
| Netflix, Inc. * | 3,318 | 1,787,904 |
| News Corp., Class A | 130,806 | 3,067,401 |
| News Corp., Class B | 41,201 | 944,327 |
| Omnicom Group, Inc. | 64,159 | 4,409,648 |
| The Interpublic Group of Cos., Inc. | 101,794 | 2,658,859 |
| The Walt Disney Co. * | 308,741 | 58,364,399 |
| ViacomCBS, Inc., Class B | 262,965 | 16,958,613 |
| 280,473,418 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 5.2% | ||
| AbbVie, Inc. | 320,716 | 34,553,942 |
| Agilent Technologies, Inc. | 26,380 | 3,220,207 |
| Alexion Pharmaceuticals, Inc. * | 18,590 | 2,839,622 |
| Amgen, Inc. | 112,774 | 25,365,128 |
| Biogen, Inc. * | 28,663 | 7,821,559 |
| Bristol-Myers Squibb Co. | 197,335 | 12,102,556 |
| Eli Lilly and Co. | 63,891 | 13,090,627 |
48
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Gilead Sciences, Inc. | 457,727 | 28,104,438 |
| ICON plc * | 6,103 | 1,102,690 |
| Illumina, Inc. * | 4,878 | 2,143,442 |
| IQVIA Holdings, Inc. * | 24,213 | 4,668,024 |
| Jazz Pharmaceuticals plc * | 9,344 | 1,570,166 |
| Johnson & Johnson | 399,040 | 63,231,878 |
| Merck & Co., Inc. | 433,345 | 31,469,514 |
| Mettler-Toledo International, Inc. * | 1,852 | 2,066,925 |
| Perrigo Co., plc | 25,912 | 1,045,808 |
| Pfizer, Inc. | 1,379,917 | 46,213,420 |
| Regeneron Pharmaceuticals, Inc. * | 4,448 | 2,004,135 |
| Thermo Fisher Scientific, Inc. | 23,185 | 10,435,105 |
| United Therapeutics Corp. * | 14,544 | 2,431,466 |
| Viatris, Inc. * | 363,196 | 5,393,461 |
| Waters Corp. * | 9,107 | 2,494,225 |
| Zoetis, Inc. | 19,737 | 3,063,972 |
| 306,432,310 | ||
| Real Estate 2.0% | ||
| Alexandria Real Estate Equities, Inc. | 6,455 | 1,030,799 |
| American Tower Corp. | 20,931 | 4,523,817 |
| Apple Hospitality REIT, Inc. | 95,254 | 1,357,370 |
| AvalonBay Communities, Inc. | 14,896 | 2,617,972 |
| Boston Properties, Inc. | 28,058 | 2,781,390 |
| Brixmor Property Group, Inc. | 94,456 | 1,858,894 |
| Camden Property Trust | 11,190 | 1,165,439 |
| CBRE Group, Inc., Class A * | 64,542 | 4,890,347 |
| Colony Capital, Inc. | 438,811 | 2,597,761 |
| Crown Castle International Corp. | 30,254 | 4,712,061 |
| Digital Realty Trust, Inc. | 63,033 | 8,492,436 |
| Diversified Healthcare Trust | 269,759 | 1,213,916 |
| Duke Realty Corp. | 30,863 | 1,211,373 |
| Equinix, Inc. | 4,609 | 2,988,199 |
| Equity Residential | 50,383 | 3,295,552 |
| Essex Property Trust, Inc. | 6,223 | 1,585,558 |
| Extra Space Storage, Inc. | 10,668 | 1,340,968 |
| Healthpeak Properties, Inc. | 74,843 | 2,177,183 |
| Host Hotels & Resorts, Inc. | 299,399 | 4,967,029 |
| Iron Mountain, Inc. | 89,379 | 3,109,495 |
| Jones Lang LaSalle, Inc. * | 18,032 | 3,137,207 |
| Kimco Realty Corp. | 91,219 | 1,672,044 |
| Lamar Advertising Co., Class A | 14,643 | 1,267,937 |
| Mid-America Apartment Communities, Inc. | 11,611 | 1,564,350 |
| Outfront Media, Inc. | 58,979 | 1,196,094 |
| Park Hotels & Resorts, Inc. | 142,822 | 3,106,379 |
| Prologis, Inc. | 31,413 | 3,112,086 |
| Public Storage | 12,608 | 2,949,516 |
| Realogy Holdings Corp. * | 206,352 | 3,111,788 |
| Realty Income Corp. | 22,320 | 1,345,003 |
| Service Properties Trust | 159,136 | 2,043,306 |
| Simon Property Group, Inc. | 75,702 | 8,548,270 |
| SL Green Realty Corp. | 28,176 | 1,946,116 |
| The Macerich Co. | 132,559 | 1,712,662 |
| UDR, Inc. | 28,131 | 1,158,153 |
| Ventas, Inc. | 90,790 | 4,802,791 |
| VEREIT, Inc. | 48,214 | 1,880,346 |
| Vornado Realty Trust | 40,480 | 1,738,211 |
| Welltower, Inc. | 79,475 | 5,396,352 |
| Weyerhaeuser Co. | 199,147 | 6,745,109 |
| WP Carey, Inc. | 15,289 | 1,047,908 |
| 117,399,187 | ||
| Retailing 6.2% | ||
| Abercrombie & Fitch Co., Class A | 83,889 | 2,296,042 |
| Advance Auto Parts, Inc. | 17,034 | 2,731,402 |
| Security | Number of Shares | Value ($) |
| Amazon.com, Inc. * | 8,825 | 27,295,107 |
| American Eagle Outfitters, Inc. | 128,881 | 3,312,242 |
| Asbury Automotive Group, Inc. * | 10,922 | 1,850,733 |
| AutoNation, Inc. * | 34,462 | 2,585,339 |
| AutoZone, Inc. * | 2,077 | 2,409,154 |
| Bed Bath & Beyond, Inc. | 409,476 | 10,998,525 |
| Best Buy Co., Inc. | 80,114 | 8,039,440 |
| Big Lots, Inc. | 39,439 | 2,505,954 |
| Booking Holdings, Inc. * | 5,824 | 13,561,242 |
| Burlington Stores, Inc. * | 4,906 | 1,269,771 |
| CarMax, Inc. * | 38,726 | 4,628,144 |
| Core-Mark Holding Co., Inc. | 63,239 | 2,060,327 |
| Dick's Sporting Goods, Inc. | 44,562 | 3,180,390 |
| Dollar General Corp. | 46,144 | 8,720,755 |
| Dollar Tree, Inc. * | 46,975 | 4,612,945 |
| eBay, Inc. | 170,270 | 9,606,633 |
| Expedia Group, Inc. | 28,110 | 4,525,710 |
| Foot Locker, Inc. | 94,576 | 4,548,160 |
| GameStop Corp., Class A *(b) | 436,391 | 44,398,420 |
| Genuine Parts Co. | 42,017 | 4,426,491 |
| Group 1 Automotive, Inc. | 15,366 | 2,342,393 |
| Kohl's Corp. | 287,902 | 15,906,586 |
| L Brands, Inc. * | 138,306 | 7,559,806 |
| Lithia Motors, Inc., Class A | 7,451 | 2,786,301 |
| LKQ Corp. * | 77,819 | 3,065,290 |
| Lowe's Cos., Inc. | 134,400 | 21,470,400 |
| Macy's, Inc. | 875,937 | 13,323,002 |
| Murphy USA, Inc. | 17,255 | 2,150,836 |
| Nordstrom, Inc. | 136,566 | 4,977,831 |
| O'Reilly Automotive, Inc. * | 10,815 | 4,837,874 |
| Penske Automotive Group, Inc. | 24,862 | 1,690,119 |
| Qurate Retail, Inc., Class A | 503,738 | 6,256,426 |
| Ross Stores, Inc. | 50,484 | 5,888,454 |
| Signet Jewelers Ltd. * | 88,412 | 4,401,149 |
| Target Corp. | 147,248 | 27,011,173 |
| The Aaron's Co., Inc. * | 12,731 | 279,573 |
| The Gap, Inc. * | 257,416 | 6,422,529 |
| The Home Depot, Inc. | 138,074 | 35,670,037 |
| The ODP Corp. * | 82,881 | 3,171,856 |
| The TJX Cos., Inc. | 234,178 | 15,453,406 |
| Tractor Supply Co. | 23,594 | 3,750,502 |
| Ulta Beauty, Inc. * | 7,489 | 2,413,929 |
| Urban Outfitters, Inc. * | 57,761 | 1,958,098 |
| Williams-Sonoma, Inc. | 20,728 | 2,721,379 |
| 365,071,875 | ||
| Semiconductors & Semiconductor Equipment 4.1% | ||
| Analog Devices, Inc. | 29,688 | 4,625,984 |
| Applied Materials, Inc. | 148,939 | 17,603,100 |
| Broadcom, Inc. | 34,371 | 16,149,902 |
| Intel Corp. | 1,061,679 | 64,528,850 |
| KLA Corp. | 17,130 | 5,331,370 |
| Lam Research Corp. | 15,699 | 8,904,316 |
| Marvell Technology Group Ltd. | 39,609 | 1,912,323 |
| Maxim Integrated Products, Inc. | 32,062 | 2,987,217 |
| Microchip Technology, Inc. | 19,242 | 2,936,906 |
| Micron Technology, Inc. * | 263,183 | 24,089,140 |
| NVIDIA Corp. | 15,791 | 8,662,627 |
| NXP Semiconductor N.V. | 47,424 | 8,657,251 |
| ON Semiconductor Corp. * | 81,800 | 3,294,086 |
| Qorvo, Inc. * | 19,456 | 3,399,547 |
| QUALCOMM, Inc. | 237,303 | 32,318,296 |
| Skyworks Solutions, Inc. | 26,860 | 4,776,245 |
| Teradyne, Inc. | 15,738 | 2,024,064 |
49
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Texas Instruments, Inc. | 129,756 | 22,353,066 |
| Xilinx, Inc. | 26,828 | 3,495,688 |
| 238,049,978 | ||
| Software & Services 5.6% | ||
| Accenture plc, Class A | 62,601 | 15,706,591 |
| Adobe, Inc. * | 11,536 | 5,302,753 |
| Akamai Technologies, Inc. * | 17,898 | 1,691,361 |
| Alliance Data Systems Corp. | 44,951 | 4,337,772 |
| Amdocs Ltd. | 36,360 | 2,756,452 |
| ANSYS, Inc. * | 3,836 | 1,308,038 |
| Autodesk, Inc. * | 4,849 | 1,338,324 |
| Automatic Data Processing, Inc. | 42,696 | 7,429,958 |
| Broadridge Financial Solutions, Inc. | 12,339 | 1,758,184 |
| Cadence Design Systems, Inc. * | 12,702 | 1,792,125 |
| CDK Global, Inc. | 26,939 | 1,350,721 |
| Check Point Software Technologies Ltd. * | 14,333 | 1,580,070 |
| Citrix Systems, Inc. | 17,799 | 2,377,590 |
| Cognizant Technology Solutions Corp., Class A | 121,927 | 8,959,196 |
| Concentrix Corp. * | 15,257 | 1,884,392 |
| Conduent, Inc. * | 340,707 | 1,833,004 |
| DXC Technology Co. | 280,428 | 7,072,394 |
| Fidelity National Information Services, Inc. | 33,723 | 4,653,774 |
| Fiserv, Inc. * | 37,439 | 4,319,337 |
| FleetCor Technologies, Inc. * | 6,393 | 1,772,843 |
| Genpact Ltd. | 31,695 | 1,281,746 |
| Global Payments, Inc. | 8,566 | 1,695,982 |
| International Business Machines Corp. | 339,453 | 40,371,145 |
| Intuit, Inc. | 14,754 | 5,756,126 |
| Jack Henry & Associates, Inc. | 6,975 | 1,035,369 |
| Mastercard, Inc., Class A | 36,305 | 12,846,524 |
| MAXIMUS, Inc. | 14,582 | 1,185,225 |
| Microsoft Corp. | 455,767 | 105,911,136 |
| NortonLifeLock, Inc. | 192,528 | 3,756,221 |
| Oracle Corp. | 478,709 | 30,881,518 |
| Paychex, Inc. | 35,789 | 3,259,304 |
| PayPal Holdings, Inc. * | 36,844 | 9,573,913 |
| Perspecta, Inc. | 45,753 | 1,335,988 |
| Sabre Corp. | 131,460 | 1,931,147 |
| salesforce.com, Inc. * | 12,038 | 2,606,227 |
| Synopsys, Inc. * | 6,758 | 1,657,129 |
| Teradata Corp. * | 60,010 | 2,406,401 |
| The Western Union Co. | 115,068 | 2,671,879 |
| VeriSign, Inc. * | 5,124 | 994,210 |
| Visa, Inc., Class A | 85,064 | 18,066,743 |
| 328,448,812 | ||
| Technology Hardware & Equipment 7.5% | ||
| Amphenol Corp., Class A | 30,753 | 3,865,037 |
| Apple Inc. | 2,143,743 | 259,950,276 |
| Arrow Electronics, Inc. * | 55,991 | 5,613,658 |
| Avnet, Inc. | 182,497 | 6,947,661 |
| CDW Corp. | 21,410 | 3,359,015 |
| Cisco Systems, Inc. | 1,013,259 | 45,464,931 |
| CommScope Holding Co., Inc. * | 113,558 | 1,656,811 |
| Corning, Inc. | 354,535 | 13,557,418 |
| Dell Technologies, Inc., Class C * | 20,376 | 1,651,882 |
| F5 Networks, Inc. * | 14,586 | 2,771,048 |
| Flex Ltd. * | 271,850 | 4,944,952 |
| FLIR Systems, Inc. | 24,250 | 1,294,950 |
| Hewlett Packard Enterprise Co. | 1,189,090 | 17,313,150 |
| HP, Inc. | 415,439 | 12,035,268 |
| Insight Enterprises, Inc. * | 17,734 | 1,482,385 |
| Jabil, Inc. | 85,362 | 3,685,078 |
| Juniper Networks, Inc. | 175,446 | 4,084,383 |
| Security | Number of Shares | Value ($) |
| Motorola Solutions, Inc. | 29,650 | 5,202,982 |
| NCR Corp. * | 53,730 | 1,867,655 |
| NetApp, Inc. | 84,201 | 5,270,983 |
| Sanmina Corp. * | 50,824 | 1,810,351 |
| Seagate Technology plc | 113,936 | 8,343,533 |
| SYNNEX Corp. | 15,076 | 1,344,176 |
| TE Connectivity Ltd. | 65,573 | 8,526,457 |
| Trimble, Inc. * | 23,305 | 1,727,833 |
| Vontier Corp. * | 12,624 | 396,394 |
| Western Digital Corp. | 156,033 | 10,692,941 |
| Xerox Holdings Corp. | 114,091 | 2,907,039 |
| 437,768,247 | ||
| Telecommunication Services 3.0% | ||
| AT&T, Inc. | 2,762,169 | 77,036,894 |
| Liberty Global plc, Class A * | 88,992 | 2,191,428 |
| Liberty Global plc, Class C * | 209,472 | 5,090,170 |
| Lumen Technologies, Inc. | 1,048,880 | 12,890,735 |
| T-Mobile US, Inc. * | 61,972 | 7,434,781 |
| Telephone and Data Systems, Inc. | 81,160 | 1,451,952 |
| Verizon Communications, Inc. | 1,213,827 | 67,124,633 |
| 173,220,593 | ||
| Transportation 2.4% | ||
| American Airlines Group, Inc. * | 203,305 | 4,257,207 |
| Avis Budget Group, Inc. * | 84,181 | 4,676,255 |
| C.H. Robinson Worldwide, Inc. | 42,153 | 3,829,600 |
| CSX Corp. | 140,250 | 12,839,887 |
| Delta Air Lines, Inc. * | 93,585 | 4,486,465 |
| Expeditors International of Washington, Inc. | 41,569 | 3,817,697 |
| FedEx Corp. | 91,274 | 23,229,233 |
| J.B. Hunt Transport Services, Inc. | 17,483 | 2,567,728 |
| Kansas City Southern | 13,410 | 2,847,479 |
| Kirby Corp. * | 20,009 | 1,251,763 |
| Knight-Swift Transportation Holdings, Inc. | 28,243 | 1,220,098 |
| Landstar System, Inc. | 9,785 | 1,566,970 |
| Macquarie Infrastructure Corp. | 34,491 | 1,080,948 |
| Norfolk Southern Corp. | 47,656 | 12,012,171 |
| Old Dominion Freight Line, Inc. | 8,617 | 1,850,673 |
| Ryder System, Inc. | 63,301 | 4,289,909 |
| Southwest Airlines Co. | 66,967 | 3,892,792 |
| Union Pacific Corp. | 135,587 | 27,925,499 |
| United Airlines Holdings, Inc. * | 61,262 | 3,227,282 |
| United Parcel Service, Inc., Class B | 99,192 | 15,655,473 |
| XPO Logistics, Inc. * | 23,197 | 2,704,770 |
| 139,229,899 | ||
| Utilities 2.9% | ||
| Alliant Energy Corp. | 36,103 | 1,666,515 |
| Ameren Corp. | 46,662 | 3,278,939 |
| American Electric Power Co., Inc. | 103,052 | 7,713,442 |
| American Water Works Co., Inc. | 17,392 | 2,467,577 |
| Atmos Energy Corp. | 17,246 | 1,459,184 |
| CenterPoint Energy, Inc. | 170,915 | 3,322,588 |
| CMS Energy Corp. | 51,145 | 2,767,456 |
| Consolidated Edison, Inc. | 87,976 | 5,775,624 |
| Dominion Energy, Inc. | 119,505 | 8,164,582 |
| DTE Energy Co. | 39,463 | 4,645,584 |
| Duke Energy Corp. | 180,240 | 15,426,742 |
| Edison International | 90,156 | 4,867,522 |
| Entergy Corp. | 42,188 | 3,662,340 |
| Evergy, Inc. | 66,389 | 3,560,442 |
| Eversource Energy | 52,446 | 4,168,408 |
| Exelon Corp. | 343,938 | 13,276,007 |
50
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| FirstEnergy Corp. | 160,717 | 5,326,161 |
| MDU Resources Group, Inc. | 58,233 | 1,636,347 |
| NextEra Energy, Inc. | 191,150 | 14,045,702 |
| NiSource, Inc. | 75,267 | 1,625,767 |
| NRG Energy, Inc. | 44,270 | 1,616,298 |
| OGE Energy Corp. | 44,737 | 1,309,452 |
| PG&E Corp. * | 441,826 | 4,643,591 |
| Pinnacle West Capital Corp. | 28,294 | 1,978,599 |
| Portland General Electric Co. | 23,567 | 993,585 |
| PPL Corp. | 219,533 | 5,749,569 |
| Public Service Enterprise Group, Inc. | 119,274 | 6,420,519 |
| Sempra Energy | 42,323 | 4,908,622 |
| Southwest Gas Holdings, Inc. | 14,334 | 893,725 |
| The AES Corp. | 275,805 | 7,325,381 |
| The Southern Co. | 211,231 | 11,981,022 |
| UGI Corp. | 69,489 | 2,662,124 |
| Vistra Corp. | 144,167 | 2,486,881 |
| WEC Energy Group, Inc. | 43,311 | 3,492,599 |
| Xcel Energy, Inc. | 88,500 | 5,185,215 |
| 170,504,111 | ||
| Total Common Stock | ||
| (Cost $4,729,532,728) | 5,851,751,349 | |
| Other Investment Companies 0.8% of net assets | ||
| Money Market Fund 0.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 6,327,893 | 6,327,893 |
| Security | Number of Shares | Value ($) |
| Securities Lending Collateral 0.7% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c) | 41,329,925 | 41,329,925 |
| Total Other Investment Companies | ||
| (Cost $47,657,818) | 47,657,818 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| S&P 500 Index, e-mini, expires 03/19/21 | 58 | 11,046,680 | (276,776) | |||
| * | Non-income producing security. |
| (a) | Issuer is affiliated with the fund’s investment adviser. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $37,922,275. |
| (c) | The rate shown is the 7-day yield. |
| REIT — | Real Estate Investment Trust |
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, 2021:
Value at 2/29/20 | Gross Purchases | Gross Sales | Realized Gains(Losses) | Net change in unrealized appreciation (depreciation) | Value at 2/28/21 | Balance of Shares Held at 2/28/21 | Dividends Received | |
| The Charles Schwab Corp. | $3,669,008 | $3,251,948 | ($1,335,246) | $160,562 | $2,656,906 | $8,403,178 | 136,150 | $80,906 |
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $5,851,751,349 | $— | $— | $5,851,751,349 | |
| Other Investment Companies1 | 47,657,818 | — | — | 47,657,818 | |
| Liabilities | |||||
| Futures Contracts2 | (276,776) | — | — | (276,776) | |
| Total | $5,899,132,391 | $— | $— | $5,899,132,391 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
51
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in affiliated issuer, at value (cost $5,703,867) | $8,403,178 | |
| Investments in unaffiliated issuers, at value (cost $4,730,156,754) including securities on loan of $37,922,275 | 5,849,676,064 | |
| Collateral invested for securities on loan, at value (cost $41,329,925) | 41,329,925 | |
| Deposit with broker for futures contracts | 583,000 | |
| Receivables: | ||
| Investments sold | 19,160,593 | |
| Fund shares sold | 17,017,544 | |
| Dividends | 12,659,841 | |
| Income from securities on loan | + | 79,978 |
| Total assets | 5,948,910,123 | |
| Liabilities | ||
| Collateral held for securities on loan | 41,329,925 | |
| Payables: | ||
| Investments bought | 19,420,843 | |
| Management fees | 1,113,091 | |
| Fund shares redeemed | 24,474,415 | |
| Variation margin on futures contracts | + | 49,007 |
| Total liabilities | 86,387,281 | |
| Net Assets | ||
| Total assets | 5,948,910,123 | |
| Total liabilities | – | 86,387,281 |
| Net assets | $5,862,522,842 | |
| Net Assets by Source | ||
| Capital received from investors | 4,976,150,110 | |
| Total distributable earnings | 886,372,732 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $5,862,522,842 | 120,900,000 | $48.49 | ||
52
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from affiliated issuer | $80,906 | |
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $10,540) | 137,729,032 | |
| Securities on loan, net | + | 1,532,323 |
| Total investment income | 139,342,261 | |
| Expenses | ||
| Management fees | 12,688,961 | |
| Total expenses | – | 12,688,961 |
| Net investment income | 126,653,300 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on affiliated issuer | (38,377) | |
| Net realized losses on unaffiliated issuers | (181,804,642) | |
| Net realized gains on in-kind redemptions on affiliated issuer | 198,939 | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 603,643,345 | |
| Net realized gains on futures contracts | + | 934,942 |
| Net realized gains | 422,934,207 | |
| Net change in unrealized appreciation (depreciation) on affiliated issuer | 2,656,906 | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 879,117,545 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 1,694,146 |
| Net change in unrealized appreciation (depreciation) | + | 883,468,597 |
| Net realized and unrealized gains | 1,306,402,804 | |
| Increase in net assets resulting from operations | $1,433,056,104 | |
53
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Large Company Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $126,653,300 | $134,103,915 | ||
| Net realized gains | 422,934,207 | 75,878,897 | ||
| Net change in unrealized appreciation (depreciation) | + | 883,468,597 | (161,320,173) | |
| Increase in net assets resulting from operations | 1,433,056,104 | 48,662,639 | ||
| Distributions to Shareholders | ||||
| Total distributions | ($134,608,220) | ($128,120,700) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 30,500,000 | $1,133,770,691 | 38,750,000 | $1,543,661,840 | ||||
| Shares redeemed | + | (57,150,000) | (2,127,678,557) | (12,700,000) | (502,481,171) | |||
| Net transactions in fund shares | (26,650,000) | ($993,907,866) | 26,050,000 | $1,041,180,669 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 147,550,000 | $5,557,982,824 | 121,500,000 | $4,596,260,216 | ||||
| Total increase (decrease) | + | (26,650,000) | 304,540,018 | 26,050,000 | 961,722,608 | |||
| End of period | 120,900,000 | $5,862,522,842 | 147,550,000 | $5,557,982,824 | ||||
54
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $34.73 | $38.08 | $36.90 | $34.89 | $26.47 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.49 | 0.55 | 0.59 | 0.52 | 0.45 | |
| Net realized and unrealized gains (losses) | 14.09 | (3.34) | 1.14 | 1.98 | 8.37 | |
| Total from investment operations | 14.58 | (2.79) | 1.73 | 2.50 | 8.82 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.56) | (0.56) | (0.55) | (0.49) | (0.40) | |
| Net asset value at end of period | $48.75 | $34.73 | $38.08 | $36.90 | $34.89 | |
| Total return | 42.73% | (7.46%) | 4.69% | 7.22% | 33.56% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.32% | |
| Net investment income (loss) | 1.40% | 1.43% | 1.53% | 1.45% | 1.43% | |
| Portfolio turnover rate2 | 24% | 26% | 23% | 21% | 23% | |
| Net assets, end of period (x 1,000) | $4,085,618 | $3,424,710 | $3,402,783 | $2,782,002 | $1,568,402 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
55
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 99.9% of net assets | ||
| Automobiles & Components 1.8% | ||
| Cooper-Standard Holding, Inc. * | 320,379 | 11,475,976 |
| Dorman Products, Inc. * | 40,029 | 3,991,292 |
| Fox Factory Holding Corp. * | 14,486 | 1,841,895 |
| Gentherm, Inc. * | 59,866 | 4,237,914 |
| LCI Industries | 44,105 | 6,216,159 |
| Modine Manufacturing Co. * | 331,922 | 4,603,758 |
| Patrick Industries, Inc. | 36,558 | 2,885,523 |
| Standard Motor Products, Inc. | 55,245 | 2,320,842 |
| Stoneridge, Inc. * | 56,564 | 1,734,252 |
| Tenneco, Inc., Class A * | 747,733 | 8,329,746 |
| Tesla, Inc. * | 19,945 | 13,472,847 |
| Veoneer, Inc. * | 279,558 | 7,682,254 |
| Winnebago Industries, Inc. | 41,509 | 2,889,026 |
| 71,681,484 | ||
| Banks 8.7% | ||
| Associated Banc-Corp. | 278,895 | 5,619,734 |
| Atlantic Union Bankshares Corp. | 60,270 | 2,213,717 |
| Axos Financial, Inc. * | 50,814 | 2,351,164 |
| BancorpSouth Bank | 135,147 | 4,062,519 |
| Bank of Hawaii Corp. | 55,303 | 4,839,013 |
| Bank OZK | 152,517 | 6,286,751 |
| BankUnited, Inc. | 214,941 | 8,638,479 |
| Banner Corp. | 47,037 | 2,435,576 |
| Berkshire Hills Bancorp, Inc. | 85,640 | 1,726,502 |
| BOK Financial Corp. | 42,393 | 3,648,342 |
| Boston Private Financial Holdings, Inc. | 201,904 | 2,778,199 |
| Brookline Bancorp, Inc. | 106,000 | 1,508,380 |
| Cadence BanCorp | 120,507 | 2,472,804 |
| Capitol Federal Financial, Inc. | 187,706 | 2,498,367 |
| Cathay General Bancorp | 104,301 | 3,925,890 |
| Central Pacific Financial Corp. | 75,919 | 1,718,047 |
| Columbia Banking System, Inc. | 85,005 | 3,764,871 |
| Commerce Bancshares, Inc. | 76,061 | 5,630,796 |
| Community Bank System, Inc. | 36,391 | 2,590,675 |
| Cullen/Frost Bankers, Inc. | 62,638 | 6,539,407 |
| CVB Financial Corp. | 97,078 | 2,078,440 |
| Eagle Bancorp, Inc. | 33,310 | 1,628,526 |
| East West Bancorp, Inc. | 175,415 | 12,657,946 |
| Essent Group Ltd. | 65,040 | 2,681,599 |
| F.N.B. Corp. | 559,147 | 6,614,709 |
| Federal Agricultural Mortgage Corp., Class C | 16,889 | 1,456,676 |
| First BanCorp | 288,655 | 3,027,991 |
| First Citizens BancShares, Inc., Class A | 6,921 | 5,106,937 |
| First Commonwealth Financial Corp. | 146,154 | 1,959,925 |
| First Financial Bancorp | 114,038 | 2,557,872 |
| First Financial Bankshares, Inc. | 52,724 | 2,354,654 |
| First Hawaiian, Inc. | 204,302 | 5,697,983 |
| First Horizon Corp. | 748,013 | 12,117,811 |
| First Interstate BancSystem, Inc., Class A | 34,883 | 1,584,386 |
| First Merchants Corp. | 44,590 | 1,875,010 |
| First Midwest Bancorp, Inc. | 135,649 | 2,683,137 |
| Security | Number of Shares | Value ($) |
| Flagstar Bancorp, Inc. | 47,500 | 2,061,025 |
| Fulton Financial Corp. | 310,052 | 4,790,303 |
| Glacier Bancorp, Inc. | 64,001 | 3,468,854 |
| Great Western Bancorp, Inc. | 138,319 | 3,711,099 |
| Hancock Whitney Corp. | 157,314 | 5,938,603 |
| Heartland Financial USA, Inc. | 33,522 | 1,566,818 |
| Hilltop Holdings, Inc. | 88,038 | 2,908,776 |
| Home BancShares, Inc. | 171,107 | 4,181,855 |
| Hope Bancorp, Inc. | 239,540 | 3,152,346 |
| Independent Bank Corp. | 20,776 | 1,776,556 |
| International Bancshares Corp. | 74,589 | 3,250,589 |
| Investors Bancorp, Inc. | 322,480 | 4,301,883 |
| MGIC Investment Corp. | 598,908 | 7,294,699 |
| National Bank Holdings Corp., Class A | 42,977 | 1,665,359 |
| NBT Bancorp, Inc. | 53,331 | 1,932,182 |
| Northwest Bancshares, Inc. | 172,218 | 2,431,718 |
| OFG Bancorp | 113,762 | 2,196,744 |
| Old National Bancorp | 191,213 | 3,466,692 |
| Park National Corp. | 17,019 | 2,110,356 |
| Pinnacle Financial Partners, Inc. | 49,560 | 4,022,785 |
| Popular, Inc. | 142,683 | 9,534,078 |
| Prosperity Bancshares, Inc. | 68,743 | 5,050,548 |
| Provident Financial Services, Inc. | 106,204 | 2,148,507 |
| Radian Group, Inc. | 334,339 | 6,820,516 |
| Renasant Corp. | 56,032 | 2,200,937 |
| S&T Bancorp, Inc. | 50,120 | 1,447,466 |
| Sandy Spring Bancorp, Inc. | 42,486 | 1,596,624 |
| Signature Bank | 46,340 | 10,117,876 |
| Simmons First National Corp., Class A | 84,938 | 2,486,985 |
| South State Corp. | 35,775 | 2,821,217 |
| Sterling Bancorp | 185,865 | 4,057,433 |
| SVB Financial Group * | 28,323 | 14,313,311 |
| Synovus Financial Corp. | 269,862 | 11,417,861 |
| TCF Financial Corp. | 79,427 | 3,559,918 |
| Texas Capital Bancshares, Inc. * | 67,251 | 5,124,526 |
| The Bank of NT Butterfield & Son Ltd. | 72,359 | 2,640,380 |
| Towne Bank | 67,665 | 1,951,459 |
| Trustmark Corp. | 100,650 | 3,035,604 |
| UMB Financial Corp. | 44,666 | 3,768,470 |
| Umpqua Holdings Corp. | 427,029 | 7,289,385 |
| United Bankshares, Inc. | 121,986 | 4,507,383 |
| United Community Banks, Inc. | 80,154 | 2,649,891 |
| Valley National Bancorp | 395,466 | 4,844,458 |
| Walker & Dunlop, Inc. | 47,747 | 4,758,466 |
| Washington Federal, Inc. | 159,636 | 4,824,200 |
| Webster Financial Corp. | 134,333 | 7,429,958 |
| WesBanco, Inc. | 65,701 | 2,120,828 |
| Westamerica BanCorp | 20,122 | 1,209,533 |
| Western Alliance Bancorp | 63,818 | 5,839,985 |
| Wintrust Financial Corp. | 72,948 | 5,373,350 |
| WSFS Financial Corp. | 35,973 | 1,911,605 |
| 354,414,835 | ||
| Capital Goods 11.9% | ||
| AAON, Inc. | 25,803 | 1,989,411 |
| AAR Corp. | 160,125 | 6,369,772 |
| Advanced Drainage Systems, Inc. | 21,789 | 2,397,226 |
56
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Aegion Corp. * | 133,851 | 3,460,048 |
| Aerojet Rocketdyne Holdings, Inc. * | 41,873 | 2,146,829 |
| Air Lease Corp. | 170,818 | 7,833,713 |
| Alamo Group, Inc. | 17,193 | 2,624,168 |
| Albany International Corp., Class A | 35,534 | 2,808,963 |
| Allegion plc | 54,924 | 5,974,633 |
| Altra Industrial Motion Corp. | 56,151 | 3,252,266 |
| American Woodmark Corp. * | 26,164 | 2,443,979 |
| Apogee Enterprises, Inc. | 116,732 | 4,365,777 |
| Applied Industrial Technologies, Inc. | 84,776 | 7,237,327 |
| Arcosa, Inc. | 120,362 | 6,828,136 |
| Argan, Inc. | 40,508 | 2,026,210 |
| Armstrong World Industries, Inc. | 44,364 | 3,796,671 |
| Astec Industries, Inc. | 56,383 | 3,829,533 |
| Astronics Corp. * | 99,411 | 1,570,694 |
| Atkore, Inc. * | 77,924 | 5,271,559 |
| AZZ, Inc. | 65,764 | 3,359,883 |
| Barnes Group, Inc. | 96,182 | 5,035,128 |
| Beacon Roofing Supply, Inc. * | 187,564 | 8,971,186 |
| Boise Cascade Co. | 153,703 | 7,675,928 |
| Builders FirstSource, Inc. * | 347,133 | 15,018,709 |
| BWX Technologies, Inc. | 78,531 | 4,555,583 |
| CAI International, Inc. | 50,989 | 2,243,516 |
| Chart Industries, Inc. * | 28,702 | 4,106,969 |
| CIRCOR International, Inc. * | 50,504 | 1,798,447 |
| Colfax Corp. * | 187,489 | 8,315,137 |
| Columbus McKinnon Corp. | 37,674 | 1,896,509 |
| Comfort Systems USA, Inc. | 72,132 | 4,467,856 |
| Crane Co. | 91,835 | 7,701,283 |
| Cubic Corp. | 50,460 | 3,504,447 |
| Douglas Dynamics, Inc. | 33,113 | 1,595,384 |
| DXP Enterprises, Inc. * | 74,439 | 2,236,148 |
| Dycom Industries, Inc. * | 103,855 | 7,953,216 |
| Encore Wire Corp. | 61,370 | 4,021,576 |
| Enerpac Tool Group Corp. | 127,391 | 3,146,558 |
| EnerSys | 89,217 | 8,054,511 |
| EnPro Industries, Inc. | 46,701 | 3,751,958 |
| ESCO Technologies, Inc. | 19,931 | 2,106,109 |
| Federal Signal Corp. | 70,397 | 2,563,155 |
| Franklin Electric Co., Inc. | 54,712 | 4,106,683 |
| Generac Holdings, Inc. * | 27,093 | 8,928,769 |
| Gibraltar Industries, Inc. * | 35,349 | 3,087,735 |
| GMS, Inc. * | 116,322 | 4,257,385 |
| Granite Construction, Inc. | 254,010 | 8,732,864 |
| Griffon Corp. | 118,094 | 2,905,112 |
| H&E Equipment Services, Inc. | 134,321 | 4,154,549 |
| HEICO Corp. | 13,231 | 1,664,195 |
| HEICO Corp., Class A | 24,624 | 2,850,474 |
| Herc Holdings, Inc. * | 75,119 | 6,592,443 |
| Hillenbrand, Inc. | 139,507 | 6,481,495 |
| Hyster-Yale Materials Handling, Inc. | 46,349 | 3,965,157 |
| Ingersoll Rand, Inc. * | 74,536 | 3,453,998 |
| Insteel Industries, Inc. | 66,046 | 2,039,500 |
| JELD-WEN Holding, Inc. * | 169,712 | 5,031,961 |
| John Bean Technologies Corp. | 23,337 | 3,443,841 |
| Kadant, Inc. | 11,176 | 1,944,624 |
| Kaman Corp. | 69,168 | 3,365,715 |
| Kennametal, Inc. | 148,498 | 5,547,885 |
| Lindsay Corp. | 18,084 | 2,897,961 |
| Lydall, Inc. * | 74,348 | 2,589,541 |
| Masonite International Corp. * | 50,629 | 5,555,014 |
| MasTec, Inc. * | 141,890 | 12,308,957 |
| Matrix Service Co. * | 200,287 | 2,717,895 |
| Maxar Technologies, Inc. | 107,094 | 5,124,448 |
| McGrath RentCorp | 33,970 | 2,638,110 |
| Meritor, Inc. * | 146,910 | 4,461,657 |
| Moog, Inc., Class A | 93,677 | 7,274,956 |
| MRC Global, Inc. * | 609,707 | 5,328,839 |
| Security | Number of Shares | Value ($) |
| Mueller Industries, Inc. | 167,770 | 6,818,173 |
| Mueller Water Products, Inc., Class A | 238,413 | 3,073,144 |
| MYR Group, Inc. * | 67,289 | 3,966,687 |
| National Presto Industries, Inc. | 14,212 | 1,454,314 |
| Navistar International Corp. * | 51,666 | 2,276,404 |
| NOW, Inc. * | 728,980 | 7,749,057 |
| nVent Electric plc | 314,214 | 8,251,260 |
| Primoris Services Corp. | 168,732 | 5,647,460 |
| Proto Labs, Inc. * | 11,207 | 1,632,636 |
| Quanex Building Products Corp. | 113,832 | 2,769,533 |
| Raven Industries, Inc. | 61,292 | 2,402,646 |
| RBC Bearings, Inc. * | 15,384 | 3,062,339 |
| REV Group, Inc. | 157,556 | 1,956,846 |
| Rexnord Corp. | 114,562 | 5,149,562 |
| Rush Enterprises, Inc., Class A | 193,720 | 8,219,540 |
| Simpson Manufacturing Co., Inc. | 44,139 | 4,301,787 |
| SiteOne Landscape Supply, Inc. * | 16,108 | 2,553,279 |
| SPX FLOW, Inc. * | 73,048 | 4,496,835 |
| Standex International Corp. | 27,341 | 2,681,058 |
| Teledyne Technologies, Inc. * | 19,274 | 7,150,654 |
| Tennant Co. | 24,181 | 1,842,592 |
| Terex Corp. | 288,728 | 11,889,819 |
| The Greenbrier Cos., Inc. | 228,890 | 10,769,274 |
| The Manitowoc Co., Inc. * | 122,348 | 1,993,049 |
| The Middleby Corp. * | 63,719 | 9,329,099 |
| Titan Machinery, Inc. * | 123,169 | 3,017,641 |
| Trex Co., Inc. * | 35,543 | 3,257,161 |
| TriMas Corp. * | 69,790 | 2,344,246 |
| Triton International Ltd. | 108,514 | 6,269,939 |
| Tutor Perini Corp. * | 461,374 | 6,782,198 |
| Vectrus, Inc. * | 30,254 | 1,651,868 |
| Wabash National Corp. | 323,038 | 5,355,970 |
| Watts Water Technologies, Inc., Class A | 31,088 | 3,546,830 |
| Welbilt, Inc. * | 223,671 | 3,574,263 |
| Woodward, Inc. | 62,155 | 7,099,344 |
| 488,094,381 | ||
| Commercial & Professional Services 5.2% | ||
| ACCO Brands Corp. | 408,291 | 3,307,157 |
| ADT, Inc. | 219,558 | 1,670,836 |
| ASGN, Inc. * | 76,743 | 7,134,797 |
| Brady Corp., Class A | 65,938 | 3,455,811 |
| CBIZ, Inc. * | 68,146 | 2,054,602 |
| Cimpress plc * | 17,719 | 1,755,599 |
| Clean Harbors, Inc. * | 86,606 | 7,374,501 |
| Copart, Inc. * | 62,714 | 6,845,860 |
| CoreLogic, Inc. | 92,047 | 7,792,699 |
| CoStar Group, Inc. * | 4,586 | 3,777,763 |
| Covanta Holding Corp. | 368,542 | 5,178,015 |
| Deluxe Corp. | 242,865 | 9,600,453 |
| Exponent, Inc. | 20,940 | 2,020,082 |
| FTI Consulting, Inc. * | 40,643 | 4,655,656 |
| Harsco Corp. * | 211,876 | 3,466,291 |
| Healthcare Services Group, Inc. | 170,052 | 4,837,979 |
| Herman Miller, Inc. | 176,463 | 6,768,238 |
| HNI Corp. | 143,578 | 5,109,941 |
| Huron Consulting Group, Inc. * | 34,547 | 1,758,442 |
| IAA, Inc. * | 74,212 | 4,351,050 |
| ICF International, Inc. | 33,872 | 2,826,618 |
| Insperity, Inc. | 34,855 | 3,091,639 |
| Interface, Inc. | 247,406 | 3,072,783 |
| KAR Auction Services, Inc. | 232,559 | 3,234,896 |
| KBR, Inc. | 248,306 | 7,697,486 |
| Kelly Services, Inc., Class A * | 369,356 | 7,689,992 |
| Kforce, Inc. | 67,913 | 3,487,333 |
| Knoll, Inc. | 170,056 | 2,773,613 |
| Korn Ferry | 113,231 | 6,969,368 |
57
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| ManTech International Corp., Class A | 41,545 | 3,247,157 |
| Matthews International Corp., Class A | 108,390 | 3,869,523 |
| MSA Safety, Inc. | 21,033 | 3,386,103 |
| Quad/Graphics, Inc. * | 778,689 | 3,410,658 |
| R.R. Donnelley & Sons Co. * | 2,291,242 | 7,790,223 |
| Resources Connection, Inc. | 153,714 | 1,961,391 |
| Rollins, Inc. | 91,172 | 3,024,175 |
| SP Plus Corp. * | 86,043 | 2,852,325 |
| Steelcase, Inc., Class A | 364,870 | 5,086,288 |
| Stericycle, Inc. * | 99,189 | 6,434,390 |
| Team, Inc. * | 194,467 | 2,156,639 |
| Tetra Tech, Inc. | 53,750 | 7,437,387 |
| The Brink's Co. | 55,218 | 4,242,399 |
| TransUnion | 62,825 | 5,290,493 |
| TriNet Group, Inc. * | 23,897 | 1,918,212 |
| TrueBlue, Inc. * | 261,335 | 5,443,608 |
| UniFirst Corp. | 22,802 | 5,524,697 |
| US Ecology, Inc. * | 31,874 | 1,217,906 |
| Viad Corp. | 97,360 | 4,073,542 |
| 212,126,616 | ||
| Consumer Durables & Apparel 4.6% | ||
| Acushnet Holdings Corp. | 51,923 | 2,192,189 |
| American Outdoor Brands, Inc. * | 41,289 | 826,193 |
| Beazer Homes USA, Inc. * | 145,563 | 2,572,098 |
| Callaway Golf Co. | 132,124 | 3,692,866 |
| Cavco Industries, Inc. * | 8,795 | 1,854,953 |
| Century Communities, Inc. * | 40,072 | 2,217,184 |
| Columbia Sportswear Co. | 43,450 | 4,478,392 |
| Crocs, Inc. * | 41,368 | 3,173,753 |
| Deckers Outdoor Corp. * | 32,937 | 10,741,085 |
| Ethan Allen Interiors, Inc. | 156,142 | 4,000,358 |
| Fossil Group, Inc. * | 1,058,389 | 16,024,009 |
| G-III Apparel Group Ltd. * | 324,686 | 9,347,710 |
| Helen of Troy Ltd. * | 28,963 | 6,279,178 |
| iRobot Corp. * | 34,803 | 4,319,400 |
| KB Home | 133,819 | 5,403,611 |
| Kontoor Brands, Inc. | 239,731 | 10,128,635 |
| La-Z-Boy, Inc. | 140,199 | 5,973,879 |
| LGI Homes, Inc. * | 17,313 | 1,891,445 |
| M.D.C Holdings, Inc. | 95,245 | 5,388,010 |
| M/I Homes, Inc. * | 64,767 | 3,231,873 |
| Meritage Homes Corp. * | 64,270 | 5,418,604 |
| Movado Group, Inc. | 104,413 | 2,380,616 |
| Oxford Industries, Inc. | 55,044 | 4,196,555 |
| Smith & Wesson Brands, Inc. | 156,089 | 2,686,292 |
| Steven Madden Ltd. | 210,534 | 7,787,653 |
| Sturm Ruger & Co., Inc. | 40,573 | 2,767,079 |
| Tempur Sealy International, Inc. | 185,359 | 6,192,844 |
| TopBuild Corp. * | 27,693 | 5,273,024 |
| Tri Pointe Homes, Inc. * | 370,081 | 7,031,539 |
| Tupperware Brands Corp. * | 681,224 | 20,825,018 |
| Universal Electronics, Inc. * | 30,549 | 1,777,646 |
| Vista Outdoor, Inc. * | 287,065 | 9,074,125 |
| Wolverine World Wide, Inc. | 210,058 | 7,341,527 |
| 186,489,343 | ||
| Consumer Services 5.8% | ||
| Adtalem Global Education, Inc. * | 158,140 | 6,214,902 |
| American Public Education, Inc. * | 43,150 | 1,270,336 |
| Arcos Dorados Holdings, Inc., Class A | 478,564 | 2,522,032 |
| BJ's Restaurants, Inc. * | 96,509 | 5,359,145 |
| Bloomin' Brands, Inc. * | 354,035 | 8,794,229 |
| Boyd Gaming Corp. * | 141,282 | 8,293,253 |
| Bright Horizons Family Solutions, Inc. * | 35,023 | 5,591,772 |
| Brinker International, Inc. | 179,961 | 12,343,525 |
| Security | Number of Shares | Value ($) |
| Caesars Entertainment, Inc. * | 134,625 | 12,579,360 |
| Choice Hotels International, Inc. | 20,659 | 2,166,509 |
| Churchill Downs, Inc. | 29,004 | 6,689,193 |
| Dave & Buster's Entertainment, Inc. * | 155,883 | 6,330,409 |
| Denny's Corp. * | 111,923 | 1,964,249 |
| Dine Brands Global, Inc. | 33,189 | 2,625,582 |
| Fiesta Restaurant Group, Inc. * | 115,801 | 1,767,123 |
| frontdoor, Inc. * | 41,663 | 2,181,891 |
| Graham Holdings Co., Class B | 14,261 | 8,568,437 |
| Grand Canyon Education, Inc. * | 43,003 | 4,501,984 |
| Hilton Grand Vacations, Inc. * | 165,539 | 6,540,446 |
| Houghton Mifflin Harcourt Co. * | 1,135,291 | 6,925,275 |
| Hyatt Hotels Corp., Class A * | 95,820 | 8,427,369 |
| International Game Technology plc | 522,731 | 9,560,750 |
| Jack in the Box, Inc. | 81,917 | 8,384,205 |
| Laureate Education, Inc., Class A * | 276,013 | 3,795,179 |
| Marriott Vacations Worldwide Corp. * | 55,636 | 9,441,986 |
| Papa John's International, Inc. | 28,056 | 2,530,371 |
| Penn National Gaming, Inc. * | 120,007 | 13,894,410 |
| Perdoceo Education Corp. * | 92,341 | 1,188,429 |
| Planet Fitness, Inc., Class A * | 20,533 | 1,767,686 |
| Red Robin Gourmet Burgers, Inc. * | 163,727 | 5,024,782 |
| Red Rock Resorts, Inc., Class A | 135,604 | 4,091,173 |
| Regis Corp. * | 209,994 | 2,467,429 |
| Ruth's Hospitality Group, Inc. | 99,921 | 2,278,698 |
| Scientific Games Corp., Class A * | 122,775 | 5,749,553 |
| SeaWorld Entertainment, Inc. * | 82,537 | 4,098,787 |
| Strategic Education, Inc. | 12,986 | 1,180,687 |
| Stride, Inc. * | 113,221 | 2,722,965 |
| Terminix Global Holdings, Inc. * | 99,645 | 4,485,021 |
| Texas Roadhouse, Inc. | 88,743 | 8,064,964 |
| The Cheesecake Factory, Inc. | 200,085 | 10,994,671 |
| Vail Resorts, Inc. | 28,183 | 8,713,620 |
| WW International, Inc. * | 54,607 | 1,610,360 |
| Wyndham Hotels & Resorts, Inc. | 83,606 | 5,457,800 |
| 239,160,547 | ||
| Diversified Financials 3.9% | ||
| AGNC Investment Corp. | 408,136 | 6,542,420 |
| Apollo Commercial Real Estate Finance, Inc. | 196,233 | 2,607,937 |
| Artisan Partners Asset Management, Inc., Class A | 73,593 | 3,495,667 |
| BGC Partners, Inc., Class A | 644,843 | 2,888,897 |
| Blackstone Mortgage Trust, Inc., Class A | 129,345 | 3,776,874 |
| Brightsphere Investment Group, Inc. | 123,364 | 2,232,888 |
| Cannae Holdings, Inc. * | 84,964 | 3,173,405 |
| Capstead Mortgage Corp. | 281,785 | 1,614,628 |
| Cboe Global Markets, Inc. | 65,944 | 6,525,818 |
| Cohen & Steers, Inc. | 20,371 | 1,311,485 |
| Compass Diversified Holdings | 151,170 | 3,575,170 |
| Credit Acceptance Corp. * | 9,477 | 3,440,340 |
| Donnelley Financial Solutions, Inc. * | 156,521 | 4,067,981 |
| Encore Capital Group, Inc. * | 44,818 | 1,497,818 |
| Enova International, Inc. * | 100,877 | 3,096,924 |
| FactSet Research Systems, Inc. | 15,081 | 4,583,267 |
| Federated Hermes, Inc. | 194,605 | 5,199,846 |
| FirstCash, Inc. | 56,922 | 3,604,301 |
| Green Dot Corp., Class A * | 40,487 | 1,913,416 |
| Greenhill & Co., Inc. | 129,443 | 1,953,295 |
| Houlihan Lokey, Inc. | 33,890 | 2,154,048 |
| Invesco Mortgage Capital, Inc. (a) | 654,612 | 2,546,441 |
| Janus Henderson Group plc | 295,604 | 8,640,505 |
| Ladder Capital Corp., Class A | 251,886 | 2,881,576 |
| MarketAxess Holdings, Inc. | 6,426 | 3,572,470 |
| MFA Financial, Inc. | 1,256,913 | 5,052,790 |
| Moelis & Co., Class A | 66,695 | 3,444,130 |
58
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Morningstar, Inc. | 12,201 | 2,736,074 |
| Nelnet, Inc., Class A | 37,537 | 2,725,186 |
| New York Mortgage Trust, Inc. | 562,538 | 2,345,783 |
| OneMain Holdings, Inc. | 187,734 | 8,806,602 |
| PennyMac Mortgage Investment Trust | 160,721 | 3,048,877 |
| Piper Sandler Cos. | 20,212 | 2,148,940 |
| PRA Group, Inc. * | 72,739 | 2,681,160 |
| Redwood Trust, Inc. | 271,139 | 2,668,008 |
| SLM Corp. | 539,388 | 8,516,936 |
| Stifel Financial Corp. | 96,434 | 5,890,189 |
| Two Harbors Investment Corp. | 522,630 | 3,773,389 |
| Virtus Investment Partners, Inc. | 10,160 | 2,549,144 |
| Waddell & Reed Financial, Inc., Class A | 457,034 | 11,466,983 |
| WisdomTree Investments, Inc. | 346,276 | 1,835,263 |
| World Acceptance Corp. * | 26,296 | 3,327,759 |
| 159,914,630 | ||
| Energy 5.2% | ||
| Arch Resources, Inc. | 133,932 | 6,418,021 |
| Archrock, Inc. | 330,695 | 3,409,465 |
| Callon Petroleum Co. *(a) | 151,455 | 3,872,704 |
| Centennial Resource Development, Inc., Class A * | 1,648,862 | 6,529,494 |
| ChampionX Corp. * | 265,319 | 5,643,335 |
| Cheniere Energy, Inc. * | 92,905 | 6,260,868 |
| Cimarex Energy Co. | 157,250 | 9,118,927 |
| CNX Resources Corp. * | 670,362 | 8,453,265 |
| CONSOL Energy, Inc. * | 579,936 | 6,269,108 |
| Continental Resources, Inc. * | 207,943 | 5,028,062 |
| Core Laboratories N.V. | 128,581 | 4,569,769 |
| Cosan Ltd., A Shares | 285,277 | 5,257,655 |
| CVR Energy, Inc. | 166,548 | 3,677,380 |
| Diamondback Energy, Inc. | 110,465 | 7,653,015 |
| Dril-Quip, Inc. * | 104,099 | 3,535,202 |
| EQT Corp. * | 454,093 | 8,078,314 |
| Equitrans Midstream Corp. | 394,185 | 2,849,958 |
| Exterran Corp. * | 408,664 | 2,235,392 |
| Forum Energy Technologies, Inc. * | 117,694 | 2,512,767 |
| Frank's International N.V. * | 607,344 | 2,751,268 |
| GasLog Ltd. | 345,463 | 2,034,777 |
| Green Plains, Inc. * | 375,818 | 9,515,712 |
| Helix Energy Solutions Group, Inc. * | 497,156 | 2,436,064 |
| International Seaways, Inc. | 79,389 | 1,376,605 |
| Kosmos Energy Ltd. | 1,150,972 | 3,544,994 |
| Liberty Oilfield Services, Inc., Class A | 175,785 | 2,054,927 |
| Magnolia Oil & Gas Corp., Class A * | 194,855 | 2,349,951 |
| Matador Resources Co. * | 133,278 | 2,784,177 |
| Newpark Resources, Inc. * | 820,089 | 2,837,508 |
| NexTier Oilfield Solutions, Inc. * | 461,935 | 2,147,998 |
| Nordic American Tankers Ltd. | 507,332 | 1,506,776 |
| Oil States International, Inc. * | 851,029 | 6,238,043 |
| Par Pacific Holdings, Inc. * | 177,903 | 3,143,546 |
| PDC Energy, Inc. * | 220,826 | 7,717,869 |
| ProPetro Holding Corp. * | 272,531 | 3,125,931 |
| QEP Resources, Inc. | 3,094,052 | 10,643,539 |
| Range Resources Corp. * | 921,860 | 8,886,730 |
| Renewable Energy Group, Inc. * | 104,629 | 8,136,997 |
| REX American Resources Corp. * | 21,454 | 2,018,178 |
| RPC, Inc. * | 500,711 | 3,179,515 |
| Scorpio Tankers, Inc. | 136,744 | 2,018,341 |
| SFL Corp., Ltd. | 263,539 | 1,987,084 |
| Southwestern Energy Co. * | 721,726 | 2,922,990 |
| Teekay Tankers Ltd., Class A * | 108,032 | 1,360,123 |
| Tidewater, Inc. * | 259,512 | 3,233,520 |
| Security | Number of Shares | Value ($) |
| US Silica Holdings, Inc. | 579,745 | 7,716,406 |
| Whiting Petroleum Corp. * | 83,305 | 2,857,362 |
| 211,899,632 | ||
| Food & Staples Retailing 0.6% | ||
| BJ's Wholesale Club Holdings, Inc. * | 68,302 | 2,744,374 |
| Ingles Markets, Inc., Class A | 93,070 | 4,835,917 |
| PriceSmart, Inc. | 72,126 | 6,956,553 |
| The Andersons, Inc. | 259,585 | 6,785,552 |
| The Chefs' Warehouse, Inc. * | 69,836 | 2,174,693 |
| Weis Markets, Inc. | 55,439 | 2,963,215 |
| 26,460,304 | ||
| Food, Beverage & Tobacco 2.1% | ||
| B&G Foods, Inc. (a) | 193,803 | 5,878,045 |
| Cal-Maine Foods, Inc. * | 85,600 | 3,261,360 |
| Calavo Growers, Inc. | 31,219 | 2,349,230 |
| Coca-Cola Consolidated, Inc. | 5,082 | 1,304,346 |
| Fresh Del Monte Produce, Inc. | 237,993 | 6,125,940 |
| Hostess Brands, Inc. * | 113,770 | 1,637,150 |
| J&J Snack Foods Corp. | 20,268 | 3,217,748 |
| John B Sanfilippo & Son, Inc. | 20,756 | 1,794,564 |
| Keurig Dr Pepper, Inc. | 186,851 | 5,702,692 |
| Lamb Weston Holdings, Inc. | 75,264 | 6,003,809 |
| Lancaster Colony Corp. | 20,931 | 3,656,018 |
| Nomad Foods Ltd. * | 190,629 | 4,502,657 |
| Pilgrim's Pride Corp. * | 203,375 | 4,553,566 |
| Post Holdings, Inc. * | 66,809 | 6,417,673 |
| The Boston Beer Co., Inc., Class A * | 4,513 | 4,642,568 |
| The Hain Celestial Group, Inc. * | 132,396 | 5,584,463 |
| TreeHouse Foods, Inc. * | 151,488 | 7,577,430 |
| Universal Corp. | 134,473 | 6,833,918 |
| Vector Group Ltd. | 275,722 | 3,763,605 |
| 84,806,782 | ||
| Health Care Equipment & Services 4.0% | ||
| ABIOMED, Inc. * | 8,584 | 2,785,937 |
| Acadia Healthcare Co., Inc. * | 138,351 | 7,642,509 |
| Align Technology, Inc. * | 19,677 | 11,159,023 |
| Allscripts Healthcare Solutions, Inc. * | 295,573 | 4,560,691 |
| Amedisys, Inc. * | 13,820 | 3,505,305 |
| AMN Healthcare Services, Inc. * | 61,431 | 4,476,477 |
| Avanos Medical, Inc. * | 50,974 | 2,343,785 |
| Brookdale Senior Living, Inc. * | 1,130,254 | 6,578,078 |
| Cantel Medical Corp. * | 37,543 | 2,788,694 |
| Chemed Corp. | 11,037 | 4,913,783 |
| Community Health Systems, Inc. * | 864,817 | 7,402,834 |
| CONMED Corp. | 21,673 | 2,667,079 |
| Covetrus, Inc. * | 379,136 | 14,088,694 |
| Globus Medical, Inc., Class A * | 37,773 | 2,360,813 |
| Haemonetics Corp. * | 26,421 | 3,342,257 |
| Hill-Rom Holdings, Inc. | 54,358 | 5,798,368 |
| HMS Holdings Corp. * | 59,749 | 2,197,867 |
| ICU Medical, Inc. * | 10,346 | 2,146,795 |
| IDEXX Laboratories, Inc. * | 10,989 | 5,716,148 |
| Integer Holdings Corp. * | 27,585 | 2,432,721 |
| Integra LifeSciences Holdings Corp. * | 34,154 | 2,334,084 |
| Invacare Corp. | 148,344 | 1,349,930 |
| LENSAR, Inc. * | 58,230 | 526,399 |
| LHC Group, Inc. * | 13,192 | 2,397,118 |
| LivaNova plc * | 31,811 | 2,466,625 |
| Masimo Corp. * | 15,193 | 3,809,341 |
| Merit Medical Systems, Inc. * | 34,657 | 1,931,088 |
| ModivCare, Inc. * | 25,648 | 3,289,612 |
| National HealthCare Corp. | 31,323 | 2,178,515 |
59
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Neogen Corp. * | 19,181 | 1,571,308 |
| NextGen Healthcare, Inc. * | 102,111 | 1,909,476 |
| NuVasive, Inc. * | 43,683 | 2,635,395 |
| Omnicell, Inc. * | 18,572 | 2,356,787 |
| Premier, Inc., Class A | 71,830 | 2,429,291 |
| Select Medical Holdings Corp. * | 207,740 | 6,574,971 |
| Teleflex, Inc. | 16,748 | 6,667,714 |
| The Ensign Group, Inc. | 49,949 | 4,096,817 |
| Tivity Health, Inc. * | 124,465 | 2,962,267 |
| Triple-S Management Corp., Class B * | 145,779 | 3,688,209 |
| Varex Imaging Corp. * | 95,866 | 2,198,207 |
| Veeva Systems, Inc., Class A * | 8,763 | 2,454,604 |
| West Pharmaceutical Services, Inc. | 23,920 | 6,713,148 |
| 165,448,764 | ||
| Household & Personal Products 1.0% | ||
| Central Garden & Pet Co. * | 15,297 | 697,543 |
| Central Garden & Pet Co., Class A * | 62,386 | 2,589,643 |
| Coty, Inc., Class A * | 1,142,950 | 8,766,427 |
| Edgewell Personal Care Co. | 189,846 | 5,807,389 |
| Energizer Holdings, Inc. | 58,164 | 2,431,255 |
| Herbalife Nutrition Ltd. * | 139,892 | 6,292,342 |
| Medifast, Inc. | 9,588 | 2,425,668 |
| Spectrum Brands Holdings, Inc. | 65,272 | 5,061,844 |
| USANA Health Sciences, Inc. * | 30,055 | 2,917,138 |
| WD-40 Co. | 8,258 | 2,574,432 |
| 39,563,681 | ||
| Insurance 2.2% | ||
| Ambac Financial Group, Inc. * | 125,607 | 2,129,039 |
| American Equity Investment Life Holding Co. | 250,895 | 6,932,229 |
| American National Group, Inc. | 16,372 | 1,473,807 |
| AMERISAFE, Inc. | 28,339 | 1,658,398 |
| Argo Group International Holdings Ltd. | 73,380 | 3,390,890 |
| Brighthouse Financial, Inc. * | 131,702 | 5,253,593 |
| Brown & Brown, Inc. | 153,083 | 7,026,510 |
| CNA Financial Corp. | 72,025 | 3,063,943 |
| Employers Holdings, Inc. | 50,827 | 1,692,031 |
| Horace Mann Educators Corp. | 46,834 | 1,804,982 |
| James River Group Holdings Ltd. | 54,282 | 2,492,087 |
| Kemper Corp. | 62,994 | 4,763,606 |
| MBIA, Inc. * | 395,095 | 2,884,194 |
| Mercury General Corp. | 62,331 | 3,640,130 |
| ProAssurance Corp. | 331,106 | 8,194,873 |
| RLI Corp. | 30,797 | 3,213,359 |
| Safety Insurance Group, Inc. | 24,101 | 1,905,907 |
| Selective Insurance Group, Inc. | 65,779 | 4,461,790 |
| Stewart Information Services Corp. | 86,693 | 4,091,910 |
| The Hanover Insurance Group, Inc. | 62,283 | 7,184,344 |
| United Fire Group, Inc. | 50,744 | 1,494,411 |
| Universal Insurance Holdings, Inc. | 104,589 | 1,557,330 |
| White Mountains Insurance Group Ltd. | 6,734 | 8,047,534 |
| 88,356,897 | ||
| Materials 7.2% | ||
| AdvanSix, Inc. * | 174,211 | 4,843,066 |
| Allegheny Technologies, Inc. * | 403,200 | 7,926,912 |
| Alpha Metallurgical Resources, Inc. * | 444,722 | 6,670,830 |
| Avient Corp. | 194,830 | 8,420,553 |
| Axalta Coating Systems Ltd. * | 271,678 | 7,427,677 |
| Balchem Corp. | 21,325 | 2,545,352 |
| Cabot Corp. | 156,633 | 7,711,043 |
| Carpenter Technology Corp. | 197,798 | 8,042,467 |
| Century Aluminum Co. * | 227,220 | 3,119,731 |
| Security | Number of Shares | Value ($) |
| Clearwater Paper Corp. * | 94,106 | 3,294,651 |
| Cleveland-Cliffs, Inc. | 1,055,455 | 14,079,770 |
| Compass Minerals International, Inc. | 73,071 | 4,610,049 |
| Constellium SE * | 207,591 | 2,748,505 |
| Eagle Materials, Inc. | 66,057 | 8,282,227 |
| Element Solutions, Inc. | 242,065 | 4,369,273 |
| Ferro Corp. * | 128,717 | 2,042,739 |
| FMC Corp. | 52,767 | 5,365,876 |
| GCP Applied Technologies, Inc. * | 104,038 | 2,579,102 |
| Glatfelter Corp. | 140,888 | 2,261,252 |
| Greif, Inc., Class A | 91,319 | 4,410,708 |
| H.B. Fuller Co. | 84,557 | 4,741,111 |
| Hecla Mining Co. | 487,345 | 3,182,363 |
| Ingevity Corp. * | 41,341 | 2,872,373 |
| Innospec, Inc. | 38,002 | 3,817,301 |
| Kaiser Aluminum Corp. | 48,242 | 5,504,412 |
| Kraton Corp. * | 158,451 | 5,892,793 |
| Livent Corp. * | 143,038 | 2,663,368 |
| Louisiana-Pacific Corp. | 225,476 | 10,734,912 |
| Materion Corp. | 49,783 | 3,409,140 |
| Mercer International, Inc. | 168,912 | 2,596,177 |
| Minerals Technologies, Inc. | 79,513 | 5,663,711 |
| Myers Industries, Inc. | 85,402 | 1,890,800 |
| Neenah, Inc. | 46,093 | 2,549,865 |
| NewMarket Corp. | 11,426 | 4,330,225 |
| Orion Engineered Carbons S.A. | 198,790 | 3,518,583 |
| Quaker Chemical Corp. | 8,135 | 2,297,161 |
| Rayonier Advanced Materials, Inc. * | 624,573 | 5,777,300 |
| Royal Gold, Inc. | 22,345 | 2,317,400 |
| Schnitzer Steel Industries, Inc., Class A | 201,586 | 6,962,780 |
| Schweitzer-Mauduit International, Inc. | 85,195 | 3,978,607 |
| Sensient Technologies Corp. | 70,758 | 5,508,510 |
| Silgan Holdings, Inc. | 149,345 | 5,609,398 |
| Southern Copper Corp. | 93,221 | 6,649,454 |
| Stepan Co. | 35,583 | 4,294,512 |
| Summit Materials, Inc., Class A * | 210,308 | 5,827,635 |
| SunCoke Energy, Inc. | 486,491 | 3,108,677 |
| The Scotts Miracle-Gro Co. | 36,074 | 7,689,173 |
| TimkenSteel Corp. * | 474,077 | 3,830,542 |
| Trinseo S.A. | 229,182 | 14,830,367 |
| Tronox Holdings plc, Class A | 254,234 | 4,662,652 |
| US Concrete, Inc. * | 58,055 | 2,987,510 |
| Valvoline, Inc. | 144,716 | 3,612,111 |
| Verso Corp., Class A | 278,396 | 3,479,950 |
| W.R. Grace & Co. | 94,522 | 5,601,374 |
| Warrior Met Coal, Inc. | 393,377 | 7,541,037 |
| Westlake Chemical Corp. | 89,187 | 7,633,515 |
| Worthington Industries, Inc. | 124,356 | 7,945,105 |
| 296,263,687 | ||
| Media & Entertainment 4.0% | ||
| AMC Entertainment Holdings, Inc., Class A (a) | 731,849 | 5,862,111 |
| AMC Networks, Inc., Class A * | 206,990 | 13,576,474 |
| Cable One, Inc. | 1,875 | 3,590,344 |
| Cars.com, Inc. * | 315,142 | 3,677,707 |
| Gannett Co., Inc. * | 1,432,685 | 7,091,791 |
| Gray Television, Inc. * | 150,195 | 2,726,039 |
| iHeartMedia, Inc., Class A * | 324,232 | 4,561,944 |
| John Wiley & Sons, Inc., Class A | 128,818 | 6,786,132 |
| Liberty Media Corp. - Liberty Formula One, Class A * | 10,722 | 415,692 |
| Liberty Media Corp. - Liberty Formula One, Class C * | 83,064 | 3,646,510 |
| Liberty TripAdvisor Holdings, Inc., Class A * | 439,606 | 2,474,982 |
| Lions Gate Entertainment Corp., Class A * | 131,646 | 1,911,500 |
60
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Lions Gate Entertainment Corp., Class B * | 297,219 | 3,727,126 |
| Live Nation Entertainment, Inc. * | 72,991 | 6,485,980 |
| Madison Square Garden Entertainment Corp. * | 11,625 | 1,252,826 |
| Madison Square Garden Sports Corp. * | 11,450 | 2,202,408 |
| Meredith Corp. * | 189,908 | 4,705,920 |
| MSG Networks, Inc., Class A * | 112,141 | 1,901,911 |
| National CineMedia, Inc. | 453,247 | 2,139,326 |
| Nexstar Media Group, Inc., Class A | 54,450 | 7,489,598 |
| Scholastic Corp. | 132,391 | 3,812,861 |
| Sinclair Broadcast Group, Inc., Class A | 248,570 | 7,688,270 |
| Sirius XM Holdings, Inc. | 823,988 | 4,820,330 |
| Spotify Technology S.A. * | 10,590 | 3,255,154 |
| Take-Two Interactive Software, Inc. * | 34,640 | 6,389,694 |
| TEGNA, Inc. | 507,518 | 9,252,053 |
| The E.W. Scripps Co., Class A | 113,370 | 2,133,623 |
| The Marcus Corp. * | 84,145 | 1,652,608 |
| The New York Times Co., Class A | 81,643 | 4,177,672 |
| TripAdvisor, Inc. * | 179,771 | 8,920,237 |
| Twitter, Inc. * | 139,150 | 10,722,899 |
| Yandex N.V., Class A * | 97,935 | 6,266,371 |
| Yelp, Inc. * | 84,703 | 3,194,150 |
| Zynga, Inc., Class A * | 352,200 | 3,927,030 |
| 162,439,273 | ||
| Pharmaceuticals, Biotechnology & Life Sciences 1.9% | ||
| Alkermes plc * | 77,102 | 1,468,022 |
| Bio-Rad Laboratories, Inc., Class A * | 8,294 | 4,847,843 |
| Bio-Techne Corp. | 11,011 | 3,982,569 |
| BioMarin Pharmaceutical, Inc. * | 22,282 | 1,725,295 |
| Bruker Corp. | 67,088 | 4,091,026 |
| Catalent, Inc. * | 51,417 | 5,846,627 |
| Charles River Laboratories International, Inc. * | 21,192 | 6,063,879 |
| Elanco Animal Health, Inc. * | 262,786 | 8,635,148 |
| Emergent BioSolutions, Inc. * | 19,740 | 1,895,040 |
| Horizon Therapeutics plc * | 23,342 | 2,122,021 |
| Incyte Corp. * | 25,107 | 1,974,917 |
| Lannett Co., Inc. * | 187,143 | 1,134,086 |
| Myriad Genetics, Inc. * | 228,010 | 6,952,025 |
| Nektar Therapeutics * | 72,894 | 1,653,965 |
| PDL BioPharma, Inc. *(b) | 823,323 | 2,033,608 |
| PerkinElmer, Inc. | 60,680 | 7,651,141 |
| PRA Health Sciences, Inc. * | 32,904 | 4,850,379 |
| Prestige Consumer Healthcare, Inc. * | 60,080 | 2,505,937 |
| Syneos Health, Inc. * | 41,286 | 3,193,472 |
| Taro Pharmaceutical Industries Ltd. * | 25,254 | 1,805,661 |
| Vertex Pharmaceuticals, Inc. * | 12,434 | 2,642,847 |
| 77,075,508 | ||
| Real Estate 9.2% | ||
| Acadia Realty Trust | 125,392 | 2,371,163 |
| Alexander & Baldwin, Inc. | 232,379 | 4,059,661 |
| American Assets Trust, Inc. | 51,290 | 1,594,093 |
| American Campus Communities, Inc. | 173,223 | 7,095,214 |
| American Finance Trust, Inc. | 195,912 | 1,735,780 |
| American Homes 4 Rent, Class A | 135,455 | 4,218,069 |
| Americold Realty Trust | 66,189 | 2,319,263 |
| Apartment Income REIT Corp. | 167,226 | 6,836,199 |
| Apartment Investment & Management Co., Class A | 167,859 | 799,009 |
| Ashford Hospitality Trust, Inc. *(a) | 668,826 | 2,294,073 |
| Brandywine Realty Trust | 344,889 | 4,217,992 |
| Brookfield Property REIT, Inc., Class A | 182,757 | 3,198,248 |
| Centerspace | 20,300 | 1,393,189 |
| Chatham Lodging Trust * | 188,030 | 2,619,258 |
| Security | Number of Shares | Value ($) |
| Columbia Property Trust, Inc. | 273,767 | 3,865,590 |
| CorePoint Lodging, Inc. | 396,557 | 3,612,634 |
| CoreSite Realty Corp. | 16,712 | 2,034,018 |
| Corporate Office Properties Trust | 145,650 | 3,786,900 |
| Cousins Properties, Inc. | 81,830 | 2,744,578 |
| CubeSmart | 142,243 | 5,257,301 |
| Cushman & Wakefield plc * | 108,226 | 1,675,338 |
| CyrusOne, Inc. | 52,281 | 3,431,202 |
| DiamondRock Hospitality Co. * | 643,792 | 6,515,175 |
| Douglas Emmett, Inc. | 146,267 | 4,790,244 |
| EastGroup Properties, Inc. | 16,469 | 2,241,596 |
| Empire State Realty Trust, Inc., Class A | 354,931 | 3,907,790 |
| EPR Properties | 114,753 | 5,184,541 |
| Equity Commonwealth | 115,800 | 3,266,718 |
| Equity LifeStyle Properties, Inc. | 79,178 | 4,881,324 |
| Federal Realty Investment Trust | 72,149 | 7,299,314 |
| First Industrial Realty Trust, Inc. | 68,615 | 2,930,547 |
| Franklin Street Properties Corp. | 382,099 | 1,895,211 |
| Gaming & Leisure Properties, Inc. | 155,686 | 6,912,458 |
| Global Net Lease, Inc. | 103,691 | 1,926,579 |
| Healthcare Realty Trust, Inc. | 113,910 | 3,287,443 |
| Healthcare Trust of America, Inc., Class A | 158,933 | 4,316,620 |
| Hersha Hospitality Trust * | 267,593 | 2,975,634 |
| Highwoods Properties, Inc. | 137,608 | 5,498,816 |
| Hudson Pacific Properties, Inc. | 152,572 | 3,904,317 |
| Invitation Homes, Inc. | 231,476 | 6,745,211 |
| iStar, Inc. | 131,576 | 2,331,527 |
| JBG SMITH Properties | 89,529 | 2,842,546 |
| Kennedy-Wilson Holdings, Inc. | 167,803 | 3,147,984 |
| Kilroy Realty Corp. | 84,630 | 5,370,620 |
| Kite Realty Group Trust | 220,846 | 4,233,618 |
| Lexington Realty Trust | 317,548 | 3,404,115 |
| Life Storage, Inc. | 56,471 | 4,737,917 |
| LTC Properties, Inc. | 33,319 | 1,363,080 |
| Mack-Cali Realty Corp. | 184,364 | 2,575,565 |
| Marcus & Millichap, Inc. * | 39,119 | 1,481,437 |
| Medical Properties Trust, Inc. | 242,702 | 5,239,936 |
| National Health Investors, Inc. | 31,767 | 2,168,733 |
| National Retail Properties, Inc. | 117,836 | 5,165,930 |
| New Senior Investment Group, Inc. | 422,687 | 2,582,618 |
| Newmark Group, Inc., Class A | 228,569 | 2,290,261 |
| Office Properties Income Trust | 94,627 | 2,393,117 |
| Omega Healthcare Investors, Inc. | 195,033 | 7,243,526 |
| Paramount Group, Inc. | 381,260 | 3,534,280 |
| Pebblebrook Hotel Trust | 222,447 | 5,040,649 |
| Pennsylvania Real Estate Investment Trust | 1,197,703 | 2,395,406 |
| Physicians Realty Trust | 116,518 | 1,980,806 |
| Piedmont Office Realty Trust, Inc., Class A | 282,829 | 4,825,063 |
| PotlatchDeltic Corp. | 62,755 | 3,184,816 |
| Preferred Apartment Communities, Inc., Class A | 152,414 | 1,254,367 |
| PS Business Parks, Inc. | 15,295 | 2,215,634 |
| QTS Realty Trust, Inc., Class A | 31,466 | 1,954,668 |
| Rayonier, Inc. | 190,271 | 6,210,445 |
| Regency Centers Corp. | 144,967 | 7,941,292 |
| Retail Opportunity Investments Corp. | 156,419 | 2,472,984 |
| Retail Properties of America, Inc., Class A | 656,482 | 6,912,755 |
| RLJ Lodging Trust | 593,752 | 9,321,906 |
| RPT Realty | 257,606 | 2,825,938 |
| Ryman Hospitality Properties, Inc. | 79,198 | 6,121,213 |
| Sabra Health Care REIT, Inc. | 182,864 | 3,148,918 |
| SBA Communications Corp. | 19,805 | 5,052,850 |
| Seritage Growth Properties, Class A * | 96,000 | 1,938,240 |
| SITE Centers Corp. | 552,803 | 7,374,392 |
| Spirit Realty Capital, Inc. | 120,474 | 5,182,791 |
| STAG Industrial, Inc. | 63,891 | 2,015,761 |
| STORE Capital Corp. | 109,988 | 3,677,999 |
| Summit Hotel Properties, Inc. * | 313,714 | 3,246,940 |
61
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Sun Communities, Inc. | 39,155 | 5,949,602 |
| Sunstone Hotel Investors, Inc. | 666,576 | 8,805,469 |
| Tanger Factory Outlet Centers, Inc. | 448,385 | 7,057,580 |
| The GEO Group, Inc. | 554,732 | 3,994,070 |
| The Howard Hughes Corp. * | 38,270 | 3,630,675 |
| Uniti Group, Inc. | 650,046 | 7,742,048 |
| Urban Edge Properties | 191,163 | 3,154,190 |
| VICI Properties, Inc. | 206,122 | 5,874,477 |
| Washington Prime Group, Inc. (a) | 667,478 | 4,158,388 |
| Washington Real Estate Investment Trust | 107,847 | 2,428,714 |
| Weingarten Realty Investors | 202,340 | 5,137,413 |
| Xenia Hotels & Resorts, Inc. | 402,373 | 8,035,389 |
| 374,008,968 | ||
| Retailing 4.9% | ||
| At Home Group, Inc. * | 152,700 | 3,846,513 |
| Caleres, Inc. | 480,278 | 7,617,209 |
| Chico's FAS, Inc. | 4,030,481 | 10,841,994 |
| Conn's, Inc. * | 177,526 | 2,519,094 |
| Designer Brands, Inc., Class A | 865,866 | 10,814,666 |
| Dillard's, Inc., Class A | 182,813 | 14,570,196 |
| Express, Inc. *(a) | 3,010,058 | 8,097,056 |
| Five Below, Inc. * | 24,522 | 4,564,035 |
| Floor & Decor Holdings, Inc., Class A * | 22,179 | 2,109,001 |
| Genesco, Inc. * | 235,229 | 10,571,191 |
| Groupon, Inc. * | 120,631 | 5,235,385 |
| GrubHub, Inc. * | 29,697 | 1,902,687 |
| Guess?, Inc. | 316,532 | 7,979,772 |
| Haverty Furniture Cos., Inc. | 102,223 | 3,697,406 |
| Hibbett Sports, Inc. * | 116,577 | 7,491,238 |
| Lumber Liquidators Holdings, Inc. * | 94,729 | 2,346,437 |
| MarineMax, Inc. * | 66,394 | 2,964,492 |
| MercadoLibre, Inc. * | 1,977 | 3,238,544 |
| Monro, Inc. | 54,649 | 3,387,692 |
| National Vision Holdings, Inc. * | 65,902 | 3,129,686 |
| Ollie's Bargain Outlet Holdings, Inc. * | 28,768 | 2,378,538 |
| Party City Holdco, Inc. * | 1,511,707 | 11,579,676 |
| Pool Corp. | 19,872 | 6,652,549 |
| Rent-A-Center, Inc. | 63,540 | 3,670,070 |
| RH * | 5,122 | 2,511,675 |
| Sally Beauty Holdings, Inc. * | 582,010 | 9,370,361 |
| Shoe Carnival, Inc. | 59,227 | 2,899,754 |
| Sleep Number Corp. * | 57,778 | 7,923,097 |
| Sonic Automotive, Inc., Class A | 139,362 | 6,425,982 |
| Stamps.com, Inc. * | 9,991 | 1,817,663 |
| The Buckle, Inc. | 145,357 | 5,587,523 |
| The Cato Corp., Class A | 271,850 | 3,354,629 |
| The Children's Place, Inc. * | 99,012 | 6,856,581 |
| The Michaels Cos., Inc. * | 718,460 | 10,776,900 |
| Zumiez, Inc. * | 73,617 | 3,318,654 |
| 202,047,946 | ||
| Semiconductors & Semiconductor Equipment 2.4% | ||
| Advanced Energy Industries, Inc. | 35,300 | 3,687,085 |
| Advanced Micro Devices, Inc. * | 52,589 | 4,444,296 |
| Ambarella, Inc. * | 20,758 | 2,335,067 |
| Amkor Technology, Inc. | 329,275 | 7,866,380 |
| Brooks Automation, Inc. | 35,051 | 2,914,841 |
| Cirrus Logic, Inc. * | 79,497 | 6,501,265 |
| CMC Materials, Inc. | 13,745 | 2,343,523 |
| Cree, Inc. * | 100,300 | 11,380,038 |
| Diodes, Inc. * | 43,281 | 3,398,424 |
| Entegris, Inc. | 54,023 | 5,683,760 |
| First Solar, Inc. * | 112,414 | 9,107,782 |
| Kulicke & Soffa Industries, Inc. | 105,998 | 5,285,060 |
| MKS Instruments, Inc. | 48,170 | 7,943,233 |
| Security | Number of Shares | Value ($) |
| Monolithic Power Systems, Inc. | 8,434 | 3,158,702 |
| Photronics, Inc. * | 150,818 | 1,796,242 |
| Power Integrations, Inc. | 37,121 | 3,280,383 |
| Semtech Corp. * | 39,183 | 2,872,506 |
| Silicon Laboratories, Inc. * | 23,411 | 3,646,029 |
| Synaptics, Inc. * | 55,522 | 7,441,614 |
| Ultra Clean Holdings, Inc. * | 52,638 | 2,441,350 |
| 97,527,580 | ||
| Software & Services 3.7% | ||
| ACI Worldwide, Inc. * | 103,945 | 3,976,936 |
| Aspen Technology, Inc. * | 28,827 | 4,338,752 |
| Black Knight, Inc. * | 64,739 | 4,964,834 |
| Blackbaud, Inc. * | 24,668 | 1,697,652 |
| Cardtronics plc, Class A * | 68,883 | 2,655,440 |
| Cerence, Inc. * | 47,684 | 5,303,414 |
| Cognyte Software Ltd. * | 48,817 | 1,409,347 |
| CommVault Systems, Inc. * | 49,880 | 3,178,852 |
| CSG Systems International, Inc. | 51,729 | 2,387,293 |
| Ebix, Inc. | 51,978 | 1,267,224 |
| EPAM Systems, Inc. * | 13,330 | 4,980,221 |
| Euronet Worldwide, Inc. * | 41,054 | 6,170,827 |
| EVERTEC, Inc. | 52,211 | 2,031,008 |
| ExlService Holdings, Inc. * | 28,865 | 2,442,556 |
| Fair Isaac Corp. * | 9,960 | 4,557,198 |
| Fortinet, Inc. * | 22,745 | 3,840,493 |
| Gartner, Inc. * | 47,109 | 8,434,395 |
| GoDaddy, Inc., Class A * | 26,878 | 2,180,343 |
| InterDigital, Inc. | 63,001 | 3,992,373 |
| j2 Global, Inc. * | 52,234 | 5,817,823 |
| LiveRamp Holdings, Inc. * | 87,815 | 5,546,395 |
| Manhattan Associates, Inc. * | 42,308 | 5,201,769 |
| MicroStrategy, Inc., Class A * | 9,078 | 6,812,222 |
| NIC, Inc. | 60,934 | 2,115,019 |
| Nuance Communications, Inc. * | 103,068 | 4,596,833 |
| Palo Alto Networks, Inc. * | 5,989 | 2,145,919 |
| Paycom Software, Inc. * | 3,970 | 1,485,733 |
| Pegasystems, Inc. | 11,392 | 1,507,731 |
| Perficient, Inc. * | 34,405 | 1,916,014 |
| Progress Software Corp. | 54,475 | 2,317,367 |
| PTC, Inc. * | 35,157 | 4,814,400 |
| Square, Inc., Class A * | 12,458 | 2,865,714 |
| SS&C Technologies Holdings, Inc. | 82,764 | 5,485,598 |
| Sykes Enterprises, Inc. * | 98,607 | 4,029,082 |
| Tyler Technologies, Inc. * | 7,153 | 3,314,843 |
| Unisys Corp. * | 113,364 | 2,783,086 |
| Verint Systems, Inc. * | 48,549 | 2,392,980 |
| VMware, Inc., Class A * | 42,087 | 5,816,844 |
| WEX, Inc. * | 21,350 | 4,448,273 |
| Xperi Holding Corp. | 277,122 | 5,847,274 |
| 151,070,077 | ||
| Technology Hardware & Equipment 4.4% | ||
| 3D Systems Corp. * | 158,450 | 5,678,848 |
| ADTRAN, Inc. | 201,353 | 3,390,785 |
| Arista Networks, Inc. * | 14,236 | 3,983,802 |
| Badger Meter, Inc. | 20,759 | 2,254,220 |
| Belden, Inc. | 114,395 | 5,057,403 |
| Benchmark Electronics, Inc. | 260,540 | 7,399,336 |
| Ciena Corp. * | 114,552 | 5,976,178 |
| Cognex Corp. | 62,573 | 5,167,904 |
| Coherent, Inc. * | 30,918 | 7,480,301 |
| Comtech Telecommunications Corp. | 70,721 | 1,900,980 |
| CTS Corp. | 52,885 | 1,701,310 |
| Diebold Nixdorf, Inc. * | 197,861 | 2,872,942 |
| Dolby Laboratories, Inc., Class A | 48,260 | 4,711,624 |
62
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Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| EchoStar Corp., Class A * | 111,792 | 2,537,678 |
| ePlus, Inc. * | 33,652 | 3,182,133 |
| Fabrinet * | 39,791 | 3,514,739 |
| II-VI, Inc. * | 58,158 | 4,902,719 |
| IPG Photonics Corp. * | 26,065 | 5,925,878 |
| Itron, Inc. * | 34,887 | 4,090,152 |
| Keysight Technologies, Inc. * | 61,112 | 8,648,570 |
| Knowles Corp. * | 148,385 | 3,084,924 |
| Littelfuse, Inc. | 19,684 | 5,122,170 |
| Lumentum Holdings, Inc. * | 25,581 | 2,302,290 |
| Methode Electronics, Inc. | 80,930 | 3,150,605 |
| MTS Systems Corp. | 52,675 | 3,074,113 |
| National Instruments Corp. | 138,725 | 6,159,390 |
| NETGEAR, Inc. * | 74,617 | 2,984,680 |
| NetScout Systems, Inc. * | 187,139 | 5,281,063 |
| OSI Systems, Inc. * | 27,866 | 2,636,681 |
| PC Connection, Inc. | 52,433 | 2,412,442 |
| Plantronics, Inc. * | 182,444 | 7,387,158 |
| Plexus Corp. * | 69,387 | 5,827,120 |
| Rogers Corp. * | 18,869 | 3,424,346 |
| ScanSource, Inc. * | 202,936 | 5,771,500 |
| Stratasys Ltd. * | 89,671 | 3,092,753 |
| TTM Technologies, Inc. * | 324,940 | 4,588,153 |
| ViaSat, Inc. * | 86,789 | 4,438,389 |
| Viavi Solutions, Inc. * | 122,954 | 1,990,011 |
| Vishay Intertechnology, Inc. | 340,715 | 8,132,867 |
| Zebra Technologies Corp., Class A * | 20,030 | 10,003,583 |
| 181,241,740 | ||
| Telecommunication Services 0.5% | ||
| ATN International, Inc. | 23,240 | 1,131,323 |
| Cincinnati Bell, Inc. * | 150,250 | 2,295,820 |
| Cogent Communications Holdings, Inc. | 29,848 | 1,786,403 |
| Consolidated Communications Holdings, Inc. * | 547,707 | 2,880,939 |
| Iridium Communications, Inc. * | 52,419 | 2,008,172 |
| Liberty Latin America Ltd., Class A * | 135,295 | 1,484,186 |
| Liberty Latin America Ltd., Class C * | 358,444 | 3,928,546 |
| Shenandoah Telecommunications Co. | 35,925 | 1,593,274 |
| United States Cellular Corp. * | 55,003 | 1,618,738 |
| Vonage Holdings Corp. * | 189,729 | 2,508,218 |
| 21,235,619 | ||
| Transportation 2.4% | ||
| Air Transport Services Group, Inc. * | 90,802 | 2,409,885 |
| Alaska Air Group, Inc. * | 112,858 | 7,338,027 |
| Allegiant Travel Co. * | 10,622 | 2,678,762 |
| AMERCO | 15,243 | 8,760,457 |
| ArcBest Corp. | 175,674 | 10,363,009 |
| Atlas Air Worldwide Holdings, Inc. * | 28,862 | 1,591,162 |
| Atlas Corp. | 282,680 | 3,796,392 |
| Copa Holdings S.A., Class A * | 25,721 | 2,357,844 |
| Costamare, Inc. | 220,166 | 2,124,602 |
| Echo Global Logistics, Inc. * | 100,371 | 2,796,336 |
| Forward Air Corp. | 60,762 | 5,211,557 |
| Hawaiian Holdings, Inc. * | 93,302 | 2,502,360 |
| Heartland Express, Inc. | 88,834 | 1,616,779 |
| Hub Group, Inc., Class A * | 106,452 | 6,129,506 |
| JetBlue Airways Corp. * | 384,279 | 7,082,262 |
| Marten Transport Ltd. | 106,030 | 1,715,565 |
| Saia, Inc. * | 28,147 | 5,644,318 |
| Schneider National, Inc., Class B | 146,336 | 3,384,752 |
| SEACOR Holdings, Inc. * | 48,948 | 2,080,779 |
| SkyWest, Inc. | 43,582 | 2,456,717 |
| Spirit Airlines, Inc. * | 90,302 | 3,240,036 |
| Uber Technologies, Inc. * | 53,263 | 2,756,360 |
| Security | Number of Shares | Value ($) |
| Werner Enterprises, Inc. | 103,267 | 4,432,220 |
| Yellow Corp. * | 644,049 | 3,844,973 |
| 96,314,660 | ||
| Utilities 2.3% | ||
| ALLETE, Inc. | 92,235 | 5,730,561 |
| American States Water Co. | 27,287 | 1,993,315 |
| Atlantica Sustainable Infrastructure plc | 92,172 | 3,332,018 |
| Avangrid, Inc. | 80,210 | 3,670,410 |
| Avista Corp. | 132,230 | 5,316,968 |
| Black Hills Corp. | 85,478 | 5,056,878 |
| California Water Service Group | 44,517 | 2,446,209 |
| Chesapeake Utilities Corp. | 16,323 | 1,725,831 |
| Clearway Energy, Inc., Class A | 26,598 | 695,538 |
| Clearway Energy, Inc., Class C | 54,210 | 1,488,607 |
| Essential Utilities, Inc. | 116,876 | 4,915,805 |
| Hawaiian Electric Industries, Inc. | 173,075 | 6,050,702 |
| IDACORP, Inc. | 60,485 | 5,216,226 |
| MGE Energy, Inc. | 34,026 | 2,167,456 |
| National Fuel Gas Co. | 132,512 | 6,021,345 |
| New Jersey Resources Corp. | 138,785 | 5,452,863 |
| Northwest Natural Holding Co. | 40,648 | 1,950,697 |
| NorthWestern Corp. | 83,073 | 4,858,109 |
| ONE Gas, Inc. | 65,939 | 4,415,935 |
| Ormat Technologies, Inc. | 33,626 | 2,880,739 |
| Otter Tail Corp. | 61,102 | 2,475,853 |
| PNM Resources, Inc. | 109,959 | 5,279,132 |
| SJW Group | 21,948 | 1,375,701 |
| South Jersey Industries, Inc. | 128,006 | 3,214,231 |
| Spire, Inc. | 77,091 | 5,120,384 |
| Unitil Corp. | 28,967 | 1,211,979 |
| 94,063,492 | ||
| Total Common Stock | ||
| (Cost $3,186,381,600) | 4,081,706,446 | |
| Other Investment Companies 0.5% of net assets | ||
| Money Market Fund 0.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 1,381,377 | 1,381,377 |
| Securities Lending Collateral 0.4% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c) | 17,211,830 | 17,211,830 |
| Total Other Investment Companies | ||
| (Cost $18,593,207) | 18,593,207 | |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental U.S. Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| Russell 2000 Index, e-mini, expires 03/19/21 | 40 | 4,398,400 | (74,680) | |||
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $16,139,000. |
| (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. |
| REIT — | Real Estate Investment Trust |
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $4,004,630,938 | $— | $— | $4,004,630,938 | |
| Pharmaceuticals, Biotechnology & Life Sciences | 75,041,900 | — | 2,033,608 | 77,075,508 | |
| Other Investment Companies1 | 18,593,207 | — | — | 18,593,207 | |
| Liabilities | |||||
| Futures Contracts2 | (74,680) | — | — | (74,680) | |
| Total | $4,098,191,365 | $— | $2,033,608 | $4,100,224,973 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental U.S. Small Company Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in unaffiliated issuers, at value (cost $3,187,762,977) including securities on loan of $16,139,000 | $4,083,087,823 | |
| Collateral invested for securities on loan, at value (cost $17,211,830) | 17,211,830 | |
| Deposit with broker for futures contracts | 642,000 | |
| Receivables: | ||
| Investments sold | 41,847,914 | |
| Fund shares sold | 4,875,441 | |
| Dividends | 2,942,495 | |
| Income from securities on loan | 43,398 | |
| Variation margin on futures contracts | + | 856 |
| Total assets | 4,150,651,757 | |
| Liabilities | ||
| Collateral held for securities on loan | 17,211,830 | |
| Payables: | ||
| Investments bought | 15,238,904 | |
| Management fees | 787,363 | |
| Fund shares redeemed | + | 31,795,249 |
| Total liabilities | 65,033,346 | |
| Net Assets | ||
| Total assets | 4,150,651,757 | |
| Total liabilities | – | 65,033,346 |
| Net assets | $4,085,618,411 | |
| Net Assets by Source | ||
| Capital received from investors | 3,680,225,275 | |
| Total distributable earnings | 405,393,136 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $4,085,618,411 | 83,800,000 | $48.75 | ||
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental U.S. Small Company Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $96,380) | $49,467,831 | |
| Securities on loan, net | + | 4,389,339 |
| Total investment income | 53,857,170 | |
| Expenses | ||
| Management fees | 8,141,286 | |
| Total expenses | – | 8,141,286 |
| Net investment income | 45,715,884 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on unaffiliated issuers | (340,381,105) | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 414,516,200 | |
| Net realized gains on futures contracts | + | 228,597 |
| Net realized gains | 74,363,692 | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 1,137,880,398 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | + | 620,009 |
| Net change in unrealized appreciation (depreciation) | + | 1,138,500,407 |
| Net realized and unrealized gains | 1,212,864,099 | |
| Increase in net assets resulting from operations | $1,258,579,983 | |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental U.S. Small Company Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $45,715,884 | $50,275,344 | ||
| Net realized gains | 74,363,692 | 111,141,879 | ||
| Net change in unrealized appreciation (depreciation) | + | 1,138,500,407 | (444,489,381) | |
| Increase (decrease) in net assets resulting from operations | 1,258,579,983 | (283,072,158) | ||
| Distributions to Shareholders | ||||
| Total distributions | ($51,561,985) | ($50,954,980) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 30,900,000 | $953,673,482 | 27,150,000 | $1,041,018,392 | ||||
| Shares redeemed | + | (45,700,000) | (1,499,782,894) | (17,900,000) | (685,064,295) | |||
| Net transactions in fund shares | (14,800,000) | ($546,109,412) | 9,250,000 | $355,954,097 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 98,600,000 | $3,424,709,825 | 89,350,000 | $3,402,782,866 | ||||
| Total increase (decrease) | + | (14,800,000) | 660,908,586 | 9,250,000 | 21,926,959 | |||
| End of period | 83,800,000 | $4,085,618,411 | 98,600,000 | $3,424,709,825 | ||||
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Large Company Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $25.24 | $27.54 | $30.28 | $26.00 | $22.08 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.70 | 0.91 | 0.94 | 0.80 | 0.74 | |
| Net realized and unrealized gains (losses) | 5.64 | (2.29) | (2.81) | 4.19 | 3.79 | |
| Total from investment operations | 6.34 | (1.38) | (1.87) | 4.99 | 4.53 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.64) | (0.92) | (0.87) | (0.71) | (0.61) | |
| Net asset value at end of period | $30.94 | $25.24 | $27.54 | $30.28 | $26.00 | |
| Total return | 25.47% | (5.32%) | (6.00%) | 19.19% | 20.62% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.25% | 0.25% | 0.25% | 0.25% | 0.32% | |
| Net investment income (loss) | 2.74% | 3.27% | 3.29% | 2.76% | 2.98% | |
| Portfolio turnover rate2 | 15% | 20% | 14% | 10% | 11% | |
| Net assets, end of period (x 1,000) | $5,721,053 | $4,416,696 | $4,083,580 | $3,630,569 | $1,928,861 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
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Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 98.4% of net assets | ||
| Australia 5.5% | ||
| AGL Energy Ltd. | 349,398 | 2,534,622 |
| Amcor plc | 243,547 | 2,685,010 |
| AMP Ltd. | 3,107,769 | 3,609,052 |
| Ampol Ltd. | 210,215 | 4,000,357 |
| APA Group | 213,946 | 1,538,768 |
| Aristocrat Leisure Ltd. | 49,235 | 1,157,254 |
| Aurizon Holdings Ltd. | 721,733 | 2,128,897 |
| Australia & New Zealand Banking Group Ltd. | 1,295,184 | 26,241,480 |
| Bendigo & Adelaide Bank Ltd. | 230,362 | 1,742,443 |
| BHP Group Ltd. | 981,027 | 37,314,778 |
| BlueScope Steel Ltd. | 315,462 | 4,073,767 |
| Boral Ltd. | 620,438 | 2,488,177 |
| Brambles Ltd. | 362,012 | 2,774,670 |
| Coca-Cola Amatil Ltd. | 153,408 | 1,590,310 |
| Coles Group Ltd. | 350,388 | 4,158,575 |
| Commonwealth Bank of Australia | 483,970 | 30,559,679 |
| Computershare Ltd. | 104,456 | 1,073,143 |
| Crown Resorts Ltd. | 191,219 | 1,473,015 |
| CSL Ltd. | 24,706 | 5,022,660 |
| Downer EDI Ltd. | 485,770 | 1,936,828 |
| Fortescue Metals Group Ltd. | 352,443 | 6,578,687 |
| Goodman Group | 111,140 | 1,424,898 |
| Incitec Pivot Ltd. * | 925,780 | 1,906,525 |
| Insurance Australia Group Ltd. | 849,190 | 3,280,640 |
| Lendlease Corp., Ltd. | 318,373 | 3,278,242 |
| Macquarie Group Ltd. | 63,531 | 7,007,978 |
| Medibank Pvt Ltd. | 1,009,893 | 2,165,750 |
| Metcash Ltd. | 905,263 | 2,361,880 |
| Mirvac Group | 928,645 | 1,603,274 |
| National Australia Bank Ltd. | 1,225,986 | 23,387,260 |
| Newcrest Mining Ltd. | 85,615 | 1,633,216 |
| Oil Search Ltd. | 446,888 | 1,466,958 |
| Orica Ltd. | 123,233 | 1,198,312 |
| Origin Energy Ltd. | 771,220 | 2,686,853 |
| QBE Insurance Group Ltd. | 469,904 | 3,379,699 |
| Ramsay Health Care Ltd. | 29,716 | 1,518,404 |
| Rio Tinto Ltd. | 141,137 | 13,897,830 |
| Scentre Group | 1,476,373 | 3,291,863 |
| Sims Ltd. | 213,918 | 2,230,838 |
| Sonic Healthcare Ltd. | 87,304 | 2,144,654 |
| South32 Ltd. | 1,763,764 | 3,782,452 |
| Stockland | 706,463 | 2,280,755 |
| Suncorp Group Ltd. | 738,476 | 5,682,977 |
| Tabcorp Holdings Ltd. | 475,141 | 1,636,951 |
| Telstra Corp., Ltd. | 2,803,569 | 6,685,211 |
| Transurban Group | 202,852 | 2,010,214 |
| Viva Energy Group Ltd. | 1,088,480 | 1,403,097 |
| Wesfarmers Ltd. | 421,876 | 16,082,590 |
| Westpac Banking Corp. | 1,646,346 | 30,360,995 |
| Woodside Petroleum Ltd. | 384,990 | 7,323,315 |
| Woolworths Group Ltd. | 498,540 | 15,207,204 |
| 317,003,007 | ||
| Security | Number of Shares | Value ($) |
| Austria 0.3% | ||
| ANDRITZ AG | 29,725 | 1,433,106 |
| Erste Group Bank AG * | 121,156 | 4,013,244 |
| OMV AG | 102,830 | 4,975,128 |
| Raiffeisen Bank International AG * | 82,436 | 1,683,023 |
| voestalpine AG | 120,763 | 4,813,757 |
| Wienerberger AG | 40,388 | 1,356,955 |
| 18,275,213 | ||
| Belgium 0.7% | ||
| Ageas S.A. N.V. | 77,579 | 4,374,924 |
| Anheuser-Busch InBev S.A. | 245,438 | 14,138,933 |
| Etablissements Franz Colruyt N.V. | 22,481 | 1,354,548 |
| Groupe Bruxelles Lambert S.A. | 39,407 | 3,929,895 |
| KBC Group N.V. * | 88,955 | 6,437,384 |
| Proximus SADP | 85,113 | 1,673,625 |
| Solvay S.A. | 38,549 | 4,730,547 |
| UCB S.A. | 17,936 | 1,794,778 |
| Umicore S.A. | 55,161 | 3,258,002 |
| 41,692,636 | ||
| Canada 6.8% | ||
| Agnico Eagle Mines Ltd. | 21,994 | 1,234,166 |
| Air Canada * | 85,206 | 1,689,313 |
| Alimentation Couche-Tard, Inc., B Shares | 213,936 | 6,463,706 |
| ARC Resources Ltd. | 300,158 | 1,806,638 |
| Atco Ltd., Class I | 40,442 | 1,185,788 |
| Bank of Montreal | 187,302 | 15,383,619 |
| Barrick Gold Corp. | 147,827 | 2,773,216 |
| Bausch Health Cos., Inc. * | 163,038 | 5,157,719 |
| BCE, Inc. | 97,694 | 4,200,225 |
| Brookfield Asset Management, Inc., Class A | 231,940 | 9,416,837 |
| Canadian Imperial Bank of Commerce | 119,411 | 11,066,740 |
| Canadian National Railway Co. | 119,901 | 13,155,962 |
| Canadian Natural Resources Ltd. | 460,220 | 12,617,880 |
| Canadian Pacific Railway Ltd. | 21,802 | 7,810,145 |
| Canadian Tire Corp., Ltd., Class A | 31,763 | 4,125,677 |
| Cenovus Energy, Inc. | 1,174,945 | 8,742,482 |
| CGI, Inc. * | 54,143 | 4,062,863 |
| CI Financial Corp. | 129,713 | 1,825,818 |
| Crescent Point Energy Corp. | 1,302,067 | 4,803,043 |
| Dollarama, Inc. | 45,409 | 1,737,092 |
| Emera, Inc. | 51,115 | 2,024,412 |
| Empire Co., Ltd., A Shares | 96,061 | 2,683,790 |
| Enbridge, Inc. | 366,918 | 12,456,663 |
| Fairfax Financial Holdings Ltd. | 8,357 | 3,422,079 |
| Finning International, Inc. | 99,210 | 2,602,499 |
| First Quantum Minerals Ltd. | 205,121 | 4,444,288 |
| Fortis, Inc. | 85,152 | 3,295,773 |
| George Weston Ltd. | 43,638 | 3,221,836 |
| Gibson Energy, Inc. | 62,918 | 1,076,464 |
| Gildan Activewear, Inc. | 87,957 | 2,686,649 |
| Great-West Lifeco, Inc. | 80,127 | 2,061,403 |
| H&R Real Estate Investment Trust | 130,785 | 1,417,354 |
69
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Hydro One Ltd. | 81,465 | 1,738,692 |
| IA Financial Corp., Inc. | 27,757 | 1,433,673 |
| Imperial Oil Ltd. | 165,583 | 3,647,796 |
| Intact Financial Corp. | 19,219 | 2,159,329 |
| Inter Pipeline Ltd. | 172,104 | 2,434,741 |
| Keyera Corp. | 71,896 | 1,401,007 |
| Kinross Gold Corp. | 198,215 | 1,238,452 |
| Linamar Corp. | 38,049 | 2,137,176 |
| Loblaw Cos. Ltd. | 77,790 | 3,768,452 |
| Magna International, Inc. | 251,288 | 21,276,114 |
| Manulife Financial Corp. | 498,895 | 9,997,604 |
| Methanex Corp. | 68,817 | 2,666,795 |
| Metro, Inc. | 65,727 | 2,746,413 |
| National Bank of Canada | 71,214 | 4,509,095 |
| Nutrien Ltd. | 207,228 | 11,243,674 |
| Onex Corp. | 36,068 | 2,029,608 |
| Open Text Corp. | 29,165 | 1,305,744 |
| Parkland Corp. | 43,546 | 1,390,995 |
| Pembina Pipeline Corp. | 108,409 | 2,771,023 |
| Power Corp. of Canada | 308,905 | 7,485,944 |
| Restaurant Brands International, Inc. | 21,481 | 1,295,138 |
| RioCan Real Estate Investment Trust | 93,225 | 1,396,166 |
| Rogers Communications, Inc., B Shares | 107,690 | 4,689,534 |
| Royal Bank of Canada | 298,302 | 25,532,389 |
| Saputo, Inc. | 74,669 | 2,113,852 |
| Shaw Communications, Inc., B Shares | 155,262 | 2,716,472 |
| SNC-Lavalin Group, Inc. | 100,631 | 2,034,876 |
| Sun Life Financial, Inc. | 126,282 | 6,108,617 |
| Suncor Energy, Inc. | 911,395 | 18,191,905 |
| TC Energy Corp. | 162,449 | 6,839,283 |
| Teck Resources Ltd., Class B | 381,181 | 7,978,907 |
| TELUS Corp. | 165,689 | 3,337,338 |
| TFI International, Inc. | 29,188 | 2,049,385 |
| The Bank of Nova Scotia | 371,980 | 21,860,436 |
| The Toronto-Dominion Bank | 386,681 | 23,561,274 |
| Thomson Reuters Corp. | 46,947 | 4,105,081 |
| TransAlta Corp. | 170,459 | 1,497,239 |
| Waste Connections, Inc. | 19,526 | 1,916,664 |
| West Fraser Timber Co., Ltd. | 57,544 | 3,954,446 |
| WSP Global, Inc. | 19,631 | 1,709,106 |
| 390,922,574 | ||
| Denmark 0.9% | ||
| AP Moller - Maersk A/S, A Shares | 2,244 | 4,531,039 |
| AP Moller - Maersk A/S, B Shares | 3,321 | 7,177,317 |
| Carlsberg A/S, B Shares | 19,168 | 3,034,966 |
| Coloplast A/S, B Shares | 8,101 | 1,241,415 |
| Danske Bank A/S * | 325,341 | 6,038,159 |
| DSV PANALPINA A/S | 15,985 | 2,953,686 |
| ISS A/S * | 135,298 | 2,451,431 |
| Novo Nordisk A/S, B Shares | 172,246 | 12,313,428 |
| Novozymes A/S, B Shares | 28,041 | 1,742,993 |
| Orsted A/S | 18,213 | 2,966,999 |
| Pandora A/S | 35,331 | 3,457,983 |
| Vestas Wind Systems A/S | 30,503 | 5,748,331 |
| 53,657,747 | ||
| Finland 1.1% | ||
| Elisa Oyj | 24,057 | 1,441,039 |
| Fortum Oyj | 119,329 | 2,996,771 |
| Kesko Oyj, B Shares | 94,347 | 2,409,467 |
| Kone Oyj, B Shares | 50,167 | 4,023,790 |
| Metso Outotec Oyj | 126,105 | 1,425,812 |
| Neles Oyj | 29,877 | 371,351 |
| Neste Oyj | 66,039 | 4,365,412 |
| Nokia Oyj * | 1,722,111 | 6,897,984 |
| Security | Number of Shares | Value ($) |
| Nokian Renkaat Oyj | 55,568 | 1,977,588 |
| Nordea Bank Abp | 1,283,284 | 11,694,837 |
| Outokumpu Oyj * | 487,901 | 2,394,914 |
| Sampo Oyj, A Shares | 121,666 | 5,444,895 |
| Stora Enso Oyj, R Shares | 248,677 | 4,927,605 |
| UPM-Kymmene Oyj | 214,645 | 8,232,940 |
| Wartsila Oyj Abp | 206,237 | 2,378,640 |
| 60,983,045 | ||
| France 8.5% | ||
| Accor S.A. * | 43,506 | 1,825,030 |
| Air France-KLM *(a) | 388,149 | 2,627,992 |
| Air Liquide S.A. | 73,704 | 11,155,900 |
| Airbus SE * | 90,830 | 10,574,025 |
| Alstom S.A. * | 55,266 | 2,773,164 |
| Arkema S.A. | 30,627 | 3,401,517 |
| Atos SE * | 21,322 | 1,672,407 |
| AXA S.A. | 749,483 | 18,922,226 |
| BNP Paribas S.A. * | 564,632 | 33,770,635 |
| Bollore S.A. | 334,671 | 1,611,083 |
| Bouygues S.A. | 130,199 | 5,303,673 |
| Bureau Veritas S.A. * | 53,988 | 1,467,231 |
| Capgemini SE | 36,197 | 5,850,067 |
| Carrefour S.A. | 561,963 | 9,853,088 |
| Casino Guichard Perrachon S.A. *(a) | 90,488 | 2,919,396 |
| Cie de Saint-Gobain * | 323,382 | 17,435,785 |
| Cie Generale des Etablissements Michelin S.C.A. | 90,638 | 13,174,464 |
| CNP Assurances * | 89,912 | 1,627,206 |
| Credit Agricole S.A. * | 472,886 | 6,666,882 |
| Danone S.A. | 141,058 | 9,666,866 |
| Dassault Systemes SE | 6,653 | 1,388,163 |
| Eiffage S.A. * | 32,747 | 3,384,966 |
| Electricite de France S.A. * | 432,346 | 5,199,536 |
| Elis S.A. * | 77,449 | 1,348,069 |
| Engie S.A. * | 1,039,700 | 15,251,122 |
| EssilorLuxottica S.A. | 28,628 | 4,691,070 |
| Eurazeo SE * | 18,708 | 1,393,122 |
| Eutelsat Communications S.A. | 122,542 | 1,485,630 |
| Faurecia SE * | 55,764 | 2,897,652 |
| Hermes International | 1,960 | 2,196,337 |
| Kering S.A. | 7,167 | 4,566,265 |
| Klepierre S.A. | 60,626 | 1,438,642 |
| L'Oreal S.A. | 26,071 | 9,582,099 |
| Lagardere S.C.A. * | 88,002 | 2,379,879 |
| Legrand S.A. | 40,479 | 3,533,675 |
| LVMH Moet Hennessy Louis Vuitton SE | 26,362 | 16,799,052 |
| Natixis S.A. * | 624,194 | 3,057,862 |
| Orange S.A. | 1,309,776 | 15,179,468 |
| Pernod-Ricard S.A. | 27,987 | 5,345,277 |
| Publicis Groupe S.A. | 99,204 | 5,844,886 |
| Rallye S.A. *(a) | 188,682 | 1,603,155 |
| Renault S.A. * | 362,585 | 16,338,922 |
| Rexel S.A. * | 296,576 | 5,601,350 |
| Rubis S.C.A. | 27,211 | 1,253,770 |
| Safran S.A. * | 50,112 | 6,888,538 |
| Sanofi | 250,353 | 23,033,987 |
| Schneider Electric SE | 111,030 | 16,556,274 |
| SCOR SE * | 74,153 | 2,473,390 |
| SES S.A. | 239,555 | 1,923,747 |
| Societe Generale S.A. * | 991,347 | 24,709,702 |
| Sodexo S.A. * | 34,786 | 3,344,925 |
| STMicroelectronics N.V. | 88,386 | 3,429,835 |
| Suez S.A. | 181,658 | 3,803,564 |
| Technip Energies N.V. * | 67,088 | 870,095 |
| TechnipFMC plc (a) | 336,536 | 2,751,571 |
| Teleperformance | 5,280 | 1,878,438 |
70
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Thales S.A. | 22,886 | 2,178,987 |
| Total SE | 1,428,169 | 66,523,501 |
| Valeo S.A. | 180,327 | 6,400,078 |
| Veolia Environnement S.A. | 238,700 | 6,475,556 |
| Vinci S.A. | 119,377 | 12,467,178 |
| Vivendi SE | 188,191 | 6,526,137 |
| Wendel SE | 12,891 | 1,481,780 |
| 487,775,889 | ||
| Germany 8.0% | ||
| adidas AG * | 26,889 | 9,429,080 |
| Allianz SE | 123,917 | 30,052,007 |
| Aurubis AG | 43,010 | 3,774,460 |
| BASF SE | 524,542 | 43,122,949 |
| Bayer AG | 338,157 | 20,572,002 |
| Bayerische Motoren Werke AG | 280,954 | 24,383,069 |
| Beiersdorf AG | 13,336 | 1,325,735 |
| Brenntag SE | 60,393 | 4,710,581 |
| Commerzbank AG * | 792,947 | 5,226,261 |
| Continental AG | 85,581 | 12,351,119 |
| Covestro AG | 130,545 | 9,500,993 |
| Daimler AG | 739,747 | 59,486,197 |
| Deutsche Bank AG * | 814,541 | 10,098,478 |
| Deutsche Boerse AG | 14,852 | 2,443,608 |
| Deutsche Lufthansa AG * | 411,353 | 6,133,903 |
| Deutsche Post AG | 364,346 | 18,158,504 |
| Deutsche Telekom AG | 1,555,770 | 28,382,555 |
| Deutsche Wohnen SE | 27,833 | 1,315,875 |
| E.ON SE | 757,137 | 7,765,658 |
| Evonik Industries AG | 92,236 | 3,122,454 |
| Freenet AG | 68,495 | 1,458,678 |
| Fresenius Medical Care AG & Co. KGaA | 59,961 | 4,174,699 |
| Fresenius SE & Co. KGaA | 167,376 | 7,200,025 |
| GEA Group AG | 59,199 | 2,056,511 |
| Hannover Rueck SE | 12,996 | 2,213,169 |
| HeidelbergCement AG | 86,031 | 6,837,711 |
| Hella GmbH & Co. KGaA * | 24,102 | 1,434,080 |
| Henkel AG & Co. KGaA | 26,519 | 2,362,655 |
| HUGO BOSS AG | 51,494 | 1,958,857 |
| Infineon Technologies AG | 167,433 | 7,316,286 |
| K+S AG | 253,449 | 2,841,945 |
| KION Group AG | 20,916 | 1,775,625 |
| LANXESS AG | 35,445 | 2,638,179 |
| Leoni AG *(a) | 131,828 | 1,801,744 |
| Merck KGaA | 18,932 | 3,091,913 |
| METRO AG | 201,275 | 2,230,528 |
| MTU Aero Engines AG | 8,011 | 1,915,579 |
| Muenchener Rueckversicherungs-Gesellschaft AG | 38,376 | 11,319,131 |
| OSRAM Licht AG * | 25,376 | 1,579,495 |
| ProSiebenSat.1 Media SE * | 141,189 | 2,909,951 |
| Rheinmetall AG | 17,124 | 1,717,266 |
| RWE AG | 183,777 | 6,990,967 |
| Salzgitter AG * | 89,716 | 2,694,119 |
| SAP SE | 102,685 | 12,720,661 |
| Siemens AG | 219,797 | 34,143,731 |
| Siemens Energy AG * | 109,222 | 4,142,927 |
| Symrise AG | 11,125 | 1,306,061 |
| Telefonica Deutschland Holding AG | 431,462 | 1,157,396 |
| ThyssenKrupp AG * | 440,977 | 5,970,801 |
| Uniper SE | 165,431 | 5,823,204 |
| United Internet AG | 37,172 | 1,645,955 |
| Volkswagen AG | 23,466 | 5,517,163 |
| Vonovia SE | 50,248 | 3,216,666 |
| 457,519,166 | ||
| Security | Number of Shares | Value ($) |
| Hong Kong 1.7% | ||
| AAC Technologies Holdings, Inc. | 177,903 | 958,619 |
| AIA Group Ltd. | 1,079,972 | 13,511,223 |
| BOC Hong Kong Holdings Ltd. | 974,774 | 3,241,979 |
| CK Asset Holdings Ltd. | 773,259 | 4,540,461 |
| CK Hutchison Holdings Ltd. | 1,290,118 | 9,745,714 |
| CLP Holdings Ltd. | 477,275 | 4,654,406 |
| Galaxy Entertainment Group Ltd. | 294,546 | 2,692,068 |
| Hang Seng Bank Ltd. | 150,328 | 2,906,817 |
| Henderson Land Development Co., Ltd. | 258,919 | 1,124,813 |
| Hong Kong & China Gas Co., Ltd. | 1,183,411 | 1,784,876 |
| Hong Kong Exchanges & Clearing Ltd. | 41,808 | 2,550,297 |
| Hongkong Land Holdings Ltd. | 328,276 | 1,582,290 |
| Jardine Matheson Holdings Ltd. | 73,333 | 3,836,782 |
| Jardine Strategic Holdings Ltd. | 77,303 | 2,000,602 |
| Lenovo Group Ltd. | 4,345,714 | 5,495,621 |
| Link REIT | 201,216 | 1,898,717 |
| MTR Corp., Ltd. | 322,934 | 1,937,850 |
| New World Development Co., Ltd. | 627,953 | 3,193,455 |
| Noble Group Ltd. *(a)(b) | 54,070,092 | 609,951 |
| PCCW Ltd. | 2,161,518 | 1,239,954 |
| Sands China Ltd. * | 549,982 | 2,573,604 |
| Sino Land Co., Ltd. | 925,938 | 1,401,318 |
| Sun Hung Kai Properties Ltd. | 418,075 | 6,715,198 |
| Swire Pacific Ltd., A Shares | 416,088 | 3,049,315 |
| Swire Pacific Ltd., B Shares | 690,923 | 801,602 |
| Techtronic Industries Co., Ltd. | 130,922 | 1,998,255 |
| The Wharf Holdings Ltd. | 1,143,580 | 2,697,766 |
| Want Want China Holdings Ltd. | 1,463,321 | 1,056,365 |
| WH Group Ltd. | 4,452,214 | 3,994,587 |
| Wharf Real Estate Investment Co., Ltd. | 593,533 | 3,546,347 |
| Yue Yuen Industrial Holdings Ltd. | 797,284 | 1,699,946 |
| 99,040,798 | ||
| Ireland 0.1% | ||
| Bank of Ireland Group plc * | 581,921 | 2,387,415 |
| Kerry Group plc, A Shares | 17,029 | 2,065,946 |
| 4,453,361 | ||
| Israel 0.2% | ||
| Bank Hapoalim B.M. * | 250,908 | 1,779,919 |
| Bank Leumi Le-Israel | 335,201 | 2,049,030 |
| Bezeq The Israeli Telecommunication Corp., Ltd. * | 1,536,570 | 1,489,397 |
| ICL Group Ltd. | 365,239 | 2,119,085 |
| Teva Pharmaceutical Industries Ltd. * | 337,145 | 3,737,122 |
| 11,174,553 | ||
| Italy 3.3% | ||
| A2A S.p.A. | 721,564 | 1,221,351 |
| Assicurazioni Generali S.p.A. | 506,939 | 9,568,265 |
| Atlantia S.p.A. * | 182,403 | 3,437,247 |
| Banco BPM S.p.A. * | 983,510 | 2,535,598 |
| CNH Industrial N.V. * | 526,395 | 7,820,604 |
| Enel S.p.A. | 2,689,534 | 25,607,179 |
| Eni S.p.A. | 2,571,950 | 29,601,218 |
| EXOR N.V. | 148,355 | 11,974,874 |
| Ferrari N.V. | 5,931 | 1,162,646 |
| Hera S.p.A. | 272,677 | 977,701 |
| Intesa Sanpaolo S.p.A. * | 8,100,027 | 20,981,087 |
| Leonardo S.p.A. | 245,045 | 1,971,998 |
| Mediobanca Banca di Credito Finanziario S.p.A. * | 233,085 | 2,438,192 |
| Pirelli & C S.p.A. * | 239,629 | 1,388,864 |
71
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Poste Italiane S.p.A. | 122,610 | 1,399,541 |
| Prysmian S.p.A. | 62,016 | 2,009,090 |
| Saipem S.p.A. | 453,802 | 1,276,812 |
| Saras S.p.A. * | 1,516,559 | 1,188,236 |
| Snam S.p.A. | 487,873 | 2,544,006 |
| Stellantis N.V. | 1,300,365 | 21,203,997 |
| Stellantis N.V. * | 837,766 | 13,650,601 |
| Telecom Italia S.p.A. | 14,412,924 | 6,873,552 |
| Tenaris S.A. | 255,436 | 2,680,677 |
| Terna Rete Elettrica Nazionale S.p.A. | 249,208 | 1,744,755 |
| UniCredit S.p.A. * | 1,229,178 | 12,741,476 |
| Unipol Gruppo S.p.A. * | 306,509 | 1,601,263 |
| 189,600,830 | ||
| Japan 23.5% | ||
| Aeon Co., Ltd. | 257,097 | 7,729,319 |
| AGC, Inc. | 136,761 | 5,006,269 |
| Air Water, Inc. | 80,844 | 1,329,441 |
| Aisin Seiki Co., Ltd. | 166,074 | 5,650,631 |
| Ajinomoto Co., Inc. | 150,332 | 2,989,990 |
| Alfresa Holdings Corp. | 136,748 | 2,636,384 |
| Alps Alpine Co., Ltd. | 157,233 | 2,069,088 |
| Amada Co., Ltd. | 154,940 | 1,877,488 |
| ANA Holdings, Inc. * | 77,327 | 1,853,700 |
| Asahi Group Holdings Ltd. | 109,306 | 4,731,737 |
| Asahi Kasei Corp. | 748,580 | 8,052,118 |
| Asics Corp. | 83,207 | 1,362,833 |
| Astellas Pharma, Inc. | 460,151 | 7,230,080 |
| Bandai Namco Holdings, Inc. | 39,358 | 3,009,664 |
| Bic Camera, Inc. | 103,251 | 1,118,375 |
| Bridgestone Corp. | 387,567 | 15,136,721 |
| Brother Industries Ltd. | 124,892 | 2,453,529 |
| Canon, Inc. | 627,623 | 13,505,028 |
| Casio Computer Co., Ltd. | 59,366 | 1,143,411 |
| Central Japan Railway Co. | 59,491 | 9,721,591 |
| Chubu Electric Power Co., Inc. | 523,967 | 6,430,325 |
| Chugai Pharmaceutical Co., Ltd. | 28,070 | 1,254,903 |
| Coca-Cola Bottlers Japan Holdings, Inc. | 83,553 | 1,435,160 |
| COMSYS Holdings Corp. | 38,832 | 1,171,812 |
| Concordia Financial Group Ltd. | 395,822 | 1,526,965 |
| Cosmo Energy Holdings Co., Ltd. | 111,736 | 2,676,462 |
| Dai Nippon Printing Co., Ltd. | 175,570 | 3,154,130 |
| Dai-ichi Life Holdings, Inc. | 445,885 | 7,822,030 |
| Daicel Corp. | 209,655 | 1,534,925 |
| Daido Steel Co., Ltd. | 30,443 | 1,252,981 |
| Daiichi Sankyo Co., Ltd. | 143,971 | 4,067,512 |
| Daikin Industries Ltd. | 41,714 | 8,112,578 |
| Daito Trust Construction Co., Ltd. | 33,001 | 3,658,174 |
| Daiwa House Industry Co., Ltd. | 312,210 | 8,800,137 |
| Daiwa Securities Group, Inc. | 535,070 | 2,599,514 |
| Denka Co., Ltd. | 48,113 | 1,806,383 |
| Denso Corp. | 253,229 | 15,183,282 |
| Dentsu Group, Inc. | 86,404 | 2,976,372 |
| DIC Corp. | 68,618 | 1,680,349 |
| East Japan Railway Co. | 167,572 | 12,357,924 |
| Ebara Corp. | 52,343 | 1,960,283 |
| EDION Corp. | 116,269 | 1,163,345 |
| Eisai Co., Ltd. | 32,885 | 2,259,108 |
| Electric Power Development Co., Ltd. | 146,653 | 2,389,615 |
| ENEOS Holdings, Inc. | 3,480,322 | 15,278,267 |
| FANUC Corp. | 31,571 | 7,805,333 |
| Fast Retailing Co., Ltd. | 4,823 | 4,753,285 |
| Fuji Electric Co., Ltd. | 59,319 | 2,460,953 |
| FUJIFILM Holdings Corp. | 136,374 | 7,769,760 |
| Fujikura Ltd. * | 427,570 | 2,058,789 |
| Fujitsu Ltd. | 72,177 | 10,405,845 |
| Furukawa Electric Co., Ltd. | 57,920 | 1,511,878 |
| Security | Number of Shares | Value ($) |
| H2O Retailing Corp. | 167,591 | 1,371,685 |
| Hakuhodo DY Holdings, Inc. | 116,202 | 1,913,068 |
| Hankyu Hanshin Holdings, Inc. | 68,413 | 2,269,945 |
| Hanwa Co., Ltd. | 72,508 | 1,886,542 |
| Haseko Corp. | 176,825 | 2,187,492 |
| Hino Motors Ltd. | 262,721 | 2,465,938 |
| Hitachi Construction Machinery Co., Ltd. | 43,491 | 1,336,897 |
| Hitachi Ltd. | 592,885 | 27,134,478 |
| Hitachi Metals Ltd. | 108,456 | 1,719,375 |
| Hokkaido Electric Power Co., Inc. | 284,967 | 1,195,610 |
| Hokuriku Electric Power Co. | 157,904 | 978,193 |
| Honda Motor Co., Ltd. | 1,415,641 | 38,686,303 |
| Hoya Corp. | 33,538 | 3,808,990 |
| Idemitsu Kosan Co., Ltd. | 194,971 | 5,094,793 |
| IHI Corp. | 120,797 | 2,220,016 |
| Iida Group Holdings Co., Ltd. | 107,109 | 2,424,882 |
| Inpex Corp. | 687,628 | 5,060,075 |
| Isetan Mitsukoshi Holdings Ltd. | 396,395 | 2,890,923 |
| Isuzu Motors Ltd. | 396,083 | 4,141,510 |
| ITOCHU Corp. | 431,857 | 12,841,402 |
| J Front Retailing Co., Ltd. | 197,225 | 1,882,653 |
| Japan Airlines Co., Ltd. * | 98,369 | 2,335,964 |
| Japan Post Bank Co., Ltd. | 131,477 | 1,251,339 |
| Japan Post Holdings Co., Ltd. | 699,866 | 5,981,772 |
| Japan Post Insurance Co., Ltd. | 84,800 | 1,734,365 |
| Japan Tobacco, Inc. | 447,095 | 8,078,260 |
| JFE Holdings, Inc. * | 925,628 | 9,713,273 |
| JGC Holdings Corp. | 151,396 | 1,942,541 |
| JSR Corp. | 60,606 | 1,806,120 |
| JTEKT Corp. | 283,152 | 2,968,658 |
| K's Holdings Corp. | 112,435 | 1,508,068 |
| Kajima Corp. | 279,058 | 3,556,981 |
| Kaneka Corp. | 53,352 | 2,068,179 |
| Kao Corp. | 76,346 | 5,119,353 |
| Kawasaki Heavy Industries Ltd. * | 154,151 | 3,455,159 |
| KDDI Corp. | 664,359 | 20,515,685 |
| Keio Corp. | 22,240 | 1,659,546 |
| Kewpie Corp. | 62,194 | 1,344,404 |
| Keyence Corp. | 7,014 | 3,328,589 |
| Kikkoman Corp. | 29,049 | 1,916,787 |
| Kintetsu Group Holdings Co., Ltd. | 43,568 | 1,819,763 |
| Kirin Holdings Co., Ltd. | 281,586 | 5,519,921 |
| Kobe Steel Ltd. * | 761,359 | 4,687,925 |
| Koito Manufacturing Co., Ltd. | 45,970 | 3,063,516 |
| Komatsu Ltd. | 386,763 | 11,580,383 |
| Konica Minolta, Inc. | 734,446 | 3,715,660 |
| Kubota Corp. | 326,323 | 7,373,969 |
| Kuraray Co., Ltd. | 230,698 | 2,581,115 |
| Kyocera Corp. | 93,995 | 6,050,476 |
| Kyushu Electric Power Co., Inc. | 426,262 | 3,660,876 |
| Kyushu Railway Co. | 57,985 | 1,508,677 |
| Lixil Corp. | 147,492 | 4,135,147 |
| Makita Corp. | 51,228 | 2,180,580 |
| Marubeni Corp. | 1,395,512 | 10,370,066 |
| Matsumotokiyoshi Holdings Co., Ltd. | 32,555 | 1,277,266 |
| Mazda Motor Corp. | 1,066,294 | 8,397,040 |
| Medipal Holdings Corp. | 122,063 | 2,417,429 |
| MEIJI Holdings Co., Ltd. | 46,520 | 2,951,710 |
| MINEBEA MITSUMI, Inc. | 125,752 | 3,086,554 |
| MISUMI Group, Inc. | 43,183 | 1,317,296 |
| Mitsubishi Chemical Holdings Corp. | 1,150,560 | 7,989,340 |
| Mitsubishi Corp. | 606,128 | 17,084,685 |
| Mitsubishi Electric Corp. | 960,335 | 14,138,215 |
| Mitsubishi Estate Co., Ltd. | 216,483 | 3,734,708 |
| Mitsubishi Gas Chemical Co., Inc. | 101,179 | 2,354,259 |
| Mitsubishi Heavy Industries Ltd. | 261,900 | 7,541,855 |
| Mitsubishi Materials Corp. | 138,735 | 3,259,374 |
| Mitsubishi Motors Corp. * | 896,310 | 2,540,695 |
72
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Mitsubishi UFJ Financial Group, Inc. | 5,038,442 | 26,388,686 |
| Mitsui & Co., Ltd. | 718,630 | 15,267,684 |
| Mitsui Chemicals, Inc. | 125,832 | 3,873,934 |
| Mitsui Fudosan Co., Ltd. | 255,439 | 5,754,211 |
| Mitsui Mining & Smelting Co., Ltd. | 44,404 | 1,546,263 |
| Mitsui OSK Lines Ltd. | 111,216 | 3,512,689 |
| Mizuho Financial Group, Inc. | 949,238 | 13,890,201 |
| MS&AD Insurance Group Holdings, Inc. | 192,027 | 5,407,180 |
| Murata Manufacturing Co., Ltd. | 102,766 | 8,759,321 |
| Nagase & Co., Ltd. | 131,831 | 2,059,009 |
| Nagoya Railroad Co., Ltd. | 52,869 | 1,341,823 |
| NEC Corp. | 95,808 | 5,215,754 |
| NGK Insulators Ltd. | 107,590 | 1,898,528 |
| NGK Spark Plug Co., Ltd. | 99,451 | 1,682,098 |
| NH Foods Ltd. | 72,953 | 3,071,093 |
| NHK Spring Co., Ltd. | 184,497 | 1,378,446 |
| Nichirei Corp. | 37,378 | 972,866 |
| Nidec Corp. | 48,430 | 6,145,801 |
| Nikon Corp. | 251,769 | 2,233,168 |
| Nintendo Co., Ltd. | 7,639 | 4,642,625 |
| Nippon Electric Glass Co., Ltd. | 62,086 | 1,405,006 |
| Nippon Express Co., Ltd. | 52,081 | 3,871,612 |
| Nippon Light Metal Holdings Co., Ltd. | 59,360 | 1,170,039 |
| Nippon Paper Industries Co., Ltd. | 117,667 | 1,537,380 |
| Nippon Shokubai Co., Ltd. | 18,904 | 1,004,286 |
| Nippon Steel Corp. * | 1,182,441 | 17,396,999 |
| Nippon Steel Trading Corp. | 31,741 | 1,111,263 |
| Nippon Telegraph & Telephone Corp. | 639,698 | 16,559,856 |
| Nippon Yusen K.K. | 186,652 | 5,352,186 |
| Nissan Motor Co., Ltd. * | 3,184,349 | 17,177,073 |
| Nisshin Seifun Group, Inc. | 97,497 | 1,567,602 |
| Nitori Holdings Co., Ltd. | 9,071 | 1,692,192 |
| Nitto Denko Corp. | 66,093 | 5,639,059 |
| NOK Corp. | 131,816 | 1,800,190 |
| Nomura Holdings, Inc. | 831,151 | 4,827,447 |
| Nomura Real Estate Holdings, Inc. | 52,395 | 1,179,797 |
| NSK Ltd. | 342,695 | 3,354,898 |
| NTN Corp. * | 592,990 | 1,725,426 |
| NTT Data Corp. | 187,182 | 2,854,991 |
| Obayashi Corp. | 364,164 | 3,120,722 |
| Odakyu Electric Railway Co., Ltd. | 53,468 | 1,563,289 |
| Oji Holdings Corp. | 619,945 | 3,904,478 |
| Olympus Corp. | 107,312 | 2,246,159 |
| Omron Corp. | 44,789 | 3,606,998 |
| Ono Pharmaceutical Co., Ltd. | 45,106 | 1,212,536 |
| Oriental Land Co., Ltd. | 11,649 | 1,950,612 |
| ORIX Corp. | 425,835 | 7,200,505 |
| Osaka Gas Co., Ltd. | 222,979 | 3,989,093 |
| Otsuka Corp. | 23,183 | 1,077,115 |
| Otsuka Holdings Co., Ltd. | 110,442 | 4,378,703 |
| Pan Pacific International Holdings Corp. | 62,040 | 1,452,880 |
| Panasonic Corp. | 1,354,431 | 17,359,447 |
| Rakuten, Inc. | 119,206 | 1,332,592 |
| Recruit Holdings Co., Ltd. | 131,804 | 6,533,292 |
| Renesas Electronics Corp. * | 187,432 | 2,056,580 |
| Resona Holdings, Inc. | 829,405 | 3,329,609 |
| Ricoh Co., Ltd. | 537,123 | 4,648,277 |
| Rohm Co., Ltd. | 23,713 | 2,330,346 |
| Ryohin Keikaku Co., Ltd. | 72,636 | 1,634,890 |
| Santen Pharmaceutical Co., Ltd. | 61,058 | 837,871 |
| SBI Holdings, Inc. | 49,193 | 1,365,805 |
| Secom Co., Ltd. | 37,714 | 3,265,904 |
| Seiko Epson Corp. | 192,470 | 3,150,626 |
| Seino Holdings Co., Ltd. | 97,531 | 1,364,006 |
| Sekisui Chemical Co., Ltd. | 181,314 | 3,224,986 |
| Sekisui House Ltd. | 266,471 | 4,994,768 |
| Seven & i Holdings Co., Ltd. | 383,717 | 14,539,755 |
| SG Holdings Co., Ltd. | 99,050 | 2,275,900 |
| Security | Number of Shares | Value ($) |
| Shikoku Electric Power Co., Inc. | 133,198 | 928,910 |
| Shimadzu Corp. | 43,882 | 1,577,511 |
| Shimamura Co., Ltd. | 17,627 | 1,755,420 |
| Shimano, Inc. | 9,458 | 2,113,713 |
| Shimizu Corp. | 311,314 | 2,352,241 |
| Shin-Etsu Chemical Co., Ltd. | 66,523 | 10,833,246 |
| Shionogi & Co., Ltd. | 39,263 | 1,994,843 |
| Shiseido Co., Ltd. | 40,780 | 3,028,836 |
| Showa Denko K.K. | 106,003 | 2,580,925 |
| SMC Corp. | 6,056 | 3,575,393 |
| Softbank Corp. | 452,107 | 6,114,944 |
| SoftBank Group Corp. | 491,523 | 45,650,648 |
| Sojitz Corp. | 1,057,278 | 2,778,654 |
| Sompo Holdings, Inc. | 124,130 | 4,753,617 |
| Sony Corp. | 176,456 | 18,417,409 |
| Stanley Electric Co., Ltd. | 59,407 | 1,759,237 |
| Subaru Corp. | 445,859 | 8,321,669 |
| Sumitomo Chemical Co., Ltd. | 1,387,742 | 6,708,158 |
| Sumitomo Corp. | 625,525 | 9,044,690 |
| Sumitomo Electric Industries Ltd. | 698,716 | 10,142,334 |
| Sumitomo Forestry Co., Ltd. | 98,443 | 1,764,841 |
| Sumitomo Heavy Industries Ltd. | 87,034 | 2,389,473 |
| Sumitomo Metal Mining Co., Ltd. | 92,154 | 4,447,680 |
| Sumitomo Mitsui Financial Group, Inc. | 551,248 | 19,361,461 |
| Sumitomo Mitsui Trust Holdings, Inc. | 125,246 | 4,116,872 |
| Sumitomo Realty & Development Co., Ltd. | 83,336 | 2,870,688 |
| Sumitomo Rubber Industries Ltd. | 185,608 | 2,064,440 |
| Suntory Beverage & Food Ltd. | 41,508 | 1,420,093 |
| Suzuken Co., Ltd. | 63,786 | 2,430,741 |
| Suzuki Motor Corp. | 201,745 | 8,708,703 |
| Sysmex Corp. | 17,478 | 1,818,506 |
| T&D Holdings, Inc. | 220,034 | 2,965,730 |
| Taiheiyo Cement Corp. | 92,160 | 2,294,052 |
| Taisei Corp. | 98,095 | 3,457,356 |
| Takashimaya Co., Ltd. | 179,529 | 1,823,262 |
| Takeda Pharmaceutical Co., Ltd. | 227,731 | 7,656,584 |
| TDK Corp. | 36,562 | 5,230,006 |
| Teijin Ltd. | 133,847 | 2,299,043 |
| Terumo Corp. | 62,660 | 2,323,725 |
| The Chugoku Electric Power Co., Inc. | 153,016 | 1,825,449 |
| The Kansai Electric Power Co., Inc. | 583,747 | 5,821,581 |
| The Yokohama Rubber Co., Ltd. | 76,790 | 1,326,202 |
| TIS, Inc. | 61,210 | 1,272,001 |
| Tobu Railway Co., Ltd. | 52,527 | 1,493,869 |
| Toho Gas Co., Ltd. | 29,902 | 1,756,960 |
| Toho Holdings Co., Ltd. | 60,469 | 1,044,898 |
| Tohoku Electric Power Co., Inc. | 485,430 | 4,269,269 |
| Tokio Marine Holdings, Inc. | 183,151 | 9,030,338 |
| Tokyo Electric Power Co. Holdings, Inc. * | 3,475,098 | 11,155,280 |
| Tokyo Electron Ltd. | 19,580 | 8,003,651 |
| Tokyo Gas Co., Ltd. | 264,447 | 5,465,668 |
| Tokyu Corp. | 164,891 | 2,265,820 |
| Tokyu Fudosan Holdings Corp. | 288,327 | 1,802,382 |
| Toppan Printing Co., Ltd. | 204,287 | 3,206,006 |
| Toray Industries, Inc. | 1,073,071 | 7,016,156 |
| Toshiba Corp. | 188,654 | 5,940,813 |
| Tosoh Corp. | 187,282 | 3,427,820 |
| TOTO Ltd. | 39,108 | 2,352,940 |
| Toyo Seikan Group Holdings Ltd. | 159,386 | 1,992,699 |
| Toyo Suisan Kaisha Ltd. | 23,715 | 1,010,570 |
| Toyoda Gosei Co., Ltd. | 53,866 | 1,395,945 |
| Toyota Industries Corp. | 59,288 | 5,064,021 |
| Toyota Motor Corp. | 1,028,773 | 76,023,370 |
| Toyota Tsusho Corp. | 204,227 | 8,549,394 |
| TS Tech Co., Ltd. | 41,688 | 1,157,044 |
| Tsuruha Holdings, Inc. | 9,749 | 1,254,541 |
| Ube Industries Ltd. | 100,542 | 2,017,635 |
| Unicharm Corp. | 40,690 | 1,610,184 |
73
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| West Japan Railway Co. | 87,068 | 5,323,456 |
| Yakult Honsha Co., Ltd. | 19,723 | 975,598 |
| Yamada Holdings Co., Ltd. | 572,119 | 2,733,326 |
| Yamaha Corp. | 30,925 | 1,721,281 |
| Yamaha Motor Co., Ltd. | 221,461 | 4,820,425 |
| Yamato Holdings Co., Ltd. | 154,582 | 4,065,504 |
| Yamazaki Baking Co., Ltd. | 73,011 | 1,228,728 |
| Yaskawa Electric Corp. | 39,790 | 1,986,886 |
| Yokogawa Electric Corp. | 82,096 | 1,553,459 |
| Z Holdings Corp. | 444,684 | 2,706,754 |
| 1,343,820,092 | ||
| Netherlands 2.5% | ||
| Aalberts N.V. | 30,373 | 1,424,531 |
| ABN AMRO Bank N.V. * | 325,627 | 3,762,742 |
| Aegon N.V. | 1,396,054 | 6,703,562 |
| Akzo Nobel N.V. | 60,310 | 6,263,358 |
| APERAM S.A. | 37,385 | 1,574,614 |
| ArcelorMittal S.A. * | 904,715 | 21,257,852 |
| ASML Holding N.V. | 18,916 | 10,684,547 |
| ASR Nederland N.V. | 60,813 | 2,553,993 |
| Boskalis Westminster * | 56,260 | 1,739,988 |
| Heineken Holding N.V. | 35,271 | 3,048,210 |
| Heineken N.V. | 46,058 | 4,567,455 |
| ING Groep N.V. | 1,879,858 | 20,624,933 |
| Koninklijke Ahold Delhaize N.V. | 603,284 | 15,992,691 |
| Koninklijke DSM N.V. | 30,701 | 5,088,518 |
| Koninklijke KPN N.V. | 1,330,465 | 4,373,199 |
| Koninklijke Philips N.V. * | 175,070 | 9,552,935 |
| NN Group N.V. | 121,521 | 5,634,583 |
| Randstad N.V. * | 68,622 | 4,609,456 |
| Signify N.V. * | 98,248 | 4,299,086 |
| Unibail-Rodamco-Westfield | 67,479 | 4,981,523 |
| Wolters Kluwer N.V. | 34,824 | 2,776,252 |
| 141,514,028 | ||
| New Zealand 0.1% | ||
| Contact Energy Ltd. | 260,017 | 1,293,159 |
| Fletcher Building Ltd. | 755,524 | 3,548,745 |
| Spark New Zealand Ltd. | 569,784 | 1,901,590 |
| 6,743,494 | ||
| Norway 0.8% | ||
| DNB A.S.A. | 294,007 | 5,757,580 |
| Equinor A.S.A. | 703,228 | 13,330,466 |
| Mowi A.S.A. | 114,909 | 2,794,002 |
| Norsk Hydro A.S.A. | 1,126,052 | 6,276,184 |
| Orkla A.S.A. | 207,609 | 1,925,181 |
| Seadrill Ltd. * | 4,382,443 | 1,308,830 |
| Subsea 7 S.A. * | 237,524 | 2,492,733 |
| Telenor A.S.A. | 295,628 | 4,810,992 |
| Yara International A.S.A. | 111,510 | 5,394,225 |
| 44,090,193 | ||
| Poland 0.3% | ||
| Bank Polska Kasa Opieki S.A. * | 89,662 | 1,632,056 |
| Grupa Lotos S.A. | 90,022 | 1,016,759 |
| KGHM Polska Miedz S.A. * | 60,885 | 3,095,086 |
| PGE Polska Grupa Energetyczna S.A. * | 1,024,910 | 1,828,703 |
| Polski Koncern Naftowy Orlen S.A. | 388,184 | 6,132,073 |
| Polskie Gornictwo Naftowe i Gazownictwo S.A. | 1,390,297 | 2,090,223 |
| Security | Number of Shares | Value ($) |
| Powszechna Kasa Oszczednosci Bank Polski S.A. * | 238,593 | 1,930,625 |
| Powszechny Zaklad Ubezpieczen S.A. * | 244,357 | 1,920,192 |
| 19,645,717 | ||
| Portugal 0.2% | ||
| EDP - Energias de Portugal S.A. | 1,057,409 | 6,091,410 |
| Galp Energia, SGPS, S.A. | 279,006 | 3,144,096 |
| Jeronimo Martins, SGPS, S.A. | 72,714 | 1,134,144 |
| 10,369,650 | ||
| Republic of Korea 7.3% | ||
| Amorepacific Corp. | 8,793 | 1,835,299 |
| BNK Financial Group, Inc. | 248,774 | 1,306,423 |
| CJ CheilJedang Corp. | 5,104 | 1,846,708 |
| CJ Corp. | 20,809 | 1,716,951 |
| Coway Co., Ltd. | 18,859 | 1,086,050 |
| DB Insurance Co., Ltd. | 39,931 | 1,471,423 |
| DL E&C Co., Ltd. * | 11,388 | 1,125,116 |
| DL Holdings Co., Ltd. | 9,083 | 699,314 |
| Doosan Heavy Industries & Construction Co., Ltd. * | 221,266 | 2,087,601 |
| E-MART, Inc. | 27,785 | 4,179,497 |
| GS Holdings Corp. | 65,759 | 2,282,689 |
| Hana Financial Group, Inc. | 154,983 | 5,110,921 |
| Hankook Tire & Technology Co., Ltd. | 75,885 | 3,218,443 |
| Hanwha Corp. * | 89,448 | 2,336,714 |
| Hanwha Solutions Corp. * | 55,745 | 2,235,258 |
| Hyundai Engineering & Construction Co., Ltd. | 77,192 | 2,734,527 |
| Hyundai Glovis Co., Ltd. | 16,529 | 2,839,428 |
| Hyundai Heavy Industries Holdings Co., Ltd. | 15,034 | 3,619,668 |
| Hyundai Marine & Fire Insurance Co., Ltd. | 67,123 | 1,308,406 |
| Hyundai Mobis Co., Ltd. | 48,289 | 13,023,202 |
| Hyundai Motor Co. | 116,498 | 24,575,012 |
| Hyundai Steel Co. | 159,227 | 5,661,877 |
| Industrial Bank of Korea | 269,237 | 1,996,212 |
| KB Financial Group, Inc. | 167,792 | 6,541,424 |
| Kia Motors Corp. | 256,392 | 18,119,737 |
| Korea Electric Power Corp. | 517,460 | 10,455,133 |
| Korea Gas Corp. * | 54,571 | 1,547,028 |
| Korea Shipbuilding & Offshore Engineering Co., Ltd. * | 26,872 | 2,678,829 |
| Korea Zinc Co., Ltd. | 4,545 | 1,632,316 |
| Korean Air Lines Co., Ltd. * | 40,945 | 1,025,903 |
| KT&G Corp. | 38,562 | 2,687,498 |
| LG Chem Ltd. | 13,025 | 9,633,979 |
| LG Corp. | 30,533 | 2,551,890 |
| LG Display Co., Ltd. | 490,983 | 9,876,472 |
| LG Electronics, Inc. | 116,460 | 15,185,928 |
| LG Household & Health Care Ltd. | 1,225 | 1,649,688 |
| LG Uplus Corp. | 189,177 | 1,986,906 |
| Lotte Chemical Corp. | 14,766 | 4,179,429 |
| Lotte Shopping Co., Ltd. | 26,131 | 2,756,140 |
| NAVER Corp. | 7,751 | 2,587,116 |
| POSCO | 90,290 | 22,622,728 |
| Posco International Corp. | 95,090 | 1,891,643 |
| S-Oil Corp. * | 31,859 | 2,410,338 |
| Samsung C&T Corp. | 21,169 | 2,289,304 |
| Samsung Electro-Mechanics Co., Ltd. | 15,572 | 2,626,519 |
| Samsung Electronics Co., Ltd. | 1,756,231 | 128,962,223 |
| Samsung Fire & Marine Insurance Co., Ltd. | 18,514 | 2,850,843 |
| Samsung Heavy Industries Co., Ltd. * | 223,976 | 1,307,773 |
74
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Samsung Life Insurance Co., Ltd. | 38,173 | 2,548,264 |
| Samsung SDI Co., Ltd. | 5,324 | 3,193,926 |
| Samsung SDS Co., Ltd. | 9,577 | 1,657,967 |
| Shinhan Financial Group Co., Ltd. | 233,913 | 6,860,199 |
| SK Holdings Co., Ltd. | 25,681 | 6,000,234 |
| SK Hynix, Inc. | 191,349 | 24,099,585 |
| SK Innovation Co., Ltd. * | 74,840 | 17,352,755 |
| SK Networks Co., Ltd. | 321,849 | 1,592,773 |
| SK Telecom Co., Ltd. | 14,081 | 3,101,956 |
| Woori Financial Group, Inc. | 346,364 | 2,953,420 |
| 417,714,605 | ||
| Singapore 0.7% | ||
| CapitaLand Ltd. | 593,022 | 1,418,222 |
| ComfortDelGro Corp., Ltd. | 1,255,382 | 1,520,016 |
| DBS Group Holdings Ltd. | 391,565 | 7,844,846 |
| Jardine Cycle & Carriage Ltd. | 73,203 | 1,158,300 |
| Keppel Corp., Ltd. | 610,471 | 2,332,250 |
| Oversea-Chinese Banking Corp., Ltd. | 774,555 | 6,401,714 |
| Singapore Airlines Ltd. * | 637,000 | 2,385,696 |
| Singapore Telecommunications Ltd. | 2,747,159 | 4,855,098 |
| United Overseas Bank Ltd. | 302,788 | 5,619,920 |
| Wilmar International Ltd. | 959,165 | 3,808,672 |
| 37,344,734 | ||
| Spain 3.4% | ||
| Acciona S.A. | 9,550 | 1,546,345 |
| Acerinox S.A. | 122,483 | 1,433,475 |
| ACS, Actividades de Construccion y Servicios S.A. | 144,630 | 4,448,485 |
| Aena SME S.A. * | 13,995 | 2,393,487 |
| Amadeus IT Group S.A. * | 56,555 | 3,947,171 |
| Banco Bilbao Vizcaya Argentaria S.A. | 4,615,004 | 25,784,586 |
| Banco de Sabadell S.A. | 9,180,124 | 4,642,105 |
| Banco Santander S.A. * | 15,913,746 | 55,968,411 |
| Bankia S.A. | 907,021 | 1,799,490 |
| Bankinter S.A. | 230,441 | 1,536,163 |
| CaixaBank S.A. | 660,233 | 1,928,947 |
| Enagas S.A. | 63,778 | 1,344,289 |
| Endesa S.A. | 149,568 | 3,730,763 |
| Ferrovial S.A. | 78,648 | 1,970,355 |
| Grifols S.A. | 44,041 | 1,112,974 |
| Iberdrola S.A. | 1,483,993 | 18,778,246 |
| Industria de Diseno Textil S.A. | 203,887 | 6,758,625 |
| Mapfre S.A. | 718,308 | 1,370,599 |
| Naturgy Energy Group S.A. | 173,454 | 4,360,251 |
| Red Electrica Corp. S.A. | 104,285 | 1,755,047 |
| Repsol S.A. | 1,779,943 | 22,501,552 |
| Telefonica S.A. | 5,364,605 | 22,959,751 |
| 192,071,117 | ||
| Sweden 2.0% | ||
| Alfa Laval AB * | 64,210 | 1,997,366 |
| Assa Abloy AB, B Shares | 138,527 | 3,491,169 |
| Atlas Copco AB, A Shares | 84,738 | 4,863,298 |
| Atlas Copco AB, B Shares | 55,796 | 2,719,358 |
| Boliden AB | 115,236 | 4,588,807 |
| Electrolux AB, Series B | 97,170 | 2,307,182 |
| Electrolux Professional AB, Class B * | 100,559 | 538,463 |
| Epiroc AB, A Shares | 70,610 | 1,506,329 |
| Epiroc AB, B Shares | 41,445 | 820,009 |
| Essity AB, B Shares | 116,734 | 3,526,992 |
| H & M Hennes & Mauritz AB, B Shares * | 385,012 | 9,121,009 |
| Hexagon AB, B Shares | 25,769 | 2,158,435 |
| Husqvarna AB, B Shares | 130,644 | 1,606,591 |
| Security | Number of Shares | Value ($) |
| ICA Gruppen AB | 29,749 | 1,419,790 |
| Investor AB, A Shares | 26,782 | 1,984,714 |
| Investor AB, B Shares | 78,728 | 5,855,794 |
| Sandvik AB * | 245,613 | 6,628,548 |
| Securitas AB, B Shares | 139,820 | 2,154,700 |
| Skandinaviska Enskilda Banken AB, A Shares * | 420,710 | 4,867,156 |
| Skanska AB, B Shares | 135,904 | 3,313,430 |
| SKF AB, B Shares | 147,507 | 4,040,590 |
| SSAB AB, A Shares * | 227,385 | 987,760 |
| SSAB AB, B Shares * | 531,291 | 2,099,839 |
| Svenska Handelsbanken AB, A Shares * | 434,733 | 4,607,080 |
| Swedbank AB, A Shares | 384,536 | 6,775,993 |
| Swedish Match AB | 22,357 | 1,616,072 |
| Tele2 AB, B Shares | 123,532 | 1,566,926 |
| Telefonaktiebolaget LM Ericsson, B Shares | 628,771 | 7,889,485 |
| Telia Co. AB | 1,273,458 | 5,171,088 |
| Trelleborg AB, B Shares * | 90,095 | 2,304,903 |
| Volvo AB, B Shares * | 474,270 | 12,212,307 |
| 114,741,183 | ||
| Switzerland 4.2% | ||
| ABB Ltd. | 425,087 | 12,264,744 |
| Adecco Group AG | 102,875 | 6,486,364 |
| Alcon, Inc. * | 55,741 | 3,850,704 |
| Baloise Holding AG | 10,354 | 1,817,354 |
| Chocoladefabriken Lindt & Sprungli AG | 11 | 978,129 |
| Chocoladefabriken Lindt & Sprungli AG, Participation Certificate | 94 | 791,726 |
| Cie Financiere Richemont S.A. | 109,685 | 10,611,082 |
| Clariant AG | 56,961 | 1,196,099 |
| Credit Suisse Group AG | 440,464 | 6,385,828 |
| DKSH Holding AG | 19,442 | 1,459,277 |
| Geberit AG | 4,038 | 2,391,666 |
| Georg Fischer AG | 1,321 | 1,705,787 |
| Givaudan S.A. | 809 | 3,062,458 |
| Julius Baer Group Ltd. | 32,867 | 2,025,824 |
| Kuehne & Nagel International AG | 11,825 | 2,817,467 |
| LafargeHolcim Ltd. * | 193,257 | 10,707,800 |
| Lonza Group AG | 3,984 | 2,525,151 |
| Nestle S.A. | 440,066 | 46,179,465 |
| Novartis AG | 290,038 | 25,050,338 |
| Roche Holding AG | 97,589 | 32,118,240 |
| Roche Holding AG, Bearer Shares | 4,161 | 1,396,346 |
| Schindler Holding AG | 2,802 | 749,635 |
| Schindler Holding AG, Participation Certificate | 5,964 | 1,635,110 |
| SGS S.A. | 795 | 2,278,830 |
| Sika AG | 11,688 | 3,101,135 |
| Sonova Holding AG * | 5,405 | 1,389,908 |
| Swiss Life Holding AG | 7,782 | 3,887,991 |
| Swiss Prime Site AG | 13,469 | 1,266,113 |
| Swiss Re AG | 104,451 | 9,857,830 |
| Swisscom AG | 7,650 | 3,857,533 |
| The Swatch Group AG | 20,166 | 1,162,781 |
| The Swatch Group AG, Bearer Shares | 13,716 | 4,108,891 |
| UBS Group AG | 926,392 | 14,428,507 |
| Zurich Insurance Group AG | 37,048 | 15,203,062 |
| 238,749,175 | ||
| United Kingdom 16.3% | ||
| 3i Group plc | 184,593 | 2,856,941 |
| Admiral Group plc | 33,214 | 1,433,960 |
| Aggreko plc | 196,024 | 2,192,491 |
| Anglo American plc | 376,966 | 14,612,086 |
| Antofagasta plc | 92,404 | 2,302,814 |
75
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Ashtead Group plc | 96,432 | 5,231,080 |
| Associated British Foods plc * | 145,232 | 4,808,200 |
| AstraZeneca plc | 151,791 | 14,738,618 |
| Aviva plc | 1,745,893 | 8,833,742 |
| Babcock International Group plc * | 250,367 | 909,049 |
| BAE Systems plc | 953,344 | 6,449,763 |
| Balfour Beatty plc * | 332,422 | 1,279,948 |
| Barclays plc | 7,952,165 | 17,744,214 |
| Barratt Developments plc * | 433,627 | 4,027,953 |
| Bellway plc | 52,794 | 2,072,622 |
| Berkeley Group Holdings plc | 40,446 | 2,291,874 |
| BHP Group plc | 645,740 | 20,489,264 |
| BP plc | 17,410,653 | 71,017,342 |
| British American Tobacco plc | 627,796 | 21,815,783 |
| BT Group plc * | 9,041,775 | 15,618,342 |
| Bunzl plc | 86,522 | 2,706,020 |
| Burberry Group plc * | 125,865 | 3,194,771 |
| Carnival plc * | 142,236 | 3,133,044 |
| Centrica plc * | 11,842,278 | 8,735,314 |
| Coca-Cola HBC AG | 52,202 | 1,633,374 |
| Compass Group plc * | 437,216 | 8,894,008 |
| CRH plc | 260,831 | 11,286,476 |
| Croda International plc | 16,345 | 1,409,509 |
| DCC plc | 36,372 | 2,934,144 |
| Diageo plc | 316,590 | 12,448,821 |
| Direct Line Insurance Group plc | 735,135 | 3,295,104 |
| Dixons Carphone plc * | 2,272,588 | 4,025,648 |
| Drax Group plc | 370,576 | 1,980,188 |
| DS Smith plc * | 489,312 | 2,718,643 |
| easyJet plc * | 162,851 | 2,244,035 |
| Evraz plc | 297,199 | 2,372,586 |
| Experian plc | 85,386 | 2,713,467 |
| Ferguson plc | 68,161 | 8,035,354 |
| Firstgroup plc * | 2,222,918 | 2,797,077 |
| Flutter Entertainment plc * | 11,718 | 2,264,123 |
| G4S plc * | 920,408 | 3,124,407 |
| GlaxoSmithKline plc | 1,119,592 | 18,639,622 |
| Glencore plc * | 14,649,215 | 59,538,498 |
| Hays plc * | 938,269 | 1,996,551 |
| HSBC Holdings plc * | 8,117,015 | 48,366,903 |
| IMI plc | 85,964 | 1,573,239 |
| Imperial Brands plc | 583,668 | 10,877,636 |
| Inchcape plc * | 309,387 | 3,066,809 |
| Informa plc * | 210,412 | 1,620,328 |
| InterContinental Hotels Group plc * | 35,773 | 2,501,713 |
| International Consolidated Airlines Group S.A. * | 1,030,984 | 2,766,805 |
| Intertek Group plc | 18,013 | 1,348,855 |
| Investec plc | 320,514 | 877,177 |
| ITV plc * | 2,336,360 | 3,588,214 |
| J Sainsbury plc | 1,912,330 | 6,047,751 |
| John Wood Group plc * | 482,605 | 2,018,119 |
| Johnson Matthey plc | 141,927 | 6,061,983 |
| Kingfisher plc * | 2,105,215 | 7,811,526 |
| Land Securities Group plc | 184,947 | 1,719,521 |
| Legal & General Group plc | 1,749,404 | 6,342,071 |
| Lloyds Banking Group plc * | 35,938,899 | 19,596,020 |
| London Stock Exchange Group plc | 12,494 | 1,680,060 |
| M&G plc | 1,092,858 | 2,809,855 |
| Marks & Spencer Group plc * | 2,914,872 | 5,782,829 |
| Meggitt plc * | 360,119 | 2,130,739 |
| Micro Focus International plc * | 221,446 | 1,296,002 |
| Mondi plc | 207,757 | 5,009,073 |
| National Grid plc | 1,411,744 | 15,916,404 |
| Natwest Group plc * | 634,556 | 1,634,173 |
| Next plc * | 35,515 | 3,753,808 |
| Ninety One plc | 142,409 | 436,830 |
| Pearson plc | 374,932 | 3,936,687 |
| Security | Number of Shares | Value ($) |
| Pennon Group plc | 94,470 | 1,154,367 |
| Persimmon plc | 102,545 | 3,713,238 |
| Prudential plc | 472,763 | 9,309,767 |
| Reckitt Benckiser Group plc | 100,213 | 8,406,473 |
| RELX plc | 230,428 | 5,452,585 |
| Rentokil Initial plc * | 183,353 | 1,196,367 |
| Rio Tinto plc | 413,391 | 35,758,527 |
| Rolls-Royce Holdings plc * | 1,951,180 | 2,937,998 |
| Royal Dutch Shell plc, A Shares | 3,843,027 | 77,628,226 |
| Royal Dutch Shell plc, B Shares | 3,571,977 | 69,296,522 |
| Royal Mail plc * | 1,700,132 | 10,760,480 |
| RSA Insurance Group plc | 274,149 | 2,588,727 |
| Severn Trent plc | 60,924 | 1,865,396 |
| Smith & Nephew plc | 142,273 | 2,755,926 |
| Smiths Group plc | 105,950 | 2,168,605 |
| Smurfit Kappa Group plc | 83,048 | 3,943,078 |
| SSE plc | 469,956 | 8,702,573 |
| Standard Chartered plc * | 1,056,034 | 6,822,638 |
| Standard Life Aberdeen plc | 733,738 | 3,188,310 |
| Tate & Lyle plc | 181,863 | 1,848,491 |
| Taylor Wimpey plc * | 1,586,892 | 3,496,569 |
| Tesco plc | 2,849,622 | 8,956,164 |
| The British Land Co. plc | 242,709 | 1,661,368 |
| The Sage Group plc | 161,333 | 1,259,977 |
| The Weir Group plc * | 67,937 | 1,882,559 |
| Travis Perkins plc * | 163,341 | 3,282,778 |
| TUI AG *(a) | 929,127 | 5,609,139 |
| Unilever plc | 497,147 | 25,946,651 |
| United Utilities Group plc | 188,616 | 2,265,746 |
| Vodafone Group plc | 20,517,442 | 35,001,989 |
| Whitbread plc * | 71,013 | 3,370,669 |
| Wm Morrison Supermarkets plc | 2,242,015 | 5,355,401 |
| WPP plc | 829,161 | 9,897,694 |
| 930,902,998 | ||
| Total Common Stock | ||
| (Cost $4,915,240,312) | 5,629,805,805 | |
| Preferred Stock 1.2% of net assets | ||
| Germany 0.7% | ||
| Bayerische Motoren Werke AG | 49,138 | 3,343,030 |
| FUCHS PETROLUB SE | 26,160 | 1,439,681 |
| Henkel AG & Co. KGaA | 45,281 | 4,483,806 |
| Volkswagen AG | 138,041 | 28,990,220 |
| 38,256,737 | ||
| Italy 0.1% | ||
| Telecom Italia S.p.A. - RSP | 7,629,016 | 4,113,336 |
| Republic of Korea 0.4% | ||
| Hyundai Motor Co., Ltd. | 20,868 | 1,931,706 |
| Hyundai Motor Co., Ltd. 2nd | 37,087 | 3,367,044 |
| LG Chem Ltd. | 2,860 | 991,518 |
| Samsung Electronics Co., Ltd. | 300,179 | 19,450,851 |
| 25,741,119 | ||
| Total Preferred Stock | ||
| (Cost $50,332,960) | 68,111,192 | |
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Schwab Fundamental International Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Rights 0.0% of net assets | ||
| Republic of Korea 0.0% | ||
| Korean Air Lines Co., Ltd. *(b) | 73,295 | 590,405 |
| Total Rights | ||
| (Cost $352,462) | 590,405 | |
| Other Investment Companies 0.4% of net assets | ||
| United States 0.4% | ||
| Money Market Fund 0.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 7,993,668 | 7,993,668 |
| Securities Lending Collateral 0.3% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c) | 14,527,678 | 14,527,678 |
| Total Other Investment Companies | ||
| (Cost $22,521,346) | 22,521,346 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| MSCI EAFE Index, expires 03/19/21 | 188 | 20,341,600 | (357,873) | |||
| * | Non-income producing security. |
| (a) | All or a portion of this security is on loan. Securities on loan were valued at $13,534,062. |
| (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. |
| REIT — | Real Estate Investment Trust |
| RSP — | Risparmio (Convertible Savings Shares) |
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $5,530,765,007 | $— | $— | $5,530,765,007 | |
| Hong Kong | 98,430,847 | — | 609,951 | 99,040,798 | |
| Preferred Stock1 | 68,111,192 | — | — | 68,111,192 | |
| Rights 1 | |||||
| Republic of Korea1 | — | — | 590,405 | 590,405 | |
| Other Investment Companies1 | 22,521,346 | — | — | 22,521,346 | |
| Liabilities | |||||
| Futures Contracts2 | (357,873) | — | — | (357,873) | |
| Total | $5,719,470,519 | $— | $1,200,356 | $5,720,670,875 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Large Company Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in unaffiliated issuers, at value (cost $4,973,919,402) including securities on loan of $13,534,062 | $5,706,501,070 | |
| Collateral invested for securities on loan, at value (cost $14,527,678) | 14,527,678 | |
| Deposit with broker for futures contracts | 1,910,304 | |
| Foreign currency, at value (cost $6,117,783) | 6,066,713 | |
| Receivables: | ||
| Dividends | 14,749,760 | |
| Foreign tax reclaims | 2,868,050 | |
| Income from securities on loan | + | 81,088 |
| Total assets | 5,746,704,663 | |
| Liabilities | ||
| Collateral held for securities on loan | 14,527,678 | |
| Payables: | ||
| Investments bought | 9,756,851 | |
| Management fees | 1,092,243 | |
| Variation margin on futures contracts | + | 275,025 |
| Total liabilities | 25,651,797 | |
| Net Assets | ||
| Total assets | 5,746,704,663 | |
| Total liabilities | – | 25,651,797 |
| Net assets | $5,721,052,866 | |
| Net Assets by Source | ||
| Capital received from investors | 5,194,194,272 | |
| Total distributable earnings | 526,858,594 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $5,721,052,866 | 184,900,000 | $30.94 | ||
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Large Company Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $14,105,004) | $124,388,872 | |
| Income from non-cash dividends | 8,686,417 | |
| Securities on loan, net | + | 1,224,984 |
| Total investment income | 134,300,273 | |
| Expenses | ||
| Management fees | 11,183,146 | |
| Professional fees | + | 70,423* |
| Total expenses | 11,253,569 | |
| Expense reduction by CSIM | - | 70,423* |
| Net expenses | – | 11,183,146 |
| Net investment income | 123,117,127 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on unaffiliated issuers | (94,735,736) | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 147,230,489 | |
| Net realized gains on futures contracts | 4,565,531 | |
| Net realized gains on foreign currency transactions | + | 232,313 |
| Net realized gains | 57,292,597 | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 977,945,572 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 1,422,549 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 85,566 |
| Net change in unrealized appreciation (depreciation) | + | 979,453,687 |
| Net realized and unrealized gains | 1,036,746,284 | |
| Increase in net assets resulting from operations | $1,159,863,411 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Large Company Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $123,117,127 | $145,349,722 | ||
| Net realized gains (losses) | 57,292,597 | (6,382,488) | ||
| Net change in unrealized appreciation (depreciation) | + | 979,453,687 | (402,664,183) | |
| Increase (decrease) in net assets resulting from operations | 1,159,863,411 | (263,696,949) | ||
| Distributions to Shareholders | ||||
| Total distributions | ($114,361,960) | ($150,746,760) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 40,300,000 | $981,805,769 | 28,200,000 | $790,856,322 | ||||
| Shares redeemed | + | (30,400,000) | (722,949,976) | (1,500,000) | (43,296,950) | |||
| Net transactions in fund shares | 9,900,000 | $258,855,793 | 26,700,000 | $747,559,372 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 175,000,000 | $4,416,695,622 | 148,300,000 | $4,083,579,959 | ||||
| Total increase | + | 9,900,000 | 1,304,357,244 | 26,700,000 | 333,115,663 | |||
| End of period | 184,900,000 | $5,721,052,866 | 175,000,000 | $4,416,695,622 | ||||
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Small Company Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $28.53 | $31.23 | $36.02 | $29.99 | $24.81 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.53 | 0.80 | 0.79 | 0.62 | 0.55 | |
| Net realized and unrealized gains (losses) | 7.66 | (2.60) | (4.82) | 6.11 | 5.18 | |
| Total from investment operations | 8.19 | (1.80) | (4.03) | 6.73 | 5.73 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.61) | (0.90) | (0.76) | (0.70) | (0.55) | |
| Net asset value at end of period | $36.11 | $28.53 | $31.23 | $36.02 | $29.99 | |
| Total return | 28.97% | (6.06%) | (11.06%) | 22.47% | 23.26% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.39% | 0.39% | 0.39% | 0.39% | 0.46% | |
| Net investment income (loss) | 1.78% | 2.54% | 2.38% | 1.83% | 1.94% | |
| Portfolio turnover rate2 | 24% | 31% | 25% | 18% | 25% | |
| Net assets, end of period (x 1,000) | $2,292,915 | $1,900,303 | $1,842,568 | $1,811,898 | $866,749 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
81
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 99.3% of net assets | ||
| Australia 5.8% | ||
| Adbri Ltd. | 758,198 | 1,907,740 |
| ALS Ltd. | 199,928 | 1,529,268 |
| Ansell Ltd. | 70,905 | 1,980,050 |
| ASX Ltd. | 32,696 | 1,711,175 |
| AusNet Services | 1,432,871 | 1,835,939 |
| Austal Ltd. | 264,121 | 484,623 |
| Australian Pharmaceutical Industries Ltd. | 1,351,633 | 1,161,542 |
| Bank of Queensland Ltd. | 368,884 | 2,510,336 |
| Bank of Queensland Ltd., Interim Shares (a) | 157,642 | 1,072,788 |
| Bapcor Ltd. | 130,878 | 693,068 |
| Beach Energy Ltd. | 549,997 | 702,583 |
| Bega Cheese Ltd. | 249,786 | 1,185,446 |
| Blackmores Ltd. * | 8,580 | 538,053 |
| Breville Group Ltd. | 40,129 | 867,415 |
| carsales.com Ltd. | 55,336 | 800,272 |
| Challenger Ltd. | 467,106 | 2,332,536 |
| Charter Hall Group | 60,784 | 558,119 |
| Charter Hall Retail REIT | 192,068 | 551,673 |
| CIMIC Group Ltd. * | 145,081 | 2,391,329 |
| Cleanaway Waste Management Ltd. | 608,075 | 1,026,282 |
| Cochlear Ltd. | 11,080 | 1,813,504 |
| Collins Foods Ltd. | 68,174 | 505,108 |
| Costa Group Holdings Ltd. | 269,629 | 951,885 |
| Cromwell Property Group | 1,093,295 | 668,679 |
| CSR Ltd. | 783,628 | 3,318,566 |
| Deterra Royalties Ltd. * | 167,867 | 591,330 |
| Dexus | 360,638 | 2,484,933 |
| Domino's Pizza Enterprises Ltd. | 12,204 | 849,878 |
| Eagers Automotive Ltd. | 213,828 | 2,193,479 |
| Eclipx Group Ltd. * | 747,173 | 1,133,784 |
| Elders Ltd. | 80,397 | 700,860 |
| Evolution Mining Ltd. | 309,626 | 1,006,792 |
| Flight Centre Travel Group Ltd. * | 122,302 | 1,572,738 |
| G.U.D. Holdings Ltd. | 60,864 | 564,037 |
| G8 Education Ltd. | 1,296,887 | 1,079,354 |
| Genworth Mortgage Insurance Australia Ltd. | 415,798 | 830,530 |
| GrainCorp Ltd., Class A | 417,661 | 1,364,550 |
| GWA Group Ltd. | 277,058 | 654,220 |
| Harvey Norman Holdings Ltd. | 557,851 | 2,263,094 |
| Healius Ltd. | 659,282 | 2,046,768 |
| IGO Ltd. | 184,604 | 1,004,730 |
| Iluka Resources Ltd. | 167,867 | 964,323 |
| Inghams Group Ltd. | 255,332 | 693,850 |
| InvoCare Ltd. | 59,414 | 516,561 |
| IOOF Holdings Ltd. | 495,402 | 1,258,012 |
| IRESS Ltd. | 88,090 | 626,751 |
| James Hardie Industries plc | 112,336 | 3,175,294 |
| JB Hi-Fi Ltd. | 83,878 | 2,818,973 |
| Link Administration Holdings Ltd. | 269,367 | 990,584 |
| Magellan Financial Group Ltd. | 16,263 | 546,945 |
| McMillan Shakespeare Ltd. | 78,944 | 757,257 |
| Mineral Resources Ltd. | 90,448 | 2,655,342 |
| Security | Number of Shares | Value ($) |
| Monadelphous Group Ltd. | 160,070 | 1,435,065 |
| nib Holdings Ltd. | 370,592 | 1,589,494 |
| Nine Entertainment Co. Holdings Ltd. | 785,321 | 1,744,947 |
| Northern Star Resources Ltd. | 122,643 | 969,442 |
| NRW Holdings Ltd. | 649,490 | 1,010,699 |
| Nufarm Ltd. * | 399,968 | 1,486,345 |
| Orora Ltd. | 1,213,370 | 2,743,022 |
| OZ Minerals Ltd. | 233,499 | 4,047,550 |
| Pact Group Holdings Ltd. | 395,221 | 1,000,555 |
| Pendal Group Ltd. | 242,913 | 1,117,096 |
| Perenti Global Ltd. | 652,391 | 575,792 |
| Perpetual Ltd. | 43,107 | 1,023,230 |
| Platinum Asset Management Ltd. | 198,387 | 711,127 |
| Premier Investments Ltd. | 48,788 | 796,982 |
| Qantas Airways Ltd. * | 850,499 | 3,292,281 |
| Qube Holdings Ltd. | 609,283 | 1,448,140 |
| REA Group Ltd. | 6,470 | 685,241 |
| Regis Resources Ltd. | 242,794 | 588,350 |
| Reliance Worldwide Corp., Ltd. | 274,483 | 913,770 |
| Resolute Mining Ltd. * | 709,455 | 354,273 |
| Sandfire Resources Ltd. | 280,320 | 1,323,845 |
| Santos Ltd. | 581,635 | 3,255,682 |
| SEEK Ltd. | 123,289 | 2,453,074 |
| Seven Group Holdings Ltd. | 54,992 | 923,447 |
| Seven West Media Ltd. * | 5,841,655 | 2,464,822 |
| Shopping Centres Australasia Property Group | 319,646 | 579,080 |
| Sigma Healthcare Ltd. * | 3,673,137 | 1,891,089 |
| Southern Cross Media Group Ltd. * | 361,522 | 649,345 |
| St. Barbara Ltd. | 384,683 | 619,469 |
| Steadfast Group Ltd. | 196,373 | 606,608 |
| Super Retail Group Ltd. | 201,220 | 1,713,630 |
| Sydney Airport * | 339,443 | 1,539,989 |
| Tassal Group Ltd. | 184,588 | 483,029 |
| The GPT Group | 640,961 | 2,118,910 |
| The Star Entertainment Grp Ltd. * | 1,030,003 | 2,942,510 |
| TPG Telecom Ltd. * | 182,286 | 959,655 |
| Treasury Wine Estates Ltd. | 347,435 | 2,931,927 |
| Tuas Ltd. * | 102,273 | 52,259 |
| United Malt Grp Ltd. | 424,306 | 1,199,016 |
| Vicinity Centres | 2,262,220 | 2,872,313 |
| Vocus Group Ltd. * | 233,946 | 912,850 |
| Washington H Soul Pattinson & Co., Ltd. | 33,899 | 784,189 |
| Whitehaven Coal Ltd. * | 1,590,924 | 1,872,174 |
| Worley Ltd. | 327,824 | 2,817,195 |
| 133,942,456 | ||
| Austria 0.7% | ||
| AT&S Austria Technologie & Systemtechnik AG | 33,215 | 983,719 |
| BAWAG Group AG * | 52,648 | 2,750,434 |
| CA Immobilien Anlagen AG | 23,607 | 1,018,656 |
| DO & Co. AG * | 8,184 | 639,733 |
| EVN AG | 30,269 | 661,329 |
| IMMOFINANZ AG * | 34,715 | 699,897 |
| Lenzing AG * | 26,617 | 3,838,156 |
| Oesterreichische Post AG (b) | 40,761 | 1,652,488 |
82
Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| UNIQA Insurance Group AG | 136,629 | 1,064,695 |
| Verbund AG | 19,352 | 1,484,534 |
| Vienna Insurance Group AG Wiener Versicherung Gruppe | 38,612 | 1,042,796 |
| 15,836,437 | ||
| Belgium 1.2% | ||
| Ackermans & van Haaren N.V. | 16,435 | 2,665,160 |
| AGFA-Gevaert N.V. * | 228,442 | 1,031,492 |
| Barco N.V. | 36,966 | 912,642 |
| Befimmo S.A. | 11,846 | 483,842 |
| Bekaert S.A. | 82,183 | 3,042,489 |
| bpost S.A. * | 236,437 | 2,575,710 |
| Cie d'Entreprises CFE * | 11,050 | 1,191,029 |
| Cofinimmo S.A. | 7,064 | 1,100,938 |
| D'Ieteren S.A. N.V. | 30,085 | 2,559,854 |
| Elia Group S.A. N.V. | 10,200 | 1,109,316 |
| Euronav N.V. | 123,560 | 1,102,332 |
| Gimv N.V. | 11,869 | 698,720 |
| KBC Ancora * | 12,536 | 503,960 |
| Melexis N.V. | 8,164 | 971,127 |
| Ontex Group N.V. * | 125,122 | 1,293,959 |
| Orange Belgium S.A. | 42,571 | 1,178,137 |
| Recticel S.A. | 50,725 | 784,402 |
| Sofina S.A. | 2,825 | 941,256 |
| Telenet Group Holding N.V. | 48,342 | 1,938,705 |
| Tessenderlo Group S.A. * | 25,413 | 1,135,144 |
| 27,220,214 | ||
| Canada 8.5% | ||
| Aecon Group, Inc. | 98,297 | 1,428,645 |
| Ag Growth International, Inc. | 18,313 | 567,472 |
| Aimia, Inc. * | 205,339 | 692,573 |
| Alamos Gold, Inc., Class A | 56,992 | 406,057 |
| Algonquin Power & Utilities Corp. | 152,380 | 2,372,362 |
| Allied Properties Real Estate Investment Trust | 32,013 | 969,999 |
| AltaGas Ltd. | 198,083 | 3,018,184 |
| Altus Group Ltd. | 12,456 | 549,205 |
| Artis Real Estate Investment Trust | 174,628 | 1,551,789 |
| ATS Automation Tooling Systems, Inc. * | 36,314 | 804,587 |
| AutoCanada, Inc. * | 76,900 | 1,852,039 |
| B2Gold Corp. | 127,576 | 558,271 |
| Badger Daylighting Ltd. | 22,510 | 720,107 |
| Baytex Energy Corp. * | 2,407,558 | 2,339,097 |
| Birchcliff Energy Ltd. | 602,670 | 1,413,847 |
| BlackBerry Ltd. * | 247,701 | 2,518,098 |
| Boardwalk Real Estate Investment Trust | 31,275 | 907,617 |
| Boyd Group Services, Inc. | 4,951 | 823,563 |
| BRP, Inc. | 15,474 | 1,123,882 |
| CAE, Inc. | 136,540 | 3,632,439 |
| Cameco Corp. | 258,733 | 4,081,278 |
| Canadian Apartment Properties REIT | 38,298 | 1,544,020 |
| Canadian Utilities Ltd., Class A | 99,640 | 2,370,582 |
| Canadian Western Bank | 65,531 | 1,731,447 |
| Canfor Corp. * | 164,609 | 3,375,395 |
| Capital Power Corp. | 81,573 | 2,210,718 |
| Cascades, Inc. | 135,195 | 1,792,989 |
| CCL Industries, Inc., Class B | 68,253 | 3,613,743 |
| Celestica, Inc. * | 356,831 | 2,973,592 |
| Centerra Gold, Inc. | 128,807 | 1,256,530 |
| CES Energy Solutions Corp. | 784,254 | 953,990 |
| Chartwell Retirement Residences | 132,416 | 1,145,304 |
| Chemtrade Logistics Income Fund | 253,876 | 1,425,796 |
| Choice Properties Real Estate Investment Trust | 72,526 | 728,697 |
| Security | Number of Shares | Value ($) |
| Chorus Aviation, Inc. | 363,685 | 1,206,538 |
| Cineplex, Inc. * | 148,017 | 1,615,794 |
| Cogeco Communications, Inc. | 8,397 | 763,225 |
| Cogeco, Inc. | 18,542 | 1,367,656 |
| Colliers International Group, Inc. | 12,637 | 1,316,404 |
| Cominar Real Estate Investment Trust | 303,910 | 2,117,288 |
| Constellation Software, Inc. | 2,121 | 2,760,517 |
| Corus Entertainment, Inc., B Shares | 669,029 | 2,784,979 |
| Crombie Real Estate Investment Trust (b) | 52,954 | 611,104 |
| Dream Office Real Estate Investment Trust | 74,185 | 1,168,443 |
| Eldorado Gold Corp. * | 43,879 | 462,012 |
| Element Fleet Management Corp. | 105,628 | 1,041,262 |
| Enerflex Ltd. | 251,678 | 1,737,493 |
| Enerplus Corp. | 645,964 | 3,143,079 |
| Ensign Energy Services, Inc. | 1,701,512 | 1,585,927 |
| Exchange Income Corp. (b) | 32,265 | 1,027,587 |
| Extendicare, Inc. (b) | 101,180 | 530,675 |
| First Capital Real Estate Investment Trust | 93,404 | 1,145,785 |
| FirstService Corp. | 5,673 | 865,244 |
| Franco-Nevada Corp. | 15,080 | 1,623,065 |
| Frontera Energy Corp. | 427,260 | 2,132,925 |
| Granite Real Estate Investment Trust | 11,198 | 644,814 |
| Great Canadian Gaming Corp. * | 39,501 | 1,322,940 |
| Home Capital Group, Inc. * | 64,740 | 1,606,227 |
| Hudbay Minerals, Inc. | 385,891 | 2,776,830 |
| IAMGOLD Corp. * | 364,749 | 1,086,180 |
| IGM Financial, Inc. | 76,435 | 2,096,227 |
| Innergex Renewable Energy, Inc. | 39,928 | 759,452 |
| Interfor Corp. * | 124,283 | 2,733,048 |
| Intertape Polymer Group, Inc. | 61,428 | 1,163,056 |
| Just Energy Group, Inc. *(b) | 54,636 | 216,645 |
| Kirkland Lake Gold Ltd. | 28,440 | 934,971 |
| Laurentian Bank of Canada | 42,735 | 1,176,731 |
| Lundin Mining Corp. | 395,688 | 4,553,850 |
| Maple Leaf Foods, Inc. | 83,752 | 1,745,164 |
| Martinrea International, Inc. | 239,565 | 2,815,740 |
| Medical Facilities Corp. | 155,634 | 860,536 |
| MEG Energy Corp. * | 544,917 | 2,827,887 |
| Morneau Shepell, Inc. | 22,568 | 583,096 |
| Mullen Group Ltd. | 205,958 | 1,630,094 |
| NFI Group, Inc. | 102,346 | 2,376,755 |
| Northland Power, Inc. | 44,740 | 1,493,100 |
| OceanaGold Corp. * | 736,238 | 1,070,046 |
| Pan American Silver Corp. | 32,173 | 1,068,621 |
| Parex Resources, Inc. * | 82,208 | 1,320,783 |
| Pason Systems, Inc. | 105,479 | 808,172 |
| Peyto Exploration & Development Corp. | 829,699 | 3,906,008 |
| PrairieSky Royalty Ltd. | 100,204 | 1,021,036 |
| Precision Drilling Corp. * | 87,547 | 2,033,082 |
| Premium Brands Holdings Corp. | 12,470 | 1,014,640 |
| Primo Water Corp. | 100,185 | 1,441,050 |
| Quebecor, Inc., Class B | 74,648 | 1,939,905 |
| Richelieu Hardware Ltd. | 34,145 | 986,591 |
| Ritchie Bros. Auctioneers, Inc. | 23,587 | 1,293,931 |
| Russel Metals, Inc. | 149,578 | 2,927,759 |
| Sagen MI Canada, Inc. | 32,703 | 1,117,740 |
| Secure Energy Services, Inc. | 937,718 | 2,414,661 |
| Seven Generations Energy Ltd., A Shares * | 564,866 | 3,747,926 |
| ShawCor Ltd. | 544,962 | 2,199,649 |
| Sienna Senior Living, Inc. (b) | 51,639 | 572,271 |
| Sierra Wireless, Inc. * | 49,718 | 840,415 |
| Sleep Country Canada Holdings, Inc. | 31,409 | 668,123 |
| SmartCentres Real Estate Investment Trust | 82,693 | 1,717,219 |
| SSR Mining, Inc. * | 29,322 | 418,522 |
| Stantec, Inc. | 63,458 | 2,509,749 |
83
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Stella-Jones, Inc. | 40,791 | 1,482,460 |
| Superior Plus Corp. | 165,232 | 1,728,019 |
| The North West Co., Inc. | 47,784 | 1,174,973 |
| TMX Group Ltd. | 12,819 | 1,230,158 |
| Toromont Industries Ltd. | 29,248 | 2,141,619 |
| Tourmaline Oil Corp. | 207,966 | 3,804,496 |
| Transat AT, Inc. * | 208,165 | 853,378 |
| Transcontinental, Inc., Class A | 146,001 | 2,522,150 |
| Trican Well Service Ltd. *(b) | 1,038,566 | 1,550,466 |
| Turquoise Hill Resources Ltd. * | 133,173 | 2,030,204 |
| Uni-Select, Inc. | 156,132 | 1,294,934 |
| Vermilion Energy, Inc. | 486,671 | 3,063,798 |
| Western Forest Products, Inc. | 1,413,296 | 1,875,464 |
| Westshore Terminals Investment Corp. | 57,176 | 853,575 |
| Wheaton Precious Metals Corp. | 54,624 | 1,964,048 |
| Whitecap Resources, Inc. | 808,624 | 3,634,337 |
| Winpak Ltd. | 21,947 | 688,574 |
| Yamana Gold, Inc. | 252,249 | 1,008,199 |
| 193,803,010 | ||
| Denmark 1.5% | ||
| Chr Hansen Holding A/S * | 18,172 | 1,568,554 |
| D/S Norden A/S | 53,524 | 1,125,304 |
| Demant A/S * | 38,020 | 1,575,724 |
| Dfds A/S * | 32,838 | 1,594,127 |
| FLSmidth & Co. A/S * | 71,667 | 3,036,891 |
| Genmab A/S * | 1,930 | 652,128 |
| GN Store Nord A/S | 25,369 | 2,145,055 |
| H. Lundbeck A/S | 28,347 | 1,085,989 |
| Jyske Bank A/S * | 69,247 | 3,010,076 |
| Matas A/S * | 94,900 | 1,267,141 |
| Nilfisk Holding A/S * | 44,687 | 1,079,564 |
| NKT A/S * | 33,771 | 1,325,207 |
| Per Aarsleff Holding A/S, Class B | 24,449 | 1,107,463 |
| Ringkjoebing Landbobank A/S | 6,522 | 643,018 |
| Rockwool International A/S, B Shares | 3,661 | 1,335,021 |
| Royal Unibrew A/S | 15,739 | 1,630,356 |
| Scandinavian Tobacco Group A/S, Class A | 70,292 | 1,313,762 |
| Schouw & Co. A/S | 11,756 | 1,197,428 |
| SimCorp A/S | 6,163 | 753,493 |
| Spar Nord Bank A/S * | 65,858 | 689,083 |
| Sydbank A/S * | 89,680 | 2,061,121 |
| The Drilling Co. of 1972 A/S * | 27,365 | 1,098,843 |
| Topdanmark A/S | 16,832 | 796,232 |
| Tryg A/S | 50,466 | 1,598,107 |
| 33,689,687 | ||
| Finland 1.1% | ||
| Cargotec Oyj, B Shares | 72,227 | 3,822,374 |
| Finnair Oyj * | 1,248,707 | 1,085,985 |
| Huhtamaki Oyj | 55,997 | 2,533,890 |
| Kemira Oyj | 112,425 | 1,824,490 |
| Kojamo Oyj | 28,321 | 545,891 |
| Konecranes Oyj | 73,899 | 3,299,115 |
| Metsa Board Oyj | 154,408 | 1,729,890 |
| Orion Oyj, Class B | 47,406 | 1,954,681 |
| Sanoma Oyj | 79,630 | 1,322,239 |
| TietoEVRY Oyj | 54,614 | 1,699,688 |
| Tokmanni Group Corp. | 33,463 | 731,113 |
| Uponor Oyj | 52,001 | 1,095,743 |
| Valmet Oyj | 77,621 | 2,621,099 |
| YIT Oyj | 152,865 | 866,507 |
| 25,132,705 | ||
| Security | Number of Shares | Value ($) |
| France 4.1% | ||
| Aeroports de Paris * | 17,390 | 2,220,560 |
| Albioma S.A. | 14,222 | 697,412 |
| Alten S.A. * | 18,386 | 2,043,115 |
| Amundi S.A. * | 24,433 | 1,868,377 |
| Beneteau S.A. | 62,662 | 939,330 |
| BioMerieux | 7,786 | 994,208 |
| CGG S.A. * | 839,821 | 987,366 |
| Cie Plastic Omnium S.A. | 81,744 | 2,948,844 |
| Coface S.A. * | 98,749 | 1,084,747 |
| Covivio | 24,722 | 2,090,027 |
| Dassault Aviation S.A. * | 1,015 | 1,100,182 |
| Derichebourg S.A. * | 289,414 | 2,309,736 |
| Edenred | 51,682 | 2,878,753 |
| Elior Group S.A. | 327,571 | 2,679,862 |
| Eramet S.A. * | 20,058 | 1,493,895 |
| Eurofins Scientific SE * | 20,424 | 1,825,583 |
| Euronext N.V. | 15,449 | 1,672,678 |
| Fnac Darty S.A. * | 35,726 | 2,179,052 |
| Gaztransport Et Technigaz S.A. | 6,215 | 525,046 |
| Gecina S.A. | 13,577 | 1,890,229 |
| Getlink SE * | 159,880 | 2,633,426 |
| ICADE | 22,742 | 1,689,379 |
| Iliad S.A. | 13,758 | 2,448,141 |
| Imerys S.A. | 55,734 | 2,891,358 |
| Ipsen S.A. | 13,823 | 1,185,391 |
| IPSOS | 58,974 | 2,294,224 |
| JCDecaux S.A. * | 58,247 | 1,386,431 |
| Kaufman & Broad S.A. | 20,465 | 910,401 |
| Korian S.A. * | 44,835 | 1,567,317 |
| Maisons du Monde S.A. * | 69,920 | 1,269,639 |
| Mercialys S.A. | 108,101 | 1,182,885 |
| Mersen S.A. * | 21,256 | 734,025 |
| Metropole Television S.A. * | 100,501 | 2,020,123 |
| Nexans S.A. * | 42,011 | 3,281,396 |
| Nexity S.A. | 57,459 | 2,821,831 |
| Orpea S.A. * | 17,282 | 2,086,781 |
| Quadient S.A. | 111,819 | 2,567,934 |
| Remy Cointreau S.A. | 7,189 | 1,378,709 |
| Sartorius Stedim Biotech | 1,627 | 714,897 |
| SEB S.A. | 16,258 | 2,934,440 |
| Societe BIC S.A. | 41,826 | 2,360,730 |
| Solocal Group * | 145,272 | 549,272 |
| Sopra Steria Group * | 11,938 | 1,951,849 |
| SPIE S.A. * | 125,261 | 2,831,018 |
| Tarkett S.A. * | 76,487 | 1,169,783 |
| Technicolor S.A. *(b) | 388,424 | 918,893 |
| Television Francaise 1 S.A. * | 240,090 | 2,105,518 |
| Trigano S.A. | 6,012 | 1,134,740 |
| Ubisoft Entertainment S.A. * | 29,676 | 2,434,281 |
| Vallourec S.A. *(b) | 36,597 | 1,800,179 |
| Vicat S.A. | 32,542 | 1,574,054 |
| Worldline S.A. * | 42,761 | 3,830,463 |
| 95,088,510 | ||
| Germany 4.3% | ||
| 1&1 Drillisch AG | 41,505 | 1,180,374 |
| Aareal Bank AG * | 94,626 | 2,526,855 |
| alstria Office REIT-AG | 38,437 | 642,904 |
| Aroundtown S.A. | 181,281 | 1,323,314 |
| Bechtle AG | 9,593 | 1,819,954 |
| Befesa S.A. | 18,419 | 1,256,462 |
| Bilfinger SE (b) | 70,673 | 2,530,595 |
| CANCOM SE | 15,413 | 991,540 |
| Carl Zeiss Meditec AG | 6,381 | 962,735 |
| CECONOMY AG * | 358,116 | 2,247,302 |
84
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Cewe Stiftung & Co. KGaA | 4,795 | 633,235 |
| CTS Eventim AG & Co., KGaA * | 15,387 | 1,053,368 |
| Deutsche Euroshop AG * | 38,707 | 835,350 |
| Deutsche Pfandbriefbank AG * | 305,192 | 3,345,091 |
| Deutz AG * | 286,561 | 2,106,097 |
| Dialog Semiconductor plc * | 48,559 | 3,795,795 |
| Duerr AG | 62,459 | 2,480,593 |
| DWS Group GmbH & Co. KGaA | 23,791 | 997,574 |
| ElringKlinger AG *(b) | 101,600 | 1,709,244 |
| Fielmann AG * | 12,007 | 951,688 |
| Fraport AG Frankfurt Airport Services Worldwide * | 37,693 | 2,392,817 |
| Gerresheimer AG | 16,694 | 1,734,528 |
| Grand City Properties S.A. | 34,731 | 857,463 |
| GRENKE AG (b) | 7,532 | 316,691 |
| Hamburger Hafen und Logistik AG | 28,200 | 720,524 |
| Heidelberger Druckmaschinen AG * | 1,061,861 | 1,550,531 |
| HOCHTIEF AG | 22,194 | 1,989,451 |
| Hornbach Holding AG & Co. KGaA | 20,640 | 1,959,131 |
| Indus Holding AG | 34,430 | 1,393,734 |
| Jenoptik AG | 29,769 | 959,709 |
| JOST Werke AG * | 16,541 | 962,714 |
| Kloeckner & Co. SE * | 473,743 | 5,074,633 |
| Knorr-Bremse AG | 23,432 | 3,001,743 |
| Koenig & Bauer AG * | 29,183 | 874,931 |
| Krones AG (b) | 21,606 | 1,831,841 |
| LEG Immobilien AG | 14,513 | 1,993,060 |
| Nordex SE * | 73,590 | 1,982,982 |
| Norma Group SE | 36,455 | 1,744,299 |
| Pfeiffer Vacuum Technology AG | 3,087 | 598,021 |
| Puma SE * | 24,047 | 2,567,982 |
| QIAGEN N.V. * | 37,257 | 1,854,124 |
| Rational AG | 820 | 705,679 |
| RTL Group S.A. * | 65,232 | 3,694,473 |
| SAF-Holland SE * | 110,983 | 1,651,559 |
| Scout24 AG | 14,805 | 1,122,246 |
| Siemens Healthineers AG | 48,116 | 2,676,619 |
| Siltronic AG * | 2,820 | 472,705 |
| Siltronic AG | 11,259 | 1,890,715 |
| Sixt SE * | 11,174 | 1,395,633 |
| Software AG | 26,968 | 1,205,912 |
| Stabilus S.A. | 14,149 | 1,063,933 |
| Stroeer SE & CO. KGaA | 8,232 | 742,905 |
| Suedzucker AG | 115,180 | 1,821,665 |
| TAG Immobilien AG | 44,191 | 1,263,736 |
| Takkt AG * | 63,460 | 904,306 |
| Talanx AG * | 41,106 | 1,719,363 |
| Wacker Chemie AG | 22,959 | 2,997,164 |
| Wacker Neuson SE * | 45,643 | 934,069 |
| Zalando SE * | 24,343 | 2,512,131 |
| 98,525,792 | ||
| Hong Kong 4.2% | ||
| Asia Cement China Holdings Corp. | 459,748 | 432,643 |
| ASM Pacific Technology Ltd. | 197,546 | 2,747,744 |
| BOC Aviation Ltd. | 99,704 | 963,963 |
| Brightoil Petroleum Holdings Ltd. *(a) | 2,380,161 | — |
| Budweiser Brewing Co. APAC Ltd. | 248,878 | 760,364 |
| Cafe de Coral Holdings Ltd. | 442,534 | 981,209 |
| Cathay Pacific Airways Ltd. * | 1,581,565 | 1,467,933 |
| China Travel International Investment Hong Kong Ltd. * | 4,216,259 | 733,749 |
| Chow Sang Sang Holdings International Ltd. | 764,197 | 1,036,353 |
| Chow Tai Fook Jewellery Group Ltd. | 1,129,361 | 1,551,946 |
| CITIC Telecom International Holdings Ltd. | 1,835,531 | 593,912 |
| CK Infrastructure Holdings Ltd. | 114,099 | 661,147 |
| Security | Number of Shares | Value ($) |
| Cowell e Holdings, Inc. (b) | 1,432,331 | 1,133,701 |
| Dah Sing Financial Holdings Ltd. | 237,405 | 768,157 |
| Dairy Farm International Holdings Ltd. | 313,019 | 1,355,372 |
| FIH Mobile Ltd. * | 10,916,000 | 1,646,402 |
| First Pacific Co., Ltd. | 10,625,114 | 3,478,996 |
| Fortune Real Estate Investment Trust | 675,442 | 630,396 |
| Giordano International Ltd. | 4,406,615 | 880,488 |
| Haitong International Securities Group Ltd. | 2,588,317 | 797,447 |
| Hang Lung Group Ltd. | 979,370 | 2,449,261 |
| Hang Lung Properties Ltd. | 1,009,560 | 2,615,862 |
| Hutchison Telecommunications Hong Kong Holdings Ltd. | 3,636,197 | 628,115 |
| Hysan Development Co., Ltd. | 310,060 | 1,321,003 |
| IGG, Inc. | 847,887 | 1,265,707 |
| Johnson Electric Holdings Ltd. | 579,996 | 1,674,787 |
| K Wah International Holdings Ltd. | 1,852,179 | 952,670 |
| Kerry Logistics Network Ltd. | 612,604 | 1,784,740 |
| Kerry Properties Ltd. | 849,429 | 2,732,022 |
| Lee & Man Paper Manufacturing Ltd. | 2,075,512 | 1,923,715 |
| Lifestyle International Holdings Ltd. * | 699,205 | 624,632 |
| Luk Fook Holdings International Ltd. | 668,067 | 1,694,852 |
| Man Wah Holdings Ltd. | 734,463 | 1,609,554 |
| Melco International Development Ltd. | 736,535 | 1,526,743 |
| MGM China Holdings Ltd. | 464,736 | 829,142 |
| Minth Group Ltd. | 443,162 | 1,948,065 |
| MMG Ltd. * | 4,433,888 | 2,794,990 |
| NagaCorp Ltd. | 602,584 | 798,541 |
| Nexteer Automotive Group Ltd. | 1,557,899 | 2,060,503 |
| NWS Holdings Ltd. | 2,271,050 | 2,567,515 |
| Pacific Basin Shipping Ltd. | 6,386,368 | 1,588,905 |
| Pacific Textiles Holdings Ltd. | 1,072,946 | 687,418 |
| Pou Sheng International Holdings Ltd. * | 3,298,312 | 714,311 |
| Power Assets Holdings Ltd. | 82,417 | 457,911 |
| PRADA S.p.A. * | 351,714 | 2,092,416 |
| Road King Infrastructure Ltd. | 551,382 | 749,169 |
| Sa Sa International Holdings Ltd. * | 2,800,930 | 686,029 |
| Samsonite International S.A. * | 2,158,839 | 4,202,269 |
| Shangri-La Asia Ltd. * | 945,659 | 967,925 |
| Shui On Land Ltd. | 7,858,835 | 1,205,568 |
| Shun Tak Holdings Ltd. | 2,088,000 | 707,902 |
| SITC International Holdings Co., Ltd. | 670,297 | 1,762,723 |
| SJM Holdings Ltd. | 1,694,943 | 2,359,747 |
| SmarTone Telecommunications Holdings Ltd. | 1,241,921 | 786,072 |
| Stella International Holdings Ltd. | 1,053,500 | 1,258,928 |
| Sun Art Retail Group Ltd. | 1,254,600 | 1,083,594 |
| Swire Properties Ltd. | 506,893 | 1,630,322 |
| The Bank of East Asia Ltd. | 1,053,734 | 2,488,531 |
| Tingyi Cayman Islands Holding Corp. | 1,342,188 | 2,695,674 |
| Truly International Holdings Ltd. * | 6,734,186 | 1,328,199 |
| Uni-President China Holdings Ltd. | 906,353 | 1,088,930 |
| Value Partners Group Ltd. | 1,035,990 | 685,109 |
| Vitasoy International Holdings Ltd. | 185,589 | 818,210 |
| VSTECS Holdings Ltd. | 1,594,551 | 1,430,653 |
| VTech Holdings Ltd. | 253,494 | 2,125,698 |
| Wynn Macau Ltd. * | 906,187 | 1,710,195 |
| Xinyi Glass Holdings Ltd. | 1,151,005 | 3,219,760 |
| 96,956,509 | ||
| Ireland 0.5% | ||
| AIB Group plc * | 1,214,034 | 2,745,306 |
| Glanbia plc | 175,412 | 2,288,837 |
| Irish Continental Group plc * | 120,144 | 629,989 |
85
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Kingspan Group plc * | 36,899 | 2,698,477 |
| Total Produce plc | 973,018 | 2,468,393 |
| 10,831,002 | ||
| Israel 1.1% | ||
| Azrieli Group Ltd. | 11,491 | 699,304 |
| Delek Group Ltd. * | 37,202 | 1,729,423 |
| Elbit Systems Ltd. | 10,176 | 1,323,031 |
| FIBI Holdings Ltd. | 20,122 | 591,748 |
| First International Bank of Israel Ltd. | 28,413 | 745,684 |
| Gazit-Globe Ltd. | 145,533 | 913,786 |
| Harel Insurance Investments & Financial Services Ltd. | 96,954 | 880,948 |
| Israel Discount Bank Ltd., A Shares | 649,847 | 2,414,833 |
| Mizrahi Tefahot Bank Ltd. | 55,895 | 1,339,037 |
| Nice Ltd. * | 8,545 | 1,986,705 |
| Oil Refineries Ltd. * | 6,578,034 | 1,429,705 |
| Partner Communications Co., Ltd. * | 101,566 | 512,628 |
| Paz Oil Co., Ltd. | 24,599 | 2,293,788 |
| Shikun & Binui Ltd. * | 112,459 | 658,587 |
| Shufersal Ltd. | 97,563 | 783,697 |
| The Israel Corp., Ltd. * | 14,099 | 3,206,930 |
| The Phoenix Holdings Ltd. * | 102,425 | 797,707 |
| Tower Semiconductor Ltd. * | 77,341 | 2,358,028 |
| 24,665,569 | ||
| Italy 2.4% | ||
| ACEA S.p.A. | 35,803 | 709,664 |
| Amplifon S.p.A. * | 19,484 | 780,439 |
| Anima Holding S.p.A. | 247,227 | 1,193,735 |
| ASTM S.p.A. * | 60,475 | 1,864,476 |
| Autogrill S.p.A. * | 240,892 | 1,564,312 |
| Azimut Holding S.p.A. | 73,779 | 1,702,401 |
| Banca Carige S.p.A. *(a) | 60,120,573 | 10,946 |
| Banca Farmafactoring S.p.A. * | 89,352 | 589,998 |
| Banca Generali S.p.A. * | 25,488 | 873,051 |
| Banca IFIS S.p.A. * | 59,513 | 759,932 |
| Banca Mediolanum S.p.A. * | 164,771 | 1,444,993 |
| Banca Monte dei Paschi di Siena S.p.A. *(b) | 587,131 | 860,893 |
| Banca Popolare di Sondrio Scarl * | 956,499 | 2,770,142 |
| BPER Banca * | 1,379,018 | 3,037,204 |
| Buzzi Unicem S.p.A. | 75,182 | 1,911,811 |
| Cerved Group S.p.A. * | 122,675 | 1,003,605 |
| Davide Campari-Milano N.V. | 127,549 | 1,451,892 |
| De'Longhi S.p.A. | 46,242 | 1,718,656 |
| DiaSorin S.p.A. | 3,432 | 676,520 |
| Enav S.p.A. | 196,049 | 950,429 |
| ERG S.p.A. | 39,035 | 1,123,870 |
| Esprinet S.p.A. * | 90,056 | 1,156,499 |
| Fincantieri S.p.A. *(b) | 615,256 | 512,677 |
| FinecoBank Banca Fineco S.p.A. * | 143,436 | 2,536,675 |
| Freni Brembo S.p.A. * | 131,745 | 1,722,253 |
| Infrastrutture Wireless Italiane S.p.A. | 50,942 | 532,695 |
| Interpump Group S.p.A. | 32,078 | 1,481,136 |
| Iren S.p.A. | 697,924 | 1,740,026 |
| Italgas S.p.A. | 336,131 | 1,991,835 |
| Maire Tecnimont S.p.A. *(b) | 231,816 | 607,777 |
| MARR S.p.A. * | 36,629 | 838,521 |
| Mediaset S.p.A. * | 759,489 | 2,162,702 |
| Moncler S.p.A. * | 44,245 | 2,755,045 |
| OVS S.p.A. *(b) | 883,882 | 1,203,744 |
| Piaggio & C S.p.A. | 186,366 | 710,303 |
| Recordati Industria Chimica e Farmaceutica S.p.A. | 27,682 | 1,415,921 |
| Reply S.p.A. | 5,232 | 610,293 |
| Security | Number of Shares | Value ($) |
| Salvatore Ferragamo S.p.A. * | 66,417 | 1,283,422 |
| Societa Cattolica di Assicurazioni SC *(b) | 241,046 | 1,329,491 |
| Tod's S.p.A. *(b) | 22,776 | 728,735 |
| UnipolSai Assicurazioni S.p.A. | 593,446 | 1,731,661 |
| Webuild S.p.A (b) | 365,027 | 688,973 |
| 54,739,353 | ||
| Japan 30.3% | ||
| ABC-Mart, Inc. | 19,687 | 1,119,797 |
| Acom Co., Ltd. | 155,633 | 693,877 |
| Adastria Co., Ltd. | 58,710 | 1,099,917 |
| ADEKA Corp. | 140,152 | 2,353,406 |
| Advantest Corp. | 40,377 | 3,316,114 |
| Aeon Delight Co., Ltd. | 24,967 | 744,042 |
| AEON Financial Service Co., Ltd. | 142,646 | 1,826,254 |
| Aeon Mall Co., Ltd. | 108,994 | 1,833,276 |
| Aica Kogyo Co., Ltd. | 41,346 | 1,430,073 |
| Aida Engineering Ltd. | 82,001 | 688,858 |
| Ain Holdings, Inc. | 22,046 | 1,421,588 |
| Aisan Industry Co., Ltd. | 145,385 | 769,637 |
| Alconix Corp. | 49,460 | 730,712 |
| Alpen Co., Ltd. | 30,413 | 645,712 |
| Amano Corp. | 58,219 | 1,304,927 |
| Anritsu Corp. (b) | 47,487 | 1,013,121 |
| AOKI Holdings, Inc. | 134,038 | 858,024 |
| Aoyama Trading Co., Ltd. * | 306,253 | 2,351,370 |
| Aozora Bank Ltd. | 121,364 | 2,563,066 |
| Arata Corp. | 38,881 | 1,634,943 |
| Arcs Co., Ltd. | 107,037 | 2,205,239 |
| Asahi Diamond Industrial Co., Ltd. | 115,251 | 535,473 |
| Asahi Holdings, Inc. | 29,636 | 1,108,499 |
| Asahi Intecc Co., Ltd. | 15,731 | 451,081 |
| Asanuma Corp. | 11,702 | 503,052 |
| ASKUL Corp. | 15,766 | 521,636 |
| Autobacs Seven Co., Ltd. | 104,603 | 1,392,219 |
| Avex, Inc. | 70,188 | 976,993 |
| Azbil Corp. | 75,798 | 3,219,316 |
| Belluna Co., Ltd. | 77,358 | 751,507 |
| Benesse Holdings, Inc. | 70,716 | 1,426,400 |
| BML, Inc. | 19,280 | 637,901 |
| Bunka Shutter Co., Ltd. | 98,462 | 920,482 |
| Calbee, Inc. | 53,423 | 1,404,021 |
| Canon Electronics, Inc. | 31,758 | 482,898 |
| Canon Marketing Japan, Inc. | 71,492 | 1,562,839 |
| Capcom Co., Ltd. | 20,227 | 1,230,251 |
| Cawachi Ltd. | 29,249 | 785,446 |
| Central Glass Co., Ltd. | 82,630 | 1,709,372 |
| Chiyoda Corp. * | 169,646 | 710,176 |
| Chudenko Corp. | 35,011 | 720,003 |
| Chugoku Marine Paints Ltd. | 66,719 | 565,490 |
| Citizen Watch Co., Ltd. | 810,156 | 2,912,425 |
| CKD Corp. | 44,322 | 953,501 |
| Cocokara fine, Inc. | 31,887 | 2,214,791 |
| Colowide Co., Ltd. (b) | 32,139 | 609,356 |
| Cosmos Pharmaceutical Corp. | 8,818 | 1,262,197 |
| Create SD Holdings Co., Ltd. | 19,008 | 577,162 |
| Credit Saison Co., Ltd. | 200,327 | 2,491,395 |
| CyberAgent, Inc. | 34,221 | 2,062,125 |
| Daido Metal Co., Ltd. | 122,951 | 626,642 |
| Daifuku Co., Ltd. | 26,760 | 2,556,944 |
| Daihen Corp. | 21,061 | 894,509 |
| Daiho Corp. | 30,005 | 1,039,220 |
| Daiichikosho Co., Ltd. | 42,747 | 1,697,201 |
| Daiki Aluminium Industry Co., Ltd. | 86,524 | 632,647 |
| Daikyonishikawa Corp. | 191,663 | 1,316,851 |
| Daio Paper Corp. | 88,049 | 1,638,006 |
| Daiseki Co., Ltd. | 22,875 | 716,051 |
86
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Daishi Hokuetsu Financial Group, Inc. | 34,832 | 768,305 |
| Daiwabo Holdings Co., Ltd. | 32,130 | 2,394,520 |
| DCM Holdings Co., Ltd. | 156,849 | 1,550,235 |
| DeNA Co., Ltd. | 92,589 | 1,822,406 |
| Descente Ltd. * | 39,173 | 658,889 |
| Dexerials Corp. | 59,831 | 868,768 |
| Disco Corp. | 8,117 | 2,544,657 |
| DMG Mori Co., Ltd. | 86,076 | 1,291,867 |
| Doshisha Co., Ltd. | 40,448 | 670,843 |
| Doutor Nichires Holdings Co., Ltd. (b) | 45,126 | 684,472 |
| Dowa Holdings Co., Ltd. | 83,786 | 3,299,064 |
| DTS Corp. | 33,425 | 726,917 |
| Duskin Co., Ltd. | 47,930 | 1,223,668 |
| DyDo Group Holdings, Inc. | 14,881 | 706,757 |
| Eagle Industry Co., Ltd. | 89,653 | 911,340 |
| Earth Corp. | 9,269 | 509,821 |
| Eizo Corp. | 19,906 | 687,573 |
| Exedy Corp. | 110,911 | 1,688,546 |
| Ezaki Glico Co., Ltd. | 47,929 | 1,950,180 |
| Fancl Corp. | 21,322 | 759,499 |
| FCC Co., Ltd. | 62,895 | 1,004,171 |
| Foster Electric Co., Ltd. | 89,712 | 1,047,510 |
| FP Corp. | 20,265 | 786,519 |
| Fuji Co., Ltd. | 51,974 | 883,958 |
| Fuji Corp. | 66,212 | 1,558,039 |
| Fuji Media Holdings, Inc. | 93,544 | 1,130,887 |
| Fuji Oil Co., Ltd. * | 402,161 | 796,471 |
| Fuji Oil Holdings, Inc. | 41,851 | 1,161,568 |
| Fuji Seal International, Inc. | 50,900 | 1,046,283 |
| Fuji Soft, Inc. | 18,808 | 930,338 |
| Fujimori Kogyo Co., Ltd. | 21,085 | 839,125 |
| Fujitec Co., Ltd. | 70,728 | 1,617,835 |
| Fujitsu General Ltd. | 45,008 | 1,216,661 |
| Fukuoka Financial Group, Inc. | 127,895 | 2,298,845 |
| Fukuyama Transporting Co., Ltd. | 33,925 | 1,326,240 |
| Furukawa Co., Ltd. | 72,477 | 889,126 |
| Futaba Corp. | 68,518 | 597,458 |
| Futaba Industrial Co., Ltd. | 230,676 | 1,134,543 |
| Fuyo General Lease Co., Ltd. | 9,740 | 644,518 |
| G-Tekt Corp. | 83,497 | 1,090,931 |
| Geo Holdings Corp. | 103,628 | 1,163,310 |
| Glory Ltd. | 90,239 | 1,970,114 |
| Gree, Inc. | 115,119 | 598,610 |
| GS Yuasa Corp. | 144,267 | 4,245,138 |
| GungHo Online Entertainment, Inc. | 61,932 | 1,266,659 |
| Gunze Ltd. | 28,495 | 972,211 |
| H.U. Group Holdings, Inc. | 84,972 | 2,627,959 |
| Hamakyorex Co., Ltd. | 20,870 | 620,968 |
| Hamamatsu Photonics K.K. | 34,556 | 2,033,660 |
| Happinet Corp. | 54,429 | 760,698 |
| Hazama Ando Corp. | 311,178 | 2,322,006 |
| Heiwa Corp. | 68,200 | 1,029,337 |
| Heiwa Real Estate Co., Ltd. | 16,655 | 540,107 |
| Heiwado Co., Ltd. | 75,077 | 1,374,133 |
| Hikari Tsushin, Inc. | 6,636 | 1,313,622 |
| Hirogin Holdings, Inc. | 288,655 | 1,696,058 |
| Hirose Electric Co., Ltd. | 17,451 | 2,545,415 |
| HIS Co., Ltd. * | 47,668 | 1,130,627 |
| Hisamitsu Pharmaceutical Co., Inc. | 40,710 | 2,537,210 |
| Hitachi Capital Corp. | 30,049 | 811,441 |
| Hitachi Transport System Ltd. | 45,995 | 1,441,931 |
| Hitachi Zosen Corp. | 408,025 | 2,592,763 |
| Hogy Medical Co., Ltd. | 14,430 | 412,421 |
| Hokuetsu Corp. | 361,257 | 1,725,923 |
| Hokuhoku Financial Group, Inc. | 160,629 | 1,450,395 |
| Horiba Ltd. | 30,679 | 1,825,651 |
| Hoshizaki Corp. | 23,386 | 2,050,171 |
| Hosiden Corp. | 133,811 | 1,284,857 |
| Security | Number of Shares | Value ($) |
| House Foods Group, Inc. | 53,776 | 1,796,908 |
| Hulic Co., Ltd. | 143,929 | 1,604,915 |
| Ibiden Co., Ltd. | 80,700 | 3,279,810 |
| Inaba Denki Sangyo Co., Ltd. | 77,945 | 1,848,030 |
| Inabata & Co., Ltd. | 157,814 | 2,223,379 |
| Internet Initiative Japan, Inc. | 38,468 | 794,346 |
| Iriso Electronics Co., Ltd. | 14,001 | 634,737 |
| Ishihara Sangyo Kaisha Ltd. | 100,764 | 771,761 |
| Ito En Ltd. | 29,463 | 1,626,079 |
| Itochu Enex Co., Ltd. | 150,261 | 1,444,221 |
| Itochu Techno-Solutions Corp. | 44,567 | 1,367,881 |
| Itoham Yonekyu Holdings, Inc. | 390,342 | 2,601,303 |
| Iwatani Corp. | 70,569 | 4,027,215 |
| Izumi Co., Ltd. | 62,566 | 2,310,843 |
| Jaccs Co., Ltd. | 40,111 | 767,282 |
| JAFCO Group Co., Ltd. | 19,098 | 1,163,375 |
| Japan Airport Terminal Co., Ltd. | 20,857 | 1,004,284 |
| Japan Aviation Electronics Industry Ltd. | 82,161 | 1,303,286 |
| Japan Display, Inc. *(b) | 3,174,899 | 1,400,603 |
| Japan Exchange Group, Inc. | 126,411 | 2,721,266 |
| Japan Petroleum Exploration Co., Ltd. | 62,359 | 1,304,072 |
| Joyful Honda Co., Ltd. | 94,010 | 1,185,934 |
| Juki Corp. | 106,965 | 868,451 |
| JVC Kenwood Corp. | 673,667 | 1,169,780 |
| Kadokawa Corp. | 36,405 | 1,336,057 |
| Kaga Electronics Co., Ltd. | 42,556 | 921,900 |
| Kagome Co., Ltd. | 48,779 | 1,453,664 |
| Kakaku.com, Inc. | 26,805 | 850,393 |
| Kaken Pharmaceutical Co., Ltd. | 26,681 | 1,060,579 |
| Kameda Seika Co., Ltd. | 11,695 | 514,277 |
| Kamigumi Co., Ltd. | 119,891 | 2,241,626 |
| Kanamoto Co., Ltd. | 52,439 | 1,164,545 |
| Kandenko Co., Ltd. | 188,828 | 1,549,049 |
| Kanematsu Corp. | 185,308 | 2,356,789 |
| Kansai Paint Co., Ltd. | 95,337 | 2,489,464 |
| Kasai Kogyo Co., Ltd. | 226,178 | 851,299 |
| Kato Sangyo Co., Ltd. | 54,417 | 1,825,988 |
| Kato Works Co., Ltd. | 43,942 | 413,683 |
| Kawasaki Kisen Kaisha Ltd. * | 214,498 | 4,036,686 |
| Keihan Holdings Co., Ltd. | 48,572 | 2,179,221 |
| Keikyu Corp. | 139,752 | 2,208,958 |
| Keisei Electric Railway Co., Ltd. | 63,031 | 2,271,814 |
| KH Neochem Co., Ltd. | 30,720 | 704,132 |
| Kinden Corp. | 164,086 | 2,678,295 |
| Kintetsu World Express, Inc. | 56,151 | 1,460,432 |
| Kissei Pharmaceutical Co., Ltd. | 23,767 | 473,377 |
| Kitz Corp. | 141,169 | 745,993 |
| Kobayashi Pharmaceutical Co., Ltd. | 15,571 | 1,470,286 |
| Kohnan Shoji Co., Ltd. | 44,400 | 1,208,560 |
| Kokuyo Co., Ltd. | 127,003 | 1,811,944 |
| Komeri Co., Ltd. | 47,112 | 1,269,114 |
| Komori Corp. | 96,713 | 639,065 |
| Konami Holdings Corp. | 55,904 | 3,583,859 |
| Konoike Transport Co., Ltd. | 75,316 | 730,256 |
| Kose Corp. | 11,833 | 1,895,901 |
| Kumagai Gumi Co., Ltd. | 59,374 | 1,554,290 |
| Kumiai Chemical Industry Co., Ltd. | 49,838 | 395,748 |
| Kura Sushi, Inc. | 9,291 | 625,272 |
| Kureha Corp. | 26,966 | 1,776,810 |
| Kurita Water Industries Ltd. | 87,226 | 3,528,666 |
| Kusuri no Aoki Holdings Co., Ltd. | 6,916 | 542,037 |
| KYB Corp. * | 67,740 | 1,882,656 |
| Kyoei Steel Ltd. | 51,069 | 675,392 |
| Kyokuto Kaihatsu Kogyo Co., Ltd. | 53,276 | 760,086 |
| KYORIN Holdings, Inc. | 46,123 | 818,214 |
| Kyoritsu Maintenance Co., Ltd. | 16,580 | 604,593 |
| Kyowa Exeo Corp. | 99,548 | 2,543,361 |
| Kyowa Kirin Co., Ltd. | 102,097 | 2,844,227 |
87
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Kyudenko Corp. | 51,349 | 1,686,892 |
| Kyushu Financial Group, Inc. | 240,333 | 974,506 |
| Lawson, Inc. | 43,327 | 2,023,201 |
| Leopalace21 Corp. * | 1,197,255 | 1,505,840 |
| Life Corp. | 27,732 | 818,633 |
| Lintec Corp. | 63,853 | 1,392,252 |
| Lion Corp. | 114,407 | 2,197,078 |
| M3, Inc. | 17,810 | 1,408,384 |
| Mabuchi Motor Co., Ltd. | 47,653 | 2,106,679 |
| Macnica Fuji Electronics Holdings, Inc. | 88,667 | 1,683,624 |
| Maeda Corp. | 199,889 | 1,763,616 |
| Maeda Road Construction Co., Ltd. | 74,624 | 1,515,734 |
| Makino Milling Machine Co., Ltd. | 36,158 | 1,357,537 |
| Mandom Corp. | 35,376 | 601,664 |
| Marudai Food Co., Ltd. | 72,851 | 1,138,511 |
| Maruha Nichiro Corp. | 89,411 | 2,067,850 |
| Marui Group Co., Ltd. | 109,753 | 2,081,949 |
| Maruichi Steel Tube Ltd. | 54,975 | 1,255,436 |
| Max Co., Ltd. | 38,334 | 574,254 |
| Maxell Holdings Ltd. * | 93,829 | 1,221,521 |
| MCJ Co., Ltd. | 64,080 | 545,528 |
| Mebuki Financial Group, Inc. | 721,259 | 1,536,754 |
| Megmilk Snow Brand Co., Ltd. | 87,133 | 1,746,913 |
| Meidensha Corp. | 64,939 | 1,391,550 |
| Meitec Corp. | 16,481 | 858,547 |
| Ministop Co., Ltd. | 33,824 | 432,721 |
| Mirait Holdings Corp. | 95,203 | 1,495,868 |
| Mitsubishi Logisnext Co., Ltd. | 72,840 | 774,617 |
| Mitsubishi Logistics Corp. | 55,848 | 1,742,957 |
| Mitsubishi Pencil Co., Ltd. | 40,955 | 517,800 |
| Mitsubishi UFJ Lease & Finance Co., Ltd. | 265,267 | 1,421,696 |
| Mitsui E&S Holdings Co., Ltd. * | 337,268 | 1,449,866 |
| Mitsui Matsushima Holdings Co., Ltd. | 59,222 | 555,866 |
| Mitsui Sugar Co., Ltd. | 25,869 | 456,483 |
| Mitsui-Soko Holdings Co., Ltd. | 43,413 | 883,826 |
| Miura Co., Ltd. | 23,332 | 1,206,677 |
| Mizuho Leasing Co., Ltd. | 22,082 | 685,010 |
| Mizuno Corp. | 49,022 | 997,097 |
| Mochida Pharmaceutical Co., Ltd. | 19,928 | 740,707 |
| Modec, Inc. | 36,316 | 589,019 |
| Morinaga & Co., Ltd. | 30,914 | 1,114,227 |
| Morinaga Milk Industry Co., Ltd. | 56,427 | 2,568,715 |
| Morita Holdings Corp. | 38,508 | 632,884 |
| MOS Food Services, Inc. | 18,779 | 541,126 |
| Musashi Seimitsu Industry Co., Ltd. | 93,543 | 1,540,904 |
| Nabtesco Corp. | 71,875 | 3,049,324 |
| Nachi-Fujikoshi Corp. | 35,236 | 1,489,940 |
| Nankai Electric Railway Co., Ltd. | 83,981 | 2,025,823 |
| NEC Networks & System Integration Corp. | 48,065 | 798,978 |
| NET One Systems Co., Ltd. | 37,754 | 1,171,175 |
| Nexon Co., Ltd. | 84,724 | 2,671,979 |
| Nichi-iko Pharmaceutical Co., Ltd. | 63,430 | 569,167 |
| Nichias Corp. | 61,166 | 1,427,819 |
| Nichicon Corp. | 88,235 | 891,957 |
| Nichiha Corp. | 35,448 | 995,166 |
| Nifco, Inc. | 84,829 | 2,910,175 |
| Nihon Kohden Corp. | 45,412 | 1,231,418 |
| Nihon Parkerizing Co., Ltd. | 96,237 | 971,945 |
| Nihon Unisys Ltd. | 40,718 | 1,177,130 |
| Nikkiso Co., Ltd. | 73,582 | 757,645 |
| Nippn Corp. | 86,338 | 1,286,885 |
| Nippo Corp. | 61,313 | 1,600,445 |
| Nippon Chemi-Con Corp. * | 49,798 | 801,610 |
| Nippon Denko Co., Ltd. | 296,672 | 776,905 |
| Nippon Densetsu Kogyo Co., Ltd. | 42,480 | 749,999 |
| Nippon Gas Co., Ltd. | 24,584 | 1,136,439 |
| Nippon Holdings Co., Ltd. | 73,985 | 1,415,257 |
| Security | Number of Shares | Value ($) |
| Nippon Kayaku Co., Ltd. | 214,253 | 2,075,362 |
| Nippon Koei Co., Ltd. | 19,745 | 524,482 |
| Nippon Paint Holdings Co., Ltd. | 31,253 | 2,323,294 |
| Nippon Sanso Holdings Corp. | 82,076 | 1,539,984 |
| Nippon Sheet Glass Co., Ltd. * | 503,982 | 2,549,712 |
| Nippon Shinyaku Co., Ltd. | 11,976 | 812,713 |
| Nippon Signal Company Ltd. | 62,699 | 543,187 |
| Nippon Soda Co., Ltd. | 41,863 | 1,314,358 |
| Nippon Suisan Kaisha Ltd. | 515,549 | 2,453,382 |
| Nippon Television Holdings, Inc. | 39,432 | 521,491 |
| Nippon Yakin Kogyo Co., Ltd. | 33,512 | 642,623 |
| Nipro Corp. | 146,433 | 1,818,386 |
| Nishi-Nippon Financial Holdings, Inc. | 184,199 | 1,203,327 |
| Nishi-Nippon Railroad Co., Ltd. | 75,696 | 2,121,534 |
| Nishimatsu Construction Co., Ltd. | 97,203 | 2,418,670 |
| Nishimatsuya Chain Co., Ltd. | 63,723 | 840,349 |
| Nishio Rent All Co., Ltd. | 34,430 | 845,400 |
| Nissan Chemical Corp. | 50,004 | 2,717,507 |
| Nissha Co., Ltd. | 82,324 | 1,021,516 |
| Nisshinbo Holdings, Inc. | 331,512 | 2,464,403 |
| Nissin Electric Co., Ltd. | 51,837 | 603,322 |
| Nissin Foods Holdings Co., Ltd. | 31,372 | 2,370,420 |
| Nitta Corp. | 22,578 | 489,960 |
| Nitto Boseki Co., Ltd. | 13,909 | 524,166 |
| Nitto Kogyo Corp. | 35,798 | 663,946 |
| NOF Corp. | 43,980 | 2,315,823 |
| Nojima Corp. | 47,200 | 1,234,714 |
| Nomura Co., Ltd. | 63,873 | 488,010 |
| Nomura Research Institute Ltd. | 86,103 | 2,675,060 |
| Noritake Co., Ltd. | 26,129 | 896,391 |
| Noritz Corp. | 80,424 | 1,205,530 |
| North Pacific Bank Ltd. | 272,541 | 616,504 |
| NS Solutions Corp. | 27,044 | 793,247 |
| NS United Kaiun Kaisha Ltd. | 34,019 | 495,565 |
| NSD Co., Ltd. | 34,554 | 590,279 |
| Obic Co., Ltd. | 6,626 | 1,118,223 |
| Oiles Corp. | 40,702 | 627,683 |
| Okamoto Industries, Inc. | 17,123 | 645,287 |
| Okamura Corp. | 157,204 | 1,628,996 |
| Okasan Securities Group, Inc. | 226,756 | 836,447 |
| Oki Electric Industry Co., Ltd. | 202,772 | 1,985,087 |
| OKUMA Corp. | 36,852 | 2,023,505 |
| Okumura Corp. | 52,184 | 1,315,621 |
| Onward Holdings Co., Ltd. (b) | 429,304 | 1,015,437 |
| Open House Co., Ltd. | 26,305 | 1,007,362 |
| Oracle Corp. Japan | 7,941 | 804,982 |
| Orient Corp. | 594,029 | 825,195 |
| Osaka Soda Co., Ltd. | 26,406 | 634,002 |
| OSG Corp. | 83,833 | 1,502,132 |
| Outsourcing, Inc. | 66,590 | 1,018,788 |
| Pacific Industrial Co., Ltd. | 80,793 | 874,360 |
| PALTAC Corp. | 47,539 | 2,574,620 |
| Paramount Bed Holdings Co., Ltd. | 17,496 | 693,830 |
| Park24 Co., Ltd. * | 83,288 | 1,790,997 |
| Penta-Ocean Construction Co., Ltd. | 359,337 | 2,671,249 |
| Persol Holdings Co., Ltd. | 168,309 | 3,328,581 |
| Pigeon Corp. | 30,853 | 1,114,924 |
| Pilot Corp. | 34,706 | 1,042,418 |
| Piolax, Inc. | 38,358 | 550,492 |
| Plenus Co., Ltd. * | 41,799 | 735,622 |
| Pola Orbis Holdings, Inc. | 53,835 | 1,229,403 |
| Press Kogyo Co., Ltd. | 408,329 | 1,222,611 |
| Prima Meat Packers Ltd. | 46,108 | 1,345,935 |
| Qol Holdings Co., Ltd. | 42,082 | 552,983 |
| Raito Kogyo Co., Ltd. | 52,477 | 869,855 |
| Raiznext Corp. | 56,139 | 600,699 |
| Relia, Inc. | 45,005 | 563,513 |
| Relo Group, Inc. | 35,345 | 832,369 |
88
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Rengo Co., Ltd. | 309,120 | 2,503,947 |
| Resorttrust, Inc. | 55,288 | 949,144 |
| Restar Holdings Corp. | 42,554 | 794,842 |
| Rinnai Corp. | 26,716 | 2,703,196 |
| Rohto Pharmaceutical Co., Ltd. | 44,208 | 1,181,757 |
| Round One Corp. | 83,986 | 914,434 |
| Royal Holdings Co., Ltd. * | 34,940 | 626,060 |
| Ryobi Ltd. * | 108,669 | 1,274,979 |
| Ryosan Co., Ltd. | 76,752 | 1,552,474 |
| Ryoyo Electro Corp. | 26,998 | 684,960 |
| S Foods, Inc. | 35,580 | 1,092,046 |
| Saizeriya Co., Ltd. | 36,847 | 768,482 |
| Sakai Chemical Industry Co., Ltd. | 35,821 | 645,208 |
| Sakata INX Corp. | 75,200 | 755,953 |
| Sakata Seed Corp. | 15,017 | 521,521 |
| San-A Co., Ltd. | 23,463 | 912,842 |
| Sanden Holdings Corp. * | 184,079 | 789,601 |
| Sangetsu Corp. | 74,270 | 1,070,760 |
| Sanken Electric Co., Ltd. | 34,549 | 1,751,123 |
| Sanki Engineering Co., Ltd. | 62,598 | 761,470 |
| Sankyo Co., Ltd. | 44,035 | 1,221,771 |
| Sankyo Tateyama, Inc. | 120,370 | 906,108 |
| Sankyu, Inc. | 65,176 | 2,716,176 |
| Sanoh Industrial Co., Ltd. | 65,959 | 586,908 |
| Sanrio Co., Ltd. | 38,434 | 628,061 |
| Sanwa Holdings Corp. | 234,122 | 2,889,717 |
| Sanyo Chemical Industries Ltd. | 15,551 | 735,658 |
| Sanyo Denki Co., Ltd. | 11,224 | 600,496 |
| Sanyo Special Steel Co., Ltd. * | 56,710 | 899,567 |
| Sapporo Holdings Ltd. | 100,652 | 2,064,245 |
| Sato Holdings Corp. | 28,121 | 658,550 |
| Sawai Pharmaceutical Co., Ltd. | 28,836 | 1,293,750 |
| SCREEN Holdings Co., Ltd. | 34,421 | 2,681,568 |
| SCSK Corp. | 24,917 | 1,466,394 |
| Sega Sammy Holdings, Inc. | 198,722 | 3,336,903 |
| Seibu Holdings, Inc. | 215,431 | 2,588,246 |
| Seiko Holdings Corp. | 63,267 | 1,051,085 |
| Seiren Co., Ltd. | 57,797 | 985,706 |
| Sekisui Jushi Corp. | 22,704 | 412,781 |
| Senko Group Holdings Co., Ltd. | 186,080 | 1,751,814 |
| Senshu Ikeda Holdings, Inc. | 440,644 | 661,752 |
| Seven Bank Ltd. | 447,537 | 1,008,155 |
| Sharp Corp. | 116,918 | 2,209,085 |
| Shibaura Machine Co., Ltd. | 29,689 | 786,393 |
| Shibuya Corp. | 17,529 | 533,899 |
| Shima Seiki Manufacturing Ltd. | 40,544 | 874,508 |
| Shimachu Co., Ltd. * | 12,210 | 629,181 |
| Shindengen Electric Manufacturing Co., Ltd. | 23,295 | 672,350 |
| Shinko Electric Industries Co., Ltd. | 57,351 | 1,536,322 |
| Shinmaywa Industries Ltd. | 154,003 | 1,374,665 |
| Shinsei Bank Ltd. | 118,467 | 1,690,162 |
| Ship Healthcare Holdings, Inc. | 30,927 | 1,715,586 |
| Shizuoka Gas Co., Ltd. | 115,225 | 1,002,568 |
| SHO-BOND Holdings Co., Ltd. | 13,308 | 580,835 |
| Shochiku Co., Ltd. * | 4,054 | 605,018 |
| Shoei Foods Corp. | 13,588 | 486,561 |
| Showa Sangyo Co., Ltd. | 35,822 | 1,054,083 |
| Siix Corp. | 77,196 | 1,310,028 |
| Sinfonia Technology Co., Ltd. | 43,414 | 528,922 |
| SKY Perfect JSAT Holdings, Inc. | 214,172 | 904,612 |
| Skylark Holdings Co., Ltd. *(b) | 154,450 | 2,389,090 |
| Sohgo Security Services Co., Ltd. | 44,814 | 2,019,028 |
| Sotetsu Holdings, Inc. | 56,432 | 1,307,248 |
| Square Enix Holdings Co., Ltd. | 34,088 | 1,932,528 |
| St Marc Holdings Co., Ltd. | 30,985 | 484,522 |
| Starts Corp., Inc. | 32,460 | 847,909 |
| Sugi Holdings Co., Ltd. | 31,777 | 2,213,116 |
| Security | Number of Shares | Value ($) |
| SUMCO Corp. | 150,076 | 3,422,984 |
| Sumitomo Bakelite Co., Ltd. | 42,227 | 1,678,537 |
| Sumitomo Dainippon Pharma Co., Ltd. | 129,359 | 2,043,469 |
| Sumitomo Mitsui Construction Co., Ltd. | 364,774 | 1,581,806 |
| Sumitomo Osaka Cement Co., Ltd. | 63,455 | 2,096,505 |
| Sumitomo Riko Co., Ltd. | 157,732 | 909,024 |
| Sumitomo Seika Chemicals Co., Ltd. | 18,730 | 682,114 |
| Sundrug Co., Ltd. | 70,446 | 2,644,866 |
| Suruga Bank Ltd. | 402,274 | 1,332,858 |
| Sushiro Global Holdings Ltd. | 36,905 | 1,380,387 |
| SWCC Showa Holdings Co., Ltd. | 39,127 | 600,089 |
| T-Gaia Corp. | 35,998 | 615,284 |
| Tachi-S Co., Ltd. | 138,152 | 1,368,034 |
| Tadano Ltd. | 196,076 | 1,849,600 |
| Taihei Dengyo Kaisha Ltd. | 23,251 | 579,856 |
| Taikisha Ltd. | 40,555 | 1,069,641 |
| Taisho Pharmaceutical Holdings Co., Ltd. | 29,979 | 1,837,459 |
| Taiyo Holdings Co., Ltd. | 9,359 | 485,783 |
| Taiyo Yuden Co., Ltd. | 81,479 | 4,022,710 |
| Takamatsu Construction Group Co., Ltd. | 26,296 | 518,565 |
| Takara Holdings, Inc. | 169,161 | 2,265,748 |
| Takara Standard Co., Ltd. | 75,169 | 1,051,265 |
| Takasago Thermal Engineering Co., Ltd. | 82,016 | 1,213,227 |
| Takeuchi Manufacturing Co., Ltd. | 39,034 | 987,391 |
| Takuma Co., Ltd. | 56,866 | 1,115,543 |
| Tamron Co., Ltd. | 23,792 | 427,872 |
| Tamura Corp. | 124,902 | 619,000 |
| TBS Holdings, Inc. | 40,327 | 735,455 |
| TechnoPro Holdings, Inc. | 11,604 | 843,016 |
| Tekken Corp. | 25,047 | 447,856 |
| The 77 Bank Ltd. | 54,471 | 716,804 |
| The Awa Bank Ltd. | 24,452 | 513,184 |
| The Bank of Kyoto Ltd. | 28,189 | 1,690,705 |
| The Chiba Bank Ltd. | 420,716 | 2,681,304 |
| The Chugoku Bank Ltd. | 120,851 | 960,773 |
| The Gunma Bank Ltd. | 429,379 | 1,378,333 |
| The Hachijuni Bank Ltd. | 372,145 | 1,226,046 |
| The Hokkoku Bank Ltd. | 20,966 | 517,951 |
| The Hyakugo Bank Ltd. | 155,084 | 439,604 |
| The Hyakujushi Bank Ltd. | 30,561 | 447,199 |
| The Iyo Bank Ltd. | 188,651 | 1,090,755 |
| The Japan Steel Works Ltd. | 78,263 | 1,998,079 |
| The Japan Wool Textile Co., Ltd. | 73,115 | 620,386 |
| The Juroku Bank Ltd. | 34,518 | 638,586 |
| The Keiyo Bank Ltd. | 148,449 | 599,147 |
| The Kiyo Bank Ltd. | 40,486 | 547,211 |
| The Musashino Bank Ltd. | 41,492 | 613,384 |
| The Nanto Bank Ltd. | 27,566 | 468,834 |
| The Nisshin Oillio Group Ltd. | 44,974 | 1,329,717 |
| The Ogaki Kyoritsu Bank Ltd. | 29,115 | 549,835 |
| The Okinawa Electric Power Co., Inc. | 76,932 | 1,028,985 |
| The Pack Corp. | 15,488 | 375,061 |
| The San-In Godo Bank Ltd. | 141,748 | 645,277 |
| The Shiga Bank Ltd. | 30,791 | 602,294 |
| The Shizuoka Bank Ltd. | 306,855 | 2,240,785 |
| The Sumitomo Warehouse Co., Ltd. | 72,760 | 999,818 |
| THK Co., Ltd. | 95,201 | 3,069,415 |
| Toa Corp. | 38,123 | 810,838 |
| Toagosei Co., Ltd. | 159,949 | 1,740,012 |
| Tobishima Corp. | 46,090 | 475,003 |
| Toda Corp. | 300,523 | 2,053,508 |
| Toei Co., Ltd. | 3,871 | 771,003 |
| Toho Co., Ltd. | 56,856 | 2,134,635 |
| Toho Zinc Co., Ltd. * | 52,923 | 1,133,071 |
| Tokai Carbon Co., Ltd. | 141,898 | 1,919,232 |
| TOKAI Holdings Corp. | 125,609 | 1,081,129 |
| Tokai Rika Co., Ltd. | 145,998 | 2,372,091 |
| Tokai Tokyo Financial Holdings, Inc. | 302,621 | 1,025,401 |
89
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Token Corp. | 13,758 | 1,079,565 |
| Tokuyama Corp. | 96,357 | 2,402,142 |
| Tokyo Century Corp. | 24,090 | 1,569,219 |
| Tokyo Dome Corp. * | 15,288 | 185,970 |
| Tokyo Ohka Kogyo Co., Ltd. | 21,618 | 1,270,215 |
| Tokyo Seimitsu Co., Ltd. | 29,775 | 1,293,958 |
| Tokyo Steel Manufacturing Co., Ltd. | 135,138 | 890,434 |
| Tokyo Tatemono Co., Ltd. | 157,374 | 2,231,951 |
| Tokyu Construction Co., Ltd. | 176,485 | 879,609 |
| TOMONY Holdings, Inc. | 136,994 | 389,611 |
| Tomy Co., Ltd. | 123,675 | 1,145,741 |
| Topcon Corp. | 115,218 | 1,448,066 |
| Toppan Forms Co., Ltd. | 85,583 | 817,754 |
| Topre Corp. | 119,218 | 1,698,638 |
| Topy Industries Ltd. * | 90,603 | 1,180,373 |
| Toshiba TEC Corp. | 26,522 | 970,864 |
| Totetsu Kogyo Co., Ltd. | 35,707 | 859,998 |
| Towa Pharmaceutical Co., Ltd. | 25,372 | 499,153 |
| Toyo Construction Co., Ltd. | 142,247 | 727,657 |
| Toyo Ink SC Holdings Co., Ltd. | 82,877 | 1,471,001 |
| Toyo Tire Corp. | 139,421 | 2,430,118 |
| Toyobo Co., Ltd. | 166,376 | 2,095,707 |
| Toyota Boshoku Corp. | 175,205 | 2,716,714 |
| TPR Co., Ltd. | 90,130 | 1,244,427 |
| Trancom Co., Ltd. | 8,398 | 641,634 |
| Transcosmos, Inc. | 32,746 | 820,955 |
| Trend Micro, Inc. | 40,244 | 1,934,009 |
| Trusco Nakayama Corp. | 43,359 | 1,033,307 |
| TSI Holdings Co., Ltd. * | 285,052 | 700,991 |
| Tsubaki Nakashima Co., Ltd. | 61,126 | 747,006 |
| Tsubakimoto Chain Co. | 73,135 | 1,979,738 |
| Tsukishima Kikai Co., Ltd. | 37,401 | 433,548 |
| Tsumura & Co. | 46,220 | 1,451,154 |
| TV Asahi Holdings Corp. | 37,782 | 724,504 |
| UACJ Corp. | 84,936 | 1,959,571 |
| Uchida Yoko Co., Ltd. | 9,777 | 412,499 |
| Ulvac, Inc. | 48,851 | 2,194,031 |
| Unipres Corp. | 229,595 | 1,971,836 |
| United Arrows Ltd. | 61,883 | 1,169,818 |
| United Super Markets Holdings, Inc. (b) | 166,788 | 1,665,688 |
| Ushio, Inc. | 116,811 | 1,456,026 |
| USS Co., Ltd. | 72,168 | 1,371,016 |
| Valor Holdings Co., Ltd. | 91,772 | 1,938,979 |
| Vital KSK Holdings, Inc. | 102,701 | 755,750 |
| VT Holdings Co., Ltd. | 175,745 | 691,169 |
| Wacoal Holdings Corp. | 83,637 | 1,783,586 |
| Wacom Co., Ltd. | 97,533 | 704,903 |
| Warabeya Nichiyo Holdings Co., Ltd. | 60,529 | 891,970 |
| Welcia Holdings Co., Ltd. | 43,885 | 1,402,557 |
| World Co., Ltd. | 42,351 | 533,462 |
| Xebio Holdings Co., Ltd. | 93,927 | 794,333 |
| YAMABIKO Corp. | 62,197 | 648,591 |
| Yamaguchi Financial Group, Inc. | 225,240 | 1,386,873 |
| Yamato Kogyo Co., Ltd. | 42,799 | 1,066,159 |
| Yamazen Corp. | 160,502 | 1,428,157 |
| Yaoko Co., Ltd. | 16,933 | 1,037,850 |
| Yellow Hat Ltd. | 45,161 | 706,621 |
| Yodogawa Steel Works Ltd. | 64,564 | 1,329,580 |
| Yokogawa Bridge Holdings Corp. | 32,204 | 585,198 |
| Yokohama Reito Co., Ltd. | 73,802 | 607,512 |
| Yondoshi Holdings, Inc. | 31,689 | 548,475 |
| Yoshinoya Holdings Co., Ltd. *(b) | 50,857 | 1,001,960 |
| Yuasa Trading Co., Ltd. | 44,152 | 1,218,801 |
| Zenkoku Hosho Co., Ltd. | 14,573 | 668,191 |
| Zensho Holdings Co., Ltd. | 57,962 | 1,543,441 |
| Zeon Corp. | 182,774 | 2,676,248 |
| ZERIA Pharmaceutical Co., Ltd. | 26,529 | 497,263 |
| Security | Number of Shares | Value ($) |
| Zojirushi Corp. | 32,590 | 525,527 |
| ZOZO, Inc. | 23,535 | 735,607 |
| 695,553,370 | ||
| Luxembourg 0.0% | ||
| Espirito Santo Financial Group S.A. *(a) | 8,470 | — |
| Netherlands 1.8% | ||
| Accell Group N.V. * | 22,126 | 821,810 |
| Adyen N.V. * | 376 | 874,441 |
| AMG Advanced Metallurgical Group N.V. | 28,780 | 1,056,728 |
| Arcadis N.V. * | 81,888 | 2,806,933 |
| ASM International N.V. | 13,559 | 3,679,989 |
| BE Semiconductor Industries N.V. | 27,446 | 2,078,124 |
| Brunel International N.V. * | 65,518 | 717,322 |
| Corbion N.V. | 34,877 | 1,993,917 |
| Eurocommercial Properties N.V. * | 56,114 | 1,198,757 |
| Flow Traders | 14,983 | 614,335 |
| ForFarmers N.V. | 99,620 | 660,216 |
| Fugro N.V. CVA * | 166,483 | 1,775,247 |
| GrandVision N.V. * | 23,436 | 716,855 |
| IMCD N.V. | 15,826 | 1,958,419 |
| Intertrust N.V. * | 54,505 | 893,135 |
| Koninklijke BAM Groep N.V. * | 795,574 | 2,147,645 |
| Koninklijke Vopak N.V. | 35,509 | 1,702,914 |
| OCI N.V. * | 59,594 | 1,287,566 |
| PostNL N.V. * | 759,804 | 3,249,087 |
| Prosus N.V. * | 5,597 | 666,184 |
| SBM Offshore N.V. | 143,543 | 2,558,604 |
| Sligro Food Group N.V. * | 88,530 | 2,127,663 |
| TKH Group N.V. | 39,371 | 1,974,622 |
| TomTom N.V. * | 60,886 | 574,969 |
| Van Lanschot Kempen N.V. * | 30,432 | 792,328 |
| Wereldhave N.V. *(b) | 80,922 | 1,363,337 |
| 40,291,147 | ||
| New Zealand 0.9% | ||
| Air New Zealand Ltd. * | 1,764,854 | 2,040,328 |
| Auckland International Airport Ltd. * | 263,365 | 1,445,769 |
| Chorus Ltd. | 273,235 | 1,567,499 |
| EBOS Group Ltd. | 97,742 | 2,021,890 |
| Fisher & Paykel Healthcare Corp., Ltd. | 69,726 | 1,482,909 |
| Genesis Energy Ltd. | 502,372 | 1,276,635 |
| Infratil Ltd. | 275,440 | 1,474,005 |
| Kiwi Property Group Ltd. | 766,700 | 666,174 |
| Mercury NZ Ltd. | 383,583 | 1,687,364 |
| Meridian Energy Ltd. | 559,306 | 2,318,026 |
| Ryman Healthcare Ltd. | 51,184 | 545,213 |
| SKY Network Television Ltd. * | 11,343,919 | 1,369,195 |
| SKYCITY Entertainment Group Ltd. * | 729,025 | 1,611,425 |
| Z Energy Ltd. * | 813,548 | 1,614,878 |
| 21,121,310 | ||
| Norway 1.6% | ||
| Aker A.S.A., A Shares | 32,481 | 2,621,260 |
| Aker BP A.S.A. | 59,873 | 1,566,348 |
| Aker Solutions A.S.A. * | 910,828 | 1,390,779 |
| Austevoll Seafood A.S.A. | 120,071 | 1,387,258 |
| Bakkafrost P/F * | 14,507 | 1,037,658 |
| Bonheur A.S.A. | 35,442 | 936,258 |
| BW Energy Ltd. * | 41,978 | 122,639 |
| BW LPG Ltd. | 169,114 | 1,011,306 |
| BW Offshore Ltd. | 139,803 | 572,069 |
| DNO A.S.A. * | 1,007,421 | 952,441 |
90
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Elkem A.S.A. | 369,069 | 1,306,227 |
| Entra A.S.A. | 56,975 | 1,193,485 |
| Europris A.S.A. | 139,120 | 821,441 |
| Frontline Ltd. | 64,504 | 438,915 |
| Gjensidige Forsikring A.S.A. | 81,302 | 1,878,669 |
| Kongsberg Gruppen A.S.A. | 44,819 | 921,152 |
| Leroy Seafood Group A.S.A. | 199,681 | 1,616,090 |
| Norwegian Finans Holding A.S.A. * | 67,566 | 600,186 |
| PGS A.S.A. * | 2,832,669 | 1,847,879 |
| Salmar A.S.A. | 25,930 | 1,717,426 |
| Schibsted A.S.A., B Shares * | 24,216 | 837,381 |
| Schibsted A.S.A., Class A * | 19,699 | 802,188 |
| SpareBank 1 Nord Norge | 117,381 | 1,048,142 |
| SpareBank 1 SMN | 111,054 | 1,289,526 |
| SpareBank 1 SR-Bank A.S.A. * | 116,717 | 1,353,928 |
| Storebrand A.S.A. * | 275,381 | 2,369,453 |
| TGS Nopec Geophysical Co. A.S.A. | 116,093 | 1,832,657 |
| Tomra Systems A.S.A. | 21,023 | 905,170 |
| Veidekke A.S.A. | 122,819 | 1,611,536 |
| XXL A.S.A. * | 355,198 | 803,444 |
| 36,792,911 | ||
| Poland 1.0% | ||
| Alior Bank S.A. * | 221,391 | 1,294,538 |
| Asseco Poland S.A. | 107,574 | 1,923,440 |
| Bank Handlowy w Warszawie S.A. * | 47,535 | 497,709 |
| Bank Millennium S.A. * | 642,917 | 712,511 |
| CCC S.A. * | 32,697 | 834,630 |
| Cyfrowy Polsat S.A. | 238,244 | 1,829,301 |
| Enea S.A. * | 981,233 | 1,717,579 |
| Eurocash S.A. * | 177,460 | 612,210 |
| Grupa Azoty S.A. * | 157,485 | 1,270,518 |
| Jastrzebska Spolka Weglowa S.A. * | 236,136 | 2,236,597 |
| LPP S.A. * | 413 | 867,624 |
| mBank S.A. * | 10,359 | 616,289 |
| Orange Polska S.A. * | 1,136,950 | 1,927,577 |
| Santander Bank Polska S.A. * | 23,778 | 1,343,130 |
| Tauron Polska Energia S.A. * | 5,933,468 | 4,077,985 |
| 21,761,638 | ||
| Portugal 0.3% | ||
| Banco Espirito Santo S.A. *(a) | 45,383 | — |
| CTT-Correios de Portugal S.A. * | 309,412 | 938,911 |
| EDP Renovaveis S.A. | 39,493 | 867,652 |
| Mota-Engil, SGPS, S.A. *(b) | 358,816 | 637,617 |
| NOS, SGPS S.A. | 328,315 | 1,105,463 |
| REN - Redes Energeticas Nacionais, SGPS, S.A. | 335,742 | 925,079 |
| Sonae, SGPS, S.A. | 2,050,963 | 1,692,832 |
| The Navigator Co. S.A. * | 470,021 | 1,604,278 |
| 7,771,832 | ||
| Republic of Korea 7.4% | ||
| AK Holdings, Inc. | 31,381 | 872,858 |
| AMOREPACIFIC Group | 34,317 | 1,976,244 |
| Asiana Airlines, Inc. * | 85,903 | 1,131,611 |
| BGF retail Co., Ltd. | 8,210 | 1,161,896 |
| Celltrion, Inc. * | 5,481 | 1,451,355 |
| Cheil Worldwide, Inc. | 67,629 | 1,170,791 |
| CJ ENM Co., Ltd. | 10,558 | 1,299,663 |
| CJ Logistics Corp. * | 7,804 | 1,139,169 |
| Com2uSCorp | 6,252 | 770,162 |
| Daesang Corp. * | 41,951 | 931,622 |
| Daewoo Engineering & Construction Co., Ltd. * | 508,084 | 2,654,609 |
| Security | Number of Shares | Value ($) |
| Daewoo Shipbuilding & Marine Engineering Co., Ltd. * | 87,509 | 1,982,291 |
| Daou Technology, Inc. | 27,967 | 677,083 |
| DB HiTek Co., Ltd. | 23,821 | 1,195,821 |
| DGB Financial Group, Inc. | 340,939 | 2,145,473 |
| Dongkuk Steel Mill Co., Ltd. | 385,935 | 3,088,167 |
| Doosan Bobcat, Inc. * | 36,156 | 1,041,074 |
| Doosan Co., Ltd. | 31,828 | 1,321,563 |
| Doosan Infracore Co., Ltd. * | 359,782 | 2,517,033 |
| Fila Holdings Corp. | 22,462 | 799,715 |
| Green Cross Corp. | 3,204 | 1,079,407 |
| Green Cross Holdings Corp. | 22,662 | 748,340 |
| GS Engineering & Construction Corp. | 121,636 | 3,935,442 |
| GS Home Shopping, Inc. | 6,005 | 726,907 |
| GS Retail Co., Ltd. | 43,096 | 1,388,585 |
| Handsome Co., Ltd. | 20,697 | 684,373 |
| Hanjin Transportation Co., Ltd. * | 20,757 | 781,505 |
| Hanon Systems | 135,687 | 1,865,923 |
| Hansol Paper Co., Ltd. | 52,875 | 616,522 |
| Hanssem Co., Ltd. * | 8,633 | 764,560 |
| Hanwha Aerospace Co., Ltd. * | 47,270 | 1,552,526 |
| Hanwha Life Insurance Co., Ltd. | 1,637,614 | 4,671,609 |
| Harim Holdings Co., Ltd. | 124,499 | 961,862 |
| HDC Holdings Co., Ltd. * | 72,526 | 706,862 |
| Hite Jinro Co., Ltd. * | 22,720 | 692,621 |
| HMM Co., Ltd. * | 260,820 | 4,410,841 |
| Hotel Shilla Co., Ltd. | 20,408 | 1,482,237 |
| Huchems Fine Chemical Corp. | 31,984 | 651,921 |
| Hyosung Corp. * | 12,512 | 892,044 |
| Hyundai Construction Equipment Co., Ltd. * | 75,083 | 2,502,767 |
| Hyundai Corp. | 60,843 | 939,587 |
| Hyundai Department Store Co., Ltd. | 28,124 | 2,052,664 |
| Hyundai Electric & Energy System Co., Ltd. * | 54,773 | 860,475 |
| Hyundai Elevator Co., Ltd. * | 17,916 | 687,298 |
| Hyundai Greenfood Co., Ltd. | 129,722 | 1,046,089 |
| Hyundai Home Shopping Network Corp. | 10,320 | 730,254 |
| Hyundai Mipo Dockyard Co., Ltd. * | 21,716 | 1,043,760 |
| Hyundai Rotem Co., Ltd. * | 37,569 | 655,409 |
| Hyundai Wia Corp. | 75,469 | 5,179,048 |
| iMarketKorea, Inc. | 94,867 | 727,018 |
| IS Dongseo Co., Ltd. * | 23,012 | 1,099,906 |
| JB Financial Group Co., Ltd. | 250,631 | 1,300,560 |
| Kakao Corp. | 3,695 | 1,604,949 |
| Kangwon Land, Inc. * | 90,409 | 1,947,395 |
| KCC Corp. | 10,646 | 1,890,411 |
| KEPCO Plant Service & Engineering Co., Ltd. * | 30,776 | 735,501 |
| Kolon Corp. | 36,163 | 730,663 |
| Kolon Industries, Inc. | 61,777 | 3,024,241 |
| Korea Aerospace Industries Ltd. * | 47,965 | 1,413,121 |
| Korea Electric Terminal Co., Ltd. | 16,254 | 1,150,150 |
| Korea Investment Holdings Co., Ltd. * | 23,055 | 1,791,457 |
| Korea PetroChemical Ind Co., Ltd. * | 9,737 | 3,150,333 |
| Korean Reinsurance Co. | 188,708 | 1,320,200 |
| Kumho Petrochemical Co., Ltd. * | 25,272 | 4,746,232 |
| Kumho Tire Co., Inc. * | 241,361 | 853,948 |
| LF Corp. | 76,574 | 1,053,020 |
| LG Hausys Ltd. | 23,569 | 1,499,941 |
| LG HelloVision Co., Ltd. | 147,611 | 593,860 |
| LG Innotek Co., Ltd. | 18,663 | 3,305,685 |
| LG International Corp. | 164,461 | 3,996,249 |
| Lotte Chilsung Beverage Co., Ltd. * | 6,051 | 616,680 |
| LOTTE Fine Chemical Co., Ltd. | 24,651 | 1,171,663 |
| LOTTE Himart Co., Ltd. | 65,632 | 2,187,733 |
| LS Corp. | 65,058 | 4,047,667 |
| LS Electric Co., Ltd. | 23,841 | 1,220,167 |
91
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Mando Corp. * | 74,939 | 4,168,836 |
| Meritz Financial Group, Inc. | 82,293 | 897,276 |
| Meritz Fire & Marine Insurance Co., Ltd. | 144,130 | 2,065,414 |
| Meritz Securities Co., Ltd. | 247,399 | 827,966 |
| Mirae Asset Daewoo Co., Ltd. | 165,220 | 1,373,525 |
| NCSoft Corp. | 2,823 | 2,351,872 |
| Nexen Tire Corp. * | 123,267 | 923,817 |
| NH Investment & Securities Co., Ltd. * | 88,449 | 854,180 |
| NongShim Co., Ltd. | 4,084 | 999,644 |
| OCI Co., Ltd. * | 43,284 | 4,815,754 |
| Orion Corp. | 11,273 | 1,289,346 |
| Ottogi Corp. | 1,236 | 616,075 |
| Pan Ocean Co., Ltd. | 240,693 | 1,225,424 |
| Partron Co., Ltd. | 62,314 | 621,199 |
| Poongsan Corp. | 71,530 | 2,330,216 |
| S&T Motiv Co., Ltd. | 11,686 | 652,169 |
| S-1 Corp. | 16,268 | 1,201,819 |
| Samsung Card Co., Ltd. | 43,974 | 1,289,669 |
| Samsung Engineering Co., Ltd. * | 100,566 | 1,154,696 |
| Samsung Securities Co., Ltd. | 34,548 | 1,123,925 |
| Seoul Semiconductor Co., Ltd. | 45,811 | 807,350 |
| Seoyon E-Hwa Co., Ltd. * | 148,477 | 938,306 |
| SFA Engineering Corp. | 17,961 | 678,633 |
| Shinsegae, Inc. | 8,418 | 2,000,539 |
| SK Chemicals Co., Ltd. | 5,871 | 1,970,064 |
| SK Gas Ltd. | 14,135 | 1,152,440 |
| SKC Co., Ltd. | 16,507 | 1,726,366 |
| Sungwoo Hitech Co., Ltd. | 362,657 | 2,111,061 |
| Taekwang Industrial Co., Ltd. * | 2,152 | 1,804,347 |
| Taeyoung Engineering & Construction Co., Ltd. | 22,664 | 239,046 |
| TY Holdings Co., Ltd. * | 22,022 | 480,231 |
| WONIK IPS Co., Ltd. | 18,921 | 837,846 |
| Youngone Corp. | 43,015 | 1,608,037 |
| Yuhan Corp. | 19,697 | 1,086,973 |
| 169,042,449 | ||
| Singapore 1.5% | ||
| Ascendas Real Estate Investment Trust | 737,909 | 1,631,535 |
| CapitaLand Integrated Commercial Trust | 1,120,498 | 1,769,607 |
| City Developments Ltd. | 362,019 | 2,003,805 |
| Genting Singapore Ltd. | 3,996,136 | 2,569,524 |
| Golden Agri-Resources Ltd. | 23,147,395 | 3,342,333 |
| Keppel Infrastructure Trust | 1,864,023 | 764,001 |
| Mapletree Commercial Trust | 414,074 | 635,264 |
| Mapletree Industrial Trust | 303,229 | 606,595 |
| Mapletree Logistics Trust | 460,430 | 640,592 |
| Mapletree North Asia Commercial Trust | 852,231 | 615,283 |
| SATS Ltd. * | 507,223 | 1,678,410 |
| Sembcorp Industries Ltd. | 2,074,549 | 2,699,083 |
| Sembcorp Marine Ltd. * | 11,500,637 | 1,323,304 |
| Singapore Exchange Ltd. | 232,595 | 1,747,480 |
| Singapore Post Ltd. | 1,648,905 | 861,840 |
| Singapore Press Holdings Ltd. | 2,273,773 | 2,393,985 |
| Singapore Technologies Engineering Ltd. | 890,433 | 2,517,882 |
| StarHub Ltd. | 946,875 | 904,363 |
| Suntec Real Estate Investment Trust | 579,596 | 632,033 |
| UOL Group Ltd. | 235,432 | 1,308,448 |
| Venture Corp., Ltd. | 203,154 | 2,933,411 |
| 33,578,778 | ||
| Spain 1.4% | ||
| Abengoa S.A., B Shares *(a) | 192,522,094 | 724,418 |
| Almirall S.A. | 42,990 | 576,603 |
| Applus Services S.A. * | 159,554 | 1,651,976 |
| Cellnex Telecom S.A. | 15,198 | 831,052 |
| Security | Number of Shares | Value ($) |
| Cia de Distribucion Integral Logista Holdings S.A. | 49,003 | 952,867 |
| Cie Automotive S.A. | 39,630 | 1,094,822 |
| Construcciones y Auxiliar de Ferrocarriles S.A. | 15,010 | 668,642 |
| Distribuidora Internacional de Alimentacion S.A. * | 4,955,712 | 727,844 |
| Ebro Foods S.A. | 73,737 | 1,596,715 |
| Ence Energia y Celulosa S.A. * | 170,372 | 879,096 |
| Ercros S.A. | 191,092 | 560,153 |
| Euskaltel S.A. | 70,030 | 702,120 |
| Faes Farma S.A. | 135,455 | 603,404 |
| Gestamp Automocion S.A. * | 400,927 | 2,190,877 |
| Indra Sistemas S.A. * | 65,980 | 582,630 |
| Inmobiliaria Colonial Socimi S.A. | 57,675 | 565,648 |
| Liberbank S.A. * | 1,926,080 | 603,172 |
| Mediaset Espana Comunicacion S.A. * | 399,531 | 2,410,205 |
| Melia Hotels International S.A. * | 166,424 | 1,414,038 |
| Merlin Properties Socimi S.A. | 97,434 | 1,015,308 |
| Obrascon Huarte Lain S.A. *(b) | 875,907 | 623,021 |
| Prosegur Cash S.A. | 496,039 | 475,653 |
| Prosegur Cia de Seguridad S.A. | 507,065 | 1,571,924 |
| Sacyr S.A. | 404,730 | 1,027,719 |
| Siemens Gamesa Renewable Energy S.A. | 83,317 | 3,114,809 |
| Tecnicas Reunidas S.A. *(b) | 50,549 | 741,799 |
| Unicaja Banco S.A. * | 2,239,666 | 1,973,636 |
| Viscofan S.A. | 21,994 | 1,555,060 |
| Zardoya Otis S.A. | 95,912 | 621,672 |
| 32,056,883 | ||
| Sweden 3.6% | ||
| AAK AB | 79,407 | 1,710,539 |
| AddTech AB, B shares | 51,459 | 753,498 |
| AF Poyry AB * | 44,698 | 1,222,795 |
| Annehem Fastigheter AB, B Shares * | 51,468 | 166,656 |
| Arjo AB, B Shares | 125,329 | 915,338 |
| Attendo AB * | 114,619 | 631,216 |
| Axfood AB | 84,628 | 2,027,018 |
| Beijer Ref AB | 13,937 | 592,979 |
| Betsson AB * | 122,617 | 1,003,550 |
| Bilia AB, A Shares * | 103,660 | 1,396,925 |
| BillerudKorsnas AB | 171,004 | 3,148,268 |
| Bonava AB, B Shares * | 147,837 | 1,583,069 |
| Bravida Holding AB | 114,186 | 1,457,214 |
| Castellum AB | 76,033 | 1,783,134 |
| Clas Ohlson AB, B Shares * | 59,980 | 541,956 |
| Cloetta AB, B Shares | 208,842 | 576,795 |
| Concentric AB | 28,595 | 631,806 |
| Coor Service Management Holding AB * | 84,545 | 589,795 |
| Dometic Group AB * | 173,534 | 2,404,657 |
| Elekta AB, B Shares | 110,490 | 1,497,516 |
| Fabege AB | 54,044 | 755,642 |
| Fastighets AB Balder, B Shares * | 11,358 | 547,341 |
| Getinge AB, B Shares | 111,657 | 2,840,573 |
| Granges AB * | 107,862 | 1,377,792 |
| Hexpol AB | 195,231 | 2,105,681 |
| Holmen AB, B Shares | 48,126 | 2,127,831 |
| Industrivarden AB, A Shares * | 61,258 | 2,187,760 |
| Industrivarden AB, C Shares * | 44,496 | 1,477,356 |
| Indutrade AB * | 81,774 | 1,876,886 |
| Intrum AB | 49,955 | 1,397,534 |
| Inwido AB * | 62,590 | 955,231 |
| JM AB | 74,579 | 2,623,551 |
| Kinnevik AB, B Shares * | 68,118 | 3,182,046 |
| Kungsleden AB | 79,135 | 815,363 |
| L E Lundbergfortagen AB, B Shares * | 31,508 | 1,576,131 |
| Lifco AB, B Shares | 9,385 | 897,151 |
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Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Lindab International AB | 56,323 | 1,236,409 |
| Loomis AB | 82,761 | 2,175,406 |
| Lundin Energy AB | 51,981 | 1,689,981 |
| Mekonomen AB * | 58,785 | 780,292 |
| Modern Times Group MTG AB, B Shares * | 47,497 | 698,876 |
| NCC AB, B Shares | 98,028 | 1,634,948 |
| Nibe Industrier AB, B Shares | 52,673 | 1,663,569 |
| Nobia AB * | 210,164 | 1,541,184 |
| Nolato AB, B Shares * | 7,063 | 634,401 |
| Nordic Entertainment Group AB, B Shreas * | 20,551 | 938,974 |
| Pandox AB * | 46,380 | 828,204 |
| Peab AB * | 238,385 | 2,840,721 |
| Ratos AB, B Shares | 462,066 | 2,337,806 |
| Resurs Holding AB * | 108,173 | 599,323 |
| Saab AB, B Shares * | 67,316 | 1,790,264 |
| SAS AB *(b) | 3,544,705 | 765,478 |
| Scandic Hotels Group AB *(b) | 234,172 | 1,098,365 |
| Svenska Cellulosa AB SCA, B Shares * | 212,620 | 3,676,510 |
| Sweco AB, B Shares | 57,909 | 836,913 |
| Swedish Orphan Biovitrum AB * | 27,736 | 454,667 |
| Thule Group AB * | 37,531 | 1,577,177 |
| Wallenstam AB, B Shares | 34,782 | 490,255 |
| Wihlborgs Fastigheter AB | 35,134 | 683,432 |
| 82,351,748 | ||
| Switzerland 3.3% | ||
| Allreal Holding AG | 6,219 | 1,265,370 |
| ALSO Holding AG * | 3,308 | 900,720 |
| ams AG * | 54,376 | 1,284,170 |
| Arbonia AG * | 52,854 | 890,922 |
| Aryzta AG * | 2,924,443 | 2,519,679 |
| Autoneum Holding AG * | 8,109 | 1,459,136 |
| Banque Cantonale Vaudoise | 9,156 | 964,854 |
| Barry Callebaut AG | 1,300 | 2,826,025 |
| Belimo Holding AG | 98 | 717,707 |
| BKW AG | 11,090 | 1,237,258 |
| Bobst Group S.A. | 8,374 | 566,561 |
| Bucher Industries AG | 4,981 | 2,415,397 |
| Burckhardt Compression Holding AG | 2,074 | 762,887 |
| Cembra Money Bank AG | 11,180 | 1,170,115 |
| Conzzeta AG | 856 | 1,193,275 |
| Daetwyler Holding AG | 3,747 | 1,138,214 |
| dormakaba Holding AG | 1,624 | 992,016 |
| Dufry AG * | 63,155 | 4,336,369 |
| Emmi AG | 1,184 | 1,177,068 |
| EMS-Chemie Holding AG | 2,095 | 1,862,891 |
| Flughafen Zuerich AG * | 10,662 | 1,891,436 |
| Forbo Holding AG | 516 | 894,864 |
| Galenica AG | 34,717 | 2,241,477 |
| GAM Holding AG * | 612,224 | 1,623,039 |
| Helvetia Holding AG | 23,709 | 2,611,054 |
| Huber & Suhner AG | 12,972 | 1,004,460 |
| Implenia AG | 28,168 | 909,167 |
| Ina Invest Holding AG * | 8,494 | 182,021 |
| Inficon Holding AG | 676 | 746,714 |
| Komax Holding AG *(b) | 2,840 | 738,469 |
| Landis & Gyr Group AG * | 20,297 | 1,414,714 |
| Logitech International S.A. | 38,288 | 4,103,283 |
| Mobimo Holding AG * | 2,546 | 797,295 |
| OC Oerlikon Corp. AG | 180,902 | 1,962,286 |
| Partners Group Holding AG | 2,626 | 3,163,209 |
| PSP Swiss Property AG | 8,204 | 982,341 |
| Rieter Holding AG | 6,134 | 738,546 |
| Schweiter Technologies AG | 688 | 1,165,793 |
| SFS Group AG | 11,047 | 1,387,434 |
| Security | Number of Shares | Value ($) |
| Siegfried Holding AG * | 1,332 | 1,043,913 |
| SIG Combibloc Group AG * | 90,098 | 2,004,389 |
| St. Galler Kantonalbank AG | 977 | 457,041 |
| Stadler Rail AG (b) | 16,090 | 806,899 |
| Straumann Holding AG | 1,155 | 1,402,126 |
| Sulzer AG | 18,491 | 2,079,293 |
| Tecan Group AG | 1,933 | 816,075 |
| Temenos AG | 6,519 | 883,914 |
| u-blox Holding AG * | 7,248 | 572,442 |
| Valiant Holding AG | 7,821 | 784,433 |
| Valora Holding AG * | 6,689 | 1,533,158 |
| VAT Group AG | 5,515 | 1,540,033 |
| Vetropack Holding AG * | 7,731 | 487,618 |
| Vifor Pharma AG | 15,933 | 1,990,525 |
| Vontobel Holding AG | 11,092 | 846,633 |
| Zur Rose Group AG * | 2,464 | 1,167,631 |
| 76,654,359 | ||
| United Kingdom 10.8% | ||
| 888 Holdings plc | 230,673 | 957,837 |
| AA plc * | 3,787,079 | 1,847,857 |
| AG Barr plc * | 69,473 | 486,623 |
| Airtel Africa plc | 971,347 | 1,082,359 |
| Ascential plc * | 131,269 | 656,294 |
| Ashmore Group plc | 140,699 | 811,238 |
| Auto Trader Group plc * | 120,033 | 923,336 |
| Avast plc | 73,336 | 473,694 |
| B&M European Value Retail S.A. | 426,307 | 3,256,654 |
| Bank of Georgia Group plc * | 39,546 | 551,787 |
| Beazley plc * | 320,875 | 1,551,313 |
| Biffa plc * | 227,421 | 810,792 |
| Big Yellow Group plc | 34,888 | 553,618 |
| Bodycote plc | 205,486 | 2,077,108 |
| Brewin Dolphin Holdings plc | 192,426 | 789,606 |
| Britvic plc | 165,875 | 1,877,311 |
| C&C Group plc * | 304,720 | 1,097,025 |
| Capita plc * | 3,769,234 | 2,384,044 |
| Card Factory plc * | 1,807,906 | 1,166,503 |
| Centamin plc | 863,638 | 1,220,131 |
| Cineworld Group plc *(b) | 1,759,868 | 2,415,200 |
| Clarkson plc | 15,320 | 544,040 |
| Close Brothers Group plc | 130,637 | 2,840,109 |
| Coats Group plc * | 1,114,497 | 969,187 |
| Computacenter plc | 53,908 | 1,572,194 |
| ConvaTec Group plc | 595,454 | 1,568,439 |
| Costain Group plc *(b) | 831,636 | 715,067 |
| Countryside Properties plc * | 250,990 | 1,633,834 |
| Cranswick plc | 38,685 | 1,839,990 |
| Crest Nicholson Holdings plc * | 514,658 | 2,311,175 |
| Daily Mail & General Trust plc N.V., Class A | 169,628 | 2,134,413 |
| Dechra Pharmaceuticals plc | 12,564 | 602,505 |
| Derwent London plc | 23,177 | 1,072,565 |
| DFS Furniture plc * | 310,266 | 939,141 |
| Dignity plc * | 96,902 | 692,296 |
| Diploma plc | 32,718 | 1,060,324 |
| Domino's Pizza Group plc | 140,890 | 603,148 |
| Dunelm Group plc * | 46,575 | 818,515 |
| Electrocomponents plc | 220,614 | 2,991,874 |
| Elementis plc * | 994,545 | 1,753,388 |
| Entain plc * | 128,120 | 2,531,032 |
| Equiniti Group plc * | 332,821 | 660,751 |
| Essentra plc * | 362,988 | 1,486,957 |
| Ferrexpo plc | 443,594 | 2,078,874 |
| Forterra plc * | 193,285 | 699,901 |
| Frasers Group plc * | 253,642 | 1,663,863 |
| Fresnillo plc | 87,530 | 1,113,619 |
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Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Games Workshop Group plc | 6,311 | 843,077 |
| Genus plc | 14,036 | 988,055 |
| Grafton Group plc | 277,535 | 3,839,477 |
| Grainger plc | 181,545 | 682,263 |
| Great Portland Estates plc | 97,796 | 927,567 |
| Greencore Group plc * | 773,295 | 1,642,258 |
| Greggs plc * | 70,741 | 2,063,118 |
| Halfords Group plc * | 661,622 | 2,677,916 |
| Halma plc | 70,431 | 2,232,307 |
| Hammerson plc | 3,777,680 | 1,379,548 |
| Hargreaves Lansdown plc | 51,808 | 1,094,098 |
| Hikma Pharmaceuticals plc | 49,251 | 1,539,662 |
| Hill & Smith Holdings plc | 47,149 | 838,490 |
| Hiscox Ltd. * | 204,007 | 2,692,499 |
| HomeServe plc | 81,789 | 1,190,376 |
| Howden Joinery Group plc * | 329,921 | 3,211,312 |
| Hunting plc | 324,213 | 1,143,178 |
| Ibstock plc * | 380,707 | 1,135,857 |
| IG Group Holdings plc | 235,175 | 2,561,339 |
| Indivior plc * | 1,309,486 | 2,352,570 |
| Intermediate Capital Group plc | 109,640 | 2,653,411 |
| Intu Properties plc *(a)(b) | 11,806,310 | 87,946 |
| IWG plc * | 479,127 | 2,411,524 |
| J.D. Wetherspoon plc * | 74,204 | 1,282,284 |
| JD Sports Fashion plc * | 126,152 | 1,464,603 |
| John Laing Group plc | 232,077 | 978,593 |
| Jupiter Fund Management plc | 563,457 | 2,327,072 |
| Just Group plc * | 1,776,762 | 2,246,862 |
| KAZ Minerals plc | 127,850 | 1,491,824 |
| Keller Group plc | 170,857 | 1,875,171 |
| Kier Group plc *(b) | 1,667,057 | 2,016,067 |
| Lancashire Holdings Ltd. | 161,410 | 1,387,855 |
| Man Group plc | 1,461,474 | 3,062,889 |
| Marshalls plc * | 80,758 | 770,031 |
| Marston's plc * | 1,575,165 | 2,106,442 |
| Mediclinic International plc * | 383,393 | 1,529,807 |
| Melrose Industries plc * | 1,501,276 | 3,482,133 |
| Mitchells & Butlers plc * | 364,873 | 1,550,793 |
| Moneysupermarket.com Group plc | 277,952 | 1,126,954 |
| Morgan Advanced Materials plc | 342,118 | 1,482,778 |
| Morgan Sindall Group plc | 61,219 | 1,412,241 |
| National Express Group plc * | 836,468 | 3,496,705 |
| Ocado Group plc * | 26,479 | 814,447 |
| OSB Group plc * | 161,495 | 1,001,588 |
| Pagegroup plc * | 366,310 | 2,449,045 |
| Paragon Banking Group plc | 186,716 | 1,172,105 |
| PayPoint plc | 59,874 | 488,866 |
| Petra Diamonds Ltd. * | 22,638,263 | 538,060 |
| Petrofac Ltd. *(b) | 768,007 | 1,399,098 |
| Petropavlovsk plc * | 2,073,047 | 794,142 |
| Pets at Home Group plc | 393,903 | 2,172,024 |
| Phoenix Group Holdings plc | 252,621 | 2,507,646 |
| Playtech plc * | 505,271 | 3,342,778 |
| Plus500 Ltd. | 90,547 | 1,730,538 |
| Polymetal International plc | 112,353 | 2,232,904 |
| Polypipe Group plc * | 105,306 | 811,229 |
| Premier Oil plc *(b) | 4,877,194 | 1,944,042 |
| Provident Financial plc * | 725,822 | 2,847,451 |
| PZ Cussons plc | 188,353 | 645,174 |
| QinetiQ Group plc | 424,083 | 1,771,617 |
| Quilter plc | 576,800 | 1,177,380 |
| Rank Group plc * | 251,607 | 623,340 |
| Rathbone Brothers plc | 28,198 | 607,913 |
| Redde Northgate plc | 562,487 | 2,162,637 |
| Redrow plc | 234,479 | 1,786,648 |
| Renishaw plc * | 11,131 | 894,830 |
| Rhi Magnesita N.V. | 19,254 | 1,056,841 |
| Rightmove plc * | 102,446 | 809,249 |
| Security | Number of Shares | Value ($) |
| Rotork plc | 403,404 | 2,012,350 |
| Safestore Holdings plc | 48,990 | 547,259 |
| Saga plc * | 579,667 | 3,061,816 |
| Savills plc * | 109,986 | 1,776,061 |
| Schroders plc | 53,203 | 2,605,642 |
| Segro plc | 135,529 | 1,723,918 |
| Senior plc * | 1,657,992 | 2,371,355 |
| Serco Group plc * | 597,317 | 1,085,642 |
| SIG plc * | 4,161,869 | 1,946,941 |
| Signature Aviation plc * | 765,288 | 4,273,379 |
| Softcat plc | 28,628 | 585,964 |
| Spectris plc | 79,001 | 3,351,094 |
| Speedy Hire plc * | 641,690 | 574,174 |
| Spirax-Sarco Engineering plc | 15,337 | 2,296,510 |
| Spire Healthcare Group plc * | 675,358 | 1,384,224 |
| Spirent Communications plc | 185,236 | 609,895 |
| SSP Group plc | 448,843 | 2,161,206 |
| ST Modwen Properties plc | 144,878 | 800,088 |
| St. James's Place plc | 183,234 | 3,007,549 |
| Stagecoach Group plc * | 1,744,286 | 2,267,980 |
| SThree plc * | 195,113 | 911,111 |
| Superdry plc * | 427,792 | 1,590,936 |
| Synthomer plc | 260,919 | 1,677,309 |
| TalkTalk Telecom Group plc | 912,316 | 1,233,418 |
| Ted Baker plc * | 314,042 | 493,945 |
| Telecom Plus plc | 40,850 | 672,784 |
| The Go-Ahead Group plc * | 141,234 | 2,318,173 |
| The Restaurant Group plc * | 1,110,936 | 1,691,435 |
| The Unite Group plc * | 45,830 | 622,168 |
| TI Fluid Systems plc | 393,132 | 1,458,740 |
| TP ICAP Group plc | 316,459 | 1,061,860 |
| Tullow Oil plc *(b) | 1,747,706 | 1,073,172 |
| Tyman plc * | 256,404 | 1,209,865 |
| UDG Healthcare plc | 129,501 | 1,396,843 |
| Ultra Electronics Holdings plc | 41,277 | 1,103,404 |
| Vesuvius plc | 318,986 | 2,323,528 |
| Victrex plc | 51,227 | 1,515,490 |
| Vistry Group plc * | 194,004 | 2,283,817 |
| WH Smith plc * | 112,843 | 3,013,328 |
| William Hill plc * | 1,072,806 | 4,058,705 |
| Wizz Air Holdings plc * | 12,580 | 933,929 |
| Workspace Group plc | 48,696 | 520,827 |
| 248,555,909 | ||
| Total Common Stock | ||
| (Cost $1,935,532,086) | 2,275,963,578 | |
| Preferred Stock 0.3% of net assets | ||
| Germany 0.3% | ||
| Draegerwerk AG & Co. KGaA | 18,155 | 1,394,913 |
| Jungheinrich AG | 53,547 | 2,320,334 |
| Sartorius AG | 2,131 | 1,100,343 |
| Schaeffler AG | 188,879 | 1,623,170 |
| Sixt SE | 15,946 | 1,203,896 |
| Total Preferred Stock | ||
| (Cost $6,066,027) | 7,642,656 | |
| Rights 0.0% of net assets | ||
| United Kingdom 0.0% | ||
| Mitchells & Butlers plc *(a) | 194,457 | 255,558 |
| Total Rights | ||
| (Cost $—) | 255,558 | |
94
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Other Investment Companies 1.6% of net assets | ||
| United States 1.6% | ||
| Money Market Fund 0.1% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (c) | 2,232,257 | 2,232,257 |
| Securities Lending Collateral 1.5% | ||
| Wells Fargo Government Money Market Fund, Select Class 0.03% (c) | 33,296,592 | 33,296,592 |
| Total Other Investment Companies | ||
| (Cost $35,528,849) | 35,528,849 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| MSCI EAFE Index, expires 03/19/21 | 73 | 7,898,600 | (202,115) | |||
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | All or a portion of this security is on loan. Securities on loan were valued at $30,840,773. |
| (c) | The rate shown is the 7-day yield. |
| CVA — | Dutch Certificate |
| REIT — | Real Estate Investment Trust |
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Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental International Small Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $1,701,940,636 | $— | $— | $1,701,940,636 | |
| Australia | 132,869,668 | — | 1,072,788 | 133,942,456 | |
| Hong Kong | 96,956,509 | — | — * | 96,956,509 | |
| Italy | 54,728,407 | — | 10,946 | 54,739,353 | |
| Luxembourg | — | — | — * | — | |
| Portugal | 7,771,832 | — | — * | 7,771,832 | |
| Spain | 31,332,465 | — | 724,418 | 32,056,883 | |
| United Kingdom | 248,467,963 | — | 87,946 | 248,555,909 | |
| Preferred Stock1 | 7,642,656 | — | — | 7,642,656 | |
| Rights 1 | |||||
| United Kingdom | — | — | 255,558 | 255,558 | |
| Other Investment Companies1 | 35,528,849 | — | — | 35,528,849 | |
| Liabilities | |||||
| Futures Contracts2 | (202,115) | — | — | (202,115) | |
| Total | $2,317,036,870 | $— | $2,151,656 | $2,319,188,526 |
| * | Level 3 amount shown includes securities determined to have no value at February 28, 2021. |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Small Company Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in unaffiliated issuers, at value (cost $1,943,830,370) including securities on loan of $30,840,773 | $2,286,094,049 | |
| Collateral invested for securities on loan, at value (cost $33,296,592) | 33,296,592 | |
| Deposit with broker for futures contracts | 1,293,600 | |
| Foreign currency, at value (cost $2,989,918) | 2,978,225 | |
| Receivables: | ||
| Investments sold | 9,671 | |
| Dividends | 3,945,027 | |
| Foreign tax reclaims | 1,216,670 | |
| Income from securities on loan | 210,232 | |
| Other assets | + | 645 |
| Total assets | 2,329,044,711 | |
| Liabilities | ||
| Collateral held for securities on loan | 33,296,592 | |
| Payables: | ||
| Investments bought | 2,047,312 | |
| Management fees | 684,041 | |
| Variation margin on futures contracts | + | 101,409 |
| Total liabilities | 36,129,354 | |
| Net Assets | ||
| Total assets | 2,329,044,711 | |
| Total liabilities | – | 36,129,354 |
| Net assets | $2,292,915,357 | |
| Net Assets by Source | ||
| Capital received from investors | 2,124,175,830 | |
| Total distributable earnings | 168,739,527 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $2,292,915,357 | 63,500,000 | $36.11 | ||
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Small Company Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $4,786,283) | $38,629,693 | |
| Securities on loan, net | + | 2,384,712 |
| Total investment income | 41,014,405 | |
| Expenses | ||
| Management fees | 7,350,837 | |
| Professional fees | + | 9,705* |
| Total expenses | 7,360,542 | |
| Expense reduction by CSIM | - | 9,705* |
| Net expenses | – | 7,350,837 |
| Net investment income | 33,663,568 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on unaffiliated issuers | (89,628,657) | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 74,321,628 | |
| Net realized gains on futures contracts | 1,604,897 | |
| Net realized gains on foreign currency transactions | + | 136,682 |
| Net realized losses | (13,565,450) | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers | 486,819,222 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 205,433 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 92,425 |
| Net change in unrealized appreciation (depreciation) | + | 487,117,080 |
| Net realized and unrealized gains | 473,551,630 | |
| Increase in net assets resulting from operations | $507,215,198 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental International Small Company Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $33,663,568 | $50,482,401 | ||
| Net realized losses | (13,565,450) | (10,362,944) | ||
| Net change in unrealized appreciation (depreciation) | + | 487,117,080 | (164,889,280) | |
| Increase (decrease) in net assets resulting from operations | 507,215,198 | (124,769,823) | ||
| Distributions to Shareholders | ||||
| Total distributions | ($38,178,680) | ($57,727,940) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 5,400,000 | $162,294,485 | 8,500,000 | $269,184,367 | ||||
| Shares redeemed | + | (8,500,000) | (238,718,494) | (900,000) | (28,952,009) | |||
| Net transactions in fund shares | (3,100,000) | ($76,424,009) | 7,600,000 | $240,232,358 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 66,600,000 | $1,900,302,848 | 59,000,000 | $1,842,568,253 | ||||
| Total increase (decrease) | + | (3,100,000) | 392,612,509 | 7,600,000 | 57,734,595 | |||
| End of period | 63,500,000 | $2,292,915,357 | 66,600,000 | $1,900,302,848 | ||||
99
Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental Emerging Markets Large Company Index ETF
Financial Statements
Financial Highlights
| 3/1/20– 2/28/21 | 3/1/19– 2/29/20 | 3/1/18– 2/28/19 | 3/1/17– 2/28/18 | 3/1/16– 2/28/17 | ||
| Per-Share Data | ||||||
| Net asset value at beginning of period | $25.54 | $28.08 | $31.22 | $26.06 | $17.78 | |
| Income (loss) from investment operations: | ||||||
| Net investment income (loss)1 | 0.79 | 1.02 | 0.85 | 0.71 | 0.49 | |
| Net realized and unrealized gains (losses) | 4.02 | (2.53) | (3.20) | 5.06 | 8.18 | |
| Total from investment operations | 4.81 | (1.51) | (2.35) | 5.77 | 8.67 | |
| Less distributions: | ||||||
| Distributions from net investment income | (0.71) | (1.03) | (0.79) | (0.61) | (0.39) | |
| Net asset value at end of period | $29.64 | $25.54 | $28.08 | $31.22 | $26.06 | |
| Total return | 19.12% | (5.74%) | (7.36%) | 22.32% | 49.03% | |
| Ratios/Supplemental Data | ||||||
| Ratios to average net assets: | ||||||
| Total expenses | 0.39% | 0.39% | 0.39% | 0.39% | 0.46% | |
| Net investment income (loss) | 3.11% | 3.61% | 2.99% | 2.48% | 2.14% | |
| Portfolio turnover rate2 | 25% | 32% | 33% | 14% | 14% | |
| Net assets, end of period (x 1,000) | $3,805,524 | $2,574,297 | $2,341,576 | $2,200,763 | $1,011,273 | |
1
Calculated based on the average shares outstanding during the period.
2
Portfolio turnover rate excludes securities received or delivered from processing of in-kind creations or redemptions.
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Schwab Fundamental Index ETFs | Annual Report
See financial notes
Schwab Fundamental Emerging Markets Large Company Index ETF
Portfolio Holdings as of February 28, 2021
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website.
| Security | Number of Shares | Value ($) |
| Common Stock 95.5% of net assets | ||
| Brazil 5.6% | ||
| Ambev S.A. | 4,983,848 | 12,537,757 |
| B3 S.A. - Brasil Bolsa Balcao | 400,249 | 3,899,753 |
| Banco Bradesco S.A. | 1,858,699 | 6,867,086 |
| Banco do Brasil S.A. | 2,477,712 | 12,470,698 |
| Banco Santander Brasil S.A. | 741,062 | 4,971,839 |
| BRF S.A. * | 1,225,214 | 4,757,472 |
| CCR S.A. | 1,511,436 | 3,051,050 |
| Centrais Eletricas Brasileiras S.A. | 486,384 | 2,828,560 |
| Cia Brasileira de Distribuicao | 327,675 | 4,880,097 |
| Cia de Saneamento Basico do Estado de Sao Paulo | 431,880 | 2,851,793 |
| Cia Energetica de Minas Gerais | 187,392 | 491,257 |
| Cielo S.A. | 4,761,400 | 3,075,702 |
| Cogna Educacao * | 3,544,594 | 2,378,730 |
| Embraer S.A. * | 2,991,756 | 6,565,377 |
| IRB Brasil Resseguros S.A. | 2,394,228 | 2,577,649 |
| Itau Unibanco Holding S.A. | 919,435 | 3,855,554 |
| JBS S.A. | 2,360,062 | 10,934,192 |
| Petrobras Distribuidora S.A. | 2,196,890 | 7,852,442 |
| Petroleo Brasileiro S.A. | 5,091,723 | 20,236,973 |
| Suzano S.A. * | 419,900 | 5,512,975 |
| Telefonica Brasil S.A. | 953,805 | 7,530,422 |
| TIM S.A. | 1,374,072 | 3,155,924 |
| Ultrapar Participacoes S.A. | 3,309,161 | 11,471,814 |
| Vale S.A. | 4,003,899 | 67,906,897 |
| 212,662,013 | ||
| Chile 1.0% | ||
| Banco de Chile | 44,207,118 | 4,848,191 |
| Cencosud S.A. | 4,375,114 | 8,575,749 |
| Empresas COPEC S.A. | 991,156 | 11,185,232 |
| Enel Americas S.A. | 40,200,561 | 6,123,169 |
| Falabella S.A. | 1,040,388 | 4,314,509 |
| Latam Airlines Group S.A. * | 1,827,960 | 3,419,731 |
| 38,466,581 | ||
| China 25.9% | ||
| Agile Group Holdings Ltd. | 3,010,643 | 4,253,598 |
| Agricultural Bank of China Ltd., A Shares | 14,681,200 | 7,386,083 |
| Agricultural Bank of China Ltd., H Shares | 45,600,272 | 16,576,894 |
| Alibaba Group Holding Ltd. ADR * | 146,945 | 34,937,643 |
| Anhui Conch Cement Co., Ltd., A Shares | 184,500 | 1,518,744 |
| Anhui Conch Cement Co., Ltd., H Shares | 838,144 | 5,391,453 |
| BAIC Motor Corp., Ltd., H Shares | 9,653,814 | 3,459,635 |
| Baidu, Inc. ADR * | 125,884 | 35,683,079 |
| Bank of China Ltd., A Shares | 9,040,500 | 4,520,355 |
| Bank of China Ltd., H Shares | 134,669,255 | 47,219,782 |
| Security | Number of Shares | Value ($) |
| Bank of Communications Co., Ltd., A Shares | 5,080,600 | 3,583,160 |
| Bank of Communications Co., Ltd., H Shares | 13,749,892 | 7,763,544 |
| China Cinda Asset Management Co., Ltd., H Shares | 20,930,892 | 4,155,230 |
| China CITIC Bank Corp., Ltd., A Shares | 1,350,400 | 1,089,931 |
| China CITIC Bank Corp., Ltd., H Shares | 19,915,320 | 9,396,259 |
| China Construction Bank Corp., A Shares | 1,133,300 | 1,269,745 |
| China Construction Bank Corp., H Shares | 149,554,629 | 120,108,715 |
| China Everbright Bank Co., Ltd., A Shares | 4,418,100 | 2,795,468 |
| China Everbright Bank Co., Ltd., H Shares | 4,840,287 | 2,096,510 |
| China Evergrande Group | 3,830,141 | 7,840,647 |
| China Hongqiao Group Ltd. | 7,451,875 | 9,241,176 |
| China Huarong Asset Management Co., Ltd., H Shares | 58,779,685 | 6,971,106 |
| China Jinmao Holdings Group Ltd. | 5,666,704 | 2,359,498 |
| China Life Insurance Co., Ltd., A Shares | 120,000 | 614,088 |
| China Life Insurance Co., Ltd., H Shares | 2,805,543 | 5,916,799 |
| China Mengniu Dairy Co., Ltd. * | 1,142,686 | 6,245,675 |
| China Merchants Bank Co., Ltd., A Shares | 1,075,600 | 8,482,166 |
| China Merchants Bank Co., Ltd., H Shares | 2,752,451 | 21,129,439 |
| China Minsheng Banking Corp., Ltd., A Shares | 4,747,600 | 3,795,237 |
| China Minsheng Banking Corp., Ltd., H Shares | 12,649,881 | 7,550,123 |
| China National Building Material Co., Ltd., H Shares | 7,476,539 | 11,334,296 |
| China Oriental Group Co., Ltd. | 13,668,315 | 4,299,237 |
| China Overseas Land & Investment Ltd. | 5,122,375 | 12,968,790 |
| China Pacific Insurance (Group) Co., Ltd., A Shares | 318,900 | 2,174,771 |
| China Pacific Insurance (Group) Co., Ltd., H Shares | 1,805,853 | 8,299,053 |
| China Petroleum & Chemical Corp., A Shares | 11,683,700 | 8,131,899 |
| China Petroleum & Chemical Corp., H Shares | 121,798,844 | 67,357,673 |
| China Railway Group Ltd., H Shares | 8,462,728 | 4,472,814 |
| China Resources Land Ltd. | 2,468,752 | 11,727,396 |
| China Resources Power Holdings Co., Ltd. | 6,413,626 | 7,465,828 |
| China Shenhua Energy Co., Ltd., A Shares | 989,900 | 2,711,594 |
| China Shenhua Energy Co., Ltd., H Shares | 6,708,240 | 12,746,551 |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental Emerging Markets Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| China State Construction Engineering Corp., Ltd., A Shares | 6,075,800 | 4,735,108 |
| China Tower Corp., Ltd., H Shares | 25,050,163 | 3,745,891 |
| China Vanke Co., Ltd., A Shares | 629,100 | 3,213,533 |
| China Vanke Co., Ltd., H Shares | 1,465,807 | 6,216,691 |
| CITIC Ltd. | 13,731,264 | 11,629,539 |
| Country Garden Holdings Co., Ltd. | 7,043,510 | 8,761,996 |
| Dongfeng Motor Group Co., Ltd., H Shares | 6,495,656 | 5,978,715 |
| ENN Energy Holdings Ltd. | 358,515 | 5,495,103 |
| Fosun International Ltd. | 3,368,988 | 5,055,208 |
| GCL-Poly Energy Holdings Ltd. * | 86,449,228 | 31,760,885 |
| Geely Automobile Holdings Ltd. | 3,109,502 | 10,101,317 |
| Great Wall Motor Co., Ltd., A Shares | 247,700 | 1,199,156 |
| Great Wall Motor Co., Ltd., H Shares | 3,462,412 | 10,064,957 |
| Guangzhou R&F Properties Co., Ltd., H Shares | 3,279,829 | 4,380,237 |
| Hengan International Group Co., Ltd. | 524,931 | 3,633,818 |
| Huaneng Power International, Inc., A Shares | 1,433,100 | 891,285 |
| Huaneng Power International, Inc., H Shares | 12,882,260 | 4,400,728 |
| Industrial & Commercial Bank of China Ltd., A Shares | 7,605,600 | 6,302,935 |
| Industrial & Commercial Bank of China Ltd., H Shares | 107,845,544 | 70,345,988 |
| Industrial Bank Co., Ltd., A Shares | 1,998,600 | 7,612,128 |
| JD.com, Inc. ADR * | 149,383 | 14,022,582 |
| Jiangxi Copper Co., Ltd., A Shares | 548,200 | 2,360,360 |
| Jiangxi Copper Co., Ltd., H Shares | 4,432,893 | 10,754,581 |
| Kingboard Holdings Ltd. | 1,847,498 | 8,526,163 |
| Kunlun Energy Co., Ltd. | 6,167,027 | 5,668,289 |
| Legend Holdings Corp., H Shares | 2,642,471 | 3,944,622 |
| Longfor Group Holdings Ltd. | 905,927 | 5,372,020 |
| NetEase, Inc. ADR | 94,090 | 10,335,787 |
| PetroChina Co., Ltd., H Shares | 73,065,933 | 26,184,624 |
| PICC Property & Casualty Co., Ltd., H Shares | 11,548,667 | 8,738,896 |
| Ping An Insurance Group Co. of China Ltd., A Shares | 357,800 | 4,703,412 |
| Ping An Insurance Group Co. of China Ltd., H Shares | 2,554,707 | 31,384,890 |
| Postal Savings Bank of China Co., Ltd., H Shares | 7,444,770 | 5,537,500 |
| SAIC Motor Corp., Ltd., A Shares | 1,438,900 | 4,718,724 |
| Shanghai Pudong Development Bank Co., Ltd., A Shares | 3,319,400 | 5,399,273 |
| Shimao Group Holdings Ltd. | 1,416,190 | 4,664,435 |
| Sinopec Shanghai Petrochemical Co., Ltd., A Shares | 1,518,600 | 867,122 |
| Sinopec Shanghai Petrochemical Co., Ltd., H Shares | 13,071,504 | 3,201,590 |
| Sinopharm Group Co., Ltd., H Shares | 2,641,943 | 6,184,803 |
| Sunac China Holdings Ltd. | 927,461 | 3,969,359 |
| Sunac Services Holdings Ltd. * | 71,605 | 230,765 |
| Tencent Holdings Ltd. | 617,124 | 52,704,164 |
| Vipshop Holdings Ltd. ADR * | 227,734 | 8,499,033 |
| Weichai Power Co., Ltd., A Shares | 309,400 | 1,052,844 |
| Weichai Power Co., Ltd., H Shares | 1,477,984 | 4,324,961 |
| 985,917,701 | ||
| Colombia 0.2% | ||
| Bancolombia S.A. | 441,097 | 3,830,217 |
| Ecopetrol S.A. | 8,115,572 | 5,049,649 |
| 8,879,866 | ||
| Security | Number of Shares | Value ($) |
| Czech Republic 0.2% | ||
| CEZ A/S | 264,041 | 6,477,070 |
| Egypt 0.1% | ||
| Commercial International Bank Egypt SAE GDR | 851,476 | 3,333,529 |
| Greece 0.5% | ||
| Alpha Bank AE * | 7,208,203 | 7,218,186 |
| Hellenic Telecommunications Organization S.A. | 276,354 | 4,273,486 |
| Motor Oil Hellas Corinth Refineries S.A. | 241,482 | 3,335,601 |
| Piraeus Financial Holdings S.A. * | 2,609,450 | 2,435,693 |
| 17,262,966 | ||
| Hungary 0.5% | ||
| MOL Hungarian Oil & Gas plc * | 1,480,289 | 10,690,603 |
| OTP Bank Nyrt * | 158,721 | 7,257,281 |
| 17,947,884 | ||
| India 9.1% | ||
| Axis Bank Ltd. * | 1,159,298 | 11,434,431 |
| Bharat Petroleum Corp., Ltd. | 2,120,239 | 12,979,377 |
| Bharti Airtel Ltd. | 987,172 | 7,473,141 |
| Coal India Ltd. | 3,129,264 | 6,481,241 |
| Grasim Industries Ltd. | 405,619 | 6,628,119 |
| HCL Technologies Ltd. | 731,299 | 9,050,553 |
| Hero MotoCorp Ltd. | 116,235 | 5,099,566 |
| Hindalco Industries Ltd. | 2,539,301 | 11,757,463 |
| Hindustan Petroleum Corp., Ltd. | 2,769,114 | 9,136,173 |
| Housing Development Finance Corp., Ltd. | 448,706 | 15,505,804 |
| Indian Oil Corp., Ltd. | 10,159,175 | 13,555,244 |
| Infosys Ltd. | 2,228,046 | 37,999,729 |
| ITC Ltd. | 1,947,160 | 5,401,491 |
| JSW Steel Ltd. | 1,594,878 | 8,582,629 |
| Larsen & Toubro Ltd. | 268,626 | 5,273,090 |
| Mahindra & Mahindra Ltd. | 574,043 | 6,299,357 |
| Maruti Suzuki India Ltd. | 77,847 | 7,273,718 |
| NTPC Ltd. | 3,600,382 | 5,257,141 |
| Oil & Natural Gas Corp., Ltd. | 13,461,687 | 20,334,045 |
| Rajesh Exports Ltd. | 739,761 | 5,119,486 |
| Reliance Industries Ltd. | 1,310,354 | 37,193,119 |
| State Bank of India * | 2,540,450 | 13,487,876 |
| Sun Pharmaceutical Industries Ltd. | 626,551 | 5,069,704 |
| Tata Consultancy Services Ltd. | 429,500 | 16,916,403 |
| Tata Motors Ltd. * | 5,775,444 | 25,381,774 |
| Tata Motors Ltd., A Shares, DVR * | 2,339,937 | 4,098,114 |
| Tata Steel Ltd. | 814,069 | 7,922,453 |
| Vedanta Ltd. | 6,284,792 | 17,729,297 |
| Wipro Ltd. | 1,179,690 | 6,586,743 |
| 345,027,281 | ||
| Indonesia 1.2% | ||
| PT Astra International Tbk | 27,157,145 | 10,298,355 |
| PT Bank Central Asia Tbk | 2,206,463 | 5,198,514 |
| PT Bank Mandiri (Persero) Tbk * | 14,863,432 | 6,419,249 |
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Schwab Fundamental Index ETFs | Annual Report
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Schwab Fundamental Emerging Markets Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| PT Bank Rakyat Indonesia (Persero) Tbk * | 33,037,745 | 10,927,513 |
| PT Telkom Indonesia (Persero) Tbk | 54,793,089 | 13,428,924 |
| 46,272,555 | ||
| Kuwait 0.5% | ||
| Kuwait Finance House KSCP | 1,839,090 | 4,387,322 |
| Mobile Telecommunications Co. KSCP | 2,719,169 | 5,633,302 |
| National Bank of Kuwait SAKP | 3,506,303 | 9,557,905 |
| 19,578,529 | ||
| Malaysia 1.6% | ||
| Axiata Group Berhad | 6,388,072 | 5,602,880 |
| CIMB Group Holdings Berhad | 8,617,220 | 9,218,669 |
| Genting Berhad | 5,077,800 | 5,783,486 |
| Malayan Banking Berhad | 5,757,953 | 11,423,437 |
| Petronas Chemicals Group Berhad | 2,875,400 | 5,278,375 |
| Public Bank Berhad | 10,425,100 | 10,714,865 |
| Tenaga Nasional Berhad | 5,696,600 | 14,215,110 |
| 62,236,822 | ||
| Mexico 3.9% | ||
| Alfa S.A.B. de C.V., A Shares | 12,106,475 | 6,594,426 |
| America Movil S.A.B. de C.V., Series L | 46,205,725 | 29,587,751 |
| Cemex S.A.B. de C.V. ADR * | 4,509,810 | 29,809,844 |
| Controladora Nemak S.A.B. de C.V. * | 12,221,659 | 1,718,356 |
| Fomento Economico Mexicano S.A.B. de C.V. | 2,292,005 | 15,689,610 |
| Grupo Bimbo S.A.B. de C.V., Series A | 2,955,978 | 5,555,579 |
| Grupo Financiero Banorte S.A.B. de C.V., O Shares * | 3,010,679 | 15,126,465 |
| Grupo Mexico S.A.B. de C.V., Series B | 4,014,742 | 19,071,008 |
| Grupo Televisa S.A.B., Series CPO * | 3,483,014 | 5,185,253 |
| Orbia Advance Corp. S.A.B. de C.V. | 2,877,154 | 6,713,199 |
| Wal-Mart de Mexico S.A.B. de C.V. | 4,830,739 | 13,787,260 |
| 148,838,751 | ||
| Philippines 0.3% | ||
| PLDT, Inc. (a) | 192,115 | 5,109,421 |
| SM Investments Corp. (a) | 199,760 | 4,167,445 |
| 9,276,866 | ||
| Qatar 0.4% | ||
| Ooredoo QPSC | 2,347,302 | 4,963,061 |
| Qatar National Bank QPSC | 2,175,470 | 10,304,622 |
| 15,267,683 | ||
| Russia 9.6% | ||
| Alrosa PJSC | 4,904,906 | 6,547,552 |
| Gazprom PJSC | 36,982,102 | 108,608,179 |
| Inter RAO UES PJSC | 83,754,823 | 5,736,285 |
| LUKOIL PJSC | 1,211,325 | 91,063,688 |
| Magnit PJSC | 209,976 | 13,864,121 |
| MMC Norilsk Nickel PJSC | 38,393 | 12,027,188 |
| Mobile TeleSystems PJSC | 1,809,165 | 7,645,641 |
| Novatek PJSC | 582,577 | 9,991,836 |
| Novolipetsk Steel PJSC | 1,895,674 | 5,693,825 |
| Rosneft Oil Co. PJSC | 3,149,821 | 22,223,590 |
| ROSSETI PJSC | 154,526,117 | 3,520,801 |
| Sberbank of Russia PJSC | 10,099,780 | 36,588,879 |
| Severstal PAO | 392,829 | 7,109,526 |
| Sistema PJSFC | 14,666,796 | 6,850,966 |
| Security | Number of Shares | Value ($) |
| Surgutneftegas PJSC | 14,147,746 | 6,165,883 |
| Tatneft PJSC | 2,322,383 | 16,341,974 |
| VTB Bank PJSC | 10,483,000,000 | 5,200,890 |
| 365,180,824 | ||
| Saudi Arabia 2.6% | ||
| Al Rajhi Bank | 576,576 | 13,989,712 |
| National Commercial Bank | 725,768 | 9,095,080 |
| Riyad Bank | 857,730 | 4,528,211 |
| Samba Financial Group | 576,551 | 5,188,267 |
| Saudi Arabian Oil Co. | 420,736 | 3,875,864 |
| Saudi Basic Industries Corp. | 1,254,478 | 35,655,874 |
| Saudi Electricity Co. | 1,102,140 | 6,194,670 |
| Saudi Telecom Co. | 493,648 | 15,636,684 |
| Yanbu National Petrochemical Co. | 243,647 | 4,631,924 |
| 98,796,286 | ||
| South Africa 6.0% | ||
| Absa Group Ltd. | 1,979,728 | 15,860,044 |
| AngloGold Ashanti Ltd. | 252,959 | 5,063,439 |
| Aspen Pharmacare Holdings Ltd. * | 489,923 | 4,607,710 |
| Barloworld Ltd. * | 1,184,741 | 7,114,117 |
| Bid Corp., Ltd. | 456,356 | 8,537,326 |
| FirstRand Ltd. | 3,921,693 | 13,028,941 |
| Gold Fields Ltd. | 668,538 | 5,551,784 |
| MTN Group Ltd. | 6,900,675 | 33,117,773 |
| Naspers Ltd., N Shares | 31,172 | 7,240,239 |
| Nedbank Group Ltd. | 1,084,304 | 9,351,663 |
| Old Mutual Ltd. | 7,429,143 | 6,597,143 |
| Remgro Ltd. | 561,209 | 3,839,027 |
| Sanlam Ltd. | 1,537,109 | 6,168,226 |
| Sappi Ltd. * | 3,407,068 | 9,987,543 |
| Sasol Ltd. * | 3,554,795 | 44,224,149 |
| Shoprite Holdings Ltd. | 1,204,421 | 10,581,649 |
| Standard Bank Group Ltd. | 2,263,526 | 19,876,138 |
| The Bidvest Group Ltd. | 479,992 | 5,331,924 |
| Vodacom Group Ltd. | 789,981 | 6,497,703 |
| Woolworths Holdings Ltd. | 2,376,250 | 7,237,198 |
| 229,813,736 | ||
| Taiwan 21.0% | ||
| Acer, Inc. | 6,937,470 | 6,687,768 |
| ASE Technology Holding Co.,Ltd. | 5,327,000 | 19,795,153 |
| Asustek Computer, Inc. | 1,821,176 | 19,877,480 |
| AU Optronics Corp. * | 43,597,371 | 29,584,070 |
| Catcher Technology Co., Ltd. | 1,042,000 | 7,182,982 |
| Cathay Financial Holding Co., Ltd. | 6,234,840 | 9,390,595 |
| Cheng Shin Rubber Industry Co., Ltd. | 3,008,000 | 4,660,091 |
| China Steel Corp. | 17,591,088 | 15,631,610 |
| Chunghwa Telecom Co., Ltd. | 3,249,764 | 12,776,202 |
| Compal Electronics, Inc. | 19,067,000 | 15,197,465 |
| CTBC Financial Holding Co., Ltd. | 13,162,809 | 9,451,797 |
| Delta Electronics, Inc. | 1,582,696 | 15,939,188 |
| Far Eastern New Century Corp. | 6,739,061 | 7,004,607 |
| Far EasTone Telecommunications Co., Ltd. | 1,735,588 | 3,850,977 |
| First Financial Holding Co., Ltd. | 5,602,471 | 4,193,933 |
| Formosa Chemicals & Fibre Corp. | 4,698,882 | 14,508,710 |
| Formosa Petrochemical Corp. | 1,988,704 | 7,140,127 |
| Formosa Plastics Corp. | 3,941,704 | 13,798,264 |
| Foxconn Technology Co., Ltd. | 2,282,858 | 5,737,369 |
| Fubon Financial Holding Co., Ltd. | 8,548,116 | 15,314,639 |
| Hon Hai Precision Industry Co., Ltd. | 32,956,928 | 132,525,839 |
| Innolux Corp. * | 55,858,000 | 34,093,385 |
| Inventec Corp. | 8,213,646 | 7,313,470 |
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Schwab Fundamental Emerging Markets Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
| Security | Number of Shares | Value ($) |
| Largan Precision Co., Ltd. | 37,700 | 4,459,977 |
| Lite-On Technology Corp. | 3,535,229 | 7,539,453 |
| MediaTek, Inc. | 765,046 | 24,611,120 |
| Mega Financial Holding Co., Ltd. | 6,446,548 | 6,758,431 |
| Nan Ya Plastics Corp. | 6,379,588 | 16,651,864 |
| Pegatron Corp. | 7,325,234 | 19,619,871 |
| Pou Chen Corp. | 5,890,000 | 6,386,428 |
| President Chain Store Corp. | 404,000 | 3,800,305 |
| Quanta Computer, Inc. | 4,093,058 | 12,491,156 |
| Synnex Technology International Corp. | 3,398,178 | 6,021,006 |
| Taiwan Cement Corp. | 4,180,302 | 6,303,660 |
| Taiwan Mobile Co., Ltd. | 1,169,000 | 4,075,394 |
| Taiwan Semiconductor Manufacturing Co., Ltd. | 8,806,352 | 191,603,961 |
| Uni-President Enterprises Corp. | 4,508,796 | 10,878,416 |
| United Microelectronics Corp. | 15,930,931 | 31,001,040 |
| Walsin Lihwa Corp. | 9,432,000 | 6,298,724 |
| Wistron Corp. | 8,327,934 | 9,568,042 |
| WPG Holdings Ltd. | 4,696,880 | 7,647,554 |
| Yageo Corp. | 316,000 | 6,727,870 |
| Yuanta Financial Holding Co., Ltd. | 6,545,960 | 4,994,225 |
| 799,094,218 | ||
| Thailand 3.0% | ||
| Advanced Info Service PCL NVDR | 858,600 | 4,715,391 |
| Charoen Pokphand Foods PCL NVDR | 4,446,400 | 4,242,044 |
| CP ALL PCL NVDR | 2,530,100 | 4,995,552 |
| Kasikornbank PCL NVDR | 1,408,000 | 6,611,316 |
| Krung Thai Bank PCL NVDR | 12,244,600 | 4,875,898 |
| PTT Exploration & Production PCL NVDR | 1,819,100 | 6,941,978 |
| PTT Global Chemical PCL NVDR | 5,537,100 | 11,529,883 |
| PTT PCL NVDR | 27,975,100 | 37,133,035 |
| Thai Oil PCL NVDR | 3,463,900 | 6,810,555 |
| The Siam Cement PCL NVDR | 1,224,000 | 14,865,903 |
| The Siam Commercial Bank PCL NVDR | 3,717,600 | 12,706,580 |
| 115,428,135 | ||
| Turkey 1.6% | ||
| Akbank T.A.S. * | 7,435,196 | 6,074,048 |
| BIM Birlesik Magazalar A/S | 443,736 | 3,954,024 |
| Eregli Demir ve Celik Fabrikalari T.A.S. | 3,702,623 | 7,282,457 |
| Haci Omer Sabanci Holding A/S | 3,225,728 | 4,557,243 |
| KOC Holding A/S | 2,606,871 | 7,583,753 |
| Turk Hava YollariI AO * | 2,394,237 | 4,354,038 |
| Turkcell Iletisim Hizmetleri A/S | 2,932,714 | 6,266,314 |
| Turkiye Garanti Bankasi A/S * | 5,698,861 | 6,852,769 |
| Turkiye Halk Bankasi A/S * | 5,306,637 | 3,827,246 |
| Turkiye Is Bankasi A/S, Class C * | 5,108,008 | 3,945,657 |
| Turkiye Petrol Rafinerileri A/S * | 494,561 | 6,740,377 |
| 61,437,926 | ||
| United Arab Emirates 0.7% | ||
| Abu Dhabi Commercial Bank PJSC | 2,366,309 | 4,045,688 |
| Emaar Properties PJSC * | 7,066,676 | 6,714,319 |
| Emirates Telecommunications Group Co. PJSC | 1,638,499 | 8,876,885 |
| First Abu Dhabi Bank PJSC | 2,031,175 | 8,128,792 |
| 27,765,684 | ||
| Total Common Stock | ||
| (Cost $2,976,650,119) | 3,634,962,906 | |
| Security | Number of Shares | Value ($) |
| Preferred Stock 4.4% of net assets | ||
| Brazil 3.2% | ||
| Banco Bradesco S.A. | 6,970,384 | 28,766,803 |
| Centrais Eletricas Brasileiras S.A., B Shares | 231,002 | 1,358,311 |
| Companhia Energetica de Minas Gerais | 2,369,533 | 5,085,118 |
| Gerdau S.A. | 2,340,806 | 10,865,980 |
| Itau Unibanco Holding S.A. | 8,793,457 | 40,314,159 |
| Metalurgica Gerdau S.A. | 2,668,893 | 5,545,578 |
| Petroleo Brasileiro S.A. | 7,789,821 | 31,086,321 |
| 123,022,270 | ||
| Colombia 0.2% | ||
| Bancolombia S.A. | 755,013 | 6,472,554 |
| Russia 1.0% | ||
| Surgutneftegas PJSC | 12,567,805 | 6,630,608 |
| Tatneft PJSC | 228,166 | 1,505,444 |
| Transneft PJSC | 15,595 | 29,960,811 |
| 38,096,863 | ||
| Total Preferred Stock | ||
| (Cost $183,739,542) | 167,591,687 | |
| Other Investment Company 0.4% of net assets | ||
| United States 0.4% | ||
| Money Market Fund 0.4% | ||
| State Street Institutional U.S. Government Money Market Fund, Premier Class 0.03% (b) | 13,393,049 | 13,393,049 |
| Total Other Investment Company | ||
| (Cost $13,393,049) | 13,393,049 | |
| Number of Contracts | Notional Amount ($) | Current Value/ Unrealized Depreciation ($) | ||||
| Futures Contracts | ||||||
| Long | ||||||
| MSCI Emerging Markets Index, expires 03/19/21 | 51 | 3,412,155 | (104,320) | |||
| * | Non-income producing security. |
| (a) | Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees. |
| (b) | 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 |
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Schwab Fundamental Emerging Markets Large Company Index ETF
Portfolio Holdings as of February 28, 2021 (continued)
The following is a summary of the inputs used to value the fund’s investments as of February 28, 2021 (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 | $3,625,686,040 | $— | $— | $3,625,686,040 | |
| Philippines | — | — | 9,276,866 | 9,276,866 | |
| Preferred Stock1 | 167,591,687 | — | — | 167,591,687 | |
| Other Investment Company1 | 13,393,049 | — | — | 13,393,049 | |
| Liabilities | |||||
| Futures Contracts2 | (104,320) | — | — | (104,320) | |
| Total | $3,806,566,456 | $— | $9,276,866 | $3,815,843,322 |
| 1 | As categorized in Portfolio Holdings. |
| 2 | Futures contracts are valued at unrealized appreciation or depreciation. |
Fund investments in mutual funds are classified as Level 1, without consideration to the classification level of the underlying securities held by the mutual funds, which could be Level 1, Level 2 or Level 3.
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Schwab Fundamental Emerging Markets Large Company Index ETF
Statement of Assets and Liabilities
As of February 28, 2021
| Assets | ||
| Investments in unaffiliated issuers, at value (cost $3,173,782,710) | $3,815,947,642 | |
| Deposit with broker for futures contracts | 515,160 | |
| Foreign currency, at value (cost $1,475,209) | 1,463,749 | |
| Receivables: | ||
| Dividends | 2,455,538 | |
| Income from securities on loan | + | 527 |
| Total assets | 3,820,382,616 | |
| Liabilities | ||
| Payables: | ||
| Management fees | 1,155,264 | |
| Foreign capital gains tax | 13,654,914 | |
| Variation margin on futures contracts | + | 48,200 |
| Total liabilities | 14,858,378 | |
| Net Assets | ||
| Total assets | 3,820,382,616 | |
| Total liabilities | – | 14,858,378 |
| Net assets | $3,805,524,238 | |
| Net Assets by Source | ||
| Capital received from investors | 3,386,797,569 | |
| Total distributable earnings | 418,726,669 | |
| Net Asset Value (NAV) | ||||
| Net Assets | ÷ | Shares Outstanding | = | NAV |
| $3,805,524,238 | 128,400,000 | $29.64 | ||
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Schwab Fundamental Emerging Markets Large Company Index ETF
Statement of Operations
For the period March 1, 2020 through February 28, 2021
| Investment Income | ||
| Dividends received from unaffiliated issuers (net of foreign withholding tax of $15,175,575) | $103,423,258 | |
| Securities on loan, net | + | 94,898 |
| Total investment income | 103,518,156 | |
| Expenses | ||
| Management fees | 11,500,249 | |
| Professional fees | + | 11,464* |
| Total expenses | 11,511,713 | |
| Expense reduction by CSIM | - | 11,464* |
| Net expenses | – | 11,500,249 |
| Net investment income | 92,017,907 | |
| Realized and Unrealized Gains (Losses) | ||
| Net realized losses on unaffiliated issuers (net of foreign capital gains tax of $8,706) | (121,866,337) | |
| Net realized gains on in-kind redemptions on unaffiliated issuers | 4,010,997 | |
| Net realized gains on futures contracts | 3,918,931 | |
| Net realized losses on foreign currency transactions | + | (1,705,853) |
| Net realized losses | (115,642,262) | |
| Net change in unrealized appreciation (depreciation) on unaffiliated issuers (net of change in foreign capital gains tax of $13,654,914) | 652,121,840 | |
| Net change in unrealized appreciation (depreciation) on futures contracts | 473,784 | |
| Net change in unrealized appreciation (depreciation) on foreign currency translations | + | 148,752 |
| Net change in unrealized appreciation (depreciation) | + | 652,744,376 |
| Net realized and unrealized gains | 537,102,114 | |
| Increase in net assets resulting from operations | $629,120,021 | |
| * | Professional fees associated with the filing of tax claims in the European Union deemed to be non-routine expenses of the fund. See financial notes 2 (d) and 4 for additional information. |
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Schwab Fundamental Emerging Markets Large Company Index ETF
Statement of Changes in Net Assets
For the current and prior report periods
| Operations | ||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||
| Net investment income | $92,017,907 | $92,667,381 | ||
| Net realized gains (losses) | (115,642,262) | 11,066,853 | ||
| Net change in unrealized appreciation (depreciation) | + | 652,744,376 | (270,561,241) | |
| Increase (decrease) in net assets resulting from operations | 629,120,021 | (166,827,007) | ||
| Distributions to Shareholders | ||||
| Total distributions | ($87,400,780) | ($99,031,790) | ||
| Transactions in Fund Shares | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | VALUE | SHARES | VALUE | |||||
| Shares sold | 31,300,000 | $765,612,459 | 24,000,000 | $683,687,511 | ||||
| Shares redeemed | + | (3,700,000) | (76,104,258) | (6,600,000) | (185,107,560) | |||
| Net transactions in fund shares | 27,600,000 | $689,508,201 | 17,400,000 | $498,579,951 | ||||
| Shares Outstanding and Net Assets | ||||||||
| 3/1/20-2/28/21 | 3/1/19-2/29/20 | |||||||
| SHARES | NET ASSETS | SHARES | NET ASSETS | |||||
| Beginning of period | 100,800,000 | $2,574,296,796 | 83,400,000 | $2,341,575,642 | ||||
| Total increase | + | 27,600,000 | 1,231,227,442 | 17,400,000 | 232,721,154 | |||
| End of period | 128,400,000 | $3,805,524,238 | 100,800,000 | $2,574,296,796 | ||||
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Schwab Fundamental Index ETFs
Financial Notes
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Strategic Trust (the trust), a no-load, open-end management investment company. The trust is organized as a Delaware statutory trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the operational funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
| SCHWAB STRATEGIC TRUST (ORGANIZED JANUARY 27, 2009) | |
| Schwab Fundamental U.S. Broad Market Index ETF | Schwab U.S. Dividend Equity ETF |
| Schwab Fundamental U.S. Large Company Index ETF | Schwab U.S. REIT ETF |
| Schwab Fundamental U.S. Small Company Index ETF | Schwab International Equity ETF |
| Schwab Fundamental International Large Company Index ETF | Schwab International Small-Cap Equity ETF |
| Schwab Fundamental International Small Company Index ETF | Schwab Emerging Markets Equity ETF |
| Schwab Fundamental Emerging Markets Large Company Index ETF | Schwab U.S. TIPS ETF |
| Schwab U.S. Broad Market ETF | Schwab Short-Term U.S. Treasury ETF |
| Schwab 1000 Index® ETF | Schwab Intermediate-Term U.S. Treasury ETF |
| Schwab U.S. Large-Cap ETF | Schwab Long-Term U.S. Treasury ETF |
| Schwab U.S. Large-Cap Growth ETF | Schwab U.S. Aggregate Bond ETF |
| Schwab U.S. Large-Cap Value ETF | Schwab 1-5 Year Corporate Bond ETF |
| Schwab U.S. Mid-Cap ETF | Schwab 5-10 Year Corporate Bond ETF |
| Schwab U.S. Small-Cap 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 institutional investors who have entered into an authorized participant agreement 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). A chart showing the frequency at which each fund’s daily closing market price was at a discount or premium to each fund’s NAV can be found at www.schwabfunds.com.
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 Codification Topic 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 mutual funds and exchange-traded funds (ETFs) referred to as “underlying funds”. For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and available on the SEC’s website at www.sec.gov.
(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 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:
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Schwab Fundamental Index ETFs
Financial Notes (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.
• Mutual 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, mutual funds, ETFs and futures contracts. Investments in mutual funds are valued daily at their NAVs, and investments in ETFs are valued daily at the last reported sale price or the official closing price, which are classified as Level 1 prices, without consideration to the classification level of the underlying securities 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.
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Schwab Fundamental Index ETFs
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of February 28, 2021 are disclosed in the Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (initial margin) whenever it enters into a futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized 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 fair 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 pursuant to Rule 2a-7 under 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 fair 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 agents start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%. In this context, the gross lending revenue equals the income received from the investment of cash collateral and fees paid by borrowers less any rebates paid to the borrowers. Any expenses charged by the cash collateral fund are in addition to these fees. All remaining revenue is retained by the fund, as applicable. No portion of lending revenue is paid to or retained by Charles Schwab Investment Management, Inc. (CSIM or the investment adviser) or any affiliate of CSIM.
As of February 28, 2021, 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 and Schwab Fundamental International Small Company Index 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, 2021, are disclosed in each fund’s Portfolio Holdings and Statement of Assets and Liabilities.
Passive Foreign Investment Companies: Certain funds may own shares in certain foreign corporations that meet the Internal Revenue Code definition of a passive foreign investment company (PFIC). The funds may elect for tax purposes to mark-to-market annually the shares of each PFIC lot held and would be required to distribute as ordinary income to shareholders any such marked-to-market gains (as well as any gains realized on sale).
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, currency gains or losses realized between the trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange appreciation or depreciation arises from changes in foreign exchange rates on foreign denominated assets and liabilities other than
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
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.
(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 date the ex-dividend is confirmed. 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.
The Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF and Schwab Fundamental Emerging Markets Large Company Index ETF filed claims to recover taxes previously withheld in certain European Union countries on the basis that those countries had purportedly violated certain provisions in the Treaty on the Functioning of the European Union. These filings are subject to various administrative and judicial proceedings within these countries, and all professional fees associated with these filings have been paid by the investment adviser. For additional details see Affiliates and Affiliated Transactions in financial note 4, Other Affiliated Transactions.
(e) Expenses:
Pursuant to the Amended and Restated Advisory Agreement (Advisory Agreement) between CSIM 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:
Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, and Schwab Fundamental U.S. Small Company Index ETF generally make distributions from net investment income, if any, quarterly. Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF generally make distributions from net investment income, if any, semiannually. All funds generally make distributions from 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.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(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 accrued as of February 28, 2021, 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.
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. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. 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. Market disruptions could cause delays in the index’s rebalancing schedule which may result in the index and, in turn, the fund experiencing returns different than those that would have been achieved under a normal rebalancing schedule.
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. Certain funds invest in foreign issuers. 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
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Financial Notes (continued)
3. Risk Factors (continued):
the U.S. dollar. Foreign securities also include American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs) and European Depositary Receipts (EDRs), which 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, auditing, financial reporting and record keeping requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in 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. 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.
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 use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right, but not the obligation, to buy or sell an instrument at a specific price on or before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount. A fund’s use of derivatives that are 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.
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 liquidity risk, leverage risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to counterparty risk, lack of availability risk, valuation risk, correlation risk and tax risk. Counterparty risk is the risk that the counterparty to a derivatives transaction may not fulfill its contractual obligations either because the financial condition of the counterparty declines, or because the counterparty is otherwise unable or unwilling to perform under the contract. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gains. A fund’s use of derivatives could reduce the fund’s performance, increase the fund’s volatility, and could cause the fund to lose more than the initial amount invested.
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.
Leverage Risk. Certain fund transactions, such as derivatives transactions, may give rise to a form of leverage and may expose a fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of a fund’s portfolio securities. The use of leverage may cause a fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.
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.
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Financial Notes (continued)
3. Risk Factors (continued):
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.
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 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 |
| 0.25% | 0.25% | 0.25% | 0.25% | 0.39% | 0.39% |
Other Affiliated Transactions
The professional fees related to foreign withholding tax claims discussed in financial note 2 were non-routine expenses. The investment adviser agreed to pay these professional fees on behalf of the funds, subject to reimbursement to the extent the funds are able to successfully recover taxes withheld in the future.
The professional fees incurred by the Schwab Fundamental International Large Company Index ETT, Schwab Fundamental International Small Company Index ETF and Schwab Fundamental Emerging Markets Large Company Index ETF were $70,423, $9,705, $11,464 respectively. There were no reimbursements made by the funds to the investment adviser during the period ended February 28, 2021.
As of February 28, 2021, the balance of professional fees related to foreign withholding tax subject to future reimbursement by the fund to the investment adviser was $84,879 for Schwab Fundamental International Large Company Index ETF, $9,705 for Schwab Fundamental International Small Company Index ETF and $11,464 for Schwab Fundamental Emerging Markets Large Company Index ETF.
No other amounts for additional tax reclaims are reflected in the financial statements due to the uncertainty surrounding the ultimate resolution of proceedings, the likelihood of receipt of these claims, and the potential timing of payment.
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Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Interfund Transactions
The funds may engage in direct transactions with certain other funds in the Fund Complex in accordance with procedures adopted by the Board under Rule 17a-7 of the 1940 Act. 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, 2021, 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 Fundamental U.S. Broad Market Index ETF | $14,804,180 | ($729,058) |
| Schwab Fundamental U.S. Large Company Index ETF | 330,776,542 | (23,702,948) |
| Schwab Fundamental U.S. Small Company Index ETF | 154,188,895 | (3,926,024) |
| Schwab Fundamental International Large Company Index ETF | 118,097,814 | (19,095,575) |
| Schwab Fundamental International Small Company Index ETF | 96,739,923 | (9,040,283) |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 47,105,476 | 219,763 |
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. The transfer agent is also responsible for the order-taking function for 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 funds in the Fund Complex in a joint, syndicated, committed $750 million line of credit (the Syndicated Credit Facility), which matured on October 1, 2020. On October 1, 2020, the Syndicated Credit Facility was amended to run for a new 364 day period with a line of credit of $850 million, maturing on September 30, 2021. 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.
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Financial Notes (continued)
7. Borrowing from Banks (continued):
During the period, the funds were participants with other funds in the Fund Complex in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which was scheduled to mature on November 27, 2020. However, on October 1, 2020, the Uncommitted Credit Facility was amended to run for a new 364 day period with a line of credit of $400 million, maturing on September 30, 2021. 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:
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, 2021 are presented on the 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, 2021, 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 Fundamental U.S. Broad Market Index ETF | $475,497 | 3 |
| Schwab Fundamental U.S. Large Company Index ETF | 10,059,889 | 62 |
| Schwab Fundamental U.S. Small Company Index ETF | 5,714,700 | 74 |
| Schwab Fundamental International Large Company Index ETF | 23,689,268 | 260 |
| Schwab Fundamental International Small Company Index ETF | 8,886,733 | 99 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 11,021,202 | 208 |
9. Purchases and Sales of Investment Securities:
For the period ended February 28, 2021, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:
| Purchases of Securities | Sales of Securities | |
| Schwab Fundamental U.S. Broad Market Index ETF | $33,540,318 | $33,926,080 |
| Schwab Fundamental U.S. Large Company Index ETF | 673,271,031 | 680,559,137 |
| Schwab Fundamental U.S. Small Company Index ETF | 845,107,957 | 780,504,768 |
| Schwab Fundamental International Large Company Index ETF | 726,459,317 | 682,447,916 |
| Schwab Fundamental International Small Company Index ETF | 454,404,766 | 458,700,265 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 1,322,150,165 | 743,740,781 |
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.
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Financial Notes (continued)
10. In-Kind Transactions (continued):
The in-kind transactions for the period ended February 28, 2021, were as follows:
| In-Kind Purchases of Securities | In-Kind Sales of Securities | |
| Schwab Fundamental U.S. Broad Market Index ETF | $19,595,084 | $57,575,066 |
| Schwab Fundamental U.S. Large Company Index ETF | 985,983,649 | 1,960,470,271 |
| Schwab Fundamental U.S. Small Company Index ETF | 802,107,199 | 1,341,927,946 |
| Schwab Fundamental International Large Company Index ETF | 880,123,871 | 661,677,153 |
| Schwab Fundamental International Small Company Index ETF | 146,363,317 | 222,088,441 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 143,510,394 | 35,983,758 |
For the period ended February 28, 2021, 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, 2021 are disclosed in the funds’ Statements of Operations, if any.
11. Federal Income Taxes
As of February 28, 2021, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| 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 | ||||||
| Tax cost | $217,985,435 | $4,823,252,514 | $3,238,010,535 | $5,084,003,032 | $2,036,649,975 | $3,278,582,014 | |||||
| Gross unrealized appreciation | $83,675,089 | $1,348,131,468 | $1,073,605,391 | $1,155,307,583 | $503,696,925 | $888,908,068 | |||||
| Gross unrealized depreciation | (15,383,411) | (272,251,591) | (211,390,953) | (518,639,740) | (221,158,374) | (351,646,760) | |||||
| Net unrealized appreciation (depreciation) | $68,291,678 | $1,075,879,877 | $862,214,438 | $636,667,843 | $282,538,551 | $537,261,308 |
As of February 28, 2021, the components of distributable earnings on a tax basis were as follows:
| 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 | ||||||
| Undistributed ordinary income | $835,373 | $18,040,278 | $— | $34,968,627 | $14,170,433 | $15,292,072 | |||||
| Net unrealized appreciation (depreciation) on investments | 68,291,678 | 1,075,879,877 | 862,214,438 | 636,667,843 | 282,538,551 | 537,261,308 | |||||
| Net other unrealized appreciation (depreciation) | — | — | — | (61,566) | 24,703 | (13,726,583) | |||||
| Capital loss carryforwards and other losses | (11,797,791) | (207,547,423) | (456,821,302) | (144,716,310) | (127,994,160) | (120,100,128) | |||||
| Total | $57,329,260 | $886,372,732 | $405,393,136 | $526,858,594 | $168,739,527 | $418,726,669 |
The primary difference between book basis and tax basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales, realization for tax purposes of unrealized appreciation or depreciation on futures contracts and the realization for tax purposes of unrealized appreciation on investments in Passive Foreign Investment Companies “PFIC”, and partnership investments. The tax cost of the funds’ investments, disclosed above, have been adjusted from their book amounts to reflect these unrealized appreciation or depreciation differences, as applicable.
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Financial Notes (continued)
11. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of February 28, 2021, the funds had capital loss carryforwards available to offset future net capital gains as follows:
| Expiration Date | 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 | |||||
| No expiration | $11,797,791 | $207,547,423 | $456,594,093 | $144,716,310 | $127,994,160 | $120,100,128 | |||||
| Total | $11,797,791 | $207,547,423 | $456,594,093 | $144,716,310 | $127,994,160 | $120,100,128 |
For tax purposes, late-year ordinary losses may be deferred and treated as occurring on the first day of the following fiscal year. For the fiscal year ended February 28, 2021, Schwab Fundamental U.S. Small Company Index ETF had ordinary losses deferred of $227,209 and had no capital loss carryforwards utilized.
The tax basis components of distributions paid during the current and prior fiscal years were:
| 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 | |
| Current fiscal year end distributions | ||||||
| Ordinary income | $6,024,890 | $134,608,220 | $51,561,985 | $114,361,960 | $38,178,680 | $87,400,780 |
| Prior fiscal year end distributions | ||||||
| Ordinary income | $6,831,860 | $128,120,700 | $50,954,980 | $150,746,760 | $57,727,940 | $99,031,790 |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts on the financial statements. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
Permanent book and tax basis differences may result in reclassifications between components of net assets as required. The adjustments have no impact on net assets or the results of operations.
As of February 28, 2021, 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 fiscal year ended February 28, 2021, the funds did not incur any interest or penalties.
12. Independent Registered Public Accounting Firm:
On June 8, 2020, the Audit, Compliance and Valuation Committee of the Board approved, and on June 9, 2020, the Board approved, Deloitte & Touche LLP as the independent registered accounting firm of the Schwab Funds Complex for fiscal periods ending after June 8, 2020.
On June 8, 2020, PricewaterhouseCoopers LLP (the “Prior Auditor”) resigned as the independent registered public accounting firm of the Schwab Funds Complex. The Prior Auditor’s reports on the financial statements of the funds for the past two fiscal years, the years ended February 28, 2019 and February 29, 2020, did not contain an adverse opinion or disclaimer of opinion, and were not qualified or modified as to uncertainty, audit scope or accounting principles. During the last two fiscal year-ends and through June 8, 2020, there were no (1) disagreements with the Prior Auditor on any matter of accounting principles or practices, financial statement disclosure, or auditing scope or procedure, which disagreements, if not resolved to the Prior Auditor’s satisfaction, would have caused it to make reference to that matter in connection with its reports on the funds’ financial statements for such periods; or (2) “reportable events,” as that term is defined in Item 304 (a)(1)(v) of Regulation S-K under the Securities Exchange Act of 1934.
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Financial Notes (continued)
13. 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.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees of Schwab Strategic Trust and Shareholders of Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF:
Opinion on the Financial Statements and Financial Highlights
We have audited the accompanying statements of assets and liabilities, including the portfolio holdings, of Schwab Fundamental U.S. Broad Market Index ETF, Schwab Fundamental U.S. Large Company Index ETF, Schwab Fundamental U.S. Small Company Index ETF, Schwab Fundamental International Large Company Index ETF, Schwab Fundamental International Small Company Index ETF, and Schwab Fundamental Emerging Markets Large Company Index ETF (the “Funds”), six of the funds constituting Schwab Strategic Trust, as of February 28, 2021, and the related statements of operations, statements of changes in net assets, and the financial highlights for the year then ended, and the related notes. In our opinion, the financial statements and financial highlights present fairly, in all material respects, the financial position of each of the Funds as of February 28, 2021, and the results of their operations, the changes in their net assets, and the financial highlights for the year then ended in conformity with accounting principles generally accepted in the United States of America. The statements of changes in net assets for the year ended February 29, 2020 and the financial highlights for each of the four years in the period ended February 29, 2020 were audited by other auditors, whose report, dated April 16, 2020, expressed an unqualified opinion on such statements of changes in net assets and financial highlights.
Basis for Opinions
These financial statements and financial highlights are the responsibility of the Funds’ management. Our responsibility is to express an opinion on the Funds’ financial statements and financial highlights based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Funds in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement, whether due to error or fraud. The Funds are not required to have, nor were we engaged to perform, an audit of their internal control over financial reporting. As part of our audits we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Funds’ internal control over financial reporting. Accordingly, we express no such opinion.
Our audits included performing procedures to assess the risks of material misstatement of the financial statements and financial highlights, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements and financial highlights. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements and financial highlights. Our procedures included confirmation of securities owned as of February 28, 2021, by correspondence with the custodian and brokers; when replies were not received from brokers, we performed other auditing procedures. We believe that our audits provide a reasonable basis for our opinion.
Deloitte & Touche LLP
Denver, Colorado
April 16, 2021
Denver, Colorado
April 16, 2021
We have served as the auditor of one or more investment companies in the Schwab Funds Complex since 2020.
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Other Federal Tax Information (unaudited)
The funds may elect to pass on the benefits of the foreign tax credit to its shareholders for the fiscal year ended February 28, 2021, and the respective foreign source income on the funds as follows:
| Foreign Tax Credit | Foreign Source Income | |
| Schwab Fundamental U.S. Broad Market Index ETF | $— | $— |
| Schwab Fundamental U.S. Large Company Index ETF | — | — |
| Schwab Fundamental U.S. Small Company Index ETF | — | — |
| Schwab Fundamental International Large Company Index ETF | 12,887,060 | 147,419,207 |
| Schwab Fundamental International Small Company Index ETF | 3,887,970 | 43,521,248 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 14,672,297 | 118,610,243 |
For corporate shareholders, the following percentage of the funds’ dividend distributions paid during the fiscal year ended February 28, 2021 qualify for the corporate dividends received deduction:
| Schwab Fundamental U.S. Broad Market Index ETF | 96.97% |
| Schwab Fundamental U.S. Large Company Index ETF | 96.53% |
| Schwab Fundamental U.S. Small Company Index ETF | 81.60% |
| Schwab Fundamental International Large Company Index ETF | —% |
| Schwab Fundamental International Small Company Index ETF | —% |
| Schwab Fundamental Emerging Markets Large Company Index ETF | —% |
For the fiscal year ended February 28, 2021, the funds designated the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amount for use in preparing their 2021 income tax return.
| Schwab Fundamental U.S. Broad Market Index ETF | $6,024,890 |
| Schwab Fundamental U.S. Large Company Index ETF | 134,608,220 |
| Schwab Fundamental U.S. Small Company Index ETF | 43,507,710 |
| Schwab Fundamental International Large Company Index ETF | 102,851,751 |
| Schwab Fundamental International Small Company Index ETF | 28,945,834 |
| Schwab Fundamental Emerging Markets Large Company Index ETF | 67,531,658 |
For the fiscal year ended February 28, 2021, Schwab Fundamental U.S. Small Company Inde ETF designates $8,054,275 as dividends eligible for the 20% qualified business income deduction under section 199A of the Internal Revenue Code. Shareholders will be notified in January 2022 via IRS form 1099 of the amounts for use in preparing their 2021 income tax return.
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Liquidity Risk Management Program (Unaudited)
The Funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The Funds’ Board of Trustees (the “Board”) has designated the Funds’ investment adviser, Charles Schwab Investment Management, Inc. (“CSIM”) as the administrator of the program. Personnel of CSIM or its affiliates conduct the day-to-day operation of the program.
Under the program, CSIM manages a Fund’s liquidity risk, which is the risk that the Fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the Fund. The program is reasonably designed to assess and manage a Fund’s liquidity risk, taking into consideration the Fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. CSIM’s process of determining the degree of liquidity of each Fund’s investments is supported by third-party liquidity assessment vendors.
The Funds’ Board reviewed a report at its meeting held on September 22, 2020 prepared by CSIM regarding the operation and effectiveness of the program for the period June 1, 2019, through May 31, 2020. No significant liquidity events impacting any of the Funds were noted in the report. In addition, CSIM provided its assessment that the program had been operating effectively in managing each Fund’s liquidity risk.
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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 103 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. | 103 | 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. | 103 | Director (2005 – 2020), 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) | Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services). | 103 | None |
| 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. | 103 | Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – present), Adamas Pharmaceuticals, Inc. Director (2003 – 2019), Symantec Corporation |
| 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) | Consultant (2018 – present), Fulham Advisers LLC (management consulting); Chief Investment Officer (2009 – 2017), CareGroup Healthcare System, Inc. (healthcare). | 103 | None |
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| 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 |
| 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). | 103 | 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). | 103 | None |
| 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, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation; Director (July 2016 – present), Charles Schwab Investment Management, Inc. | 103 | Director (2008 – present), The Charles Schwab Corporation |
| 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, SSB; Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; 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.; Director (Oct. 2020 – present), TD Ameritrade Holding Corporation. | 103 | None |
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| 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 (Apr. 2019 – present), President (Oct. 2018 – present), Chief Operating Officer (Jan. 2020 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Senior Vice President (June 2020 – present) and Chief Operating Officer (Jan. 2020 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Apr. 2019 – present), President (Nov. 2018 – present) and Trustee (Apr. 2019 – Dec. 2020), 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. |
| Mark Fischer 1970 Treasurer, Chief Financial Officer and Chief Operating 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) and Chief Operating Officer (Dec. 2020 – 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; Chief Financial Officer (Mar. 2020 – present) and 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. |
| 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 (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 (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 and 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 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. 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. |
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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 $300 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.
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.
market price return The return based on the change in market price per share of the fund over a given time period. Market price returns assume that dividends and capital gain distributions have been reinvested in the fund at market price.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for 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.
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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 1000 Index An index that measures the performance of the 1,000 largest companies in the Russell 3000 Index, and represents approximately 92% of the total market capitalization of 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.
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.
Russell RAFI Developed ex US Large Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the largest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Developed ex US Small Company Index (Net) An index that ranks developed ex-U.S. companies in the FTSE Global Total Cap Index by fundamental measures of size and tracks the performance of those companies whose fundamental scores rank below the 87.5% threshold. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the developed ex-U.S. companies in the FTSE Global Total Cap Index measures the performance of the smallest investable securities in developed countries globally, excluding companies assigned to the United States.
Russell RAFI Emerging Markets Large Company Index (Net) An index that ranks emerging market companies in the FTSE Global Total Cap Index by measures of fundamental size and tracks the performance of those companies whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis. The Net series reduces index performance by adjusting for local taxes. Selecting the emerging companies in the FTSE Global Total Cap Index measures the performance of the investable securities in emerging countries globally.
Russell RAFI US Index An index that selects, ranks, and weights securities by fundamental measures of company size rather than market capitalization. The index measures the performance of the constituent companies by fundamental overall company scores, which are created using as the universe U.S. companies in the FTSE Global Total Cap Index. Securities are grouped in order of decreasing company score and each company receives a weight based on its percentage of the total scores of the companies. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis.
Russell RAFI US Large Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Large Company Index includes only those securities that are members of the U.S. portion whose fundamental scores are in the top 87.5%. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis.
Russell RAFI US Small Company Index An index that ranks U.S. companies in the FTSE Global Total Cap Index. The Russell RAFI US Small Company Index includes only those securities that are members of the U.S. portion and rank below the 87.5% fundamental score threshold. The index uses a partial quarterly reconstitution methodology in which the index is split into four equal segments at the annual reconstitution and each segment is then rebalanced on a rolling quarterly basis.
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.
S&P Developed ex-U.S. Small Cap Index (Net) An index composed of the stocks representing the lowest 15% of float-adjusted market cap in each developed market country, excluding the U.S. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.
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.
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Schwab Fundamental Index ETFs | Annual Report
Schwab Fundamental Index 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 at www.schwabfunds.com/schwabetfs_prospectus, the SEC’s website at www.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 at www.schwabfunds.com/schwabetfs_prospectus or the SEC’s website at www.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 Long-Term U.S. Treasury ETF
Schwab U.S. Aggregate Bond ETF
Schwab 1-5 Year Corporate Bond ETF
Schwab 5-10 Year Corporate 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
Index ETF
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Schwab ETFs
1-877-824-5615
© 2021 Charles Schwab Investment Management, Inc. All rights reserved.
Printed on recycled paper.
Printed on recycled paper.
| * | FUNDAMENTAL INDEX is a registered trademark of Research Affiliates LLC. |
Item 2: Code of Ethics.
| (a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. |
| (c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. |
| (d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. |
| (f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 13(a)(1) of Form N-CSR. |
Item 3: Audit Committee Financial Expert.
Registrant’s Board of Trustees has determined that Kiran M. Patel and Kimberly S. Patmore, each currently serving on its audit, compliance and valuation committee, are each an “audit committee financial expert,” as such term is defined in Item 3 of Form N-CSR. Each member of Registrant’s audit, compliance and valuation committee is “independent” under the standards set forth in Item 3 of Form N-CSR.
The designation of each of Mr. Patel and Ms. Patmore as an “audit committee financial expert” pursuant to Item 3 of Form N-CSR does not (i) impose upon such individual any duties, obligations, or liability that are greater than the duties, obligations and liability imposed upon such individual as a member of Registrant’s audit, compliance and valuation committee or Board of Trustees in the absence of such designation; and (ii) affect the duties, obligations or liability of any other member of Registrant’s audit, compliance and valuation committee or Board of Trustees.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of twenty-five operational series. Seven series have a fiscal year-end of the last day of February, whose annual financial statements are reported in Item 1, eleven series have a fiscal year-end of August 31and seven series have a fiscal year-end of December 31. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to each of the twenty-five operational series during 2020/2021 and 2019/2020, based on their respective 2020/2021 and 2019/2020 fiscal years, as applicable.
The following table presents fees billed by the principal accountant in each of the last two fiscal years for the services rendered to the Funds:
(a) Audit Fees | (b)Audit-Related Fees | (c) Tax Fees1 | (d) All Other Fees | |||||||||||||||||||||||||
Fiscal Year | Fiscal Year 2019/2020 | Fiscal Year 2020/2021 | Fiscal Year 2019/2020 | Fiscal Year 2020/2021 | Fiscal Year 2019/2020 | Fiscal Year 2020/2021 | Fiscal Year 2019/2020 | |||||||||||||||||||||
| $450,900 | $ | 563,669 | $ | 0 | $ | 0 | $ | 77,500 | $ | 104,429 | $ | 0 | $ | 0 | ||||||||||||||
| 1 | The nature of the services includes tax compliance, tax advice and tax planning. |
(e) (1) Registrant’s audit, compliance and valuation committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit, compliance and valuation committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2019/2020: $4,326,956 2018/2019:$104,429
(h) During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit, compliance and valuation committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence.
Item 5: Audit Committee of Listed Registrants.
The Registrant is a listed issuer as defined in Rule 10A-3 under the Exchange Act and has separately-designated standing audit, compliance and valuation committee established in accordance with Section 3(a)(58)(A) of the Exchange Act. The Registrant’s audit, compliance and valuation committee members are Kiran M. Patel, John F. Cogan, Nancy F. Heller and Kimberly S. Patmore.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
| (a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Jonathan de St. Paer and Registrant’s Chief Financial Officer, Mark Fischer, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
| (b) | During the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 12: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 13: Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Strategic Trust – Schwab U.S. REIT ETF and Schwab Fundamental Index ETFs
| By: | /s/ Jonathan de St. Paer | |
| Jonathan de St. Paer | ||
| Chief Executive Officer | ||
| Date: | April 16, 2021 | |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| By: | /s/ Jonathan de St. Paer | |
| Jonathan de St. Paer | ||
| Chief Executive Officer | ||
| Date: | April 16, 2021 | |
| By: | /s/ Mark Fischer | |
| Mark Fischer | ||
| Chief Financial Officer | ||
| Date: | April 16, 2021 | |