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

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSRS

CERTIFIED SHAREHOLDER REPORT

REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-22311

Schwab Strategic Trust

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(Exact name of registrant as specified in charter)

211 Main Street, San Francisco, California 94105

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(Address of principal executive offices) (Zip code)

Jonathan de St. Paer

Schwab Strategic Trust

211 Main Street, San Francisco, California 94105

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(Name and address of agent for service)

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

Date of fiscal year end: August 31

Date of reporting period: February 29, 2020

Item 1: Report(s) to Shareholders.

Semiannual Report | February 29, 2020

Schwab International Equity ETFs

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

New Notice Regarding Shareholder Report Delivery Options

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

If you would like to receive a fund’s future shareholder reports in paper free of charge after January 1, 2021, you can make that request:

• If you invest through Charles Schwab & Co, Inc. (broker-dealer), by calling 1-866-345-5954 and using the unique identifier attached to this mailing; or

• If you invest through another financial intermediary (such as a bank or broker-dealer) by contacting them directly.

If you already receive shareholder reports and other fund documents electronically, you will not be affected by this change and you need not take any action.

In This Report

Performance at a Glance	2
From the President	3
The Investment Environment	4
Fund Management	6
Performance and Fund Facts
Schwab International Equity ETF	7
Schwab International Small-Cap Equity ETF	9
Schwab Emerging Markets Equity ETF	11
Fund Expenses	13
Financial Statements and Condensed Portfolio Holdings
Schwab International Equity ETF	14
Schwab International Small-Cap Equity ETF	21
Schwab Emerging Markets Equity ETF	28
Financial Notes	35
Investment Advisory Agreement Approval	45
Trustees and Officers	46
Glossary	50

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

Distributor: SEI Investments Distribution Co. (SIDCO)

The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS), which was developed by and is the exclusive property of MSCI Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc.

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Schwab International Equity ETFs

Performance at a Glance

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

Total Returns for the 6 Months Ended February 29, 2020
Schwab International Equity ETF (Ticker Symbol: SCHF)
Market Price Return¹	0.20%
NAV Return¹	-0.51%
FTSE Developed ex US Index (Net)^*	-0.52%
ETF Category: Morningstar Foreign Large Blend²	0.08%
Performance Details	pages 7-8

Schwab International Small-Cap Equity ETF (Ticker Symbol: SCHC)
Market Price Return¹	-0.23%
NAV Return¹	-0.70%
FTSE Developed Small Cap ex US Liquid Index (Net)^*	-0.74%
ETF Category: Morningstar Foreign Small/Mid Blend²	-0.06%
Performance Details	pages 9-10

Schwab Emerging Markets Equity ETF (Ticker Symbol: SCHE)
Market Price Return¹	2.51%
NAV Return¹	2.46%
FTSE Emerging Index (Net)^*	2.52%
ETF Category: Morningstar Diversified Emerging Markets²	1.88%
Performance Details	pages 11-12

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

For index definitions, please see the Glossary.

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

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

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

^*	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
¹	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
²	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.

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Schwab International Equity ETFs

From the President

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

Dear Shareholder,

The six-month reporting period ended February 29, 2020, ushered in a time of uncertainty that most Americans haven’t seen in their lifetimes. Up until the last week of February, U.S. stock market performance was strong, with the longest bull market cycle in history continuing and major equity indices hitting new highs. But then, COVID-19—whose effects had seemed mainly confined to China—began to spread quickly around the world, affecting millions of people and sending stock markets reeling. As February 2020 drew to a close, U.S. stocks experienced their worst week since the 2008 financial crisis. In this period, the S&P 500^® Index, a bellwether for the overall U.S. stock market, dropped more than 10% in six days and global markets saw similar sell-offs. For the six-month reporting period ended February 29, 2020, the S&P 500^® Index returned 1.9%, erasing double-digit gains from earlier in the period. The MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, returned -0.9% over the same period.

We can’t know what the full human impact of the COVID-19 outbreak will be or how long the economic impact will last. The sudden health crisis and U.S. market decline have understandably rattled investors, leading many to seek the perceived safety of asset classes such as cash. Market volatility and declines can be difficult to withstand, and can engender strong emotional reactions, such as selling out of fear or staying on the sidelines. In the longer-term, this can often make the investing outcomes worse. At times like these it’s important to remember that all market cycles, no matter how long—and whether up or down—ultimately come to an end.

At Charles Schwab Investment Management, we are committed to serving our clients through this challenging time. We believe that maintaining a long-term investing plan and a portfolio with exposure to a mix of asset classes that perform differently over time is one of the best ways to weather the inevitable ups and downs that come with investing. While market volatility and uncertainty can be unsettling, we believe that having a diversified portfolio and investing plan to rely on can make it easier for investors to achieve their long-term goals, even during difficult times like these.

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

Sincerely,

“ At Charles Schwab Investment Management, we are committed to serving our clients through this challenging time.”

Past performance cannot guarantee 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 International Equity ETFs

The Investment Environment

Up until the final week of the six-month reporting period ended February 29, 2020, international equity markets were mostly lower as economic momentum continued to slow, dampened by uncertainties from several fronts, including trade, inflation, and geopolitical concerns. In the final week of the reporting period, however, the expanding COVID-19 outbreak sent ripples through every corner of the global economy, driving a global selloff that sent major market indices into bear-market territory resulting in the fastest stock market correction (commonly defined as a decline of 10% or more) in the U.S. on record, more than erasing 2020’s strong gains. For the reporting period, the MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, returned -0.91%, while the MSCI Emerging Markets Index (Net)* returned 2.93%. For comparison, the S&P 500^® Index, a bellwether for the overall U.S. stock market, returned 1.92% for the reporting period.

Asset Class Performance Comparison % returns during the 6 months ended February 29, 2020

Category:	S&P 500{R} Index:	Russell 2000{R} Index:	MSCI EAFE{R} Index (Net)*:	Bloomberg Barclays US Aggregate Bond Index:	Bloomberg Barclays US Treasury Bills 1-3 Month Index:
Description:	measures U.S. large-cap stocks	measures U.S. small-cap stocks	measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East	measures the U.S. bond market	measures short-term U.S. Treasury obligations
Line Style	1	2	4	3	5
8/31/2019	0.00	0.00	0.00	0.00	0.00
9/7/2019	1.83	0.71	2.23	-0.15	0.04
9/14/2019	2.87	5.65	4.27	-1.81	0.07
9/21/2019	2.36	4.44	3.90	-0.95	0.12
9/28/2019	1.35	1.88	3.21	-0.58	0.16
10/5/2019	1.05	0.58	0.98	0.23	0.21
10/12/2019	1.73	1.35	3.31	-0.80	0.25
10/19/2019	2.29	2.93	4.60	-0.70	0.28
10/26/2019	3.55	4.50	5.92	-0.85	0.31
11/2/2019	5.09	6.58	7.17	-0.38	0.36
11/9/2019	6.07	7.25	7.74	-1.25	0.39
11/16/2019	7.06	7.14	7.83	-0.72	0.41
11/23/2019	6.75	6.65	7.21	-0.44	0.44
11/30/2019	7.86	9.08	7.76	-0.28	0.47
12/7/2019	8.08	9.73	8.17	-0.50	0.51
12/14/2019	8.91	10.06	10.03	-0.21	0.53
12/21/2019	10.74	12.37	10.73	-0.51	0.56
12/28/2019	11.41	12.20	11.58	-0.22	0.60
1/4/2020	11.28	11.73	11.57	0.18	0.63
1/11/2020	12.37	11.53	11.47	0.09	0.66
1/18/2020	14.60	14.36	12.42	0.15	0.68
1/25/2020	13.44	11.86	11.73	0.94	0.71
2/1/2020	11.07	8.63	8.94	1.56	0.74
2/8/2020	14.63	11.53	10.96	1.50	0.77
2/15/2020	16.52	13.65	10.93	1.52	0.80
2/22/2020	15.10	13.06	9.56	2.11	0.83
2/29/2020	1.92	-0.52	-0.91	3.39	0.88

41 graphic description end -->

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 International Equity ETFs

The Investment Environment (continued)

Japan’s economy shrank over the reporting period, particularly during the final quarter of 2019 as a sales tax increase took effect and business spending tumbled. Several Asian economies, including emerging market countries such as China and India, slowed but still outpaced many developed economies. China’s economy slowed amid trade pressure from the U.S. and sluggish demand from home and abroad, while India’s economy was dampened primarily as a result of a fall in factory output and exports and a slowdown in investment.

In response to the economic environment, to bolster growth, and to help ensure stability given ongoing trade tensions, a number of central banks reduced their policy rates, including the U.S. Federal Reserve (Fed), while others maintained low—and for some international central banks, negative—interest rates. In the U.S., amid growing signs of global economic weakness that threatened to dampen U.S. economic growth, along with continued low inflation and weakness in manufacturing—and following one 0.25% interest rate cut in July—the Fed enacted two interest rate cuts during the period—in September and October. The federal funds rate ended the reporting period in a range of 1.50% to 1.75%. The European Central Bank held interest rates steady, unchanged since March 2016. 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 0.75%, where it has remained since August 2018. Central banks in key emerging market economies—including China, India, Mexico, and Thailand—lowered their policy rates in response to inflation and trade-related pressures. The changing interest rate landscape particularly towards the end of the period, resulted in significant currency volatility and, as a result, the U.S. dollar suffered.

COVID-19, first reported in China at the end of December and rapidly spreading to other countries by February, took a dramatic toll on global markets, disrupting supply chains, lowering earnings expectations, and spooking investors. Over the course of the final six trading days of the reporting period, the S&P 500^® Index fell over 10% from its peak, wiping out trillions in market value. The market drop was broadly felt. Fed Chairman Jerome Powell signaled that the Fed was prepared to cut interest rates to help protect the economy from the widening global slowdown. (Following the end of the reporting period, at the beginning of March, the Fed cut the federal funds rate by 0.50%. In mid-March, the Fed lowered the federal funds rate again, cutting it by 1.00% to a range of 0.00% to 0.25%.)

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Schwab International Equity 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. Prior to joining CSIM in 2016, Mr. Bliss spent 12 years at BlackRock (formerly Barclays Global Investors) managing and leading institutional index teams, most recently as a managing director and head of 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.

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

Jane Qin, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2012, Ms. Qin spent more than four years at The Bank of New York Mellon Corporation. During that time, Ms. Qin spent more than two years as an associate equity portfolio manager and nearly two years as a performance analyst. She also worked at Wells Fargo Funds Management as a mutual fund analyst and at CIGNA Reinsurance in the risk management group as a risk analyst.

David Rios, Portfolio Manager, is responsible for the day-to-day co-management of the funds. 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).

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Schwab International Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab International Equity ETF (11/3/09)
Market Price Return²	0.20%	0.20%	2.40%	4.77%
NAV Return²	-0.51%	-0.61%	2.21%	4.74%
FTSE Developed ex US Index (Net)³	-0.52%	-0.78%	2.13%	4.75%
ETF Category: Morningstar Foreign Large Blend⁴	0.08%	-0.14%	1.96%	4.53%
Fund Expense Ratio⁵: 0.06%

For index definitions, please see the Glossary.

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

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

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

¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁵	As stated in the prospectus.

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Schwab International Equity ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	1,486
Weighted Average Market Cap (millions)	$58,485
Price/Earnings Ratio (P/E)	15.0
Price/Book Ratio (P/B)	1.4
Portfolio Turnover Rate	3%^2,3

Sector Weightings % of Investments¹

Sector Weightings % of Investments{1}	Value	Override
Financials	19.6
Industrials	14.4
Health Care	11.1
Consumer Discretionary	10.5
Consumer Staples	10.2
Information Technology	8.6
Materials	7.2
Energy	5.2
Communication Services	5.1
Utilities	3.8
Real Estate	3.2
Other	1.1

41 graphic description end -->

Top Equity Holdings % of Net Assets⁴

Nestle S.A.	1.9
Roche Holding AG	1.4
Samsung Electronics Co., Ltd.	1.3
Novartis AG	1.1
Toyota Motor Corp.	1
HSBC Holdings plc	0.9
AIA Group Ltd.	0.8
SAP SE	0.8
AstraZeneca plc	0.7
ASML Holding N.V.	0.7

41 graphic description end -->

Country Weightings % of Investments⁵

Country Weightings % of Investments{1}	Value	Override
Japan	22
United Kingdom	13.7
France	9.1
Switzerland	8.1
Canada	8
Germany	7.3
Australia	6.2
Republic of Korea	4
Hong Kong	3.4
Netherlands	3.3
Other Countries	14.9

41 graphic description end -->

Portfolio holdings may have changed since the report date.

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

Source of Sector Classification: S&P and MSCI.

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

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Schwab International Small-Cap Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab International Small-Cap Equity ETF (1/14/10)
Market Price Return²	-0.23%	-3.23%	2.43%	5.41%
NAV Return²	-0.70%	-4.01%	2.33%	5.44%
FTSE Developed Small Cap ex US Liquid Index (Net)³	-0.74%	-4.14%	2.22%	5.49%
ETF Category: Morningstar Foreign Small/Mid Blend⁴	-0.06%	-2.50%	2.99%	6.28%
Fund Expense Ratio⁵: 0.11%

For index definitions, please see the Glossary.

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

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

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

¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁵	As stated in the prospectus. Effective February 25, 2020, the management fee was reduced to 0.11%. For more information, see financial note 4 or refer to the prospectus supplement dated February 25, 2020.

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Schwab International Small-Cap Equity ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	2,126
Weighted Average Market Cap (millions)	$2,341
Price/Earnings Ratio (P/E)	13.7
Price/Book Ratio (P/B)	1.3
Portfolio Turnover Rate	9%^2,3

Sector Weightings % of Investments¹

Sector Weightings % of Investments{1}	Value	Override
Industrials	20.2
Real Estate	12
Consumer Discretionary	11.4
Financials	10.6
Information Technology	10.6
Materials	10.2
Health Care	6.4
Consumer Staples	5.1
Communication Services	4
Utilities	3.8
Energy	3.7
Other	2

41 graphic description end -->

Top Equity Holdings % of Net Assets⁴

Open Text Corp.	0.6
Emera, Inc.	0.6
Kirkland Lake Gold Ltd.	0.5
Algonquin Power & Utilities Corp.	0.5
CAE, Inc.	0.4
WSP Global, Inc.	0.4
Canadian Apartment Properties REIT	0.4
Kinross Gold Corp.	0.4
Intermediate Capital Group plc	0.3
ASM International N.V.	0.3

41 graphic description end -->

Country Weightings % of Investments⁵

Country Weightings % of Investments{1}	Value	Override
Canada	18.3
Japan	18.2
United Kingdom	14.5
Sweden	5.4
Australia	5.4
Germany	4.8
Switzerland	4.7
Republic of Korea	4.3
Italy	2.5
France	2.5
Other Countries	19.4

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

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

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Schwab Emerging Markets Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab Emerging Markets Equity ETF (1/14/10)
Market Price Return²	2.51%	0.08%	2.52%	3.01%
NAV Return²	2.46%	-0.05%	2.65%	3.13%
FTSE Emerging Index (Net)³	2.52%	0.04%	2.76%	3.35%
ETF Category: Morningstar Diversified Emerging Markets⁴	1.88%	-0.49%	2.33%	3.26%
Fund Expense Ratio⁵: 0.11%

For index definitions, please see the Glossary.

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

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

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

¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	The total return cited for the index is calculated net of foreign withholding taxes; the underlying tax rate information is available from FTSE.
⁴	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁵	As stated in the prospectus. Effective February 25, 2020, the management fee was reduced to 0.11%. For more information, see financial note 4 or refer to the prospectus supplement dated February 25, 2020.

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Schwab Emerging Markets Equity ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	1,317
Weighted Average Market Cap (millions)	$120,708
Price/Earnings Ratio (P/E)	13.6
Price/Book Ratio (P/B)	1.9
Portfolio Turnover Rate	9%^2,3

Sector Weightings % of Investments¹

Sector Weightings % of Investments{1}	Value	Override
Financials	24.9
Consumer Discretionary	15.7
Communication Services	12.2
Information Technology	11.4
Energy	7.6
Materials	7.2
Consumer Staples	5.9
Industrials	5.2
Real Estate	3.4
Health Care	3.2
Utilities	3
Other	0.3

41 graphic description end -->

Top Equity Holdings % of Net Assets⁴

Alibaba Group Holding Ltd. ADR	7.2
Tencent Holdings Ltd.	5.7
Taiwan Semiconductor Manufacturing Co., Ltd.	5
China Construction Bank Corp., H Shares	1.5
Naspers Ltd., N Shares	1.3
Ping An Insurance Group Co. of China Ltd., H Shares	1.2
Reliance Industries Ltd.	1.2
Industrial & Commercial Bank of China Ltd., H Shares	1.1
Housing Development Finance Corp., Ltd.	1
Meituan Dianping, B Shares	0.9

41 graphic description end -->

Country Weightings % of Investments⁵

Country Weightings % of Investments{1}	Value	Override
China	39.6
Taiwan	13.4
India	10.5
Brazil	8
South Africa	4.9
Russia	4.1
Thailand	2.8
Mexico	2.8
Other Countries	13.9

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

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

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Schwab International Equity ETFs

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

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

The expense examples below are intended to help you understand your ongoing cost (in dollars) of investing in a fund and to compare this cost with the ongoing cost of investing in other mutual funds. These examples are based on an investment of $1,000 invested for six months beginning September 1, 2019 and held through February 29, 2020.

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 9/1/19	Ending Account Value (Net of Expenses) at 2/29/20	Expenses Paid During Period 9/1/19-2/29/20²
Schwab International Equity ETF
Actual Return	0.06%	$1,000.00	$994.90	$0.30
Hypothetical 5% Return	0.06%	$1,000.00	$1,024.60	$0.30
Schwab International Small-Cap Equity ETF³
Actual Return	0.12%	$1,000.00	$993.00	$0.59
Hypothetical 5% Return	0.12%	$1,000.00	$1,024.30	$0.60
Schwab Emerging Markets Equity ETF³
Actual Return	0.13%	$1,000.00	$1,024.60	$0.65
Hypothetical 5% Return	0.13%	$1,000.00	$1,024.25	$0.65

¹	Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights.
²	Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days of the period, and divided by 366 days of the fiscal year.
³	Effective February 25, 2020, the management fee for the Schwab International Small-Cap Equity ETF and Schwab Emerging Markets Equity ETF was reduced to 0.11%. If the fund expense changes had been in place throughout the entire most recent fiscal half-year the expenses paid during period under the actual return and hypothetical 5% return example would have been the following; For Schwab International Small-Cap Equity ETF, $0.55 and $0.55, respectively, for Schwab Emerging Markets Equity ETF, $0.55 and $0.55, respectively. (See financial note 4)

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Schwab International Equity ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$30.82	$33.25	$32.51	$28.32	$28.55	$32.37
Income (loss) from investment operations:
Net investment income (loss)¹	0.31	1.00	0.98	0.88	0.84	0.87
Net realized and unrealized gains (losses)	(0.41)	(2.30)	0.56	4.02	(0.45)	(3.85)
Total from investment operations	(0.10)	(1.30)	1.54	4.90	0.39	(2.98)
Less distributions:
Distributions from net investment income	(0.73)	(1.13)	(0.80)	(0.71)	(0.62)	(0.84)
Net asset value at end of period	$29.99	$30.82	$33.25	$32.51	$28.32	$28.55
Total return	(0.51%)²	(3.79%)	4.70%	17.76%	1.47%	(9.27%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.06%³	0.06%	0.06%	0.06%⁴	0.08%	0.08%
Net investment income (loss)	1.92%³	3.22%	2.91%	2.95%	3.06%	2.86%
Portfolio turnover rate⁵	3%²	8%	5%	5%	5%	4%
Net assets, end of period (x 1,000)	$19,040,731	$18,138,537	$16,294,052	$11,413,011	$6,168,595	$4,042,603

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

⁵

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

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Schwab International Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers, any holdings exceeding 1% of the fund’s net assets as of the report date, and any affiliated issuers. The remaining securities held by the fund are grouped as "Other Securities" in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab ETFs at 1-877-824-5615. This complete schedule, filed on the fund’s Form N-CSR(S), is also available on the U.S. Securities and Exchange Commission (SEC)’s website at www.sec.gov.

In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website. The fund also makes available its complete schedule of portfolio holdings on a daily basis on the fund’s website at www.schwabfunds.com/schwabetfs_prospectus.

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 98.9% of net assets

Australia 6.2%
BHP Group Ltd.	3,531,765	0.4	76,510,732
Commonwealth Bank of Australia	2,121,472	0.6	111,860,226
CSL Ltd.	542,429	0.6	108,220,774
Westpac Banking Corp.	4,272,535	0.4	65,121,498
Other Securities		4.2	819,816,656
		6.2	1,181,529,886

Austria 0.2%
Other Securities		0.2	34,450,988

Belgium 0.8%
Other Securities		0.8	146,081,941

Canada 8.0%
Brookfield Asset Management, Inc., Class A	1,088,462	0.3	65,087,976
Canadian National Railway Co.	869,002	0.4	73,664,646
Enbridge, Inc.	2,372,023	0.5	88,282,690
Royal Bank of Canada	1,727,989	0.7	128,496,936
The Bank of Nova Scotia	1,475,150	0.4	77,166,933
The Toronto-Dominion Bank	2,198,563	0.6	113,076,909
Other Securities		5.1	980,904,166
		8.0	1,526,680,256

Denmark 1.7%
Novo Nordisk A/S, B Shares	1,980,875	0.6	115,245,192
Other Securities		1.1	206,663,674
		1.7	321,908,866

Finland 1.1%
Other Securities		1.1	202,394,061

France 9.2%
Air Liquide S.A.	555,012	0.4	74,926,321
Airbus SE	661,844	0.4	78,588,950
L'Oreal S.A.	288,324	0.4	76,326,965
LVMH Moet Hennessy Louis Vuitton SE	297,836	0.6	121,326,488
Sanofi	1,298,567	0.6	119,718,630
Total S.A.	2,905,565	0.7	122,494,255
Other Securities		6.1	1,159,782,366
		9.2	1,753,163,975

Security	Number of Shares	% of Net Assets	Value ($)
Germany 6.9%
adidas AG	233,752	0.3	64,332,421
Allianz SE	501,651	0.6	107,342,273
BASF SE	1,094,959	0.3	63,842,359
Bayer AG	1,118,075	0.4	80,087,602
SAP SE	1,163,492	0.8	142,577,850
Siemens AG	906,199	0.5	92,772,582
Other Securities		4.0	774,018,595
		6.9	1,324,973,682

Hong Kong 3.4%
AIA Group Ltd.	14,554,380	0.8	143,619,228
Other Securities		2.6	508,525,006
		3.4	652,144,234

Ireland 0.2%
Other Securities		0.2	42,227,667

Israel 0.5%
Other Securities		0.5	89,720,573

Italy 2.2%
Enel S.p.A.	9,339,608	0.4	77,722,859
Other Securities		1.8	352,327,369
		2.2	430,050,228

Japan 22.2%
Keyence Corp.	215,405	0.4	68,716,322
Mitsubishi UFJ Financial Group, Inc.	14,928,728	0.4	73,616,005
SoftBank Group Corp.	1,939,970	0.5	90,159,640
Sony Corp.	1,473,701	0.5	90,322,508
Takeda Pharmaceutical Co., Ltd.	1,823,710	0.4	63,622,312
Toyota Motor Corp.	2,954,222	1.0	195,195,292
Other Securities		19.0	3,641,122,524
		22.2	4,222,754,603

Netherlands 3.3%
ASML Holding N.V.	478,791	0.7	130,482,689
Unilever N.V.	1,739,748	0.5	90,993,483
Other Securities		2.1	403,632,804
		3.3	625,108,976

New Zealand 0.3%
Other Securities		0.3	53,343,973

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Table of Contents

Schwab International Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Norway 0.5%
Other Securities		0.5	104,406,238

Poland 0.2%
Other Securities		0.2	46,280,623

Portugal 0.2%
Other Securities		0.2	31,006,788

Republic of Korea 3.8%
Samsung Electronics Co., Ltd.	5,624,573	1.3	251,010,174
Other Securities		2.5	465,573,147
		3.8	716,583,321

Singapore 1.2%
Other Securities		1.2	220,708,412

Spain 2.4%
Banco Santander S.A.	19,666,404	0.4	71,871,699
Iberdrola S.A.	7,181,906	0.4	81,414,089
Other Securities		1.6	311,886,728
		2.4	465,172,516

Sweden 2.4%
Other Securities		2.4	451,201,378

Switzerland 8.2%
Nestle S.A.	3,473,359	1.9	354,709,992
Novartis AG	2,534,525	1.1	212,748,754
Roche Holding AG	834,401	1.4	266,970,391
Zurich Insurance Group AG	174,176	0.4	66,740,925
Other Securities		3.4	655,528,231
		8.2	1,556,698,293

United Kingdom 13.8%
AstraZeneca plc	1,577,019	0.7	136,853,409
BP plc	23,932,786	0.6	121,100,537
British American Tobacco plc	2,743,380	0.6	107,313,712
Diageo plc	2,787,822	0.5	98,476,330
GlaxoSmithKline plc	5,872,218	0.6	117,174,189
HSBC Holdings plc (a)	24,311,581	0.9	162,687,713
Royal Dutch Shell plc, A Shares	5,077,464	0.6	107,749,239
Royal Dutch Shell plc, B Shares	4,484,784	0.5	95,297,958
Unilever plc	1,304,663	0.4	69,490,839
Other Securities		8.4	1,610,579,303
		13.8	2,626,723,229
Total Common Stock
(Cost $18,485,698,055)			18,825,314,707

Preferred Stock 0.7% of net assets

Germany 0.4%
Other Securities		0.4	82,572,439

Security	Number of Shares	% of Net Assets	Value ($)
Italy 0.0%
Other Securities		0.0	4,204,198

Republic of Korea 0.3%
Other Securities		0.3	46,388,098
Total Preferred Stock
(Cost $127,436,079)			133,164,735

Rights 0.0% of net assets

Spain 0.0%
Other Securities		0.0	127,409
Total Rights
(Cost $141,515)			127,409

Other Investment Companies 1.1% of net assets

United States 1.1%
Money Market Fund 0.0%
Other Securities		0.0	5,237,612
Securities Lending Collateral 1.1%
Wells Fargo Government Money Market Fund, Select Class 1.52% (c)		1.1	214,869,862
Total Other Investment Companies
(Cost $220,107,474)			220,107,474

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
MSCI EAFE Index, expires 03/20/20	875	79,450,000	(6,374,895)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $199,876,711.
(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)

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Table of Contents

Schwab International Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

The following is a summary of the inputs used to value the fund’s investments as of February 29, 2020 and reflects the complete schedule of portfolio holdings (see financial note 2(a) for additional information):

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$15,515,440,456	$—	$—	$15,515,440,456
Hong Kong	652,144,234	—	—^*	652,144,234
Portugal	31,006,788	—	—^*	31,006,788
United Kingdom	2,618,213,674	—	8,509,555	2,626,723,229
Preferred Stock¹	133,164,735	—	—	133,164,735
Rights¹	127,409	—	—	127,409
Other Investment Companies¹	220,107,474	—	—	220,107,474
Liabilities
Futures Contracts²	(6,374,895)	—	—	(6,374,895)
Total	$19,163,829,875	$—	$8,509,555	$19,172,339,430

*	Level 3 amount shown includes securities determined to have no value at February 29, 2020.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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

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Table of Contents

Schwab International Equity ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $18,618,513,261) including securities on loan of $199,876,711		$18,963,844,463
Collateral invested for securities on loan, at value (cost $214,869,862)		214,869,862
Deposit with broker for futures contracts		10,956,999
Foreign currency, at value (cost $3,740,759)		3,723,875
Receivables:
Fund shares sold		61,824,114
Dividends		49,110,571
Foreign tax reclaims		16,660,927
Income from securities on loan	+	248,690
Total assets		19,321,239,501
Liabilities
Collateral held for securities on loan		214,869,862
Payables:
Investments bought		58,315,126
Management fees		950,739
Variation margin on futures contracts	+	6,373,171
Total liabilities		280,508,898
Net Assets
Total assets		19,321,239,501
Total liabilities	–	280,508,898
Net assets		$19,040,730,603
Net Assets by Source
Capital received from investors		19,478,960,870
Total distributable loss		(438,230,267)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$19,040,730,603		634,800,000		$29.99

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Table of Contents

Schwab International Equity ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends (net of foreign withholding tax of $18,364,692)		$193,994,832
Securities on loan, net	+	1,454,136
Total investment income		195,448,968
Expenses
Management fees		5,885,507
Total expenses	–	5,885,507
Net investment income		189,563,461
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(153,717,072)
Net realized gains on futures contracts		6,434,514
Net realized gains on foreign currency transactions	+	1,085,900
Net realized losses		(146,196,658)
Net change in unrealized appreciation (depreciation) on investments		(213,827,080)
Net change in unrealized appreciation (depreciation) on futures contracts		(6,311,611)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(273,038)
Net change in unrealized appreciation (depreciation)	+	(220,411,729)
Net realized and unrealized losses		(366,608,387)
Decrease in net assets resulting from operations		($177,044,926)

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Schwab International Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$189,563,461	$539,201,794
Net realized losses		(146,196,658)	(304,902,030)
Net change in unrealized appreciation (depreciation)	+	(220,411,729)	(817,627,450)
Decrease in net assets resulting from operations		(177,044,926)	(583,327,686)
Distributions to Shareholders
Total distributions		($442,528,600)	($592,259,760)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		46,300,000	$1,521,767,146	98,500,000	$3,020,072,181
Shares redeemed	+	—	—	—	—
Net transactions in fund shares		46,300,000	$1,521,767,146	98,500,000	$3,020,072,181
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		588,500,000	$18,138,536,983	490,000,000	$16,294,052,248
Total increase	+	46,300,000	902,193,620	98,500,000	1,844,484,735
End of period		634,800,000	$19,040,730,603	588,500,000	$18,138,536,983

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Table of Contents

Schwab International Small-Cap Equity ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$31.15	$35.86	$34.80	$29.96	$29.46	$33.32
Income (loss) from investment operations:
Net investment income (loss)¹	0.31	0.82	0.84	0.73	0.67	0.73
Net realized and unrealized gains (losses)	(0.44)	(4.63)	1.22	4.70	0.50	(3.84)
Total from investment operations	(0.13)	(3.81)	2.06	5.43	1.17	(3.11)
Less distributions:
Distributions from net investment income	(0.95)	(0.90)	(1.00)	(0.59)	(0.67)	(0.75)
Net asset value at end of period	$30.07	$31.15	$35.86	$34.80	$29.96	$29.46
Total return	(0.70%)²	(10.57%)	5.93%	18.52%	4.12%	(9.29%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.12%³^,⁴	0.12%	0.12%	0.14%⁵	0.17%⁶	0.18%⁷
Net investment income (loss)	1.87%³	2.54%	2.31%	2.31%	2.34%	2.40%
Portfolio turnover rate⁸	9%²	20%	16%	12%	23%	23%
Net assets, end of period (x 1,000)	$2,249,532	$2,186,842	$2,280,998	$1,538,038	$787,951	$609,773

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective February 25, 2020, the annual operating expense ratio was reduced to 0.11%. The ratio presented for the period ended 2/29/20 is a blended ratio. (See financial note 4)

⁵

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

⁶

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

⁷

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

⁸

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

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Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.2% of net assets

Australia 5.4%
Other Securities		5.4	122,427,658

Austria 1.1%
Other Securities		1.1	23,834,351

Belgium 2.1%
Cofinimmo S.A.	34,501	0.2	5,464,836
Elia Group S.A. N.V.	45,928	0.2	4,545,509
Other Securities		1.7	36,583,276
		2.1	46,593,621

Canada 18.6%
Algonquin Power & Utilities Corp.	687,038	0.5	10,441,074
Allied Properties Real Estate Investment Trust	152,370	0.3	6,182,884
AltaGas Ltd.	358,111	0.2	5,354,258
B2Gold Corp.	1,317,523	0.2	5,260,866
CAE, Inc.	349,719	0.4	9,355,540
Canadian Apartment Properties REIT	209,806	0.4	8,772,981
CCL Industries, Inc., Class B	194,044	0.3	6,405,252
CI Financial Corp.	284,862	0.2	4,730,193
Element Fleet Management Corp.	562,051	0.2	5,258,957
Emera, Inc.	314,013	0.6	13,230,957
Empire Co., Ltd., A Shares	225,846	0.2	5,045,720
First Quantum Minerals Ltd.	896,316	0.3	6,623,798
Gildan Activewear, Inc.	264,574	0.3	6,407,644
H&R Real Estate Investment Trust	374,192	0.2	5,410,710
IA Financial Corp., Inc.	139,834	0.3	6,655,488
Keyera Corp.	278,676	0.3	6,688,971
Kinross Gold Corp. *	1,631,043	0.4	8,201,691
Kirkland Lake Gold Ltd.	345,509	0.5	11,142,463
Onex Corp.	107,381	0.3	6,028,407
Open Text Corp.	339,339	0.6	14,207,064
Pan American Silver Corp.	270,395	0.2	5,352,103
Parkland Fuel Corp.	192,371	0.3	6,047,645
Ritchie Bros. Auctioneers, Inc.	141,932	0.2	5,628,219
SNC-Lavalin Group, Inc.	233,311	0.2	5,422,806
The Descartes Systems Group, Inc. *	109,422	0.2	4,542,845
The Stars Group, Inc. *	207,465	0.2	4,754,068
TMX Group Ltd.	73,866	0.3	6,147,108
Toromont Industries Ltd.	102,776	0.2	5,080,803
WSP Global, Inc.	139,013	0.4	9,161,903
Yamana Gold, Inc.	1,249,518	0.2	4,868,312
Other Securities		9.5	209,505,863
		18.6	417,916,593

Security	Number of Shares	% of Net Assets	Value ($)
Denmark 1.5%
Royal Unibrew A/S	65,421	0.2	5,587,059
SimCorp A/S	52,118	0.2	4,964,239
Other Securities		1.1	23,656,250
		1.5	34,207,548

Finland 1.1%
Other Securities		1.1	25,110,951

France 2.5%
Other Securities		2.5	57,494,816

Germany 4.7%
Bechtle AG	35,980	0.2	4,699,192
Other Securities		4.5	101,813,332
		4.7	106,512,524

Hong Kong 1.4%
Other Securities		1.4	30,937,015

Ireland 0.2%
Other Securities		0.2	4,485,969

Israel 0.9%
Other Securities		0.9	21,501,473

Italy 2.5%
Other Securities		2.5	57,470,024

Japan 18.5%
Lasertec Corp.	100,514	0.2	4,589,361
Other Securities		18.3	411,799,218
		18.5	416,388,579

Netherlands 2.3%
ASM International N.V.	64,042	0.3	7,382,908
IMCD N.V.	69,545	0.3	5,649,165
Other Securities		1.7	38,284,802
		2.3	51,316,875

New Zealand 1.1%
Other Securities		1.1	24,013,241

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Norway 1.9%
Other Securities		1.9	42,880,518

Poland 0.6%
Other Securities		0.6	13,274,187

Portugal 0.4%
Other Securities		0.4	8,364,114

Republic of Korea 4.3%
Other Securities		4.3	96,882,550

Singapore 1.5%
Other Securities		1.5	32,818,994

Spain 1.8%
Other Securities		1.8	40,689,972

Sweden 5.5%
Evolution Gaming Group AB	161,216	0.3	5,836,641
Fabege AB	348,838	0.3	5,647,195
Getinge AB, B Shares	295,133	0.2	4,873,678
Other Securities		4.7	106,424,329
		5.5	122,781,843

Switzerland 4.7%
VAT Group AG *	33,989	0.2	4,559,607
Other Securities		4.5	100,275,417
		4.7	104,835,024

United Kingdom 14.6%
Beazley plc	690,383	0.2	4,713,364
Electrocomponents plc	587,035	0.2	4,545,410
HomeServe plc	365,193	0.2	5,518,237
Intermediate Capital Group plc	366,224	0.3	7,447,029
Spectris plc	154,009	0.2	5,342,801
The Unite Group plc	377,536	0.2	5,463,632
Vistry Group plc	284,511	0.2	4,647,964
Other Securities		13.1	290,084,963
		14.6	327,763,400
Total Common Stock
(Cost $2,352,066,672)			2,230,501,840

Preferred Stock 0.2% of net assets

Germany 0.2%
Other Securities		0.2	4,136,389

Italy 0.0%
Other Securities		0.0	520,798

Republic of Korea 0.0%
Other Securities		0.0	151,896

Security	Number of Shares	% of Net Assets	Value ($)
Sweden 0.0%
Other Securities		0.0	699,830
Total Preferred Stock
(Cost $6,874,878)			5,508,913

Rights 0.0% of net assets

Norway 0.0%
Other Securities		0.0	—
Total Rights
(Cost $—)			—

Warrants 0.0% of net assets

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

Other Investment Companies 2.1% of net assets

Switzerland 0.1%
Other Securities		0.1	1,757,744

United Kingdom 0.1%
Other Securities		0.1	2,606,747

United States 1.9%
Money Market Fund 0.0%
Other Securities		0.0	533,102
Securities Lending Collateral 1.9%
Wells Fargo Government Money Market Fund, Select Class 1.52% (c)		1.9	41,600,655
		1.9	42,133,757
Total Other Investment Companies
(Cost $46,504,897)			46,498,248

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
MSCI EAFE Index, expires 03/20/20	146	13,256,800	(810,233)

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab International Small-Cap Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $38,317,199.
(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.

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

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$1,334,205,173	$—	$—	$1,334,205,173
Australia	121,551,715	—	875,943^*	122,427,658
Hong Kong	30,915,792	—	21,223^*	30,937,015
Japan	415,966,308	—	422,271	416,388,579
Netherlands	50,462,268	—	854,607	51,316,875
Republic of Korea	96,809,577	—	72,973	96,882,550
Singapore	32,741,277	—	77,717^*	32,818,994
Spain	40,689,972	—	—^*	40,689,972
Switzerland	104,518,344	—	316,680	104,835,024
Preferred Stock¹	5,508,913	—	—	5,508,913
Rights¹
Norway	—	—	—^*	—
Warrants¹
Singapore	—	—	—^*	—
Other Investment Companies¹	46,498,248	—	—	46,498,248
Liabilities
Futures Contracts²	(810,233)	—	—	(810,233)
Total	$2,279,057,354	$—	$2,641,414	$2,281,698,768

*	Level 3 amount shown includes securities determined to have no value at February 29, 2020.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $2,363,845,792) including securities on loan of $38,317,199		$2,240,908,346
Collateral invested for securities on loan, at value (cost $41,600,655)		41,600,655
Deposit with broker for futures contracts		1,715,434
Foreign currency, at value (cost $1,328,184)		1,330,050
Receivables:
Investments sold		2,087,684
Dividends		3,436,553
Foreign tax reclaims		1,132,048
Income from securities on loan	+	224,060
Total assets		2,292,434,830
Liabilities
Collateral held for securities on loan		41,600,655
Payables:
Investments bought		99,073
Management fees		224,237
Variation margin on futures contracts		809,946
Foreign capital gains tax	+	168,733
Total liabilities		42,902,644
Net Assets
Total assets		2,292,434,830
Total liabilities	–	42,902,644
Net assets		$2,249,532,186
Net Assets by Source
Capital received from investors		2,551,603,950
Total distributable loss		(302,071,764)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$2,249,532,186		74,800,000		$30.07

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends (net of foreign withholding tax of $2,053,988)		$20,630,846
Income from non-cash dividends		1,384,832
Securities on loan, net	+	1,608,893
Total investment income		23,624,571
Expenses
Management fees		1,410,098
Total expenses	–	1,410,098
Net investment income		22,214,473
Realized and Unrealized Gains (Losses)
Net realized losses on investments (net of foreign capital gains tax of $7,867)		(21,917,048)
Net realized gains on futures contracts		1,184,947
Net realized gains on foreign currency transactions	+	138,054
Net realized losses		(20,594,047)
Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $37,383)		(27,674,726)
Net change in unrealized appreciation (depreciation) on futures contracts		(949,955)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(24,057)
Net change in unrealized appreciation (depreciation)	+	(28,648,738)
Net realized and unrealized losses		(49,242,785)
Decrease in net assets resulting from operations		($27,028,312)

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab International Small-Cap Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$22,214,473	$54,351,677
Net realized gains (losses)		(20,594,047)	22,051,117
Net change in unrealized appreciation (depreciation)	+	(28,648,738)	(312,570,575)
Decrease in net assets resulting from operations		(27,028,312)	(236,167,781)
Distributions to Shareholders
Total distributions		($67,564,440)	($59,504,600)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		4,600,000	$157,282,448	14,200,000	$453,570,587
Shares redeemed	+	—	—	(7,600,000)	(252,053,793)
Net transactions in fund shares		4,600,000	$157,282,448	6,600,000	$201,516,794
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		70,200,000	$2,186,842,490	63,600,000	$2,280,998,077
Total increase or decrease	+	4,600,000	62,689,696	6,600,000	(94,155,587)
End of period		74,800,000	$2,249,532,186	70,200,000	$2,186,842,490

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab Emerging Markets Equity ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$24.82	$25.89	$26.99	$22.56	$20.83	$27.34
Income (loss) from investment operations:
Net investment income (loss)¹	0.36	0.72	0.68	0.71	0.58	0.66
Net realized and unrealized gains (losses)	0.29	(1.00)	(1.13)	4.21	1.64	(6.49)
Total from investment operations	0.65	(0.28)	(0.45)	4.92	2.22	(5.83)
Less distributions:
Distributions from net investment income	(0.73)	(0.79)	(0.65)	(0.49)	(0.49)	(0.68)
Net asset value at end of period	$24.74	$24.82	$25.89	$26.99	$22.56	$20.83
Total return	2.46%²	(0.97%)	(1.79%)	22.40%	11.02%	(21.62%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.13%³^,⁴	0.13%	0.13%	0.13%⁵	0.14%	0.14%
Net investment income (loss)	2.72%³	2.85%	2.48%	2.96%	2.85%	2.66%
Portfolio turnover rate⁶	9%²	13%	18%	7%	10%	8%
Net assets, end of period (x 1,000)	$6,187,411	$5,804,446	$4,900,591	$4,248,821	$2,009,874	$1,276,740

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective February 25, 2020, the annual operating expense ratio was reduced to 0.11%. The ratio presented for the period ended 2/29/20 is a blended ratio. (See financial note 4)

⁵

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

⁶

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

₂₈

Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 97.5% of net assets

Brazil 6.1%
B3 S.A. - Brasil Bolsa Balcao	2,446,859	0.4	26,032,434
Itau Unibanco Holding S.A. ADR	5,833,470	0.7	41,242,633
Petroleo Brasileiro S.A.	4,510,083	0.4	27,140,570
Vale S.A.	4,225,862	0.7	41,503,207
Other Securities		3.9	241,657,662
		6.1	377,576,506

Chile 0.7%
Other Securities		0.7	45,216,548

China 39.6%
Alibaba Group Holding Ltd. ADR *	2,148,167	7.2	446,818,736
Baidu, Inc. ADR *	342,518	0.7	41,095,310
Bank of China Ltd., H Shares	92,773,707	0.6	36,666,391
China Construction Bank Corp., H Shares	114,692,398	1.5	92,718,782
China Life Insurance Co., Ltd., H Shares	9,275,342	0.4	21,733,178
China Merchants Bank Co., Ltd., H Shares	4,588,301	0.4	21,637,236
China Mobile Ltd.	6,533,107	0.8	51,389,310
CNOOC Ltd.	19,731,462	0.5	27,041,019
Industrial & Commercial Bank of China Ltd., H Shares	95,812,423	1.1	65,530,211
JD.com, Inc. ADR *	986,277	0.6	37,981,527
Meituan Dianping, B Shares *	4,229,710	0.9	53,678,383
NetEase, Inc. ADR	88,367	0.5	28,163,447
New Oriental Education & Technology Group, Inc. ADR *	169,273	0.4	21,648,324
Ping An Insurance Group Co. of China Ltd., H Shares	6,715,192	1.2	74,665,425
TAL Education Group ADR *	420,810	0.4	22,887,856
Tencent Holdings Ltd.	7,044,766	5.7	348,936,511
Xiaomi Corp., B Shares *	11,434,526	0.3	18,428,939
Other Securities		16.4	1,036,778,261
		39.6	2,447,798,846

Colombia 0.4%
Other Securities		0.4	24,937,696

Czech Republic 0.2%
Other Securities		0.2	9,511,604

Egypt 0.1%
Other Securities		0.1	9,015,339

Security	Number of Shares	% of Net Assets	Value ($)
Greece 0.3%
Other Securities		0.3	17,259,929

Hong Kong 0.0%
Other Securities		0.0	—

Hungary 0.3%
Other Securities		0.3	20,776,914

India 10.5%
Axis Bank Ltd.	2,427,939	0.4	23,459,339
Hindustan Unilever Ltd.	865,304	0.4	26,075,725
Housing Development Finance Corp., Ltd.	2,119,847	1.0	63,910,446
Infosys Ltd.	4,546,327	0.8	46,094,814
Reliance Industries Ltd.	3,834,543	1.2	70,596,398
Tata Consultancy Services Ltd.	1,111,302	0.5	30,800,162
Other Securities		6.2	386,028,701
		10.5	646,965,585

Indonesia 1.9%
PT Bank Central Asia Tbk	11,815,381	0.4	25,899,546
PT Bank Rakyat Indonesia (Persero) Tbk	65,118,435	0.3	19,016,988
Other Securities		1.2	75,422,548
		1.9	120,339,082

Kuwait 0.9%
National Bank of Kuwait SAKP	7,546,842	0.4	24,983,500
Other Securities		0.5	32,923,216
		0.9	57,906,716

Malaysia 2.5%
Other Securities		2.5	151,656,660

Mexico 2.8%
America Movil S.A.B. de C.V., Series L	33,672,660	0.4	26,398,590
Fomento Economico Mexicano S.A.B. de C.V.	2,572,070	0.3	20,685,438
Grupo Financiero Banorte S.A.B. de C.V., O Shares	3,467,489	0.3	18,678,707
Other Securities		1.8	105,763,074
		2.8	171,525,809

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Schwab International Equity ETFs | Semiannual Report

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Table of Contents

Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Peru 0.1%
Other Securities		0.1	3,054,543

Philippines 1.2%
Other Securities		1.2	70,964,924

Qatar 1.1%
Qatar National Bank QPSC	5,481,021	0.5	28,359,062
Other Securities		0.6	42,106,881
		1.1	70,465,943

Russia 3.9%
Gazprom PJSC	12,984,189	0.6	39,155,445
LUKOIL PJSC	509,400	0.7	43,204,245
MMC Norilsk Nickel PJSC	65,485	0.3	19,733,203
NovaTek PJSC	1,330,438	0.3	19,101,289
Sberbank of Russia PJSC	12,516,560	0.7	43,465,244
Tatneft PJSC	1,870,072	0.3	18,689,589
Other Securities		1.0	57,209,827
		3.9	240,558,842

Saudi Arabia 2.3%
Al Rajhi Bank	1,122,711	0.3	18,524,806
Other Securities		2.0	123,813,589
		2.3	142,338,395

South Africa 4.9%
Naspers Ltd., N Shares	532,313	1.3	80,564,810
Other Securities		3.6	225,421,185
		4.9	305,985,995

Taiwan 13.4%
Hon Hai Precision Industry Co., Ltd.	14,676,092	0.6	38,920,398
Largan Precision Co., Ltd.	125,956	0.3	18,427,817
MediaTek, Inc.	1,784,713	0.3	21,218,867
Taiwan Semiconductor Manufacturing Co., Ltd.	29,627,500	5.0	309,195,660
Other Securities		7.2	441,602,959
		13.4	829,365,701

Thailand 2.8%
PTT PCL NVDR	17,608,900	0.4	21,763,496
Other Securities		2.4	151,911,142
		2.8	173,674,638

Turkey 0.6%
Other Securities		0.6	38,801,628

United Arab Emirates 0.9%
First Abu Dhabi Bank PJSC	5,392,019	0.3	21,022,547
Other Securities		0.6	36,530,259
		0.9	57,552,806
Total Common Stock
(Cost $5,535,328,751)			6,033,250,649

Security	Number of Shares	% of Net Assets	Value ($)
Preferred Stock 2.2% of net assets

Brazil 1.9%
Banco Bradesco S.A.	4,950,962	0.6	33,502,792
Petroleo Brasileiro S.A.	5,824,575	0.5	32,714,136
Other Securities		0.8	54,020,833
		1.9	120,237,761

Chile 0.1%
Other Securities		0.1	3,725,940

Colombia 0.0%
Other Securities		0.0	2,863,753

Russia 0.2%
Other Securities		0.2	10,419,587
Total Preferred Stock
(Cost $133,230,241)			137,247,041

Rights 0.0% of net assets

China 0.0%
Other Securities		0.0	—
Total Rights
(Cost $—)			—

Warrants 0.0% of net assets

Thailand 0.0%
Other Securities		0.0	26,662
Total Warrants
(Cost $—)			26,662

Other Investment Companies 0.3% of net assets

United States 0.3%
Money Market Fund 0.2%
Other Securities		0.2	8,779,867
Securities Lending Collateral 0.1%
Other Securities		0.1	7,588,575
Total Other Investment Companies
(Cost $16,368,442)			16,368,442

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
MSCI Emerging Markets Index, expires 03/20/20	312	15,737,280	(1,040,491)

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Schwab Emerging Markets Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $7,268,025.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

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

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	$5,369,025,135	$—	$—	$5,369,025,135
Greece	17,259,929	—	—^*	17,259,929
Hong Kong	—	—	—^*	—
India	646,591,302	—	374,283	646,965,585
Preferred Stock¹	137,247,041	—	—	137,247,041
Rights¹
China	—	—	—^*	—
Warrants¹	26,662	—	—	26,662
Other Investment Companies¹	16,368,442	—	—	16,368,442
Liabilities
Futures Contracts²	(1,040,491)	—	—	(1,040,491)
Total	$6,185,478,020	$—	$374,283	$6,185,852,303

*	Level 3 amount shown includes securities determined to have no value at February 29, 2020.
¹	As categorized in the complete schedule of Portfolio Holdings.
²	Futures contracts are valued at unrealized appreciation or depreciation.

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Schwab Emerging Markets Equity ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $5,677,338,859) including securities on loan of $7,268,025		$6,179,304,219
Collateral invested for securities on loan, at value (cost $7,588,575)		7,588,575
Deposit with broker for futures contracts		3,430,742
Foreign currency, at value (cost $4,293,951)		4,263,381
Receivables:
Dividends		6,298,738
Income from securities on loan		27,501
Foreign tax reclaims	+	12,416
Total assets		6,200,925,572
Liabilities
Collateral held for securities on loan		7,588,575
Payables:
Investments bought		1,148,594
Management fees		638,363
Foreign capital gains tax		3,099,591
Variation margin on futures contracts	+	1,039,877
Total liabilities		13,515,000
Net Assets
Total assets		6,200,925,572
Total liabilities	–	13,515,000
Net assets		$6,187,410,572
Net Assets by Source
Capital received from investors		6,272,818,123
Total distributable loss		(85,407,551)

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$6,187,410,572		250,100,000		$24.74

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Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends (net of foreign withholding tax of $5,137,831)		$90,486,310
Securities on loan, net	+	299,020
Total investment income		90,785,330
Expenses
Management fees		4,100,679
Total expenses	–	4,100,679
Net investment income		86,684,651
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(111,651,940)
Net realized gains on futures contracts		1,348,087
Net realized losses on foreign currency transactions	+	(608,028)
Net realized losses		(110,911,881)
Net change in unrealized appreciation (depreciation) on investments (net of change in foreign capital gains tax of $2,449,548)		156,807,490
Net change in unrealized appreciation (depreciation) on futures contracts		(1,233,041)
Net change in unrealized appreciation (depreciation) on foreign currency translations	+	(219,536)
Net change in unrealized appreciation (depreciation)	+	155,354,913
Net realized and unrealized gains		44,443,032
Increase in net assets resulting from operations		$131,127,683

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Schwab Emerging Markets Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$86,684,651	$153,198,002
Net realized losses		(110,911,881)	(99,824,502)
Net change in unrealized appreciation (depreciation)	+	155,354,913	(98,218,265)
Increase (decrease) in net assets resulting from operations		131,127,683	(44,844,765)
Distributions to Shareholders
Total distributions		($178,900,650)	($160,604,080)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		16,200,000	$430,737,160	46,300,000	$1,153,254,120
Shares redeemed	+	—	—	(1,700,000)	(43,949,430)
Net transactions in fund shares		16,200,000	$430,737,160	44,600,000	$1,109,304,690
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		233,900,000	$5,804,446,379	189,300,000	$4,900,590,534
Total increase	+	16,200,000	382,964,193	44,600,000	903,855,845
End of period		250,100,000	$6,187,410,572	233,900,000	$5,804,446,379

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Financial Notes, unaudited

1. Business Structure of the Funds:

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

SCHWAB STRATEGIC TRUST (ORGANIZED JANUARY 27, 2009)
Schwab International Equity ETF	Schwab Short-Term U.S. Treasury ETF
Schwab International Small-Cap Equity ETF	Schwab Intermediate-Term U.S. Treasury ETF
Schwab Emerging Markets Equity ETF	Schwab Long-Term U.S. Treasury ETF
Schwab U.S. Broad Market ETF	Schwab U.S. Aggregate Bond ETF
Schwab 1000 Index^® ETF	Schwab 1-5 Year Corporate Bond ETF
Schwab U.S. Large-Cap ETF	Schwab 5-10 Year Corporate Bond ETF
Schwab U.S. Large-Cap Growth ETF	Schwab Fundamental U.S. Broad Market Index ETF
Schwab U.S. Large-Cap Value ETF	Schwab Fundamental U.S. Large Company Index ETF
Schwab U.S. Mid-Cap ETF	Schwab Fundamental U.S. Small Company Index ETF
Schwab U.S. Small-Cap ETF	Schwab Fundamental International Large Company Index ETF
Schwab U.S. Dividend Equity ETF	Schwab Fundamental International Small Company Index ETF
Schwab U.S. REIT ETF	Schwab Fundamental Emerging Markets Large Company Index ETF
Schwab U.S. TIPS ETF

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

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

(a) Security Valuation:

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

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

• Securities traded on an exchange or over-the-counter: Traded securities are valued at the closing value for the day, or, on days when no closing value has been reported, at 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.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

• Securities for which no quoted value is available: The Board has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when it is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Pricing Committee considers a number of factors, including unobservable market inputs when arriving at fair value. The Pricing Committee may employ techniques such as the review of related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. The Pricing Committee regularly reviews these inputs and assumptions to calibrate the valuations. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board convenes on a regular basis to review fair value determinations made by the funds pursuant to the valuation procedures.

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

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

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

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

• Level 1—quoted prices in active markets for identical securities—Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and futures contracts. Investments in mutual funds are valued daily at their NAVs, which are classified as Level 1 prices, without consideration to the classification level of the specific investments held by an underlying fund.

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

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

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

The levels associated with valuing the funds’ investments as of February 29, 2020 are disclosed in the Condensed Portfolio Holdings.

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

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

vary from one contract to another. Subsequent payments (variation margin) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized appreciation or depreciation until the contract is closed, at which time the gains or losses are realized. Futures contracts are traded publicly on exchanges, and their market value may change daily.

Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating under Rule 2a-7 of the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate market value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agent start at 10% of gross lending revenue, with subsequent breakpoints to a low of 7.5%. 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 29, 2020, the funds had securities on loan, all of which were classified as common stocks. The value of the securities on loan and the related collateral as of February 29, 2020, if any, are disclosed in each fund’s Condensed Portfolio Holdings. The value of the securities on loan and the investment of cash collateral are also disclosed in each fund’s Statement of Assets and Liabilities.

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

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

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

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

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2. Significant Accounting Policies (continued):

(d) Investment Income:

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

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

The funds 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.

(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:

The funds make distributions from net investment income, if any, semiannually. The 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.

(i) Foreign Taxes:

The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges and capital gains on investments. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of February 29, 2020, 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.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(k) Recent Accounting Standards:

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

3. Risk Factors:

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 or 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.

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

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

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

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

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

Foreign Investment Risk. A fund’s investments in securities of foreign issuers involve certain risks that may be greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); the imposition of economic sanctions or other government restrictions; differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may negatively impact the value or liquidity of a fund’s investments, and could impair the fund’s ability to meet its investment objective or invest in accordance with its investment strategy. There is a risk that investments in securities denominated in, and/or receiving revenues in, foreign currencies will decline in value relative to the U.S. dollar. Foreign securities also include American Depositary Receipts (ADRs), Global Depositary Receipts (GDRs), and European Depositary Receipts (EDRs), which are receipts issued by U.S. and foreign banks that represent shares of foreign-based corporations. Investment in ADRs, GDRs and EDRs may be less liquid than the underlying shares in their primary trading market and GDRs, many of which are issued by companies in

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3. Risk Factors (continued):

emerging markets, may be more volatile. To the extent a fund’s investments in a single country or a limited number of countries represent a large percentage of the fund’s assets, the fund’s performance may be adversely affected by the economic, political, regulatory and social conditions in those countries and the fund’s price may be more volatile than the price of a fund that is geographically diversified.

Emerging Markets Risk. Certain funds invest in emerging markets. Emerging market countries may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in developed countries. As a result, there may be an increased risk of illiquidity and price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar, and, at times, it may be difficult to value such investments.

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

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

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

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

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.

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions:

Investment Adviser

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

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

Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
0.06%	0.11%*	0.11%*

*	Prior to February 25, 2020, the management fees of Schwab International Small-Cap Equity ETF and Schwab Emerging Markets Equity ETF were 0.12% and 0.13%, respectively.

Investment from Affiliates

Certain funds in the Fund Complex (for definition refer to Trustees and Officers section) may own shares of other funds in the Fund Complex. The table below reflects the percentages of shares of each fund in this report that are owned by other funds in the Fund Complex as of February 29, 2020, as applicable:

	Underlying Funds
	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Schwab VIT Balanced Portfolio	0.0%*	0.1%	0.1%
Schwab VIT Balanced with Growth Portfolio	0.1%	0.2%	0.1%
Schwab VIT Growth Portfolio	0.2%	0.3%	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%	-%	0.1%
Schwab Target 2030 Index Fund	0.4%	-%	0.2%
Schwab Target 2035 Index Fund	0.2%	-%	0.1%
Schwab Target 2040 Index Fund	0.3%	-%	0.2%
Schwab Target 2045 Index Fund	0.2%	-%	0.1%
Schwab Target 2050 Index Fund	0.2%	-%	0.2%
Schwab Target 2055 Index Fund	0.1%	-%	0.1%
Schwab Target 2060 Index Fund	0.2%	-%	0.1%

*	Less than 0.05%

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, which are subject to reimbursement by the funds to the extent the funds are able to successfully recover taxes withheld in the future.

As of February 29, 2020, the balance of professional fees related to foreign withholding tax subject to future reimbursement by the fund to the investment adviser was $93,919 for Schwab International Equity ETF, $4,324 for Schwab International Small-Cap Equity ETF and $17,966 for Schwab Emerging Markets Equity ETF. There were no professional fees incurred by the funds and no reimbursements made by the funds to the investment adviser during the period ended February 29, 2020.

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, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Interfund Transactions

The funds may engage in direct transactions with certain other funds in the Fund Complex when permitted by applicable law. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended February 29, 2020, each fund’s total aggregate security transactions with other funds in the Fund Complex as well as any realized gains (losses) were as follows:

	Total Aggregate Transactions	Realized Gains (Losses)
Schwab International Equity ETF	$179,916,610	($30,309,371)
Schwab International Small-Cap Equity ETF	98,650,448	5,693,415
Schwab Emerging Markets Equity ETF	91,437,726	(19,850,601)

Interfund Borrowing and Lending

Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other funds in the Fund Complex. All loans are for temporary or emergency purposes and the interest rate to be charged will be the average of the overnight repurchase agreement rate and the short-term bank loan rate. All loans are subject to numerous conditions designed to ensure fair and equitable treatment of all participating funds. The interfund lending facility is subject to the oversight and periodic review of the Board. The funds had no interfund borrowing or lending activity during the period.

5. Other Service Providers:

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

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

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

6. Board of Trustees:

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

7. Borrowing from Banks:

During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $750 million line of credit (the Syndicated Credit Facility), which matured on October 3, 2019. On October 3, 2019, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on October 1, 2020. Under the terms of the Syndicated Credit Facility, in addition to CSIM paying the interest charged on any borrowings by a fund, CSIM paid a commitment fee of 0.15% per annum on the funds’ proportionate share of the unused portion of the Syndicated Credit Facility.

During the period, the funds were participants with other funds in the Fund Complex in a joint, unsecured, uncommitted $500 million line of credit (the Uncommitted Credit Facility), with State Street, which matured on November 29, 2019. On November 29, 2019, the Uncommitted Credit Facility was amended to run for a new 364 day period, maturing on November 27, 2020. 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.

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Financial Notes, unaudited (continued)

8. Derivatives:

Certain funds entered into equity index futures contracts during the report period. The funds invested in futures contracts to equitize available cash. The current value and variation margin for futures contracts held at February 29, 2020 are presented on the Condensed Portfolio Holdings and Statement of Assets and Liabilities, respectively. The net realized and change in unrealized gains (losses) on futures contracts are presented on the Statement of Operations. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period ended February 29, 2020, the month-end average notional amounts of futures contracts held by the funds and the month-end average number of contracts held were as follows:

	Notional Amounts	Number of Contracts
Schwab International Equity ETF	$77,755,688	810
Schwab International Small-Cap Equity ETF	10,733,587	112
Schwab Emerging Markets Equity ETF	13,388,748	259

9. Purchases and Sales of Investment Securities:

For the period ended February 29, 2020, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab International Equity ETF	$608,127,554	$719,370,938
Schwab International Small-Cap Equity ETF	208,817,210	230,675,222
Schwab Emerging Markets Equity ETF	768,175,679	591,294,637

10. In-Kind Transactions:

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

The in-kind transactions for the period ended February 29, 2020, were as follows:

	In-Kind Purchases of Securities	In-Kind Sales of Securities
Schwab International Equity ETF	$1,388,575,796	$—
Schwab International Small-Cap Equity ETF	145,883,178	—
Schwab Emerging Markets Equity ETF	113,721,680	—

For the period ended February 29, 2020, 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 29, 2020 are disclosed in the funds’ Statements of Operations, if any.

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Financial Notes, unaudited (continued)

11. Federal Income Taxes

As of February 29, 2020, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:

	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Tax cost	$18,928,455,570	$2,421,676,097	$5,810,836,677
Gross unrealized appreciation	$2,305,155,255	$257,279,511	$969,558,447
Gross unrealized depreciation	(2,061,271,395)	(397,256,840)	(594,542,821)
Net unrealized appreciation (depreciation)	$243,883,860	($139,977,329)	$375,015,626

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of August 31, 2019, the funds had capital loss carryforwards available to offset future net capital gains before the expiration dates as follows:

Expiration Date	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
No expiration	$543,635,769	$121,167,521	$340,568,982
Total	$543,635,769	$121,167,521	$340,568,982

The tax-basis components of distributions and components of distributable earnings on a tax basis are finalized at fiscal year-end; accordingly, tax basis balances have not been determined as of February 29, 2020. The tax-basis components of distributions paid during the fiscal year ended August 31, 2019 were as follows:

	Schwab International Equity ETF	Schwab International Small-Cap Equity ETF	Schwab Emerging Markets Equity ETF
Ordinary income	$592,259,760	$59,504,600	$160,604,080

As of August 31, 2019, 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 August 31, 2019, the funds did not incur any interest or penalties.

12. Subsequent Events:

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

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Investment Advisory Agreement Approval

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

At a meeting held on February 24, 2020, the Board of Trustees (the Board or the Trustees, as appropriate), including a majority of the Independent Trustees, considered information specifically relating to its consideration of the approval of an amendment to the amended and restated investment advisory agreement (the Amended Agreement) between Schwab Strategic Trust (the Trust) and Charles Schwab Investment Management, Inc. (CSIM) with respect to the existing funds in the Trust, including Schwab International Small-Cap Equity

ETF and Schwab Emerging Markets Equity ETF (the Funds) to reflect a reduction to the rate paid by the Trust to CSIM as compensation for CSIM’s services rendered to the Funds. The Board reviewed materials provided by CSIM relating to this change (including a representation by CSIM that the change will not result in any reduction in the nature and level of services provided to the Funds and other series by CSIM) and also took into account the information that the Board reviewed and the conclusions it reached at its June 4, 2019 meeting in connection with the approval of the continuation of CSIM as investment adviser to the Funds and other series of the Trust.

Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including a majority of the Independent Trustees, approved the amendment to the Amended Agreement with respect to the Funds and concluded that the compensation payable by the Funds to CSIM under the amendment to the Amended Agreement is fair and reasonable in light of the services CSIM renders to (and the expenses it bears relating to) the Funds and such other matters as the Trustees considered to be relevant in the exercise of their reasonable judgment.

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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 99 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.	99	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.	99	Director (2005 – present), Gilead Sciences, Inc.
Nancy F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services).	99	None
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	CEO and Owner (May 2012 – present), Kochis Global (wealth management consulting).	99	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
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.	99	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).	99	None
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses).	99	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).	99	None
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Chairman, Chief Executive Officer and Founder (Mar. 1990 – present), Smith Graham & Co. (investment advisors).	99	Director (2012 – present), Eaton Corporation plc

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Interested Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Walter W. Bettinger II² 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010)	Director, President and Chief Executive Officer (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc.	99	Director (2008 – present), The Charles Schwab Corporation
Jonathan de St. Paer² 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Director (Apr. 2019 – present), President (Oct. 2018 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.	99	None
Joseph R. Martinetto² 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	99	None

Officers of the Trust
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served³)	Principal Occupations During the Past Five Years
Jonathan de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Director (Apr. 2019 – present), President (Oct. 2018 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.

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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served³)	Principal Occupations During the Past Five Years
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013)	Treasurer and Chief Financial Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; 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, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
³	The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

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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.

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

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

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

Global Depositary Receipt (GDR) A negotiable security (receipt) that is issued by a foreign bank, and that represents shares of foreign-based corporations.

gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.

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

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

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

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

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

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

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

MSCI Emerging Markets Index (Net) A free float-adjusted market capitalization weighted index that is designed to measure equity market performance in the global emerging markets. This series approximates the minimum possible dividend reinvestment. The returns are calculated applying dividend withholding rates applicable to non-resident persons who do not benefit from double taxation treaties.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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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

Investment Adviser

Charles Schwab Investment Management, Inc.

211 Main Street, San Francisco, CA 94105

Schwab ETFs

1-877-824-5615

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

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MFR54790-10
00242742

Semiannual Report | February 29, 2020

Schwab U.S. Equity ETFs

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

New Notice Regarding Shareholder Report Delivery Options

If you would like to receive a fund’s future shareholder reports in paper free of charge after January 1, 2021, you can make that request:

• If you invest through Charles Schwab & Co, Inc. (broker-dealer), by calling 1-866-345-5954 and using the unique identifier attached to this mailing; or

• If you invest through another financial intermediary (such as a bank or broker-dealer) by contacting them directly.

If you already receive shareholder reports and other fund documents electronically, you will not be affected by this change and you need not take any action.

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

Distributor: SEI Investments Distribution Co. (SIDCO)

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Schwab U.S. Equity ETFs

Performance at a Glance

Total Returns for the 6 Months Ended February 29, 2020
Schwab U.S. Broad Market ETF (Ticker Symbol: SCHB)
Market Price Return¹	1.86%
NAV Return¹	1.70%
Dow Jones U.S. Broad Stock Market Index	1.71%
ETF Category: Morningstar Large Blend²	0.49%
Performance Details	pages 7-8

Schwab 1000 Index ETF (Ticker Symbol: SCHK)
Market Price Return¹	1.96%
NAV Return¹	1.92%
Schwab 1000 Index^®	1.91%
Russell 1000^® Index	1.97%
ETF Category: Morningstar Large Blend²	0.49%
Performance Details	pages 9-10

Schwab U.S. Large-Cap ETF (Ticker Symbol: SCHX)
Market Price Return¹	2.36%
NAV Return¹	2.08%
Dow Jones U.S. Large-Cap Total Stock Market Index	2.10%
ETF Category: Morningstar Large Blend²	0.49%
Performance Details	pages 11-12

Schwab U.S. Large-Cap Growth ETF (Ticker Symbol: SCHG)
Market Price Return¹	6.76%
NAV Return¹	6.56%
Dow Jones U.S. Large-Cap Growth Total Stock Market Index	6.58%
ETF Category: Morningstar Large Growth²	3.62%
Performance Details	pages 13-14

Total Returns for the 6 Months Ended February 29, 2020
Schwab U.S. Large-Cap Value ETF (Ticker Symbol: SCHV)
Market Price Return¹	-2.00%
NAV Return¹	-2.23%
Dow Jones U.S. Large-Cap Value Total Stock Market Index	-2.20%
ETF Category: Morningstar Large Value²	-2.25%
Performance Details	pages 15-16

Schwab U.S. Mid-Cap ETF (Ticker Symbol: SCHM)
Market Price Return¹	-1.86%
NAV Return¹	-1.86%
Dow Jones U.S. Mid-Cap Total Stock Market Index	-1.86%
ETF Category: Morningstar Mid-Cap Blend²	-2.18%
Performance Details	pages 17-18

Schwab U.S. Small-Cap ETF (Ticker Symbol: SCHA)
Market Price Return¹	-2.05%
NAV Return¹	-2.16%
Dow Jones U.S. Small-Cap Total Stock Market Index	-2.19%
ETF Category: Morningstar Small Blend²	-2.89%
Performance Details	pages 19-20

Schwab U.S. Dividend Equity ETF (Ticker Symbol: SCHD)
Market Price Return¹	-1.48%
NAV Return¹	-1.67%
Dow Jones U.S. Dividend 100^TM Index	-1.64%
ETF Category: Morningstar Large Value²	-2.25%
Performance Details	pages 21-22

For index definitions, please see the Glossary.

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

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

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

ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.

Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.

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Schwab U.S. Equity ETFs

From the President

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

Dear Shareholder,

The six-month reporting period ended February 29, 2020, ushered in a time of uncertainty that most Americans haven’t seen in their lifetimes. Up until the last week of February, U.S. stock market performance was strong, with the longest bull market cycle in history continuing and major equity indices hitting new highs. But then, COVID-19—whose effects had seemed mainly confined to China—began to spread quickly around the world, affecting millions of people and sending stock markets reeling. As February 2020 drew to a close, U.S. stocks experienced their worst week since the 2008 financial crisis. In this period, the S&P 500^® Index, a bellwether for the overall U.S. stock market, dropped more than 10% in six days. For the six-month reporting period ended February 29, 2020, the S&P 500^® Index returned 1.9%, erasing double-digit gains from earlier in the period.

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

Sincerely,

“ At Charles Schwab Investment Management, we are committed to serving our clients through this challenging time.”

Past performance cannot guarantee 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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The Investment Environment

Up until the final week of the six-month reporting period ended February 29, 2020, U.S. equity markets were positive, with major market indices hitting new highs in mid-February. In the final week of the reporting period, however, the expanding COVID-19 outbreak sent ripples through every corner of the global economy, driving a global selloff that sent major market indices into bear-market territory resulting in the fastest stock market correction (commonly defined as a decline of 10% or more) in the U.S. on record, more than erasing 2020’s strong gains. For the reporting period, the S&P 500^® Index, a bellwether for the overall U.S. stock market, returned 1.92%. Mid- and small-cap stocks were weaker, with the Dow Jones U.S. Mid-Cap Total Stock Market Index and the Russell 2000^® Index returning -1.86% and -0.52%, respectively. Growth stocks outperformed value. Markets outside the U.S. were mixed over the reporting period. The MSCI EAFE^® Index (Net)*, a broad measure of developed international equity performance, returned -0.91%, while the MSCI Emerging Markets Index (Net)* returned 2.93%.

Steady, albeit slowing, economic growth, accommodative monetary policy, and robust consumer spending helped propel U.S. stock markets to new highs in mid-February. The U.S. economy, despite escalating trade tensions with China over much of the reporting period, maintained steady growth in its record eleventh year of expansion, although at a slowing pace. In December, an announced partial trade resolution between the U.S. and China helped ease market tensions. U.S. gross domestic product (GDP) grew at an annual rate of 2.1% in the third and fourth quarters of 2019, up from 2.0% in the second quarter. Unemployment remained low, ending the period close to its lowest rate in 50 years. Consumer confidence remained solid for most of the reporting period. Inflation crept slightly higher over the reporting period. Amid growing signs of global economic weakness that threatened to dampen U.S. economic growth, along with continued low inflation and weakness in manufacturing—and following one 0.25% interest-rate cut in July—the Federal Reserve (Fed) enacted two interest rate cuts during the period—in September and October. The federal funds rate ended the reporting period in a range of 1.50% to 1.75%.

Asset Class Performance Comparison % returns during the 6 months ended February 29, 2020

Category:	S&P 500{R} Index:	Russell 2000{R} Index:	MSCI EAFE{R} Index (Net)*:	Bloomberg Barclays US Aggregate Bond Index:	Bloomberg Barclays US Treasury Bills 1-3 Month Index:
Description:	measures U.S. large-cap stocks	measures U.S. small-cap stocks	measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East	measures the U.S. bond market	measures short-term U.S. Treasury obligations
Line Style	1	2	4	3	5
8/31/2019	0.00	0.00	0.00	0.00	0.00
9/7/2019	1.83	0.71	2.23	-0.15	0.04
9/14/2019	2.87	5.65	4.27	-1.81	0.07
9/21/2019	2.36	4.44	3.90	-0.95	0.12
9/28/2019	1.35	1.88	3.21	-0.58	0.16
10/5/2019	1.05	0.58	0.98	0.23	0.21
10/12/2019	1.73	1.35	3.31	-0.80	0.25
10/19/2019	2.29	2.93	4.60	-0.70	0.28
10/26/2019	3.55	4.50	5.92	-0.85	0.31
11/2/2019	5.09	6.58	7.17	-0.38	0.36
11/9/2019	6.07	7.25	7.74	-1.25	0.39
11/16/2019	7.06	7.14	7.83	-0.72	0.41
11/23/2019	6.75	6.65	7.21	-0.44	0.44
11/30/2019	7.86	9.08	7.76	-0.28	0.47
12/7/2019	8.08	9.73	8.17	-0.50	0.51
12/14/2019	8.91	10.06	10.03	-0.21	0.53
12/21/2019	10.74	12.37	10.73	-0.51	0.56
12/28/2019	11.41	12.20	11.58	-0.22	0.60
1/4/2020	11.28	11.73	11.57	0.18	0.63
1/11/2020	12.37	11.53	11.47	0.09	0.66
1/18/2020	14.60	14.36	12.42	0.15	0.68
1/25/2020	13.44	11.86	11.73	0.94	0.71
2/1/2020	11.07	8.63	8.94	1.56	0.74
2/8/2020	14.63	11.53	10.96	1.50	0.77
2/15/2020	16.52	13.65	10.93	1.52	0.80
2/22/2020	15.10	13.06	9.56	2.11	0.83
2/29/2020	1.92	-0.52	-0.91	3.39	0.88

41 graphic description end -->

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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The Investment Environment (continued)

Outside the U.S., conditions continued to soften, dampened by slowing economic output, slumping world trade, geopolitical concerns, and, particularly towards the end of the reporting period, the COVID-19 outbreak. Oil prices struggled for much of the period amid rising U.S. crude production, falling steeply to the lowest price in more than a year by the end of the reporting period. In the eurozone, growth slowed, subdued by strikes in France that dampened manufacturing output and political unrest in Italy, among other things. In January, Brexit occurred with the formal departure of the United Kingdom from the European Union, although many uncertainties remain. Amid the economic and political turmoil leading up to its departure, the United Kingdom’s growth was volatile with GDP growing in the third quarter of 2019 after shrinking in the second quarter. United Kingdom GDP was flat in the fourth quarter of 2019. Japan’s economy shrank over the reporting period, particularly during the final quarter of 2019 as a sales tax increase took effect and business spending tumbled. Several Asian economies, including emerging market countries such as China and India, slowed but still outpaced many developed economies. China’s economy slowed amid trade pressure from the U.S. and sluggish demand from home and abroad, while India’s economy was dampened primarily as a result of a fall in factory output and exports and a slowdown in investment. In response to the economic environment, to bolster growth, and to help ensure stability given ongoing trade tensions, a number of central banks reduced their policy rates, while others maintained low—and for some international central banks, negative—interest rates.

Although all sectors suffered in the final week of February, among the sectors in the Dow Jones U.S. Broad Market Index, the information technology sector was the strongest performer for the reporting period, rising on a combination of strong fundamentals, ongoing economic strength, rising demand, and continued solid balance sheets with large cash balances and relatively low debt. The health care sector was the next-strongest performer for the reporting period. Supported by an aging population that portends more-extensive drug treatments and medical care, the health care sector exhibited solid fundamentals and strong balance sheets with substantial cash. The weakest performing sector of the reporting period was the energy sector, which suffered as a result of falling oil prices driven by demand concerns related to the COVID-19 outbreak in China further slowing global growth, as well as from growing U.S. crude oil production from fracking. The materials sector underperformed, impacted by fluctuations in the global economy, the ongoing U.S.-China trade war, and the COVID-19 outbreak.

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Fund Management

Jeremy Brown, Portfolio Manager, is responsible for the day-to-day co-management of the funds. Prior to joining CSIM in 2017, Mr. Brown spent six years with ALPS Advisors, Inc. in Denver, most recently as a senior analyst 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 funds. Prior to joining CSIM in 2010, Mr. Juwono worked at BlackRock (formerly Barclays Global Investors), where he spent more than three years as a portfolio manager, managing equity index funds for institutional clients, and two years as a senior business analyst. Prior to that, Mr. Juwono worked for more than four years as a senior financial analyst with Union Bank of California.

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

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Schwab U.S. Broad Market ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab U.S. Broad Market ETF (11/3/09)
Market Price Return²	1.86%	6.84%	8.68%	12.46%
NAV Return²	1.70%	6.83%	8.66%	12.46%
Dow Jones U.S. Broad Stock Market Index	1.71%	6.84%	8.69%	12.48%
ETF Category: Morningstar Large Blend³	0.49%	5.39%	7.22%	11.06%
Fund Expense Ratio⁴: 0.03%

For index definitions, please see the Glossary.

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

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

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 U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Broad Market ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	2,462
Weighted Average Market Cap (millions)	$244,270
Price/Earnings Ratio (P/E)	19.5
Price/Book Ratio (P/B)	2.9
Portfolio Turnover Rate	2%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Information Technology	23.5
Health Care	13.9
Financials	12.9
Consumer Discretionary	10.2
Communication Services	9.8
Industrials	9.6
Consumer Staples	6.5
Real Estate	4.1
Utilities	3.3
Energy	3.3
Materials	2.7
Other	0.2

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Top Equity Holdings % of Net Assets⁵

Microsoft Corp.	4.3
Apple, Inc.	3.9
Amazon.com, Inc.	2.7
Facebook, Inc., Class A	1.6
Berkshire Hathaway, Inc., Class B	1.4
Alphabet, Inc., Class A	1.4
Alphabet, Inc., Class C	1.4
JPMorgan Chase & Co.	1.3
Johnson & Johnson	1.2
Visa, Inc., Class A	1.1

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab 1000 Index ETF

Average Annual Returns¹

Fund and Inception Date	6 Months	1 Year	Since Inception^*
Fund: Schwab 1000 Index ETF (10/11/17)
Market Price Return²	1.96%	7.81%	8.24%
NAV Return²	1.92%	7.77%	8.24%
Schwab 1000 Index^®	1.91%	7.80%	8.29%
Russell 1000^® Index	1.97%	7.82%	8.33%
ETF Category: Morningstar Large Blend³	0.49%	5.39%	N/A
Fund Expense Ratio⁴: 0.05%

For index definitions, please see the Glossary.

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

^*	Inception (10/11/17) represents the date that the shares began trading in the secondary market.
¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴	As stated in the prospectus.

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab 1000 Index ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	1,002
Weighted Average Market Cap (millions)	$258,281
Price/Earnings Ratio (P/E)	19.8
Price/Book Ratio (P/B)	3.0
Portfolio Turnover Rate	3%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Information Technology	24.2
Health Care	13.9
Financials	12.5
Consumer Discretionary	10.2
Communication Services	10.1
Industrials	9.3
Consumer Staples	6.7
Real Estate	3.8
Utilities	3.4
Energy	3.3
Materials	2.5
Other	0.1

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Top Equity Holdings % of Net Assets⁵

Microsoft Corp.	4.5
Apple, Inc.	4.2
Amazon.com, Inc.	2.9
Facebook, Inc., Class A	1.7
Berkshire Hathaway, Inc., Class B	1.5
Alphabet, Inc., Class A	1.5
Alphabet, Inc., Class C	1.5
JPMorgan Chase & Co.	1.3
Johnson & Johnson	1.3
Visa, Inc., Class A	1.1

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Large-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab U.S. Large-Cap ETF (11/3/09)
Market Price Return²	2.36%	8.26%	9.16%	12.59%
NAV Return²	2.08%	8.08%	9.10%	12.58%
Dow Jones U.S. Large-Cap Total Stock Market Index	2.10%	8.10%	9.12%	12.65%
ETF Category: Morningstar Large Blend³	0.49%	5.39%	7.22%	11.06%
Fund Expense Ratio⁴: 0.03%

For index definitions, please see the Glossary.

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

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

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 U.S. Large-Cap ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	758
Weighted Average Market Cap (millions)	$267,380
Price/Earnings Ratio (P/E)	19.8
Price/Book Ratio (P/B)	3.0
Portfolio Turnover Rate	3%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Information Technology	24.3
Health Care	13.9
Financials	12.4
Communication Services	10.4
Consumer Discretionary	10.1
Industrials	9.1
Consumer Staples	6.8
Real Estate	3.6
Energy	3.4
Utilities	3.3
Materials	2.6
Other	0.1

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

Microsoft Corp.	4.7
Apple, Inc.	4.3
Amazon.com, Inc.	3
Facebook, Inc., Class A	1.8
Berkshire Hathaway, Inc., Class B	1.5
Alphabet, Inc., Class A	1.5
Alphabet, Inc., Class C	1.5
JPMorgan Chase & Co.	1.4
Johnson & Johnson	1.3
Visa, Inc., Class A	1.2

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Large-Cap Growth ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab U.S. Large-Cap Growth ETF (12/11/09)
Market Price Return²	6.76%	16.06%	11.59%	14.44%
NAV Return²	6.56%	15.92%	11.57%	14.44%
Dow Jones U.S. Large-Cap Growth Total Stock Market Index	6.58%	15.96%	11.61%	14.53%
ETF Category: Morningstar Large Growth³	3.62%	10.78%	10.04%	13.01%
Fund Expense Ratio⁴: 0.04%

For index definitions, please see the Glossary.

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

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

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 U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Large-Cap Growth ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	351
Weighted Average Market Cap (millions)	$404,290
Price/Earnings Ratio (P/E)	25.0
Price/Book Ratio (P/B)	4.8
Portfolio Turnover Rate	6%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Information Technology	35.9
Communication Services	14.2
Consumer Discretionary	13.9
Health Care	12.8
Industrials	7.3
Financials	6.8
Real Estate	3.4
Consumer Staples	2.1
Materials	2.1
Utilities	0.9
Energy	0.5
Other	0.1

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

Microsoft Corp.	8.8
Apple, Inc.	8.1
Amazon.com, Inc.	5.6
Facebook, Inc., Class A	3.3
Berkshire Hathaway, Inc., Class B	2.9
Alphabet, Inc., Class A	2.9
Alphabet, Inc., Class C	2.8
Visa, Inc., Class A	2.2
Mastercard, Inc., Class A	1.8
UnitedHealth Group, Inc.	1.7

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Large-Cap Value ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab U.S. Large-Cap Value ETF (12/11/09)
Market Price Return²	-2.00%	0.19%	6.57%	10.63%
NAV Return²	-2.23%	0.02%	6.55%	10.64%
Dow Jones U.S. Large-Cap Value Total Stock Market Index	-2.20%	0.06%	6.61%	10.76%
ETF Category: Morningstar Large Value³	-2.25%	-0.73%	4.91%	9.49%
Fund Expense Ratio⁴: 0.04%

For index definitions, please see the Glossary.

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

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

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 U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Large-Cap Value ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	410
Weighted Average Market Cap (millions)	$113,456
Price/Earnings Ratio (P/E)	16.0
Price/Book Ratio (P/B)	2.2
Portfolio Turnover Rate	15%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Financials	18.6
Health Care	15.1
Consumer Staples	12.1
Information Technology	11.2
Industrials	11
Energy	6.7
Communication Services	6.1
Utilities	6.1
Consumer Discretionary	5.9
Real Estate	3.9
Materials	3.2
Other	0.1

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

JPMorgan Chase & Co.	2.9
Johnson & Johnson	2.8
The Procter & Gamble Co.	2.2
AT&T, Inc.	2.1
Intel Corp.	1.9
Bank of America Corp.	1.8
Verizon Communications, Inc.	1.8
Exxon Mobil Corp.	1.7
The Coca-Cola Co.	1.7
Merck & Co., Inc.	1.6

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Mid-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Mid-Cap ETF (1/13/11)
Market Price Return²	-1.86%	-0.99%	6.37%	10.33%
NAV Return²	-1.86%	-0.86%	6.39%	10.34%
Dow Jones U.S. Mid-Cap Total Stock Market Index	-1.86%	-0.85%	6.42%	10.38%
ETF Category: Morningstar Mid-Cap Blend³	-2.18%	-1.62%	4.04%	N/A
Fund Expense Ratio⁴: 0.04%

For index definitions, please see the Glossary.

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

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

^*	Inception (1/13/11) represents the date that the shares began trading in the secondary market.
¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴	As stated in the prospectus.

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Mid-Cap ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	505
Weighted Average Market Cap (millions)	$7,838
Price/Earnings Ratio (P/E)	17.6
Price/Book Ratio (P/B)	2.2
Portfolio Turnover Rate	15%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Information Technology	18.5
Industrials	15.3
Financials	13.6
Consumer Discretionary	12.5
Real Estate	10.7
Health Care	10.5
Materials	6
Utilities	4.6
Communication Services	3.3
Consumer Staples	2.2
Energy	2.1
Other	0.7

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

RingCentral, Inc., Class A	0.6
Burlington Stores, Inc.	0.5
Sun Communities, Inc.	0.5
Leidos Holdings, Inc.	0.5
STERIS plc	0.5
Domino's Pizza, Inc.	0.4
Alnylam Pharmaceuticals, Inc.	0.4
International Flavors & Fragrances, Inc.	0.4
NVR, Inc.	0.4
Lamb Weston Holdings, Inc.	0.4

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Small-Cap ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	10 Years
Fund: Schwab U.S. Small-Cap ETF (11/3/09)
Market Price Return²	-2.05%	-4.38%	4.85%	10.94%
NAV Return²	-2.16%	-4.58%	4.82%	10.92%
Dow Jones U.S. Small-Cap Total Stock Market Index	-2.19%	-4.61%	4.80%	10.93%
ETF Category: Morningstar Small Blend³	-2.89%	-6.80%	3.80%	9.56%
Fund Expense Ratio⁴: 0.04%

For index definitions, please see the Glossary.

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

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

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

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 U.S. Equity ETFs | Semiannual Report

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Schwab U.S. Small-Cap ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	1,731
Weighted Average Market Cap (millions)	$3,082
Price/Earnings Ratio (P/E)	16.6
Price/Book Ratio (P/B)	1.7
Portfolio Turnover Rate	8%^2,3

Sector Weightings % of Investments⁴

	Value	Override
Financials	18.3
Information Technology	15.1
Industrials	15.1
Health Care	14.6
Consumer Discretionary	11.5
Real Estate	8.6
Materials	3.7
Utilities	3.3
Communication Services	3.2
Consumer Staples	3.1
Energy	2.1
Other	1.4

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

Teladoc Health, Inc.	0.4
Charles River Laboratories International, Inc.	0.3
Entegris, Inc.	0.3
AECOM	0.3
Etsy, Inc.	0.3
New Residential Investment Corp.	0.3
Generac Holdings, Inc.	0.3
First American Financial Corp.	0.3
LPL Financial Holdings, Inc.	0.3
Horizon Therapeutics plc	0.3

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Dividend Equity ETF

Average Annual Total Returns¹

Fund and Inception Date	6 Months	1 Year	5 Years	Since Inception^*
Fund: Schwab U.S. Dividend Equity ETF (10/20/11)
Market Price Return²	-1.48%	2.72%	8.05%	12.23%
NAV Return²	-1.67%	2.64%	8.04%	12.22%
Dow Jones U.S. Dividend 100^TM Index	-1.64%	2.71%	8.14%	12.34%
ETF Category: Morningstar Large Value³	-2.25%	-0.73%	4.91%	N/A
Fund Expense Ratio⁴: 0.06%

For index definitions, please see the Glossary.

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

The fund may underperform other funds that do not limit their investment to dividend paying stocks. Stocks held by the fund may reduce or stop paying dividends, affecting the fund’s ability to generate income. Diversification strategies do not ensure a profit and do not protect against losses in declining markets.

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

^*	Inception (10/20/11) represents the date that the shares began trading in the secondary market.
¹	Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption or sale of fund shares.
²	ETF performance must be shown based on both a market price and NAV basis. The fund’s per share NAV is the value of one share of the fund. NAV is calculated by taking the fund’s total assets (including the market value of securities owned), subtracting liabilities, and dividing by the number of shares outstanding. The NAV Return is based on the NAV of the fund, and the Market Price Return is based on the market price per share of the fund. The price used to calculate market return (Market Price) is determined using the Official Closing Price on the primary stock exchange (generally, 4:00 p.m. Eastern time) and may not represent the returns you would receive if shares were traded at other times. NAV is used as a proxy for purposes of calculating Market Price Return on inception date. Market Price and NAV returns assume that dividends and capital gain distributions have been reinvested in the fund at Market Price and NAV, respectively.
³	Source for category information: Morningstar, Inc. The Morningstar Category return represents all passively- and actively-managed ETFs within the category as of the report date.
⁴	As stated in the prospectus.

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Schwab U.S. Dividend Equity ETF

Performance and Fund Facts as of February 29, 2020

Statistics¹

Number of Holdings	100
Weighted Average Market Cap (millions)	$121,179
Price/Earnings Ratio (P/E)	16.3
Price/Book Ratio (P/B)	3.3
Portfolio Turnover Rate	5%^2,3

Sector Weightings % of Investments⁴

Sector Weightings % of Investments{4}	Value	Override
Consumer Staples	21.7
Information Technology	17.9
Industrials	15.9
Health Care	12.4
Consumer Discretionary	10.9
Financials	9
Energy	5.6
Communication Services	5
Materials	1.6

41 graphic description end -->

Top Equity Holdings % of Net Assets⁵

The Home Depot, Inc.	5.1
The Coca-Cola Co.	5
Intel Corp.	4.9
PepsiCo, Inc.	4.8
Bristol-Myers Squibb Co.	4.7
The Procter & Gamble Co.	4.5
Verizon Communications, Inc.	4.4
Pfizer, Inc.	4.4
International Business Machines Corp.	4
Exxon Mobil Corp.	3.7

41 graphic description end -->

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S& P and MSCI.

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

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Schwab U.S. Equity ETFs

Fund Expenses (Unaudited)

Examples for a $1,000 Investment

	Expense Ratio (Annualized)¹	Beginning Account Value at 9/1/19	Ending Account Value (Net of Expenses) at 2/29/20	Expenses Paid During Period 9/1/19-2/29/20²
Schwab U.S. Broad Market ETF
Actual Return	0.03%	$1,000.00	$1,017.00	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.75	$0.15
Schwab 1000 Index ETF
Actual Return	0.05%	$1,000.00	$1,019.20	$0.25
Hypothetical 5% Return	0.05%	$1,000.00	$1,024.65	$0.25
Schwab U.S. Large-Cap ETF
Actual Return	0.03%	$1,000.00	$1,020.80	$0.15
Hypothetical 5% Return	0.03%	$1,000.00	$1,024.75	$0.15
Schwab U.S. Large-Cap Growth ETF
Actual Return	0.04%	$1,000.00	$1,065.60	$0.21
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.70	$0.20
Schwab U.S. Large-Cap Value ETF
Actual Return	0.04%	$1,000.00	$977.70	$0.20
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.70	$0.20
Schwab U.S. Mid-Cap ETF
Actual Return	0.04%	$1,000.00	$981.40	$0.20
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.70	$0.20
Schwab U.S. Small-Cap ETF
Actual Return	0.04%	$1,000.00	$978.40	$0.20
Hypothetical 5% Return	0.04%	$1,000.00	$1,024.70	$0.20
Schwab U.S. Dividend Equity ETF
Actual Return	0.06%	$1,000.00	$983.30	$0.30
Hypothetical 5% Return	0.06%	$1,000.00	$1,024.60	$0.30

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 182 days of the period, and divided by 366 days of the fiscal year.

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Table of Contents

Schwab U.S. Broad Market ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$70.13	$70.55	$59.72	$52.42	$48.02	$48.75
Income (loss) from investment operations:
Net investment income (loss)¹	0.80	1.43	1.18	1.12	1.03	0.99
Net realized and unrealized gains (losses)	0.42	(0.55)	10.77	7.20	4.34	(0.79)
Total from investment operations	1.22	0.88	11.95	8.32	5.37	0.20
Less distributions:
Distributions from net investment income	(0.80)	(1.30)	(1.12)	(1.02)	(0.97)	(0.93)
Net asset value at end of period	$70.55	$70.13	$70.55	$59.72	$52.42	$48.02
Total return	1.70%²	1.35%	20.20%	16.03%	11.35%	0.33%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03%³	0.03%	0.03%	0.03%	0.03%⁴	0.04%
Net investment income (loss)	2.15%³	2.12%	1.81%	1.99%	2.09%	1.98%
Portfolio turnover rate⁵	2%²	4%	4%	4%	5%	3%
Net assets, end of period (x 1,000)	$14,772,891	$14,877,368	$13,326,391	$10,215,289	$6,858,980	$4,919,185

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

⁵

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

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Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.8% of net assets

Automobiles & Components 0.8%
Other Securities		0.8	121,613,781

Banks 5.2%
Bank of America Corp.	4,105,674	0.8	117,011,709
Citigroup, Inc.	1,106,704	0.5	70,231,436
JPMorgan Chase & Co.	1,591,293	1.3	184,765,030
Wells Fargo & Co.	1,953,306	0.6	79,792,550
Other Securities		2.0	314,310,213
		5.2	766,110,938

Capital Goods 6.7%
Honeywell International, Inc.	362,165	0.4	58,732,298
The Boeing Co.	271,188	0.5	74,606,531
Other Securities		5.8	855,535,749
		6.7	988,874,578

Commercial & Professional Services 1.1%
Other Securities		1.1	168,219,701

Consumer Durables & Apparel 1.3%
NIKE, Inc., Class B	631,745	0.4	56,465,368
Other Securities		0.9	140,580,114
		1.3	197,045,482

Consumer Services 2.1%
McDonald's Corp.	381,838	0.5	74,141,484
Other Securities		1.6	235,755,472
		2.1	309,896,956

Diversified Financials 5.2%
Berkshire Hathaway, Inc., Class B *	991,117	1.4	204,507,082
The Charles Schwab Corp. (b)	576,261	0.2	23,482,636
Other Securities		3.6	538,859,227
		5.2	766,848,945

Energy 3.3%
Chevron Corp.	959,125	0.6	89,524,727
Exxon Mobil Corp.	2,146,404	0.8	110,411,022
Other Securities		1.9	286,029,487
		3.3	485,965,236

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Costco Wholesale Corp.	223,933	0.5	62,956,524
Walmart, Inc.	719,028	0.5	77,424,935
Other Securities		0.4	61,103,308
		1.4	201,484,767

Food, Beverage & Tobacco 3.5%
PepsiCo, Inc.	706,645	0.6	93,298,339
Philip Morris International, Inc.	789,139	0.4	64,606,810
The Coca-Cola Co.	1,953,950	0.7	104,516,786
Other Securities		1.8	250,907,321
		3.5	513,329,256

Health Care Equipment & Services 6.3%
Abbott Laboratories	895,539	0.5	68,983,369
Medtronic plc	680,037	0.5	68,459,325
UnitedHealth Group, Inc.	480,449	0.8	122,495,277
Other Securities		4.5	664,707,708
		6.3	924,645,679

Household & Personal Products 1.7%
The Procter & Gamble Co.	1,263,152	1.0	143,026,701
Other Securities		0.7	102,737,837
		1.7	245,764,538

Insurance 2.5%
Other Securities		2.5	372,669,269

Materials 2.7%
Other Securities		2.7	394,673,971

Media & Entertainment 7.8%
Alphabet, Inc., Class A *	151,915	1.4	203,452,164
Alphabet, Inc., Class C *	151,538	1.4	202,959,390
Comcast Corp., Class A	2,304,243	0.6	93,160,544
Facebook, Inc., Class A *	1,220,469	1.6	234,903,668
Netflix, Inc. *	222,406	0.6	82,074,486
The Walt Disney Co.	914,380	0.7	107,576,807
Other Securities		1.5	236,729,916
		7.8	1,160,856,975

Pharmaceuticals, Biotechnology & Life Sciences 7.7%
AbbVie, Inc.	750,909	0.5	64,360,410
Amgen, Inc.	301,661	0.4	60,250,752
Bristol-Myers Squibb Co.	1,187,715	0.5	70,146,448
Johnson & Johnson	1,334,603	1.2	179,477,411
Merck & Co., Inc.	1,291,654	0.7	98,889,030

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Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	2,808,161	0.7	93,848,741
Thermo Fisher Scientific, Inc.	203,676	0.4	59,228,981
Other Securities		3.3	510,897,487
		7.7	1,137,099,260

Real Estate 4.1%
Other Securities		4.1	604,209,682

Retailing 6.0%
Amazon.com, Inc. *	211,190	2.7	397,829,162
The Home Depot, Inc.	553,075	0.8	120,481,858
Other Securities		2.5	364,018,098
		6.0	882,329,118

Semiconductors & Semiconductor Equipment 4.1%
Intel Corp.	2,205,248	0.8	122,435,369
NVIDIA Corp.	310,498	0.6	83,856,195
Other Securities		2.7	404,888,992
		4.1	611,180,556

Software & Services 13.4%
Accenture plc, Class A	322,168	0.4	58,180,319
Adobe, Inc. *	245,919	0.6	84,871,565
International Business Machines Corp.	448,975	0.4	58,434,096
Mastercard, Inc., Class A	450,135	0.9	130,651,684
Microsoft Corp.	3,867,941	4.3	626,645,121
PayPal Holdings, Inc. *	596,365	0.4	64,401,456
salesforce.com, Inc. *	450,393	0.5	76,746,967
Visa, Inc., Class A	868,074	1.1	157,781,130
Other Securities		4.8	719,200,440
		13.4	1,976,912,778

Technology Hardware & Equipment 5.9%
Apple, Inc.	2,117,569	3.9	578,858,662
Cisco Systems, Inc.	2,150,156	0.6	85,855,729
Other Securities		1.4	215,112,094
		5.9	879,826,485

Telecommunication Services 1.9%
AT&T, Inc.	3,703,294	0.9	130,430,015
Verizon Communications, Inc.	2,095,551	0.8	113,495,042
Other Securities		0.2	39,593,194
		1.9	283,518,251

Transportation 1.8%
Other Securities		1.8	259,872,428

Utilities 3.3%
NextEra Energy, Inc.	247,678	0.4	62,603,091
Other Securities		2.9	432,286,924
		3.3	494,890,015
Total Common Stock
(Cost $11,579,347,348)			14,747,838,645

Security	Number of Shares	% of Net Assets	Value ($)
Rights 0.0% of net assets

Materials 0.0%
Other Securities		0.0	6,692

Media 0.0%
Other Securities		0.0	3,586
Total Rights
(Cost $6,692)			10,278

Other Investment Companies 0.3% of net assets

Money Market Fund 0.1%
Other Securities		0.1	14,433,289

Securities Lending Collateral 0.2%
Other Securities		0.2	22,919,675
Total Other Investment Companies
(Cost $37,352,964)			37,352,964

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/20/20	143	21,100,365	(2,786,673)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $22,021,632.
(b)	Issuer is affiliated with the fund’s investment adviser.
(c)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(d)	The rate shown is the 7-day yield.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Broad Market ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

The fund owns shares of an affiliate, The Charles Schwab Corp., since that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corp. shares owned by the fund during the period ended February 29, 2020:

	Market Value at 8/31/19	Gross Purchases	Gross Sales	Realized Gains(Losses)	Net change in unrealized appreciation (depreciation)	Market Value at 2/29/20	Balance of Shares Held at 2/29/20	Dividends Received
The Charles Schwab Corp.	$23,118,065	$684,361	($1,929,182)	$83,308	$1,526,084	$23,482,636	576,261	$205,085

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$14,747,838,645	$—	$—	$14,747,838,645
Rights¹
Materials	—	—	6,692	6,692
Media	—	—	3,586	3,586
Other Investment Companies¹	37,352,964	—	—	37,352,964
Liabilities
Futures Contracts²	(2,786,673)	—	—	(2,786,673)
Total	$14,782,404,936	$—	$10,278	$14,782,415,214

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Broad Market ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in affiliated issuer, at value (cost $20,591,047)		$23,482,636
Investments in unaffiliated issuers, at value (cost $11,573,196,282) including securities on loan of $22,021,632		14,738,799,576
Collateral invested for securities on loan, at value (cost $22,919,675)		22,919,675
Deposit with broker for futures contracts		4,811,320
Receivables:
Investments sold		84,093,958
Dividends		26,632,240
Income from securities on loan	+	86,892
Total assets		14,900,826,297
Liabilities
Collateral held for securities on loan		22,919,675
Payables:
Investments bought		17,006,466
Management fees		379,359
Fund shares redeemed		84,751,093
Variation margin on futures contracts		2,786,390
Due to custodian	+	92,121
Total liabilities		127,935,104
Net Assets
Total assets		14,900,826,297
Total liabilities	–	127,935,104
Net assets		$14,772,891,193
Net Assets by Source
Capital received from investors		11,397,474,384
Total distributable earnings		3,375,416,809

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$14,772,891,193		209,400,000		$70.55

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Broad Market ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends received from affiliated issuer		$205,085
Dividends received from unaffiliated issuers (net of foreign withholding tax of $8,651)		171,312,774
Securities on loan, net	+	693,983
Total investment income		172,211,842
Expenses
Management fees		2,353,249
Total expenses	–	2,353,249
Net investment income		169,858,593
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(255,156)
Net realized losses on unaffiliated investments		(33,999,605)
Net realized gains on in-kind redemptions on affiliated issuer		338,464
Net realized gains on in-kind redemptions on unaffiliated investments		254,292,427
Net realized gains on futures contracts	+	1,318,882
Net realized gains		221,695,012
Net change in unrealized appreciation (depreciation) on affiliated issuer		1,526,084
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(119,402,845)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(2,883,809)
Net change in unrealized appreciation (depreciation)	+	(120,760,570)
Net realized and unrealized gains		100,934,442
Increase in net assets resulting from operations		$270,793,035

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Broad Market ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$169,858,593	$294,788,603
Net realized gains		221,695,012	554,655,585
Net change in unrealized appreciation (depreciation)	+	(120,760,570)	(555,447,484)
Increase in net assets resulting from operations		270,793,035	293,996,704
Distributions to Shareholders
Total distributions		($170,378,385)	($265,289,790)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		4,100,000	$302,221,598	42,400,000	$2,804,352,289
Shares redeemed	+	(6,850,000)	(507,112,701)	(19,150,000)	(1,282,082,268)
Net transactions in fund shares		(2,750,000)	($204,891,103)	23,250,000	$1,522,270,021
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		212,150,000	$14,877,367,646	188,900,000	$13,326,390,711
Total increase or decrease	+	(2,750,000)	(104,476,453)	23,250,000	1,550,976,935
End of period		209,400,000	$14,772,891,193	212,150,000	$14,877,367,646

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab 1000 Index ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	10/11/17¹– 8/31/18
Per-Share Data
Net asset value at beginning of period	$28.80	$28.62	$25.00
Income (loss) from investment operations:
Net investment income (loss)²	0.33	0.57	0.44
Net realized and unrealized gains (losses)	0.23	0.10	3.47
Total from investment operations	0.56	0.67	3.91
Less distributions:
Distributions from net investment income	(0.32)	(0.49)	(0.29)
Net asset value at end of period	$29.04	$28.80	$28.62
Total return	1.92%³	2.42%	15.72%³
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.05%⁴	0.05%	0.05%⁴
Net investment income (loss)	2.15%⁴	2.06%	1.87%⁴
Portfolio turnover rate⁵	3%³	5%	3%³
Net assets, end of period (x 1,000)	$908,806	$838,213	$486,487

*	Unaudited.

Commencement of operations.

Calculated based on the average shares outstanding during the period.

Not annualized.

⁴

Annualized.

⁵

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.7% of net assets

Automobiles & Components 0.8%
Other Securities		0.8	7,061,129

Banks 4.9%
Bank of America Corp.	266,874	0.9	7,605,909
Citigroup, Inc.	71,963	0.5	4,566,772
JPMorgan Chase & Co.	103,454	1.3	12,012,044
Wells Fargo & Co.	126,870	0.6	5,182,639
Other Securities		1.6	15,175,284
		4.9	44,542,648

Capital Goods 6.5%
Honeywell International, Inc.	23,544	0.4	3,818,130
The Boeing Co.	17,623	0.5	4,848,264
Other Securities		5.6	50,429,896
		6.5	59,096,290

Commercial & Professional Services 1.0%
Other Securities		1.0	9,005,050

Consumer Durables & Apparel 1.2%
NIKE, Inc., Class B	41,061	0.4	3,670,032
Other Securities		0.8	7,511,003
		1.2	11,181,035

Consumer Services 2.0%
McDonald's Corp.	24,824	0.5	4,820,076
Other Securities		1.5	13,549,628
		2.0	18,369,704

Diversified Financials 5.1%
Berkshire Hathaway, Inc., Class B *	64,543	1.5	13,317,803
The Charles Schwab Corp. (a)	37,499	0.2	1,528,084
Other Securities		3.4	31,439,790
		5.1	46,285,677

Energy 3.3%
Chevron Corp.	62,317	0.7	5,816,669
Exxon Mobil Corp.	139,448	0.8	7,173,205
Other Securities		1.8	17,089,021
		3.3	30,078,895

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Costco Wholesale Corp.	14,559	0.5	4,093,117
Walmart, Inc.	46,753	0.6	5,034,363
Other Securities		0.3	3,606,377
		1.4	12,733,857

Food, Beverage & Tobacco 3.6%
PepsiCo, Inc.	45,957	0.7	6,067,703
Philip Morris International, Inc.	51,279	0.5	4,198,212
The Coca-Cola Co.	127,104	0.8	6,798,793
Other Securities		1.6	15,328,999
		3.6	32,393,707

Health Care Equipment & Services 6.2%
Abbott Laboratories	58,261	0.5	4,487,845
Medtronic plc	44,250	0.5	4,454,647
UnitedHealth Group, Inc.	31,220	0.9	7,959,851
Other Securities		4.3	39,793,387
		6.2	56,695,730

Household & Personal Products 1.7%
The Procter & Gamble Co.	82,307	1.0	9,319,622
Other Securities		0.7	6,146,537
		1.7	15,466,159

Insurance 2.5%
Other Securities		2.5	22,857,297

Materials 2.5%
Other Securities		2.5	23,106,607

Media & Entertainment 8.2%
Alphabet, Inc., Class A *	9,877	1.5	13,227,772
Alphabet, Inc., Class C *	9,853	1.5	13,196,419
Comcast Corp., Class A	149,826	0.7	6,057,465
Facebook, Inc., Class A *	79,361	1.7	15,274,612
Netflix, Inc. *	14,468	0.6	5,339,126
The Walt Disney Co.	59,404	0.8	6,988,881
Other Securities		1.4	14,107,893
		8.2	74,192,168

Pharmaceuticals, Biotechnology & Life Sciences 7.6%
AbbVie, Inc.	48,746	0.5	4,178,020
Amgen, Inc.	19,585	0.4	3,911,712
Bristol-Myers Squibb Co.	77,270	0.5	4,563,566
Johnson & Johnson	86,738	1.3	11,664,526
Merck & Co., Inc.	83,926	0.7	6,425,375

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Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	182,428	0.7	6,096,744
Thermo Fisher Scientific, Inc.	13,213	0.4	3,842,340
Other Securities		3.1	28,362,235
		7.6	69,044,518

Real Estate 3.8%
Other Securities		3.8	34,683,044

Retailing 6.1%
Amazon.com, Inc. *	13,732	2.9	25,867,655
The Home Depot, Inc.	35,957	0.9	7,832,873
Other Securities		2.3	21,787,000
		6.1	55,487,528

Semiconductors & Semiconductor Equipment 4.2%
Intel Corp.	143,401	0.9	7,961,623
NVIDIA Corp.	20,174	0.6	5,448,392
Other Securities		2.7	25,131,973
		4.2	38,541,988

Software & Services 13.8%
Accenture plc, Class A	20,925	0.4	3,778,846
Adobe, Inc. *	15,952	0.6	5,505,354
International Business Machines Corp.	29,188	0.4	3,798,818
Mastercard, Inc., Class A	29,277	0.9	8,497,649
Microsoft Corp.	251,579	4.5	40,758,314
PayPal Holdings, Inc. *	38,695	0.5	4,178,673
salesforce.com, Inc. *	29,232	0.6	4,981,133
Visa, Inc., Class A	56,463	1.1	10,262,715
Other Securities		4.8	43,890,754
		13.8	125,652,256

Technology Hardware & Equipment 6.1%
Apple, Inc.	137,758	4.2	37,657,527
Cisco Systems, Inc.	139,811	0.6	5,582,653
Other Securities		1.3	11,878,386
		6.1	55,118,566

Telecommunication Services 2.0%
AT&T, Inc.	240,802	1.0	8,481,047
Verizon Communications, Inc.	136,321	0.8	7,383,145
Other Securities		0.2	2,007,748
		2.0	17,871,940

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 1.8%
Other Securities		1.8	16,039,122

Utilities 3.4%
NextEra Energy, Inc.	16,103	0.5	4,070,194
Other Securities		2.9	26,986,821
		3.4	31,057,015
Total Common Stock
(Cost $842,162,959)			906,561,930

Other Investment Companies 0.1% of net assets

Money Market Fund 0.1%
Other Securities		0.1	511,224

Securities Lending Collateral 0.0%
Other Securities		0.0	92,750
Total Other Investment Companies
(Cost $603,974)			603,974

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/20/20	14	2,065,770	(215,066)

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

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s investment adviser.
(b)	All or a portion of this security is on loan. Securities on loan were valued at $91,000.
(c)	The rate shown is the 7-day yield.

REIT —

Real Estate Investment Trust

	Market Value at 8/31/19	Gross Purchases	Gross Sales	Realized Gains(Losses)	Net change in unrealized appreciation (depreciation)	Market Value at 2/29/20	Balance of Shares Held at 2/29/20	Dividends Received
The Charles Schwab Corp.	$1,387,479	$149,087	($90,621)	($13,921)	$96,060	$1,528,084	37,499	$12,749

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab 1000 Index ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$906,561,930	$—	$—	$906,561,930
Other Investment Companies¹	603,974	—	—	603,974
Liabilities
Futures Contracts²	(215,066)	—	—	(215,066)
Total	$906,950,838	$—	$—	$906,950,838

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

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Table of Contents

Schwab 1000 Index ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in affiliated issuer, at value (cost $1,752,204)		$1,528,084
Investments in unaffiliated issuers, at value (cost $840,921,979) including securities on loan of $91,000		905,545,070
Collateral invested for securities on loan, at value (cost $92,750)		92,750
Deposit with broker for futures contracts		296,653
Receivables:
Investments sold		78,350
Dividends		1,659,253
Income from securities on loan	+	204
Total assets		909,200,364
Liabilities
Collateral held for securities on loan		92,750
Payables:
Investments bought		48,009
Management fees		38,256
Variation margin on futures contracts	+	215,039
Total liabilities		394,054
Net Assets
Total assets		909,200,364
Total liabilities	–	394,054
Net assets		$908,806,310
Net Assets by Source
Capital received from investors		845,038,784
Total distributable earnings		63,767,526

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$908,806,310		31,300,000		$29.04

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Table of Contents

Schwab 1000 Index ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends received from affiliated issuer		$12,749
Dividends received from unaffiliated issuers (net of foreign withholding tax of $184)		10,012,187
Securities on loan, net	+	1,004
Total investment income		10,025,940
Expenses
Management fees		226,161
Total expenses	–	226,161
Net investment income		9,799,779
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(16,040)
Net realized losses on unaffiliated investments		(4,307,024)
Net realized gains on in-kind redemptions on affiliated issuer		2,119
Net realized gains on in-kind redemptions on unaffiliated investments		3,498,036
Net realized gains on futures contracts	+	248,639
Net realized losses		(574,270)
Net change in unrealized appreciation (depreciation) on affiliated issuer		96,060
Net change in unrealized appreciation (depreciation) on unaffiliated investments		1,637,743
Net change in unrealized appreciation (depreciation) on futures contracts	+	(229,116)
Net change in unrealized appreciation (depreciation)	+	1,504,687
Net realized and unrealized gains		930,417
Increase in net assets resulting from operations		$10,730,196

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab 1000 Index ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$9,799,779	$14,379,283
Net realized gains (losses)		(574,270)	8,715,101
Net change in unrealized appreciation (depreciation)	+	1,504,687	24,311,946
Increase in net assets resulting from operations		10,730,196	47,406,330
Distributions to Shareholders
Total distributions		($9,528,940)	($11,758,680)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		2,600,000	$81,509,208	16,200,000	$422,614,476
Shares redeemed	+	(400,000)	(12,117,594)	(4,100,000)	(106,536,181)
Net transactions in fund shares		2,200,000	$69,391,614	12,100,000	$316,078,295
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		29,100,000	$838,213,440	17,000,000	$486,487,495
Total increase	+	2,200,000	70,592,870	12,100,000	351,725,945
End of period		31,300,000	$908,806,310	29,100,000	$838,213,440

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Table of Contents

Schwab U.S. Large-Cap ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$70.00	$69.53	$59.10	$51.75	$47.30	$47.99
Income (loss) from investment operations:
Net investment income (loss)¹	0.81	1.47	1.19	1.15	1.03	1.01
Net realized and unrealized gains (losses)	0.68	0.33	10.39	7.24	4.41	(0.77)
Total from investment operations	1.49	1.80	11.58	8.39	5.44	0.24
Less distributions:
Distributions from net investment income	(0.80)	(1.33)	(1.15)	(1.04)	(0.99)	(0.93)
Net asset value at end of period	$70.69	$70.00	$69.53	$59.10	$51.75	$47.30
Total return	2.08%²	2.70%	19.79%	16.39%	11.66%	0.43%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.03%³	0.03%	0.03%	0.03%	0.03%⁴	0.04%
Net investment income (loss)	2.18%³	2.19%	1.86%	2.07%	2.13%	2.04%
Portfolio turnover rate⁵	3%²	4%	3%	4%	4%	4%
Net assets, end of period (x 1,000)	$18,441,771	$17,785,958	$14,989,877	$9,824,643	$6,218,346	$4,329,918

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

⁵

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

₃₈

Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.7% of net assets

Automobiles & Components 0.8%
Other Securities		0.8	145,518,319

Banks 4.7%
Bank of America Corp.	5,615,713	0.9	160,047,820
Citigroup, Inc.	1,512,791	0.5	96,001,717
JPMorgan Chase & Co.	2,174,534	1.4	252,485,143
Wells Fargo & Co.	2,668,702	0.6	109,016,477
Other Securities		1.3	245,025,937
		4.7	862,577,094

Capital Goods 6.3%
Honeywell International, Inc.	495,128	0.4	80,294,908
The Boeing Co.	370,697	0.6	101,982,452
Other Securities		5.3	986,986,113
		6.3	1,169,263,473

Commercial & Professional Services 0.9%
Other Securities		0.9	171,429,683

Consumer Durables & Apparel 1.2%
NIKE, Inc., Class B	863,636	0.4	77,191,786
Other Securities		0.8	136,745,009
		1.2	213,936,795

Consumer Services 1.9%
McDonald's Corp.	522,093	0.6	101,374,798
Other Securities		1.3	252,866,638
		1.9	354,241,436

Diversified Financials 5.2%
Berkshire Hathaway, Inc., Class B *	1,355,545	1.5	279,703,155
The Charles Schwab Corp. (a)	787,278	0.2	32,081,578
Other Securities		3.5	646,946,384
		5.2	958,731,117

Energy 3.4%
Chevron Corp.	1,310,907	0.7	122,360,059
Exxon Mobil Corp.	2,933,594	0.8	150,904,075
Other Securities		1.9	353,600,621
		3.4	626,864,755

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.4%
Costco Wholesale Corp.	306,066	0.5	86,047,395
Walmart, Inc.	983,408	0.6	105,893,374
Other Securities		0.3	68,214,994
		1.4	260,155,763

Food, Beverage & Tobacco 3.6%
PepsiCo, Inc.	966,532	0.7	127,611,220
Philip Morris International, Inc.	1,078,087	0.5	88,262,983
The Coca-Cola Co.	2,672,982	0.8	142,977,807
Other Securities		1.6	314,464,642
		3.6	673,316,652

Health Care Equipment & Services 6.3%
Abbott Laboratories	1,224,580	0.5	94,329,397
Medtronic plc	929,503	0.5	93,573,067
UnitedHealth Group, Inc.	656,737	0.9	167,441,666
Other Securities		4.4	799,573,891
		6.3	1,154,918,021

Household & Personal Products 1.8%
The Procter & Gamble Co.	1,728,578	1.1	195,726,887
Other Securities		0.7	129,153,750
		1.8	324,880,637

Insurance 2.5%
Other Securities		2.5	456,553,601

Materials 2.6%
Other Securities		2.6	473,396,671

Media & Entertainment 8.4%
Alphabet, Inc., Class A *	207,672	1.5	278,124,726
Alphabet, Inc., Class C *	207,165	1.5	277,462,299
Comcast Corp., Class A	3,145,899	0.7	127,188,697
Facebook, Inc., Class A *	1,668,220	1.8	321,082,303
Netflix, Inc. *	303,649	0.6	112,055,590
The Walt Disney Co.	1,249,723	0.8	147,029,911
Other Securities		1.5	279,007,401
		8.4	1,541,950,927

Pharmaceuticals, Biotechnology & Life Sciences 7.6%
AbbVie, Inc.	1,024,819	0.5	87,837,236
Amgen, Inc.	412,174	0.5	82,323,513
Bristol-Myers Squibb Co.	1,625,711	0.5	96,014,492
Johnson & Johnson	1,824,164	1.3	245,313,575
Merck & Co., Inc.	1,764,912	0.7	135,121,663

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pfizer, Inc.	3,837,042	0.7	128,233,944
Thermo Fisher Scientific, Inc.	277,848	0.4	80,798,198
Other Securities		3.0	547,005,965
		7.6	1,402,648,586

Real Estate 3.6%
Other Securities		3.6	672,237,355

Retailing 6.2%
Amazon.com, Inc. *	288,700	3.0	543,838,625
The Home Depot, Inc.	756,235	0.9	164,738,232
Other Securities		2.3	436,942,041
		6.2	1,145,518,898

Semiconductors & Semiconductor Equipment 4.2%
Intel Corp.	3,015,194	0.9	167,403,571
NVIDIA Corp.	424,021	0.6	114,515,351
Other Securities		2.7	498,885,286
		4.2	780,804,208

Software & Services 13.9%
Accenture plc, Class A	439,951	0.4	79,450,751
Adobe, Inc. *	335,398	0.6	115,752,558
International Business Machines Corp.	613,808	0.4	79,887,111
Mastercard, Inc., Class A	615,625	1.0	178,685,156
Microsoft Corp.	5,288,296	4.7	856,756,835
PayPal Holdings, Inc. *	813,658	0.5	87,866,927
salesforce.com, Inc. *	614,615	0.6	104,730,396
Visa, Inc., Class A	1,186,979	1.2	215,745,303
Other Securities		4.5	842,135,371
		13.9	2,561,010,408

Technology Hardware & Equipment 6.1%
Apple, Inc.	2,895,125	4.3	791,411,370
Cisco Systems, Inc.	2,939,496	0.6	117,374,075
Other Securities		1.2	219,734,616
		6.1	1,128,520,061

Telecommunication Services 2.0%
AT&T, Inc.	5,064,380	1.0	178,367,464
Verizon Communications, Inc.	2,867,353	0.8	155,295,838
Other Securities		0.2	42,164,252
		2.0	375,827,554

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 1.8%
Other Securities		1.8	326,899,505

Utilities 3.3%
NextEra Energy, Inc.	339,039	0.5	85,695,498
Other Securities		2.8	531,321,896
		3.3	617,017,394
Total Common Stock
(Cost $15,234,147,824)			18,398,218,913

Other Investment Companies 0.1% of net assets

Money Market Fund 0.0%
Other Securities		0.0	5,165,139

Securities Lending Collateral 0.1%
Other Securities		0.1	8,424,550
Total Other Investment Companies
(Cost $13,589,689)			13,589,689

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/20/20	253	37,331,415	(4,165,863)

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

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s investment adviser.
(b)	All or a portion of this security is on loan. Securities on loan were valued at $8,003,207.
(c)	The rate shown is the 7-day yield.

	Market Value at 8/31/19	Gross Purchases	Gross Sales	Realized Gains(Losses)	Net change in unrealized appreciation (depreciation)	Market Value at 2/29/20	Balance of Shares Held at 2/29/20	Dividends Received
The Charles Schwab Corp.	$30,565,445	$2,949,132	($3,420,932)	$309,105	$1,678,828	$32,081,578	787,278	$272,768

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$18,398,218,913	$—	$—	$18,398,218,913
Other Investment Companies¹	13,589,689	—	—	13,589,689
Liabilities
Futures Contracts²	(4,165,863)	—	—	(4,165,863)
Total	$18,407,642,739	$—	$—	$18,407,642,739

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

₄₁

Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in affiliated issuer, at value (cost $30,531,101)		$32,081,578
Investments in unaffiliated issuers, at value (cost $15,208,781,862) including securities on loan of $8,003,207		18,371,302,474
Collateral invested for securities on loan, at value (cost $8,424,550)		8,424,550
Deposit with broker for futures contracts		6,578,976
Receivables:
Investments sold		71,883,492
Fund shares sold		176,713,013
Dividends		34,281,814
Income from securities on loan	+	5,644
Total assets		18,701,271,541
Liabilities
Collateral held for securities on loan		8,424,550
Payables:
Investments bought		153,968,729
Management fees		468,246
Fund shares redeemed		92,474,085
Variation margin on futures contracts	+	4,165,364
Total liabilities		259,500,974
Net Assets
Total assets		18,701,271,541
Total liabilities	–	259,500,974
Net assets		$18,441,770,567
Net Assets by Source
Capital received from investors		14,916,422,124
Total distributable earnings		3,525,348,443

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$18,441,770,567		260,900,000		$70.69

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Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends received from affiliated issuer		$272,768
Dividends received from unaffiliated issuers		210,718,137
Securities on loan, net	+	127,709
Total investment income		211,118,614
Expenses
Management fees		2,853,981
Total expenses	–	2,853,981
Net investment income		208,264,633
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(432,183)
Net realized losses on unaffiliated investments		(104,531,769)
Net realized gains on in-kind redemptions on affiliated issuer		741,288
Net realized gains on in-kind redemptions on unaffiliated investments		495,314,439
Net realized gains on futures contracts	+	4,292,590
Net realized gains		395,384,365
Net change in unrealized appreciation (depreciation) on affiliated issuer		1,678,828
Net change in unrealized appreciation (depreciation) on unaffiliated investments		(244,948,269)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(4,418,121)
Net change in unrealized appreciation (depreciation)	+	(247,687,562)
Net realized and unrealized gains		147,696,803
Increase in net assets resulting from operations		$355,961,436

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Table of Contents

Schwab U.S. Large-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$208,264,633	$340,417,546
Net realized gains		395,384,365	400,596,612
Net change in unrealized appreciation (depreciation)	+	(247,687,562)	(282,000,815)
Increase in net assets resulting from operations		355,961,436	459,013,343
Distributions to Shareholders
Total distributions		($204,415,300)	($302,865,295)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		23,150,000	$1,709,338,684	56,050,000	$3,767,929,713
Shares redeemed	+	(16,350,000)	(1,205,071,891)	(17,550,000)	(1,127,997,534)
Net transactions in fund shares		6,800,000	$504,266,793	38,500,000	$2,639,932,179
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		254,100,000	$17,785,957,638	215,600,000	$14,989,877,411
Total increase	+	6,800,000	655,812,929	38,500,000	2,796,080,227
End of period		260,900,000	$18,441,770,567	254,100,000	$17,785,957,638

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$84.02	$81.69	$65.55	$55.25	$51.93	$50.11
Income (loss) from investment operations:
Net investment income (loss)¹	0.37	0.95	0.68	0.75	0.59	0.66
Net realized and unrealized gains (losses)	5.13	2.30	16.17	10.17	3.30	1.79
Total from investment operations	5.50	3.25	16.85	10.92	3.89	2.45
Less distributions:
Distributions from net investment income	(0.40)	(0.92)	(0.71)	(0.62)	(0.57)	(0.63)
Net asset value at end of period	$89.12	$84.02	$81.69	$65.55	$55.25	$51.93
Total return	6.56%²	4.09%	25.88%	19.89%	7.56%	4.87%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%	0.04%	0.05%⁴	0.07%⁵	0.07%
Net investment income (loss)	0.82%³	1.21%	0.93%	1.25%	1.14%	1.25%
Portfolio turnover rate⁶	6%²	14%	5%	5%	7%	10%
Net assets, end of period (x 1,000)	$8,956,326	$8,107,853	$6,886,721	$4,470,809	$2,980,475	$2,246,101

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

⁵

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

⁶

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

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.8% of net assets

Automobiles & Components 0.7%
Tesla, Inc. *	90,707	0.7	60,591,369

Banks 0.2%
Other Securities		0.2	17,587,136

Capital Goods 5.2%
Lockheed Martin Corp.	158,162	0.7	58,499,379
The Boeing Co.	340,529	1.0	93,682,933
Other Securities		3.5	312,461,131
		5.2	464,643,443

Commercial & Professional Services 1.2%
Other Securities		1.2	103,777,895

Consumer Durables & Apparel 1.4%
NIKE, Inc., Class B	793,463	0.8	70,919,723
Other Securities		0.6	53,397,287
		1.4	124,317,010

Consumer Services 1.4%
Starbucks Corp.	751,854	0.7	58,967,909
Other Securities		0.7	68,349,344
		1.4	127,317,253

Diversified Financials 5.6%
Berkshire Hathaway, Inc., Class B *	1,245,635	2.9	257,024,326
CME Group, Inc.	228,210	0.5	45,372,712
S&P Global, Inc.	155,648	0.4	41,388,360
Other Securities		1.8	161,893,718
		5.6	505,679,116

Energy 0.5%
Other Securities		0.5	43,945,791

Food & Staples Retailing 0.9%
Costco Wholesale Corp.	281,381	0.8	79,107,454
Other Securities		0.1	4,694,832
		0.9	83,802,286

Food, Beverage & Tobacco 0.8%
Other Securities		0.8	69,472,144

Security	Number of Shares	% of Net Assets	Value ($)
Health Care Equipment & Services 8.5%
Anthem, Inc.	161,450	0.5	41,507,180
Becton Dickinson & Co.	172,212	0.5	40,955,458
Cigna Corp.	237,835	0.5	43,509,535
Danaher Corp.	407,021	0.7	58,847,096
Intuitive Surgical, Inc. *	73,591	0.4	39,294,650
Stryker Corp.	205,069	0.4	39,084,101
UnitedHealth Group, Inc.	603,367	1.7	153,834,450
Other Securities		3.8	348,525,108
		8.5	765,557,578

Household & Personal Products 0.4%
Other Securities		0.4	38,612,734

Insurance 1.0%
Other Securities		1.0	87,708,065

Materials 2.1%
Linde plc	342,335	0.7	65,389,408
Other Securities		1.4	118,710,347
		2.1	184,099,755

Media & Entertainment 13.9%
Alphabet, Inc., Class A *	190,732	2.9	255,437,831
Alphabet, Inc., Class C *	190,267	2.8	254,830,301
Charter Communications, Inc., Class A *	99,853	0.5	49,244,504
Facebook, Inc., Class A *	1,532,027	3.3	294,869,237
Netflix, Inc. *	278,801	1.1	102,885,933
The Walt Disney Co.	1,147,914	1.5	135,052,082
Other Securities		1.8	154,888,524
		13.9	1,247,208,412

Pharmaceuticals, Biotechnology & Life Sciences 4.3%
Biogen, Inc. *	115,015	0.4	35,469,476
Thermo Fisher Scientific, Inc.	255,388	0.8	74,266,830
Vertex Pharmaceuticals, Inc. *	163,869	0.4	36,711,572
Zoetis, Inc.	303,566	0.5	40,444,098
Other Securities		2.2	194,275,436
		4.3	381,167,412

Real Estate 3.4%
American Tower Corp.	282,054	0.7	63,969,847
Crown Castle International Corp.	264,855	0.4	37,951,073
Other Securities		2.3	201,670,850
		3.4	303,591,770

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Retailing 10.4%
Amazon.com, Inc. *	265,154	5.6	499,483,848
Booking Holdings, Inc. *	26,668	0.5	45,219,861
Lowe's Cos., Inc.	487,971	0.6	52,003,069
The Home Depot, Inc.	694,648	1.7	151,322,120
Other Securities		2.0	179,521,543
		10.4	927,550,441

Semiconductors & Semiconductor Equipment 3.1%
Broadcom, Inc.	252,727	0.8	68,898,435
Micron Technology, Inc. *	705,251	0.4	37,067,993
NVIDIA Corp.	389,992	1.2	105,325,139
Other Securities		0.7	66,279,786
		3.1	277,571,353

Software & Services 23.9%
Accenture plc, Class A	404,567	0.8	73,060,755
Adobe, Inc. *	308,257	1.2	106,385,656
Automatic Data Processing, Inc.	275,833	0.5	42,682,398
Fidelity National Information Services, Inc.	391,398	0.6	54,686,129
Fiserv, Inc. *	363,724	0.4	39,776,857
Intuit, Inc.	165,805	0.5	44,079,259
Mastercard, Inc., Class A	565,645	1.8	164,178,461
Microsoft Corp.	4,857,484	8.8	786,960,983
PayPal Holdings, Inc. *	747,536	0.9	80,726,413
salesforce.com, Inc. *	564,755	1.1	96,234,252
ServiceNow, Inc. *	120,161	0.4	39,183,301
Visa, Inc., Class A	1,090,608	2.2	198,228,910
Other Securities		4.7	415,549,066
		23.9	2,141,732,440

Technology Hardware & Equipment 8.8%
Apple, Inc.	2,659,415	8.1	726,977,684
Other Securities		0.7	65,449,783
		8.8	792,427,467

Telecommunication Services 0.3%
Other Securities		0.3	27,637,295

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 0.9%
Other Securities		0.9	83,598,119

Utilities 0.9%
NextEra Energy, Inc.	311,344	0.8	78,695,309
Other Securities		0.1	5,308,951
		0.9	84,004,260
Total Common Stock
(Cost $6,522,840,578)			8,943,600,544

Other Investment Companies 0.1% of net assets

Money Market Fund 0.1%
Other Securities		0.1	5,192,390

Securities Lending Collateral 0.0%
Other Securities		0.0	596,750
Total Other Investment Companies
(Cost $5,789,140)			5,789,140

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
Russell 1000 Growth Index, e-mini, expires 03/20/20	137	11,531,290	(1,181,621)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $493,075.
(b)	The rate shown is the 7-day yield.

During the period, the fund held shares of an affiliate, The Charles Schwab Corp., since that company was 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 29, 2020:

	Market Value at 8/31/19	Gross Purchases	Gross Sales	Realized Gains(Losses)	Net change in unrealized appreciation (depreciation)	Market Value at 2/29/20	Balance of Shares Held at 2/29/20	Dividends Received
The Charles Schwab Corp.	$24,714,498	$2,539,556	($30,129,426)	$3,819,332	($943,960)	$—	—	$—

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$8,943,600,544	$—	$—	$8,943,600,544
Other Investment Companies¹	5,789,140	—	—	5,789,140
Liabilities
Futures Contracts²	(1,181,621)	—	—	(1,181,621)
Total	$8,948,208,063	$—	$—	$8,948,208,063

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

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $6,528,032,968) including securities on loan of $493,075		$8,948,792,934
Collateral invested for securities on loan, at value (cost $596,750)		596,750
Deposit with broker for futures contracts		2,090,592
Receivables:
Investments sold		18,148,058
Fund shares sold		40,140,562
Dividends		6,526,825
Income from securities on loan	+	614
Total assets		9,016,296,335
Liabilities
Collateral held for securities on loan		596,750
Payables:
Investments bought		8,851,759
Management fees		303,260
Fund shares redeemed		49,037,285
Variation margin on futures contracts	+	1,181,351
Total liabilities		59,970,405
Net Assets
Total assets		9,016,296,335
Total liabilities	–	59,970,405
Net assets		$8,956,325,930
Net Assets by Source
Capital received from investors		6,459,401,342
Total distributable earnings		2,496,924,588

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$8,956,325,930		100,500,000		$89.12

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends received from unaffiliated issuers		$37,986,104
Securities on loan, net	+	92,152
Total investment income		38,078,256
Expenses
Management fees		1,767,182
Total expenses	–	1,767,182
Net investment income		36,311,074
Realized and Unrealized Gains (Losses)
Net realized losses on affiliated issuer		(786,088)
Net realized losses on unaffiliated investments		(110,922,639)
Net realized gains on in-kind redemptions on affiliated issuer		4,605,420
Net realized gains on in-kind redemptions on unaffiliated investments		270,396,303
Net realized gains on futures contracts	+	1,077,414
Net realized gains		164,370,410
Net change in unrealized appreciation (depreciation) on affiliated issuer		(943,960)
Net change in unrealized appreciation (depreciation) on unaffiliated investments		313,013,602
Net change in unrealized appreciation (depreciation) on futures contracts	+	(1,260,633)
Net change in unrealized appreciation (depreciation)	+	310,809,009
Net realized and unrealized gains		475,179,419
Increase in net assets resulting from operations		$511,490,493

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Growth ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$36,311,074	$85,077,928
Net realized gains		164,370,410	243,635,236
Net change in unrealized appreciation (depreciation)	+	310,809,009	(3,749,927)
Increase in net assets resulting from operations		511,490,493	324,963,237
Distributions to Shareholders
Total distributions		($39,414,200)	($80,450,420)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		15,550,000	$1,371,284,484	19,500,000	$1,542,423,996
Shares redeemed	+	(11,550,000)	(994,888,311)	(7,300,000)	(565,804,444)
Net transactions in fund shares		4,000,000	$376,396,173	12,200,000	$976,619,552
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		96,500,000	$8,107,853,464	84,300,000	$6,886,721,095
Total increase	+	4,000,000	848,472,466	12,200,000	1,221,132,369
End of period		100,500,000	$8,956,325,930	96,500,000	$8,107,853,464

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$55.14	$56.37	$50.65	$46.01	$40.89	$43.54
Income (loss) from investment operations:
Net investment income (loss)¹	1.06	1.84	1.47	1.36	1.29	1.20
Net realized and unrealized gains (losses)	(2.20)	(1.48)	5.63	4.56	5.01	(2.75)
Total from investment operations	(1.14)	0.36	7.10	5.92	6.30	(1.55)
Less distributions:
Distributions from net investment income	(1.03)	(1.59)	(1.38)	(1.28)	(1.18)	(1.10)
Net asset value at end of period	$52.97	$55.14	$56.37	$50.65	$46.01	$40.89
Total return	(2.23%)²	0.70%	14.20%	13.01%	15.70%	(3.71%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%	0.04%	0.05%⁴	0.07%⁵	0.07%
Net investment income (loss)	3.64%³	3.38%	2.72%	2.79%	3.00%	2.75%
Portfolio turnover rate⁶	15%²	7%	8%	7%	6%	15%
Net assets, end of period (x 1,000)	$6,353,546	$5,976,674	$4,692,419	$3,532,689	$2,491,664	$1,435,194

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

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

⁵

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

⁶

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.7% of net assets

Automobiles & Components 0.9%
Other Securities		0.9	58,140,638

Banks 9.7%
Bank of America Corp.	4,103,731	1.8	116,956,333
Citigroup, Inc.	1,106,687	1.1	70,230,357
JPMorgan Chase & Co.	1,589,843	2.9	184,596,671
U.S. Bancorp	720,504	0.5	33,460,206
Wells Fargo & Co.	1,951,034	1.3	79,699,739
Other Securities		2.1	131,776,483
		9.7	616,719,789

Capital Goods 7.6%
3M Co.	291,389	0.7	43,486,894
Caterpillar, Inc.	280,101	0.5	34,799,748
General Electric Co.	4,427,748	0.8	48,173,898
Honeywell International, Inc.	362,209	0.9	58,739,434
United Technologies Corp.	411,321	0.8	53,714,409
Other Securities		3.9	246,243,506
		7.6	485,157,889

Commercial & Professional Services 0.7%
Other Securities		0.7	42,782,584

Consumer Durables & Apparel 0.9%
Other Securities		0.9	57,481,506

Consumer Services 2.5%
McDonald's Corp.	381,704	1.2	74,115,466
Other Securities		1.3	83,589,420
		2.5	157,704,886

Diversified Financials 4.7%
American Express Co.	339,956	0.6	37,371,363
The Charles Schwab Corp. (a)	579,641	0.4	23,620,371
The Goldman Sachs Group, Inc.	161,563	0.5	32,437,003
Other Securities		3.2	205,391,735
		4.7	298,820,472

Energy 6.7%
Chevron Corp.	958,586	1.4	89,474,417
Exxon Mobil Corp.	2,145,079	1.7	110,342,864
Other Securities		3.6	223,601,424
		6.7	423,418,705

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 1.9%
Walmart, Inc.	719,047	1.2	77,426,981
Other Securities		0.7	46,081,655
		1.9	123,508,636

Food, Beverage & Tobacco 6.9%
Altria Group, Inc.	946,708	0.6	38,218,602
Mondelez International, Inc., Class A	730,020	0.6	38,545,056
PepsiCo, Inc.	706,925	1.5	93,335,308
Philip Morris International, Inc.	788,701	1.0	64,570,951
The Coca-Cola Co.	1,954,792	1.7	104,561,824
Other Securities		1.5	97,709,675
		6.9	436,941,416

Health Care Equipment & Services 3.7%
Abbott Laboratories	895,911	1.1	69,012,024
CVS Health Corp.	659,209	0.6	39,011,989
Medtronic plc	679,454	1.1	68,400,634
Other Securities		0.9	58,636,924
		3.7	235,061,571

Household & Personal Products 3.3%
The Procter & Gamble Co.	1,264,114	2.2	143,135,628
Other Securities		1.1	63,817,215
		3.3	206,952,843

Insurance 4.2%
Chubb Ltd.	229,799	0.5	33,327,749
Other Securities		3.7	230,764,213
		4.2	264,091,962

Materials 3.1%
Other Securities		3.1	199,724,160

Media & Entertainment 2.1%
Comcast Corp., Class A	2,300,691	1.4	93,016,937
Other Securities		0.7	41,870,141
		2.1	134,887,078

Pharmaceuticals, Biotechnology & Life Sciences 11.4%
AbbVie, Inc.	749,617	1.0	64,249,673
Allergan plc	166,418	0.5	31,730,920
Amgen, Inc.	301,193	0.9	60,157,278
Bristol-Myers Squibb Co.	1,188,246	1.1	70,177,809
Eli Lilly & Co.	428,298	0.8	54,021,227
Gilead Sciences, Inc.	641,188	0.7	44,472,800

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Johnson & Johnson	1,334,122	2.8	179,412,727
Merck & Co., Inc.	1,290,615	1.6	98,809,484
Pfizer, Inc.	2,805,329	1.5	93,754,095
Other Securities		0.5	25,584,128
		11.4	722,370,141

Real Estate 3.9%
Other Securities		3.9	250,005,444

Retailing 1.6%
The TJX Cos., Inc.	614,794	0.6	36,764,681
Other Securities		1.0	62,620,414
		1.6	99,385,095

Semiconductors & Semiconductor Equipment 5.5%
Intel Corp.	2,205,014	1.9	122,422,377
QUALCOMM, Inc.	578,983	0.7	45,334,369
Texas Instruments, Inc.	473,949	0.9	54,096,539
Other Securities		2.0	128,267,903
		5.5	350,121,188

Software & Services 2.6%
International Business Machines Corp.	448,895	0.9	58,423,684
Oracle Corp.	1,098,273	0.9	54,320,583
Other Securities		0.8	55,387,823
		2.6	168,132,090

Technology Hardware & Equipment 3.1%
Cisco Systems, Inc.	2,150,351	1.4	85,863,515
Other Securities		1.7	108,676,318
		3.1	194,539,833

Telecommunication Services 4.0%
AT&T, Inc.	3,702,722	2.1	130,409,869
Verizon Communications, Inc.	2,096,329	1.8	113,537,179
Other Securities		0.1	8,887,917
		4.0	252,834,965

Transportation 2.7%
Union Pacific Corp.	351,928	0.9	56,241,614
United Parcel Service, Inc., Class B	355,221	0.5	32,143,948
Other Securities		1.3	84,050,284
		2.7	172,435,846

Security	Number of Shares	% of Net Assets	Value ($)
Utilities 6.0%
Dominion Energy, Inc.	417,279	0.5	32,622,872
Duke Energy Corp.	369,642	0.5	33,896,171
The Southern Co.	531,658	0.5	32,090,877
Other Securities		4.5	285,743,164
		6.0	384,353,084
Total Common Stock
(Cost $6,183,313,611)			6,335,571,821

Other Investment Companies 0.1% of net assets

Money Market Fund 0.0%
Other Securities		0.0	2,463,777

Securities Lending Collateral 0.1%
Other Securities		0.1	5,713,550
Total Other Investment Companies
(Cost $8,177,327)			8,177,327

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
Russell 1000 Value Index, e-mini, expires 03/20/20	273	16,142,490	(1,977,191)

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

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s investment adviser.
(b)	All or a portion of this security is on loan. Securities on loan were valued at $5,485,924.
(c)	The rate shown is the 7-day yield.

	Market Value at 8/31/19	Gross Purchases	Gross Sales	Realized Gains(Losses)	Net change in unrealized appreciation (depreciation)	Market Value at 2/29/20	Balance of Shares Held at 2/29/20	Dividends Received
The Charles Schwab Corp.	$—	$26,167,817	($1,426,763)	$91,618	($1,212,301)	$23,620,371	579,641	$201,148

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$6,335,571,821	$—	$—	$6,335,571,821
Other Investment Companies¹	8,177,327	—	—	8,177,327
Liabilities
Futures Contracts²	(1,977,191)	—	—	(1,977,191)
Total	$6,341,771,957	$—	$—	$6,341,771,957

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

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in affiliated issuer, at value (cost $24,832,672)		$23,620,371
Investments in unaffiliated issuers, at value (cost $6,160,944,716) including securities on loan of $5,485,924		6,314,415,227
Collateral invested for securities on loan, at value (cost $5,713,550)		5,713,550
Deposit with broker for futures contracts		2,663,243
Receivables:
Investments sold		853,587
Dividends		19,849,179
Fund shares sold		15,890,485
Income from securities on loan	+	4,120
Total assets		6,383,009,762
Liabilities
Collateral held for securities on loan		5,713,550
Payables:
Investments bought		21,557,501
Management fees		216,098
Variation margin on futures contracts	+	1,976,650
Total liabilities		29,463,799
Net Assets
Total assets		6,383,009,762
Total liabilities	–	29,463,799
Net assets		$6,353,545,963
Net Assets by Source
Capital received from investors		6,284,630,454
Total distributable earnings		68,915,509

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$6,353,545,963		119,950,000		$52.97

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends received from affiliated issuer		$201,148
Dividends received from unaffiliated issuers		124,837,681
Securities on loan, net	+	11,130
Total investment income		125,049,959
Expenses
Management fees		1,350,897
Total expenses	–	1,350,897
Net investment income		123,699,062
Realized and Unrealized Gains (Losses)
Net realized gains on affiliated issuer		47,882
Net realized losses on unaffiliated investments		(116,925,318)
Net realized gains on in-kind redemptions on affiliated issuer		43,736
Net realized gains on in-kind redemptions		43,423,275
Net realized gains on futures contracts	+	954,323
Net realized losses		(72,456,102)
Net change in unrealized appreciation (depreciation) on affiliated issuer		(1,212,301)
Net change in unrealized appreciation (depreciation) on investments		(213,558,349)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(2,020,804)
Net change in unrealized appreciation (depreciation)	+	(216,791,454)
Net realized and unrealized losses		(289,247,556)
Decrease in net assets resulting from operations		($165,548,494)

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Table of Contents

Schwab U.S. Large-Cap Value ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$123,699,062	$182,529,712
Net realized gains (losses)		(72,456,102)	425,954,963
Net change in unrealized appreciation (depreciation)	+	(216,791,454)	(486,469,154)
Increase (decrease) in net assets resulting from operations		(165,548,494)	122,015,521
Distributions to Shareholders
Total distributions		($119,075,435)	($153,831,815)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		15,050,000	$862,001,543	50,100,000	$2,701,585,976
Shares redeemed	+	(3,500,000)	(200,505,613)	(24,950,000)	(1,385,515,156)
Net transactions in fund shares		11,550,000	$661,495,930	25,150,000	$1,316,070,820
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		108,400,000	$5,976,673,962	83,250,000	$4,692,419,436
Total increase	+	11,550,000	376,872,001	25,150,000	1,284,254,526
End of period		119,950,000	$6,353,545,963	108,400,000	$5,976,673,962

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Table of Contents

Schwab U.S. Mid-Cap ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$55.72	$58.44	$48.77	$43.67	$40.70	$40.56
Income (loss) from investment operations:
Net investment income (loss)¹	0.54	0.84	0.76	0.71	0.74	0.59
Net realized and unrealized gains (losses)	(1.54)	(2.76)	9.59	5.09	2.84	0.12
Total from investment operations	(1.00)	(1.92)	10.35	5.80	3.58	0.71
Less distributions:
Distributions from net investment income	(0.54)	(0.80)	(0.68)	(0.70)	(0.61)	(0.57)
Net asset value at end of period	$54.18	$55.72	$58.44	$48.77	$43.67	$40.70
Total return	(1.86%)²	(3.24%)	21.36%	13.38%	8.94%	1.71%
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%⁴	0.05%	0.06%⁵	0.07%	0.07%
Net investment income (loss)	1.84%³	1.52%	1.42%	1.54%	1.83%	1.42%
Portfolio turnover rate⁶	15%²	19%	13%	17%	21%	12%
Net assets, end of period (x 1,000)	$6,260,010	$6,254,639	$5,358,783	$3,555,096	$2,532,590	$1,841,785

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 11, 2019, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/19 is a blended ratio.

⁵

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

⁶

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.9% of net assets

Automobiles & Components 1.0%
Other Securities		1.0	62,118,906

Banks 4.7%
Other Securities		4.7	295,426,378

Capital Goods 11.4%
Allegion plc	196,832	0.4	22,633,712
Arconic, Inc.	820,539	0.4	24,082,820
IDEX Corp.	161,132	0.4	23,847,536
Jacobs Engineering Group, Inc.	286,882	0.4	26,490,684
Teledyne Technologies, Inc. *	77,233	0.4	26,052,236
Westinghouse Air Brake Technologies Corp.	385,755	0.4	26,501,368
Other Securities		9.0	562,271,965
		11.4	711,880,321

Commercial & Professional Services 1.7%
Other Securities		1.7	106,234,228

Consumer Durables & Apparel 3.7%
NVR, Inc. *	7,355	0.4	26,972,109
PulteGroup, Inc.	539,662	0.3	21,694,412
Other Securities		3.0	181,817,424
		3.7	230,483,945

Consumer Services 3.9%
Domino's Pizza, Inc.	81,887	0.4	27,797,361
Other Securities		3.5	217,252,771
		3.9	245,050,132

Diversified Financials 4.5%
FactSet Research Systems, Inc.	80,378	0.3	21,379,744
Raymond James Financial, Inc.	261,541	0.4	21,872,674
Other Securities		3.8	238,171,328
		4.5	281,423,746

Energy 2.1%
Other Securities		2.1	131,384,199

Food & Staples Retailing 0.6%
Other Securities		0.6	38,836,091

Security	Number of Shares	% of Net Assets	Value ($)
Food, Beverage & Tobacco 1.4%
Lamb Weston Holdings, Inc.	309,417	0.4	26,885,243
Other Securities		1.0	61,078,929
		1.4	87,964,172

Health Care Equipment & Services 5.4%
DENTSPLY SIRONA, Inc.	471,255	0.4	23,204,596
Insulet Corp. *	130,975	0.4	24,881,321
STERIS plc	179,566	0.5	28,482,759
Varian Medical Systems, Inc. *	192,582	0.4	23,681,809
West Pharmaceutical Services, Inc.	156,752	0.4	23,600,581
Other Securities		3.3	216,334,880
		5.4	340,185,946

Household & Personal Products 0.2%
Other Securities		0.2	12,118,025

Insurance 4.5%
Brown & Brown, Inc.	495,270	0.3	21,301,563
Everest Re Group Ltd.	86,408	0.3	21,418,815
Other Securities		3.9	238,754,537
		4.5	281,474,915

Materials 6.1%
FMC Corp.	274,594	0.4	25,564,701
International Flavors & Fragrances, Inc. (a)	226,196	0.4	27,093,757
Other Securities		5.3	326,991,959
		6.1	379,650,417

Media & Entertainment 2.8%
Other Securities		2.8	177,655,511

Pharmaceuticals, Biotechnology & Life Sciences 5.1%
Alnylam Pharmaceuticals, Inc. *	236,136	0.4	27,783,762
Other Securities		4.7	294,421,981
		5.1	322,205,743

Real Estate 10.8%
Camden Property Trust	205,125	0.3	21,739,147
Duke Realty Corp.	778,445	0.4	25,276,109
Equity LifeStyle Properties, Inc.	385,590	0.4	26,347,365
Medical Properties Trust, Inc.	1,096,188	0.4	23,162,452
Sun Communities, Inc.	196,244	0.5	30,001,783

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
VICI Properties, Inc.	976,616	0.4	24,473,997
Other Securities		8.4	522,564,603
		10.8	673,565,456

Retailing 3.9%
Burlington Stores, Inc. *	140,303	0.5	30,341,927
Tractor Supply Co.	250,826	0.4	22,200,609
Other Securities		3.0	193,383,620
		3.9	245,926,156

Semiconductors & Semiconductor Equipment 2.6%
Qorvo, Inc. *	246,140	0.4	24,756,761
Other Securities		2.2	135,522,132
		2.6	160,278,893

Software & Services 12.0%
DocuSign, Inc. *	264,749	0.4	22,850,486
EPAM Systems, Inc. *	116,470	0.4	25,996,104
Fair Isaac Corp. *	61,341	0.4	23,066,056
Gartner, Inc. *	189,484	0.4	24,517,335
GoDaddy, Inc., Class A *	374,840	0.4	26,231,303
Jack Henry & Associates, Inc.	162,968	0.4	24,728,764
Leidos Holdings, Inc.	281,803	0.5	28,927,078
RingCentral, Inc., Class A *	158,749	0.6	37,425,077
SS&C Technologies Holdings, Inc.	465,692	0.4	25,845,906
Tyler Technologies, Inc. *	82,550	0.4	25,867,042
Other Securities		7.7	484,672,234
		12.0	750,127,385

Technology Hardware & Equipment 4.1%
Zebra Technologies Corp., Class A *	114,236	0.4	24,100,369
Other Securities		3.7	229,959,319
		4.1	254,059,688

Telecommunication Services 0.5%
Other Securities		0.5	31,476,516

Transportation 2.3%
Expeditors International of Washington, Inc.	360,714	0.4	25,401,480
Old Dominion Freight Line, Inc.	135,236	0.4	26,208,737
Other Securities		1.5	91,540,380
		2.3	143,150,597

Security	Number of Shares	% of Net Assets	Value ($)
Utilities 4.6%
AES Corp.	1,406,476	0.4	23,530,343
Alliant Energy Corp.	508,742	0.4	26,515,633
Atmos Energy Corp.	252,781	0.4	26,099,638
NiSource, Inc.	791,457	0.3	21,385,168
Pinnacle West Capital Corp.	238,070	0.3	21,304,884
Other Securities		2.8	170,312,674
		4.6	289,148,340
Total Common Stock
(Cost $5,928,556,861)			6,251,825,706

Other Investment Companies 0.7% of net assets

Money Market Fund 0.1%
Other Securities		0.1	7,846,565

Securities Lending Collateral 0.6%
Wells Fargo Government Money Market Fund, Select Class 1.52% (b)		0.6	36,739,705
Total Other Investment Companies
(Cost $44,586,270)			44,586,270

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P Mid-Cap 400 Index, e-mini, expires 03/20/20	39	7,067,580	(634,053)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $35,322,152.
(b)	The rate shown is the 7-day yield.

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$6,251,825,706	$—	$—	$6,251,825,706
Other Investment Companies¹	44,586,270	—	—	44,586,270
Liabilities
Futures Contracts²	(634,053)	—	—	(634,053)
Total	$6,295,777,923	$—	$—	$6,295,777,923

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $5,936,403,426) including securities on loan of $35,322,152		$6,259,672,271
Collateral invested for securities on loan, at value (cost $36,739,705)		36,739,705
Deposit with broker for futures contracts		1,411,732
Receivables:
Investments sold		12,371,321
Dividends		7,016,833
Income from securities on loan	+	45,829
Total assets		6,317,257,691
Liabilities
Collateral held for securities on loan		36,739,705
Payables:
Investments bought		8,826,143
Management fees		212,429
Fund shares redeemed		10,835,149
Variation margin on futures contracts	+	633,976
Total liabilities		57,247,402
Net Assets
Total assets		6,317,257,691
Total liabilities	–	57,247,402
Net assets		$6,260,010,289
Net Assets by Source
Capital received from investors		6,047,573,177
Total distributable earnings		212,437,112

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$6,260,010,289		115,550,000		$54.18

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends (net of foreign withholding tax of $11,768)		$61,512,290
Securities on loan, net	+	626,194
Total investment income		62,138,484
Expenses
Management fees		1,316,104
Total expenses	–	1,316,104
Net investment income		60,822,380
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(236,995,664)
Net realized gains on in-kind redemptions		330,459,807
Net realized losses on futures contracts	+	(879,103)
Net realized gains		92,585,040
Net change in unrealized appreciation (depreciation) on investments		(292,177,616)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(646,254)
Net change in unrealized appreciation (depreciation)	+	(292,823,870)
Net realized and unrealized losses		(200,238,830)
Decrease in net assets resulting from operations		($139,416,450)

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Mid-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$60,822,380	$85,672,960
Net realized gains		92,585,040	310,703,125
Net change in unrealized appreciation (depreciation)	+	(292,823,870)	(548,974,215)
Decrease in net assets resulting from operations		(139,416,450)	(152,598,130)
Distributions to Shareholders
Total distributions		($60,427,930)	($80,783,475)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		19,600,000	$1,138,252,244	39,050,000	$2,178,261,705
Shares redeemed	+	(16,300,000)	(933,036,637)	(18,500,000)	(1,049,023,933)
Net transactions in fund shares		3,300,000	$205,215,607	20,550,000	$1,129,237,772
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		112,250,000	$6,254,639,062	91,700,000	$5,358,782,895
Total increase	+	3,300,000	5,371,227	20,550,000	895,856,167
End of period		115,550,000	$6,260,010,289	112,250,000	$6,254,639,062

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Table of Contents

Schwab U.S. Small-Cap ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$69.20	$78.24	$64.03	$57.42	$53.54	$54.53
Income (loss) from investment operations:
Net investment income (loss)¹	0.64	1.04	0.98	0.90	0.93	0.80
Net realized and unrealized gains (losses)	(2.09)	(9.07)	14.10	6.64	3.75	(1.07)
Total from investment operations	(1.45)	(8.03)	15.08	7.54	4.68	(0.27)
Less distributions:
Distributions from net investment income	(0.64)	(1.01)	(0.87)	(0.93)	(0.80)	(0.72)
Net asset value at end of period	$67.11	$69.20	$78.24	$64.03	$57.42	$53.54
Total return	(2.16%)²	(10.26%)	23.71%	13.21%	8.89%	(0.54%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.04%³	0.04%⁴	0.05%	0.06%⁵	0.08%⁶	0.08%
Net investment income (loss)	1.76%³	1.49%	1.38%	1.46%	1.76%	1.44%
Portfolio turnover rate⁷	8%²	11%	9%	11%	11%	9%
Net assets, end of period (x 1,000)	$8,106,884	$8,100,071	$8,853,388	$5,490,843	$3,772,207	$2,893,741

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 11, 2019, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/19 is a blended ratio.

⁵

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

⁶

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

⁷

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

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Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.8% of net assets

Automobiles & Components 1.2%
Other Securities		1.2	95,754,761

Banks 10.5%
Prosperity Bancshares, Inc.	300,882	0.2	19,436,977
TCF Financial Corp.	488,925	0.2	17,816,427
Other Securities		10.1	813,381,600
		10.5	850,635,004

Capital Goods 10.4%
AECOM *	500,765	0.3	22,504,379
BWX Technologies, Inc.	303,208	0.2	16,627,927
Curtiss-Wright Corp.	135,865	0.2	16,295,648
Generac Holdings, Inc. *	199,014	0.3	20,496,452
ITT, Inc.	279,337	0.2	16,802,121
Oshkosh Corp.	216,846	0.2	15,645,439
Trex Co., Inc. *	186,143	0.2	17,804,578
Watsco, Inc.	103,966	0.2	16,320,583
Other Securities		8.6	696,751,917
		10.4	839,249,044

Commercial & Professional Services 3.3%
Other Securities		3.3	270,031,942

Consumer Durables & Apparel 3.1%
Deckers Outdoor Corp. *	89,267	0.2	15,514,605
Other Securities		2.9	238,827,704
		3.1	254,342,309

Consumer Services 3.9%
Planet Fitness, Inc., Class A *	260,555	0.2	17,584,857
Other Securities		3.7	301,171,473
		3.9	318,756,330

Diversified Financials 5.1%
LPL Financial Holdings, Inc.	257,330	0.3	20,452,588
New Residential Investment Corp.	1,326,343	0.3	20,637,897
Other Securities		4.5	368,799,200
		5.1	409,889,685

Energy 2.1%
Other Securities		2.1	171,591,280

Security	Number of Shares	% of Net Assets	Value ($)
Food & Staples Retailing 0.9%
Casey's General Stores, Inc.	117,377	0.3	19,134,799
Performance Food Group Co. *	373,057	0.2	15,817,617
Other Securities		0.4	35,709,035
		0.9	70,661,451

Food, Beverage & Tobacco 1.6%
Other Securities		1.6	131,120,270

Health Care Equipment & Services 6.2%
Amedisys, Inc. *	102,792	0.2	17,886,836
HealthEquity, Inc. *	225,502	0.2	16,008,387
Penumbra, Inc. *	102,531	0.2	17,005,792
Teladoc Health, Inc. *	230,916	0.4	28,855,263
Other Securities		5.2	420,507,558
		6.2	500,263,836

Household & Personal Products 0.6%
Other Securities		0.6	50,794,774

Insurance 3.0%
First American Financial Corp.	358,281	0.3	20,457,845
Other Securities		2.7	220,048,637
		3.0	240,506,482

Materials 3.7%
Other Securities		3.7	303,382,103

Media & Entertainment 2.5%
Nexstar Media Group, Inc., Class A	146,636	0.2	16,860,207
The New York Times Co., Class A	459,073	0.2	17,196,875
Zynga, Inc., Class A *	3,010,523	0.3	20,200,609
Other Securities		1.8	152,283,196
		2.5	206,540,887

Pharmaceuticals, Biotechnology & Life Sciences 8.6%
Charles River Laboratories International, Inc. *	155,544	0.3	24,197,980
Horizon Therapeutics plc *	597,072	0.3	20,431,804
Moderna, Inc. *	709,969	0.2	18,409,496
Reata Pharmaceuticals, Inc., Class A *	81,454	0.2	15,863,166
Other Securities		7.6	618,424,274
		8.6	697,326,720

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Real Estate 8.7%
Cousins Properties, Inc.	467,792	0.2	16,695,497
First Industrial Realty Trust, Inc.	404,290	0.2	15,565,165
Hudson Pacific Properties, Inc.	492,325	0.2	15,892,251
Life Storage, Inc.	148,762	0.2	16,052,907
Rexford Industrial Realty, Inc.	353,459	0.2	16,531,277
Other Securities		7.7	625,980,373
		8.7	706,717,470

Retailing 3.4%
Etsy, Inc. *	376,848	0.3	21,785,583
Five Below, Inc. *	177,503	0.2	17,208,916
Other Securities		2.9	239,314,269
		3.4	278,308,768

Semiconductors & Semiconductor Equipment 3.1%
Entegris, Inc.	428,913	0.3	22,869,641
MKS Instruments, Inc.	173,801	0.2	17,413,122
SolarEdge Technologies, Inc. *	154,961	0.2	19,326,736
Other Securities		2.4	191,069,999
		3.1	250,679,498

Software & Services 8.0%
Avalara, Inc. *	209,952	0.2	17,793,432
CACI International, Inc., Class A *	79,649	0.2	19,515,598
MongoDB, Inc. *	111,269	0.2	16,968,523
RealPage, Inc. *	253,289	0.2	16,235,825
Other Securities		7.2	578,466,402
		8.0	648,979,780

Technology Hardware & Equipment 4.2%
Ciena Corp. *	494,360	0.2	19,008,142
Lumentum Holdings, Inc. *	246,040	0.2	19,146,833
SYNNEX Corp.	130,572	0.2	16,325,417
Tech Data Corp. *	112,905	0.2	16,076,543
Other Securities		3.4	270,159,668
		4.2	340,716,603

Telecommunication Services 0.7%
Other Securities		0.7	53,979,155

Transportation 1.6%
Other Securities		1.6	129,375,395

Utilities 3.4%
IDACORP, Inc.	160,716	0.2	15,531,594
MDU Resources Group, Inc.	638,292	0.2	17,699,837
Portland General Electric Co.	284,690	0.2	15,489,983
Other Securities		2.8	224,355,808
		3.4	273,077,222
Total Common Stock
(Cost $8,148,558,597)			8,092,680,769

Security	Number of Shares	% of Net Assets	Value ($)
Rights 0.0% of net assets

Materials 0.0%
Other Securities		0.0	35,598

Media 0.0%
Other Securities		0.0	15,132
Total Rights
(Cost $35,598)			50,730

Other Investment Companies 1.4% of net assets

Money Market Fund 0.1%
Other Securities		0.1	8,231,594

Securities Lending Collateral 1.3%
Wells Fargo Government Money Market Fund, Select Class 1.52% (c)		1.3	104,336,506
Total Other Investment Companies
(Cost $112,568,100)			112,568,100

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
Russell 2000 Index, e-mini expires 03/20/20	164	12,094,180	(1,612,608)

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

*	Non-income producing security.
(a)	All or a portion of this security is on loan. Securities on loan were valued at $100,833,148.
(b)	Fair-valued by management using significant unobservable inputs in accordance with procedures approved by the fund’s Board of Trustees.
(c)	The rate shown is the 7-day yield.

CVR —	Contingent Value Rights
REIT —	Real Estate Investment Trust

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Small-Cap ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$8,092,680,769	$—	$—	$8,092,680,769
Rights¹
Materials	—	—	35,598	35,598
Media & Entertainment	—	—	15,132	15,132
Other Investment Companies¹	112,568,100	—	—	112,568,100
Liabilities
Futures Contracts²	(1,612,608)	—	—	(1,612,608)
Total	$8,203,636,261	$—	$50,730	$8,203,686,991

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

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $8,156,825,789) including securities on loan of $100,833,148		$8,100,963,093
Collateral invested for securities on loan, at value (cost $104,336,506)		104,336,506
Deposit with broker for futures contracts		2,821,338
Receivables:
Investments sold		34,144,997
Dividends		8,146,401
Income from securities on loan	+	517,479
Total assets		8,250,929,814
Liabilities
Collateral held for securities on loan		104,336,506
Payables:
Investments bought		3,445,194
Management fees		277,944
Fund shares redeemed		33,554,854
Variation margin on futures contracts		1,612,283
Due to custodian	+	819,407
Total liabilities		144,046,188
Net Assets
Total assets		8,250,929,814
Total liabilities	–	144,046,188
Net assets		$8,106,883,626
Net Assets by Source
Capital received from investors		8,091,800,088
Total distributable earnings		15,083,538

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$8,106,883,626		120,800,000		$67.11

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends (net of foreign withholding tax of $52,948)		$74,390,009
Securities on loan, net	+	3,806,750
Total investment income		78,196,759
Expenses
Management fees		1,728,693
Total expenses	–	1,728,693
Net investment income		76,468,066
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(163,177,756)
Net realized gains on in-kind redemptions		372,269,517
Net realized gains on futures contracts	+	956,742
Net realized gains		210,048,503
Net change in unrealized appreciation (depreciation) on investments		(485,208,402)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(1,646,553)
Net change in unrealized appreciation (depreciation)	+	(486,854,955)
Net realized and unrealized losses		(276,806,452)
Decrease in net assets resulting from operations		($200,338,386)

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Small-Cap ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$76,468,066	$117,973,566
Net realized gains		210,048,503	378,583,521
Net change in unrealized appreciation (depreciation)	+	(486,854,955)	(1,409,738,942)
Decrease in net assets resulting from operations		(200,338,386)	(913,181,855)
Distributions to Shareholders
Total distributions		($76,200,380)	($113,198,860)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		15,850,000	$1,144,723,798	21,350,000	$1,530,345,531
Shares redeemed	+	(12,100,000)	(861,372,026)	(17,450,000)	(1,257,281,901)
Net transactions in fund shares		3,750,000	$283,351,772	3,900,000	$273,063,630
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		117,050,000	$8,100,070,620	113,150,000	$8,853,387,705
Total increase or decrease	+	3,750,000	6,813,006	3,900,000	(753,317,085)
End of period		120,800,000	$8,106,883,626	117,050,000	$8,100,070,620

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Dividend Equity ETF

Financial Statements

Financial Highlights

	9/1/19– 2/29/20*	9/1/18– 8/31/19	9/1/17– 8/31/18	9/1/16– 8/31/17	9/1/15– 8/31/16	9/1/14– 8/31/15
Per-Share Data
Net asset value at beginning of period	$53.30	$52.71	$45.83	$42.47	$36.52	$38.90
Income (loss) from investment operations:
Net investment income (loss)¹	0.92	1.66	1.49	1.40	1.29	1.19
Net realized and unrealized gains (losses)	(1.74)	0.48	6.75	3.26	5.85	(2.46)
Total from investment operations	(0.82)	2.14	8.24	4.66	7.14	(1.27)
Less distributions:
Distributions from net investment income	(0.95)	(1.55)	(1.36)	(1.30)	(1.19)	(1.11)
Net asset value at end of period	$51.53	$53.30	$52.71	$45.83	$42.47	$36.52
Total return	(1.67%)²	4.18%	18.21%	11.12%	19.89%	(3.47%)
Ratios/Supplemental Data
Ratios to average net assets:
Total expenses	0.06%³	0.06%⁴	0.07%	0.07%	0.07%	0.07%
Net investment income (loss)	3.27%³	3.23%	2.99%	3.17%	3.27%	3.03%
Portfolio turnover rate⁵	5%²	24%	23%	15%	22%	19%
Net assets, end of period (x 1,000)	$10,690,466	$9,820,959	$8,092,908	$6,040,705	$4,300,443	$2,497,808

*	Unaudited.

Calculated based on the average shares outstanding during the period.

Not annualized.

Annualized.

⁴

Effective March 11, 2019, the annual operating expense ratio was reduced. The ratio presented for the period ended 8/31/19 is a blended ratio.

⁵

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

₇₃

Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Dividend Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited)

Security	Number of Shares	% of Net Assets	Value ($)
Common Stock 99.6% of net assets

Automobiles & Components 0.3%
Other Securities		0.3	32,920,398

Banks 2.4%
Fifth Third Bancorp	2,695,446	0.6	65,768,882
Huntington Bancshares, Inc.	3,830,233	0.4	46,996,959
KeyCorp	3,699,426	0.6	60,485,615
Other Securities		0.8	85,972,638
		2.4	259,224,094

Capital Goods 13.3%
3M Co.	2,122,408	3.0	316,748,170
Cummins, Inc.	582,103	0.8	88,066,363
Eaton Corp. plc	1,549,515	1.3	140,572,001
Emerson Electric Co.	2,269,295	1.3	145,484,502
Fastenal Co.	2,115,790	0.7	72,402,334
Illinois Tool Works, Inc.	1,086,000	1.7	182,209,080
Lockheed Martin Corp.	916,808	3.2	339,099,775
Rockwell Automation, Inc.	431,688	0.7	79,214,748
Other Securities		0.6	58,676,047
		13.3	1,422,473,020

Commercial & Professional Services 0.1%
Other Securities		0.1	7,219,080

Consumer Durables & Apparel 1.1%
Garmin Ltd.	533,360	0.4	47,143,690
Other Securities		0.7	72,608,375
		1.1	119,752,065

Consumer Services 0.7%
Darden Restaurants, Inc.	453,312	0.4	44,197,920
Other Securities		0.3	26,277,801
		0.7	70,475,721

Diversified Financials 4.4%
Ameriprise Financial, Inc.	482,803	0.6	68,220,064
BlackRock, Inc.	433,393	1.9	200,665,293
T. Rowe Price Group, Inc.	869,062	1.0	102,558,007
Other Securities		0.9	95,971,561
		4.4	467,414,925

Security	Number of Shares	% of Net Assets	Value ($)
Energy 5.6%
Exxon Mobil Corp.	7,729,322	3.7	397,596,324
ONEOK, Inc.	1,523,587	1.0	101,653,725
Valero Energy Corp.	1,528,889	0.9	101,288,896
		5.6	600,538,945

Food, Beverage & Tobacco 14.8%
Altria Group, Inc.	6,892,128	2.6	278,235,207
General Mills, Inc.	2,226,439	1.0	109,095,511
Kellogg Co.	917,964	0.5	55,509,283
PepsiCo, Inc.	3,887,796	4.8	513,305,706
The Coca-Cola Co.	9,879,838	5.0	528,472,535
The Hershey Co.	549,589	0.7	79,135,320
Other Securities		0.2	18,836,503
		14.8	1,582,590,065

Health Care Equipment & Services 3.2%
Cardinal Health, Inc.	1,099,669	0.5	57,314,748
CVS Health Corp.	4,798,161	2.7	283,955,168
Other Securities		0.0	3,131,217
		3.2	344,401,133

Household & Personal Products 6.8%
Kimberly-Clark Corp.	1,269,921	1.6	166,600,936
The Clorox Co.	463,947	0.7	73,962,431
The Procter & Gamble Co.	4,275,791	4.5	484,147,815
Other Securities		0.0	5,003,870
		6.8	729,715,052

Insurance 2.2%
Fidelity National Financial, Inc.	1,013,251	0.4	39,273,609
Principal Financial Group, Inc.	956,595	0.4	42,463,252
Prudential Financial, Inc.	1,483,103	1.1	111,900,121
Other Securities		0.3	35,748,119
		2.2	229,385,101

Materials 1.6%
International Paper Co.	1,450,151	0.5	53,597,581
Other Securities		1.1	120,201,948
		1.6	173,799,529

Media & Entertainment 0.5%
Omnicom Group, Inc.	802,990	0.5	55,631,147

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Schwab U.S. Equity ETFs | Semiannual Report

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Table of Contents

Schwab U.S. Dividend Equity ETF

Condensed Portfolio Holdings as of February 29, 2020 (Unaudited) (continued)

Security	Number of Shares	% of Net Assets	Value ($)
Pharmaceuticals, Biotechnology & Life Sciences 9.1%
Bristol-Myers Squibb Co.	8,540,672	4.7	504,412,088
Pfizer, Inc.	13,946,177	4.4	466,081,236
		9.1	970,493,324

Retailing 8.8%
Best Buy Co., Inc.	855,793	0.6	64,740,740
Genuine Parts Co.	539,173	0.5	47,037,453
Target Corp.	1,885,001	1.8	194,155,103
The Home Depot, Inc.	2,514,205	5.1	547,694,417
Other Securities		0.8	82,689,023
		8.8	936,316,736

Semiconductors & Semiconductor Equipment 13.0%
Intel Corp.	9,339,734	4.9	518,542,032
KLA Corp.	587,530	0.8	90,309,236
Maxim Integrated Products, Inc.	1,001,401	0.5	55,697,924
QUALCOMM, Inc.	4,212,713	3.1	329,855,428
Texas Instruments, Inc.	3,444,439	3.7	393,148,267
		13.0	1,387,552,887

Software & Services 4.8%
International Business Machines Corp.	3,268,335	4.0	425,373,801
Paychex, Inc.	1,179,913	0.8	91,419,659
		4.8	516,793,460

Technology Hardware & Equipment 0.0%
Other Securities		0.0	3,778,651

Telecommunication Services 4.4%
Verizon Communications, Inc.	8,726,534	4.4	472,629,081

Security	Number of Shares	% of Net Assets	Value ($)
Transportation 2.5%
United Parcel Service, Inc., Class B	2,576,425	2.2	233,140,698
Other Securities		0.3	34,400,943
		2.5	267,541,641
Total Common Stock
(Cost $10,450,877,111)			10,650,646,055

Other Investment Company 0.1% of net assets

Securities Lending Collateral 0.1%
Other Securities		0.1	2,994,250
Total Other Investment Company
(Cost $2,994,250)			2,994,250

	Number of Contracts	Notional Amount ($)	Current Value/ Unrealized Depreciation ($)
Futures Contracts
Long
S&P 500 Index, e-mini, expires 03/20/20	249	36,741,195	(4,636,614)

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

(a)	All or a portion of this security is on loan. Securities on loan were valued at $3,004,400.
(b)	The rate shown is the 7-day yield.

Description	Quoted Prices in Active Markets for Identical Assets (Level 1)	Other Significant Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Assets
Common Stock¹	$10,650,646,055	$—	$—	$10,650,646,055
Other Investment Company¹	2,994,250	—	—	2,994,250
Liabilities
Futures Contracts²	(4,636,614)	—	—	(4,636,614)
Total	$10,649,003,691	$—	$—	$10,649,003,691

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

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Schwab U.S. Dividend Equity ETF

Statement of Assets and Liabilities

As of February 29, 2020; unaudited

Assets
Investments in unaffiliated issuers, at value (cost $10,450,877,111) including securities on loan of $3,004,400		$10,650,646,055
Collateral invested for securities on loan, at value (cost $2,994,250)		2,994,250
Deposit with broker for futures contracts		6,364,737
Receivables:
Investments sold		7,690,812
Dividends		38,784,702
Fund shares sold		15,459,821
Income from securities on loan	+	7,528
Total assets		10,721,947,905
Liabilities
Collateral held for securities on loan		2,994,250
Payables:
Management fees		544,674
Fund shares redeemed		23,189,731
Variation margin on futures contracts		4,636,124
Due to custodian	+	116,697
Total liabilities		31,481,476
Net Assets
Total assets		10,721,947,905
Total liabilities	–	31,481,476
Net assets		$10,690,466,429
Net Assets by Source
Capital received from investors		10,629,535,479
Total distributable earnings		60,930,950

Net Asset Value (NAV)
Net Assets	÷	Shares Outstanding	=	NAV
$10,690,466,429		207,450,000		$51.53

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Schwab U.S. Dividend Equity ETF

Statement of Operations

For the period September 1, 2019 through February 29, 2020; unaudited

Investment Income
Dividends		$184,044,372
Securities on loan, net	+	58,400
Total investment income		184,102,772
Expenses
Management fees		3,302,896
Total expenses	–	3,302,896
Net investment income		180,799,876
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(51,924,800)
Net realized gains on in-kind redemptions		93,764,487
Net realized gains on futures contracts	+	3,085,022
Net realized gains		44,924,709
Net change in unrealized appreciation (depreciation) on investments		(477,015,437)
Net change in unrealized appreciation (depreciation) on futures contracts	+	(4,855,805)
Net change in unrealized appreciation (depreciation)	+	(481,871,242)
Net realized and unrealized losses		(436,946,533)
Decrease in net assets resulting from operations		($256,146,657)

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Schwab U.S. Dividend Equity ETF

Statement of Changes in Net Assets

For the current and prior report periods

Figures for the current period are unaudited

Operations
	9/1/19-2/29/20		9/1/18-8/31/19
Net investment income		$180,799,876	$282,628,086
Net realized gains		44,924,709	260,018,757
Net change in unrealized appreciation (depreciation)	+	(481,871,242)	(134,725,586)
Increase (decrease) in net assets resulting from operations		(256,146,657)	407,921,257
Distributions to Shareholders
Total distributions		($183,709,055)	($258,520,350)

Transactions in Fund Shares
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	VALUE	SHARES	VALUE
Shares sold		28,750,000	$1,622,374,907	67,000,000	$3,443,124,440
Shares redeemed	+	(5,550,000)	(313,012,263)	(36,300,000)	(1,864,473,911)
Net transactions in fund shares		23,200,000	$1,309,362,644	30,700,000	$1,578,650,529
Shares Outstanding and Net Assets
		9/1/19-2/29/20		9/1/18-8/31/19
		SHARES	NET ASSETS	SHARES	NET ASSETS
Beginning of period		184,250,000	$9,820,959,497	153,550,000	$8,092,908,061
Total increase	+	23,200,000	869,506,932	30,700,000	1,728,051,436
End of period		207,450,000	$10,690,466,429	184,250,000	$9,820,959,497

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Schwab U.S. Equity ETFs

Financial Notes, unaudited

1. Business Structure of the Funds:

SCHWAB STRATEGIC TRUST (ORGANIZED JANUARY 27, 2009)
Schwab U.S. Broad Market ETF	Schwab 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	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

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.

2. Significant Accounting Policies:

(a) Security Valuation:

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

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Schwab U.S. Equity ETFs

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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

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

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

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

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

The levels associated with valuing the funds’ investments as of February 29, 2020 are disclosed in the Condensed Portfolio Holdings.

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

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

(d) Investment Income:

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

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Schwab U.S. Equity ETFs

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(e) Expenses:

(f) Distributions to Shareholders:

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

(g) Accounting Estimates:

(h) Federal Income Taxes:

(i) Indemnification:

(j) Recent Accounting Standards:

3. Risk Factors:

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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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

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

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

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

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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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

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

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

4. Affiliates and Affiliated Transactions:

Investment Adviser

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

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

Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
0.03%	0.05%	0.03%	0.04%	0.04%	0.04%	0.04%	0.06%

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Investment from Affiliates

	Underlying Funds
	Schwab U.S. Large-Cap ETF	Schwab U.S. Small-Cap ETF
Schwab VIT Balanced Portfolio	0.1%	0.0%*
Schwab VIT Balanced with Growth Portfolio	0.2%	0.1%
Schwab VIT Growth Portfolio	0.2%	0.1%
Schwab Target 2010 Index Fund	0.0%*	0.0%*
Schwab Target 2015 Index Fund	0.1%	0.0%*
Schwab Target 2020 Index Fund	0.3%	0.0%*
Schwab Target 2025 Index Fund	0.5%	0.1%
Schwab Target 2030 Index Fund	0.8%	0.1%
Schwab Target 2035 Index Fund	0.5%	0.1%
Schwab Target 2040 Index Fund	0.7%	0.2%
Schwab Target 2045 Index Fund	0.4%	0.1%
Schwab Target 2050 Index Fund	0.4%	0.1%
Schwab Target 2055 Index Fund	0.2%	0.1%
Schwab Target 2060 Index Fund	0.3%	0.1%

*	Less than 0.05%

Interfund Transactions

	Total Aggregate Transactions	Realized Gains (Losses)
Schwab U.S. Broad Market ETF	$47,493,314	($12,849,021)
Schwab 1000 Index ETF	3,896,698	(234,381)
Schwab U.S. Large-Cap ETF	420,962,975	(78,475,245)
Schwab U.S. Large-Cap Growth ETF	596,940,044	(114,197,987)
Schwab U.S. Large-Cap Value ETF	722,542,382	(69,103,250)
Schwab U.S. Mid-Cap ETF	354,910,721	(87,329,761)
Schwab U.S. Small-Cap ETF	395,447,084	(66,602,157)
Schwab U.S. Dividend Equity ETF	128,396,645	(9,731,990)

Interfund Borrowing and Lending

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Financial Notes, unaudited (continued)

5. Other Service Providers:

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

6. Board of Trustees:

7. Borrowing from Banks:

8. Derivatives:

	Notional Amounts	Number of Contracts
Schwab U.S. Broad Market ETF	$23,403,626	153
Schwab 1000 Index ETF	1,585,115	10
Schwab U.S. Large-Cap ETF	29,288,553	191
Schwab U.S. Large-Cap Growth ETF	9,202,010	109
Schwab U.S. Large-Cap Value ETF	13,850,491	218
Schwab U.S. Mid-Cap ETF	10,127,943	51
Schwab U.S. Small-Cap ETF	13,546,114	173
Schwab U.S. Dividend Equity ETF	26,044,694	170

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Schwab U.S. Equity ETFs

Financial Notes, unaudited (continued)

9. Purchases and Sales of Investment Securities:

For the period ended February 29, 2020, purchases and sales of securities (excluding in-kind transactions and short-term obligations) were as follows:

	Purchases of Securities	Sales of Securities
Schwab U.S. Broad Market ETF	$393,217,653	$372,011,765
Schwab 1000 Index ETF	30,635,282	28,917,070
Schwab U.S. Large-Cap ETF	555,967,223	571,242,706
Schwab U.S. Large-Cap Growth ETF	516,045,185	525,697,563
Schwab U.S. Large-Cap Value ETF	1,030,447,312	1,044,730,927
Schwab U.S. Mid-Cap ETF	1,048,706,224	1,003,998,068
Schwab U.S. Small-Cap ETF	894,246,882	702,698,931
Schwab U.S. Dividend Equity ETF	511,990,288	527,271,960

10. In-Kind Transactions:

The in-kind transactions for the period ended February 29, 2020, were as follows:

	In-Kind Purchases of Securities	In-Kind Sales of Securities
Schwab U.S. Broad Market ETF	$259,714,713	$459,219,396
Schwab 1000 Index ETF	78,503,409	11,625,419
Schwab U.S. Large-Cap ETF	1,456,815,749	958,710,173
Schwab U.S. Large-Cap Growth ETF	1,285,506,834	897,472,129
Schwab U.S. Large-Cap Value ETF	829,837,652	172,763,832
Schwab U.S. Mid-Cap ETF	1,115,996,730	917,898,002
Schwab U.S. Small-Cap ETF	1,106,860,120	831,481,302
Schwab U.S. Dividend Equity ETF	1,591,940,734	283,257,848

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Financial Notes, unaudited (continued)

11. Federal Income Taxes

As of February 29, 2020, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:

	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF
Tax cost	$11,655,416,292	$845,163,300	$15,305,450,149	$6,541,202,392	$6,220,693,053
Gross unrealized appreciation	$3,998,272,137	$114,649,587	$4,030,709,956	$2,512,792,712	$603,273,187
Gross unrealized depreciation	(871,273,215)	(52,862,049)	(928,517,366)	(105,787,041)	(482,194,283)
Net unrealized appreciation (depreciation)	$3,126,998,922	$61,787,538	$3,102,192,590	$2,407,005,671	$121,078,904

	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
Tax cost	$5,992,071,520	$8,333,708,044	$10,485,877,866
Gross unrealized appreciation	$818,457,681	$1,158,821,313	$963,881,340
Gross unrealized depreciation	(514,751,278)	(1,288,842,366)	(800,755,515)
Net unrealized appreciation (depreciation)	$303,706,403	($130,021,053)	$163,125,825

Expiration Date	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
No expiration	$62,177,573	$2,502,538	$84,669,523	$85,616,664	$46,716,090	$202,458,368	$114,253,600	$223,525,531
Total	$62,177,573	$2,502,538	$84,669,523	$85,616,664	$46,716,090	$202,458,368	$114,253,600	$223,525,531

	Schwab U.S. Broad Market ETF	Schwab 1000 Index ETF	Schwab U.S. Large-Cap ETF	Schwab U.S. Large-Cap Growth ETF	Schwab U.S. Large-Cap Value ETF	Schwab U.S. Mid-Cap ETF	Schwab U.S. Small-Cap ETF	Schwab U.S. Dividend Equity ETF
Ordinary income	$265,289,790	$11,758,680	$302,865,295	$80,450,420	$153,831,815	$80,783,475	$113,198,860	$258,520,350

12. Subsequent Events:

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Trustees and Officers

Independent Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Robert W. Burns 1959 Trustee (Trustee of Schwab Strategic Trust since 2009; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	Retired/Private Investor (Jan. 2009 – present). Formerly, Managing Director, Pacific Investment Management Company, LLC (PIMCO) (investment management firm) and President, PIMCO Funds.	99	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.	99	Director (2005 – present), Gilead Sciences, Inc.
Nancy F. Heller 1956 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Retired. President and Chairman (2014 – 2016), TIAA Charitable (financial services); Senior Managing Director (2003 – 2016), TIAA (financial services).	99	None
Stephen Timothy Kochis 1946 Trustee (Trustee of Schwab Strategic Trust since 2012; The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2016)	CEO and Owner (May 2012 – present), Kochis Global (wealth management consulting).	99	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
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.	99	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).	99	None
Kiran M. Patel 1948 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust since 2011; Schwab Strategic Trust since 2016)	Retired. Executive Vice President and General Manager of Small Business Group (Dec. 2008 – Sept. 2013), Intuit, Inc. (financial software and services firm for consumers and small businesses).	99	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).	99	None
Gerald B. Smith 1950 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2000; Laudus Trust since 2010; Schwab Strategic Trust since 2016)	Chairman, Chief Executive Officer and Founder (Mar. 1990 – present), Smith Graham & Co. (investment advisors).	99	Director (2012 – present), Eaton Corporation plc

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Interested Trustees
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served¹)	Principal Occupations During the Past Five Years	Number of Portfolios in Fund Complex Overseen by the Trustee	Other Directorships
Walter W. Bettinger II² 1960 Chairman and Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust and Schwab Annuity Portfolios since 2008; Schwab Strategic Trust since 2009; Laudus Trust since 2010)	Director, President and Chief Executive Officer (Oct. 2008 – present), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – present) and Director (May 2008 – present), Charles Schwab & Co., Inc.; Director (Apr. 2006 – present), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present) and President and Chief Executive Officer (Aug. 2017 – present), Schwab Holdings, Inc.; Director (July 2016 – present), Charles Schwab Investment Management, Inc.	99	Director (2008 – present), The Charles Schwab Corporation
Jonathan de St. Paer² 1973 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2019)	Director (Apr. 2019 – present), President (Oct. 2018 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.	99	None
Joseph R. Martinetto² 1962 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2016)	Chief Operating Officer (Feb. 2018 – present) and Senior Executive Vice President (July 2015 – Feb. 2018), The Charles Schwab Corporation; Senior Executive Vice President (July 2015 – present), Charles Schwab & Co., Inc.; Chief Financial Officer (July 2015 – Aug. 2017) and Executive Vice President and Chief Financial Officer (May 2007 – July 2015), The Charles Schwab Corporation and Charles Schwab & Co., Inc.; Director (May 2007 – present), Charles Schwab & Co., Inc.; Director (Apr. 2010 – present) and Chief Executive Officer (July 2013 – Apr. 2015), Charles Schwab Bank; Director (Nov. 2017 – present), Charles Schwab Premier Bank; Director (May 2007 – present), Chief Financial Officer (May 2007 – Aug. 2017), Senior Executive Vice President (Feb. 2016 – present), and Executive Vice President (May 2007 – Feb. 2016), Schwab Holdings, Inc.	99	None

Officers of the Trust
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served³)	Principal Occupations During the Past Five Years
Jonathan de St. Paer 1973 President and Chief Executive Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2018)	Director (Apr. 2019 – present), President (Oct. 2018 – present), and Chief Executive Officer (Apr. 2019 – Nov. 2019), Charles Schwab Investment Management, Inc.; Trustee and Chief Executive Officer (Apr. 2019 – present) and President (Nov. 2018 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Director (Apr. 2019 – present), Charles Schwab Worldwide Funds plc and Charles Schwab Asset Management (Ireland) Limited; Senior Vice President (Apr. 2019 – present), Senior Vice President – Strategy and Product Development (CSIM) (Jan. 2014 – Mar. 2019), and Vice President (Jan. 2009 – Dec. 2013), Charles Schwab & Co., Inc.

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Officers of the Trust (continued)
Name, Year of Birth, and Position(s) with the trust (Terms of office, and length of Time Served³)	Principal Occupations During the Past Five Years
Mark Fischer 1970 Treasurer and Chief Financial Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013)	Treasurer and Chief Financial Officer (Jan. 2016 – present), Schwab Funds, Laudus Funds and Schwab ETFs; Assistant Treasurer (Dec. 2013 – Dec. 2015), Schwab Funds and Laudus Funds; Assistant Treasurer (Nov. 2013 – Dec. 2015), Schwab ETFs; 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, Mr. de St. Paer and Mr. Martinetto are Interested Trustees. Mr. Bettinger is an Interested Trustee because he owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc. (CSIM), the investment adviser for the trusts in the Fund Complex, is an employee and director of Charles Schwab & Co., Inc. (CS&Co), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust, and is a director of CSIM. Mr. de St. Paer is an Interested Trustee because he owns stock of CSC and is an employee and director of CSIM. Mr. Martinetto is an Interested Trustee because he owns stock of CSC and is an employee and director of CS&Co.
³	The President, Treasurer and Secretary/Clerk hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board.

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Glossary

ask See “offer.”

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

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

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

cap, capitalization See “market cap.”

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

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

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

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

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

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

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

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

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

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

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

gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.

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

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