UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSRS
CERTIFIED SHAREHOLDER REPORT OF REGISTERED
MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-06200
Schwab Investments – Schwab Taxable Bond Funds and Schwab Municipal Bond Funds
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
Omar Aguilar
Schwab Investments
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: August 31
Date of reporting period: February 29, 2024
Item 1: Report(s) to Shareholders.
Semiannual Report | February 29, 2024
Schwab Taxable Bond Funds
Schwab Treasury Inflation
Protected Securities Index Fund
Schwab U.S. Aggregate
Bond Index Fund
Schwab Short-Term
Bond Index Fund
No Action Required – Notice Regarding Shareholder Report Delivery |
Beginning on July 24, 2024, fund shareholder reports will be streamlined to highlight key information deemed important for investors to assess and monitor their fund investments. Other information, including financial statements, will not appear in the streamlined shareholder reports but will available online and delivered free of charge upon request. |
• If you already receive the full shareholder reports, you will receive the streamlined shareholder reports in the same way that you currently receive the full shareholder reports (either in paper or electronically). |
• If you currently receive a notification when a shareholder report is available on a fund’s website, beginning July 24, 2024, you will begin to receive the streamlined shareholder report (in paper). |
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Three ways for investors to include bonds in an asset allocation strategy.
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset Management®
Distributor: Charles Schwab & Co., Inc. (Schwab)
Schwab Taxable Bond Funds | Semiannual Report1
Schwab Taxable Bond Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
Total Returns for the 6 Months Ended February 29, 2024 |
Schwab Treasury Inflation Protected Securities Index Fund (Ticker Symbol: SWRSX) | |
Bloomberg US Aggregate Bond Index1 | |
Bloomberg US Treasury Inflation-Linked Bond Index (Series-L)SM | |
Fund Category: Morningstar Inflation Protected Bond2 | |
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Schwab U.S. Aggregate Bond Index Fund (Ticker Symbol: SWAGX) | |
Bloomberg US Aggregate Bond Index | |
Fund Category: Morningstar Intermediate Core Bond2 | |
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Schwab Short-Term Bond Index Fund (Ticker Symbol: SWSBX) | |
Bloomberg US Aggregate Bond Index1 | |
Bloomberg US Government/Credit 1-5 Year Index | |
Fund Category: Morningstar Short-Term Bond2 | |
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All total return figures 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 of fund shares.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Treasury Inflation Protected Securities (TIPS) are inflation-linked securities issued by the U.S. Government whose principal value is adjusted periodically in accordance with the rise and fall in the inflation rate. Thus, the dividend amount payable is also impacted by variations in the inflation rate, as it is based upon the principal value of the bond. It may fluctuate up or down. Repayment at maturity is guaranteed by the U.S. Government and may be adjusted for inflation to become the greater of the original face amount at issuance or that face amount plus an adjustment for inflation. Treasury Inflation-Protected Securities are guaranteed by the U.S. Government, but inflation-protected bond funds do not provide such a guarantee.
Index ownership — Bloomberg Index Services Limited. BLOOMBERG® is a trademark and service mark of Bloomberg Finance L.P. and its affiliates (collectively “Bloomberg”). Bloomberg or Bloomberg’s licensors own all proprietary rights in the Bloomberg Indices. Neither Bloomberg nor Bloomberg’s licensors approves or endorses this material, or guarantees the accuracy or completeness of any information herein, or makes any warranty, express or implied, as to the results to be obtained therefrom and, to the maximum extent allowed by law, neither shall have any liability or responsibility for injury or damages arising in connection therewith.
1
In anticipation of new regulatory requirements, the fund’s regulatory index has changed to the Bloomberg US Aggregate Bond Index. The Bloomberg US Aggregate Bond Index provides a broad measure of market performance. The fund generally invests in securities that are included in the second index listed. The fund does not seek to track the regulatory index.
2
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
2Schwab Taxable Bond Funds | Semiannual Report
Schwab Taxable Bond Funds
| Matthew Hastings, CFA, Managing Director and Head of Bond Strategies for Schwab Asset Management, leads the portfolio management team for the Schwab Taxable Bond Funds and Schwab Fixed-Income ETFs. He also has overall responsibility for all aspects of the management of the funds. Prior to joining Schwab in 1999, Mr. Hastings was in fixed-income sales and trading at Lehman Brothers. He has worked in the fixed-income securities industry since 1996. |
| Steven Hung, Senior Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day co-management of each of the funds, except for the Schwab Treasury Inflation Protected Securities Index Fund. He is primarily responsible for the management and oversight of corporate bonds within the taxable bond strategies, with additional responsibility for managing municipal bond index strategies. Mr. Hung has been a portfolio manager with Schwab Asset Management since 2005 and prior to that, served in various roles as an associate portfolio manager and trader since 1999. In 1998, he joined Charles Schwab & Co.’s management training program and worked as a clerk on the options trading floor of the Pacific Coast Stock Exchange. |
| Mark McKissick, CFA, Senior Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day co-management of the funds. Prior to joining Schwab in 2016, Mr. McKissick worked at Denver Investments for 17 years, most recently as a director of fixed income and portfolio manager. In this role he co-managed multiple bond strategies, as well as oversaw the firm’s fixed-income business including the investment process, client service, and other administrative functions. He also served as a credit/security analyst from 1999 to 2005. Prior to that, he worked as a senior research analyst with Hotchkis & Wiley, a portfolio manager at Payden & Rygel, and a vice president in fixed income at Salomon Brothers. |
| Alfonso Portillo, Jr., Senior Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day co-management of the Schwab U.S. Aggregate Bond Index Fund. His primary focus is securitized products. Prior to joining Schwab in 2007, Mr. Portillo worked for ten years at Pacific Investment Management Company, most recently as a vice president and member of the mortgage- and asset-backed portfolio management team. He has worked in fixed-income asset management since 1996. |
Schwab Taxable Bond Funds | Semiannual Report3
Schwab Treasury Inflation Protected Securities Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
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Fund: Schwab Treasury Inflation Protected Securities Index Fund (3/31/06) | | | | |
Bloomberg US Aggregate Bond Index2 | | | | |
Bloomberg US Treasury Inflation-Linked Bond Index (Series-L)SM | | | | |
Fund Category: Morningstar Inflation Protected Bond3 | | | | |
Fund Expense Ratio4: 0.05% |
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12-Month Distribution Yield | |
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.
Index ownership — Bloomberg® and Bloomberg US Treasury Inflation-Linked Bond Index (Series-L)SM are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (BISL), the administrator of the indices (collectively, “Bloomberg”). Bloomberg is not affiliated with Charles Schwab Investment Management, Inc., dba Schwab Asset Management, and Bloomberg does not approve, endorse, review, or recommend Schwab Treasury Inflation Protected Securities Index Fund. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Schwab Treasury Inflation Protected Securities Index Fund.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
In anticipation of new regulatory requirements, the fund’s regulatory index has changed from the Bloomberg US Treasury Inflation-Linked Bond Index (Series-L)SM to the Bloomberg US Aggregate Bond Index. The Bloomberg US Aggregate Bond Index provides a broad measure of market performance. The fund generally invests in securities that are included in the Bloomberg US Treasury Inflation-Linked Bond Index (Series-L)SM. The fund does not seek to track the regulatory index.
3
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
4
As stated in the prospectus.
5
The fund’s yields, including the SEC Yield, are adjusted monthly based on changes in the rate of inflation and these changes can cause the yield to vary substantially from month to month. Exceptionally high yield is attributable to the rise in inflation rate and might not be repeated. Exceptionally low or negative yield is attributable to the fall in inflation rate and might not be repeated.
4Schwab Taxable Bond Funds | Semiannual Report
Schwab Treasury Inflation Protected Securities Index Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type1
Weighted Average Maturity3 | |
Weighted Average Duration3 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
Treasury Inflation Protected Securities (TIPS) are inflation-linked securities issued by the U.S. Government whose principal value is adjusted periodically in accordance with the rise and fall in the inflation rate. Thus, the dividend amount payable is also impacted by variations in the inflation rate, as it is based upon the principal value of the bond. It may fluctuate up or down. Repayment at maturity is guaranteed by the U.S. Government and may be adjusted for inflation to become the greater of the original face amount at issuance or that face amount plus an adjustment for inflation. Treasury Inflation-Protected Securities are guaranteed by the U.S. Government, but inflation-protected bond funds do not provide such a guarantee.
1
The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
2
Includes the fund’s position(s) in money market mutual funds registered under the Investment Company Act of 1940, as amended.
3
See Glossary for definitions of maturity and duration.
4
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Taxable Bond Funds | Semiannual Report5
Schwab U.S. Aggregate Bond Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
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Fund: Schwab U.S. Aggregate Bond Index Fund (2/23/17) | | | | |
Bloomberg US Aggregate Bond Index | | | | |
Fund Category: Morningstar Intermediate Core Bond2 | | | | |
Fund Expense Ratio3: 0.04% |
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12-Month Distribution Yield | |
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.
Index ownership — Bloomberg® and Bloomberg US Aggregate Bond Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (BISL), the administrator of the indices (collectively, “Bloomberg”). Bloomberg is not affiliated with Charles Schwab Investment Management, Inc., dba Schwab Asset Management, and Bloomberg does not approve, endorse, review, or recommend Schwab U.S. Aggregate Bond Index Fund. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Schwab U.S. Aggregate Bond Index Fund.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
3
As stated in the prospectus.
6Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type1
Weighted Average Maturity4 | |
Weighted Average Duration4 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
1
The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
2
The fund may seek to obtain exposure to U.S. agency mortgage pass-through securities, in part or in full, through the use of “to-be-announced” or “TBA” transactions, which are standardized contracts for future delivery of mortgage pass-through securities in which the exact mortgage pools to be delivered are not specified until a few days prior to settlement. These transactions represented approximately 2.1% of net assets on February 29, 2024.
3
Includes the fund’s position(s) in money market mutual funds registered under the Investment Company Act of 1940, as amended.
4
See Glossary for definitions of maturity and duration.
5
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Taxable Bond Funds | Semiannual Report7
Schwab Short-Term Bond Index Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
| | | | |
Fund: Schwab Short-Term Bond Index Fund (2/23/17) | | | | |
Bloomberg US Aggregate Bond Index2 | | | | |
Bloomberg US Government/Credit 1-5 Year Index | | | | |
Fund Category: Morningstar Short-Term Bond3 | | | | |
Fund Expense Ratio4: 0.06% |
| |
12-Month Distribution Yield | |
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.
Index ownership — Bloomberg® and Bloomberg US Government/Credit 1-5 Year Index are service marks of Bloomberg Finance L.P. and its affiliates, including Bloomberg Index Services Limited (BISL), the administrator of the indices (collectively, “Bloomberg”). Bloomberg is not affiliated with Charles Schwab Investment Management, Inc., dba Schwab Asset Management, and Bloomberg does not approve, endorse, review, or recommend Schwab Short-Term Bond Index Fund. Bloomberg does not guarantee the timeliness, accurateness, or completeness of any data or information relating to Schwab Short-Term Bond Index Fund.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
In anticipation of new regulatory requirements, the fund’s regulatory index has changed from the Bloomberg US Government/Credit 1-5 Year Index to the Bloomberg US Aggregate Bond Index. The Bloomberg US Aggregate Bond Index provides a broad measure of market performance. The fund generally invests in securities that are included in the Bloomberg US Government/Credit 1-5 Year Index. The fund does not seek to track the regulatory index.
3
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
4
As stated in the prospectus.
8Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type1
Weighted Average Maturity3 | |
Weighted Average Duration3 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
1
The percentage may differ from the Portfolio Holdings because the above calculation is based on a percentage of total investments, whereas the calculation in the Portfolio Holdings is based on a percentage of net assets.
2
Includes the fund’s position(s) in money market mutual funds registered under the Investment Company Act of 1940, as amended.
3
See Glossary for definitions of maturity and duration.
4
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Taxable Bond Funds | Semiannual Report9
Schwab Taxable Bond Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; 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, 2023 and held through February 29, 2024.
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. 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.
| | BEGINNING
ACCOUNT VALUE
AT 9/1/23 | ENDING
ACCOUNT VALUE
(NET OF EXPENSES)
AT 2/29/24 | EXPENSES PAID
DURING PERIOD
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Schwab Treasury Inflation Protected Securities Index Fund | | | | |
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Schwab U.S. Aggregate Bond Index Fund | | | | |
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Schwab Short-Term Bond Index Fund | | | | |
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| Based on the most recent six-month expense ratio. |
| Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days in the period, and divided by 366 days in the fiscal year. |
10Schwab Taxable Bond Funds | Semiannual Report
Schwab Treasury Inflation Protected Securities Index Fund
Financial Statements
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Net asset value at beginning of period | | | | | | |
Income (loss) from investment operations: | | | | | | |
Net investment income (loss)1 | | | | | | |
Net realized and unrealized gains (losses) | | | | | | |
Total from investment operations | | | | | | |
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Distributions from net investment income | | | | | | |
Distributions from net realized gains | | | | | | |
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Net asset value at end of period | | | | | | |
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Ratios to average net assets: | | | | | | |
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Net investment income (loss) | | | | | | |
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Net assets, end of period (x 1,000,000) | | | | | | |
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| Calculated based on the average shares outstanding during the period. |
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| Ratio includes less than 0.005% of non-routine proxy expenses. |
Schwab Taxable Bond Funds | Semiannual Report11
Schwab Treasury Inflation Protected Securities Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed-rate securities, the rate shown is the interest rate (the rate established when the security was issued). For variable-rate securities, the rate shown is the rate as of the report date based on each security’s rate reset date. The reference rate and spread used is shown parenthetically in the security description, if available; if not, the reference rate is described in a footnote. The maturity date shown for all the securities is the final legal maturity. Inflation-protected securities are fixed-income securities whose principal value is periodically adjusted by the rate of inflation. The interest rate on these instruments is generally lower at issuance than typical bonds or notes. Over the life of an inflation-indexed instrument interest will be paid based on a principal value, which is adjusted for any inflation or deflation.
SECURITY RATE, MATURITY DATE | | |
TREASURIES 99.8% OF NET ASSETS |
U.S. Treasury Inflation Protected Securities |
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SECURITY RATE, MATURITY DATE | | |
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Total Treasuries
(Cost $2,797,549,100) | |
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SHORT-TERM INVESTMENTS 0.1% OF NET ASSETS |
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State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (a) | | |
Total Short-Term Investments
(Cost $1,913,725) | |
Total Investments in Securities
(Cost $2,799,462,825) | |
| The rate shown is the annualized 7-day yield. |
12Schwab Taxable Bond Funds | Semiannual Report
Schwab Treasury Inflation Protected Securities Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
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| As categorized in the Portfolio Holdings. |
Schwab Taxable Bond Funds | Semiannual Report13
Schwab Treasury Inflation Protected Securities Index Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
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Investments in securities, at value - unaffiliated (cost $2,799,462,825) | | |
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14Schwab Taxable Bond Funds | Semiannual Report
Schwab Treasury Inflation Protected Securities Index Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
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Interest received from securities - unaffiliated | | |
Dividends received from securities - unaffiliated | | |
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REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
| See financial note 2(b), Inflation-Protected Securities, for additional information. |
Schwab Taxable Bond Funds | Semiannual Report15
Schwab Treasury Inflation Protected Securities Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
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Net change in unrealized appreciation (depreciation) | | | |
Increase (decrease) in net assets resulting from operations | | | |
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DISTRIBUTIONS TO SHAREHOLDERS |
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TRANSACTIONS IN FUND SHARES |
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Net transactions in fund shares | | | | | |
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SHARES OUTSTANDING AND NET ASSETS |
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Total increase (decrease) | | | | | |
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16Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Financial Statements
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Net asset value at beginning of period | | | | | | |
Income (loss) from investment operations: | | | | | | |
Net investment income (loss)1 | | | | | | |
Net realized and unrealized gains (losses) | | | | | | |
Total from investment operations | | | | | | |
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Distributions from net investment income | | | | | | |
Distributions from net realized gains | | | | | | |
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Net asset value at end of period | | | | | | |
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Ratios to average net assets: | | | | | | |
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Net investment income (loss) | | | | | | |
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Net assets, end of period (x 1,000,000) | | | | | | |
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| Calculated based on the average shares outstanding during the period. |
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| Ratio includes less than 0.005% of non-routine proxy expenses. |
| Includes to-be-announced (TBA) transactions ( if any) (see financial note 2 for additional information). |
Schwab Taxable Bond Funds | Semiannual Report17
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed rate securities, the rate shown is the interest rate (the rate established when the security was issued). All securities are currently in a fixed rate coupon period based on index eligibility requirements and the fund’s investment objective. Variable rate securities are subject to index requirements and will be removed from the index and fund prior to converting from a fixed rate coupon to a variable rate coupon. The maturity date shown for all the securities is the final legal maturity.
SECURITY RATE, MATURITY DATE | | |
CORPORATES 24.8% OF NET ASSETS |
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Financial Institutions 8.1% |
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Australia & New Zealand Banking Group Ltd. |
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Banco Bilbao Vizcaya Argentaria SA |
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18Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Bank of New York Mellon Corp. |
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Canadian Imperial Bank of Commerce |
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Capital One Financial Corp. |
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Schwab Taxable Bond Funds | Semiannual Report19
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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SECURITY RATE, MATURITY DATE | | |
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Citizens Financial Group, Inc. |
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Commonwealth Bank of Australia |
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Discover Financial Services |
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20Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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First Citizens BancShares, Inc. |
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First-Citizens Bank & Trust Co. |
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Goldman Sachs Group, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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Huntington Bancshares, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report21
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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SECURITY RATE, MATURITY DATE | | |
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Manufacturers & Traders Trust Co. |
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Mitsubishi UFJ Financial Group, Inc. |
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5.41%, 04/19/34 (a)(b)(c) | | |
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22Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Mizuho Financial Group, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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National Australia Bank Ltd. |
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PNC Financial Services Group, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report23
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Santander Holdings USA, Inc. |
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Santander U.K. Group Holdings PLC |
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Sumitomo Mitsui Banking Corp. |
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SECURITY RATE, MATURITY DATE | | |
Sumitomo Mitsui Financial Group, Inc. |
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24Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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SECURITY RATE, MATURITY DATE | | |
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Brokerage/Asset Managers/Exchanges 0.3% |
Affiliated Managers Group, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report25
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Ameriprise Financial, Inc. |
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Apollo Global Management, Inc. |
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Brookfield Capital Finance LLC |
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Brookfield Finance I U.K. PLC/Brookfield Finance, Inc. |
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Brookfield Finance LLC/Brookfield Finance, Inc. |
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Cboe Global Markets, Inc. |
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5.64%, 05/19/29 (a)(b)(e) | | |
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6.20%, 11/17/29 (a)(b)(e) | | |
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5.85%, 05/19/34 (a)(b)(e) | | |
6.14%, 08/24/34 (a)(b)(e) | | |
SECURITY RATE, MATURITY DATE | | |
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Intercontinental Exchange, Inc. |
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Janus Henderson U.S. Holdings, Inc. |
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Jefferies Financial Group, Inc. |
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26Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Raymond James Financial, Inc. |
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AerCap Ireland Capital DAC/AerCap Global Aviation Trust |
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SECURITY RATE, MATURITY DATE | | |
Bain Capital Specialty Finance, Inc. |
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BlackRock TCP Capital Corp. |
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Blackstone Private Credit Fund |
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Blackstone Secured Lending Fund |
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Blue Owl Capital Corp. II |
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Blue Owl Capital Corp. III |
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Blue Owl Credit Income Corp. |
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Blue Owl Technology Finance Corp. |
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HPS Corporate Lending Fund |
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Schwab Taxable Bond Funds | Semiannual Report27
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Main Street Capital Corp. |
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Morgan Stanley Direct Lending Fund |
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New Mountain Finance Corp. |
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Oaktree Specialty Lending Corp. |
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Oaktree Strategic Credit Fund |
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Sixth Street Specialty Lending, Inc. |
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Andrew W Mellon Foundation |
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Allied World Assurance Co. Holdings Ltd. |
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American Equity Investment Life Holding Co. |
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American Financial Group, Inc. |
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American International Group, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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Aon Corp./Aon Global Holdings PLC |
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|
| | |
| | |
|
| | |
Arch Capital Group U.S., Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Assured Guaranty U.S. Holdings, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
AXIS Specialty Finance LLC |
| | |
| | |
Berkshire Hathaway Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
28Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Brighthouse Financial, Inc. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Cincinnati Financial Corp. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
CNO Financial Group, Inc. |
| | |
Corebridge Financial, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
Everest Reinsurance Holdings, Inc. |
| | |
| | |
| | |
F&G Annuities & Life, Inc. |
| | |
Fairfax Financial Holdings Ltd. |
| | |
| | |
| | |
| | |
| | |
Fidelity National Financial, Inc. |
| | |
| | |
First American Financial Corp. |
| | |
| | |
|
| | |
| | |
Hanover Insurance Group, Inc. |
| | |
Hartford Financial Services Group, Inc. |
| | |
| | |
| | |
| | |
| | |
Horace Mann Educators Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report29
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Marsh & McLennan Cos., Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Nationwide Financial Services, Inc. |
| | |
Old Republic International Corp. |
| | |
| | |
|
| | |
| | |
|
| | |
Principal Financial Group, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Prudential Financial, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Prudential Funding Asia PLC |
| | |
|
| | |
| | |
Reinsurance Group of America, Inc. |
| | |
| | |
30Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
RenaissanceRe Holdings Ltd. |
| | |
| | |
Selective Insurance Group, Inc. |
| | |
Stewart Information Services Corp. |
| | |
Transatlantic Holdings, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
Willis North America, Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
|
| | |
| | |
Alexandria Real Estate Equities, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
AvalonBay Communities, Inc. |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report31
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Brixmor Operating Partnership LP |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
COPT Defense Properties LP |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Healthcare Realty Holdings LP |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Invitation Homes Operating Partnership LP |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
32Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
Mid-America Apartments LP |
| | |
| | |
| | |
| | |
| | |
| | |
National Health Investors, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Omega Healthcare Investors, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
Phillips Edison Grocery Center Operating Partnership I LP |
| | |
|
| | |
| | |
Piedmont Operating Partnership LP |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Public Storage Operating Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Retail Opportunity Investments Partnership LP |
| | |
Rexford Industrial Realty LP |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Schwab Taxable Bond Funds | Semiannual Report33
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Sun Communities Operating LP |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
|
|
Air Products & Chemicals, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
AngloGold Ashanti Holdings PLC |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
Barrick North America Finance LLC |
| | |
| | |
Barrick PD Australia Finance Pty. Ltd. |
| | |
BHP Billiton Finance USA Ltd. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Celanese U.S. Holdings LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Celulosa Arauco y Constitucion SA |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
34Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Huntsman International LLC |
| | |
| | |
International Flavors & Fragrances, Inc. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
LYB International Finance BV |
| | |
| | |
LYB International Finance II BV |
| | |
SECURITY RATE, MATURITY DATE | | |
LYB International Finance III LLC |
| | |
| | |
| | |
| | |
| | |
| | |
LyondellBasell Industries NV |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Newmont Corp./Newcrest Finance Pty. Ltd. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Packaging Corp. of America |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
Schwab Taxable Bond Funds | Semiannual Report35
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Rio Tinto Finance USA Ltd. |
| | |
| | |
| | |
Rio Tinto Finance USA PLC |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Suzano International Finance BV |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Acuity Brands Lighting, Inc. |
| | |
|
| | |
Allegion U.S. Holding Co., Inc. |
| | |
|
| | |
| | |
| | |
Amcor Flexibles North America, Inc. |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
36Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Caterpillar Financial Services Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
CNH Industrial Capital LLC |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
Fortune Brands Innovations, Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
GE Capital International Funding Co. Unlimited Co. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report37
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
Honeywell International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Huntington Ingalls Industries, Inc. |
| | |
| | |
| | |
| | |
|
| | |
Illinois Tool Works, Inc. |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Johnson Controls International PLC |
| | |
| | |
| | |
| | |
| | |
Johnson Controls International PLC/Tyco Fire & Security Finance SCA |
| | |
| | |
| | |
|
| | |
L3Harris Technologies, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Lennox International, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
38Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Martin Marietta Materials, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
Precision Castparts Corp. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Rockwell Automation, Inc. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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|
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| | |
Schwab Taxable Bond Funds | Semiannual Report39
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Stanley Black & Decker, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Teledyne Technologies, Inc. |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
Trane Technologies Financing Ltd. |
| | |
| | |
| | |
Trane Technologies Global Holding Co. Ltd. |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
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|
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| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Westinghouse Air Brake Technologies Corp. |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
40Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Bell Telephone Co. of Canada or Bell Canada |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
British Telecommunications PLC |
| | |
| | |
Charter Communications Operating LLC/Charter Communications Operating Capital |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report41
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Deutsche Telekom International Finance BV |
| | |
| | |
Discovery Communications LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Interpublic Group of Cos., Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Omnicom Group, Inc./Omnicom Capital, Inc. |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Rogers Communications, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
Take-Two Interactive Software, Inc. |
| | |
| | |
| | |
|
| | |
42Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
Time Warner Cable Enterprises LLC |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
TWDC Enterprises 18 Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Verizon Communications, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
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| | |
| | |
| | |
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| | |
| | |
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| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report43
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Warnermedia Holdings, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
Alibaba Group Holding Ltd. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
American Honda Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
44Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Choice Hotels International, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Dick's Sporting Goods, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Ford Motor Credit Co. LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
General Motors Financial Co., Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report45
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
GLP Capital LP/GLP Financing II, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Harman International Industries, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Magna International, Inc. |
| | |
| | |
Marriott International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
46Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Mercedes-Benz Finance North America LLC |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
O'Reilly Automotive, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Toll Brothers Finance Corp. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Toyota Motor Credit Corp. |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report47
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
Consumer Non-Cyclical 3.9% |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Advocate Health & Hospitals Corp. |
| | |
| | |
| | |
Agilent Technologies, Inc. |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
48Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. |
| | |
| | |
| | |
Anheuser-Busch InBev Finance, Inc. |
| | |
| | |
| | |
Anheuser-Busch InBev Worldwide, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
Archer-Daniels-Midland Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Baptist Healthcare System Obligated Group |
Series 20B
3.54%, 08/15/50 (a) | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report49
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
BAT International Finance PLC |
| | |
| | |
| | |
|
| | |
| | |
Baxter International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
BayCare Health System, Inc. |
Series 2020
3.83%, 11/15/50 (a) | | |
Baylor Scott & White Holdings |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Bio-Rad Laboratories, Inc. |
| | |
| | |
Bon Secours Mercy Health, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
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| | |
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|
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|
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|
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| | |
|
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| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Catholic Health Services of Long Island Obligated Group |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Children's Health System of Texas |
| | |
|
| | |
Children's Hospital Corp. |
| | |
| | |
50Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Children's Hospital Medical Center |
| | |
Children's Hospital of Philadelphia |
| | |
Church & Dwight Co., Inc. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Cleveland Clinic Foundation |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Coca-Cola Consolidated, Inc. |
| | |
Coca-Cola Femsa SAB de CV |
| | |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Community Health Network, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Constellation Brands, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Corewell Health Obligated Group |
| | |
Cottage Health Obligated Group |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report51
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
DH Europe Finance II SARL |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
Duke University Health System, Inc. |
| | |
Edwards Lifesciences Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
Fomento Economico Mexicano SAB de CV |
| | |
Franciscan Missionaries of Our Lady Health System, Inc. |
| | |
GE HealthCare Technologies, Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
GlaxoSmithKline Capital PLC |
| | |
GlaxoSmithKline Capital, Inc. |
| | |
| | |
| | |
| | |
Hackensack Meridian Health, Inc. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Hartford HealthCare Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
52Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
IHC Health Services, Inc. |
| | |
|
| | |
| | |
Indiana University Health, Inc. Obligated Group |
| | |
|
| | |
| | |
Integris Baptist Medical Center, Inc. |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
JBS USA LUX SA/JBS USA Food Co./JBS Luxembourg SARL |
| | |
| | |
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Johns Hopkins Health System Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Kaiser Foundation Hospitals |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report53
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Koninklijke Ahold Delhaize NV |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Laboratory Corp. of America Holdings |
| | |
| | |
| | |
| | |
Mass General Brigham, Inc. |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
McLaren Health Care Corp. |
Series A
4.39%, 05/15/48 (a) | | |
Mead Johnson Nutrition Co. |
| | |
| | |
Medtronic Global Holdings SCA |
| | |
| | |
|
| | |
| | |
Memorial Sloan-Kettering Cancer Center |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Molson Coors Beverage Co. |
| | |
| | |
| | |
Mondelez International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Montefiore Obligated Group |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
54Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
New York & Presbyterian Hospital |
| | |
| | |
| | |
| | |
Northwell Healthcare, Inc. |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
NY Society for Relief of Ruptured & Crippled Maintaining Hosp Special Surgery |
Series 2020
2.67%, 10/01/50 (a) | | |
|
| | |
| | |
| | |
|
| | |
Orlando Health Obligated Group |
| | |
| | |
PeaceHealth Obligated Group |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
Pfizer Investment Enterprises Pte. Ltd. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Philip Morris International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Piedmont Healthcare, Inc. |
| | |
Schwab Taxable Bond Funds | Semiannual Report55
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Providence St Joseph Health Obligated Group |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Regeneron Pharmaceuticals, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
RWJ Barnabas Health, Inc. |
| | |
|
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
Shire Acquisitions Investments Ireland DAC |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
STERIS Irish FinCo UnLtd Co. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Takeda Pharmaceutical Co. Ltd. |
| | |
| | |
| | |
| | |
| | |
|
| | |
Thermo Fisher Scientific, Inc. |
| | |
| | |
| | |
| | |
56Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Universal Health Services, Inc. |
| | |
| | |
|
| | |
| | |
Utah Acquisition Sub, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
West Virginia United Health System Obligated Group |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Willis-Knighton Medical Center |
| | |
|
| | |
| | |
| | |
Yale-New Haven Health Services Corp. |
| | |
Zimmer Biomet Holdings, Inc. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
Baker Hughes Holdings LLC |
| | |
Baker Hughes Holdings LLC/Baker Hughes Co.-Obligor, Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
BP Capital Markets America, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
Schwab Taxable Bond Funds | Semiannual Report57
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Canadian Natural Resources Ltd. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Cheniere Corpus Christi Holdings LLC |
| | |
| | |
| | |
| | |
Cheniere Energy Partners LP |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Columbia Pipeline Group, Inc. |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Continental Resources, Inc. |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
DCP Midstream Operating LP |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Eastern Gas Transmission & Storage, Inc. |
| | |
| | |
Enbridge Energy Partners LP |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
58Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Enterprise Products Operating LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Kinder Morgan Energy Partners LP |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Magellan Midstream Partners LP |
| | |
Schwab Taxable Bond Funds | Semiannual Report59
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
Occidental Petroleum Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Patterson-UTI Energy, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Pioneer Natural Resources Co. |
| | |
| | |
| | |
| | |
Plains All American Pipeline LP/PAA Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Sabine Pass Liquefaction LLC |
| | |
| | |
| | |
| | |
| | |
| | |
Schlumberger Finance Canada Ltd. |
| | |
60Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Schlumberger Investment SA |
| | |
| | |
Shell International Finance BV |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Spectra Energy Partners LP |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp. |
| | |
| | |
| | |
| | |
| | |
|
| | |
Tennessee Gas Pipeline Co. LLC |
| | |
Texas Eastern Transmission LP |
| | |
TotalEnergies Capital International SA |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
TransCanada PipeLines Ltd. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Transcontinental Gas Pipe Line Co. LLC |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Valero Energy Partners LP |
| | |
Western Midstream Operating LP |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
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| | |
Schwab Taxable Bond Funds | Semiannual Report61
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
|
| | |
Booz Allen Hamilton, Inc. |
| | |
|
| | |
California Institute of Technology |
| | |
| | |
Case Western Reserve University |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
George Washington University |
| | |
| | |
| | |
|
| | |
| | |
| | |
Jacobs Engineering Group, Inc. |
| | |
|
| | |
Leland Stanford Junior University |
| | |
| | |
Massachusetts Institute of Technology |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
President & Fellows of Harvard College |
| | |
| | |
| | |
| | |
|
| | |
| | |
Trustees of Boston College |
| | |
Trustees of Princeton University |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
Trustees of the University of Pennsylvania |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
University of Notre Dame du Lac |
| | |
University of Southern California |
| | |
| | |
| | |
| | |
|
| | |
| | |
William Marsh Rice University |
| | |
|
| | |
| | |
| | |
|
|
| | |
| | |
Advanced Micro Devices, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
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| | |
| | |
|
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| | |
| | |
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| | |
| | |
| | |
62Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
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| | |
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| | |
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| | |
| | |
| | |
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|
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| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
Automatic Data Processing, Inc. |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Broadcom Corp./Broadcom Cayman Finance Ltd. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Broadridge Financial Solutions, Inc. |
| | |
| | |
| | |
CDW LLC/CDW Finance Corp. |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Dell International LLC/EMC Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report63
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
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| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
FactSet Research Systems, Inc. |
| | |
Fidelity National Information Services, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
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|
| | |
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| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
Hewlett Packard Enterprise Co. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
IBM International Capital Pte. Ltd. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
International Business Machines Corp. |
| | |
| | |
64Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
Keysight Technologies, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
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|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Microchip Technology, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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|
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| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report65
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
NXP BV/NXP Funding LLC/NXP USA, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
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|
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|
| | |
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| | |
66Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
Tencent Music Entertainment Group |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Tyco Electronics Group SA |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
American Airlines 2012-1 Class AA Pass-Through Trust |
| | |
American Airlines 2015-2 Class AA Pass-Through Trust |
| | |
American Airlines 2016-1 Class AA Pass-Through Trust |
| | |
American Airlines 2016-2 Class AA Pass-Through Trust |
| | |
American Airlines 2017-1 Class AA Pass-Through Trust |
| | |
American Airlines 2019-1 Class AA Pass-Through Trust |
| | |
Burlington Northern Santa Fe LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report67
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Canadian National Railway Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Canadian Pacific Railway Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
CH Robinson Worldwide, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Delta Air Lines 2020-1 Class AA Pass-Through Trust |
| | |
FedEx Corp. 2020-1 Class AA Pass-Through Trust |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
JB Hunt Transport Services, Inc. |
| | |
JetBlue 2019-1 Class AA Pass-Through Trust |
| | |
JetBlue 2020-1 Class A Pass-Through Trust |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
68Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
Triton Container International Ltd./TAL International Container Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
United Airlines 2014-1 Class A Pass-Through Trust |
| | |
United Airlines 2014-2 Class A Pass-Through Trust |
| | |
United Airlines 2016-1 Class AA Pass-Through Trust |
| | |
United Airlines 2016-2 Class AA Pass-Through Trust |
| | |
United Airlines 2018-1 Class AA Pass-Through Trust |
| | |
United Airlines 2019-1 Class AA Pass-Through Trust |
| | |
United Airlines 2019-2 Class AA Pass-Through Trust |
| | |
United Airlines 2020-1 Class A Pass-Through Trust |
| | |
United Airlines 2020-1 Class B Pass-Through Trust |
| | |
United Airlines 2023-1 Class A Pass-Through Trust |
| | |
United Parcel Service, Inc. |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
|
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
American Electric Power Co., Inc. |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report69
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Arizona Public Service Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Atlantic City Electric Co. |
| | |
| | |
|
| | |
| | |
|
| | |
Baltimore Gas & Electric Co. |
| | |
| | |
| | |
| | |
| | |
| | |
Berkshire Hathaway Energy Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
CenterPoint Energy Houston Electric LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Cleco Corporate Holdings LLC |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Connecticut Light & Power Co. |
| | |
| | |
| | |
| | |
| | |
| | |
Consolidated Edison Co. of New York, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Constellation Energy Generation LLC |
| | |
| | |
70Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Dominion Energy South Carolina, Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Duke Energy Carolinas LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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|
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
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| | |
| | |
|
| | |
| | |
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|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report71
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
Evergy Kansas Central, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Florida Power & Light Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Iberdrola International BV |
| | |
|
| | |
| | |
Indiana Michigan Power Co. |
| | |
| | |
72Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Interstate Power & Light Co. |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
Louisville Gas & Electric Co. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
National Rural Utilities Cooperative Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
NextEra Energy Capital Holdings, Inc. |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Northern States Power Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
Oklahoma Gas & Electric Co. |
| | |
| | |
| | |
| | |
Oncor Electric Delivery Co. LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report73
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
Pacific Gas & Electric Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Pinnacle West Capital Corp. |
| | |
Potomac Electric Power Co. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
PPL Capital Funding, Inc. |
| | |
| | |
PPL Electric Utilities Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Public Service Co. of Colorado |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Public Service Co. of New Hampshire |
| | |
| | |
Public Service Co. of Oklahoma |
| | |
| | |
Public Service Electric & Gas Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Public Service Enterprise Group, Inc. |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
San Diego Gas & Electric Co. |
| | |
| | |
| | |
| | |
| | |
| | |
74Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
Southern California Edison Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Southwestern Electric Power Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
Southwestern Public Service Co. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
Tucson Electric Power Co. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Virginia Electric & Power Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Wisconsin Electric Power Co. |
| | |
| | |
| | |
Wisconsin Power & Light Co. |
| | |
| | |
| | |
| | |
Wisconsin Public Service Corp. |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report75
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
CenterPoint Energy Resources Corp. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Piedmont Natural Gas Co., Inc. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Southern California Gas Co. |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Southern Co. Gas Capital Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
American Water Capital Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Essential Utilities, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Total Corporates
(Cost $1,272,606,013) | |
|
TREASURIES 41.6% OF NET ASSETS |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
76Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report77
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
78Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Total Treasuries
(Cost $1,975,817,927) | |
|
GOVERNMENT RELATED 4.8% OF NET ASSETS |
|
|
|
|
Oesterreichische Kontrollbank AG |
| | |
| | |
| | |
| | |
| | |
| | |
|
Export Development Canada |
| | |
| | |
| | |
| | |
| | |
|
Kreditanstalt fuer Wiederaufbau |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Landwirtschaftliche Rentenbank |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Japan Bank for International Cooperation |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Japan International Cooperation Agency |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Export-Import Bank of Korea |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report79
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Federal Farm Credit Banks Funding Corp. | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Federal Home Loan Mortgage Corp. | | |
| | |
| | |
| | |
| | |
Federal National Mortgage Association | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Tennessee Valley Authority | | |
| | |
| | |
| | |
| | |
|
|
|
|
|
| | |
|
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
Province of British Columbia |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Province of New Brunswick |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
American Municipal Power, Inc. | | |
RB (Build America Bonds) Series 2010 | | |
| | |
RB (Build America Bonds) Series 2010 | | |
| | |
| | |
RB (Build America Bonds) Series 2009F2 | | |
| | |
RB (Build America Bonds) Series 2010S3 | | |
| | |
Board of Regents of the University of Texas System | | |
| | |
| | |
| | |
GO (Build America Bonds) Series 2009 | | |
| | |
GO (Build America Bonds) Series 2009 | | |
| | |
GO (Build America Bonds) Series 2009 | | |
| | |
GO (Build America Bonds) Series 2009 | | |
| | |
80Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
California State University | | |
| | |
| | |
| | |
| | |
Chicago O'Hare International Airport | | |
RB (Build America Bonds) Series 2010B | | |
| | |
| | |
| | |
Chicago Transit Authority Sales & Transfer Tax Receipts Revenue | | |
RB (Pension Funding) Series 2008A | | |
| | |
City of Atlanta GA Water & Wastewater Revenue | | |
| | |
| | |
GO Bonds (Pension Funding) Series 2017 | | |
| | |
| | |
| | |
City of San Antonio TX Electric & Gas Systems Revenue | | |
RB (Build America Bonds) Series 2009 | | |
| | |
Commonwealth Financing Authority | | |
| | |
| | |
Commonwealth of Massachusetts | | |
GO (Build America Bonds) Series 2009 | | |
| | |
| | |
| | |
Commonwealth of Massachusetts Transportation Fund Revenue | | |
RB (Build America Bonds) Series 2010 | | |
| | |
| | |
| | |
| | |
County of Clark Department of Aviation | | |
RB (Build America Bonds) Series 2010C | | |
| | |
County of Miami-Dade Water & Sewer System Revenue | | |
| | |
| | |
Dallas Area Rapid Transit | | |
| | |
| | |
Dallas County Hospital District | | |
GO (Build America Bonds) Series C | | |
| | |
Dallas/Fort Worth International Airport | | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
District of Columbia Water & Sewer Authority | | |
| | |
| | |
East Bay Municipal Utility District Water System Revenue | | |
Water System RB (Build America Bonds) Series 2010 | | |
| | |
Foothill-Eastern Transportation Corridor Agency | | |
| | |
| | |
Golden State Tobacco Securitization Corp. | | |
| | |
| | |
Grand Parkway Transportation Corp. | | |
| | |
| | |
Health & Educational Facilities Authority of the State of Missouri | | |
| | |
| | |
GO (Build America Bonds) Series 2010 | | |
| | |
GO Bonds (Pension Funding) Series 2003 | | |
| | |
Illinois State Toll Highway Authority | | |
RB (Build America Bonds) Series A | | |
| | |
| | |
| | |
RB (Build America Bonds) Series B | | |
| | |
| | |
| | |
Kansas Development Finance Authority | | |
| | |
| | |
Los Angeles Community College District/CA | | |
| | |
| | |
| | |
| | |
Los Angeles County Public Works Financing Auth | | |
| | |
Los Angeles Department of Water & Power Power System | | |
| | |
RB (Build America Bonds) Series 2010 | | |
| | |
Los Angeles Unified School District | | |
GO (Build America Bonds) Series 2009 | | |
| | |
GO (Build America Bonds) Series 2010 | | |
| | |
Louisiana Local Government Environmental Facilities & Community Development Authority | | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report81
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Maryland Health & Higher Educational Facilities Authority | | |
| | |
| | |
| | |
| | |
Massachusetts School Building Authority | | |
| | |
| | |
Metropolitan Government Nashville & Davidson County Health & Educational Facs Board | | |
RB (Vanderbilt Univ Medical Center) Series 2016 B | | |
| | |
Metropolitan Transportation Authority | | |
RB (Build America Bonds) Series C | | |
| | |
RB (Build America Bonds) Series E | | |
| | |
Michigan Finance Authority | | |
| | |
| | |
Michigan State Building Authority | | |
| | |
| | |
Municipal Electric Authority of Georgia | | |
RB (Build America Bonds) Series 2010 | | |
| | |
RB (Build America Bonds) Series A | | |
| | |
| | |
| | |
New Jersey Economic Development Authority | | |
| | |
| | |
New Jersey Transportation Trust Fund Authority | | |
RB (Build America Bonds) Series 2010C | | |
| | |
New Jersey Turnpike Authority | | |
RB (Build America Bonds) Series 2009F | | |
| | |
RB (Build America Bonds) Series 2010A | | |
| | |
New York City Transitional Finance Authority | | |
RB (Build America Bonds) Series 2010 | | |
| | |
New York City Water & Sewer System | | |
RB (Build America Bonds) Series GG | | |
| | |
Water System RB (Build America Bonds) | | |
| | |
Water System RB (Build America Bonds) Series 2011CC | | |
| | |
New York State Dormitory Authority | | |
RB (Build America Bonds) Series 2010 | | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
New York State Urban Development Corp. | | |
RB (Build America Bonds) Series 2009 | | |
| | |
North Texas Tollway Authority | | |
RB (Build America Bonds) Series 2009B | | |
| | |
| | |
RB (Build America Bonds) Series 2010C | | |
| | |
| | |
GO Bonds (Pension Funding) Series 2003 | | |
| | |
Oregon School Boards Association | | |
| | |
| | |
Port Authority of New York & New Jersey | | |
Consolidated Bonds 164th Series | | |
| | |
Consolidated Bonds 165th Series | | |
| | |
Consolidated Bonds 168th Series | | |
| | |
Consolidated Bonds 174th Series | | |
| | |
Consolidated Bonds 181st Series | | |
| | |
Consolidated Bonds 192th Series | | |
| | |
Consolidated Bonds 215th Series | | |
| | |
Regents of the University of California Medical Center Pooled Revenue | | |
RB (Build America Bonds) Series F | | |
| | |
RB (Build America Bonds) Series H | | |
| | |
Regional Transportation District Sales Tax Revenue | | |
| | |
| | |
Rutgers The State University of New Jersey | | |
| | |
| | |
Sales Tax Securitization Corp. | | |
| | |
| | |
| | |
| | |
San Diego County Water Authority., Class B | | |
RB (Build America Bonds) Series 2010B | | |
| | |
San Jose Redevelopment Agency Successor Agency | | |
| | |
| | |
State Board of Administration Finance Corp. | | |
| | |
| | |
| | |
| | |
82Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
GO (Build America Bonds) Series 2010 | | |
| | |
| | |
| | |
| | |
GO Mobility Fund Bonds (Build America Bonds) Series 2009A | | |
| | |
Texas Natural Gas Securitization Finance Corp. | | |
| | |
| | |
Texas Private Activity Bond Surface Transportation Corp. | | |
| | |
| | |
Texas Transportation Commission | | |
| | |
| | |
The Pennsylvania State University | | |
| | |
| | |
| | |
RB (Build America Bonds) Series 2009 | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
University of Pittsburgh-of the Commonwealth System of Higher Education | | |
| | |
| | |
| | |
General Revenue Pledge and Refunding Bonds, Series 2020 | | |
| | |
| | |
| | |
| | |
| | |
|
|
|
Canada Government International Bonds |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
Chile Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Hungary Government International Bonds |
| | |
|
Indonesia Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Israel Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
Republic of Italy Government International Bonds |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report83
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
|
Mexico Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Panama Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Peru Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Philippines Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Republic of Poland Government International Bonds |
| | |
| | |
| | |
| | |
| | |
|
Korea International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Uruguay Government International Bonds |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
|
| | |
| | |
84Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Asian Infrastructure Investment Bank |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
Council of Europe Development Bank |
| | |
| | |
European Bank for Reconstruction & Development |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
Inter-American Development Bank |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Inter-American Investment Corp. |
| | |
International Bank for Reconstruction & Development |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
International Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report85
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
Total Government Related
(Cost $242,869,571) | |
|
SECURITIZED 28.1% OF NET ASSETS |
|
Asset-Backed Securities 0.0% |
|
Ford Credit Floorplan Master Owner Trust A |
| | |
| | |
|
Capital One Multi-Asset Execution Trust |
| | |
| | |
|
PG&E Wildfire Recovery Funding LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
Commercial Mortgage-Backed Security 2.1% |
|
Series 2017-BNK7, Class A5 | | |
| | |
Series 2017-BNK8, Class A4 | | |
| | |
Series 2017-BNK9, Class A4 | | |
| | |
Series 2019-BN19, Class A3 | | |
| | |
Series 2020-BN26, Class A4 | | |
| | |
Bank of America Merrill Lynch Commercial Mortgage Trust |
Series 2016-UB10, Class A3 | | |
| | |
|
| | |
| | |
|
Series 2019-B10, Class A4 | | |
| | |
Series 2019-B12, Class A5 | | |
| | |
Series 2019-B13, Class A4 | | |
| | |
| | |
| | |
Series 2020-B16, Class A5 | | |
| | |
|
Series 2016-CD2, Class A4 | | |
| | |
SECURITY RATE, MATURITY DATE | | |
CFCRE Commercial Mortgage Trust |
| | |
| | |
| | |
| | |
| | |
| | |
Citigroup Commercial Mortgage Trust |
Series 2014-GC25, Class A4 | | |
| | |
Series 2016-GC36, Class A5 | | |
| | |
Series 2016-GC37, Class A4 | | |
| | |
| | |
| | |
|
Series 2014-LC17, Class A5 | | |
| | |
Series 2015-CR24, Class A5 | | |
| | |
Series 2015-LC23, Class A4 | | |
| | |
Series 2016-CR28, Class A4 | | |
| | |
Series 2016-DC2, Class A5 | | |
| | |
CSAIL Commercial Mortgage Trust |
Series 2019-C17, Class A5 | | |
| | |
|
Series 2016-NXSR, Class A4 | | |
| | |
Federal Home Loan Mortgage Corp. Multifamily Structured Pass-Through Certificates |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
86Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Federal National Mortgage Association-Aces |
Series 2015-M13, Class A2 | | |
| | |
Series 2016-M11, Class A2 | | |
| | |
GS Mortgage Securities Trust |
Series 2014-GC20, Class A5 | | |
| | |
Series 2020-GC45, Class A5 | | |
| | |
JP Morgan Chase Commercial Mortgage Securities Trust |
Series 2016-JP4, Class A4 | | |
| | |
JPMBB Commercial Mortgage Securities Trust |
Series 2015-C32, Class A5 | | |
| | |
Series 2015-C33, Class A3 | | |
| | |
Series 2015-C33, Class A4 | | |
| | |
JPMCC Commercial Mortgage Securities Trust |
Series 2017-JP5, Class A5 | | |
| | |
JPMDB Commercial Mortgage Securities Trust |
| | |
| | |
Morgan Stanley Bank of America Merrill Lynch Trust |
Series 2016-C28, Class A4 | | |
| | |
Morgan Stanley Capital I Trust |
| | |
| | |
Series 2015-UBS8, Class A4 | | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Series 2020-HR8, Class A4 | | |
| | |
UBS Commercial Mortgage Trust |
| | |
| | |
| | |
| | |
Wells Fargo Commercial Mortgage Trust |
Series 2013-C33, Class A3 | | |
| | |
Series 2015-C28, Class A3 | | |
| | |
Series 2015-C30, Class A4 | | |
| | |
Series 2015-NXS4, Class A4 | | |
| | |
Series 2016-C32, Class A4 | | |
| | |
Series 2016-NXS5, Class A4 | | |
| | |
Series 2016-NXS5, Class A6 | | |
| | |
Series 2016-NXS6, Class ASB | | |
| | |
Series 2017-C40, Class A4 | | |
| | |
Series 2017-C41, Class A4 | | |
| | |
Series 2017-C42, Class A4 | | |
| | |
Series 2018-C44, Class A5 | | |
| | |
Series 2018-C47, Class A3 | | |
| | |
Series 2019-C50, Class A5 | | |
| | |
Series 2019-C51, Class A4 | | |
| | |
Series 2019-C53, Class A4 | | |
| | |
Series 2020-C55, Class A5 | | |
| | |
Series 2020-C58, Class A4 | | |
| | |
| | |
|
Mortgage-Backed Securities Pass-Through 26.0% |
Federal Home Loan Mortgage Corp. |
| | |
1.50%, 08/01/35 to 08/01/51 (a) | | |
2.00%, 01/01/28 to 03/01/52 (a) | | |
2.50%, 04/01/27 to 05/01/52 (a) | | |
3.00%, 08/01/26 to 05/01/52 (a) | | |
3.50%, 01/01/26 to 02/01/53 (a) | | |
4.00%, 05/01/26 to 10/01/52 (a) | | |
4.50%, 05/01/34 to 09/01/52 (a) | | |
5.00%, 11/01/33 to 06/01/53 (a) | | |
5.50%, 06/01/33 to 07/01/53 (a) | | |
6.00%, 05/01/32 to 12/01/53 (a) | | |
6.50%, 02/01/36 to 01/01/54 (a) | | |
| | |
Federal National Mortgage Association |
1.00%, 03/01/36 to 07/01/36 (a) | | |
1.50%, 08/01/35 to 04/01/51 (a) | | |
Schwab Taxable Bond Funds | Semiannual Report87
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
2.00%, 12/01/27 to 04/01/52 (a) | | |
2.50%, 07/01/27 to 05/01/52 (a) | | |
3.00%, 10/01/26 to 05/01/52 (a) | | |
3.50%, 10/01/25 to 09/01/50 (a) | | |
4.00%, 06/01/27 to 07/01/52 (a) | | |
4.50%, 12/01/24 to 09/01/52 (a) | | |
5.00%, 11/01/33 to 08/01/53 (a) | | |
5.50%, 03/01/33 to 10/01/53 (a) | | |
6.00%, 04/01/35 to 12/01/53 (a) | | |
6.50%, 08/01/34 to 12/01/53 (a) | | |
| | |
| | |
Government National Mortgage Association |
1.50%, 03/20/51 to 10/20/51 (a) | | |
2.00%, 04/20/36 to 03/20/52 (a) | | |
2.50%, 08/20/27 to 04/20/52 (a) | | |
3.00%, 04/20/27 to 04/20/52 (a) | | |
3.50%, 09/20/32 to 06/20/51 (a) | | |
4.00%, 06/15/39 to 09/20/52 (a) | | |
4.50%, 07/15/39 to 08/20/53 (a) | | |
5.00%, 02/20/33 to 11/20/53 (a) | | |
5.50%, 04/15/33 to 01/20/54 (a) | | |
6.00%, 04/20/44 to 01/20/54 (a) | | |
6.50%, 01/20/53 to 01/20/54 (a) | | |
7.00%, 01/20/53 to 01/20/54 (a) | | |
| | |
Government National Mortgage Association, TBA |
| | |
| | |
| | |
Uniform Mortgage-Backed Security, TBA |
| | |
| | |
| | |
| | |
| | |
| | |
Total Securitized
(Cost $1,475,400,237) | |
| | |
SHORT-TERM INVESTMENTS 2.7% OF NET ASSETS |
|
|
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (m) | | |
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (m)(n) | | |
| | |
Total Short-Term Investments
(Cost $122,801,920) | |
Total Investments in Securities
(Cost $5,089,495,668) | |
| Supranational bonds represent the debt of international organizations or institutions such as the World Bank, the International Monetary Fund, regional multilateral development banks and others. |
| The effective maturity may be shorter than the final maturity shown because of the possibility of interim principal payments and prepayments or as the result of embedded demand features (puts or calls). |
| Security is in a fixed-rate coupon period. Based on index eligibility requirements and the fund’s investment objective this security will be removed from the index prior to converting to a floating rate security. |
| All or a portion of this security is on loan. Securities on loan were valued at $1,771,342. |
| Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $10,050,185 or 0.2% of net assets. |
| Issuer is affiliated with the fund’s investment adviser. |
| Interest rate is subject to adjustments from time to time if a nationally recognized statistical rating organization downgrades (or subsequently upgrades) the debt rating assigned to the bond. |
| Step up bond that pays an initial coupon rate for a set period and increased coupon rates at one or more preset intervals. Rate shown is as of period end. |
| Guaranteed by the Republic of Germany. |
| |
| Perpetual security has no stated maturity date. Maturity date represents next call date. |
| Fixed rate is determined by a formula set forth in the security’s offering documents and is affected by the current WAC of the underlying loans. |
| Security or a portion of the security purchased on a delayed-delivery or when-issued basis. |
| The rate shown is the annualized 7-day yield. |
| Security purchased with cash collateral received for securities on loan. |
| |
| |
| |
| Real Estate Investment Trust |
| |
| Weighted Average Coupon, which is the weighted average gross interest rate of the securitized asset pool and is determined by the different speeds at which the underlying mortgages are paid down. |
88Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
Below is a summary of the fund’s transactions with affiliated issuers during the period ended February 29, 2024:
SECURITY
RATE, MATURITY DATE | | | | | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | ACCRETION OF DISCOUNTS (AMORTIZATION OF PREMIUMS) | | | |
CORPORATES 0.0% OF NET ASSETS |
|
Financial Institutions 0.0% |
Brokerage/Asset Managers/Exchanges 0.0% |
|
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| As categorized in the Portfolio Holdings. |
Schwab Taxable Bond Funds | Semiannual Report89
Schwab U.S. Aggregate Bond Index Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
|
Investments in securities, at value - affiliated (cost $3,043,486) | | |
Investments in securities, at value - unaffiliated (cost $5,086,452,182) including securities on loan of $1,771,342 | | |
| | |
Deposits with brokers for TBA margin | | |
| | |
| | |
| | |
| | |
| | |
Income from securities on loan | | |
| | |
|
|
Collateral held for securities on loan | | |
| | |
| | |
Investments bought - delayed-delivery | | |
| | |
Distributions to shareholders | | |
| | |
| | |
| | |
|
|
Capital received from investors | | |
| | |
| | |
90Schwab Taxable Bond Funds | Semiannual Report
Schwab U.S. Aggregate Bond Index Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
|
Interest received from securities - unaffiliated (net of foreign withholding tax of $352) | | |
Dividends received from securities - unaffiliated | | |
Interest received from securities - affiliated | | |
| | |
| | |
|
|
| | |
| | |
| | |
|
REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - affiliated | | |
Net realized losses on sales of securities - unaffiliated | | |
| | |
Net change in unrealized appreciation (depreciation) on securities - affiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
Schwab Taxable Bond Funds | Semiannual Report91
Schwab U.S. Aggregate Bond Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
|
| | |
| | | |
| | | |
Net change in unrealized appreciation (depreciation) | | | |
Increase (decrease) in net assets resulting from operations | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS |
| | | |
TRANSACTIONS IN FUND SHARES |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net transactions in fund shares | | | | | |
|
SHARES OUTSTANDING AND NET ASSETS |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
92Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Financial Statements
| | | | | | |
|
Net asset value at beginning of period | | | | | | |
Income (loss) from investment operations: | | | | | | |
Net investment income (loss)1 | | | | | | |
Net realized and unrealized gains (losses) | | | | | | |
Total from investment operations | | | | | | |
| | | | | | |
Distributions from net investment income | | | | | | |
Distributions from net realized gains | | | | | | |
| | | | | | |
Net asset value at end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets: | | | | | | |
| | | | | | |
Net investment income (loss) | | | | | | |
| | | | | | |
Net assets, end of period (x 1,000,000) | | | | | | |
| |
| Calculated based on the average shares outstanding during the period. |
| |
| |
| Ratio includes less than 0.005% of non-routine proxy expenses. |
Schwab Taxable Bond Funds | Semiannual Report93
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed-rate securities, the rate shown is the interest rate (the rate established when the security was issued). All securities are currently in a fixed-rate coupon period based on index eligibility requirements and the fund’s investment objective. Variable rate securities are subject to index requirements and will be removed from the index and fund prior to converting from a fixed rate coupon to a variable rate coupon. The maturity date shown for all the securities is the final legal maturity.
SECURITY RATE, MATURITY DATE | | |
CORPORATES 26.3% OF NET ASSETS |
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Financial Institutions 11.6% |
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Australia & New Zealand Banking Group Ltd. |
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Banco Bilbao Vizcaya Argentaria SA |
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SECURITY RATE, MATURITY DATE | | |
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Bank of New York Mellon Corp. |
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94Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Canadian Imperial Bank of Commerce |
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Capital One Financial Corp. |
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SECURITY RATE, MATURITY DATE | | |
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Citizens Financial Group, Inc. |
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Commonwealth Bank of Australia |
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Discover Financial Services |
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First Citizens BancShares, Inc. |
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Goldman Sachs Group, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report95
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Huntington Bancshares, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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Manufacturers & Traders Trust Co. |
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Mitsubishi UFJ Financial Group, Inc. |
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Mizuho Financial Group, Inc. |
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96Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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National Australia Bank Ltd. |
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PNC Financial Services Group, Inc. |
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Santander Holdings USA, Inc. |
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Santander U.K. Group Holdings PLC |
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SECURITY RATE, MATURITY DATE | | |
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Sumitomo Mitsui Financial Group, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report97
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Brokerage/Asset Managers/Exchanges 0.4% |
Affiliated Managers Group, Inc. |
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Ameriprise Financial, Inc. |
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Cboe Global Markets, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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5.64%, 05/19/29 (a)(c)(e) | | |
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Intercontinental Exchange, Inc. |
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Jefferies Financial Group, Inc. |
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AerCap Ireland Capital DAC/AerCap Global Aviation Trust |
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98Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Bain Capital Specialty Finance, Inc. |
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BlackRock TCP Capital Corp. |
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Blackstone Private Credit Fund |
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Blackstone Secured Lending Fund |
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Blue Owl Capital Corp. III |
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Blue Owl Credit Income Corp. |
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Blue Owl Technology Finance Corp. |
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SECURITY RATE, MATURITY DATE | | |
HPS Corporate Lending Fund |
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Main Street Capital Corp. |
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Morgan Stanley Direct Lending Fund |
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New Mountain Finance Corp. |
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Oaktree Specialty Lending Corp. |
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Oaktree Strategic Credit Fund |
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Sixth Street Specialty Lending, Inc. |
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Allied World Assurance Co. Holdings Ltd. |
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American Equity Investment Life Holding Co. |
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American International Group, Inc. |
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Aon Corp./Aon Global Holdings PLC |
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Assured Guaranty U.S. Holdings, Inc. |
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AXIS Specialty Finance PLC |
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Brighthouse Financial, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report99
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Cincinnati Financial Corp. |
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CNO Financial Group, Inc. |
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Corebridge Financial, Inc. |
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F&G Annuities & Life, Inc. |
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Fairfax Financial Holdings Ltd. |
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Fidelity National Financial, Inc. |
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Horace Mann Educators Corp. |
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Marsh & McLennan Cos., Inc. |
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Old Republic International Corp. |
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Principal Financial Group, Inc. |
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Prudential Financial, Inc. |
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RenaissanceRe Finance, Inc. |
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SECURITY RATE, MATURITY DATE | | |
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Willis North America, Inc. |
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Alexandria Real Estate Equities, Inc. |
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AvalonBay Communities, Inc. |
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Brixmor Operating Partnership LP |
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COPT Defense Properties LP |
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100Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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Healthcare Realty Holdings LP |
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Invitation Homes Operating Partnership LP |
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Mid-America Apartments LP |
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Omega Healthcare Investors, Inc. |
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Piedmont Operating Partnership LP |
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Public Storage Operating Co. |
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SECURITY RATE, MATURITY DATE | | |
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Retail Opportunity Investments Partnership LP |
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Sun Communities Operating LP |
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Air Products & Chemicals, Inc. |
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AngloGold Ashanti Holdings PLC |
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Schwab Taxable Bond Funds | Semiannual Report101
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
BHP Billiton Finance USA Ltd. |
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Celanese U.S. Holdings LLC |
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Celulosa Arauco y Constitucion SA |
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International Flavors & Fragrances, Inc. |
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LYB International Finance III LLC |
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Packaging Corp. of America |
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Rio Tinto Finance USA Ltd. |
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SECURITY RATE, MATURITY DATE | | |
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Suzano International Finance BV |
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Allegion U.S. Holding Co., Inc. |
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Amcor Flexibles North America, Inc. |
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Caterpillar Financial Services Corp. |
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102Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
CNH Industrial Capital LLC |
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Honeywell International, Inc. |
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Huntington Ingalls Industries, Inc. |
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Illinois Tool Works, Inc. |
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Johnson Controls International PLC |
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SECURITY RATE, MATURITY DATE | | |
L3Harris Technologies, Inc. |
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Lennox International, Inc. |
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Martin Marietta Materials, Inc. |
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Precision Castparts Corp. |
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Rockwell Automation, Inc. |
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Stanley Black & Decker, Inc. |
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Schwab Taxable Bond Funds | Semiannual Report103
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Teledyne Technologies, Inc. |
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Trane Technologies Financing Ltd. |
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Westinghouse Air Brake Technologies Corp. |
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Charter Communications Operating LLC/Charter Communications Operating Capital |
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SECURITY RATE, MATURITY DATE | | |
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Discovery Communications LLC |
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Interpublic Group of Cos., Inc. |
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Omnicom Group, Inc./Omnicom Capital, Inc. |
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Rogers Communications, Inc. |
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Take-Two Interactive Software, Inc. |
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104Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
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| | |
TWDC Enterprises 18 Corp. |
| | |
| | |
| | |
| | |
Verizon Communications, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
Warnermedia Holdings, Inc. |
| | |
| | |
| | |
|
Alibaba Group Holding Ltd. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
American Honda Finance Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
|
| | |
|
| | |
|
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|
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|
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| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
Ford Motor Credit Co. LLC |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
General Motors Financial Co., Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report105
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
GLP Capital LP/GLP Financing II, Inc. |
| | |
| | |
| | |
| | |
|
| | |
Harman International Industries, Inc. |
| | |
|
| | |
| | |
| | |
| | |
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| | |
| | |
|
| | |
|
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|
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| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Magna International, Inc. |
| | |
Marriott International, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
O'Reilly Automotive, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
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|
| | |
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| | |
| | |
|
| | |
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| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
Toll Brothers Finance Corp. |
| | |
| | |
|
| | |
| | |
Toyota Motor Credit Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
106Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Consumer Non-Cyclical 3.3% |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
Advocate Health & Hospitals Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Anheuser-Busch Cos. LLC/Anheuser-Busch InBev Worldwide, Inc. |
| | |
Anheuser-Busch InBev Worldwide, Inc. |
| | |
| | |
Archer-Daniels-Midland Co. |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
BAT International Finance PLC |
| | |
| | |
| | |
|
| | |
Baxter International, Inc. |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report107
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
Constellation Brands, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Edwards Lifesciences Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
GE HealthCare Technologies, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
GlaxoSmithKline Capital, Inc. |
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
JBS USA LUX SA/JBS USA Food Co./JBS USA Finance, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
Kaiser Foundation Hospitals |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
108Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Laboratory Corp. of America Holdings |
| | |
|
| | |
|
| | |
| | |
| | |
Mead Johnson Nutrition Co. |
| | |
Medtronic Global Holdings SCA |
| | |
|
| | |
| | |
| | |
| | |
Molson Coors Beverage Co. |
| | |
Mondelez International, Inc. |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
PeaceHealth Obligated Group |
| | |
Pepsico Singapore Financing I Pte. Ltd. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Pfizer Investment Enterprises Pte. Ltd. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Philip Morris International, Inc. |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Providence St Joseph Health Obligated Group |
| | |
|
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
|
| | |
Shire Acquisitions Investments Ireland DAC |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
Takeda Pharmaceutical Co. Ltd. |
| | |
Thermo Fisher Scientific, Inc. |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
Universal Health Services, Inc. |
| | |
|
| | |
Schwab Taxable Bond Funds | Semiannual Report109
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Utah Acquisition Sub, Inc. |
| | |
|
| | |
| | |
|
| | |
| | |
Zimmer Biomet Holdings, Inc. |
| | |
| | |
|
| | |
| | |
| | |
|
Baker Hughes Holdings LLC/Baker Hughes Co.-Obligor, Inc. |
| | |
| | |
|
| | |
BP Capital Markets America, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Canadian Natural Resources Ltd. |
| | |
| | |
|
| | |
Cheniere Corpus Christi Holdings LLC |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
Columbia Pipeline Group, Inc. |
| | |
Continental Resources, Inc. |
| | |
|
| | |
DCP Midstream Operating LP |
| | |
|
| | |
|
| | |
SECURITY RATE, MATURITY DATE | | |
Enbridge Energy Partners LP |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Enterprise Products Operating LLC |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
Magellan Midstream Partners LP |
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
110Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Occidental Petroleum Corp. |
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
Patterson-UTI Energy, Inc. |
| | |
|
| | |
| | |
|
| | |
| | |
Pioneer Natural Resources Co. |
| | |
| | |
Plains All American Pipeline LP/PAA Finance Corp. |
| | |
| | |
Sabine Pass Liquefaction LLC |
| | |
| | |
| | |
| | |
Schlumberger Finance Canada Ltd. |
| | |
Shell International Finance BV |
| | |
| | |
| | |
Spectra Energy Partners LP |
| | |
| | |
|
| | |
Targa Resources Partners LP/Targa Resources Partners Finance Corp. |
| | |
|
| | |
| | |
Tennessee Gas Pipeline Co. LLC |
| | |
|
| | |
TransCanada PipeLines Ltd. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
Transcontinental Gas Pipe Line Co. LLC |
| | |
| | |
|
| | |
| | |
Valero Energy Partners LP |
| | |
Western Midstream Operating LP |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
|
| | |
Jacobs Engineering Group, Inc. |
| | |
|
| | |
| | |
|
|
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
Automatic Data Processing, Inc. |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report111
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
|
| | |
| | |
| | |
Broadcom Corp./Broadcom Cayman Finance Ltd. |
| | |
| | |
|
| | |
| | |
| | |
Broadridge Financial Solutions, Inc. |
| | |
CDW LLC/CDW Finance Corp. |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
Dell International LLC/EMC Corp. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
FactSet Research Systems, Inc. |
| | |
Fidelity National Information Services, Inc. |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
|
| | |
Genpact Luxembourg SARL/Genpact USA, Inc. |
| | |
|
| | |
| | |
| | |
| | |
Hewlett Packard Enterprise Co. |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
IBM International Capital Pte. Ltd. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
International Business Machines Corp. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
Keysight Technologies, Inc. |
| | |
|
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
112Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Microchip Technology, Inc. |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
|
| | |
| | |
|
| | |
NXP BV/NXP Funding LLC/NXP USA, Inc. |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
Tyco Electronics Group SA |
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
| | |
|
American Airlines 2016-1 Class AA Pass-Through Trust |
| | |
American Airlines 2016-2 Class AA Pass-Through Trust |
| | |
American Airlines Pass-Through Trust |
| | |
|
| | |
Burlington Northern Santa Fe LLC |
| | |
| | |
Canadian National Railway Co. |
| | |
Canadian Pacific Railway Co. |
| | |
| | |
CH Robinson Worldwide, Inc. |
| | |
Schwab Taxable Bond Funds | Semiannual Report113
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
Delta Air Lines 2020-1 Class AA Pass-Through Trust |
| | |
|
| | |
| | |
| | |
|
| | |
JB Hunt Transport Services, Inc. |
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
| | |
| | |
United Airlines 2013-1 Class A Pass-Through Trust |
| | |
United Airlines 2014-1 Class A Pass-Through Trust |
| | |
United Airlines 2014-2 Class A Pass-Through Trust |
| | |
United Airlines 2016-1 Class AA Pass-Through Trust |
| | |
United Airlines 2020-1 Class A Pass-Through Trust |
| | |
United Airlines 2020-1 Class B Pass-Through Trust |
| | |
United Parcel Service, Inc. |
| | |
| | |
| | |
| | |
|
|
|
|
| | |
|
| | |
|
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
|
| | |
| | |
| | |
|
| | |
American Electric Power Co., Inc. |
| | |
| | |
| | |
|
| | |
Baltimore Gas & Electric Co. |
| | |
Berkshire Hathaway Energy Co. |
| | |
| | |
|
| | |
| | |
CenterPoint Energy Houston Electric LLC |
| | |
|
| | |
Cleco Corporate Holdings LLC |
| | |
|
| | |
| | |
|
| | |
| | |
Connecticut Light & Power Co. |
| | |
Consolidated Edison Co. of New York, Inc. |
| | |
| | |
Constellation Energy Generation LLC |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
Duke Energy Carolinas LLC |
| | |
| | |
|
| | |
| | |
| | |
| | |
114Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
| | |
|
| | |
|
| | |
|
| | |
|
| | |
|
| | |
| | |
| | |
|
| | |
Evergy Kansas Central, Inc. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Florida Power & Light Co. |
| | |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
Indiana Michigan Power Co. |
| | |
Interstate Power & Light Co. |
| | |
|
| | |
|
| | |
National Rural Utilities Cooperative Finance Corp. |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
NextEra Energy Capital Holdings, Inc. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Oncor Electric Delivery Co. LLC |
| | |
| | |
| | |
Pacific Gas & Electric Co. |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
Pinnacle West Capital Corp. |
| | |
PPL Capital Funding, Inc. |
| | |
Public Service Electric & Gas Co. |
| | |
| | |
| | |
Public Service Enterprise Group, Inc. |
| | |
| | |
|
| | |
| | |
San Diego Gas & Electric Co. |
| | |
|
| | |
Southern California Edison Co. |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report115
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
|
| | |
| | |
Southwestern Electric Power Co. |
| | |
| | |
| | |
System Energy Resources, Inc. |
| | |
Tucson Electric Power Co. |
| | |
Virginia Electric & Power Co. |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
|
| | |
CenterPoint Energy Resources Corp. |
| | |
|
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
Southern California Gas Co. |
| | |
| | |
Southern Co. Gas Capital Corp. |
| | |
|
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
American Water Capital Corp. |
| | |
| | |
| | |
| | |
Total Corporates
(Cost $402,420,033) | |
|
TREASURIES 65.1% OF NET ASSETS |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
116Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
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| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Total Treasuries
(Cost $967,522,091) | |
|
GOVERNMENT RELATED 7.4% OF NET ASSETS |
|
|
|
|
Oesterreichische Kontrollbank AG |
| | |
| | |
| | |
| | |
| | |
|
Export Development Canada |
| | |
| | |
| | |
|
Kreditanstalt fuer Wiederaufbau |
| | |
| | |
| | |
| | |
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report117
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Landwirtschaftliche Rentenbank |
| | |
| | |
| | |
| | |
| | |
| | |
|
Japan Bank for International Cooperation |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Japan International Cooperation Agency |
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
|
Export-Import Bank of Korea |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
|
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
Federal Farm Credit Banks Funding Corp. | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Federal Home Loan Mortgage Corp. | | |
| | |
| | |
| | |
Federal National Mortgage Association | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
|
|
|
| | |
Province of British Columbia |
| | |
| | |
| | |
|
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
|
| | |
| | |
|
| | |
| | |
118Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
Los Angeles Community College District/CA | | |
| | |
| | |
Metropolitan Government Nashville & Davidson County Health & Educational Facs Board | | |
RB (Vanderbilt Univ Medical Center) Series 2016 B | | |
| | |
New Jersey Transportation Trust Fund Authority | | |
RB (Build America Bonds) Series 2010C | | |
| | |
| | |
GO Bonds (Pension Funding) Series 2003 | | |
| | |
Oregon School Boards Association | | |
| | |
| | |
State Board of Administration Finance Corp. | | |
| | |
| | |
| | |
| | |
| | |
| | |
State Public School Building Auth | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
|
Canada Government International Bonds |
| | |
| | |
| | |
| | |
|
Chile Government International Bonds |
| | |
| | |
| | |
| | |
|
Indonesia Government International Bonds |
| | |
| | |
| | |
| | |
| | |
|
Republic of Italy Government International Bonds |
| | |
SECURITY RATE, MATURITY DATE | | |
|
Mexico Government International Bonds |
| | |
| | |
| | |
| | |
|
Panama Government International Bonds |
| | |
| | |
| | |
|
Peru Government International Bonds |
| | |
|
Philippines Government International Bonds |
| | |
| | |
| | |
| | |
|
Republic of Poland Government International Bonds |
| | |
|
Uruguay Government International Bonds |
| | |
| | |
|
|
|
| | |
| | |
| | |
| | |
| | |
Arab Petroleum Investments Corp. |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Asian Infrastructure Investment Bank |
| | |
| | |
| | |
| | |
| | |
|
| | |
| | |
Schwab Taxable Bond Funds | Semiannual Report119
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
SECURITY RATE, MATURITY DATE | | |
| | |
| | |
Council of Europe Development Bank |
| | |
| | |
| | |
Council Of Europe Development Bank |
| | |
European Bank for Reconstruction & Development |
| | |
| | |
| | |
| | |
|
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Inter-American Development Bank |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
Inter-American Investment Corp. |
| | |
| | |
International Bank for Reconstruction & Development |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
International Finance Corp. |
| | |
| | |
| | |
| | |
SECURITY RATE, MATURITY DATE | | |
|
| | |
| | |
| | |
| | |
| | |
Total Government Related
(Cost $114,794,148) | |
| | |
SHORT-TERM INVESTMENTS 0.7% OF NET ASSETS |
|
|
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (i) | | |
State Street Institutional U.S. Government Money Market Fund, Premier Class 5.28% (i)(j) | | |
| | |
Total Short-Term Investments
(Cost $9,515,655) | |
Total Investments in Securities
(Cost $1,494,251,927) | |
| Supranational bonds represent the debt of international organizations or institutions such as the World Bank, the International Monetary Fund, regional multilateral development banks and others. |
| The effective maturity may be shorter than the final maturity shown because of the possibility of interim principal payments and prepayments or as the result of embedded demand features (puts or calls). |
| All or a portion of this security is on loan. Securities on loan were valued at $1,639,634. |
| Security is in a fixed-rate coupon period. Based on index eligibility requirements and the fund’s investment objective this security will be removed from the index prior to converting to a floating rate security. |
| Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $2,493,654 or 0.2% of net assets. |
| Issuer is affiliated with the fund’s investment adviser. |
| Interest rate is subject to adjustments from time to time if a nationally recognized statistical rating organization downgrades (or subsequently upgrades) the debt rating assigned to the bond. |
| Step up bond that pays an initial coupon rate for a set period and increased coupon rates at one or more preset intervals. Rate shown is as of period end. |
| Guaranteed by the Republic of Germany. |
| The rate shown is the annualized 7-day yield. |
| Security purchased with cash collateral received for securities on loan. |
| |
| |
| Real Estate Investment Trust |
120Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
Below is a summary of the fund’s transactions with affiliated issuers during the period ended February 29, 2024:
SECURITY
RATE, MATURITY DATE | | | | | NET CHANGE IN UNREALIZED APPRECIATION (DEPRECIATION) | ACCRETION OF DISCOUNTS (AMORTIZATION OF PREMIUMS) | | | |
CORPORATES 0.1% OF NET ASSETS |
|
Financial Institutions 0.1% |
Brokerage/Asset Managers/Exchanges 0.1% |
|
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
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| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
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| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| As categorized in the Portfolio Holdings. |
Schwab Taxable Bond Funds | Semiannual Report121
Schwab Short-Term Bond Index Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
|
Investments in securities, at value - affiliated (cost $1,653,118) | | |
Investments in securities, at value - unaffiliated (cost $1,492,598,809) including securities on loan of $1,639,634 | | |
| | |
| | |
| | |
| | |
| | |
Income from securities on loan | | |
| | |
|
|
Collateral held for securities on loan | | |
| | |
| | |
Distributions to shareholders | | |
| | |
| | |
| | |
| | |
|
|
Capital received from investors | | |
| | |
| | |
122Schwab Taxable Bond Funds | Semiannual Report
Schwab Short-Term Bond Index Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
|
Interest received from securities - unaffiliated (net of foreign withholding tax of $125) | | |
Dividends received from securities - unaffiliated | | |
Interest received from securities - affiliated | | |
| | |
| | |
|
|
| | |
| | |
| | |
|
REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - affiliated | | |
Net realized losses on sales of securities - unaffiliated | | |
| | |
Net change in unrealized appreciation (depreciation) on securities - affiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
Schwab Taxable Bond Funds | Semiannual Report123
Schwab Short-Term Bond Index Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
|
| | |
| | | |
| | | |
Net change in unrealized appreciation (depreciation) | | | |
Increase in net assets resulting from operations | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS |
| | | |
TRANSACTIONS IN FUND SHARES |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net transactions in fund shares | | | | | |
|
SHARES OUTSTANDING AND NET ASSETS |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
124Schwab Taxable Bond Funds | Semiannual Report
Schwab Taxable Bond Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Investments (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
|
Schwab Treasury Inflation Protected Securities Index Fund | Schwab California Tax-Free Bond Fund |
Schwab U.S. Aggregate Bond Index Fund | Schwab Opportunistic Municipal Bond Fund |
Schwab Short-Term Bond Index Fund | |
Schwab Tax-Free Bond Fund | Schwab Global Real Estate Fund |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
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. The "Fund Complex" includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust.
2. Significant Accounting Policies:The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The funds follow the investment company accounting and reporting guidance of the Financial Accounting Standards Board (FASB) Accounting Standard Codification Topic 946 Financial Services — Investment Companies. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (GAAP).
The funds may invest in certain mutual funds which are referred to as "underlying funds". For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the U.S. Securities and Exchange Commission (SEC) and are available on the SEC’s website at www.sec.gov.
Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated authority to a Valuation Designee, the funds’ investment adviser, to make fair valuation determinations under adopted procedures, subject to Board oversight. The investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and liabilities as well as to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Securities held in the funds’ portfolio are valued every business day. The following valuation policies and procedures are used by the Valuation Designee to value various types of securities:
• Bonds and notes: Fixed income investments are generally valued using an evaluated price at the mid-point of the bid/ask spread provided by an approved, independent pricing service (mid-price). To determine the evaluated mid-price, a pricing service may use a variety of techniques and inputs. Techniques may include, but are not limited to, spread models that calculate an investment-specific price relative to a benchmark or yield curve models that establish a price based on yields of comparable bonds along a range of maturities. Inputs differ by valuation approach and techniques, as appropriate, and examples of inputs may include, but are not limited to, interest rates, market conditions, comparable bonds, market trades, projected cash flows, credit reviews and issuer news.
• Short-term securities (60 days or less to maturity): Securities with remaining maturities of 60 days or less are generally valued at an evaluated price; however, such securities may be valued at their amortized cost if it approximates the security’s fair value.
• Mutual funds: Mutual funds are valued at their respective NAVs.
• Securities for which no quoted value is available: The Valuation Designee has adopted procedures to fair value a fund’s securities when market prices are not “readily available” or are unreliable. For example, a security may be fair valued when it’s de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a
Schwab Taxable Bond Funds | Semiannual Report125
Schwab Taxable Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
price; or when a security’s primary trading market is closed during regular market hours. Fair value determinations are made in good faith in accordance with adopted valuation procedures. The Valuation Designee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Valuation Designee may employ methods 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. 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.
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 methods 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 it is determined 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 the Valuation Designee’s 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 investments — Investments whose values are based on quoted market prices in active markets. These generally include active listed equities, mutual funds, ETFs and futures contracts. Mutual funds and ETFs are classified as Level 1 prices, without consideration to the classification level of the underlying securities held which could be Level 1, Level 2 or Level 3 in the fair value hierarchy.
• 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 Valuation Designee’s 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 readily available for these securities, one or more valuation methods are used for which sufficient and reliable data is available. The inputs used 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 in the absence of market information. Assumptions used due to the lack of observable inputs may significantly impact the resulting fair value and therefore a fund`s results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of February 29, 2024, are disclosed in each fund’s Portfolio Holdings.
(b) Accounting Policies for certain Portfolio Investments (if held):
Inflation-Protected Securities: The Schwab Treasury Inflation Protected Securities Index Fund invests in U.S. Treasury inflation-protected securities (TIPS). Inflation-protected securities are fixed-income securities whose principal value is periodically adjusted to the rate of inflation. The interest rate on these instruments is generally fixed at issuance at a rate lower than typical bonds or notes. Over the life of an inflation-indexed instrument, however, interest will be paid based on a principal value, which is adjusted for any inflation or deflation. Any increase or decrease in the principal amount of an inflation-protected security will be included as an addition or reduction to interest income in the fund’s Statement of Operations, even though investors do not receive their principal until maturity.
126Schwab Taxable Bond Funds | Semiannual Report
Schwab Taxable Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
TBA Commitments: The funds may enter into “TBA” (to-be-announced) commitments to purchase or sell securities for a fixed price at a future date. Payments or proceeds of TBA commitments are not delivered until the contractual settlement date. Unsettled TBA commitments are valued at the current fair value generally according to the procedures described above in the Security Valuation section. The funds’ use of TBA commitments may cause the funds to experience higher portfolio turnover and higher transaction costs.
Agency MBS and TBA Transactions: The Treasury Market Practices Group (TMPG) of the Federal Reserve Bank of New York recommended the margining of certain forward-settling Agency MBS (Mortgage-Backed Securities) transactions, including TBAs, to reduce counterparty credit risk. The TMPG recommended market participants exchange two-way variation margin on a regular basis. The Schwab U.S. Aggregate Bond Index Fund posts and receives variation margin with certain counterparties in instances where the unrealized gain (loss) on such transactions exceeds certain pre-determined thresholds. The variation margin, if any, is disclosed in the Statement of Assets and Liabilities.
Delayed-Delivery Transactions and When-Issued Securities: The funds may transact in securities on a delayed-delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed-delivery or when-issued basis are identified as such in the funds’ Portfolio Holdings, if any. The funds may receive compensation for interest forgone in the purchase of a delayed-delivery or when-issued security. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors. The funds comply with Rule 18f-4 under the 1940 Act, the funds operate as limited derivatives users, with respect to purchase commitments held within the funds, portfolio securities are no longer required to be segregated as collateral with a value at least equal to the amount of a purchase commitment and the funds’ exposure is monitored under a derivatives risk management program.
Securities Lending: Under the trust’s Securities Lending Program, a fund (lender) may make short-term loans of its securities to another party (borrower) to generate additional revenue for the fund. The borrower pledges collateral in the form of cash, securities issued or fully guaranteed by the U.S. government or foreign governments, or letters of credit issued by a bank. Collateral at the individual loan level is required to be maintained on a daily marked-to-market basis in an amount at least equal to the current value of the securities loaned. The lending agent provides a fund with indemnification against borrower default (the borrower fails to return the security on loan) reducing the risk of loss as a result of default. The cash collateral of securities loaned is currently invested in money market portfolios operating pursuant to Rule 2a-7 under the 1940 Act. Each fund bears the risk of loss with respect to the investment of cash collateral. The terms of the securities lending agreement allow the funds or the lending agent to terminate any loan at any given time and the securities must be returned within the earlier of the standard trade settlement period or the specified time period under the relevant securities lending agreement. Securities lending income, as disclosed in each fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent and broker rebates which are subject to adjustments pursuant to the securities lending agreement. On loans not collateralized by cash, a fee is received from the borrower, and is allocated between a fund and the lending agent. The aggregate fair value of securities loaned will not at any time exceed one-third of the total assets of a fund, including collateral received from the loan. Securities lending fees paid to the unaffiliated lending agents start at 9% of gross lending revenue, with subsequent breakpoints to a low of 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 the investment adviser or any of its affiliates.
As of February 29, 2024, the Schwab U.S. Aggregate Bond Index Fund and Schwab Short-Term Bond Index Fund had securities on loan, all of which were classified as corporate bonds. The value of the securities on loan and the related collateral as of February 29, 2024, are disclosed in each fund’s Portfolio Holdings and Statement of Assets and Liabilities.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved. Gains and losses from paydowns on mortgage and asset backed securities are recorded as adjustments to interest income.
Interest income is recorded as it accrues. If a fund buys a debt security at a discount (less than face value) or a premium (more than face value), it amortizes premiums and accretes discounts from the purchase settlement date up to maturity. The fund then increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. Certain securities
Schwab Taxable Bond Funds | Semiannual Report127
Schwab Taxable Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
may be callable (meaning that the issuer has the option to pay it off before its maturity date). The fund amortizes the premium and accretes the discount on each callable security to the security’s maturity date, except when the purchase price is higher than the call price at the security’s call date (in which case the premium is amortized to the call date). Any increase or decrease in the principal amount of an inflation-protected security is included as an addition or reduction to interest income in the Statement of Operations; such adjustments may have a significant impact on a fund’s distributions. Dividends and distributions from underlying funds are recorded on the date they are effective (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.
Pursuant to an Amended and Restated Investment Advisory Agreement between the investment adviser and the Schwab Treasury Inflation Protected Securities Index Fund and an Investment Advisory Agreement between the investment adviser and the Schwab U.S. Aggregate Bond Index Fund and Schwab Short-Term Bond Index Fund, the investment adviser pays the operating expenses of the funds, excluding acquired fund fees and expenses, 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. Acquired fund fees and expenses are indirect expenses incurred by a fund through its investments in underlying funds.
(f) U.S. Treasury, Agency Debt & Agency MBS Charges:
Due to market conditions or other reasons, delivery of U.S. Treasury securities, agency debt and agency MBS may not occur on a timely basis. In these instances, a fund may fail to receive a security purchased causing the fund to be unable to deliver a security sold. The TMPG recommends voluntary fail charges when securities are not delivered as agreed by the parties. These fail charges are included in net realized gains (losses) on sales of securities on each fund’s Statement of Operations, if any.
(g) Distributions to Shareholders:
The funds, except for the Schwab Treasury Inflation Protected Securities Index Fund, declare distributions from net investment income, if any, every day they are open for business. These distributions, which are substantially equal to a fund’s net investment income for that day, are paid out to shareholders once a month. The Schwab Treasury Inflation Protected Securities Index Fund declares and pays distributions from net investment income, if any, quarterly. All the funds make distributions from net realized capital gains, if any, once a year. To receive a distribution, you must be a registered shareholder on the record date. Distributions are paid to shareholders on the payable date.
(h) Accounting Estimates:
The accounting policies described in this report conform to GAAP. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has to make estimates and assumptions that affect the information reported in the financial statements. It’s possible that once the results are known, they may turn out to be different from these estimates and these differences may be material.
(i) 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.
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.
Effective January 24, 2023, the SEC adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a
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Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these rule and form amendment changes on the content of the current shareholder report and the newly created annual and semiannual streamlined shareholder reports.
The funds invest mainly in corporate bonds, mortgage-backed and asset-backed securities, government or municipal obligations, and other debt securities. These investments may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below:
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Investment Style Risk. The funds are index funds. Therefore, they follow the securities included in their 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 a fund’s expenses, the fund’s performance may be below that of its index. Errors relating to an index may occur from time to time and may not be identified by the index provider for a period of time. In addition, market disruptions could cause delays in the index’s rebalancing schedule. Such errors and/or market disruptions may result in losses for the fund.
Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, a fund’s yield will change over time. During periods when interest rates are low, a fund’s yield (and total return) also may be low. Changes in interest rates also may affect a fund’s share price: a rise in interest rates generally causes a fund’s share price to fall. The longer a fund’s portfolio duration, the more sensitive to interest rate movements its share price is likely to be. Also, a change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates, which could have sudden and unpredictable effects on the markets and significantly impact the value of fixed-income securities in which a fund invests. A sudden or unpredictable rise in interest rates may cause volatility and the value of fixed-income securities to decline.
Credit Risk. A decline in the credit quality of an issuer, guarantor or liquidity provider of a portfolio investment or a counterparty could cause the funds to lose money or underperform. The funds could lose money if, due to a decline in credit quality, the issuer, guarantor or liquidity provider of a portfolio investment or a counterparty fails to make, or is perceived as being unable or unwilling to make, timely principal or interest payments or otherwise honor its obligations.
Sampling Index Tracking Risk. An index fund may not fully replicate its respective index and may hold securities not included in the respective 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. If a fund utilizes a sampling approach it may not track the return of the index as well as it would if a fund purchased all of the securities in the 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.
Portfolio Turnover Risk. (Schwab U.S. Aggregate Bond Index Fund only). The fund may engage in frequent trading of its portfolio securities in connection with its tracking of the index, primarily due to the fund rolling over its positions in TBAs as it tracks the portion of the index represented by mortgage-backed securities. A higher portfolio turnover rate may result in increased transaction costs, which may lower the fund’s performance. A higher portfolio turnover rate can also result in an increase in taxable capital gains distributions to the fund’s shareholders.
Liquidity Risk. The funds may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the funds 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, a 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.
Prepayment and Extension Risk. Certain fixed-income securities are subject to the risk that the securities may be paid off earlier or later than expected, especially during periods of falling or rising interest rates, respectively. Prepayments of obligations could cause
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Financial Notes, unaudited (continued)
3. Risk Factors (continued):
a fund to forgo future interest income on the portion of the security’s principal repaid early and force a fund to reinvest that money at the lower prevailing interest rates. Extensions of obligations could cause a fund to exhibit additional volatility and hold securities paying lower-than-market rates of interest. Either case could hurt a fund’s performance.
Non-U.S. Issuer Risk. Certain funds may invest in U.S.-registered, dollar-denominated bonds of non-U.S. corporations, governments, agencies and supra-national entities. A fund’s investments in bonds of non-U.S. issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; 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 be heightened in connection with bonds issued by non-U.S. corporations and entities in emerging markets.
Derivatives Risk. Certain funds may invest in derivative instruments. The principal types of derivatives used by the funds 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 derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause a fund to become a commodity pool, which would require the fund to comply with certain CFTC rules.
A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as market risk, credit risk, liquidity risk and leverage risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. 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. A fund’s use of derivatives also could create a risk of counterparty default under certain transactions, risks that the fund would need to liquidate portfolio positions when it may not be advantageous to do so in order to meet margin and payment obligations, and legal risks relating to insufficient documentation, insufficient capacity or authority of a counterparty, or legality or enforceability of a contract.
Mortgage-Backed and Mortgage Pass-Through Securities Risk. Mortgage-backed securities tend to increase in value less than other debt securities when interest rates decline, but are subject to similar or greater risk of decline in fair value during periods of rising interest rates. Certain of the mortgage-backed securities in which a fund may invest are issued or guaranteed by agencies or instrumentalities of the U.S. government but are not backed by the full faith and credit of the U.S. government. There can be no assurance that the U.S. government would provide financial support to its agencies or instrumentalities where it was not obligated to do so which can cause a fund to lose money or underperform. The risks of investing in mortgage-backed securities include, among others, interest rate risk, credit risk, prepayment risk and extension risk. Transactions in mortgage pass-through securities often occur through TBA transactions. A fund could lose money or underperform if a TBA counterparty defaults or goes bankrupt.
Mortgage Dollar Rolls Risk. Mortgage dollar rolls are transactions in which a fund sells mortgage-backed securities to a dealer and simultaneously agrees to repurchase similar securities in the future at a predetermined price. A fund’s mortgage dollar rolls could lose money if the price of the mortgage-backed securities sold falls below the agreed upon repurchase price, or if the counterparty is unable to honor the agreement.
Securities Lending Risk. Securities lending involves the risk of loss of rights in, or delay in recovery of, the loaned securities if the borrower fails to return the security loaned or becomes insolvent.
Inflation-Protected Security Risk. The value of inflation-protected securities, including TIPS, generally will fluctuate in response to changes in “real” interest rates, generally decreasing when real interest rates rise and increasing when real interest rates fall. Real interest rates represent nominal (or stated) interest rates reduced by the expected impact of inflation. In addition, interest payments on inflation-indexed securities will generally vary up or down along with the rate of inflation.
Leverage Risk. Certain fund transactions, such as derivatives transactions, TBA transactions and mortgage dollar rolls, may give rise to a form of leverage and may expose the funds to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of a fund’s portfolio securities. The use of leverage may cause a fund to liquidate portfolio positions when it would not be advantageous to do so in order to satisfy its obligations.
Money Market Fund Risk. The funds may invest in underlying money market funds that either seek to maintain a stable $1.00 net asset value (“stable share price money market funds”) or that have a share price that fluctuates (“variable share price money market funds”). Although an underlying stable share price money market fund seeks to maintain a stable $1.00 net asset value, it is possible
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Financial Notes, unaudited (continued)
3. Risk Factors (continued):
to lose money by investing in such a money market fund. Because the share price of an underlying variable share price money market fund will fluctuate, when a fund sells the shares it owns they may be worth more or less than what the fund originally paid for them. In addition, neither type of money market fund is designed to offer capital appreciation. Certain underlying money market funds may impose a fee upon the sale of shares or may temporarily suspend the ability to sell shares if such fund’s liquidity falls below required minimums.
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:Charles Schwab Investment Management Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between the investment adviser and the trust.
For its advisory and administrative services to the funds, the investment adviser is entitled to receive an annual fee, payable monthly, based on each fund’s average daily net assets as follows:
SCHWAB TREASURY INFLATION PROTECTED SECURITIES INDEX FUND | SCHWAB U.S. AGGREGATE BOND INDEX FUND | SCHWAB SHORT-TERM BOND INDEX FUND |
| | |
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Financial Notes, unaudited (continued)
4. Affiliates and Affiliated Transactions (continued):
Investments from Affiliates
Certain funds in the Fund Complex may own shares of other funds in the Fund Complex. The table below reflects the percentage of shares of each fund in this report that are owned by other funds in the Fund Complex as of February 29, 2024, as applicable:
| |
| SCHWAB TREASURY INFLATION PROTECTED SECURITIES INDEX FUND | SCHWAB U.S. AGGREGATE BOND INDEX FUND | SCHWAB SHORT-TERM BOND INDEX FUND |
| | | |
Schwab MarketTrack Balanced Portfolio | | | |
Schwab MarketTrack Conservative Portfolio | | | |
Schwab MarketTrack Growth Portfolio | | | |
Schwab Monthly Income Fund - Flexible Payout | | | |
Schwab Monthly Income Fund - Income Payout | | | |
Schwab Monthly Income Fund - Target Payout | | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
| | | |
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 by the Board. The funds had no interfund borrowing or lending activity during the period.
The Board may include people who are officers and/or directors of the investment adviser 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 funds did not pay any interested persons or non-interested persons (independent trustees). The independent trustees are paid by the investment adviser. For more information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $1 billion line of credit (the Syndicated Credit Facility), which matured on September 28, 2023. On September 28, 2023, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on
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Financial Notes, unaudited (continued)
6. Borrowing from Banks (continued):
September 26, 2024. Under the terms of the Syndicated Credit Facility, in addition to the investment adviser paying the interest charged on any borrowings by a fund, the investment adviser 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 $400 million line of credit (the Uncommitted Credit Facility), with State Street Bank and Trust Company, which matured on September 28, 2023. On September 28, 2023, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 26, 2024. Under the terms of the Uncommitted Credit Facility, the investment adviser 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 the investment adviser. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
7. Purchases and Sales/Maturities of Investment Securities:For the period ended February 29, 2024, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| PURCHASES OF LONG-TERM
U.S. GOVERNMENT
SECURITIES* | PURCHASES OF OTHER
LONG-TERM SECURITIES | TOTAL PURCHASES OF
LONG-TERM SECURITIES |
Schwab Treasury Inflation Protected Securities Index Fund | | | |
Schwab U.S. Aggregate Bond Index Fund | | | |
Schwab Short-Term Bond Index Fund | | | |
| SALES/MATURITIES OF
LONG-TERM U.S. GOVERNMENT
SECURITIES* | SALES/MATURITIES OF
OTHER LONG-TERM SECURITIES | TOTAL SALES/MATURITIES OF
LONG-TERM SECURITIES |
Schwab Treasury Inflation Protected Securities Index Fund | | | |
Schwab U.S. Aggregate Bond Index Fund | | | |
Schwab Short-Term Bond Index Fund | | | |
*
Includes securities guaranteed by U.S. Government Agencies.
As of February 29, 2024, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| | GROSS UNREALIZED
APPRECIATION | GROSS UNREALIZED
DEPRECIATION | NET UNREALIZED
APPRECIATION
(DEPRECIATION) |
Schwab Treasury Inflation Protected Securities Index Fund | | | | |
Schwab U.S. Aggregate Bond Index Fund | | | | |
Schwab Short-Term Bond Index Fund | | | | |
| | | | |
| | | | |
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of August 31, 2023, the funds had capital loss carryforwards available as follows:
| |
Schwab Treasury Inflation Protected Securities Index Fund | |
Schwab U.S. Aggregate Bond Index Fund | |
Schwab Short-Term Bond Index Fund | |
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Financial Notes, unaudited (continued)
8. Federal Income Taxes (continued):
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, 2024. The tax basis components of distributions paid during the fiscal year ended August 31, 2023 were as follows:
| PRIOR FISCAL YEAR END DISTRIBUTIONS |
| | |
Schwab Treasury Inflation Protected Securities Index Fund | | |
Schwab U.S. Aggregate Bond Index Fund | | |
Schwab Short-Term Bond Index Fund | | |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts in the financial statements. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
As of August 31, 2023, 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, 2023, the funds did not incur any interest or penalties.
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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Liquidity Risk Management Program (unaudited)
The funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The funds’ Board of Trustees (the “Board”) has designated the funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a fund’s liquidity risk, which is the risk that the fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the fund. The program is reasonably designed to assess and manage a fund’s liquidity risk, taking into consideration the fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each fund’s investments is supported by third-party liquidity assessment vendors.
The funds’ Board reviewed a report at its meeting held on September 19, 2023 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2022, through May 31, 2023, which included individual fund liquidity risk metrics. The report summarized the operation of the program and the information and factors considered by the investment adviser in assessing whether the program has been adequately and effectively implemented with respect to a fund. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each fund’s liquidity risk.
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Trustees and Officers
The tables below give information about the trustees and officers of Schwab Investments, 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 106 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 funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
|
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 | |
Michael J. Beer 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 2022) | Retired. Director, President and Chief Executive Officer (Dec. 2016 – Sept. 2019), Principal Funds (investment management). | | Director (2016 – 2019), Principal Funds, Inc. |
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. | | |
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) | | | |
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) | | | Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – 2021), 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). | | |
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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 | |
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). | | |
J. Derek Penn 1957 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021) | Head of Equity Sales and Trading (2006 – 2018), BNY Mellon (financial services). | | |
|
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 | |
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) | Co-Chairman of the Board (July 2022 – present), Director and Chief Executive Officer (Oct. 2008 – present) and President (Feb. 2007 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), Charles Schwab & Co., Inc.; Co-Chairman of the Board (July 2022 – present) and Director (Apr. 2006 – present), Charles Schwab Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present), Chief Executive Officer (Aug. 2017 – present) and President (Aug. 2017 – Nov. 2021), Schwab Holdings, Inc.; Manager (Sept. 2023 – present), TD Ameritrade Holding LLC; Director (Oct. 2020 – Aug. 2023), TD Ameritrade Holding Corporation; Director (July 2016 – Oct. 2021), Charles Schwab Investment Management, Inc. | | Director (2008 – present), The Charles Schwab Corporation |
Richard A. Wurster2 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 2022) | President (Oct. 2021 – present) and Executive Vice President – Schwab Asset Management Solutions (Apr. 2019 – Oct. 2021), The Charles Schwab Corporation; President, Director (Oct. 2021 – present), Executive Vice President – Schwab Asset Management Solutions (July 2019 – Oct. 2021) and Senior Vice President – Advisory (May 2016 – July 2019), Charles Schwab & Co., Inc.; President (Nov. 2021 – present), Schwab Holdings, Inc.; Director (Oct. 2021 – present) and Chief Executive Officer (Nov. 2019 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Mar. 2018 – Oct. 2022), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (July 2016 – Apr. 2018) and President (Mar. 2017 – Apr. 2018), ThomasPartners, Inc.; Chief Executive Officer (July 2016 – Apr. 2018), Windhaven Investment Management, Inc. | | |
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|
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 |
Omar Aguilar 1970 Chief Executive Officer, President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Chief Executive Officer (Jan. 2022 – present), President (Oct. 2023 – present), (Chief Investment Officer (Apr. 2011 – present) and Senior Vice President (Apr. 2011 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Oct. 2022 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Sept. 2023 – present), President (Oct. 2023 – present), Chief Investment Officer (June 2011 – present) and Vice President (June 2011 – Sept. 2023), Schwab Funds, Laudus Trust and Schwab ETFs. |
Mark Fischer 1970 Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Chief Operating Officer (Dec. 2020 – present) and Treasurer and Chief Financial Officer (Jan. 2016 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Chief Financial Officer (Mar. 2020 – present), Chief Operating Officer (Oct. 2023 – present), Managing Director (Mar. 2023 – present) and Vice President (Oct. 2013 – Mar. 2023), Charles Schwab Investment Management, Inc. |
Dana Smith 1965 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 2023) | Treasurer and Chief Financial Officer (Jan. 2023 – present) and Assistant Treasurer (Dec. 2015 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Vice President (Mar. 2022 – Mar. 2023) and Director (Oct. 2015 – Mar. 2022), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Apr. 2022 – May 2022), Charles Schwab & Co., Inc. |
Patrick Cassidy 1964 Vice President and Chief Investment 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) | Chief Investment Officer (Oct. 2023 – present) and Vice President (Feb. 2018 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Chief Investment Officer (Oct. 2023 – present), and Senior Vice President (Oct. 2012 – Mar. 2023), Charles Schwab Investment Management, Inc. |
William P. McMahon, Jr. 1972 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021) | Managing Director (Mar. 2023 – present), Senior Vice President (Jan. 2020 – Mar. 2023) and Chief Investment Officer (Jan. 2020 – present) Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2021 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Senior Vice President and Chief Investment Officer – ThomasPartners Strategies (Apr. 2018 – Dec. 2019), Charles Schwab Investment Advisory, Inc.; Senior Vice President and Chief Investment Officer (May 2001 – Apr. 2018), ThomasPartners, Inc. |
Catherine MacGregor 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Trust (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) | Chief Legal Officer (Mar. 2022 – present), Managing Director (Mar. 2023 – present) and Vice President (Sept. 2005 – Mar. 2023), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Aug. 2005 – May 2022), Charles Schwab & Co., Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Trust; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President (Nov. 2005 – Oct. 2021) and Assistant Secretary (June 2007 – Oct. 2021), Schwab Funds; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President and Assistant Secretary (Oct. 2009 – Oct. 2021), Schwab ETFs. |
1
Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.
2
Mr. Bettinger and Mr. Wurster are Interested Trustees. Mr. Bettinger and Mr. Wurster are Interested Trustees because each owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc., the investment adviser for the trusts in the Fund Complex, and is an employee of Charles Schwab & Co., Inc. (Schwab), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust.
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.
138Schwab Taxable Bond Funds | Semiannual Report
Schwab Taxable Bond Funds
agency discount notes Notes issued by federal agencies—known as Government Sponsored Enterprises, or GSEs—at a discount to their value at maturity. An agency discount note is a short-term investment offering a high degree of credit quality.
Alternative Minimum Tax (AMT) A federal income tax designed to limit the extent to which high-income taxpayers (including individuals, estates, trusts and corporations) can benefit from certain deductions and exemptions. For example, some types of income that are exempt from regular federal income tax are not exempt from the AMT.
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset-backed securities Bond or other debt securities that represent ownership in a pool of assets such as credit card debt.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
average rate The average rate of interest paid annually by the fixed-income securities in a fund or portfolio.
Bloomberg 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 US Government/Credit 1–5 Year Index An index that is a broad-based benchmark measuring the performance of U.S. dollar-denominated U.S. Treasury bonds, government related bonds (i.e., U.S. and non-U.S. agencies, sovereign, quasi-sovereign, supranational and local authority debt) and investment grade U.S. corporate bonds that have a remaining maturity of greater than or equal to one year and less than five years. 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 a remaining maturity greater than or equal to one year and less than five years. The index excludes certain types of securities, including, bonds with equity type features (e.g., warrants, convertibles and preferreds), tax-exempt municipal securities, inflation-linked bonds, floating rate issues, strips, private placements, U.S. dollar-denominated 25 and 50 par retail bonds, structured notes and pass-through certificates. The index is market capitalization weighted and the securities in the index are updated on the last business day of each month.
Bloomberg US Treasury Inflation-Linked Bond Index (Series-L) An index which includes all publicly-issued U.S. Treasury Inflation-Protected Securities (TIPS) that have at least one year remaining to maturity, are rated investment grade and have $500 million or more of outstanding face value. The TIPS in the index must be denominated in U.S. dollars and must be fixed-rate and non-convertible. The index is market capitalization weighted and the
TIPS in the index are updated on the last business day of each month. TIPS are publicly issued, dollar denominated U.S. Government securities issued by the U.S. Treasury that have principal and interest payments linked to an official inflation measure (as measured by the Consumer Price Index, or CPI) and their payments are supported by the full faith and credit of the United States.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
call An early repayment of a bond’s principal by the issuer, usually done because the issuer is able to refinance its bond debt at a lower rate.
call protection A term used in reference to a bond that cannot be called by the issuer before maturity, or at least for many years from the present date. A bond that offers call protection can more reliably be expected to provide a given yield over a given number of years than a bond that could be called (assuming both bonds are of the same credit quality).
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.
certificate of participation A municipal bond that is repaid from an annual budget appropriation rather than being backed by the full faith and credit of the issuer.
commercial mortgage-backed securities Bond or other debt securities that represent ownership in a pool of commercial mortgage loans.
coupon, coupon rate The annual rate of interest paid until maturity by the issuer of a debt security.
credit-enhanced securities Securities that are backed by the credit of an entity other than the issuer (such as a financial institution). Credit enhancements, which can equal up to 100% of the security’s value, are designed to help lower the risk of default on a security and may also make the security more liquid.
credit quality The capacity of an issuer to make its interest and principal payments; an assessment typically rendered by an independent third-party organization.
credit risk The risk that a bond issuer may be unable to pay interest or principal to its bondholders.
Schwab Taxable Bond Funds | Semiannual Report139
Schwab Taxable Bond Funds
discount rate The implied rate on a debt security that does not pay interest but is bought at a discount and redeemed at face value when it matures.
duration A measure of an individual bond’s sensitivity to interest rates, expressed in years. Calculations of duration generally take into account the bond’s yield, interest payments, maturity date and call features.
weighted average duration A measure of the duration of all bonds in a fund’s portfolio, also expressed in years, based on the market value weighted average duration of each bond in the portfolio.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s 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.
general obligation bonds Municipal bonds that are secured by the issuer’s full faith and credit, which typically is backed by the power of the issuer to levy taxes.
interest Payments to bondholders (usually made twice a year) as compensation for loaning the bond principal to the issuer.
interest rate risk The risk that a bond’s value will fluctuate if market interest rates change or are expected to change. Bond prices tend to move in the opposite direction of interest rates: when interest rates rise, bond prices tend to fall.
liquidity-enhanced security A security that when tendered is paid from funds advanced by an entity other than the issuer (such as a large financial institution). Liquidity enhancements are often used on variable-rate securities where the portfolio manager has an option to tender the securities prior to their final maturity.
market risk Those elements of risk that are common to all securities in an asset class, and therefore cannot be significantly reduced by diversification within the asset class. Also known as “systemic risk.”
maturity The maturity of a bond will generally be determined using a portfolio security’s final maturity date (date on which the final principal payment of a bond is scheduled to be paid); however, for securitized products, such as mortgage-backed securities and certain other asset-backed securities, maturity will be determined on an average life basis (weighted average time to receipt of all principal payments) by the investment adviser. Because pre-payment rates of individual mortgage pools vary widely, the average life of a particular pool cannot be predicted precisely. For securities with embedded demand features, such as puts or calls, either the demand date or the final maturity date will be used depending on interest rates, yields and other market conditions. The weighted average maturity (WAM) of a fund is dollar-weighted based upon the market value of a fund’s securities at the time of the calculation.
mortgage-backed securities Bond or other debt securities that represent ownership in a pool of mortgage loans.
muni, municipal bonds, municipal securities Debt securities issued by a state, its counties, municipalities, authorities and other subdivisions, or the territories and possessions of the United States and the District
of Columbia, including their subdivisions, agencies and instrumentalities and corporations. These securities may be issued to obtain money for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, public utilities, schools, streets, and water and sewer works.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
prepayment risk The risk that a mortgage-backed security may be paid off early, typically because interest rates have fallen and the homeowners who hold the underlying mortgages have refinanced those mortgages at lower rates. In this type of situation, the investor who held the mortgage-backed security will usually have to settle for a lower rate when reinvesting the principal.
refunded bond A bond for which the principal and interest payments are secured or guaranteed by cash or U.S. government securities held in an escrow account.
restricted securities Securities that are subject to contractual restrictions on resale. These securities are often purchased in private placement transactions.
revenue bonds Municipal bonds that are issued to finance public works projects and are secured by revenue generated by the project (such as water and sewer fees) rather than the full faith and credit of the issuer.
section 4(2)/144A securities Securities exempt from registration under Section 4(2) of the Securities Act of 1933. These securities may be sold only to qualified institutional buyers under Securities Act Rule 144A.
taxable equivalent yield The yield an investor would need to get from a taxable investment in order to match the yield paid by a given tax-exempt investment, once the effect of all applicable taxes is taken into account. For example, if your tax rate were 25%, a tax-exempt investment paying 4.5% would have a taxable equivalent yield for you of 6.0% (4.5% ÷ [1 – 0.25%] = 6.0%).
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
yield to maturity The annualized rate of return a bondholder could expect if the bond were held to maturity. In addition to interest payments, yield to maturity also factors in any difference between a bond’s current price and its principal amount, or face value.
140Schwab Taxable Bond Funds | Semiannual Report
Schwab Taxable Bond Funds
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset Management advocates for investors of all sizes with a steadfast focus on lowering costs and reducing unnecessary complexity. The list below shows all currently available Schwab Funds®.
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 Fund. 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 Funds’ website at www.schwabassetmanagement.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds 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.schwabassetmanagement.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Equity Funds
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Health Care Fund
Schwab International Core Equity Fund
Schwab International Opportunities Fund
Schwab Select Large Cap Growth Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab Fundamental Global Real Estate Index Fund
Schwab Global Real Estate Fund
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab U.S. Large-Cap Growth Index Fund
Schwab U.S. Large-Cap Value Index Fund
Schwab U.S. Mid-Cap Index Fund
Schwab International Index Fund®
Schwab Balanced Fund
Schwab MarketTrack Portfolios®
Schwab Target Funds
Schwab Target Index Funds
Schwab Monthly Income Funds
Bond Funds
Schwab Treasury Inflation Protected Securities Index Fund
Schwab U.S. Aggregate Bond Index Fund
Schwab Short-Term Bond Index Fund
Schwab Tax-Free Bond Fund1
Schwab California Tax-Free Bond Fund1
Schwab Opportunistic Municipal Bond Fund
Schwab provides a broad choice of taxable and tax-exempt money market funds for both retail and institutional client types.
Charles Schwab Investment Management, Inc., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Schwab Funds
1-877-824-5615
© 2024 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
¹
State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation.
²
You could lose money by investing in the Schwab Money Funds. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. Because the share price of Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares if the Fund’s Board determines that the fee is in the best interests of the Fund. An investment in the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Schwab Money Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.
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Semiannual Report | February 29, 2024
Schwab Municipal Bond Funds
Schwab Tax-Free Bond Fund
Schwab California Tax-Free Bond Fund
Schwab Opportunistic Municipal Bond Fund
No Action Required – Notice Regarding Shareholder Report Delivery |
Beginning on July 24, 2024, fund shareholder reports will be streamlined to highlight key information deemed important for investors to assess and monitor their fund investments. Other information, including financial statements, will not appear in the streamlined shareholder reports but will available online and delivered free of charge upon request. |
• If you already receive the full shareholder reports, you will receive the streamlined shareholder reports in the same way that you currently receive the full shareholder reports (either in paper or electronically). |
• If you currently receive a notification when a shareholder report is available on a fund’s website, beginning July 24, 2024, you will begin to receive the streamlined shareholder report (in paper). |
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Three ways investors can include bonds in an asset allocation strategy.
Fund investment adviser: Charles Schwab Investment Management, Inc., dba Schwab Asset Management®
Distributor: Charles Schwab & Co., Inc. (Schwab)
Schwab Municipal Bond Funds | Semiannual Report1
Schwab Municipal Bond Funds
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
Total Returns for the 6 Months Ended February 29, 2024 |
Schwab Tax-Free Bond Fund (Ticker Symbol: SWNTX) | |
Bloomberg Municipal Bond Index1 | |
Bloomberg Municipal 3-15 Year Blend Index | |
Fund Category: Morningstar Muni National Intermediate* | |
| |
| |
Schwab California Tax-Free Bond Fund (Ticker Symbol: SWCAX) | |
Bloomberg Municipal Bond Index1 | |
Bloomberg California Municipal 3-15 Year Blend Index | |
Fund Category: Morningstar Muni California Intermediate* | |
| |
| |
Schwab Opportunistic Municipal Bond Fund (Ticker Symbol: SWHYX) | |
Bloomberg Municipal Bond Index | |
Fund Category: Morningstar Muni National Long* | |
| |
All total return figures 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.
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
*
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
1
In anticipation of new regulatory requirements, the fund’s regulatory index has changed to the Bloomberg Municipal Bond Index. The Bloomberg Municipal Bond Index provides a broad measure of market performance. The second index listed is the fund’s additional index and is more representative of the fund’s investment universe than the regulatory index.
2Schwab Municipal Bond Funds | Semiannual Report
Schwab Municipal Bond Funds
| Jason D. Diefenthaler, Managing Director and Head of Tax-Exempt Strategies for Schwab Asset Management, is responsible for developing, managing, and implementing Schwab Asset Management’s tax-exempt fixed income investment strategies, including separately managed accounts, actively managed mutual funds, and exchange-traded funds (ETFs). Mr. Diefenthaler also leads the portfolio management team for the Wasmer SchroederTM Municipal Bond Strategies and is responsible for day-to-day co-management of several tax-free Schwab Funds. Previously, Mr. Diefenthaler was the director of tax-exempt portfolio management at Wasmer Schroeder & Company, LLC (Schwab Asset Management became the investment adviser for Wasmer Schroeder Strategies in 2020). He oversaw all tax-exempt strategies and management of the Wasmer Schroeder High Yield Municipal Fund, which subsequently reorganized into the Schwab Opportunistic Municipal Bond Fund. Mr. Diefenthaler began his career with Wasmer Schroeder in 2000. He was a credit analyst before becoming a portfolio manager. |
| John Khodarahmi, Senior Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day co-management of the funds. Prior to joining Schwab in 2015, Mr. Khodarahmi was a vice president and senior municipal trader at Eaton Vance Management for the firm’s tax-free bond funds. Previous to Eaton Vance, he was a vice president and portfolio manager at both Banc of America Montgomery Securities and Thomas Weisel Partners, managing corporate cash and high net worth portfolios. Prior to those roles, Mr. Khodarahmi was a municipal trader and underwriter for Fleet Securities, Inc. (now part of Bank of America). |
| James Cortez, CFA, Senior Portfolio Manager for Schwab Asset Management, is responsible for the day-to-day co-management of the funds and has been a portfolio manager with Schwab Asset Management since 2019. Mr. Cortez joined the firm in 2006 as a director on Schwab Asset Management’s municipal research team, responsible for conducting credit research for municipal fixed income funds and money market funds with a focus on healthcare and higher education credits. Prior to joining Schwab, Mr. Cortez was an associate director in Standard & Poor’s healthcare group. |
Schwab Municipal Bond Funds | Semiannual Report3
Schwab Tax-Free Bond Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
Average Annual Returns1,2
| | | | |
Fund: Schwab Tax-Free Bond Fund (9/11/92) | | | | |
Bloomberg Municipal Bond Index3 | | | | |
Bloomberg Municipal 3-15 Year Blend Index | | | | |
Fund Category: Morningstar Muni National Intermediate4 | | | | |
Fund Expense Ratios5: Net 0.38%; Gross 0.41% |
| |
30-Day SEC Yield-No Waiver1,6 | |
12-Month Distribution Yield1,2 | |
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.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower.
3
In anticipation of new regulatory requirements, the fund’s regulatory index has changed from the Bloomberg Municipal 3-15 Year Blend Index to the Bloomberg Municipal Bond Index. The Bloomberg Municipal Bond Index provides a broad measure of market performance. The Bloomberg Municipal 3-15 Year Blend Index is the fund’s additional index and is more representative of the fund’s investment universe than the regulatory index.
4
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
5
As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as the investment adviser serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the Financial Highlights section of the financial statements.
6
Yield if fund expenses had not been partially absorbed by the investment adviser and its affiliates.
4Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type
Weighted Average Maturity1 | |
Weighted Average Duration1 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
1
See Glossary for definitions of maturity and duration.
2
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Municipal Bond Funds | Semiannual Report5
Schwab California Tax-Free Bond Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
Average Annual Returns1,2
| | | | |
Fund: Schwab California Tax-Free Bond Fund (2/24/92) | | | | |
Bloomberg Municipal Bond Index3 | | | | |
Bloomberg California Municipal 3-15 Year Blend Index4 | | | | |
S&P California AMT-Free Municipal Bond Index | | | | |
Fund Category: Morningstar Muni California Intermediate6 | | | | |
Fund Expense Ratios7: Net 0.38%; Gross 0.41% |
| |
30-Day SEC Yield-No Waiver1,8 | |
12-Month Distribution Yield1,2 | |
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.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower.
3
In anticipation of new regulatory requirements, the fund’s regulatory index has changed from the Bloomberg California Municipal 3-15 Year Blend Index to the Bloomberg Municipal Bond Index. The Bloomberg Municipal Bond Index provides a broad measure of market performance. The Bloomberg California Municipal 3-15 Year Blend Index is the fund’s additional index and is more representative of the fund’s investment universe than the regulatory index.
4
The Bloomberg California Municipal 3-15 Year Blend Index was established effective January 1, 2020. Performance shown prior to January 1, 2020 is based on a subset of securities included in the Bloomberg Municipal 3-15 Year Blend Index.
5
Information not available to the fund.
6
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
7
As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as the investment adviser serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the Financial Highlights section of the financial statements.
8
Yield if fund expenses had not been partially absorbed by the investment adviser and its affiliates.
6Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type
Weighted Average Maturity1 | |
Weighted Average Duration1 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
1
See Glossary for definitions of maturity and duration.
2
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Municipal Bond Funds | Semiannual Report7
Schwab Opportunistic Municipal Bond Fund
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value of an investment will fluctuate so that an investor’s shares may be worth more or less than their original cost. Current performance may be lower or higher than performance data quoted. To obtain performance information current to the most recent month end, please visit www.schwabassetmanagement.com/schwabfunds_prospectus.
Average Annual Returns1,2,3
| | | | |
Fund: Schwab Opportunistic Municipal Bond Fund (3/31/14)4 | | | | |
Bloomberg Municipal Bond Index | | | | |
Fund Category: Morningstar Muni National Long5 | | | | |
Fund Expense Ratios6: Net 0.50%; Gross 0.68% |
| |
30-Day SEC Yield-No Waiver1,7 | |
12-Month Distribution Yield1,2 | |
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.
*
The fund experienced a spike in distribution yield due to a larger than normal income distribution payment to shareholders in April 2023, which included a special payment of past due interest income received from defaulted securities (see financial notes 2(d) for additional information). Without the special payment of past due interest income from defaulted securities the 12-Month Distribution Yield would have been 3.61%.
1
Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.
2
Fund expenses may have been partially absorbed by the investment adviser and its affiliates. Without these reductions, the total return/yield may have been lower.
3
Effective August 10, 2020, the Wasmer Schroeder High Yield Municipal Fund (the predecessor fund) was reorganized into the Schwab Opportunistic Municipal Bond Fund. The performance and financial history prior to August 10, 2020 are that of the predecessor fund.
4
Inception date is that of the predecessor fund.
5
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds and ETFs within the category as of the report date.
6
As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as the investment adviser serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual expense ratios during the period, refer to the Financial Highlights section of the financial statements.
7
Yield if fund expenses had not been partially absorbed by the investment adviser and its affiliates.
8Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Performance and Fund Facts as of February 29, 2024
Portfolio Composition % of investments
These charts show two different views of the fund’s portfolio: by type of security and credit quality of the security.
By Security Type
Weighted Average Maturity1 | |
Weighted Average Duration1 | |
Portfolio holdings may have changed since the report date.
Fixed-income securities are subject to increased loss of principal during periods of rising interest rates. An investment in the fund(s) is not insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency.
1
See Glossary for definitions of maturity and duration.
2
Bloomberg Index Rating: Based on the middle rating of Moody’s, S&P and Fitch; when a rating from only two agencies is available, the lower is used; when only one agency rates a bond, that rating is used. In cases where explicit bond level ratings may not be available, other sources may be used to classify securities by credit quality. Source: Bloomberg Index Service Ltd.
Schwab Municipal Bond Funds | Semiannual Report9
Schwab Municipal Bond Funds
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you may incur two types of costs: (1) transaction costs; and (2) ongoing costs, including management fees, transfer agent and shareholder services fees, and other fund expenses.
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, 2023 and held through February 29, 2024.
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. 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.
| | BEGINNING
ACCOUNT VALUE
AT 9/1/23 | ENDING
ACCOUNT VALUE
(NET OF EXPENSES)
AT 2/29/24 | EXPENSES PAID
DURING PERIOD
|
Schwab Tax-Free Bond Fund | | | | |
| | | | |
| | | | |
Schwab California Tax-Free Bond Fund | | | | |
| | | | |
| | | | |
Schwab Opportunistic Municipal Bond Fund | | | | |
| | | | |
| | | | |
| Based on the most recent six-month expense ratio. |
| Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by 182 days in the period, and divided by 366 days in the fiscal year. |
10Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Financial Statements
| | | | | | |
|
Net asset value at beginning of period | | | | | | |
Income (loss) from investment operations: | | | | | | |
Net investment income (loss)1 | | | | | | |
Net realized and unrealized gains (losses) | | | | | | |
Total from investment operations | | | | | | |
| | | | | | |
Distributions from net investment income | | | | | | |
Distributions from net realized gains | | | | | | |
| | | | | | |
Net asset value at end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets: | | | | | | |
| | | | | | |
| | | | | | |
Net investment income (loss) | | | | | | |
| | | | | | |
Net assets, end of period (x 1,000) | | | | | | |
| |
| Calculated based on the average shares outstanding during the period. |
| The per share amount does not accord with the change in aggregate gains and losses in securities during the period because of the timing of fund transactions in relation to fluctuating market values. |
| |
| |
| Effective July 1, 2022, the net operating expense limitation was lowered from 0.49% to 0.38%. The ratio presented for the year ended August 31, 2022, is a blended ratio. |
| Ratio includes less than 0.005% of non-routine proxy expenses. |
Schwab Municipal Bond Funds | Semiannual Report11
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed rate securities, the rate shown is the interest rate (the rate established when the security was issued). For variable rate securities, the rate shown is the rate as of the report date based on each security’s rate reset date. The reference rate and spread used is shown parenthetically in the security description, if available; if not, the reference rate is described in a footnote. The maturity date shown for all the securities is the final legal maturity.
ISSUER TYPE OF SECURITY, SERIES | | | | |
MUNICIPAL SECURITIES 100.4% OF NET ASSETS |
|
Black Belt Energy Gas District |
Gas Supply RB Series 2022D1 | | | | |
| | | | |
| | | | |
|
| | | | |
|
| | | | |
| | | | |
The Southeast Alabama Gas District |
Gas Supply Refunding RB Series 2024B | | | | |
|
| | | | |
| | | | |
| | | | |
|
|
| | | | |
| | | | |
| | | | |
Chandler Industrial Development Auth |
IDRB (Intel Corp) Series 2022 | | | | |
Salt River Project Agricultural Improvement & Power District |
Electric System RB Series 2023A | | | | |
| | | | |
|
|
Sales & Use Tax Bonds Series 2020 | | | | |
Bentonville Sales & Use Tax |
Sales & Use Tax Refunding RB Series 2021B | | | | |
|
Sales & Use Tax RB Series 2021 | | | | |
12Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Sewer Refunding RB Series 2015 | | | | |
| | | | |
|
Alameda Corridor Transportation Auth |
Sr Lien Refunding RB Series 2022A | | | | |
|
Toll Bridge RB Series 2021C (SIFMA Municipal Swap Index + 0.45%) | | | | |
|
| | | | |
California Community Choice Financing Auth |
RB (Deutsche Bank) Series 2023C | | | | |
California Educational Facilities Auth |
RB (St Marys College) Series 2023A | | | | |
California Health Facilities Financing Auth |
RB (Adventist Health System) Series 2011A | | | | |
RB (Kaiser Permanente) Series 2017A2 | | | | |
California Public Finance Auth |
RB (Sharp Healthcare) Series 2017C | | | | |
California Statewide Communities Development Auth |
Hospital Refunding RB (Methodist Hospital of Southern California) Series 2018 | | | | |
RB (Loma Linda Univ Medical Center) Series 2016A | | | | |
RB (Loma Linda Univ Medical Center) Series 2018A | | | | |
Fair Oaks Recreation & Park District |
| | | | |
Hastings Campus Housing Financing Auth |
Campus Housing RB Series 2020A | | | | |
Los Angeles Dept of Airports |
Sub Refunding RB Series 2023A | | | | |
|
GO Refunding Bonds Series 2002A | | | | |
Rancho Cucamonga Successor Redevelopment Agency |
Tax Allocation Refunding Bonds Series 2014 | | | | |
San Diego Cnty Regional Airport Auth |
Sr Airport RB Series 2023B | | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
San Francisco Airport Commission |
| | | | |
| | | | |
| | | | |
| | | | |
Santa Cruz Cnty Successor Redevelopment Agency |
Tax Allocation Refunding Bonds 2014 | | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report13
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Colorado Educational & Cultural Facilities Auth |
Charter School RB (Loveland Classical Schools) Series 2023 | | | | |
Colorado Health Facilities Auth |
RB (CommonSpirit Health) Series 2022A | | | | |
RB (CommonSpirit Health) Series 2022A | | | | |
Colorado Regional Transportation District |
RB (Denver Transit Partners) Series 2020A | | | | |
RB (Denver Transit Partners) Series 2020A | | | | |
|
Airport System RB Series 2017A | | | | |
Airport System Sub RB Series 2023B | | | | |
Airport System Sub RB Series 2023B | | | | |
Airport System Sub RB Series 2023B | | | | |
Dedicated Tax RB Series 2018A-2 | | | | |
Whispering Pines Metropolitan District #1 |
LT GO Refunding Bonds Series 2023 | | | | |
| | | | |
|
|
| | | | |
| | | | |
| | | | |
DISTRICT OF COLUMBIA 0.4% |
Metropolitan Washington Airports Auth |
Sr Lien Refunding RB (Dulles Metrorail) Series 2019A | | | | |
|
Florida Development Finance Corp |
Healthcare Facilities RB (Tampa General Hospital) Series 2024B | | | | |
Florida Higher Educational Facilities Financing Auth |
Educational Facilities RB (Florida Institute of Technology) Series 2019 | | | | |
Educational Facilities RB (Florida Institute of Technology) Series 2019 | | | | |
Educational Facilities RB (Florida Institute of Technology) Series 2019 | | | | |
Florida Insurance Assistance Interlocal Agency |
Insurance Assessment RB Series 2023A1 | | | | |
|
| | | | |
| | | | |
Hollywood Community Redevelopment Agency |
| | | | |
|
Health Care Facilities Refunding RB (Baptist Health) Series 2017 | | | | |
Miami Beach Health Facilities Auth |
Hospital Refunding & RB (Mt Sinai Medical Center) Series 2014 | | | | |
Hospital Refunding & RB (Mt Sinai Medical Center) Series 2014 | | | | |
14Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
| | | | |
Refunding RB Series 2020A | | | | |
Miami-Dade Cnty Educational Facilities Auth |
RB (Univ of Miami) Series 2018A | | | | |
Miami-Dade Cnty Expressway Auth |
Toll System RB Series 2014A | | | | |
|
| | | | |
|
RB (Moffitt Cancer Center) Series 2023A | | | | |
|
RB (John Knox Village) Series 2021A | | | | |
|
| | | | |
|
Tax Allocation RB (Moffitt Cancer Center) Series 2020A | | | | |
Tax Allocation RB (Moffitt Cancer Center) Series 2020A | | | | |
Tax Allocation RB (Moffitt Cancer Center) Series 2020A | | | | |
Tax Allocation RB (Moffitt Cancer Center) Series 2020A | | | | |
Tax Allocation RB (Moffitt Cancer Center) Series 2020A | | | | |
|
Utility System RB Series 2022 | | | | |
Village Community Dev Dist. No.15 |
| | | | |
| | | | |
| | | | |
| | | | |
|
|
Airport PFC & Sub Lien RB Series 2022D | | | | |
Columbia Cnty Hospital Auth |
Revenue Anticipation Certificates (Wellstar Health System) Series 2023A | | | | |
Georgia State Road & Tollway Auth |
Managed Lane System RB Series 2021A | | | | |
Main Street Natural Gas Inc |
Gas Supply RB Series 2023A | | | | |
Gas Supply RB Series 2023B | | | | |
Gas Supply RB Series 2023B | | | | |
Gas Supply RB Series 2023D | | | | |
| | | | |
|
|
Water & Wastewater System RB Series 2016 | | | | |
Schwab Municipal Bond Funds | Semiannual Report15
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
|
Airport System RB Series 2020A | | | | |
Harbor System RB Series 2020A | | | | |
| | | | |
|
|
| | | | |
|
|
GO Refunding Bonds Series 2014 | | | | |
GO Refunding Bonds Series 2016B | | | | |
|
| | | | |
| | | | |
| | | | |
OHare General Airport Sr Lien Refunding RB Series 2012A | | | | |
OHare General Airport Sr Lien Refunding RB Series 2015B | | | | |
OHare General Airport Sr Lien Refunding RB Series 2015B | | | | |
OHare General Airport Sr Lien Refunding RB Series 2016C | | | | |
OHare General Airport Sr Lien Refunding RB Series 2016C | | | | |
Chicago Board of Education |
ULT GO Bonds Series 2023A | | | | |
|
| | | | |
| | | | |
|
Sr Lien Airport Refunding RB Series 2023C | | | | |
|
LT GO Refunding Bonds Series 2023C | | | | |
Chicago Transit Auth Sales Tax |
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
GO Refunding Bonds Series 2016 | | | | |
GO Refunding Bonds Series 2018B | | | | |
|
RB (OSF Healthcare System) Series 2020B1 | | | | |
RB (Rosalind Franklin Univ) Series 2017A | | | | |
RB (Rosalind Franklin Univ) Series 2017A | | | | |
RB (Rosalind Franklin Univ) Series 2017A | | | | |
16Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Refunding RB (Southern Illinois Healthcare Enterprises) Series 2017C | | | | |
Refunding RB (Southern Illinois Healthcare Enterprises) Series 2017C | | | | |
Illinois Toll Highway Auth |
| | | | |
| | | | |
Kankakee River Metropolitan Agency |
Sr Lien Sewage Treatment Facility Refunding RB Series 2016 | | | | |
Metropolitan Pier & Exposition Auth |
| | | | |
|
Auxiliary Facilities System RB Series 2021 | | | | |
Auxiliary Facilities System RB Series 2021 | | | | |
Auxiliary Facilities System RB Series 2021 | | | | |
Auxiliary Facilities System RB Series 2021 | | | | |
Auxiliary Facilities System Refunding RB Series 2020B | | | | |
Auxiliary Facilities System Refunding RB Series 2020B | | | | |
Auxiliary Facilities System Refunding RB Series 2020B | | | | |
Auxiliary Facilities System Refunding RB Series 2020B | | | | |
Auxiliary Facilities System Refunding RB Series 2020B | | | | |
| | | | |
|
Public Energy Financing Auth |
Gas Project RB Series 2019 | | | | |
|
|
| | | | |
| | | | |
Johnson & Miami Cnty USD No. 230 |
| | | | |
| | | | |
|
|
| | | | |
| | | | |
Kentucky Public Energy Auth |
Gas Supply RB Series 2018C1 | | | | |
| | | | |
|
Louisiana Housing Corp M/F Revenue |
S/F Mortgage RB Series 2023C | | | | |
Louisiana Offshore Terminal Auth |
Port RB (LOOP LLC) Series 2007A | | | | |
Schwab Municipal Bond Funds | Semiannual Report17
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Louisiana Public Facilities Auth |
RB (Loyola Univ) Series 2023A | | | | |
RB (Loyola Univ) Series 2023A | | | | |
Refunding RB (Ochsner Clinic Fdn) Series 2017 | | | | |
Louisiana Stadium & Exposition District |
| | | | |
|
Public Improvement Bonds Series 2021A | | | | |
| | | | |
|
Maine Health & Educational Facilities Auth |
RB (MaineHealth) Series 2020A | | | | |
RB (MaineHealth) Series 2023B | | | | |
|
General Airport Refunding RB Series 2019 | | | | |
General Airport Refunding RB Series 2019 | | | | |
General Airport Refunding RB Series 2019 | | | | |
| | | | |
|
|
Metropolitan District GO Bonds 78th Issue | | | | |
|
GO Bonds 1st Series 2018A | | | | |
Maryland Health & Higher Educational Facilities Auth |
RB (Frederick Health System) Series 2020 | | | | |
RB (Frederick Health System) Series 2023 | | | | |
RB (Frederick Health System) Series 2023 | | | | |
Maryland Stadium Authority |
Built to Learn RB Series 2022A | | | | |
Built to Learn RB Series 2022A | | | | |
Built to Learn RB Series 2022A | | | | |
|
RB (Diakon Lutheran Social Ministries) Series 2019B | | | | |
| | | | |
|
Massachusetts Development Finance Agency |
RB (Beth Israel Lahey Health) Series 2023M | | | | |
RB (Boston Medical Center) Series 2016E | | | | |
RB (Boston Medical Center) Series 2023G | | | | |
RB (Boston Medical Center) Series 2023G | | | | |
RB (Boston Medical Center) Series 2023G | | | | |
RB (Boston Medical Center) Series 2023G | | | | |
RB (Lahey Health System) Series 2015F | | | | |
RB (Lesley Univ) Series 2019A | | | | |
RB (UMASS Memorial Health) Series 2016I | | | | |
18Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
S/F Housing RB Series 183 | | | | |
S/F Housing RB Series 203 | | | | |
| | | | |
|
|
Water Supply System 2nd Lien RB Series 2022B | | | | |
|
| | | | |
| | | | |
|
ULT GO Bonds Series 2023II | | | | |
|
| | | | |
Michigan Housing Development Auth |
S/F Mortgage RB Series 2015A | | | | |
|
| | | | |
| | | | |
| | | | |
|
|
Health Care Facilities Refunding RB (Hazelden Betty Ford Fdn) Series 2019 | | | | |
|
Refunding COP Series 2019C | | | | |
Refunding COP Series 2019C | | | | |
| | | | |
|
Mississippi Development Bank |
Special Obligation (Jackson Public SD) RB Series 2018 | | | | |
Special Obligation (Jackson Public SD) RB Series 2018 | | | | |
Special Obligation (Jackson Public SD) Refunding RB Series 2012A | | | | |
| | | | |
|
Missouri Health & Educational Facilities Auth |
Educational Facilities RB (Kansas City Univ of Medicine) Series 2017A | | | | |
Educational Facilities RB (Kansas City Univ of Medicine) Series 2017A | | | | |
Missouri Housing Development Commission |
S/F Mortgage RB Series 2017D | | | | |
S/F Mortgage RB Series 2018A | | | | |
|
Airport RB (Lambert International) Series 2023B | | | | |
| | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report19
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
|
S/F Housing RB Series 2018A | | | | |
S/F Mortgage Bonds Series 2023B | | | | |
| | | | |
|
|
RB (Father Flanagan Boys Home) Series 2017 | | | | |
|
| | | | |
| | | | |
|
|
Hospital Refunding RB (Carson Tahoe Regional Healthcare) Series 2017 | | | | |
Hospital Refunding RB (Carson Tahoe Regional Healthcare) Series 2017 | | | | |
|
| | | | |
| | | | |
|
|
Tax Appeal Refunding Bonds Series 2017A | | | | |
Tax Appeal Refunding Bonds Series 2017A | | | | |
New Jersey Transportation Trust Fund Auth |
Transportation Bonds Series 2023BB | | | | |
Transportation Bonds Series 2023BB | | | | |
Transportation Program Bonds Series 2015AA | | | | |
Transportation Program Bonds Series 2023AA | | | | |
Transportation Program Notes Series 2014 BB1 | | | | |
Transportation System Bonds Series 2023A | | | | |
Transportation System RB Series 2019BB | | | | |
|
| | | | |
| | | | |
| | | | |
|
New Mexico Mortgage Finance Auth |
S/F Mortgage RB Series 2018B | | | | |
|
Metropolitan Transportation Auth |
Transportation RB Series 2015A2 | | | | |
Transportation RB Series 2020C1 | | | | |
Nassau Cnty Local Economic Assistance Corp |
RB (Catholic Health Services Long Island) Series 2014 | | | | |
RB (Catholic Health Services Long Island) Series 2014 | | | | |
20Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
GO Bonds Fiscal 2015 Series F5 | | | | |
GO Bonds Fiscal 2018 Series B4 | | | | |
GO Bonds Fiscal 2022 Series A1 | | | | |
New York City Transitional Finance Auth |
Building Aid RB Fiscal 2019 Series S3A | | | | |
Building Aid RB Fiscal 2019 Series S3A | | | | |
Future Tax Secured Sub Bonds Fiscal 2020 Series A2 | | | | |
Future Tax Secured Sub Bonds Fiscal 2023 Series F1 | | | | |
Future Tax Secured Sub Bonds Fiscal 2024 Series D1 | | | | |
Future Tax Secured Sub Bonds Fiscal 2024 Series D1 | | | | |
New York Liberty Development Corp |
RB (Goldman Sachs Headquarters) Series 2005 | | | | |
New York State Dormitory Auth |
RB (Montefiore Health) Series 2018A | | | | |
RB (New York Institute of Technology) Series 2024 | | | | |
RB (New York Institute of Technology) Series 2024 | | | | |
RB (Rochester Institute of Technology) Series 2022A | | | | |
State Personal Income Tax RB Series 2019A | | | | |
State Personal Income Tax RB Series 2019D | | | | |
New York State Thruway Auth |
| | | | |
| | | | |
New York Transportation Development Corp |
Special Facilities RB (JFK Airport - New Terminal 1) Series 2023 | | | | |
Special Facility RB (JFK Airport - Terminal 4) Series 2020A | | | | |
Special Facility RB (JFK Airport - Terminal 4) Series 2020A | | | | |
Port Auth of New York & New Jersey |
Consolidated Bonds 221st Series | | | | |
Consolidated Bonds 236th Series | | | | |
Consolidated Bonds 236th Series | | | | |
Sales Tax Asset Receivable Corp |
| | | | |
Triborough Bridge & Tunnel Auth |
Sales Tax RB Series 2023A | | | | |
Sales Tax RB Series 2024A1 | | | | |
| | | | |
Westchester Cnty Local Development Corp |
RB (New York Blood Center) Series 2024 | | | | |
| | | | |
|
|
| | | | |
Greater Asheville Regional Airport Auth |
Airport System RB Series 2022A | | | | |
Airport System RB Series 2022A | | | | |
North Carolina Capital Facilities Finance Agency |
Educational Facilities Refunding RB (Meredith College) Series 2018 | | | | |
Educational Facilities Refunding RB (Meredith College) Series 2018 | | | | |
Schwab Municipal Bond Funds | Semiannual Report21
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Educational Facilities Refunding RB (Meredith College) Series 2018 | | | | |
Educational Facilities Refunding RB (Meredith College) Series 2018 | | | | |
Educational Facilities Refunding RB (Meredith College) Series 2018 | | | | |
North Carolina Medical Care Commission |
Health Care Facilities RB (Presbyterian Homes) Series 2020A | | | | |
North Carolina Medical Care Commission Retirement Facilities |
Retirement Facilities 1st Mortgage RB (United Methodist Retirement Homes) Series 2024A | | | | |
| | | | |
|
|
Refunding Bonds Series 2019B | | | | |
Refunding Bonds Series 2019B | | | | |
| | | | |
|
Buckeye Tobacco Settlement Financing Auth |
Tobacco Settlement Refunding Bonds Series 2020A-2 | | | | |
|
Airport System RB Series 2019B | | | | |
|
ULT GO Bonds Series 2017A | | | | |
Northeast Ohio Medical Univ |
General Refunding RB Series 2021A | | | | |
| | | | |
|
Norman Regional Hospital Auth |
| | | | |
Oklahoma Development Finance Auth |
| | | | |
| | | | |
|
|
Campus Refunding & RB (Pacific Univ) Series 2015A | | | | |
Campus Refunding & RB (Pacific Univ) Series 2015A | | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
|
| | | | |
|
| | | | |
|
Transient Lodging Tax RB Series 2018 | | | | |
22Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
|
Lancaster Cnty Hospital Auth |
RB (Penn State Health) Series 2021 | | | | |
Montgomery Cnty Higher Education & Health Auth |
| | | | |
Pennsylvania Economic Development Financing Auth |
Solid Waste Disposal RB (Republic Services Inc) Series 2019B | | | | |
Pennsylvania State Turnpike Commission |
| | | | |
| | | | |
| | | | |
| | | | |
|
GO Refunding Bonds Series 2017 | | | | |
GO Refunding Bonds Series 2019A | | | | |
GO Refunding Bonds Series 2019A | | | | |
GO Refunding Bonds Series 2019A | | | | |
Philadelphia Redevelopment Auth Financing Corp |
| | | | |
Pocono Mountains Park Auth |
Hospital RB (St Luke’s Hospital) Series 2015A | | | | |
| | | | |
|
Puerto Rico Sales Tax Financing Corp |
Restructured Sales Tax Bonds Series 2019A1 | | | | |
|
Rhode Island Health & Educational Building Corp |
Hospital Financing RB (Lifespan Obligated Group) Series 2024 | | | | |
Hospital Financing RB (Lifespan Obligated Group) Series 2024 | | | | |
Hospital Financing RB (Lifespan Obligated Group) Series 2024 | | | | |
| | | | |
|
South Carolina Public Service Auth |
Refunding RB Series 2020A | | | | |
Refunding RB Series 2022A | | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report23
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
|
| | | | |
|
LT Capital Outlay Refunding Certificates Series 2017A | | | | |
LT Capital Outlay Refunding Certificates Series 2017B | | | | |
South Dakota Health & Educational Facilities Auth |
| | | | |
| | | | |
|
Chattanooga-Hamilton Cnty Hospital Auth |
Hospital Refunding & RB (Erlanger Health) Series 2014A | | | | |
Hospital Refunding & RB (Erlanger Health) Series 2014A | | | | |
Metro Government of Nashville & Davidson Cnty Health & Educational Facilities Board |
Educational Facilities RB (Belmont Univ) Series 2023 | | | | |
Metropolitan Nashville Airport Auth |
| | | | |
| | | | |
Tennessee Housing Development Agency Home Ownership |
Residential Finance Program Bonds Series 2023-3A | | | | |
| | | | |
|
|
Airport System RB Series 2022 | | | | |
Airport System RB Series 2022 | | | | |
Airport System RB Series 2022 | | | | |
Central Texas Regional Mobility Auth |
| | | | |
| | | | |
|
Water & Sewer System RB Series 2023 | | | | |
|
ULT GO Refunding Bonds Series 2015A | | | | |
|
| | | | |
|
Utility System Jr Lien RB Series 2022B | | | | |
|
Sr Lien Special Tax RB (Kay Bailey Hutchison Convention Center) Series 2023 | | | | |
|
ULT GO Bonds Series 2014B | | | | |
ULT GO Bonds Series 2014B | | | | |
ULT GO Bonds Series 2014B | | | | |
ULT GO Bonds Series 2014B | | | | |
|
ULT Refunding Bonds Series 2019 | | | | |
24Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
| | | | |
|
| | | | |
|
ULT GO Bonds Series 2023A | | | | |
Greater Texoma Utility Auth |
| | | | |
| | | | |
Harris Cnty Cultural Education Facilities Finance Corp |
Medical Facilities RB (Baylor College of Medicine) Series 2024A | | | | |
RB (Houston Methodist) Series 2020B | | | | |
|
Sub Lien Refunding RB Series 2018A | | | | |
|
| | | | |
Lower Colorado River Auth |
Refunding RB (LCRA Transmission Services) Series 2016 | | | | |
|
Electric Light & Power System Refunding RB Series 2023 | | | | |
|
Waterworks & Sewer System RB Series 2022 | | | | |
Newark Higher Education Finance Corp |
Education RB (Orenda) Series 2023A | | | | |
Education RB (Orenda) Series 2023A | | | | |
Education RB (The Hughen Center) Series 2022A | | | | |
Education RB (The Hughen Center) Series 2022A | | | | |
Education RB (The Hughen Center) Series 2022A | | | | |
Education RB (The Hughen Center) Series 2022A | | | | |
Nixon-Smiley Consolidated ISD |
| | | | |
North East Texas Regional Mobility Auth |
| | | | |
|
| | | | |
|
ULT GO Bonds Series 2019B | | | | |
|
Electric & Gas Systems Jr Lien RB Series 2014 | | | | |
| | | | |
|
| | | | |
|
ULT GO Refunding Bonds Series 2015B | | | | |
|
| | | | |
| | | | |
Tarrant Cnty Cultural Education Facilities Finance Corp |
Hospital RB (Baylor Scott & White) Series 2022D | | | | |
Schwab Municipal Bond Funds | Semiannual Report25
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
| | | | |
Texas Dept of Housing & Community Affairs |
Residential Mortgage RB Series 2019A | | | | |
S/F Mortgage RB Series 2018A | | | | |
Texas Municipal Gas Corp III |
Gas Supply Refunding RB Series 2021 | | | | |
Texas State Affordable Housing Corp Heroes 2019 Program |
S/F Mortgage RB Series 2019A | | | | |
Texas Transportation Corp |
Sr Lien RB (NTE Mobility Partners) Series 2023 | | | | |
|
| | | | |
|
Tax & Revenue Certificates of Obligation Series 2023 | | | | |
Tax & Revenue Certificates of Obligation Series 2023 | | | | |
Tax & Revenue Certificates of Obligation Series 2023 | | | | |
| | | | |
|
|
Student Building Fee RB Series 2018 | | | | |
Student Building Fee RB Series 2018 | | | | |
| | | | |
|
|
Multiple Purpose Bonds Series 2017D | | | | |
Multiple Purpose Bonds Series 2018A | | | | |
Multiple Purpose Bonds Series 2018C | | | | |
| | | | |
|
Lynchburg Economic Development Auth |
Hospital Refunding RB (Centra Health) Series 2021 | | | | |
|
Central Puget Sound Regional Transit Auth |
Sales & Motor Vehicle Excise Tax RB Series 2016S1 | | | | |
King Cnty Public Hospital District #2 |
LT GO Refunding Bonds (EvergreenHealth) Series 2015 | | | | |
|
| | | | |
|
| | | | |
| | | | |
|
| | | | |
| | | | |
26Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
| | | | |
| | | | |
Skagit Cnty Hospital District No 1 |
| | | | |
| | | | |
|
| | | | |
Washington Health Care Facilities Auth |
RB (Overlake Hospital) Series 2014 | | | | |
Refunding RB (Overlake Hospital) Series 2017B | | | | |
| | | | |
|
West Virginia Hospital Finance Auth |
Hospital RB (West Virginia Univ Health System) Series 2023A | | | | |
Hospital Revenue & Refunding Bonds (Vandalia Health) Series 2023B | | | | |
| | | | |
|
Wisconsin Center District |
Jr Dedicated Tax RB Series 2020D | | | | |
Jr Dedicated Tax RB Series 2020D | | | | |
Jr Dedicated Tax RB Series 2020D | | | | |
Wisconsin Health & Educational Facilities Auth |
RB (Fort HealthCare Inc) Series 2024B | | | | |
RB (Franciscan Sisters of Christian Charity) Series 2017A | | | | |
RB (Franciscan Sisters of Christian Charity) Series 2017A | | | | |
RB (UnityPoint Health) Series 2014A | | | | |
| | | | |
|
|
Hospital Refunding RB (Cheyenne Regional Medical Center) Series 2021 | | | | |
Total Municipal Securities
(Cost $608,609,160) | |
Total Investments in Securities
(Cost $608,609,160) | |
| The effective maturity may be shorter than the final maturity shown because the security is subject to a put, demand or call feature. |
| Security or a portion of the security purchased on a delayed-delivery or when-issued basis. |
| Step up bond that pays an initial coupon rate for a set period and increased coupon rates at one or more preset intervals. Rate shown is as of period end. |
| Variable rate security; rate shown is effective rate at period end. |
| Bond currently pays a fixed coupon rate and will be remarketed at a to be determined rate at the end of the current fixed rate term. |
| Credit-enhanced or liquidity-enhanced. |
| VRDN is a municipal security which allows holders to sell their security through a put or tender feature, at par value plus accrued interest. The interest rate resets on a periodic basis, the majority of which are weekly but may be daily or monthly. Unless a reference rate and spread is shown parenthetically, the Remarketing Agent, generally a dealer, determines the interest rate for the security at each interest rate reset date. The rate is typically based on the SIFMA Municipal Swap Index. |
Schwab Municipal Bond Funds | Semiannual Report27
Schwab Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
| |
| |
| Securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended. These securities may be resold in transactions exempt from registrations, normally to qualified institutional buyers. At the period end, the value of these amounted to $3,750,000 or 0.6% of net assets. |
| TOB is a synthetically created VRDN where the owner of a long-term bond places the bond in a trust in combination with a liquidity facility. The trust then sells certificates which mirror the VRDN sold directly by a municipal issuer. VRDN is a municipal security which allows holders to sell their security through a put or tender feature, at par value plus accrued interest. The interest rate resets on a periodic basis, the majority of which are weekly but may be daily or monthly. Unless a reference rate and spread is shown parenthetically, the Remarketing Agent, generally a dealer, determines the interest rate for the security at each interest rate reset date. The rate is typically based on the SIFMA Municipal Swap Index. |
| Community college district |
| Certificate of participation |
| |
| Housing finance agency/authority |
| Industrial development agency/authority |
| Industrial development revenue bond |
| Independent school district |
| |
| |
| Passenger facility charge |
| |
| |
| |
| Securities Industry and Financial Markets Association. The SIFMA Municipal Swap Index is a market index comprised of high-grade 7-day tax-exempt Variable Rate Demand Obligations with certain characteristics. |
| |
| |
| |
| Variable rate demand note |
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
| | | | |
| | | | |
| | | | |
| As categorized in the Portfolio Holdings. |
28Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
|
Investments in securities, at value - unaffiliated (cost $608,609,160) | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
Investments bought - delayed-delivery | | |
| | |
Distributions to shareholders | | |
| | |
| | |
| | |
| | |
| | |
|
|
Capital received from investors | | |
| | |
| | |
Schwab Municipal Bond Funds | Semiannual Report29
Schwab Tax-Free Bond Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
|
Interest received from securities - unaffiliated | | |
|
|
Investment adviser and administrator fees | | |
| | |
Portfolio accounting fees | | |
| | |
| | |
| | |
Independent trustees’ fees | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
30Schwab Municipal Bond Funds | Semiannual Report
Schwab Tax-Free Bond Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
|
| | |
| | | |
| | | |
Net change in unrealized appreciation (depreciation) | | | |
Increase in net assets resulting from operations | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS |
| | | |
TRANSACTIONS IN FUND SHARES |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net transactions in fund shares | | | | | |
|
SHARES OUTSTANDING AND NET ASSETS |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Schwab Municipal Bond Funds | Semiannual Report31
Schwab California Tax-Free Bond Fund
Financial Statements
| | | | | | |
|
Net asset value at beginning of period | | | | | | |
Income (loss) from investment operations: | | | | | | |
Net investment income (loss)1 | | | | | | |
Net realized and unrealized gains (losses) | | | | | | |
Total from investment operations | | | | | | |
| | | | | | |
Distributions from net investment income | | | | | | |
Distributions from net realized gains | | | | | | |
| | | | | | |
Net asset value at end of period | | | | | | |
| | | | | | |
|
Ratios to average net assets: | | | | | | |
| | | | | | |
| | | | | | |
Net investment income (loss) | | | | | | |
| | | | | | |
Net assets, end of period (x 1,000) | | | | | | |
| |
| Calculated based on the average shares outstanding during the period. |
| |
| |
| Effective July 1, 2022, the net operating expense limitation was lowered from 0.49% to 0.38%. The ratio presented for the year ended August 31, 2022, is a blended ratio. |
| Ratio includes less than 0.005% of non-routine proxy expenses. |
32Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed rate securities, the rate shown is the interest rate (the rate established when the security was issued). For variable rate securities, the rate shown is the rate as of the report date based on each security’s rate reset date. The reference rate and spread used is shown parenthetically in the security description, if available; if not, the reference rate is described in a footnote. The maturity date shown for all the securities is the final legal maturity.
ISSUER TYPE OF SECURITY, SERIES | | | | |
MUNICIPAL SECURITIES 99.4% OF NET ASSETS |
|
Alameda Corridor Transportation Auth |
2nd Sub Lien Refunding RB Series 2022C | | | | |
Sr Lien Refunding RB Series 2022A | | | | |
Sr Lien Refunding RB Series 2024A | | | | |
Sr Lien Refunding RB Series 2024A | | | | |
Sub Lien Refunding RB Series 2024C | | | | |
Sub Lien Refunding RB Series 2024C | | | | |
|
| | | | |
American Canyon Finance Auth |
| | | | |
|
Electric System Refunding RB Series 2015 | | | | |
|
Toll Bridge RB Series 2017H | | | | |
Toll Bridge RB Series 2023B | | | | |
|
| | | | |
| | | | |
|
| | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
GO Refunding Bonds Series 2016 | | | | |
GO Refunding Bonds Series 2017 | | | | |
Schwab Municipal Bond Funds | Semiannual Report33
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
California Cnty Tobacco Securitization Agency |
Tobacco Settlement (Gold Country) Sr Refunding Bonds Series 2020A | | | | |
Tobacco Settlement (Los Angeles Cnty Securitization) RB Series 2020A | | | | |
Tobacco Settlement (Los Angeles Cnty Securitization) RB Series 2020A | | | | |
Tobacco Settlement (Los Angeles Cnty Securitization) Sr RB Series 2020A | | | | |
Tobacco Settlement Sr RB (Sonoma Cnty Securitization Corp) Series 2020A | | | | |
Tobacco Settlement Sr RB (Sonoma Cnty Securitization Corp) Series 2020A | | | | |
California Community Choice Financing Auth |
Clean Energy RB Series 2023D | | | | |
RB (Deutsche Bank) Series 2023C | | | | |
| | | | |
| | | | |
| | | | |
California Educational Facilities Auth |
RB (Art Center College of Design) Series 2018A | | | | |
RB (Santa Clara Univ) Series 2015 | | | | |
RB (St Marys College) Series 2023A | | | | |
RB (University of Redlands) Series 2022A | | | | |
California Health Facilities Financing Auth |
RB (Adventist Health System) Series 2011A | | | | |
RB (CommonSpirit Health) Series 2020A | | | | |
RB (CommonSpirit Health) Series 2020A | | | | |
RB (Episcopal Communities & Services) Series 2024A | | | | |
RB (Episcopal Communities & Services) Series 2024B | | | | |
RB (Kaiser Permanente) Series 2017A2 | | | | |
RB (On Lok Sr Health Services) Series 2020 | | | | |
RB (On Lok Sr Health Services) Series 2020 | | | | |
RB (Scripps Health) Series 2024B1 | | | | |
Refunding RB (Marshall Medical Center) Series 2015 | | | | |
Refunding RB (Marshall Medical Center) Series 2015 | | | | |
California Infrastructure & Economic Development Bank |
RB (Brightline West Passenger Rail) Series 2020A | | | | |
| | | | |
| | | | |
Refunding RB (Academy of Motion Picture Arts & Sciences) Series 2023A | | | | |
Refunding RB (Performing Arts Center of Los Angeles Cnty) Series 2020 | | | | |
Refunding RB (Performing Arts Center of Los Angeles Cnty) Series 2020 | | | | |
Refunding RB (Performing Arts Center of Los Angeles Cnty) Series 2020 | | | | |
Refunding RB (Walt Disney Family Museum) Series 2016 | | | | |
Refunding RB (Walt Disney Family Museum) Series 2016 | | | | |
Refunding RB (Walt Disney Family Museum) Series 2016 | | | | |
California Municipal Finance Auth |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
Insured Refunding RB (Channing House) Series 2017A | | | | |
Insured Refunding RB (Channing House) Series 2017A | | | | |
RB (Community Health System) Series 2021A | | | | |
34Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
RB (Inland Christian Home) Series 2020 | | | | |
RB (National Univ) Series 2019A | | | | |
RB (National Univ) Series 2019A | | | | |
RB (Samuel Merritt Univ) Series 2022 | | | | |
RB (Univ of La Verne) Series 2017A | | | | |
Refunding RB (Aldersly) Series 2023A | | | | |
Refunding RB (Eisenhower Medical Center) Series 2017B | | | | |
Refunding RB (Eisenhower Medical Center) Series 2017B | | | | |
Refunding RB (HumanGood California) Series 2019A | | | | |
Refunding RB (HumanGood California) Series 2019A | | | | |
Refunding RB (HumanGood California) Series 2019A | | | | |
Refunding RB (Institute of Aging) Series 2017 | | | | |
Refunding RB (Institute of Aging) Series 2017 | | | | |
Refunding RB (Institute of Aging) Series 2017 | | | | |
Refunding RB (Institute of Aging) Series 2017 | | | | |
Refunding RB (Southwestern Law School) Series 2021 | | | | |
Refunding RB (Southwestern Law School) Series 2021 | | | | |
Solid Waste Disposal Refunding RB Series 2021A | | | | |
Special Tax RB (Bold Program) Series 2023B | | | | |
Sr RB (Caritas Projects) Series 2023A | | | | |
California Pollution Control Financing Auth |
Solid Waste Disposal RB (Republic Services Inc) Series 2017 | | | | |
California Public Finance Auth |
RB (Henry Mayo Newhall Hospital) Series 2017 | | | | |
RB (Henry Mayo Newhall Hospital) Series 2017 | | | | |
RB (Sharp Healthcare) Series 2017C | | | | |
California Public Works Board |
| | | | |
Lease Refunding RB Series 2022C | | | | |
California School Finance Auth |
School Facility RB (Kipp LA) Series 2017A | | | | |
School Facility RB (Kipp LA) Series 2017A | | | | |
|
| | | | |
| | | | |
California Statewide Communities Development Auth |
Hospital Refunding RB (Methodist Hospital of Southern California) Series 2018 | | | | |
Hospital Refunding RB (Methodist Hospital of Southern California) Series 2018 | | | | |
Insured Health Facility Refunding RB (Los Angeles Jewish Home for the Aging) Series 2019A | | | | |
Pollution Control Refunding RB (Southern California Edison) Series 2006C | | | | |
RB (Adventist Health System West) Series 2018A | | | | |
RB (Loma Linda Univ Medical Center) Series 2018A | | | | |
RB (Redlands Community Hospital) Series 2016 | | | | |
RB (Redlands Community Hospital) Series 2016 | | | | |
RB (Viamonte Sr Living 1) Series 2018A | | | | |
RB (Viamonte Sr Living 1) Series 2018A | | | | |
RB (Viamonte Sr Living 1) Series 2018A | | | | |
RB (Viamonte Sr Living 1) Series 2018A | | | | |
RB (Viamonte Sr Living 1) Series 2018A | | | | |
Refunding RB (CHF-Irvine) Series 2016 | | | | |
Schwab Municipal Bond Funds | Semiannual Report35
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Refunding RB (CHF-Irvine) Series 2016 | | | | |
Refunding RB (Odd Fellows Home) Series 2023A | | | | |
Salinas Transportation Revenue COPs Series 2018B | | | | |
Salinas Transportation Revenue COPs Series 2018B | | | | |
California Statewide Communities Development Auth District 2021-02 |
Special Tax Bonds Series 2023 | | | | |
Cathedral City Successor Redevelopment Agency |
Sub Tax Allocation Refunding RB Series 2021C | | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
|
Wastewater Refunding RB Series 2015 | | | | |
|
| | | | |
|
GO Refunding Bonds Series 2016F | | | | |
GO Refunding Bonds Series 2016F | | | | |
GO Refunding Bonds Series 2016F | | | | |
|
| | | | |
|
Water Revenue COP Series 2019 | | | | |
Water Revenue COP Series 2019 | | | | |
Water Revenue COP Series 2019 | | | | |
|
| | | | |
Discovery Bay Public Financing Auth |
Water & Wastewater Enterprise RB Series 2022 | | | | |
East Bay Municipal Utility District |
Wastewater System RB Series 2024A | | | | |
Water System Refunding RB Series 2015A | | | | |
|
GO Refunding Bonds Series 2013 | | | | |
Foothill Eastern Transportation Corridor Agency |
Toll Road Refunding RB Series 2013A | | | | |
Toll Road Sr Lien Refunding RB Series 2021A | | | | |
Fresno Jt Power Finance Auth |
Lease Refunding RB Series 2017A | | | | |
Lease Refunding RB Series 2017A | | | | |
|
| | | | |
| | | | |
Golden West Schools Financing Auth |
GO RB (Rowland USD) Series 2005 | | | | |
36Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Refunding COP Series 2014A | | | | |
Refunding RB Series 2023A | | | | |
Refunding RB Series 2023A | | | | |
Greenfield Redevelopment Agency |
Tax Allocation Refunding Bonds Series 2016 | | | | |
Tax Allocation Refunding Bonds Series 2016 | | | | |
|
| | | | |
Hastings Campus Housing Financing Auth |
Campus Housing RB Series 2020A | | | | |
Hastings College of the Law |
Refunding Bonds Series 2017 | | | | |
Refunding Bonds Series 2017 | | | | |
Refunding Bonds Series 2017 | | | | |
|
| | | | |
Independent Cities Finance Auth |
Mobile Home Park Refunding RB (Union City Tropics) Series 2019 | | | | |
Mobile Home Park Refunding RB (Union City Tropics) Series 2019 | | | | |
Mobile Home Park Refunding RB (Union City Tropics) Series 2019 | | | | |
Indian Wells Successor Redevelopment Agency |
Consolidated Whitewater Redevelopment Sub Tax Allocation Refunding Bonds Series 2015A | | | | |
Inglewood Successor Redevelopment Agency |
Sub Lien Tax Allocation RB Series 2017A | | | | |
|
| | | | |
| | | | |
Irvine Facilities Financing Auth |
| | | | |
|
| | | | |
Kern Cnty Water Agency Improvement District #4 |
Refunding RB Series 2016A | | | | |
|
| | | | |
|
GO Refunding Bonds Series 2019 | | | | |
GO Refunding Bonds Series 2019 | | | | |
Lancaster Redevelopment Agency |
Tax Allocation Refunding Bonds Series 2017 | | | | |
Tax Allocation Refunding Bonds Series 2017 | | | | |
Livermore Valley Joint USD |
| | | | |
|
GO Refunding Bonds Series 2015F | | | | |
|
Sr Airport RB Series 2022C | | | | |
|
GO Refunding Bonds Series 2016 | | | | |
Schwab Municipal Bond Funds | Semiannual Report37
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Wastewater System RB Series 2015A | | | | |
Los Angeles Cnty Metropolitan Transportation Auth |
Sr Sales Tax Refunding RB Series 2014A | | | | |
Los Angeles Cnty Redevelopment Refunding Auth |
Tax Allocation Refunding RB (South Gate) Series 2014A | | | | |
Los Angeles Cnty Sanitation Districts Financing Auth |
Sub RB (District #14) Series 2015A | | | | |
Los Angeles Dept of Airports |
| | | | |
Sr Refunding RB Series 2018B | | | | |
| | | | |
Sub Refunding RB Series 2021A | | | | |
Sub Refunding RB Series 2023A | | | | |
Los Angeles Dept of Water & Power |
Power System RB Series 2001B3 | | | | |
Power System RB Series 2015A | | | | |
Water System RB Series 2014A | | | | |
Los Angeles Development Auth |
M/F Housing RB Series 2022F | | | | |
|
Refunding RB Series 2015A | | | | |
Los Angeles Municipal Improvement Corp |
| | | | |
|
| | | | |
| | | | |
| | | | |
Los Osos Community Facilities Wastewater Assessment District #1 |
Limited Obligation Refunding Bonds Series 2019 | | | | |
Limited Obligation Refunding Bonds Series 2019 | | | | |
Madera Irrigation District |
Water Refunding RB Series 2015 | | | | |
|
GO Refunding Bonds Series 2015 | | | | |
Modesto Irrigation District Financing Auth |
Electric System RB Series 2015A | | | | |
Electric System RB Series 2015A | | | | |
Northern California Energy Auth |
Commodity Supply RB Series 2018 | | | | |
|
Special Tax Refunding Bonds Series 2020 | | | | |
|
GO Refunding Bonds Series 2015A | | | | |
|
| | | | |
| | | | |
| | | | |
38Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Oakley Successor Redevelopment Agency |
Tax Allocation Refunding Bonds Series 2018 | | | | |
Tax Allocation Refunding Bonds Series 2018 | | | | |
Tax Allocation Refunding Bonds Series 2018 | | | | |
Tax Allocation Refunding Bonds Series 2018 | | | | |
Oceanside Successor Redevelopment Agency |
Tax Allocation Refunding Bonds Series 2015A | | | | |
|
| | | | |
|
| | | | |
| | | | |
|
Lease Refunding RB Series 2018 | | | | |
Lease Refunding RB Series 2018 | | | | |
Lease Refunding RB Series 2018 | | | | |
|
Wastewater Refunding RB Series 2014 | | | | |
|
| | | | |
| | | | |
| | | | |
|
Wastewater RB Series 2017 | | | | |
|
| | | | |
|
| | | | |
|
Refunding COP Series 2015A | | | | |
|
| | | | |
|
| | | | |
| | | | |
Pico Rivera Public Financing Auth |
Lease Refunding RB Series 2016 | | | | |
Lease Refunding RB Series 2016 | | | | |
|
| | | | |
|
GO Refunding Bonds Series 2002A | | | | |
|
Intermediate Lien Refunding RB Series 2021H | | | | |
Intermediate Lien Refunding RB Series 2021H | | | | |
Refunding RB Series 2017D | | | | |
|
| | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report39
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Water Refunding RB Series 2017 | | | | |
Regents of the University of California |
Medical Center Pooled RB Series 2022P | | | | |
Rialto Public Financing Auth |
| | | | |
| | | | |
| | | | |
Richmond California Redevelopment Agency |
Refunding RB Series 2021A | | | | |
Refunding RB Series 2021A | | | | |
|
Lease Refunding RB Series 2015A | | | | |
Riverside Cnty Transportation Commission |
Sr Lien Toll Refunding RB Series 2021B1 | | | | |
Rosedale-Rio Bravo Water Storage District |
Refunding RB Series 2020A | | | | |
Refunding RB Series 2020A | | | | |
Ross Valley Public Financing Auth |
RB (Marin Cnty Sanitary District #1) Series 2013 | | | | |
RB (Marin Cnty Sanitary District #1) Series 2013 | | | | |
Sacramento Area Flood Control Agency |
Consolidated Capital Assessment District No 2 Bonds Series 2016A | | | | |
|
Airport System Sr Refunding RB Series 2016A | | | | |
Refunding COP Series 2020 | | | | |
Sacramento Cnty Sanitation District Financing Auth |
| | | | |
|
| | | | |
San Diego Assoc of Governments |
Capital Grant Receipts RB (Mid Coast Corridor Transit) Series 2019A | | | | |
|
GO Refunding Bonds Series 2024 | | | | |
GO Refunding Bonds Series 2024 | | | | |
|
RB (Sanford Burnham Institute) Series 2015A | | | | |
RB (Sanford Burnham Institute) Series 2015A | | | | |
RB (Sanford Burnham Institute) Series 2015A | | | | |
San Diego Cnty Regional Airport Auth |
| | | | |
Sr Airport RB Series 2023B | | | | |
Sub Airport RB Series 2017B | | | | |
San Diego Unified Port District |
Refunding RB Series 2013A | | | | |
|
| | | | |
San Francisco Airport Commission |
| | | | |
| | | | |
40Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
| | | | |
| | | | |
| | | | |
Refunding RB 2nd Series 2020A | | | | |
Refunding RB 2nd Series 2023C | | | | |
San Francisco Redevelopment Agency |
Special Tax Refunding Bonds (Mission Bay South) Series 2023 | | | | |
Special Tax Refunding Bonds (Mission Bay South) Series 2023 | | | | |
San Francisco Successor Redevelopment Agency |
Subordinate Tax Allocation Refunding Bonds Series 2014C | | | | |
Subordinate Tax Allocation Refunding Bonds Series 2014C | | | | |
Subordinate Tax Allocation Refunding Bonds Series 2014C | | | | |
|
| | | | |
| | | | |
San Joaquin Hills Transportation Corridor Agency Toll |
Toll Road Sr Lien Refunding RB Series 2021A | | | | |
|
| | | | |
| | | | |
| | | | |
San Mateo Foster City Public Finance Auth |
| | | | |
Santa Cruz Cnty Capital Financing Auth |
| | | | |
| | | | |
| | | | |
| | | | |
Santa Monica Public Financing Auth |
| | | | |
Sierra View Healthcare District |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
South San Francisco Public Facilities Auth |
| | | | |
|
| | | | |
Southern California Metropolitan Water District |
Water Refunding RB Series 2016A | | | | |
Southern California Public Power Auth |
RB (Apex Power) Series 2014A | | | | |
Refunding RB (Windy Point/Windy Flats) Series 2023-1 | | | | |
Refunding RB (Windy Point/Windy Flats) Series 2023-1 | | | | |
|
Natural Gas Refunding RB Series 2019 | | | | |
Natural Gas Refunding RB Series 2019 | | | | |
Schwab Municipal Bond Funds | Semiannual Report41
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Natural Gas Refunding RB Series 2019 | | | | |
Natural Gas Refunding RB Series 2019 | | | | |
Tobacco Securitization Auth of Northern California |
Sr Refunding Bonds (Sacramento Cnty Tobacco Corp) Series 2021A1 | | | | |
Truckee Donner Public Utility District |
Water System Refunding RB Series 2015 | | | | |
Water System Refunding RB Series 2015 | | | | |
Water System Revenue COP Series 2022A | | | | |
|
| | | | |
Limited Project RB Series 2017M | | | | |
|
| | | | |
|
Electric System RB Series 2021A | | | | |
|
| | | | |
|
| | | | |
|
GO Refunding Bonds Series 2016B | | | | |
GO Refunding Bonds Series 2016B | | | | |
GO Refunding Bonds Series 2016B | | | | |
GO Refunding Bonds Series 2016B | | | | |
| | | | |
|
|
Refunding RB Series 2022A | | | | |
Refunding RB Series 2022A | | | | |
|
Water & Wastewater System RB Series 2016 | | | | |
| | | | |
|
Puerto Rico Industrial, Tourist, Educational, Medical & Environmental Control Facilities Financing Auth |
Hospital Refunding RB Series 2021 | | | | |
Hospital Refunding RB Series 2021 | | | | |
Hospital Refunding RB Series 2021 | | | | |
Hospital Refunding RB Series 2021 | | | | |
42Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Puerto Rico Sales Tax Financing Corp |
Restructured Sales Tax Bonds Series 2019A1 | | | | |
| | | | |
Total Municipal Securities
(Cost $432,119,902) | |
Total Investments in Securities
(Cost $432,119,902) | |
| The effective maturity may be shorter than the final maturity shown because the security is subject to a put, demand or call feature. |
| Step up bond that pays an initial coupon rate for a set period and increased coupon rates at one or more preset intervals. Rate shown is as of period end. |
| |
| Bond currently pays a fixed coupon rate and will be remarketed at a to be determined rate at the end of the current fixed rate term. |
| Credit-enhanced or liquidity-enhanced. |
| VRDN is a municipal security which allows holders to sell their security through a put or tender feature, at par value plus accrued interest. The interest rate resets on a periodic basis, the majority of which are weekly but may be daily or monthly. Unless a reference rate and spread is shown parenthetically, the Remarketing Agent, generally a dealer, determines the interest rate for the security at each interest rate reset date. The rate is typically based on the SIFMA Municipal Swap Index. |
| Security or a portion of the security purchased on a delayed-delivery or when-issued basis. |
| |
| Community college district |
| Certificate of participation |
| |
| |
| |
| |
| |
| Securities Industry and Financial Markets Association. The SIFMA Municipal Swap Index is a market index comprised of high-grade 7-day tax-exempt Variable Rate Demand Obligations with certain characteristics. |
| |
| Union high school district |
| |
| Variable rate demand note |
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
| | | | |
| | | | |
| | | | |
| As categorized in the Portfolio Holdings. |
Schwab Municipal Bond Funds | Semiannual Report43
Schwab California Tax-Free Bond Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
|
Investments in securities, at value - unaffiliated (cost $432,119,902) | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
Investments bought - delayed-delivery | | |
Distributions to shareholders | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
Capital received from investors | | |
| | |
| | |
44Schwab Municipal Bond Funds | Semiannual Report
Schwab California Tax-Free Bond Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
|
Interest received from securities - unaffiliated | | |
|
|
Investment adviser and administrator fees | | |
| | |
Portfolio accounting fees | | |
| | |
| | |
Independent trustees’ fees | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
Schwab Municipal Bond Funds | Semiannual Report45
Schwab California Tax-Free Bond Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
|
| | |
| | | |
| | | |
Net change in unrealized appreciation (depreciation) | | | |
Increase in net assets resulting from operations | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS |
| | | |
TRANSACTIONS IN FUND SHARES |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net transactions in fund shares | | | | | |
|
SHARES OUTSTANDING AND NET ASSETS |
| | |
| | | | | |
| | | | | |
Total increase (decrease) | | | | | |
| | | | | |
46Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Financial Statements
| | | | | | | |
|
Net asset value at beginning of period | | | | | | | |
Income (loss) from investment operations: | | | | | | | |
Net investment income (loss)3 | | | | | | | |
Net realized and unrealized gains (losses) | | | | | | | |
Total from investment operations | | | | | | | |
| | | | | | | |
Distributions from net investment income | | | | | | | |
Distributions from net realized gains | | | | | | | |
| | | | | | | |
| | | | | | | |
Net asset value at end of period | | | | | | | |
| | | | | | | |
|
Ratios to average net assets: | | | | | | | |
| | | | | | | |
| | | | | | | |
Net investment income (loss) | | | | | | | |
| | | | | | | |
Net assets, end of period (x 1,000) | | | | | | | |
| |
| Effective July 1, 2021, the Schwab High Yield Municipal Bond Fund changed its name to Schwab Opportunistic Municipal Bond Fund. |
| Effective August 10, 2020, the Wasmer Schroeder High Yield Municipal Fund was reorganized into the Schwab Opportunistic Municipal Bond Fund (formerly, Schwab High Yield Municipal Bond Fund), which commenced operations on that day. The Financial Highlights above present the shares of the Wasmer Schroeder High Yield Municipal Fund prior to the acquisition date of August 10, 2020, and Schwab Opportunistic Municipal Bond Fund subsequent to that date. |
| Calculated based on the average shares outstanding during the period. |
| Includes a special payment of past due interest income received from defaulted securities. The per share effect on net investment income and distributions from net investment income was $0.27 and ($0.27), respectively, and effect on net investment income to average net assets was 2.77% (see financial note 2(d) for additional information). |
| Effective July 1, 2021, redemption fees were eliminated. |
| Amount is less than $0.01 per share. |
| |
| |
| Ratio includes less than 0.005% of non-routine proxy expenses. |
| Effective July 1, 2021, the net operating expense limitation was lowered from 0.60% to 0.50%. The ratio presented for the year ended August 31, 2021, is a blended ratio. |
| Effective August 10, 2020, the net operating expense limitation was lowered from 0.75% to 0.60%. The ratio presented for the period ended August 31, 2020, is a blended ratio. |
Schwab Municipal Bond Funds | Semiannual Report47
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited)
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the U.S. Securities and Exchange Commission (SEC) for the first and third quarters of each fiscal year on Form N-PORT Part F. The fund’s Form N-PORT Part F is available on the SEC’s website at www.sec.gov. You can also obtain this information at no cost on the fund’s website at www.schwabassetmanagement.com/schwabfunds_prospectus, by calling 1-866-414-6349, or by sending an email request to orders@mysummaryprospectus.com. The fund also makes available its complete schedule of portfolio holdings 15 to 20 days after the end of the month on the fund’s website.
For fixed rate securities, the rate shown is the interest rate (the rate established when the security was issued). For variable rate securities, the rate shown is the rate as of the report date based on each security’s rate reset date. The reference rate and spread used is shown parenthetically in the security description, if available; if not, the reference rate is described in a footnote. The maturity date shown for all the securities is the final legal maturity.
ISSUER TYPE OF SECURITY, SERIES | | | | |
MUNICIPAL SECURITIES 104.8% OF NET ASSETS |
|
Black Belt Energy Gas District |
| | | | |
Gas Supply RB Series 2022D1 | | | | |
Energy Southeast Cooperative District |
Energy Supply RB Series 2023B1 | | | | |
|
| | | | |
| | | | |
|
|
| | | | |
La Paz Cnty Industrial Development Auth |
Education Facility Lease RB (Harmony Public Schools) Series 2018A | | | | |
| | | | |
|
|
| | | | |
California Community Choice Financing Auth |
RB (Deutsche Bank) Series 2023C | | | | |
| | | | |
California Educational Facilities Auth |
RB (St Marys College) Series 2023A | | | | |
California Health Facilities Financing Auth |
RB (Episcopal Communities & Services) Series 2024B | | | | |
RB (Kaiser Permanente) Series 2017A2 | | | | |
California Municipal Finance Auth |
Refunding RB (Eisenhower Medical Center) Series 2017B | | | | |
California Public Finance Auth |
RB (Henry Mayo Newhall Hospital) Series 2021A | | | | |
|
| | | | |
East Bay Municipal Utility District |
Wastewater System RB Series 2024A | | | | |
48Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
San Diego Cnty Regional Airport Auth |
Sr Airport RB Series 2023B | | | | |
Sub Airport RB Series 2021B | | | | |
| | | | |
|
Colorado Educational & Cultural Facilities Auth |
Charter School RB (Loveland Classical Schools) Series 2023 | | | | |
Colorado Health Facilities Auth |
RB (CommonSpirit Health) Series 2019A1 | | | | |
RB (CommonSpirit Health) Series 2019A1 | | | | |
RB (Intermountain Healthcare) Series 2022A | | | | |
Refunding RB (Intermountain Healthcare) Series 2019A | | | | |
|
Airport System RB Series 2022A | | | | |
Airport System Sub RB Series 2023B | | | | |
Whispering Pines Metropolitan District #1 |
LT GO Refunding Bonds Series 2023 | | | | |
| | | | |
|
|
| | | | |
| | | | |
Connecticut Health & Educational Facilities Auth |
RB (Connecticut Children’s Medical Center) Series E | | | | |
| | | | |
DISTRICT OF COLUMBIA 0.5% |
Metropolitan Washington Airports Auth |
Sr Lien Refunding RB (Dulles Metrorail) Series 2019A | | | | |
|
Florida Development Finance Corp |
Healthcare Facilities RB (Tampa General Hospital) Series 2024A | | | | |
|
| | | | |
|
Consolidated Utility RB Series 2022 | | | | |
Lee Cnty Industrial Development Auth |
Healthcare Facilities Improvement RB (Shell Point Alliance) Series 2019 | | | | |
|
| | | | |
|
RB (John Knox Village) Series 2021A | | | | |
|
Hospital RB (H Lee Moffitt Cancer Center) Series 2020B | | | | |
Revenue & Refunding Bonds (Univ of Tampa) Series 2020A | | | | |
Schwab Municipal Bond Funds | Semiannual Report49
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Village Community Dev Dist. No.15 |
| | | | |
| | | | |
|
Columbia Cnty Hospital Auth |
Revenue Anticipation Certificates (Wellstar Health System) Series 2023A | | | | |
Main Street Natural Gas Inc |
Gas Supply RB Series 2023D | | | | |
| | | | |
|
|
Water & Wastewater System Refunding RB Series 2014A | | | | |
|
|
Airport System RB Series 2020A | | | | |
Honolulu City & Cnty Board |
Water System RB Series 2022A | | | | |
| | | | |
|
Idaho Housing & Finance Assoc |
Facilities RB (White Pine Charter School) Series 2023A | | | | |
Facilities RB (White Pine Charter School) Series 2023A | | | | |
| | | | |
|
|
2nd Lien Water Refunding RB Series 2023B | | | | |
| | | | |
| | | | |
Chicago Board of Education |
ULT GO Bonds Series 2023A | | | | |
|
LT GO Refunding Bonds Series 2023 | | | | |
|
| | | | |
| | | | |
| | | | |
| | | | |
|
Refunding RB (Northwestern Memorial Healthcare) Series 2021A | | | | |
Illinois Toll Highway Auth |
| | | | |
| | | | |
50Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
Metropolitan Pier & Exposition Auth |
Refunding Bonds Series 2010B-1 | | | | |
| | | | |
|
|
Health Facilities RB (UnityPoint Health) Series 2014C | | | | |
|
Kentucky Public Energy Auth |
Gas Supply RB (Morgan Stanley) Series 2019A1 | | | | |
|
Louisiana Housing Corp M/F Revenue |
S/F Mortgage RB Series 2023C | | | | |
Louisiana Public Facilities Auth |
RB (Loyola Univ) Series 2023A | | | | |
Louisiana Stadium & Exposition District |
| | | | |
|
Sewerage Service RB Series 2015 | | | | |
| | | | |
|
Maine Health & Educational Facilities Auth |
RB (MaineHealth) Series 2023B | | | | |
|
Maryland Economic Development Corp |
Refunding RB (Transportation Facilities) Series 2017A | | | | |
Maryland Health & Higher Educational Facilities Auth |
RB (Frederick Health System) Series 2020 | | | | |
RB (Frederick Health System) Series 2023 | | | | |
| | | | |
|
Massachusetts Development Finance Agency |
RB (Boston Medical Center) Series 2023G | | | | |
RB (Emerson College) Series 2018 | | | | |
| | | | |
|
|
| | | | |
|
|
| | | | |
Schwab Municipal Bond Funds | Semiannual Report51
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
| | | | |
South Central Minnesota Multi-Cnty Hsg & Redevelopment Auth |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
Pooled Housing Development RB Series 1993 | | | | |
| | | | |
|
|
Airport Special Obligation Bonds Series 2020A | | | | |
St Louis Board of Education |
| | | | |
| | | | |
|
|
Hospital Refunding RB (Carson Tahoe Regional Healthcare) Series 2017 | | | | |
|
Airport System Jr Lien Sub RB Series 2021B | | | | |
|
| | | | |
Nevada Dept of Business & Industry |
RB (Brightline West Passenger Rail) Series 2020A | | | | |
| | | | |
|
New Jersey Economic Development Auth |
School Facilities Construction Refunding Bonds Series 2023RRR | | | | |
State Lease RB Series 2017B | | | | |
New Jersey Transportation Trust Fund Auth |
Transportation Bonds Series 2023BB | | | | |
Transportation System Bonds Series 2019A | | | | |
Transportation System Bonds Series 2022A | | | | |
Transportation System RB Series 2021A | | | | |
|
| | | | |
Tobacco Settlement Financing Corp |
Tobacco Settlement Bonds Series 2018A | | | | |
| | | | |
|
Metropolitan Transportation Auth |
Transportation RB Series 2020C1 | | | | |
52Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
GO Bonds Fiscal 2018 Series B4 | | | | |
GO Bonds Fiscal 2021 Series F1 | | | | |
GO Bonds Fiscal 2022 Series A1 | | | | |
GO Bonds Fiscal 2022 Series D1 | | | | |
New York City Transitional Finance Auth |
Building Aid RB Fiscal 2021 Series S1 | | | | |
Future Tax Secured Sub Bonds Fiscal 2020 Series A2 | | | | |
Future Tax Secured Sub Bonds Fiscal 2022 Series C1 | | | | |
Future Tax Secured Sub Bonds Fiscal 2023 Series A1 | | | | |
Future Tax Secured Sub Bonds Fiscal 2024 Series B | | | | |
Future Tax Secured Sub RB Fiscal 2014 Series B3 | | | | |
New York Liberty Development Corp |
RB (Goldman Sachs Headquarters) Series 2005 | | | | |
New York State Dormitory Auth |
RB (New York Institute of Technology) Series 2024 | | | | |
RB (New York Institute of Technology) Series 2024 | | | | |
State Personal Income Tax RB Series 2017A | | | | |
New York Transportation Development Corp |
Special Facilities RB (JFK Airport - New Terminal 1) Series 2023 | | | | |
Triborough Bridge & Tunnel Auth |
Sales Tax RB Series 2023A | | | | |
Westchester Cnty Local Development Corp |
RB (New York Blood Center) Series 2024 | | | | |
| | | | |
|
Greater Asheville Regional Airport Auth |
Airport System RB Series 2022A | | | | |
North Carolina Medical Care Commission Retirement Facilities |
Retirement Facilities 1st Mortgage RB (United Methodist Retirement Homes) Series 2024A | | | | |
| | | | |
|
|
ULT GO Bonds Series 2017A | | | | |
|
Oklahoma Development Finance Auth |
Health System RB (OU Medicine) Series 2018B | | | | |
|
|
| | | | |
|
| | | | |
|
| | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report53
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
Commonwealth Financing Auth |
Tobacco Settlement RB Series 2018 | | | | |
Pennsylvania State Turnpike Commission |
| | | | |
| | | | |
|
Puerto Rico Sales Tax Financing Corp |
Restructured Sales Tax Bonds Series 2019A1 | | | | |
|
Rhode Island Health & Educational Building Corp |
Hospital Financing RB (Lifespan Obligated Group) Series 2024 | | | | |
Hospital Financing RB (Lifespan Obligated Group) Series 2024 | | | | |
| | | | |
|
South Carolina Public Service Auth |
| | | | |
Refunding RB Series 2016B | | | | |
| | | | |
|
Chattanooga Health Educational & Housing Facilities Board |
Student Housing Refunding RB (CDFI Univ of Tennessee at Chattanooga) Series 2015 | | | | |
Metro Government of Nashville & Davidson Cnty Health & Educational Facilities Board |
Educational Facilities RB (Belmont Univ) Series 2023 | | | | |
Metropolitan Nashville Airport Auth |
| | | | |
Tennessee Housing Development Agency Home Ownership |
Residential Finance Program Bonds Series 2023-3A | | | | |
| | | | |
|
|
| | | | |
|
| | | | |
Sr Lien Special Tax RB (Dallas Fair Park) Series 2023 | | | | |
El Paso Cnty Hospital District |
GO Refunding Bonds Series 2017 | | | | |
GO Refunding Bonds Series 2017 | | | | |
|
| | | | |
| | | | |
|
Electric Utility System Refunding RB Series 2023 | | | | |
54Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
ULT GO Bonds Series 2023A | | | | |
Greater Texoma Utility Auth |
| | | | |
|
Certificates of Obligation Series 2023 | | | | |
|
Water & Wastewater System RB Series 2018 | | | | |
|
Electric Light & Power System Refunding RB Series 2023 | | | | |
Martin Cnty Hospital District |
GO Refunding Bonds Series 2021 | | | | |
New Hope Cultural Educational Facilities Corp |
Education RB (Beta Academy) Series 2019A | | | | |
Newark Higher Education Finance Corp |
Education RB (Orenda) Series 2023A | | | | |
|
Electric & Gas Systems Refunding RB Series 2023B | | | | |
| | | | |
|
Tax & Waterworks & Sewer System GO RB Series 2023C | | | | |
Texas Municipal Gas Corp III |
Gas Supply Refunding RB Series 2021 | | | | |
Texas Transportation Corp |
Sr Lien RB (NTE Mobility Partners) Series 2023 | | | | |
| | | | |
|
|
| | | | |
| | | | |
|
General RB (Univ of Utah) Series 2022A | | | | |
| | | | |
|
Lynchburg Economic Development Auth |
Hospital Refunding RB (Centra Health) Series 2021 | | | | |
|
|
Water & Sewer Refunding RB Series 2023A | | | | |
Port Vancouver Washington |
| | | | |
Skagit Cnty Hospital District No 1 |
| | | | |
| | | | |
Schwab Municipal Bond Funds | Semiannual Report55
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
ISSUER TYPE OF SECURITY, SERIES | | | | |
|
West Virginia Hospital Finance Auth |
Hospital Revenue & Refunding Bonds (Vandalia Health) Series 2023B | | | | |
|
Wisconsin Health & Educational Facilities Auth |
RB (Fort HealthCare Inc) Series 2024A | | | | |
RB (Fort HealthCare Inc) Series 2024A | | | | |
RB (Woodland Hill Sr Housing) Series 2014 | | | | |
| | | | |
Total Municipal Securities
(Cost $56,693,057) | |
Total Investments in Securities
(Cost $56,693,057) | |
| The effective maturity may be shorter than the final maturity shown because the security is subject to a put, demand or call feature. |
| Security or a portion of the security purchased on a delayed-delivery or when-issued basis. |
| Credit-enhanced or liquidity-enhanced. |
| |
| The underlying properties were sold and the bond trustee collected sales proceeds from the underlying properties. A substantial distribution to bond holders occurred on April 14, 2023, with a residual distribution to be paid in 2025. Due to the sale of the underlying properties, accruals for interest were suspended. Previously, the securities were making semiannual distributions of variable amounts of cash flow. The residual distribution payment to be made to bond holders in 2025 consists of county tax levy deficit payments collected and to be collected by the bond trustee through the end of 2024 less trust operating, administration, and legal expenses in liquidating the trust. |
| Fair valued using significant unobservable inputs (see financial note 2(a), Securities for which no quoted value is available, for additional information). |
| VRDN is a municipal security which allows holders to sell their security through a put or tender feature, at par value plus accrued interest. The interest rate resets on a periodic basis, the majority of which are weekly but may be daily or monthly. Unless a reference rate and spread is shown parenthetically, the Remarketing Agent, generally a dealer, determines the interest rate for the security at each interest rate reset date. The rate is typically based on the SIFMA Municipal Swap Index. |
| Community college district |
| Certificate of participation |
| |
| Industrial development agency/authority |
| Independent school district |
| |
| |
| |
| |
| |
| Securities Industry and Financial Markets Association. The SIFMA Municipal Swap Index is a market index comprised of high-grade 7-day tax-exempt Variable Rate Demand Obligations with certain characteristics. |
| |
| Variable rate demand note |
56Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Portfolio Holdings as of February 29, 2024 (Unaudited) (continued)
The following is a summary of the inputs used to value the fund’s investments as of February 29, 2024 (see financial note 2(a) for additional information):
| QUOTED PRICES IN
ACTIVE MARKETS FOR
IDENTICAL ASSETS
(LEVEL 1) | OTHER SIGNIFICANT
OBSERVABLE INPUTS
(LEVEL 2) | SIGNIFICANT
UNOBSERVABLE INPUTS
(LEVEL 3) | |
| | | | |
| | | | |
| | | | |
| | | | |
| As categorized in the Portfolio Holdings. |
The following is a reconciliation of Level 3 investments for which significant unobservable inputs were used to determine fair value:
| | | | | | | NET CHANGE IN
UNREALIZED
APPRECIATION
(DEPRECIATION) | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
The Level 3 securities held are valued utilizing an evaluated price from a third-party vendor pricing service using significant unobservable inputs. A significant change in third-party pricing information may result in a lower or higher value for Level 3
investments (see financial note 2(a), Securities for which no quoted value is available, for additional information).
Schwab Municipal Bond Funds | Semiannual Report57
Schwab Opportunistic Municipal Bond Fund
Statement of Assets and Liabilities
As of February 29, 2024; unaudited
|
Investments in securities, at value - unaffiliated (cost $56,693,057) | | |
| | |
| | |
| | |
| | |
| | |
| | |
|
|
| | |
Investments bought - delayed-delivery | | |
Distributions to shareholders | | |
| | |
| | |
| | |
| | |
| | |
|
|
Capital received from investors | | |
| | |
| | |
58Schwab Municipal Bond Funds | Semiannual Report
Schwab Opportunistic Municipal Bond Fund
Statement of Operations
For the period September 1, 2023 through February 29, 2024; unaudited |
|
Interest received from securities - unaffiliated | | |
|
|
Investment adviser and administrator fees | | |
Portfolio accounting fees | | |
| | |
| | |
Independent trustees’ fees | | |
| | |
| | |
| | |
| | |
| | |
| | |
| | |
|
REALIZED AND UNREALIZED GAINS (LOSSES) |
Net realized losses on sales of securities - unaffiliated | | |
Net change in unrealized appreciation (depreciation) on securities - unaffiliated | | |
Net realized and unrealized gains | | |
Increase in net assets resulting from operations | | |
Schwab Municipal Bond Funds | Semiannual Report59
Schwab Opportunistic Municipal Bond Fund
Statement of Changes in Net Assets
For the current and prior report periods
Figures for the current period are unaudited
|
| | |
| | | |
| | | |
Net change in unrealized appreciation (depreciation) | | | |
Increase in net assets resulting from operations | | | |
|
DISTRIBUTIONS TO SHAREHOLDERS |
| | | |
TRANSACTIONS IN FUND SHARES |
| | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
Net transactions in fund shares | | | | | |
|
SHARES OUTSTANDING AND NET ASSETS |
| | |
| | | | | |
| | | | | |
Total increase (decrease) | | | | | |
| | | | | |
| Includes a special payment of past due interest income received from defaulted securities (see financial note 2(d) for additional information). |
60Schwab Municipal Bond Funds | Semiannual Report
Schwab Municipal Bond Funds
Financial Notes, unaudited
1. Business Structure of the Funds:
Each of the funds in this report is a series of Schwab Investments (the trust), a no-load, open-end management investment company. The trust is organized as a Massachusetts business trust and is registered under the Investment Company Act of 1940, as amended (the 1940 Act). The list below shows all the funds in the trust as of the end of the period, including the funds discussed in this report, which are highlighted:
|
Schwab Tax-Free Bond Fund | Schwab U.S. Aggregate Bond Index Fund |
Schwab California Tax-Free Bond Fund | Schwab Short-Term Bond Index Fund |
Schwab Opportunistic Municipal Bond Fund | |
Schwab Treasury Inflation Protected Securities Index Fund | Schwab Global Real Estate Fund |
Each fund in this report offers one share class. Shares are bought and sold at closing net asset value per share (NAV), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the funds’ Board of Trustees (the Board) may authorize the issuance of as many shares as necessary.
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. The "Fund Complex" includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust.
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).
Pursuant to Rule 2a-5 under the 1940 Act, the Board has designated authority to a Valuation Designee, the funds’ investment adviser, to make fair valuation determinations under adopted procedures, subject to Board oversight. The investment adviser has formed a Pricing Committee to administer the pricing and valuation of portfolio securities and other assets and liabilities as well as to ensure that prices used for internal purposes or provided by third parties reasonably reflect fair value. The Valuation Designee may utilize independent pricing services, quotations from securities and financial instrument dealers and other market sources to determine fair value.
Securities held in the funds’ portfolio are valued every business day. The following valuation policies and procedures are used by the Valuation Designee to value various types of securities:
• Bonds and notes: Fixed income investments are generally valued using an evaluated price at the mid-point of the bid/ask spread provided by an approved, independent pricing service (mid-price). To determine the evaluated mid-price, a pricing service may use a variety of techniques and inputs. Techniques may include, but are not limited to, spread models that calculate an investment-specific price relative to a benchmark or yield curve models that establish a price based on yields of comparable bonds along a range of maturities. Inputs differ by valuation approach and techniques, as appropriate, and examples of inputs may include, but are not limited to, interest rates, market conditions, comparable bonds, market trades, projected cash flows, credit reviews and issuer news.
• Short-term securities (60 days or less to maturity): Securities with remaining maturities of 60 days or less are generally valued at an evaluated price; however, such securities may be valued at their amortized cost if it approximates the security’s fair value.
• Securities for which no quoted value is available: The Valuation Designee has adopted procedures to fair value a fund’s securities when market prices are not “readily available” or are unreliable. For example, a security may be fair valued when it’s 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. Fair value determinations are made in good faith in accordance with adopted valuation procedures. The Valuation Designee considers a number of factors, including unobservable market inputs, when arriving at fair value. The Valuation Designee may employ methods such as the review of
Schwab Municipal Bond Funds | Semiannual Report61
Schwab Municipal Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
related or comparable assets or liabilities, related market activities, recent transactions, market multiples, book values, transactional back-testing, disposition analysis and other relevant information. 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.
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 methods 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 it is determined 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 the Valuation Designee’s 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 investments — Investments whose values are based on quoted market prices in active markets. These generally include active listed equities, mutual funds, exchange-traded funds (ETFs) and futures contracts. Mutual funds and ETFs are classified as Level 1 prices, without consideration to the classification level of the underlying securities held which could be Level 1, Level 2 or Level 3 in the fair value hierarchy.
• 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 Valuation Designee’s 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 readily available for these securities, one or more valuation methods are used for which sufficient and reliable data is available. The inputs used 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 in the absence of market information. Assumptions used due to the lack of observable inputs may significantly impact the resulting fair value and therefore a fund’s results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities.
The levels associated with valuing the funds’ investments as of February 29, 2024, are disclosed in each fund’s 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 value may change daily.
Delayed-Delivery Transactions and When-Issued Securities: The funds may transact in securities on a delayed-delivery or when-issued basis. Payment and delivery may take place after the customary settlement period for that security. The price of the underlying securities and the date when the securities will be delivered and paid for are fixed at the time the transaction is negotiated. The securities purchased on a delayed-delivery or when-issued basis are identified as such in the funds’ Portfolio Holdings, if any. The funds may receive compensation for interest forgone in the purchase of a delayed-delivery or when-issued
62Schwab Municipal Bond Funds | Semiannual Report
Schwab Municipal Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
security. Losses may arise due to changes in the value of the underlying securities or if the counterparty does not perform under the contract’s terms, or if the issuer does not issue the securities due to political, economic, or other factors. The funds comply with Rule 18f-4 under the 1940 Act, the funds operate as limited derivatives users, with respect to purchase commitments held within the funds, portfolio securities are no longer required to be segregated as collateral with a value at least equal to the amount of a purchase commitment and the funds’ exposure is monitored under a derivatives risk management program.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains and losses from security transactions are based on the identified costs of the securities involved.
When 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.
Interest income is recorded as it accrues. If a fund buys a debt security at a discount (less than face value) or a premium (more than face value), it amortizes premiums and accretes discounts from the purchase settlement date up to maturity. The fund then increases (in the case of discounts) or reduces (in the case of premiums) the income it records from the security. Certain securities may be callable (meaning that the issuer has the option to pay it off before its maturity date). The fund amortizes the premium and accretes the discount on each callable security to the security’s maturity date, except when the purchase price is higher than the call price at the security’s call date (in which case the premium is amortized to the call date). Debt securities may be placed on non-accrual status and set to accrue at a rate of interest less than the contractual coupon or have the interest receivable written off when the collection of all or a portion of interest has become doubtful.
The Schwab Opportunistic Municipal Bond Fund holds Southcentral Minnesota Multi-County Housing and Redevelopment Authority (Southcentral) bonds which were received in-kind by the Wasmer Schroeder High Yield Municipal Fund (predecessor fund) in 2014 when the predecessor fund commenced investment operations. The Southcentral bonds were purchased as distressed debt instruments in default (as the bonds were not making full payments of interest and principal when due at the time of purchase) prior to the transfer in-kind to the predecessor fund. During the period ended August 31, 2023, the underlying properties that represented collateral for the Southcentral bonds were sold; the proceeds from the sale of collateral were collected by the bond trustee which resulted in a distribution payment to bondholders. The fund received an aggregate distribution payment of $3,817,109 for past due interest coupons and principal payments. The distribution consisted of past due unpaid interest income of $1,116,060, and the fund’s shareholders received an income distribution payment of the past due interest income in April 2023 in the amount of $1,116,060 which represented $0.27 per share on record date.
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to more than one fund in the trusts generally are allocated among those funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds, except Schwab Opportunistic Municipal Bond Fund, declare distributions from net investment income, if any, every day they are open for business. These distributions, which are substantially equal to a fund’s net investment income for that day, are paid out to shareholders once a month. The Schwab Opportunistic Municipal Bond Fund declares and pays its dividends on the last business day of every month, based on its determination of net investment income, if any. The funds make distributions from net realized capital gains, if any, once a year. To receive a distribution, you must be a registered shareholder on the record date. Distributions are paid to shareholders on the payable date.
(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.
Schwab Municipal Bond Funds | Semiannual Report63
Schwab Municipal Bond Funds
Financial Notes, unaudited (continued)
2. Significant Accounting Policies (continued):
(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.
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.
Effective January 24, 2023, the U.S. Securities and Exchange Commission (SEC) adopted rule and form amendments to require mutual funds and ETFs to transmit concise and visually engaging streamlined annual and semiannual reports to shareholders that highlight key information deemed important for retail investors to assess and monitor their fund investments. Other information, including financial statements, will no longer appear in a streamlined shareholder report but must be available online, delivered free of charge upon request, and filed on a semiannual basis on Form N-CSR. The rule and form amendments have a compliance date of July 24, 2024. At this time, management is evaluating the impact of these rule and form amendment changes on the content of the current shareholder report and the newly created annual and semiannual streamlined shareholder reports.
3. Credit and Liquidity Enhancements:A portion of the funds’ investments are in securities with credit enhancements and/or liquidity enhancements from financial institutions or corporations. These enhancements are employed by the issuers of the securities to reduce credit risk and/or provide liquidity to the purchaser. At February 29, 2024, as a percentage of the total assets, 12% of the Schwab Tax-Free Bond Fund and 16% of the Schwab Opportunistic Municipal Bond Fund assets had credit and/or liquidity enhancements, with no single entity providing greater than 10%. Schwab California Tax-Free Bond Fund held less than 10% of total assets in these types of securities.
The funds invest primarily in investment-grade municipal bond securities. These investments may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below:
Market Risk. Financial markets rise and fall in response to a variety of factors, sometimes rapidly and unpredictably. Markets may be impacted by economic, political, regulatory and other conditions, including economic sanctions and other government actions. In addition, the occurrence of global events, such as war, terrorism, environmental disasters, natural disasters and epidemics, may also negatively affect the financial markets. As with any investment whose performance is tied to these markets, the value of an investment in a fund will fluctuate, which means that an investor could lose money over short or long periods.
Management Risk. As actively managed mutual funds, the funds are subject to the risk that their investment adviser will select investments or allocate assets in a manner that could cause a fund to underperform or otherwise not meet its investment objective. The funds’ investment adviser applies its own investment techniques and risk analyses in making investment decisions for each fund, but there can be no guarantee that they will produce the desired results.
Investment Style Risk. The funds are not designed to offer substantial capital appreciation. In exchange for its goal of capital preservation, a fund may offer lower long-term performance than stock investments or certain other types of bond investments. A fund’s emphasis on quality and preservation of capital also could cause it to underperform certain other types of bond investments, particularly those that take greater maturity and credit risks. At the same time, some of the funds’ investments may have greater risks than investments in some taxable bonds.
Municipal Securities Risk. The funds primarily invest in municipal securities whose interest, in the opinion of the issuers’ counsel, is exempt from federal income tax and from the AMT. Neither the investment adviser nor the funds guarantee that this opinion is correct, and there is no assurance that the Internal Revenue Service (IRS) will agree with such counsel’s opinion. If certain types of investments a fund buys as tax-exempt are later ruled to be taxable, a portion of the fund’s income could be taxable. To the extent
64Schwab Municipal Bond Funds | Semiannual Report
Schwab Municipal Bond Funds
Financial Notes, unaudited (continued)
4. Risk Factors (continued):
that a fund invests in municipal securities from a given state or geographic region, its share price and performance could be affected by local, state and regional factors, including erosion of the tax base and changes in the economic climate. In addition, many municipal securities are issued to finance specific projects (especially those relating to education, health care, transportation and utilities) and conditions in those sectors can affect the overall municipal market. National governmental actions, such as the elimination of tax-exempt status, or the reduction of financial support to municipalities, also could affect performance. Municipalities continue to experience difficulties in the current economic and political environment.
Interest Rate Risk. Interest rates rise and fall over time. As with any investment whose yield reflects current interest rates, a fund’s yield will change over time. During periods when interest rates are low, a fund’s yield (and total return) also may be low. Changes in interest rates also may affect a fund’s share price: a rise in interest rates generally causes a fund’s share price to fall. The longer a fund’s portfolio duration, the more sensitive to interest rate movements its share price is likely to be. Also, a change in a central bank’s monetary policy or economic conditions, among other things, may result in a change in interest rates, which could have sudden and unpredictable effects on the markets and significantly impact the value of fixed-income securities in which a fund invests. A sudden or unpredictable rise in interest rates may cause volatility and the value of fixed-income securities to decline.
Credit Risk. A decline in the credit quality of an issuer, guarantor or liquidity provider of a portfolio investment or a counterparty could cause the funds to lose money or underperform. The funds could lose money if, due to a decline in credit quality, the issuer, guarantor or liquidity provider of a portfolio investment or a counterparty fails to make, or is perceived as being unable or unwilling to make, timely principal or interest payments or otherwise honor its obligations.
Liquidity Risk. The funds may be unable to sell certain securities, such as illiquid securities, readily at a favorable time or price, or the funds may have to sell them at a loss.
High-Yield Risk. High-yield securities and unrated securities of similar credit quality (junk bonds) are subject to greater levels of credit and liquidity risks, and may be more volatile than higher-rated securities. High-yield securities are considered predominately speculative with respect to the issuer’s continuing ability to make principal and interest payments.
Prepayment and Extension Risk. Certain fixed-income securities are subject to the risk that the securities may be paid off earlier or later than expected, especially during periods of falling or rising interest rates, respectively. Prepayments of obligations could cause a fund to forgo future interest income on the portion of the security’s principal repaid early and force the fund to reinvest that money at the lower prevailing interest rates. Extensions of obligations could cause a fund to exhibit additional volatility and hold securities paying lower-than-market rates of interest. Either case could hurt a fund’s performance.
Derivatives Risk. Currently, the only type of derivatives the funds invest in is futures. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A fund’s use of futures involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk, credit risk, market risk and management risk, are discussed elsewhere in this section. A fund’s use of futures is also subject to lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable futures transactions may not be available in all circumstances for risk management or other purposes. Valuation risk is the risk that a particular future may be valued incorrectly. Correlation risk is the risk that changes in the value of the future may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of futures 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. However, these risks are less severe when a fund uses derivatives for hedging rather than to enhance the fund’s returns or as a substitute for a position or security. The use of derivatives that are subject to regulation by the Commodity Futures Trading Commission (CFTC) could cause a fund to become a commodity pool, which would require the fund to comply with certain CFTC rules. A fund’s use of derivatives also could create a risk of counterparty default under certain transactions, risks that the fund would need to liquidate portfolio positions when it may not be advantageous to do so in order to meet margin and payment obligations, and legal risks relating to insufficient documentation, insufficient capacity or authority of a counterparty, or legality or enforceability of a contract.
Distressed or Defaulted Securities Risk. Investments in defaulted securities and obligations of distressed issuers, including securities that are, or may be, involved in reorganizations or other financial restructurings, either out of court or in bankruptcy, involve substantial risks in addition to the risks of investing in high-yield debt securities. A fund’s share price may decline if the reorganization or restructuring is not completed as anticipated. A fund will generally not receive interest payments on the distressed securities and may incur costs to protect its investment. Repayment of defaulted securities and obligations of distressed issuers is subject to significant uncertainties. A fund could lose its entire investment in such securities.
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Financial Notes, unaudited (continued)
4. Risk Factors (continued):
Rule 144A Securities Risk. The market for Rule 144A securities typically is less active than the market for publicly-traded securities. Rule 144A securities carry the risk that the liquidity of these securities may become impaired, making it more difficult for a fund to sell these bonds.
Zero Coupon Securities Risk. While interest payments are not made on such securities, holders of such securities are deemed to have received income annually, notwithstanding that cash may not be received currently. Some of these securities may be subject to substantially greater price fluctuations during periods of changing market interest rates than are comparable securities that pay interest currently. Longer term zero coupon bonds are more exposed to interest rate risk than shorter term zero coupon bonds.
California State-Specific Risk. Because the Schwab California Tax-Free Bond Fund concentrates its investments in California municipal securities, the fund may be affected significantly by economic, regulatory, social or political developments affecting the ability of California issuers to pay interest or repay principal.
Taxable Investments Risk. A fund may invest a portion of its assets in securities that generate income that is not exempt from federal income tax and in securities whose interest is subject to the AMT. These investments could generate taxable income for shareholders.
Portfolio Turnover Risk. The Schwab Opportunistic Municipal Bond Fund buys and sells portfolio securities actively. This may cause the fund’s portfolio turnover rate and transaction costs to rise, which may lower the fund’s performance and may increase the likelihood of capital gains distributions.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
5. Affiliates and Affiliated Transactions:Charles Schwab Investment Management, Inc., dba Schwab Asset Management, a wholly owned subsidiary of The Charles Schwab Corporation, serves as each fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement between the investment adviser and the trust.
For its advisory and administrative services to the Schwab Tax-Free Bond Fund and Schwab California Tax-Free Bond Fund, the investment adviser is entitled to receive an annual fee, payable monthly, equal to 0.22% of each fund’s average daily net assets.
For its advisory and administrative services to the Schwab Opportunistic Municipal Bond Fund, the investment adviser is entitled to receive an annual fee, payable monthly, equal to 0.40% of the fund’s average daily net assets.
The Board has adopted a Shareholder Servicing Plan (the Plan) on behalf of the funds, except the Schwab Opportunistic Municipal Bond Fund. The Plan enables each fund to bear expenses relating to the provision by financial intermediaries, including Charles Schwab & Co., Inc. (Schwab), a broker-dealer affiliate of the investment adviser (together, service providers), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds.
Pursuant to the Plan, each fund’s shares, excluding the Schwab Opportunistic Municipal Bond Fund, are subject to an annual shareholder servicing fee up to 0.15%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab, as distributor of the funds (or, in the case of payments made to Schwab acting as a service provider, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described above without regard to whether the fee is more or less than the service provider’s actual cost of providing the services, and if more, such excess may be retained as profit by the service provider.
The investment adviser and its affiliates have made an additional agreement with the funds, for so long as the investment adviser serves as the investment adviser to the funds, in which the agreement may only be amended or terminated with the approval of the Board, to limit the total annual fund operating expenses charged, excluding interest, taxes and certain non-routine expenses (expense limitation) to 0.38% for Schwab Tax-Free Bond Fund and Schwab California Tax-Free Bond Fund, and 0.50% for the Schwab Opportunistic Municipal Bond Fund.
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Financial Notes, unaudited (continued)
5. Affiliates and Affiliated Transactions (continued):
Interfund Transactions
The funds may engage in direct transactions with certain other funds in the Fund Complex in accordance with procedures adopted by the Board pursuant to Rule 17a-7 under the 1940 Act. When one fund is seeking to sell a security that another is seeking to buy, an interfund transaction can allow both funds to benefit by reducing transaction costs. This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended February 29, 2024, the funds had no direct security transactions with other funds in the Fund Complex.
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 by the Board. The funds had no interfund borrowing or lending activity during the period.
The Board may include people who are officers and/or directors of the investment adviser 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 funds did not pay any of these interested persons for their services as trustees, but did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations. For information regarding the trustees, please refer to the Trustees and Officers table at the end of this report.
During the period, the funds were participants with other funds in the Fund Complex in a joint, syndicated, committed $1 billion line of credit (the Syndicated Credit Facility), which matured on September 28, 2023. On September 28, 2023, the Syndicated Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 26, 2024. Under the terms of the Syndicated Credit Facility, in addition to the interest charged on any borrowings by a fund, each fund 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 $400 million line of credit (the Uncommitted Credit Facility), with State Street Bank and Trust Company, which matured on September 28, 2023. On September 28, 2023, the Uncommitted Credit Facility was amended to run for a new 364 day period with the line of credit amount remaining unchanged, maturing on September 26, 2024. Under the terms of the Uncommitted Credit Facility, each fund pays interest on the amount a fund borrows. There were no borrowings by any of the funds 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 disclosed on each fund’s Statement of Operations, if any. The interest expense is determined based on a negotiated rate above the current Federal Funds Rate.
8. Purchases and Sales/Maturities of Investment Securities:For the period ended February 29, 2024, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
| | SALES/MATURITIES
OF SECURITIES |
Schwab Tax-Free Bond Fund | | |
Schwab California Tax-Free Bond Fund | | |
Schwab Opportunistic Municipal Bond Fund | | |
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Financial Notes, unaudited (continued)
As of February 29, 2024, the tax basis cost of the funds’ investments and gross unrealized appreciation and depreciation were as follows:
| | GROSS UNREALIZED
APPRECIATION | GROSS UNREALIZED
DEPRECIATION | NET UNREALIZED
APPRECIATION
(DEPRECIATION) |
Schwab Tax-Free Bond Fund | | | | |
Schwab California Tax-Free Bond Fund | | | | |
Schwab Opportunistic Municipal Bond Fund | | | | |
| | | | |
| | | | |
Capital loss carryforwards have no expiration and may be used to offset future realized capital gains for federal income tax purposes. As of August 31, 2023, the funds had capital loss carryforwards available as follows:
| |
Schwab Tax-Free Bond Fund | |
Schwab California Tax-Free Bond Fund | |
Schwab Opportunistic Municipal Bond Fund | |
The Schwab Opportunistic Municipal Bond Fund had a shareholder ownership change during the period ended August 31, 2023, which limits the availability of capital loss carryforwards to offset potential future capital gains. In addition to the available capital loss carryforward disclosed above for the Schwab Opportunistic Municipal Bond Fund, there are additional capital loss carryforwards as of the ownership change date in the amount of $2,847,176, the availability of those losses will be limited to $1,158,839 annually.
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, 2024. The tax basis components of distributions paid during the fiscal year ended August 31, 2023 were as follows:
| PRIOR FISCAL YEAR END DISTRIBUTIONS |
| | |
Schwab Tax-Free Bond Fund | | |
Schwab California Tax-Free Bond Fund | | |
Schwab Opportunistic Municipal Bond Fund | | |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences reflect the differing character of certain income items and net realized gains and losses for financial statement and tax purposes, and may result in reclassification among certain capital accounts in the financial statements. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
As of August 31, 2023, 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 each fund’s Statement of Operations. During the fiscal year ended August 31, 2023, the funds did not incur any interest or penalties.
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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Liquidity Risk Management Program (unaudited)
The funds have adopted and implemented a liquidity risk management program (the “program”) as required by Rule 22e-4 under the Investment Company Act of 1940, as amended. The funds’ Board of Trustees (the “Board”) has designated the funds’ investment adviser, Charles Schwab Investment Management, Inc., dba Schwab Asset Management, as the administrator of the program. Personnel of the investment adviser or its affiliates conduct the day-to-day operation of the program.
Under the program, the investment adviser manages a fund’s liquidity risk, which is the risk that the fund could not meet shareholder redemption requests without significant dilution of remaining shareholders’ interests in the fund. The program is reasonably designed to assess and manage a fund’s liquidity risk, taking into consideration the fund’s investment strategy and the liquidity of its portfolio investments during normal and reasonably foreseeable stressed conditions; its historical redemption history and shareholder concentrations; and its cash holdings and access to other funding sources, including the custodian overdraft facility and lines of credit. The investment adviser’s process of determining the degree of liquidity of each fund’s investments is supported by third-party liquidity assessment vendors.
The funds’ Board reviewed a report at its meeting held on September 19, 2023 prepared by the investment adviser regarding the operation and effectiveness of the program for the period June 1, 2022, through May 31, 2023, which included individual fund liquidity risk metrics. The report summarized the operation of the program and the information and factors considered by the investment adviser in assessing whether the program has been adequately and effectively implemented with respect to a fund. In addition, the investment adviser provided its assessment that the program had been operating effectively in managing each fund’s liquidity risk.
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Trustees and Officers
The tables below give information about the trustees and officers of Schwab Investments, 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 106 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 funds’ Statement of Additional Information, which is available free by calling 1-877-824-5615.
|
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 | |
Michael J. Beer 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 2022) | Retired. Director, President and Chief Executive Officer (Dec. 2016 – Sept. 2019), Principal Funds (investment management). | | Director (2016 – 2019), Principal Funds, Inc. |
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. | | |
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) | | | |
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) | | | Director (2004 – present), Corcept Therapeutics Incorporated Director (2009 – 2021), 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). | | |
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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 | |
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). | | |
J. Derek Penn 1957 Trustee (Trustee of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021) | Head of Equity Sales and Trading (2006 – 2018), BNY Mellon (financial services). | | |
|
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 | |
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) | Co-Chairman of the Board (July 2022 – present), Director and Chief Executive Officer (Oct. 2008 – present) and President (Feb. 2007 – Oct. 2021), The Charles Schwab Corporation; President and Chief Executive Officer (Oct. 2008 – Oct. 2021) and Director (May 2008 – Oct. 2021), Charles Schwab & Co., Inc.; Co-Chairman of the Board (July 2022 – present) and Director (Apr. 2006 – present), Charles Schwab Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (Nov. 2017 – present), Charles Schwab Premier Bank, SSB; Co-Chairman of the Board (July 2022 – present) and Director (July 2019 – present), Charles Schwab Trust Bank; Director (May 2008 – present), Chief Executive Officer (Aug. 2017 – present) and President (Aug. 2017 – Nov. 2021), Schwab Holdings, Inc.; Manager (Sept. 2023 – present), TD Ameritrade Holding LLC; Director (Oct. 2020 – Aug. 2023), TD Ameritrade Holding Corporation; Director (July 2016 – Oct. 2021), Charles Schwab Investment Management, Inc. | | Director (2008 – present), The Charles Schwab Corporation |
Richard A. Wurster2 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 2022) | President (Oct. 2021 – present) and Executive Vice President – Schwab Asset Management Solutions (Apr. 2019 – Oct. 2021), The Charles Schwab Corporation; President, Director (Oct. 2021 – present), Executive Vice President – Schwab Asset Management Solutions (July 2019 – Oct. 2021) and Senior Vice President – Advisory (May 2016 – July 2019), Charles Schwab & Co., Inc.; President (Nov. 2021 – present), Schwab Holdings, Inc.; Director (Oct. 2021 – present) and Chief Executive Officer (Nov. 2019 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Mar. 2018 – Oct. 2022), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (July 2016 – Apr. 2018) and President (Mar. 2017 – Apr. 2018), ThomasPartners, Inc.; Chief Executive Officer (July 2016 – Apr. 2018), Windhaven Investment Management, Inc. | | |
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|
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 |
Omar Aguilar 1970 Chief Executive Officer, President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2011) | Chief Executive Officer (Jan. 2022 – present), President (Oct. 2023 – present), (Chief Investment Officer (Apr. 2011 – present) and Senior Vice President (Apr. 2011 – Jan. 2022), Charles Schwab Investment Management, Inc.; Director, Chief Executive Officer and President (Oct. 2022 – present), Charles Schwab Investment Advisory, Inc.; Chief Executive Officer (Sept. 2023 – present), President (Oct. 2023 – present), Chief Investment Officer (June 2011 – present) and Vice President (June 2011 – Sept. 2023), Schwab Funds, Laudus Trust and Schwab ETFs. |
Mark Fischer 1970 Chief Operating Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2013) | Chief Operating Officer (Dec. 2020 – present) and Treasurer and Chief Financial Officer (Jan. 2016 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Chief Financial Officer (Mar. 2020 – present), Chief Operating Officer (Oct. 2023 – present), Managing Director (Mar. 2023 – present) and Vice President (Oct. 2013 – Mar. 2023), Charles Schwab Investment Management, Inc. |
Dana Smith 1965 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 2023) | Treasurer and Chief Financial Officer (Jan. 2023 – present) and Assistant Treasurer (Dec. 2015 – Dec. 2022), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Vice President (Mar. 2022 – Mar. 2023) and Director (Oct. 2015 – Mar. 2022), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Apr. 2022 – May 2022), Charles Schwab & Co., Inc. |
Patrick Cassidy 1964 Vice President and Chief Investment 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) | Chief Investment Officer (Oct. 2023 – present) and Vice President (Feb. 2018 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Managing Director (Mar. 2023 – present), Chief Investment Officer (Oct. 2023 – present), and Senior Vice President (Oct. 2012 – Mar. 2023), Charles Schwab Investment Management, Inc. |
William P. McMahon, Jr. 1972 Vice President and Chief Investment Officer (Officer of The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios, Schwab Strategic Trust and Laudus Trust since 2021) | Managing Director (Mar. 2023 – present), Senior Vice President (Jan. 2020 – Mar. 2023) and Chief Investment Officer (Jan. 2020 – present) Charles Schwab Investment Management, Inc.; Vice President and Chief Investment Officer (June 2021 – present), Schwab Funds, Laudus Trust and Schwab ETFs; Senior Vice President and Chief Investment Officer – ThomasPartners Strategies (Apr. 2018 – Dec. 2019), Charles Schwab Investment Advisory, Inc.; Senior Vice President and Chief Investment Officer (May 2001 – Apr. 2018), ThomasPartners, Inc. |
Catherine MacGregor 1964 Chief Legal Officer and Secretary, Schwab Funds and Schwab ETFs Chief Legal Officer, Vice President and Clerk, Laudus Trust (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) | Chief Legal Officer (Mar. 2022 – present), Managing Director (Mar. 2023 – present) and Vice President (Sept. 2005 – Mar. 2023), Charles Schwab Investment Management, Inc.; Managing Director (May 2022 – present) and Vice President (Aug. 2005 – May 2022), Charles Schwab & Co., Inc.; Vice President (Dec. 2005 – present) and Chief Legal Officer and Clerk (Mar. 2007 – present), Laudus Trust; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President (Nov. 2005 – Oct. 2021) and Assistant Secretary (June 2007 – Oct. 2021), Schwab Funds; Chief Legal Officer and Secretary (Oct. 2021 – present), Vice President and Assistant Secretary (Oct. 2009 – Oct. 2021), Schwab ETFs. |
1
Each Trustee shall hold office until the election and qualification of his or her successor, or until he or she dies, resigns or is removed. The retirement policy requires that each independent trustee retire by December 31 of the year in which the Trustee turns 74 or the Trustee’s twentieth year of service as an independent trustee on any trust in the Fund Complex, whichever occurs first.
2
Mr. Bettinger and Mr. Wurster are Interested Trustees. Mr. Bettinger and Mr. Wurster are Interested Trustees because each owns stock of The Charles Schwab Corporation (CSC), the parent company of Charles Schwab Investment Management, Inc., the investment adviser for the trusts in the Fund Complex, and is an employee of Charles Schwab & Co., Inc. (Schwab), the principal underwriter for The Charles Schwab Family of Funds, Schwab Investments, Schwab Capital Trust, Schwab Annuity Portfolios and Laudus Trust.
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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agency discount notes Notes issued by federal agencies—known as Government Sponsored Enterprises, or GSEs—at a discount to their value at maturity. An agency discount note is a short-term investment offering a high degree of credit quality.
Alternative Minimum Tax (AMT) A federal income tax designed to limit the extent to which high-income taxpayers (including individuals, estates, trusts and corporations) can benefit from certain deductions and exemptions. For example, some types of income that are exempt from regular federal income tax are not exempt from the AMT.
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset-backed securities Bond or other debt securities that represent ownership in a pool of assets such as credit card debt.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
average rate The average rate of interest paid annually by the fixed-income securities in a fund or portfolio.
Bloomberg California Municipal 3-15 Year Blend Index An index that measures the performance of U.S. tax exempt bonds issued in the State of California with maturities greater than or equal to three years and less than fifteen years that have par value of at least $7 million. The securities in the index must be denominated in U.S. dollars and must be fixed-rate. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. The securities in the index must be rated investment grade. The index is rebalanced at each month-end. At each rebalancing, cash is effectively reinvested into the return universe for the following month.
Bloomberg Municipal 3-15 Year Blend Index An index that measures the performance of U.S. tax exempt bonds with maturities greater than or equal to three years and less than fifteen years that have par value of at least $7 million. The securities in the index must be denominated in U.S. dollars and must be fixed-rate. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. The securities in the index must be rated investment grade. The index is rebalanced at each month-end. At each rebalancing, cash is effectively reinvested into the return universe for the following month.
Bloomberg Municipal Bond Index An index that measures the performance of U.S. tax exempt bonds that have par value of at least $7 million. The securities in the index must be denominated in U.S. dollars and must be fixed-rate. The index has four main sectors: state and local general obligation bonds, revenue bonds, insured bonds, and prerefunded bonds. The securities in the index must be rated investment grade. The index is rebalanced at each month-end. At each rebalancing, cash is effectively reinvested into the return universe for the following month.
bond A security representing a loan from the investor to the issuer. A bond typically pays interest at a fixed rate (the coupon rate) until a specified date (the maturity date), at which time the issuer returns the money borrowed (principal or face value) to the bondholder. Because of their structure, bonds are sometimes called “fixed-income securities” or “debt securities.”
An individual bond is subject to the credit risk of the issuer. Changes in interest rates can affect a bond’s market value prior to call or maturity. There is no guarantee that a bond’s yield to call or maturity will provide a positive return over the rate of inflation.
bond fund A bond fund is subject to the same credit, interest rate, and inflation risks as bonds. In addition, a bond fund incurs ongoing fees and expenses. A bond fund’s net asset value will fluctuate with the price of the underlying bonds and the portfolio turnover activity; return of principal is not guaranteed.
call An early repayment of a bond’s principal by the issuer, usually done because the issuer is able to refinance its bond debt at a lower rate.
call protection A term used in reference to a bond that cannot be called by the issuer before maturity, or at least for many years from the present date. A bond that offers call protection can more reliably be expected to provide a given yield over a given number of years than a bond that could be called (assuming both bonds are of the same credit quality).
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.
certificate of participation A municipal bond that is repaid from an annual budget appropriation rather than being backed by the full faith and credit of the issuer.
coupon, coupon rate The annual rate of interest paid until maturity by the issuer of a debt security.
credit-enhanced securities Securities that are backed by the credit of an entity other than the issuer (such as a financial institution). Credit enhancements, which can equal up to 100% of the security’s value, are designed to help lower the risk of default on a security and may also make the security more liquid.
Credit RatingsMost major bond issuers arrange with a recognized independent rating organization, such as Standard & Poor’s (S&P) or Moody’s Investors Service, to rate the creditworthiness of their bonds. The spectrum of these ratings is divided into two major categories: investment grade and below investment grade (sometimes called “junk bonds”). Bonds rated below investment grade range from those that are considered to have some vulnerability to default to those that appear on the brink of default or are in default.
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credit quality The capacity of an issuer to make its interest and principal payments. See chart below.
credit risk The risk that a bond issuer may be unable to pay interest or principal to its bondholders.
discount rate The implied rate on a debt security that does not pay interest but is bought at a discount and redeemed at face value when it matures.
duration A measure of an individual bond’s sensitivity to interest rates, expressed in years. Calculations of duration generally take into account the bond’s yield, interest payments, maturity date and call features.
weighted average duration A measure of the duration of all bonds in a fund’s portfolio, also expressed in years, based on the market value weighted average duration of each bond in the portfolio.
expense ratio The amount that is taken from a mutual fund’s assets each year to cover the fund’s 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.
general obligation bonds Municipal bonds that are secured by the issuer’s full faith and credit, which typically is backed by the power of the issuer to levy taxes.
interest Payments to bondholders (usually made twice a year) as compensation for loaning the bond principal to the issuer.
interest rate risk The risk that a bond’s value will fluctuate if market interest rates change or are expected to change. Bond prices tend to move in the opposite direction of interest rates: when interest rates rise, bond prices tend to fall.
liquidity-enhanced security A security that when tendered is paid from funds advanced by an entity other than the issuer (such as a large financial institution). Liquidity enhancements are often used on variable-rate securities where the portfolio manager has an option to tender the securities prior to their final maturity.
market risk Those elements of risk that are common to all securities in an asset class, and therefore cannot be significantly reduced by diversification within the asset class. Also known as “systemic risk.”
maturity The maturity of a bond will generally be determined using a portfolio security’s final maturity date (date on which the final principal payment of a bond is scheduled to be paid); however, for securitized products, such as mortgage-backed securities and certain other asset-backed securities, maturity will be determined on an average life basis (weighted average time to receipt of all principal payments) by the investment adviser. Because pre-payment rates of individual mortgage pools vary widely, the average life of a particular pool cannot be predicted precisely. For securities with embedded demand features, such as puts or calls, either the demand date or the final maturity date will be used depending on interest rates, yields and other market conditions. The weighted average maturity (WAM) of a fund is dollar-weighted based upon the market value of a fund’s securities at the time of the calculation.
mortgage-backed securities Bond or other debt securities that represent ownership in a pool of mortgage loans.
muni, municipal bonds, municipal securities Debt securities issued by a state, its counties, municipalities, authorities and other subdivisions, or the territories and possessions of the United States and the District of Columbia, including their subdivisions, agencies and
instrumentalities and corporations. These securities may be issued to obtain money for various public purposes, including the construction of a wide range of public facilities such as airports, bridges, highways, housing, hospitals, mass transportation, public utilities, schools, streets, and water and sewer works.
net asset value (NAV) The value of one share of a mutual fund. NAV is calculated by taking the fund’s total assets, subtracting liabilities, and dividing by the number of shares outstanding.
outstanding shares, shares outstanding When speaking of a company or mutual fund, indicates all shares currently held by investors.
prepayment risk The risk that a mortgage-backed security may be paid off early, typically because interest rates have fallen and the homeowners who hold the underlying mortgages have refinanced those mortgages at lower rates. In this type of situation, the investor who held the mortgage-backed security will usually have to settle for a lower rate when reinvesting the principal.
refunded bond A bond for which the principal and interest payments are secured or guaranteed by cash or U.S. government securities held in an escrow account.
restricted securities Securities that are subject to contractual restrictions on resale. These securities are often purchased in private placement transactions.
revenue bonds Municipal bonds that are issued to finance public works projects and are secured by revenue generated by the project (such as water and sewer fees) rather than the full faith and credit of the issuer.
S&P California AMT-Free Municipal Bond Index A broad, comprehensive market value-weighted index designed to measure the performance of investment-grade tax-exempt bonds issues within California.
section 4(2)/144A securities Securities exempt from registration under Section 4(2) of the Securities Act of 1933. These securities may be sold only to qualified institutional buyers under Securities Act Rule 144A.
taxable equivalent yield The yield an investor would need to get from a taxable investment in order to match the yield paid by a given tax-exempt investment, once the effect of all applicable taxes is taken into account. For example, if your tax rate were 25%, a tax-exempt investment paying 4.5% would have a taxable equivalent yield for you of 6.0% (4.5% ÷ [1 – 0.25%] = 6.0%).
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
weighted average For mutual funds, an average that gives the same weight to each security as the security represents in the fund’s portfolio.
yield The income paid out by an investment, expressed as a percentage of the investment’s market value.
yield to maturity The annualized rate of return a bondholder could expect if the bond were held to maturity. In addition to interest payments, yield to maturity also factors in any difference between a bond’s current price and its principal amount, or face value.
74Schwab Municipal Bond Funds | Semiannual Report
Schwab Municipal Bond Funds
Schwab Asset Management
With a straightforward lineup of core products and solutions for building the foundation of a portfolio, Schwab Asset Management advocates for investors of all sizes with a steadfast focus on lowering costs and reducing unnecessary complexity. The list below shows all currently available Schwab Funds®.
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 Fund. 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 Funds’ website at www.schwabassetmanagement.com/schwabfunds_prospectus, the SEC’s website at www.sec.gov, or by contacting Schwab Funds 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.schwabassetmanagement.com/schwabfunds_prospectus or the SEC’s website at www.sec.gov.
Equity Funds
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Health Care Fund
Schwab International Core Equity Fund
Schwab International Opportunities Fund
Schwab Select Large Cap Growth Fund
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small Company Index Fund
Schwab Fundamental Emerging Markets Large Company Index Fund
Schwab Fundamental Global Real Estate Index Fund
Schwab Global Real Estate Fund
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab U.S. Large-Cap Growth Index Fund
Schwab U.S. Large-Cap Value Index Fund
Schwab U.S. Mid-Cap Index Fund
Schwab International Index Fund®
Schwab Balanced Fund
Schwab MarketTrack Portfolios®
Schwab Target Funds
Schwab Target Index Funds
Schwab Monthly Income Funds
Bond Funds
Schwab Treasury Inflation Protected Securities Index Fund
Schwab U.S. Aggregate Bond Index Fund
Schwab Short-Term Bond Index Fund
Schwab Tax-Free Bond Fund1
Schwab California Tax-Free Bond Fund1
Schwab Opportunistic Municipal Bond Fund
Schwab provides a broad choice of taxable and tax-exempt money market funds for both retail and institutional client types.
Charles Schwab Investment Management, Inc., dba Schwab Asset Management
211 Main Street, San Francisco, CA 94105
Schwab Funds
1-877-824-5615
© 2024 Charles Schwab & Co., Inc. All rights reserved.
Member SIPC®
Printed on recycled paper.
¹
State, local, and the Federal Alternative Minimum Tax may apply. Capital gains are not exempt from Federal Taxation.
²
You could lose money by investing in the Schwab Money Funds. All Schwab Money Funds with the exception of Schwab Variable Share Price Money Fund seek to preserve the value of your investment at $1.00 per share, but cannot guarantee they will do so. Because the share price of Schwab Variable Share Price Money Fund will fluctuate, when you sell your shares they may be worth more or less than what you originally paid for them. All Schwab Money Funds with the exception of Schwab Government Money Fund, Schwab Retirement Government Money Fund, Schwab U.S. Treasury Money Fund, Schwab Treasury Obligations Money Fund and Schwab Government Money Market Portfolio may impose a fee upon the sale of your shares if the Fund’s Board determines that the fee is in the best interests of the Fund. An investment in the Schwab Money Funds is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The Schwab Money Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.
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Item 2: Code of Ethics.
Not applicable to this semi-annual report.
Item 3: Audit Committee Financial Expert.
Not applicable to this semi-annual report.
Item 4: Principal Accountant Fees and Services.
Not applicable to this semi-annual report.
Item 5: Audit Committee of Listed Registrants.
Not applicable to this semi-annual report.
Item 6: Schedule of Investments.
The schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form.
Item 7: Financial Statements and Financial Highlights for Open-End Management Investment Companies.
The financial statements and financial highlights are included as part of the report to shareholders filed under Item 1 of this Form.
Item 8: Changes in and Disagreements with Accountants for Open-End Management Investment Companies.
Not applicable.
Item 9: Proxy Disclosures for Open-End Management Investment Companies.
Not applicable.
Item 10: Remuneration Paid to Directors, Officers, and Others of Open-End Management Investment Companies.
The remuneration paid to directors, officers and others are included as part of the report to shareholders filed under Item 1 of this Form.
Item 11: Statement Regarding Basis for Approval of Investment Advisory Contract.
Not applicable.
Item 12: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 13: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 14: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 15: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 16: Controls and Procedures.
| (a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Principal Executive Officer, Omar Aguilar and Registrant’s Principal Financial Officer, Dana Smith, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. |
| (b) | During the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 17: Disclosure of Securities Lending Activities for Closed-End Management Investment Companies.
Not applicable.
Item 18: Recovery of Erroneously Awarded Compensation.
(a) Not applicable.
(b) Not applicable.
Item 19: Exhibits.
Pursuant to the requirements of the Securities Exchange Act of 1934 and the 1940 Act, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Investments – Schwab Taxable Bond Funds and Schwab Municipal Bond Funds
| | |
| By: | | /s/ Omar Aguilar |
| | Omar Aguilar Principal Executive Officer |
| |
| Date: | | April 16, 2024 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the 1940 Act, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| | |
| By: | | /s/ Omar Aguilar |
| | Omar Aguilar Principal Executive Officer |
| |
| Date: | | April 16, 2024 |
| | |
| By: | | /s/ Dana Smith |
| | Dana Smith Principal Financial Officer |
| |
| Date: | | April 16, 2024 |
