UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES
Investment Company Act file number: 811-7704
Schwab Capital Trust
(Exact name of registrant as specified in charter)
211 Main Street, San Francisco, California 94105
(Address of principal executive offices) (Zip code)
(Address of principal executive offices) (Zip code)
Marie Chandoha
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Schwab Capital Trust
211 Main Street, San Francisco, California 94105
(Name and address of agent for service)
Registrant’s telephone number, including area code: (415) 636-7000
Date of fiscal year end: October 31
Date of reporting period: October 31, 2011
Item 1: Report(s) to Shareholders.
Annual report dated October 31, 2011, enclosed.
Schwab Equity Index Funds
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
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Schwab Equity Index Funds
Annual Report
October 31, 2011
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market
Index Fund®
Schwab International
Index Fund®
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Five cost-efficient ways to tap into the power of
the stock market for long-term growth potential.
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Schwab S&P 500 Index Fund | 6 | |
Schwab 1000 Index® Fund | 8 | |
Schwab Small-Cap Index Fund® | 10 | |
Schwab Total Stock Market Index Fund® | 12 | |
Schwab International Index Fund® | 14 | |
Fund Expenses | 16 | |
Financial Statements and Portfolio Holdings | ||
Schwab S&P 500 Index Fund | 17 | |
Schwab 1000 Index® Fund | 24 | |
Schwab Small-Cap Index Fund® | 30 | |
Schwab Total Stock Market Index Fund® | 37 | |
Schwab International Index Fund® | 44 | |
Financial Notes | 50 | |
Report of Independent Registered Public Accounting Firm | 65 | |
Other Federal Tax Information | 66 | |
Investment Advisory Agreement Approval | 67 | |
Trustees and Officers | 69 | |
Glossary | 73 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab S&P 500 Index Fund (Ticker Symbol: SWPPX) | 7.97% | |||
S&P 500® Index | 8.09% | |||
Fund Category: Morningstar Large-Cap Blend | 5.33% | |||
Performance Details | pages 6-7 | |||
Schwab 1000 Index® Fund (Ticker Symbol: SNXFX) | 7.60% | |||
Schwab 1000 Index® | 7.88% | |||
Fund Category: Morningstar Large-Cap Blend | 5.33% | |||
Performance Details | pages 8-9 | |||
Schwab Small-Cap Index Fund® (Ticker Symbol: SWSSX) | 8.45% | |||
Schwab Small-Cap Index® | 8.59% | |||
Fund Category: Morningstar Small-Cap Blend | 6.60% | |||
Performance Details | pages 10-11 | |||
Schwab Total Stock Market Index Fund® (Ticker Symbol: SWTSX) | 8.14% | |||
Dow Jones U.S. Total Stock Market IndexSM | 8.05% | |||
Fund Category: Morningstar Large-Cap Blend | 5.33% | |||
Performance Details | pages 12-13 | |||
Schwab International Index Fund® (Ticker Symbol: SWISX)1 | -4.83% | |||
Schwab International Index® | -3.82% | |||
Fund Category: Morningstar Foreign Large-Cap Blend | -6.43% | |||
Performance Details | pages 14-15 | |||
Minimum Initial Investment2 | $ 100 | |||
All fund and index 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the funds’ returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations, see financial note 2 for more information. |
2 | Please see prospectus for further details and eligibility requirements. |
2 Schwab Equity Index Funds
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst02.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Equity Index Funds 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab Equity Index Funds. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Equity Index Funds
Fund Management
![]() | Larry Mano, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day management of the Schwab Total Stock Market Index Fund and co-management of each of the remaining funds. Prior to joining the firm in November 1998, he worked for 20 years in equity management. | |
![]() | Ron Toll, a portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds, except the Schwab Total Stock Market Index Fund. He joined the firm in 1998, became Manager, Portfolio Operations in 2000, Manager, Portfolio Operations and Analytics in 2005 and was named to his current position in 2007. |
Schwab Equity Index Funds 5
Schwab S&P 500 Index Fund
The Schwab S&P 500 Index Fund (the fund) seeks to track the total return of the S&P 500 Index (the index). To pursue its goal, the fund generally invests in stocks that are included in the index. Generally, the fund gives the same weight to a given stock as the index does. The index includes the stocks of 500 leading U.S. publicly traded companies from a broad range of industries. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 7.97% for the 12 months ended October 31, 2011, while the index returned 8.09%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Energy and Information Technology stocks added the most to the fund’s absolute performance (total return), reflecting the respectable returns generated by investments in these sectors combined with their average weights within the fund. Financials was the only sector that subtracted from the fund’s total return, reflecting the negative returns generated by these investments. New legislation expected to trim the financial industry’s profits and Europe’s ongoing and largely unresolved sovereign debt crisis were primary catalysts behind the poor performance of this sector.
The fund used a replication investment approach and maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 502 | |
Weighted Average Market Cap ($ x 1,000,000) | $90,171 | |
Price/Earnings Ratio (P/E) | 14.2 | |
Price/Book Ratio (P/B) | 2.2 | |
Portfolio Turnover Rate | 3% |
Sector Weightings % of Investments
Information Technology | 19.3% | |
Financials | 13.8% | |
Energy | 12.1% | |
Health Care | 11.3% | |
Consumer Staples | 10.8% | |
Consumer Discretionary | 10.5% | |
Industrials | 10.4% | |
Utilities | 3.6% | |
Materials | 3.5% | |
Telecommunication Services | 3.0% | |
Other | 1.7% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 3.3% | |
Apple, Inc. | 3.2% | |
International Business Machines Corp. | 1.9% | |
Chevron Corp. | 1.8% | |
Microsoft Corp. | 1.7% | |
General Electric Co. | 1.5% | |
Johnson & Johnson | 1.5% | |
The Procter & Gamble Co. | 1.5% | |
AT&T, Inc. | 1.5% | |
The Coca-Cola Co. | 1.3% | |
Total | 19.2% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Standard & Poor’s®, S&P®, S&P 500®, Standard & Poor’s 500® and 500® are trademarks of The McGraw-Hill Companies, Inc. and have been licensed for use by the fund. The fund is not sponsored, endorsed, sold or promoted by Standard & Poor’s, and Standard & Poor’s makes no representation regarding the advisability of investing in the fund.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Equity Index Funds
Schwab S&P 500 Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,2,4
Performance of a Hypothetical
$10,000 Investment1,2,4
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978cteisp5i01.gif)
Pre-Tax Average Annual Total Returns1,2,3,4
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab S&P 500 Index Fund (5/19/97) | 7.97 | % | 0.27 | % | 3.64 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % |
Fund Expense Ratios5: Net 0.09%; Gross 0.10%
Average Annual Total Returns After Tax1,2,3,4
1 Year | 5 Years | 10 Years | ||||||||||
Fund: Schwab S&P 500 Index Fund (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 7.65% | -0.02% | 3.24% | |||||||||
Post-Liquidation (shares were sold) | 5.54% | 0.20% | 2.99% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 3.66% | -1.27% | 2.77% | |||||||||
Post-Liquidation (shares were sold) | 2.68% | -0.69% | 2.70% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. | |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/11 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect both the effects of taxable distributions and the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. | |
3 | The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
4 | On September 9, 2009, the Investor Share class, Select Share class and e.Shares class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. On September 9, 2009, the Schwab Institutional Select S&P 500 Fund merged into the fund. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 7
Schwab 1000 Index® Fund
The Schwab 1000 Index Fund (the fund) seeks to match the total return of the Schwab 1000 Index (the index). To pursue its goal, the fund generally invests in stocks that are included in the index. Generally, the fund gives the same weight to a given stock as the index does. The index includes the stocks of the largest 1,000 publicly traded companies in the United States, with size being determined by market capitalization (total market value of all shares outstanding). The index is designed to be a measure of the performance of large- and mid-cap U.S. stocks. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 7.60% for the 12 months ended October 31, 2011, while the index returned 7.88%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. The fund experienced taxable gains that were generated by selling securities to meet redemptions.
Energy and Information Technology stocks added the most to the fund’s absolute performance (total return), reflecting the respectable returns generated by investments in these sectors combined with their average weights within the fund. Financials was the only sector that subtracted from the fund’s total return, reflecting the negative returns generated by these investments. Europe’s ongoing and largely unresolved sovereign debt crisis and new legislation expected to trim the financial industry’s profits were primary catalysts behind this sector’s poor performance.
A replication investment approach was used by the fund, which maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 972 | |
Weighted Average Market Cap ($ x 1,000,000) | $80,438 | |
Price/Earnings Ratio (P/E) | 14.7 | |
Price/Book Ratio (P/B) | 2.2 | |
Portfolio Turnover Rate | 5% |
Sector Weightings % of Investments
Information Technology | 19.1% | |
Financials | 14.4% | |
Energy | 11.9% | |
Consumer Discretionary | 11.4% | |
Health Care | 11.4% | |
Industrials | 11.0% | |
Consumer Staples | 10.2% | |
Materials | 4.0% | |
Utilities | 3.8% | |
Telecommunication Services | 2.8% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 3.0% | |
Apple, Inc. | 2.9% | |
International Business Machines Corp. | 1.7% | |
Chevron Corp. | 1.6% | |
Microsoft Corp. | 1.5% | |
General Electric Co. | 1.4% | |
Johnson & Johnson | 1.4% | |
The Procter & Gamble Co. | 1.4% | |
AT&T, Inc. | 1.3% | |
The Coca-Cola Co. | 1.2% | |
Total | 17.4% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Equity Index Funds
Schwab 1000 Index® Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,2,4
Performance of a Hypothetical
$10,000 Investment1,2,4
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctei100001.gif)
Pre-Tax Average Annual Total Returns1,2,3,4
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | 7.60 | % | 0.43 | % | 4.00 | % | |||||||||
Schwab 1000 Index® | 7.88 | % | 0.69 | % | 4.31 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % |
Fund Expense Ratios5: Net 0.29%; Gross 0.35%
Average Annual Total Returns After Tax1,2,3,4
1 Year | 5 Years | 10 Years | ||||||||||
Fund: Schwab 1000 Index® Fund (4/2/91) | ||||||||||||
Pre-Liquidation (still own shares) | 7.14% | 0.14% | 3.65% | |||||||||
Post-Liquidation (shares were sold) | 5.50% | 0.34% | 3.34% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 3.66% | -1.27% | 2.77% | |||||||||
Post-Liquidation (shares were sold) | 2.68% | -0.69% | 2.70% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. | |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/11 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect both the effects of taxable distributions and the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. | |
3 | The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
4 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Investor Shares. Accordingly, the past performance shown is that of the fund’s former Investor Shares. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 9
Schwab Small-Cap Index Fund®
The Schwab Small-Cap Index Fund (the fund) seeks to track the total return of the performance of a benchmark index that measures the total return of small capitalization U.S. stocks. To pursue its goal, the fund generally invests in stocks that are included in the Schwab Small-Cap Index (the index). Generally, the fund gives the same weight to a given stock as the index does. The index includes the stocks of the second-largest 1,000 publicly traded companies in the United States, with size being determined by market capitalization (total market value of all shares outstanding). The index is designed to be a measure of the performance of small-cap U.S. stocks. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 8.45% for the 12 months ended October 31, 2011, while the index returned 8.59%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Health Care and Information Technology stocks added the most to the fund’s absolute performance (total return), reflecting the double-digit returns generated by investments in these sectors combined with their average weights within the fund. Telecommunication Services and Materials stocks added the least to the fund’s total return, reflecting the relatively small size of these investment allocations within the fund, combined with the limited returns generated by these stocks.
The fund used a replication investment approach and maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 960 | |
Weighted Average Market Cap ($ x 1,000,000) | $1,335 | |
Price/Earnings Ratio (P/E) | 80.7 | |
Price/Book Ratio (P/B) | 1.8 | |
Portfolio Turnover Rate | 26% |
Sector Weightings % of Investments
Financials | 18.5% | |
Industrials | 16.5% | |
Information Technology | 16.4% | |
Consumer Discretionary | 15.1% | |
Health Care | 12.9% | |
Energy | 5.5% | |
Materials | 5.2% | |
Consumer Staples | 4.5% | |
Utilities | 3.9% | |
Telecommunication Services | 1.3% | |
Other | 0.2% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Pharmasset, Inc. | 0.6% | |
Level 3 Communications, Inc. | 0.5% | |
Healthspring, Inc. | 0.4% | |
Catalyst Health Solutions, Inc. | 0.3% | |
Nu Skin Enterprises, Inc., Class A | 0.3% | |
Equity Lifestyle Properties, Inc. | 0.3% | |
Home Properties, Inc. | 0.3% | |
Signature Bank | 0.3% | |
Hancock Holding Co. | 0.3% | |
Hexcel Corp. | 0.3% | |
Total | 3.6% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Equity Index Funds
Schwab Small-Cap Index Fund®
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,2,4
Performance of a Hypothetical
$10,000 Investment1,2,4
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978cteiscap01.gif)
Pre-Tax Average Annual Total Returns1,2,3,4
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | 8.45 | % | 2.53 | % | 7.13 | % | |||||||||
Schwab Small-Cap Index® | 8.59 | % | 2.69 | % | 7.24 | % | |||||||||
Russell 2000® Index* | 6.71 | % | 0.68 | % | 7.02 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | 6.60 | % | 0.77 | % | 7.19 | % |
Fund Expense Ratios5: Net 0.17%; Gross 0.20%
Average Annual Total Returns After Tax1,2,3,4
1 Year | 5 Years | 10 Years | ||||||||||
Fund: Schwab Small-Cap Index Fund® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | 8.22% | 1.23% | 6.23% | |||||||||
Post-Liquidation (shares were sold) | 5.72% | 1.81% | 5.97% | |||||||||
Fund Category: Morningstar Small-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 5.15% | -0.35% | 6.10% | |||||||||
Post-Liquidation (shares were sold) | 3.66% | 0.25% | 5.93% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | Effective December 14, 2011, the fund’s benchmark index will change to the Russell 2000® Index. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. | |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/11 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect both the effects of taxable distributions and the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. | |
3 | The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
4 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 11
Schwab Total Stock Market Index Fund®
The Schwab Total Stock Market Index Fund (the fund) seeks to track the total return of the entire U.S. stock market, as measured by the Dow Jones U.S. Total Stock Market Index (the index). To pursue its goal, the fund generally invests in stocks that are included in the index. The fund generally gives the same weight to a given stock as the index does. The index includes all publicly traded stocks of companies headquartered in the United States for which pricing information is readily available—approximately 3,800 stocks. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 8.14% for the 12 months ended October 31, 2011, while the index returned 8.05%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Stocks of Energy and Information Technology companies added the most to the fund’s absolute performance (total return), reflecting the respectable returns generated by investments in these sectors combined with their average weights within the fund. Financials was the only sector that subtracted from the fund’s total return, reflecting the negative returns generated by these investments. New legislation expected to trim the financial industry’s profits and Europe’s ongoing and largely unresolved sovereign debt crisis were primary catalysts behind this sector’s poor performance.
A sampling investment approach was used by the fund, which maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 2,271 | |
Weighted Average Market Cap ($ x 1,000,000) | $74,202 | |
Price/Earnings Ratio (P/E) | 15.6 | |
Price/Book Ratio (P/B) | 2.2 | |
Portfolio Turnover Rate | 1% |
Sector Weightings % of Investments
Information Technology | 18.9% | |
Financials | 15.0% | |
Consumer Discretionary | 11.6% | |
Health Care | 11.5% | |
Energy | 11.2% | |
Industrials | 10.8% | |
Consumer Staples | 9.6% | |
Materials | 4.1% | |
Utilities | 3.8% | |
Telecommunication Services | 2.7% | |
Other | 0.8% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Exxon Mobil Corp. | 2.7% | |
Apple, Inc. | 2.7% | |
International Business Machines Corp. | 1.6% | |
Chevron Corp. | 1.5% | |
Microsoft Corp. | 1.4% | |
General Electric Co. | 1.3% | |
The Procter & Gamble Co. | 1.3% | |
Johnson & Johnson | 1.2% | |
AT&T, Inc. | 1.2% | |
Pfizer, Inc. | 1.1% | |
Total | 16.0% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
“Dow Jones” and “The Dow Jones U.S. Total Stock Market IndexSM” are service marks of Dow Jones & Company, Inc. and have been licensed for certain purposes by CSIM. The Schwab Total Stock Market Index Fund, based on The Dow Jones U.S. Total Stock Market IndexSM, is not sponsored, endorsed, sold or promoted by Dow Jones and Dow Jones makes no representation regarding the advisability of investing in such a product.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Equity Index Funds
Schwab Total Stock Market Index Fund®
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,2,4
Performance of a Hypothetical
$10,000 Investment1,2,4
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978cteitstk01.gif)
Pre-Tax Average Annual Total Returns1,2,3,4
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | 8.14 | % | 0.92 | % | 4.79 | % | |||||||||
Dow Jones U.S. Total Stock Market IndexSM | 8.05 | % | 0.82 | % | 4.76 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % |
Fund Expense Ratios5: Net 0.09%; Gross 0.11%
Average Annual Total Returns After Tax1,2,3,4
1 Year | 5 Years | 10 Years | ||||||||||
Fund: Schwab Total Stock Market Index Fund® (6/1/99) | ||||||||||||
Pre-Liquidation (still own shares) | 7.83% | 0.65% | 4.42% | |||||||||
Post-Liquidation (shares were sold) | 5.62% | 0.75% | 4.01% | |||||||||
Fund Category: Morningstar Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | 3.66% | -1.27% | 2.77% | |||||||||
Post-Liquidation (shares were sold) | 2.68% | -0.69% | 2.70% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. | |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/11 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect both the effects of taxable distributions and the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. | |
3 | The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
4 | On September 18, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 13
Schwab International Index Fund®
The Schwab International Index Fund (the fund) seeks to track the performance of a benchmark index that measures the total return of large, publicly traded non-U.S. companies from countries with developed equity markets outside of the United States. To pursue its goal, the fund generally invests in stocks that are included in the Schwab International Index (the index). The index includes stocks of 350 of the largest publicly traded companies from selected countries outside the United States. (The fund generally gives the same weight to a given stock as the index does. For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -4.83% for the 12 months ended October 31, 2011, while the index returned -3.82%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. Timing differences in foreign exchange calculations represented part of why the fund underperformed the index.* Fair valuation of the fund’s holdings on the last trading day of the current period explains a majority of the fund’s underperformance compared with the index during the period (please see financial note 2 for more information).
Energy and Consumer Staples stocks added the most to the fund’s absolute performance (total return), reflecting the relatively solid returns generated by investments in these sectors combined with their average weights within the fund. Financial stocks detracted the most from the fund’s return. This sector represented roughly one-quarter of the fund and posted double-digit losses. Europe’s ongoing and largely unresolved sovereign debt crisis was a primary catalyst behind the poor performance of international financial stocks.
U.K. stocks helped the fund’s total return the most from a country allocation standpoint. The positive effect on the fund’s performance reflected the large average weight of this investment position compared with other country allocations, combined with the modestly positive return that these stocks generated. Stocks from France posted losses, and when combined with their relatively large weight in the fund, subtracted the most from the fund’s total return.
The fund used a replication investment approach and maintained a tight allocation across all countries, regions, sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Country Weightings % of Equity Investments
United Kingdom | 21.4% | |||
Japan | 13.9% | |||
Canada | 9.5% | |||
France | 9.4% | |||
Switzerland | 8.6% | |||
Germany | 7.9% | |||
Australia | 7.4% | |||
United States** | 4.1% | |||
Spain | 3.3% | |||
Italy | 2.5% | |||
Other | 12.0% | |||
Total | 100.0% |
Statistics
Number of Holdings | 353 | |
Weighted Average Market Cap ($ x 1,000,000) | $58,501 | |
Price/Earnings Ratio (P/E) | 12.5 | |
Price/Book Ratio (P/B) | 1.4 | |
Portfolio Turnover Rate | 10% |
Sector Weightings % of Investments
Financials | 23.3% | |
Energy | 11.6% | |
Consumer Staples | 11.1% | |
Materials | 10.2% | |
Health Care | 9.1% | |
Industrials | 8.8% | |
Consumer Discretionary | 7.6% | |
Telecommunication Services | 6.4% | |
Utilities | 4.2% | |
Information Technology | 3.6% | |
Other | 4.1% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
iShares MSCI EAFE Index Fund** | 4.1% | |
Nestle S.A. - Reg’d | 2.2% | |
HSBC Holdings plc | 1.7% | |
Novartis AG - Reg’d | 1.7% | |
Vodafone Group plc | 1.6% | |
BP plc | 1.5% | |
Royal Dutch Shell plc, A Shares | 1.4% | |
BHP Billiton Ltd. | 1.4% | |
Total S.A. | 1.4% | |
Roche Holding AG | 1.3% | |
Total | 18.3% |
Manager views and portfolio holdings may have changed since the report date.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
* | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
** | Effective December 20, 2011, the fund’s investment strategy will change to require that the fund invest 80% of its net assets in stocks that are included in the MSCI EAFE Index. As a result of portfolio rebalancing, the fund held a large position in the iShares MSCI EAFE Index Fund at end of the period. | |
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Equity Index Funds
Schwab International Index Fund®
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,2,4
Performance of a Hypothetical
$10,000 Investment1,2,4
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978cteiintl01.gif)
Pre-Tax Average Annual Total Returns1,2,3,4
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab International Index Fund® (5/19/97) | -4.83 | % | -2.38 | % | 5.36 | % | |||||||||
Schwab International Index® | -3.82 | % | -2.02 | % | 5.79 | % | |||||||||
MSCI EAFE Index®* | -3.64 | % | -1.95 | % | 6.19 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | -6.43 | % | -2.49 | % | 5.14 | % |
Fund Expense Ratios5: Net 0.19%; Gross 0.21%
Average Annual Total Returns After Tax1,2,3,4
1 Year | 5 Years | 10 Years | ||||||||||
Fund: Schwab International Index Fund® (5/19/97) | ||||||||||||
Pre-Liquidation (still own shares) | -5.26% | -2.74% | 4.84% | |||||||||
Post-Liquidation (shares were sold) | -2.61% | -1.91% | 4.53% | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | ||||||||||||
Pre-Liquidation (still own shares) | -8.15% | -3.84% | 4.22% | |||||||||
Post-Liquidation (shares were sold) | -4.88% | -2.60% | 4.13% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | Effective December 20, 2011, the fund’s benchmark index will change to the MSCI EAFE® Index. The Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE Index®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. | |
2 | The pre-tax total return and the graph do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. After-tax returns are calculated using the highest historical individual federal marginal income tax rates in effect as of 10/31/11 and do not reflect the impact of state and local taxes or the alternative minimum tax. Actual returns depend on an investor’s situation and may differ from those shown. After-tax returns may not be relevant to investors who hold their fund shares through tax-deferred arrangements. Pre-liquidation after-tax returns reflect both the effects of taxable distributions and the tax effects of purchases and sales of securities within the fund portfolios and assume investors continue to hold fund shares at the end of the measurement periods. Post-liquidation figures assume investors sold fund shares at the end of the measurement periods and reflect both the effects of taxable distributions and any taxable gains or losses realized upon the sale of shares. Source for category information: Morningstar, Inc. Some funds in this category may not use tax-efficient strategies, including this fund. | |
3 | The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
4 | On August 21, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
5 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Equity Index Funds 15
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab S&P 500 Index Fund | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000 | $ | 929.20 | $ | 0.44 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab 1000 Index® Fund | ||||||||||||||||
Actual Return | 0.29% | $ | 1,000 | $ | 921.30 | $ | 1.40 | |||||||||
Hypothetical 5% Return | 0.29% | $ | 1,000 | $ | 1,023.74 | $ | 1.48 | |||||||||
Schwab Small-Cap Index Fund® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000 | $ | 876.70 | $ | 0.90 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000 | $ | 1,024.25 | $ | 0.97 | |||||||||
Schwab Total Stock Market Index Fund® | ||||||||||||||||
Actual Return | 0.09% | $ | 1,000 | $ | 920.10 | $ | 0.44 | |||||||||
Hypothetical 5% Return | 0.09% | $ | 1,000 | $ | 1,024.75 | $ | 0.46 | |||||||||
Schwab International Index Fund® | ||||||||||||||||
Actual Return | 0.19% | $ | 1,000 | $ | 838.70 | $ | 0.88 | |||||||||
Hypothetical 5% Return | 0.19% | $ | 1,000 | $ | 1,024.25 | $ | 0.97 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
16 Schwab Equity Index Funds
Schwab S&P 500 Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.70 | 16.28 | 15.28 | 24.28 | 21.56 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.39 | 0.35 | 0.20 | 0.44 | 0.41 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.09 | 2.31 | 1.22 | (9.02 | ) | 2.68 | ||||||||||||||||
Total from investment operations | 1.48 | 2.66 | 1.42 | (8.58 | ) | 3.09 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.36 | ) | (0.24 | ) | (0.42 | ) | (0.42 | ) | (0.37 | ) | ||||||||||||
Net asset value at end of period | 19.82 | 18.70 | 16.28 | 15.28 | 24.28 | |||||||||||||||||
Total return (%) | 7.97 | 16.50 | 9.81 | (35.92 | ) | 14.50 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.13 | 2 | 0.19 | 0.19 | ||||||||||||||||
Gross operating expenses | 0.10 | 0.10 | 0.16 | 0.21 | 0.20 | |||||||||||||||||
Net investment income (loss) | 1.96 | 1.97 | 2.09 | 2.06 | 1.78 | |||||||||||||||||
Portfolio turnover rate | 3 | 2 | 3 | 3 | 3 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 10,909 | 10,007 | 8,718 | 2,598 | 4,345 |
1 Effective September 9, 2009, the Investor Share class, the e.Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.
See financial notes 17
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Common Stock | 8,824,947,361 | 10,701,120,014 | ||||||||
1 | .7% | Short-Term Investments | 182,670,166 | 182,670,166 | ||||||||
99 | .8% | Total Investments | 9,007,617,527 | 10,883,790,180 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 10,781,362 | 10,781,362 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 14,018,050 | |||||||||
100 | .0% | Net Assets | 10,908,589,592 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.1% of net assets | ||||||||||||
Automobiles & Components 0.7% | ||||||||||||
Other Securities | 0.7 | 73,827,731 | ||||||||||
Banks 2.5% | ||||||||||||
U.S. Bancorp | 1,800,028 | 0.4 | 46,062,717 | |||||||||
Wells Fargo & Co. | 4,954,909 | 1.2 | 128,381,692 | |||||||||
Other Securities | 0.9 | 102,156,227 | ||||||||||
2.5 | 276,600,636 | |||||||||||
Capital Goods 7.9% | ||||||||||||
3M Co. | 667,919 | 0.5 | 52,778,959 | |||||||||
Caterpillar, Inc. | 605,362 | 0.5 | 57,182,494 | |||||||||
General Electric Co. | 9,963,752 | 1.5 | 166,494,296 | |||||||||
United Technologies Corp. | 851,535 | 0.6 | 66,402,699 | |||||||||
Other Securities | 4.8 | 515,720,451 | ||||||||||
7.9 | 858,578,899 | |||||||||||
Commercial & Professional Supplies 0.6% | ||||||||||||
Other Securities | 0.6 | 59,551,322 | ||||||||||
Consumer Durables & Apparel 1.0% | ||||||||||||
Other Securities | 1.0 | 106,891,771 | ||||||||||
Consumer Services 2.1% | ||||||||||||
McDonald’s Corp. | 966,738 | 0.8 | 89,761,623 | |||||||||
Other Securities | 1.3 | 133,913,497 | ||||||||||
2.1 | 223,675,120 | |||||||||||
Diversified Financials 5.7% | ||||||||||||
American Express Co. | 975,741 | 0.5 | 49,392,009 | |||||||||
Bank of America Corp. | 9,478,911 | 0.6 | 64,740,962 | |||||||||
Citigroup, Inc. | 2,734,147 | 0.8 | 86,371,704 | |||||||||
JPMorgan Chase & Co. | 3,653,531 | 1.2 | 126,996,738 | |||||||||
The Charles Schwab Corp. (b) | 1,009,981 | 0.1 | 12,402,567 | |||||||||
The Goldman Sachs Group, Inc. | 473,969 | 0.5 | 51,923,304 | |||||||||
Other Securities | 2.0 | 234,151,638 | ||||||||||
5.7 | 625,978,922 | |||||||||||
Energy 12.0% | ||||||||||||
Chevron Corp. | 1,881,534 | 1.8 | 197,655,147 | |||||||||
ConocoPhillips | 1,286,590 | 0.8 | 89,610,993 | |||||||||
Exxon Mobil Corp. | 4,555,941 | 3.3 | 355,773,433 | |||||||||
Occidental Petroleum Corp. | 759,350 | 0.6 | 70,573,989 | |||||||||
Schlumberger Ltd. | 1,263,215 | 0.9 | 92,808,406 | |||||||||
Other Securities | 4.6 | 507,031,001 | ||||||||||
12.0 | 1,313,452,969 | |||||||||||
Food & Staples Retailing 2.3% | ||||||||||||
Wal-Mart Stores, Inc. | 1,647,102 | 0.9 | 93,423,625 | |||||||||
Other Securities | 1.4 | 154,858,255 | ||||||||||
2.3 | 248,281,880 | |||||||||||
Food, Beverage & Tobacco 6.2% | ||||||||||||
Altria Group, Inc. | 1,955,891 | 0.5 | 53,884,797 | |||||||||
Kraft Foods, Inc., Class A | 1,654,854 | 0.5 | 58,217,764 | |||||||||
PepsiCo, Inc. | 1,480,863 | 0.9 | 93,220,326 | |||||||||
Philip Morris International, Inc. | 1,645,846 | 1.1 | 114,995,260 | |||||||||
The Coca-Cola Co. | 2,148,728 | 1.3 | 146,801,097 | |||||||||
Other Securities | 1.9 | 208,166,095 | ||||||||||
6.2 | 675,285,339 | |||||||||||
Health Care Equipment & Services 3.9% | ||||||||||||
UnitedHealth Group, Inc. | 1,005,610 | 0.4 | 48,259,224 | |||||||||
Other Securities | 3.5 | 380,384,718 | ||||||||||
3.9 | 428,643,942 | |||||||||||
Household & Personal Products 2.4% | ||||||||||||
The Procter & Gamble Co. | 2,574,690 | 1.5 | 164,754,413 | |||||||||
Other Securities | 0.9 | 93,053,852 | ||||||||||
2.4 | 257,808,265 | |||||||||||
Insurance 3.6% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 1,647,830 | 1.2 | 128,300,044 | |||||||||
Other Securities | 2.4 | 268,437,870 | ||||||||||
3.6 | 396,737,914 |
18 See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Materials 3.5% | ||||||||||||
Other Securities | 3.5 | 381,359,596 | ||||||||||
Media 3.1% | ||||||||||||
Comcast Corp., Class A | 2,583,964 | 0.6 | 60,593,956 | |||||||||
The Walt Disney Co. | 1,735,183 | 0.6 | 60,523,183 | |||||||||
Other Securities | 1.9 | 212,793,537 | ||||||||||
3.1 | 333,910,676 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.4% | ||||||||||||
Abbott Laboratories | 1,453,886 | 0.7 | 78,320,839 | |||||||||
Amgen, Inc. | 865,859 | 0.5 | 49,587,745 | |||||||||
Bristol-Myers Squibb Co. | 1,592,364 | 0.5 | 50,302,779 | |||||||||
Johnson & Johnson | 2,567,825 | 1.5 | 165,342,252 | |||||||||
Merck & Co., Inc. | 2,900,114 | 0.9 | 100,053,933 | |||||||||
Pfizer, Inc. | 7,310,833 | 1.3 | 140,806,643 | |||||||||
Other Securities | 2.0 | 219,105,723 | ||||||||||
7.4 | 803,519,914 | |||||||||||
Real Estate 1.8% | ||||||||||||
Other Securities | 1.8 | 198,635,117 | ||||||||||
Retailing 3.7% | ||||||||||||
Amazon.com, Inc. * | 340,290 | 0.7 | 72,655,318 | |||||||||
The Home Depot, Inc. | 1,465,750 | 0.5 | 52,473,850 | |||||||||
Other Securities | 2.5 | 278,620,068 | ||||||||||
3.7 | 403,749,236 | |||||||||||
Semiconductors & Semiconductor Equipment 2.4% | ||||||||||||
Intel Corp. | 4,920,305 | 1.1 | 120,744,285 | |||||||||
Other Securities | 1.3 | 144,881,026 | ||||||||||
2.4 | 265,625,311 | |||||||||||
Software & Services 9.5% | ||||||||||||
Google, Inc., Class A * | 235,862 | 1.3 | 139,781,256 | |||||||||
International Business Machines Corp. | 1,119,090 | 1.9 | 206,617,587 | |||||||||
Microsoft Corp. | 6,995,831 | 1.7 | 186,298,980 | |||||||||
Oracle Corp. | 3,692,686 | 1.1 | 121,009,320 | |||||||||
Other Securities | 3.5 | 387,078,169 | ||||||||||
9.5 | 1,040,785,312 | |||||||||||
Technology Hardware & Equipment 7.3% | ||||||||||||
Apple, Inc. * | 868,740 | 3.2 | 351,648,577 | |||||||||
Cisco Systems, Inc. | 5,153,828 | 0.9 | 95,500,433 | |||||||||
EMC Corp. * | 1,949,545 | 0.4 | 47,783,348 | |||||||||
Hewlett-Packard Co. | 1,959,508 | 0.5 | 52,142,508 | |||||||||
QUALCOMM, Inc. | 1,569,565 | 0.7 | 80,989,554 | |||||||||
Other Securities | 1.6 | 171,498,896 | ||||||||||
7.3 | 799,563,316 | |||||||||||
Telecommunication Services 3.0% | ||||||||||||
AT&T, Inc. | 5,552,836 | 1.5 | 162,753,623 | |||||||||
Verizon Communications, Inc. | 2,648,178 | 0.9 | 97,929,622 | |||||||||
Other Securities | 0.6 | 61,767,793 | ||||||||||
3.0 | 322,451,038 | |||||||||||
Transportation 1.9% | ||||||||||||
United Parcel Service, Inc., Class B | 923,318 | 0.6 | 64,853,856 | |||||||||
Other Securities | 1.3 | 145,549,501 | ||||||||||
1.9 | 210,403,357 | |||||||||||
Utilities 3.6% | ||||||||||||
Other Securities | 3.6 | 395,802,431 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $8,824,947,361) | 10,701,120,014 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 1.7% of net assets | ||||||||||||
Time Deposit 1.6% | ||||||||||||
Bank of America | ||||||||||||
0.03%, 11/01/11 | 170,540,163 | 1.6 | 170,540,163 | |||||||||
U.S. Treasury Obligations 0.1% | ||||||||||||
Other Securities | 0.1 | 12,130,003 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $182,670,166) | 182,670,166 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||||||
Invesco Short Term Investment Trust Government & Agency Portfolio | 10,781,362 | 0.1 | 10,781,362 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $10,781,362) | 10,781,362 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, tax basis cost of the fund’s investments was $9,051,852,174 and the unrealized appreciation and depreciation were $3,227,324,321 and ($1,395,386,315), respectively, with a net unrealized appreciation of $1,831,938,006.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
See financial notes 19
Schwab S&P 500 Index Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 2,900 | 181,148,500 | 8,117,863 |
20 See financial notes
Schwab S&P 500 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated issuers, at value (cost $11,500,984) | $12,402,567 | |||||
Investments in unaffiliated issuers, at value (cost $8,996,116,543) including securities on loan of $9,899,324 | + | 10,871,387,613 | ||||
Total investments, at value (cost $9,007,617,527) | 10,883,790,180 | |||||
Cash | 7,329 | |||||
Collateral invested for securities on loan | 10,781,362 | |||||
Receivables: | ||||||
Investments sold | 7,735,472 | |||||
Fund shares sold | 18,431,029 | |||||
Dividends | 12,264,207 | |||||
Income from securities on loan | 62,505 | |||||
Foreign tax reclaims | 22,725 | |||||
Interest | 142 | |||||
Prepaid expenses | + | 261,382 | ||||
Total assets | 10,933,356,333 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 10,781,362 | |||||
Payables: | ||||||
Investments bought | 4,649,150 | |||||
Investment adviser and administrator fees | 51,971 | |||||
Shareholder service fees | 19,025 | |||||
Fund shares redeemed | 4,580,223 | |||||
Due to brokers for futures | 4,422,675 | |||||
Accrued expenses | + | 262,335 | ||||
Total liabilities | 24,766,741 | |||||
Net Assets | ||||||
Total assets | 10,933,356,333 | |||||
Total liabilities | − | 24,766,741 | ||||
Net assets | $10,908,589,592 | |||||
Net Assets by Source | ||||||
Capital received from investors | 9,341,400,923 | |||||
Net investment income not yet distributed | 171,894,015 | |||||
Net realized capital losses | (488,995,862 | ) | ||||
Net unrealized capital gains | 1,884,290,516 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$10,908,589,592 | 550,398,011 | $19.82 |
See financial notes 21
Schwab S&P 500 Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated issuer | $219,259 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $2,081) | 221,157,471 | |||||
Interest | 51,126 | |||||
Securities on loan | + | 936,991 | ||||
Total investment income | 222,364,847 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 6,520,782 | |||||
Shareholder service fees | 2,120,498 | |||||
Transfer agent fees | 449,335 | |||||
Shareholder reports | 293,263 | |||||
Portfolio accounting fees | 276,858 | |||||
Custodian fees | 215,160 | |||||
Registration fees | 108,470 | |||||
Professional fees | 101,400 | |||||
Trustees’ fees | 83,966 | |||||
Interest expense | 2,597 | |||||
Other expenses | + | 334,537 | ||||
Total expenses | 10,506,866 | |||||
Expense reduction by CSIM and its affiliates | − | 723,096 | ||||
Payment for state filing fees (see financial note 11) | − | 27,879 | ||||
Net expenses | − | 9,755,891 | ||||
Net investment income | 212,608,956 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 137,401,176 | |||||
Net realized gains on futures contracts | + | 174,072 | ||||
Net realized gains | 137,575,248 | |||||
Net unrealized losses on affiliated issuer | (3,054,682 | ) | ||||
Net unrealized gains on unaffiliated investments | 445,509,569 | |||||
Net unrealized gains on futures contracts | + | 7,989,980 | ||||
Net unrealized gains | + | 450,444,867 | ||||
Net realized and unrealized gains | 588,020,115 | |||||
Increase in net assets resulting from operations | $800,629,071 |
22 See financial notes
Schwab S&P 500 Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $212,608,956 | $186,921,830 | ||||||||
Net realized gains | 137,575,248 | 41,883,358 | ||||||||
Net unrealized gains | + | 450,444,867 | 1,199,925,752 | |||||||
Increase in net assets from operations | 800,629,071 | 1,428,730,940 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($191,615,698 | ) | ($130,372,304 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 93,309,499 | $1,842,476,643 | 77,474,237 | $1,356,717,395 | ||||||||||||||
Shares reinvested | 9,010,183 | 172,725,206 | 6,889,298 | 118,013,668 | ||||||||||||||
Shares redeemed | + | (87,190,945 | ) | (1,722,551,980 | ) | (84,582,907 | ) | (1,483,749,859 | ) | |||||||||
Net transactions in fund shares | 15,128,737 | $292,649,869 | (219,372 | ) | ($9,018,796 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 535,269,274 | $10,006,926,350 | 535,488,646 | $8,717,586,510 | ||||||||||||||
Total increase or decrease | + | 15,128,737 | 901,663,242 | (219,372 | ) | 1,289,339,840 | ||||||||||||
End of period | 550,398,011 | $10,908,589,592 | 535,269,274 | $10,006,926,350 | ||||||||||||||
Net investment income not yet distributed | $171,894,015 | $151,724,654 |
See financial notes 23
Schwab 1000 Index® Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 35.79 | 31.00 | 28.69 | 45.81 | 40.40 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.62 | 2 | 0.57 | 2 | 0.54 | 2 | 0.66 | 2 | 0.60 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 2.07 | 4.80 | 2.41 | (17.13 | ) | 5.33 | ||||||||||||||||
Total from investment operations | 2.69 | 5.37 | 2.95 | (16.47 | ) | 5.93 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.57 | ) | (0.58 | ) | (0.64 | ) | (0.62 | ) | (0.52 | ) | ||||||||||||
Distributions from net realized gains | (0.47 | ) | — | — | (0.03 | ) | — | |||||||||||||||
Total distributions | (1.04 | ) | (0.58 | ) | (0.64 | ) | (0.65 | ) | (0.52 | ) | ||||||||||||
Net asset value at end of period | 37.44 | 35.79 | 31.00 | 28.69 | 45.81 | |||||||||||||||||
Total return (%) | 7.60 | 17.51 | 10.72 | (36.43 | ) | 14.81 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.29 | 0.29 | 0.38 | 3 | 0.49 | 0.48 | ||||||||||||||||
Gross operating expenses | 0.34 | 0.35 | 0.44 | 0.49 | 0.48 | |||||||||||||||||
Net investment income (loss) | 1.64 | 1.71 | 1.96 | 1.68 | 1.39 | |||||||||||||||||
Portfolio turnover rate | 5 | 5 | 4 | 4 | 6 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 4,552 | 4,575 | 4,279 | 2,260 | 3,974 |
1 Effective September 18, 2009, the Select Share class and the Investor Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Investor Shares.
2 Calculated based on the average shares outstanding during the period.
3 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
24 See financial notes
Schwab 1000 Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
100 | .0% | Common Stock | 2,061,921,510 | 4,553,381,300 | ||||||||
100 | .0% | Total Investments | 2,061,921,510 | 4,553,381,300 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 6,910,178 | 6,910,178 | ||||||||
(0 | .2)% | Other Assets and Liabilities, Net | (8,737,014 | ) | ||||||||
100 | .0% | Net Assets | 4,551,554,464 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 100.0% of net assets | ||||||||||||
Automobiles & Components 0.9% | ||||||||||||
Other Securities | 0.9 | 38,984,627 | ||||||||||
Banks 2.6% | ||||||||||||
U.S. Bancorp | 680,905 | 0.4 | 17,424,359 | |||||||||
Wells Fargo & Co. | 1,863,096 | 1.1 | 48,272,817 | |||||||||
Other Securities | 1.1 | 53,795,057 | ||||||||||
2.6 | 119,492,233 | |||||||||||
Capital Goods 8.2% | ||||||||||||
3M Co. | 249,454 | 0.4 | 19,711,855 | |||||||||
Caterpillar, Inc. | 225,296 | 0.5 | 21,281,460 | |||||||||
General Electric Co. | 3,729,302 | 1.4 | 62,316,636 | |||||||||
United Technologies Corp. | 320,903 | 0.5 | 25,024,016 | |||||||||
Other Securities | 5.4 | 245,708,995 | ||||||||||
8.2 | 374,042,962 | |||||||||||
Commercial & Professional Supplies 0.7% | ||||||||||||
Other Securities | 0.7 | 33,211,223 | ||||||||||
Consumer Durables & Apparel 1.3% | ||||||||||||
Other Securities | 1.3 | 58,857,714 | ||||||||||
Consumer Services 2.2% | ||||||||||||
McDonald’s Corp. | 367,036 | 0.7 | 34,079,293 | |||||||||
Other Securities | 1.5 | 65,416,614 | ||||||||||
2.2 | 99,495,907 | |||||||||||
Diversified Financials 5.4% | ||||||||||||
American Express Co. | 371,777 | 0.4 | 18,819,352 | |||||||||
Bank of America Corp. | 3,490,241 | 0.5 | 23,838,346 | |||||||||
Citigroup, Inc. | 1,009,956 | 0.7 | 31,904,510 | |||||||||
JPMorgan Chase & Co. | 1,373,478 | 1.0 | 47,742,095 | |||||||||
The Charles Schwab Corp. (a) | 351,965 | 0.1 | 4,322,130 | |||||||||
The Goldman Sachs Group, Inc. | 175,132 | 0.4 | 19,185,711 | |||||||||
Other Securities | 2.3 | 100,180,548 | ||||||||||
5.4 | 245,992,692 | |||||||||||
Energy 11.9% | ||||||||||||
Chevron Corp. | 714,337 | 1.6 | 75,041,102 | |||||||||
ConocoPhillips | 495,066 | 0.8 | 34,481,347 | |||||||||
Exxon Mobil Corp. | 1,722,663 | 3.0 | 134,522,754 | |||||||||
Occidental Petroleum Corp. | 288,416 | 0.6 | 26,805,383 | |||||||||
Schlumberger Ltd. | 484,247 | 0.8 | 35,577,627 | |||||||||
Other Securities | 5.1 | 236,256,185 | ||||||||||
11.9 | 542,684,398 | |||||||||||
Food & Staples Retailing 2.1% | ||||||||||||
CVS Caremark Corp. | 478,311 | 0.4 | 17,362,689 | |||||||||
Wal-Mart Stores, Inc. | 635,627 | 0.8 | 36,052,763 | |||||||||
Other Securities | 0.9 | 40,617,983 | ||||||||||
2.1 | 94,033,435 | |||||||||||
Food, Beverage & Tobacco 5.9% | ||||||||||||
Altria Group, Inc. | 741,105 | 0.4 | 20,417,443 | |||||||||
Kraft Foods, Inc., Class A | 618,964 | 0.5 | 21,775,154 | |||||||||
PepsiCo, Inc. | 554,285 | 0.8 | 34,892,241 | |||||||||
Philip Morris International, Inc. | 625,065 | 1.0 | 43,673,292 | |||||||||
The Coca-Cola Co. | 805,074 | 1.2 | 55,002,656 | |||||||||
Other Securities | 2.0 | 92,076,539 | ||||||||||
5.9 | 267,837,325 | |||||||||||
Health Care Equipment & Services 4.1% | ||||||||||||
UnitedHealth Group, Inc. | 378,892 | 0.4 | 18,183,027 | |||||||||
Other Securities | 3.7 | 169,288,662 | ||||||||||
4.1 | 187,471,689 | |||||||||||
Household & Personal Products 2.3% | ||||||||||||
The Procter & Gamble Co. | 974,719 | 1.4 | 62,372,269 | |||||||||
Other Securities | 0.9 | 41,980,075 | ||||||||||
2.3 | 104,352,344 | |||||||||||
Insurance 3.9% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 611,212 | 1.0 | 47,588,966 | |||||||||
Other Securities | 2.9 | 129,077,502 | ||||||||||
3.9 | 176,666,468 | |||||||||||
Materials 4.0% | ||||||||||||
Other Securities | 4.0 | 180,925,574 |
See financial notes 25
Schwab 1000 Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Media 3.1% | ||||||||||||
Comcast Corp., Class A | 975,923 | 0.5 | 22,885,394 | |||||||||
The Walt Disney Co. | 663,160 | 0.5 | 23,131,021 | |||||||||
Other Securities | 2.1 | 96,714,665 | ||||||||||
3.1 | 142,731,080 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.3% | ||||||||||||
Abbott Laboratories | 548,746 | 0.6 | 29,560,947 | |||||||||
Amgen, Inc. | 328,460 | 0.4 | 18,810,904 | |||||||||
Bristol-Myers Squibb Co. | 602,539 | 0.4 | 19,034,207 | |||||||||
Johnson & Johnson | 963,987 | 1.4 | 62,071,123 | |||||||||
Merck & Co., Inc. | 1,083,718 | 0.8 | 37,388,271 | |||||||||
Pfizer, Inc. | 2,777,751 | 1.2 | 53,499,484 | |||||||||
Other Securities | 2.5 | 110,151,460 | ||||||||||
7.3 | 330,516,396 | |||||||||||
Real Estate 2.5% | ||||||||||||
Other Securities | 2.5 | 112,996,963 | ||||||||||
Retailing 3.9% | ||||||||||||
Amazon.com, Inc. * | 124,841 | 0.6 | 26,654,802 | |||||||||
The Home Depot, Inc. | 558,735 | 0.4 | 20,002,713 | |||||||||
Other Securities | 2.9 | 131,765,785 | ||||||||||
3.9 | 178,423,300 | |||||||||||
Semiconductors & Semiconductor Equipment 2.6% | ||||||||||||
Intel Corp. | 1,879,980 | 1.0 | 46,134,709 | |||||||||
Other Securities | 1.6 | 72,372,331 | ||||||||||
2.6 | 118,507,040 | |||||||||||
Software & Services 9.5% | ||||||||||||
Google, Inc., Class A * | 88,511 | 1.2 | 52,455,159 | |||||||||
International Business Machines Corp. | 426,340 | 1.7 | 78,715,154 | |||||||||
Microsoft Corp. | 2,611,538 | 1.5 | 69,545,257 | |||||||||
Oracle Corp. | 1,374,010 | 1.0 | 45,026,308 | |||||||||
Other Securities | 4.1 | 184,886,968 | ||||||||||
9.5 | 430,628,846 | |||||||||||
Technology Hardware & Equipment 7.0% | ||||||||||||
Apple, Inc. * | 325,614 | 2.9 | 131,802,035 | |||||||||
Cisco Systems, Inc. | 1,967,415 | 0.8 | 36,456,200 | |||||||||
EMC Corp. * | 731,324 | 0.4 | 17,924,751 | |||||||||
Hewlett-Packard Co. | 738,468 | 0.4 | 19,650,633 | |||||||||
QUALCOMM, Inc. | 574,178 | 0.7 | 29,627,585 | |||||||||
Other Securities | 1.8 | 84,609,147 | ||||||||||
7.0 | 320,070,351 | |||||||||||
Telecommunication Services 2.8% | ||||||||||||
AT&T, Inc. | 2,089,577 | 1.3 | 61,245,502 | |||||||||
Verizon Communications, Inc. | 1,003,357 | 0.8 | 37,104,142 | |||||||||
Other Securities | 0.7 | 30,166,202 | ||||||||||
2.8 | 128,515,846 | |||||||||||
Transportation 2.0% | ||||||||||||
United Parcel Service, Inc., Class B | 348,635 | 0.5 | 24,488,123 | |||||||||
Other Securities | 1.5 | 68,061,270 | ||||||||||
2.0 | 92,549,393 | |||||||||||
Utilities 3.8% | ||||||||||||
Other Securities | 3.8 | 174,393,494 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $2,061,921,510) | 4,553,381,300 | |||||||||||
End of Investments. | ||||||||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||||||
SSIT U.S. Government Money Market Fund | 6,910,178 | 0.2 | 6,910,178 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $6,910,178) | 6,910,178 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $2,038,309,166 and the unrealized appreciation and depreciation were $2,649,757,514 and ($134,685,380), respectively, with a net unrealized appreciation of $2,515,072,134.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. | |
(b) | All or a portion of this security is on loan. |
REIT — | Real Estate Investment Trust. |
26 See financial notes
Schwab 1000 Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,615,081) | $4,322,130 | |||||
Investments in unaffiliated issuers, at value (cost $2,060,306,429) including securities on loan of $6,399,393 | + | 4,549,059,170 | ||||
Total investments, at value (cost $2,061,921,510) | 4,553,381,300 | |||||
Collateral invested for securities on loan | 6,910,178 | |||||
Receivables: | ||||||
Dividends | 4,796,868 | |||||
Fund shares sold | 3,019,208 | |||||
Income from securities on loan | 33,166 | |||||
Foreign tax reclaims | 8,275 | |||||
Interest | 41 | |||||
Prepaid expenses | + | 133,272 | ||||
Total assets | 4,568,282,308 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 6,910,178 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 70,228 | |||||
Shareholder service fees | 42,277 | |||||
Due to custodian | 7,198,015 | |||||
Fund shares redeemed | 2,327,741 | |||||
Accrued expenses | + | 179,405 | ||||
Total liabilities | 16,727,844 | |||||
Net Assets | ||||||
Total assets | 4,568,282,308 | |||||
Total liabilities | − | 16,727,844 | ||||
Net assets | $4,551,554,464 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,784,471,999 | |||||
Net investment income not yet distributed | 68,967,233 | |||||
Net realized capital gains | 206,655,442 | |||||
Net unrealized capital gains | 2,491,459,790 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$4,551,554,464 | 121,575,249 | $37.44 |
See financial notes 27
Schwab 1000 Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated issuer | $85,762 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $13,125) | 91,096,688 | |||||
Interest | 29,928 | |||||
Securities on loan | + | 562,962 | ||||
Total investment income | 91,775,340 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 10,836,411 | |||||
Shareholder service fees | 4,642,267 | |||||
Shareholder reports | 202,982 | |||||
Portfolio accounting fees | 149,738 | |||||
Transfer agent fees | 104,418 | |||||
Custodian fees | 101,757 | |||||
Professional fees | 67,553 | |||||
Trustees’ fees | 53,719 | |||||
Registration fees | 50,311 | |||||
Interest expense | 6,484 | |||||
Other expenses | + | 119,498 | ||||
Total expenses | 16,335,138 | |||||
Expense reduction by CSIM and its affiliates | − | 2,569,881 | ||||
Custody credits | − | 122 | ||||
Net expenses | − | 13,765,135 | ||||
Net investment income | 78,010,205 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on affiliated issuer | 281,316 | |||||
Net realized gains on unaffiliated investments | 200,151,747 | |||||
Net realized gains on futures contracts | + | 1,369,053 | ||||
Net realized gains | 201,802,116 | |||||
Net unrealized losses on affiliated issuer | (1,327,209 | ) | ||||
Net unrealized gains on unaffiliated investments | 70,624,301 | |||||
Net unrealized losses on futures contracts | + | (8,122 | ) | |||
Net unrealized gains | + | 69,288,970 | ||||
Net realized and unrealized gains | 271,091,086 | |||||
Increase in net assets resulting from operations | $349,101,291 |
28 See financial notes
Schwab 1000 Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $78,010,205 | $76,646,671 | ||||||||
Net realized gains | 201,802,116 | 58,671,007 | ||||||||
Net unrealized gains | + | 69,288,970 | 583,282,542 | |||||||
Increase in net assets from operations | 349,101,291 | 718,600,220 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (72,629,008 | ) | (78,998,534 | ) | ||||||
Distributions from net realized gains | + | (59,077,498 | ) | — | ||||||
Total distributions | ($131,706,506 | ) | ($78,998,534 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 8,119,509 | $304,265,267 | 7,828,659 | $261,539,915 | ||||||||||||||
Shares reinvested | 3,151,858 | 114,822,202 | 2,124,208 | 69,015,533 | ||||||||||||||
Shares redeemed | + | (17,520,002 | ) | (660,242,679 | ) | (20,167,504 | ) | (673,928,250 | ) | |||||||||
Net transactions in fund shares | (6,248,635 | ) | ($241,155,210 | ) | (10,214,637 | ) | ($343,372,802 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 127,823,884 | $4,575,314,889 | 138,038,521 | $4,279,086,005 | ||||||||||||||
Total increase or decrease | + | (6,248,635 | ) | (23,760,425 | ) | (10,214,637 | ) | 296,228,884 | ||||||||||
End of period | 121,575,249 | $4,551,554,464 | 127,823,884 | $4,575,314,889 | ||||||||||||||
Net investment income not yet distributed | $68,967,233 | $56,870,446 |
See financial notes 29
Schwab Small-Cap Index Fund®
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 19.18 | 15.14 | 13.85 | 25.35 | 25.97 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 2 | 0.22 | 2 | 0.18 | 2 | 0.33 | 2 | 0.35 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 1.37 | 3.97 | 1.40 | (7.89 | ) | 2.36 | ||||||||||||||||
Total from investment operations | 1.62 | 4.19 | 1.58 | (7.56 | ) | 2.71 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.20 | ) | (0.15 | ) | (0.29 | ) | (0.32 | ) | (0.28 | ) | ||||||||||||
Distributions from net realized gains | (0.05 | ) | — | — | (3.62 | ) | (3.05 | ) | ||||||||||||||
Total distributions | (0.25 | ) | (0.15 | ) | (0.29 | ) | (3.94 | ) | (3.33 | ) | ||||||||||||
Net asset value at end of period | 20.55 | 19.18 | 15.14 | 13.85 | 25.35 | |||||||||||||||||
Total return (%) | 8.45 | 27.85 | 11.98 | (34.48 | ) | 11.35 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.28 | 3 | 0.42 | 0.42 | ||||||||||||||||
Gross operating expenses | 0.19 | 0.20 | 0.33 | 0.42 | 0.42 | |||||||||||||||||
Net investment income (loss) | 1.18 | 1.23 | 1.41 | 1.78 | 1.43 | |||||||||||||||||
Portfolio turnover rate | 26 | 33 | 26 | 64 | 31 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,502 | 1,406 | 1,142 | 628 | 969 |
1 Effective August 21, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Calculated based on the average shares outstanding during the period.
3 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
30 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .4% | Common Stock | 1,332,736,154 | 1,492,931,898 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .2% | Short-Term Investment | 2,705,000 | 2,705,000 | ||||||||
99 | .6% | Total Investments | 1,335,441,154 | 1,495,636,898 | ||||||||
2 | .7% | Collateral Invested for Securities on Loan | 40,423,756 | 40,423,756 | ||||||||
(2 | .3)% | Other Assets and Liabilities, Net | (34,384,644 | ) | ||||||||
100 | .0% | Net Assets | 1,501,676,010 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.4% of net assets | ||||||||||||
Automobiles & Components 0.6% | ||||||||||||
Other Securities | 0.6 | 9,249,878 | ||||||||||
Banks 6.3% | ||||||||||||
Hancock Holding Co. | 147,149 | 0.3 | 4,458,615 | |||||||||
Signature Bank * | 80,509 | 0.3 | 4,488,377 | |||||||||
Other Securities | 5.7 | 85,574,903 | ||||||||||
6.3 | 94,521,895 | |||||||||||
Capital Goods 9.8% | ||||||||||||
HEICO Corp. | 64,356 | 0.2 | 3,669,579 | |||||||||
Hexcel Corp. * | 180,083 | 0.3 | 4,449,851 | |||||||||
Robbins & Myers, Inc. | 83,000 | 0.2 | 3,709,270 | |||||||||
Teledyne Technologies, Inc. * | 67,200 | 0.2 | 3,660,384 | |||||||||
Other Securities | 8.9 | 131,801,824 | ||||||||||
9.8 | 147,290,908 | |||||||||||
Commercial & Professional Supplies 4.1% | ||||||||||||
Other Securities | 4.1 | 61,033,827 | ||||||||||
Consumer Durables & Apparel 2.4% | ||||||||||||
Carter’s, Inc. * | 94,414 | 0.2 | 3,596,229 | |||||||||
Other Securities | 2.2 | 31,872,109 | ||||||||||
2.4 | 35,468,338 | |||||||||||
Consumer Services 5.1% | ||||||||||||
Six Flags Entertainment Corp. | 100,000 | 0.2 | 3,590,000 | |||||||||
Other Securities | 4.9 | 72,926,700 | ||||||||||
5.1 | 76,516,700 | |||||||||||
Diversified Financials 2.4% | ||||||||||||
Other Securities | 2.4 | 36,543,743 | ||||||||||
Energy 5.4% | ||||||||||||
Bill Barrett Corp. * | 84,200 | 0.2 | 3,502,720 | |||||||||
CVR Energy, Inc. * | 139,600 | 0.2 | 3,456,496 | |||||||||
Energy XXI (Bermuda) Ltd. * | 130,700 | 0.3 | 3,838,659 | |||||||||
Helix Energy Solutions Group, Inc. * | 194,300 | 0.2 | 3,509,058 | |||||||||
Rosetta Resources, Inc. * | 96,500 | 0.3 | 4,278,810 | |||||||||
Other Securities | 4.2 | 62,818,135 | ||||||||||
5.4 | 81,403,878 | |||||||||||
Food & Staples Retailing 1.3% | ||||||||||||
Other Securities | 1.3 | 19,380,083 | ||||||||||
Food, Beverage & Tobacco 2.4% | ||||||||||||
TreeHouse Foods, Inc. * | 63,600 | 0.3 | 3,901,224 | |||||||||
Other Securities | 2.1 | 32,029,722 | ||||||||||
2.4 | 35,930,946 | |||||||||||
Health Care Equipment & Services 7.2% | ||||||||||||
Catalyst Health Solutions, Inc. * | 90,100 | 0.3 | 4,952,797 | |||||||||
Healthspring, Inc. * | 123,844 | 0.4 | 6,680,145 | |||||||||
HMS Holdings Corp. * | 156,000 | 0.3 | 3,812,640 | |||||||||
LifePoint Hospitals, Inc. * | 91,600 | 0.2 | 3,541,256 | |||||||||
Owens & Minor, Inc. | 117,500 | 0.2 | 3,515,600 | |||||||||
Thoratec Corp. * | 101,700 | 0.2 | 3,713,067 | |||||||||
WellCare Health Plans, Inc. * | 74,600 | 0.2 | 3,656,146 | |||||||||
Other Securities | 5.4 | 78,307,632 | ||||||||||
7.2 | 108,179,283 | |||||||||||
Household & Personal Products 0.8% | ||||||||||||
Nu Skin Enterprises, Inc., Class A | 93,622 | 0.3 | 4,730,720 | |||||||||
Other Securities | 0.5 | 6,737,772 | ||||||||||
0.8 | 11,468,492 | |||||||||||
Insurance 3.2% | ||||||||||||
ProAssurance Corp. | 56,000 | 0.3 | 4,286,800 | |||||||||
Other Securities | 2.9 | 43,812,570 | ||||||||||
3.2 | 48,099,370 | |||||||||||
Materials 5.1% | ||||||||||||
Carpenter Technology Corp. | 77,400 | 0.3 | 4,390,128 | |||||||||
Coeur d’Alene Mines Corp. * | 156,650 | 0.3 | 4,005,541 | |||||||||
NewMarket Corp. | 17,700 | 0.2 | 3,436,278 |
See financial notes 31
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 4.3 | 65,542,675 | ||||||||||
5.1 | 77,374,622 | |||||||||||
Media 1.7% | ||||||||||||
Other Securities | 1.7 | 24,883,593 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.7% | ||||||||||||
Cepheid, Inc. * | 108,100 | 0.3 | 3,878,628 | |||||||||
Cubist Pharmaceuticals, Inc. * | 104,932 | 0.3 | 3,967,479 | |||||||||
Medicis Pharmaceutical Corp., Class A | 111,749 | 0.3 | 4,278,869 | |||||||||
Pharmasset, Inc. * | 128,400 | 0.6 | 9,039,360 | |||||||||
Questcor Pharmaceuticals, Inc. * | 108,100 | 0.3 | 4,389,941 | |||||||||
Seattle Genetics, Inc. * | 177,398 | 0.3 | 3,902,756 | |||||||||
Other Securities | 3.6 | 55,466,929 | ||||||||||
5.7 | 84,923,962 | |||||||||||
Real Estate 6.5% | ||||||||||||
Equity Lifestyle Properties, Inc. | 69,259 | 0.3 | 4,580,098 | |||||||||
Extra Space Storage, Inc. | 169,558 | 0.3 | 3,820,142 | |||||||||
Home Properties, Inc. | 77,265 | 0.3 | 4,550,908 | |||||||||
Kilroy Realty Corp. | 107,100 | 0.3 | 3,929,499 | |||||||||
LaSalle Hotel Properties | 148,726 | 0.2 | 3,556,039 | |||||||||
Post Properties, Inc. | 87,667 | 0.2 | 3,601,360 | |||||||||
Tanger Factory Outlet Centers, Inc. | 139,100 | 0.3 | 3,917,056 | |||||||||
Other Securities | 4.6 | 69,926,462 | ||||||||||
6.5 | 97,881,564 | |||||||||||
Retailing 5.3% | ||||||||||||
Chico’s FAS, Inc. | 311,500 | 0.3 | 3,850,140 | |||||||||
Rent-A-Center, Inc. | 118,505 | 0.3 | 4,046,946 | |||||||||
Other Securities | 4.7 | 72,062,382 | ||||||||||
5.3 | 79,959,468 | |||||||||||
Semiconductors & Semiconductor Equipment 3.6% | ||||||||||||
Other Securities | 3.6 | 53,966,035 | ||||||||||
Software & Services 7.6% | ||||||||||||
CommVault Systems, Inc. * | 81,200 | 0.2 | 3,457,496 | |||||||||
NeuStar, Inc., Class A * | 135,900 | 0.3 | 4,320,261 | |||||||||
Other Securities | 7.1 | 106,968,410 | ||||||||||
7.6 | 114,746,167 | |||||||||||
Technology Hardware & Equipment 5.1% | ||||||||||||
Diebold, Inc. | 115,500 | 0.2 | 3,728,340 | |||||||||
Other Securities | 4.9 | 73,355,708 | ||||||||||
5.1 | 77,084,048 | |||||||||||
Telecommunication Services 1.3% | ||||||||||||
Level 3 Communications, Inc. * | 260,298 | 0.5 | 6,947,354 | |||||||||
Other Securities | 0.8 | 12,761,292 | ||||||||||
1.3 | 19,708,646 | |||||||||||
Transportation 2.6% | ||||||||||||
Landstar System, Inc. | 85,400 | 0.3 | 3,811,402 | |||||||||
Other Securities | 2.3 | 34,673,911 | ||||||||||
2.6 | 38,485,313 | |||||||||||
Utilities 3.9% | ||||||||||||
Cleco Corp. | 106,900 | 0.3 | 3,941,403 | |||||||||
IDACORP, Inc. | 87,700 | 0.2 | 3,541,326 | |||||||||
New Jersey Resources Corp. | 73,800 | 0.2 | 3,470,076 | |||||||||
WGL Holdings, Inc. | 91,300 | 0.3 | 3,908,553 | |||||||||
Other Securities | 2.9 | 43,969,781 | ||||||||||
3.9 | 58,831,139 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,332,736,154) | 1,492,931,898 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | — | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | — | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.2% of net assets | ||||||||||||
U.S. Treasury Obligations 0.2% | ||||||||||||
Other Securities | 0.2 | 2,705,000 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $2,705,000) | 2,705,000 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 2.7% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 40,423,756 | 2.7 | 40,423,756 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $40,423,756) | 40,423,756 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 the tax basis cost of the fund’s investments was $1,342,201,749 and the unrealized appreciation and
32 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
depreciation were $331,444,840 and ($178,009,691), respectively, with a net unrealized appreciation of $153,435,149.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $127,375 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 90 | 6,653,700 | 206,992 |
See financial notes 33
Schwab Small-Cap Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $1,335,441,154) including securities on loan of $38,047,860 | $1,495,636,898 | |||||
Collateral invested for securities on loan | 40,423,756 | |||||
Receivables: | ||||||
Investments sold | 8,174,047 | |||||
Fund shares sold | 1,663,127 | |||||
Dividends | 603,283 | |||||
Income from securities on loan | 250,679 | |||||
Receivable from investment adviser | 623 | |||||
Prepaid expenses | + | 41,235 | ||||
Total assets | 1,546,793,648 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 40,423,756 | |||||
Payables: | ||||||
Investments bought | 1,491,259 | |||||
Investment adviser and administrator fees | 19,854 | |||||
Shareholder service fees | 2,926 | |||||
Due to custodian | 2,410,381 | |||||
Fund shares redeemed | 666,640 | |||||
Due to brokers for futures | 22,191 | |||||
Accrued expenses | + | 80,631 | ||||
Total liabilities | 45,117,638 | |||||
Net Assets | ||||||
Total assets | 1,546,793,648 | |||||
Total liabilities | − | 45,117,638 | ||||
Net assets | $1,501,676,010 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,242,735,453 | |||||
Net investment income not yet distributed | 21,301,466 | |||||
Net realized capital gains | 77,236,355 | |||||
Net unrealized capital gains | 160,402,736 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,501,676,010 | 73,091,655 | $20.55 |
34 See financial notes
Schwab Small-Cap Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,208) | $18,901,415 | |||||
Interest | 5,805 | |||||
Securities on loan | + | 2,504,628 | ||||
Total investment income | 21,411,848 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,345,717 | |||||
Shareholder service fees | 309,179 | |||||
Portfolio accounting fees | 80,861 | |||||
Shareholder reports | 77,384 | |||||
Transfer agent fees | 52,993 | |||||
Professional fees | 49,002 | |||||
Custodian fees | 42,209 | |||||
Registration fees | 32,275 | |||||
Trustees’ fees | 17,157 | |||||
Interest expense | 1,158 | |||||
Other expenses | + | 37,934 | ||||
Total expenses | 3,045,869 | |||||
Expense reduction by CSIM and its affiliates | − | 84,581 | ||||
Payment for state filing fees (see financial note 11) | − | 15,440 | ||||
Net expenses | − | 2,945,848 | ||||
Net investment income | 18,466,000 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 93,195,186 | |||||
Net realized gains on futures contracts | + | 2,180,995 | ||||
Net realized gains | 95,376,181 | |||||
Net unrealized gains on investments | 7,885,245 | |||||
Net unrealized gains on futures contracts | + | 197,344 | ||||
Net unrealized gains | + | 8,082,589 | ||||
Net realized and unrealized gains | 103,458,770 | |||||
Increase in net assets resulting from operations | $121,924,770 |
See financial notes 35
Schwab Small-Cap Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $18,466,000 | $16,175,241 | ||||||||
Net realized gains | 95,376,181 | 83,503,173 | ||||||||
Net unrealized gains | + | 8,082,589 | 214,131,549 | |||||||
Increase in net assets from operations | 121,924,770 | 313,809,963 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (14,254,530 | ) | (11,038,239 | ) | ||||||
Distributions from net realized gains | + | (4,031,438 | ) | — | ||||||
Total distributions | ($18,285,968 | ) | ($11,038,239 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 14,936,269 | $309,163,569 | 12,649,438 | $222,755,641 | ||||||||||||||
Shares reinvested | 814,081 | 16,827,051 | 641,064 | 10,224,972 | ||||||||||||||
Shares redeemed | + | (15,965,406 | ) | (333,977,185 | ) | (15,417,491 | ) | (271,677,060 | ) | |||||||||
Net transactions in fund shares | (215,056 | ) | ($7,986,565 | ) | (2,126,989 | ) | ($38,696,447 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 73,306,711 | $1,406,023,773 | 75,433,700 | $1,141,948,496 | ||||||||||||||
Total increase or decrease | + | (215,056 | ) | 95,652,237 | (2,126,989 | ) | 264,075,277 | |||||||||||
End of period | 73,091,655 | $1,501,676,010 | 73,306,711 | $1,406,023,773 | ||||||||||||||
Net investment income not yet distributed | $21,301,466 | $9,010,974 |
36 See financial notes
Schwab Total Stock Market Index Fund®
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 21.57 | 18.50 | 17.08 | 27.04 | 23.90 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.41 | 0.37 | 0.24 | 0.40 | 0.37 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.33 | 3.02 | 1.55 | (9.93 | ) | 3.09 | ||||||||||||||||
Total from investment operations | 1.74 | 3.39 | 1.79 | (9.53 | ) | 3.46 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.39 | ) | (0.32 | ) | (0.37 | ) | (0.37 | ) | (0.32 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.06 | ) | — | ||||||||||||||||
Total distributions | (0.39 | ) | (0.32 | ) | (0.37 | ) | (0.43 | ) | (0.32 | ) | ||||||||||||
Net asset value at end of period | 22.92 | 21.57 | 18.50 | 17.08 | 27.04 | |||||||||||||||||
Total return (%) | 8.14 | 18.53 | 10.92 | (35.76 | ) | 14.62 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.09 | 0.09 | 0.21 | 2 | 0.38 | 0.37 | ||||||||||||||||
Gross operating expenses | 0.11 | 0.11 | 0.28 | 0.38 | 0.37 | |||||||||||||||||
Net investment income (loss) | 1.79 | 1.85 | 2.02 | 1.71 | 1.49 | |||||||||||||||||
Portfolio turnover rate | 1 | 3 | 5 | 1 | 0 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,747 | 1,470 | 1,205 | 585 | 906 |
1 Effective September 18, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 Less than 1%.
See financial notes 37
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Common Stock | 1,418,654,506 | 1,730,168,207 | ||||||||
0 | .0% | Rights | — | 29 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .8% | Short-Term Investments | 14,293,902 | 14,293,902 | ||||||||
99 | .8% | Total Investments | 1,432,948,408 | 1,744,462,138 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,856,627 | 4,856,627 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (2,496,426 | ) | ||||||||
100 | .0% | Net Assets | 1,746,822,339 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.0% of net assets | ||||||||||||
Automobiles & Components 0.9% | ||||||||||||
Other Securities | 0.9 | 16,144,090 | ||||||||||
Banks 3.0% | ||||||||||||
U.S. Bancorp | 237,031 | 0.3 | 6,065,623 | |||||||||
Wells Fargo & Co. | 616,306 | 0.9 | 15,968,489 | |||||||||
Other Securities | 1.8 | 30,228,076 | ||||||||||
3.0 | 52,262,188 | |||||||||||
Capital Goods 7.9% | ||||||||||||
3M Co. | 80,000 | 0.4 | 6,321,600 | |||||||||
Caterpillar, Inc. | 71,100 | 0.4 | 6,716,106 | |||||||||
General Electric Co. | 1,319,666 | 1.3 | 22,051,619 | |||||||||
United Technologies Corp. | 100,068 | 0.4 | 7,803,303 | |||||||||
Other Securities | 5.4 | 95,847,732 | ||||||||||
7.9 | 138,740,360 | |||||||||||
Commercial & Professional Supplies 1.0% | ||||||||||||
Other Securities | 1.0 | 16,867,463 | ||||||||||
Consumer Durables & Apparel 1.4% | ||||||||||||
Other Securities | 1.4 | 23,957,011 | ||||||||||
Consumer Services 2.4% | ||||||||||||
McDonald’s Corp. | 127,709 | 0.7 | 11,857,781 | |||||||||
Other Securities | 1.7 | 30,044,080 | ||||||||||
2.4 | 41,901,861 | |||||||||||
Diversified Financials 5.1% | ||||||||||||
American Express Co. | 132,650 | 0.4 | 6,714,743 | |||||||||
Bank of America Corp. | 1,244,956 | 0.5 | 8,503,049 | |||||||||
Citigroup, Inc. | 358,528 | 0.6 | 11,325,900 | |||||||||
JPMorgan Chase & Co. | 490,444 | 1.0 | 17,047,833 | |||||||||
The Charles Schwab Corp. (b) | 126,026 | 0.1 | 1,547,599 | |||||||||
Other Securities | 2.5 | 44,300,739 | ||||||||||
5.1 | 89,439,863 | |||||||||||
Energy 11.2% | ||||||||||||
Chevron Corp. | 248,739 | 1.5 | 26,130,032 | |||||||||
ConocoPhillips | 163,223 | 0.7 | 11,368,482 | |||||||||
Exxon Mobil Corp. | 605,034 | 2.7 | 47,247,105 | |||||||||
Occidental Petroleum Corp. | 100,820 | 0.5 | 9,370,211 | |||||||||
Schlumberger Ltd. | 170,260 | 0.7 | 12,509,002 | |||||||||
Other Securities | 5.1 | 89,454,280 | ||||||||||
11.2 | 196,079,112 | |||||||||||
Food & Staples Retailing 2.0% | ||||||||||||
CVS Caremark Corp. | 168,140 | 0.3 | 6,103,482 | |||||||||
Wal-Mart Stores, Inc. | 218,100 | 0.7 | 12,370,632 | |||||||||
Other Securities | 1.0 | 15,892,865 | ||||||||||
2.0 | 34,366,979 | |||||||||||
Food, Beverage & Tobacco 5.4% | ||||||||||||
Altria Group, Inc. | 257,300 | 0.4 | 7,088,615 | |||||||||
Kraft Foods, Inc., Class A | 200,513 | 0.4 | 7,054,047 | |||||||||
PepsiCo, Inc. | 195,858 | 0.7 | 12,329,261 | |||||||||
Philip Morris International, Inc. | 220,300 | 0.9 | 15,392,361 | |||||||||
The Coca-Cola Co. | 262,700 | 1.0 | 17,947,664 | |||||||||
Other Securities | 2.0 | 34,687,172 | ||||||||||
5.4 | 94,499,120 | |||||||||||
Health Care Equipment & Services 4.3% | ||||||||||||
UnitedHealth Group, Inc. | 137,080 | 0.4 | 6,578,469 | |||||||||
Other Securities | 3.9 | 68,944,896 | ||||||||||
4.3 | 75,523,365 | |||||||||||
Household & Personal Products 2.2% | ||||||||||||
The Procter & Gamble Co. | 343,215 | 1.3 | 21,962,328 | |||||||||
Other Securities | 0.9 | 15,958,022 | ||||||||||
2.2 | 37,920,350 | |||||||||||
Insurance 3.8% | ||||||||||||
Berkshire Hathaway, Inc., Class B * | 236,774 | 1.1 | 18,435,224 | |||||||||
Other Securities | 2.7 | 48,197,655 | ||||||||||
3.8 | 66,632,879 |
38 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Materials 4.1% | ||||||||||||
Other Securities | 4.1 | 70,755,280 | ||||||||||
Media 3.0% | ||||||||||||
Comcast Corp., Class A | 277,004 | 0.4 | 6,495,744 | |||||||||
The Walt Disney Co. | 219,693 | 0.4 | 7,662,892 | |||||||||
Other Securities | 2.2 | 37,979,960 | ||||||||||
3.0 | 52,138,596 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.1% | ||||||||||||
Abbott Laboratories | 193,305 | 0.6 | 10,413,340 | |||||||||
Amgen, Inc. | 115,268 | 0.4 | 6,601,398 | |||||||||
Bristol-Myers Squibb Co. | 212,450 | 0.4 | 6,711,295 | |||||||||
Johnson & Johnson | 338,670 | 1.2 | 21,806,961 | |||||||||
Merck & Co., Inc. | 380,170 | 0.8 | 13,115,865 | |||||||||
Pfizer, Inc. | 996,301 | 1.1 | 19,188,757 | |||||||||
Other Securities | 2.6 | 46,657,488 | ||||||||||
7.1 | 124,495,104 | |||||||||||
Real Estate 3.1% | ||||||||||||
Other Securities | 3.1 | 54,262,647 | ||||||||||
Retailing 3.9% | ||||||||||||
Amazon.com, Inc. * | 43,200 | 0.5 | 9,223,632 | |||||||||
The Home Depot, Inc. | 201,570 | 0.4 | 7,216,206 | |||||||||
Other Securities | 3.0 | 52,015,503 | ||||||||||
3.9 | 68,455,341 | |||||||||||
Semiconductors & Semiconductor Equipment 2.7% | ||||||||||||
Intel Corp. | 661,732 | 0.9 | 16,238,903 | |||||||||
Other Securities | 1.8 | 30,581,025 | ||||||||||
2.7 | 46,819,928 | |||||||||||
Software & Services 9.3% | ||||||||||||
Google, Inc., Class A * | 31,450 | 1.1 | 18,638,528 | |||||||||
International Business Machines Corp. | 150,710 | 1.6 | 27,825,587 | |||||||||
Microsoft Corp. | 924,750 | 1.4 | 24,626,092 | |||||||||
Oracle Corp. | 473,249 | 0.9 | 15,508,370 | |||||||||
Other Securities | 4.3 | 75,360,961 | ||||||||||
9.3 | 161,959,538 | |||||||||||
Technology Hardware & Equipment 6.9% | ||||||||||||
Apple, Inc. * | 114,900 | 2.7 | 46,509,222 | |||||||||
Cisco Systems, Inc. | 685,009 | 0.7 | 12,693,217 | |||||||||
EMC Corp. * | 253,686 | 0.4 | 6,217,844 | |||||||||
Hewlett-Packard Co. | 268,636 | 0.4 | 7,148,404 | |||||||||
QUALCOMM, Inc. | 207,600 | 0.6 | 10,712,160 | |||||||||
Other Securities | 2.1 | 37,771,481 | ||||||||||
6.9 | 121,052,328 | |||||||||||
Telecommunication Services 2.7% | ||||||||||||
AT&T, Inc. | 734,556 | 1.2 | 21,529,836 | |||||||||
Verizon Communications, Inc. | 348,072 | 0.7 | 12,871,703 | |||||||||
Other Securities | 0.8 | 12,953,173 | ||||||||||
2.7 | 47,354,712 | |||||||||||
Transportation 1.9% | ||||||||||||
United Parcel Service, Inc., Class B | 87,380 | 0.4 | 6,137,571 | |||||||||
Other Securities | 1.5 | 26,925,917 | ||||||||||
1.9 | 33,063,488 | |||||||||||
Utilities 3.7% | ||||||||||||
Other Securities | 3.7 | 65,476,604 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $1,418,654,506) | 1,730,168,207 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Banks 0.0% | ||||||||||||
Other Securities | 0.0 | 29 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | 29 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | — | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investments 0.8% of net assets | ||||||||||||
Time Deposit 0.7% | ||||||||||||
Bank of America | ||||||||||||
0.03%, 11/01/11 | 12,648,902 | 0.7 | 12,648,902 | |||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 1,645,000 | ||||||||||
Total Short-Term Investments | ||||||||||||
(Cost $14,293,902) | 14,293,902 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 39
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 4,856,627 | 0.3 | 4,856,627 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $4,856,627) | 4,856,627 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 the tax basis cost of the fund’s investments was $1,444,456,294 and the unrealized appreciation and depreciation were $505,574,423 and ($205,568,579), respectively, with a net unrealized appreciation of $300,005,844.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | Illiquid security. At the period end, the value of these amounted to $8,396 or 0.0% of net assets. | |
(d) | All or a portion of this security is on loan. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 70 | 5,175,100 | 396,770 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 135 | 8,432,775 | 643,476 | |||||||||
Net unrealized gains | 1,040,246 | |||||||||||
40 See financial notes
Schwab Total Stock Market Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated issuers, at value (cost $2,486,364) | $1,547,599 | |||||
Investments in unaffiliated issuers, at value (cost $1,430,462,044) including securities on loan of $4,539,646 | + | 1,742,914,539 | ||||
Total investments, at value (cost $1,432,948,408) | 1,744,462,138 | |||||
Collateral invested for securities on loan | 4,856,627 | |||||
Receivables: | ||||||
Fund shares sold | 2,073,523 | |||||
Dividends | 1,725,930 | |||||
Income from securities on loan | 29,657 | |||||
Foreign tax reclaims | 2,887 | |||||
Interest | 10 | |||||
Prepaid expenses | + | 43,828 | ||||
Total assets | 1,753,194,600 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,856,627 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 6,585 | |||||
Shareholder service fees | 3,189 | |||||
Fund shares redeemed | 1,063,761 | |||||
Due to brokers for futures | 354,700 | |||||
Accrued expenses | + | 87,399 | ||||
Total liabilities | 6,372,261 | |||||
Net Assets | ||||||
Total assets | 1,753,194,600 | |||||
Total liabilities | − | 6,372,261 | ||||
Net assets | $1,746,822,339 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,441,373,231 | |||||
Net investment income not yet distributed | 25,269,704 | |||||
Net realized capital losses | (32,374,572 | ) | ||||
Net unrealized capital gains | 312,553,976 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,746,822,339 | 76,225,346 | $22.92 |
See financial notes 41
Schwab Total Stock Market Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated issuer | $27,599 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $5,354) | 31,779,044 | |||||
Interest | 10,674 | |||||
Securities on loan | + | 331,060 | ||||
Total investment income | 32,148,377 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,024,203 | |||||
Shareholder service fees | 334,519 | |||||
Portfolio accounting fees | 99,601 | |||||
Transfer agent fees | 75,755 | |||||
Shareholder reports | 75,068 | |||||
Registration fees | 54,904 | |||||
Professional fees | 49,292 | |||||
Custodian fees | 47,375 | |||||
Trustees’ fees | 17,845 | |||||
Interest expense | 1,146 | |||||
Other expenses | + | 36,562 | ||||
Total expenses | 1,816,270 | |||||
Expense reduction by CSIM and its affiliates | − | 278,819 | ||||
Payment for state filing fees (see financial note 11) | − | 25,662 | ||||
Net expenses | − | 1,511,789 | ||||
Net investment income | 30,636,588 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 573,433 | |||||
Net realized gains on futures contracts | + | 2,187,717 | ||||
Net realized gains | 2,761,150 | |||||
Net unrealized losses on affiliated issuer | (461,362 | ) | ||||
Net unrealized gains on unaffiliated investments | 81,726,746 | |||||
Net unrealized gains on futures contracts | + | 83,953 | ||||
Net unrealized gains | + | 81,349,337 | ||||
Net realized and unrealized gains | 84,110,487 | |||||
Increase in net assets resulting from operations | $114,747,075 |
42 See financial notes
Schwab Total Stock Market Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $30,636,588 | $24,843,447 | ||||||||
Net realized gains (losses) | 2,761,150 | (5,259,869 | ) | |||||||
Net unrealized gains | + | 81,349,337 | 205,159,657 | |||||||
Increase in net assets from operations | 114,747,075 | 224,743,235 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($26,769,873 | ) | ($20,970,578 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 22,264,739 | $513,941,756 | 15,037,117 | $303,313,169 | ||||||||||||||
Shares reinvested | 1,030,256 | 22,943,799 | 918,372 | 17,825,608 | ||||||||||||||
Shares redeemed | + | (15,226,159 | ) | (348,432,230 | ) | (12,936,100 | ) | (259,233,074 | ) | |||||||||
Net transactions in fund shares | 8,068,836 | $188,453,325 | 3,019,389 | $61,905,703 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 68,156,510 | $1,470,391,812 | 65,137,121 | $1,204,713,452 | ||||||||||||||
Total increase | + | 8,068,836 | 276,430,527 | 3,019,389 | 265,678,360 | |||||||||||||
End of period | 76,225,346 | $1,746,822,339 | 68,156,510 | $1,470,391,812 | ||||||||||||||
Net investment income not yet distributed | $25,269,704 | $21,644,849 |
See financial notes 43
Schwab International Index Fund®
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 17.31 | 16.26 | 13.95 | 25.95 | 21.14 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.57 | 0.48 | 0.37 | 0.68 | 0.54 | |||||||||||||||||
Net realized and unrealized gains (losses) | (1.38 | ) | 1.01 | 2.58 | (12.13 | ) | 4.93 | |||||||||||||||
Total from investment operations | (0.81 | ) | 1.49 | 2.95 | (11.45 | ) | 5.47 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.48 | ) | (0.44 | ) | (0.64 | ) | (0.55 | ) | (0.66 | ) | ||||||||||||
Net asset value at end of period | 16.02 | 17.31 | 16.26 | 13.95 | 25.95 | |||||||||||||||||
Total return (%) | (4.83 | ) | 9.31 | 22.55 | (45.02 | ) | 26.50 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.19 | 0.19 | 0.32 | 2 | 0.50 | 0.50 | ||||||||||||||||
Gross operating expenses | 0.21 | 0.22 | 0.41 | 0.54 | 0.54 | |||||||||||||||||
Net investment income (loss) | 3.26 | 2.88 | 2.92 | 3.15 | 2.34 | |||||||||||||||||
Portfolio turnover rate | 10 | 13 | 21 | 10 | 5 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,375 | 1,471 | 1,369 | 711 | 1,264 |
1 Effective August 21, 2009, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
44 See financial notes
Schwab International Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
95 | .1% | Common Stock | 1,064,505,397 | 1,308,416,799 | ||||||||
0 | .3% | Preferred Stock | 2,869,550 | 3,798,553 | ||||||||
4 | .1% | Other Investment Company | 59,206,235 | 56,297,750 | ||||||||
99 | .5% | Total Investments | 1,126,581,182 | 1,368,513,102 | ||||||||
0 | .4% | Collateral Invested for Securities on Loan | 5,801,760 | 5,801,760 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 823,975 | |||||||||
100 | .0% | Net Assets | 1,375,138,837 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 95.1% of net assets | ||||||||||||
Australia 7.4% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | 397,907 | 0.7 | 8,991,269 | |||||||||
BHP Billiton Ltd. | 486,822 | 1.4 | 19,056,448 | |||||||||
Commonwealth Bank of Australia | 239,050 | 0.9 | 12,280,005 | |||||||||
National Australia Bank Ltd. | 333,721 | 0.6 | 8,913,492 | |||||||||
Westpac Banking Corp. | 459,492 | 0.8 | 10,663,077 | |||||||||
Other Securities | 3.0 | 41,739,096 | ||||||||||
7.4 | 101,643,387 | |||||||||||
Austria 0.1% | ||||||||||||
Other Securities | 0.1 | 1,959,703 | ||||||||||
Belgium 0.6% | ||||||||||||
Other Securities | 0.6 | 9,094,496 | ||||||||||
Canada 9.5% | ||||||||||||
Bank of Nova Scotia | 164,704 | 0.6 | 8,680,112 | |||||||||
Barrick Gold Corp. | 153,921 | 0.6 | 7,599,150 | |||||||||
Royal Bank of Canada | 217,968 | 0.8 | 10,632,159 | |||||||||
Suncor Energy, Inc. | 238,799 | 0.6 | 7,606,590 | |||||||||
The Toronto-Dominion Bank | 136,432 | 0.7 | 10,297,245 | |||||||||
Other Securities | 6.2 | 85,356,241 | ||||||||||
9.5 | 130,171,497 | |||||||||||
China 0.2% | ||||||||||||
Other Securities | 0.2 | 2,298,995 | ||||||||||
Denmark 0.8% | ||||||||||||
Novo Nordisk A/S, Class B | 64,228 | 0.5 | 6,818,855 | |||||||||
Other Securities | 0.3 | 4,481,597 | ||||||||||
0.8 | 11,300,452 | |||||||||||
Finland 0.7% | ||||||||||||
Other Securities | 0.7 | 9,117,651 | ||||||||||
France 9.3% | ||||||||||||
BNP Paribas S.A. | 162,308 | 0.5 | 7,247,842 | |||||||||
DANONE S.A. | 98,288 | 0.5 | 6,813,609 | |||||||||
Sanofi | 175,865 | 0.9 | 12,581,207 | |||||||||
Total S.A. | 356,248 | 1.4 | 18,588,030 | |||||||||
Other Securities | 6.0 | 82,828,386 | ||||||||||
9.3 | 128,059,074 | |||||||||||
Germany 7.6% | ||||||||||||
Allianz SE - Reg’d | 68,946 | 0.6 | 7,671,076 | |||||||||
BASF SE | 139,330 | 0.7 | 10,170,503 | |||||||||
Bayer AG - Reg’d | 125,445 | 0.6 | 7,992,347 | |||||||||
Daimler AG - Reg’d | 135,920 | 0.5 | 6,903,250 | |||||||||
E.ON AG | 303,545 | 0.5 | 7,319,981 | |||||||||
SAP AG | 136,681 | 0.6 | 8,264,816 | |||||||||
Siemens AG - Reg’d | 124,799 | 1.0 | 13,081,531 | |||||||||
Other Securities | 3.1 | 42,595,904 | ||||||||||
7.6 | 103,999,408 | |||||||||||
Hong Kong 2.3% | ||||||||||||
Other Securities | 2.3 | 32,474,754 | ||||||||||
Ireland 0.1% | ||||||||||||
Other Securities | 0.1 | 1,965,467 | ||||||||||
Israel 0.5% | ||||||||||||
Other Securities | 0.5 | 6,564,036 | ||||||||||
Italy 2.5% | ||||||||||||
Eni S.p.A. | 447,375 | 0.7 | 9,888,733 | |||||||||
Other Securities | 1.8 | 24,413,462 | ||||||||||
2.5 | 34,302,195 | |||||||||||
Japan 13.9% | ||||||||||||
Canon, Inc. | 182,895 | 0.6 | 8,303,031 | |||||||||
Honda Motor Co., Ltd. | 237,139 | 0.5 | 7,091,342 | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 2,147,209 | 0.7 | 9,331,634 | |||||||||
Toyota Motor Corp. | 403,303 | 1.0 | 13,389,969 | |||||||||
Other Securities | 11.1 | 152,827,300 | ||||||||||
13.9 | 190,943,276 |
See financial notes 45
Schwab International Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Netherlands 2.2% | ||||||||||||
Unilever N.V. CVA | 260,118 | 0.7 | 8,980,225 | |||||||||
Other Securities | 1.5 | 20,975,807 | ||||||||||
2.2 | 29,956,032 | |||||||||||
Norway 0.8% | ||||||||||||
Other Securities | 0.8 | 10,743,507 | ||||||||||
Portugal 0.2% | ||||||||||||
Other Securities | 0.2 | 3,120,150 | ||||||||||
Singapore 1.2% | ||||||||||||
Other Securities | 1.2 | 16,693,129 | ||||||||||
Spain 3.3% | ||||||||||||
Banco Santander S.A. | 1,306,490 | 0.8 | 11,057,944 | |||||||||
Telefonica S.A. | 613,907 | 0.9 | 13,046,504 | |||||||||
Other Securities | 1.6 | 20,833,956 | ||||||||||
3.3 | 44,938,404 | |||||||||||
Sweden 2.0% | ||||||||||||
Other Securities | 2.0 | 28,318,757 | ||||||||||
Switzerland 8.6% | ||||||||||||
Nestle S.A. - Reg’d | 525,628 | 2.2 | 30,401,094 | |||||||||
Novartis AG - Reg’d | 416,501 | 1.7 | 23,463,696 | |||||||||
Roche Holding AG | 106,576 | 1.3 | 17,485,852 | |||||||||
UBS AG - Reg’d * | 581,118 | 0.5 | 7,344,290 | |||||||||
Other Securities | 2.9 | 39,327,609 | ||||||||||
8.6 | 118,022,541 | |||||||||||
United Kingdom 21.3% | ||||||||||||
Anglo American plc | 200,720 | 0.5 | 7,358,490 | |||||||||
AstraZeneca plc | 204,392 | 0.7 | 9,812,691 | |||||||||
BG Group plc | 514,209 | 0.8 | 11,150,114 | |||||||||
BHP Billiton plc | 320,394 | 0.7 | 10,089,040 | |||||||||
BP plc | 2,873,603 | 1.5 | 21,146,375 | |||||||||
British American Tobacco plc | 300,013 | 1.0 | 13,755,690 | |||||||||
Diageo plc | 379,847 | 0.6 | 7,861,224 | |||||||||
GlaxoSmithKline plc | 770,586 | 1.3 | 17,293,765 | |||||||||
HSBC Holdings plc | 2,706,394 | 1.7 | 23,614,121 | |||||||||
Rio Tinto plc | 223,527 | 0.9 | 12,092,567 | |||||||||
Royal Dutch Shell plc, A Shares | 548,991 | 1.4 | 19,447,845 | |||||||||
Royal Dutch Shell plc, B Shares | 408,945 | 1.1 | 14,672,192 | |||||||||
Standard Chartered plc | 294,899 | 0.5 | 6,881,269 | |||||||||
Tesco plc | 1,215,869 | 0.6 | 7,839,211 | |||||||||
Vodafone Group plc | 7,714,407 | 1.6 | 21,420,479 | |||||||||
Other Securities | 6.4 | 88,294,815 | ||||||||||
21.3 | 292,729,888 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,064,505,397) | 1,308,416,799 | |||||||||||
Preferred Stock 0.3% of net assets | ||||||||||||
Germany 0.3% | ||||||||||||
Other Securities | 0.3 | 3,798,553 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $2,869,550) | 3,798,553 | |||||||||||
Other Investment Company 4.1% of net assets | ||||||||||||
United States 4.1% | ||||||||||||
iShares MSCI EAFE Index Fund (cost $59,206,235) | 1,075,000 | 4.1 | 56,297,750 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $59,206,235) | 56,297,750 | |||||||||||
End of Investments. | ||||||||||||
Collateral Invested for Securities on Loan 0.4% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 5,801,760 | 0.4 | 5,801,760 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $5,801,760) | 5,801,760 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $1,145,372,793 and the unrealized appreciation and depreciation were $412,847,229 and ($189,706,920), respectively, with a net unrealized appreciation of $223,140,309.
At 10/31/11, the values of certain foreign securities held by the fund aggregating $1,178,330,751 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $32,986 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
CVA — | Dutch Certificate | |
Reg’d — | Registered |
46 See financial notes
Schwab International Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $1,126,581,182) including securities on loan of $5,423,729 | $1,368,513,102 | |||||
Foreign currency, at value (cost $557,606) | 551,564 | |||||
Collateral invested for securities on loan | 5,801,760 | |||||
Receivables: | ||||||
Investments sold | 81,117,009 | |||||
Dividends | 2,795,765 | |||||
Foreign tax reclaims | 996,308 | |||||
Fund shares sold | 815,449 | |||||
Income from securities on loan | 36,291 | |||||
Prepaid expenses | + | 41,277 | ||||
Total assets | 1,460,668,525 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 5,801,760 | |||||
Payables: | ||||||
Investments bought | 77,728,063 | |||||
Investment adviser and administrator fees | 15,410 | |||||
Shareholder service fees | 2,466 | |||||
Due to custodian | 1,314,401 | |||||
Fund shares redeemed | 542,228 | |||||
Accrued expenses | + | 125,360 | ||||
Total liabilities | 85,529,688 | |||||
Net Assets | ||||||
Total assets | 1,460,668,525 | |||||
Total liabilities | − | 85,529,688 | ||||
Net assets | $1,375,138,837 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,185,706,443 | |||||
Net investment income not yet distributed | 34,013,997 | |||||
Net realized capital losses | (86,449,191 | ) | ||||
Net unrealized capital gains | 241,867,588 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,375,138,837 | 85,846,006 | $16.02 |
See financial notes 47
Schwab International Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $4,725,127) | $50,145,676 | |||||
Interest | 518 | |||||
Securities on loan | + | 1,409,338 | ||||
Total investment income | 51,555,532 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,243,729 | |||||
Shareholder service fees | 292,792 | |||||
Custodian fees | 254,635 | |||||
Portfolio accounting fees | 98,194 | |||||
Shareholder reports | 82,501 | |||||
Transfer agent fees | 69,534 | |||||
Professional fees | 51,599 | |||||
Registration fees | 37,195 | |||||
Trustees’ fees | 16,846 | |||||
Interest expense | 3,527 | |||||
Other expenses | + | 47,621 | ||||
Total expenses | 3,198,173 | |||||
Expense reduction by CSIM and its affiliates | − | 352,589 | ||||
Net expenses | − | 2,845,584 | ||||
Net investment income | 48,709,948 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 35,570,118 | |||||
Net realized losses on foreign currency transactions | + | (105,885 | ) | |||
Net realized gains | 35,464,233 | |||||
Net unrealized losses on investments | (150,971,210 | ) | ||||
Net unrealized losses on foreign currency translations | + | (227,231 | ) | |||
Net unrealized losses | + | (151,198,441 | ) | |||
Net realized and unrealized losses | (115,734,208 | ) | ||||
Decrease in net assets resulting from operations | ($67,024,260 | ) |
48 See financial notes
Schwab International Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $48,709,948 | $40,359,546 | ||||||||
Net realized gains | 35,464,233 | 9,404,241 | ||||||||
Net unrealized gains (losses) | + | (151,198,441 | ) | 76,594,270 | ||||||
Increase (Decrease) in net assets from operations | (67,024,260 | ) | 126,358,057 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($40,811,469 | ) | ($37,166,734 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 15,538,810 | $265,131,011 | 15,761,167 | $253,347,349 | ||||||||||||||
Shares reinvested | 2,149,594 | 36,392,628 | 2,026,607 | 33,378,223 | ||||||||||||||
Shares redeemed | + | (16,818,082 | ) | (289,204,022 | ) | (17,048,579 | ) | (274,591,340 | ) | |||||||||
Net transactions in fund shares | 870,322 | $12,319,617 | 739,195 | $12,134,232 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 84,975,684 | $1,470,654,949 | 84,236,489 | $1,369,329,394 | ||||||||||||||
Total increase or decrease | + | 870,322 | (95,516,112 | ) | 739,195 | 101,325,555 | ||||||||||||
End of period | 85,846,006 | $1,375,138,837 | 84,975,684 | $1,470,654,949 | ||||||||||||||
Net investment income not yet distributed | $34,013,997 | $26,168,756 |
See financial notes 49
Schwab Equity Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust, except Schwab 1000 Index Fund which is a series of Schwab Investments. Both Schwab Capital Trust and Schwab Investments (the “trusts”), are no-load, open-end management investment companies. Each 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 trusts as of the end of the period, including the funds discussed in this report, which are highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab Target 2030 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2035 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2040 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental International Large Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Monthly Income Fund – Moderate Payout | |||
Laudus Small-Cap MarketMasters Fund | Schwab Monthly Income Fund – Enhanced Payout | |||
Laudus International MarketMasters Fund | Schwab Monthly Income Fund – Maximum Payout | |||
Schwab Balanced Fund | ||||
Schwab Premier Equity Fund | Schwab Investments (organized October 26, 1990) | |||
Schwab Core Equity Fund | Schwab 1000 Index Fund | |||
Schwab Dividend Equity Fund | Schwab Short-Term Bond Market Fund | |||
Schwab Large-Cap Growth Fund | Schwab Premier Income Fund | |||
Schwab Small-Cap Equity Fund | Schwab Total Bond Market Fund | |||
Schwab Hedged Equity Fund | Schwab GNMA Fund | |||
Schwab Financial Services Fund | Schwab Treasury Inflation Protected Securities Fund | |||
Schwab Health Care Fund | (formerly Schwab Inflation Protected Fund) | |||
Schwab International Core Equity Fund | Schwab Tax-Free Bond Fund | |||
Schwab Target 2010 Fund | Schwab California Tax-Free Bond Fund | |||
Schwab Target 2015 Fund | Schwab Global Real Estate Fund | |||
Schwab Target 2020 Fund | ||||
Schwab Target 2025 Fund | ||||
Each fund in this report offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”), which is the price for all outstanding shares of the funds. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the valuation date exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board of Trustees has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when a security is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund |
50
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. |
• | International fair valuation: The Board of Trustees has adopted procedures to fair value foreign equity securities that trade in markets that close prior to when the funds value their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the net asset value of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | Futures and forward contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a value based on that day’s exchange rates (for forwards). | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. | |
• | Underlying funds: valued at their respective net asset values. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and futures contracts. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more |
51
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of October 31, 2011:
Schwab S&P 500 Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $10,701,120,014 | $— | $— | $10,701,120,014 | ||||||||||||
Short-Term Investments(a) | — | 182,670,166 | — | 182,670,166 | ||||||||||||
Total | $10,701,120,014 | $182,670,166 | $— | $10,883,790,180 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $10,781,362 | $— | $— | $10,781,362 | ||||||||||||
Futures Contract* | 8,117,863 | — | — | 8,117,863 |
Schwab 1000 Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $4,553,381,300 | $— | $— | $4,553,381,300 | ||||||||||||
Total | $4,553,381,300 | $— | $— | $4,553,381,300 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $6,910,178 | $— | $— | $6,910,178 |
Schwab Small-Cap Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $1,361,866,260 | $— | $— | $1,361,866,260 | ||||||||||||
Banks | 94,462,584 | — | 59,311 | 94,521,895 | ||||||||||||
Diversified Financials | 36,475,679 | — | 68,064 | 36,543,743 | ||||||||||||
Rights(a) | — | — | — | — | ||||||||||||
Short-Term Investment(a) | — | 2,705,000 | — | 2,705,000 | ||||||||||||
Warrants | — | — | — | — | ||||||||||||
Total | $1,492,804,523 | $2,705,000 | $127,375 | $1,495,636,898 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $40,423,756 | $— | $— | $40,423,756 | ||||||||||||
Futures Contract* | 206,992 | — | — | 206,992 |
52
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | $— | $— | ($3,046,446 | ) | $1,438,693 | $— | $1,735,128 | $— | $127,375 | |||||||||||||||||||||||
Total | $— | $— | ($3,046,446 | ) | $1,438,693 | $— | $1,735,128 | $— | $127,375 | |||||||||||||||||||||||
Schwab Total Stock Market Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $1,555,402,668 | $— | $— | $1,555,402,668 | ||||||||||||
Banks | 52,258,974 | — | 3,214 | 52,262,188 | ||||||||||||
Diversified Financials | 89,436,503 | — | 3,360 | 89,439,863 | ||||||||||||
Transportation | 33,061,695 | — | 1,793 | 33,063,488 | ||||||||||||
Rights(a) | — | — | 29 | 29 | ||||||||||||
Short-Term Investments(a) | — | 14,293,902 | — | 14,293,902 | ||||||||||||
Warrants | — | — | — | — | ||||||||||||
Total | $1,730,159,840 | $14,293,902 | $8,396 | $1,744,462,138 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,856,627 | $— | $— | $4,856,627 | ||||||||||||
Futures Contracts* | 1,040,246 | — | — | 1,040,246 |
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | $3,300 | ($19,049 | ) | ($153,377 | ) | $40,738 | $— | $136,755 | $— | $8,367 | ||||||||||||||||||||||
Rights | 46,179 | — | (46,150 | ) | — | — | — | — | 29 | |||||||||||||||||||||||
Total | $49,479 | ($19,049 | ) | ($199,527 | ) | $40,738 | $— | $136,755 | $— | $8,396 | ||||||||||||||||||||||
53
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab International Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $— | $753,915,995 | $— | $753,915,995 | ||||||||||||
Australia | 1,588,675 | 100,054,712 | — | 101,643,387 | ||||||||||||
Canada | 130,171,497 | — | — | 130,171,497 | ||||||||||||
Netherlands | 2,091,443 | 27,864,589 | — | 29,956,032 | ||||||||||||
United Kingdom | — | 292,696,902 | 32,986 | 292,729,888 | ||||||||||||
Preferred Stock(a) | — | 3,798,553 | — | 3,798,553 | ||||||||||||
Other Investment Company(a) | 56,297,750 | — | — | 56,297,750 | ||||||||||||
Total | $190,149,365 | $1,178,330,751 | $32,986 | $1,368,513,102 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $5,801,760 | $— | $— | $5,801,760 |
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
United Kingdom | $71,780 | $1,063 | ($2,034 | ) | $32,812 | ($70,635 | ) | $— | $— | $32,986 | ||||||||||||||||||||||
Total | $71,780 | $1,063 | ($2,034 | ) | $32,812 | ($70,635 | ) | $— | $— | $32,986 | ||||||||||||||||||||||
* | Futures Contracts are not included in Investments and are valued at unrealized appreciation or depreciation. | |
** | All security transfers in and out of Level 3 from Level 1 or Level 2 were the result of fair valued securities for which no quoted value was available. | |
(a) | As categorized in complete schedule of holdings. |
All net realized and change in unrealized gains (losses) in the tables above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investments held by the funds at October 31, 2011 are as follows:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | — | |||
Schwab Small-Cap Index Fund | (2,982,566 | ) | ||
Schwab Total Stock Market Index Fund | (173,757 | ) | ||
Schwab International Index Fund | 174 |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
Certain funds entered into equity index futures contracts (“futures”) from November 1, 2010 through October 31, 2011. The funds invested in futures to gain market exposure while still keeping a small portion of assets in cash for business operations. The fair value and due to brokers for futures contracts held at October 31, 2011 and the realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 2011 are presented on the face of the Portfolio Holdings, Statement of Assets and Liabilities and Statement of Operations, respectively. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During
54
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
the period, the monthly average contract value of futures contracts held by the funds and the monthly average number of contracts were as follows:
Contract Values | Number of Contracts | |||||||
Schwab S&P 500 Index Fund | $65,618,340 | 1,030 | ||||||
Schwab 1000 Index Fund | 7,317,646 | 110 | ||||||
Schwab Small-Cap Index Fund | 15,122,008 | 191 | ||||||
Schwab Total Stock Market Index Fund | 19,891,040 | 282 | ||||||
Schwab International Index Fund | — | — |
(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 (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value changes daily.
Forward Foreign Currency Contracts: “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. The value of the forward foreign currency contracts are accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the Securities Lending Program, a fund (the “lender”) may make short-term loans of its securities to another party (the “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. The initial collateral received by a fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios registered under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 2011 and the value of the related collateral are disclosed in the complete Portfolio Holdings and the Statement of Assets and Liabilities.
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The funds mitigate this risk by ensuring that the funds’ repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. All collateral is held by the funds’ custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counterparty.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, trade and settlement dates on securities
55
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forwards 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. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, under which the funds receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges, capital gains on investments on currency repatriation. All foreign taxes are recorded in accordance with the
56
Schwab Equity Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2011, if any, are reflected in the funds’ Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(l) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in a fund will fluctuate, which means that you could lose money.
The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
As an index fund, each fund seeks to track the performance of its benchmark index, although it may not be successful in doing so. The divergence between the performance of a fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
In addition, because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. Further, because of a fund’s expenses, the fund’s performance may be below that of its benchmark index.
Certain funds do not fully replicate their benchmark index and may hold securities not included in the index. As a result, such funds are subject to the risk that the investment adviser’s investment strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. A fund utilizing a sampling approach, may not track the return of the index as well as it would if the fund purchases all of the securities in the benchmark index.
57
Schwab Equity Index Funds
Financial Notes (continued)
3. Risk Factors (continued):
A significant percentage of an index may be composed of securities in a single industry or sector of the economy. If a fund is focused in an industry or sector, it may present more risks than if it were broadly diversified over numerous industries and sectors of the economy.
Historically, small-cap stocks have been riskier than large- and mid-cap stocks. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. Small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.
Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more volatile than those of large-cap companies because mid-cap companies tend to be more susceptible to adverse business or economic events than larger more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments — bonds, for instance — a fund’s large- and mid-cap holdings could reduce performance.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
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 and could cause the fund to lose more than the principal amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund.
A particular investment may be difficult to purchase or sell. A fund may be unable to sell illiquid securities at an advantageous time or price.
Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
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. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and each trust.
For its advisory and administrative services to the Schwab 1000 Index Fund, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of the fund’s average daily net assets as follows:
Schwab | ||||
1000 | ||||
% of Average Daily Net Assets | Index Fund | |||
First $500 million | 0.30% | |||
$500 million to $5 billion | 0.22% | |||
$5 billion to $10 billion | 0.20% | |||
Over $10 billion | 0.18% |
58
Schwab Equity Index Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab | ||||||||||||||
Schwab | Schwab | Total Stock | Schwab | |||||||||||
S&P 500 | Small-Cap | Market | International | |||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||
0.06% | 0.15% | 0.06% | 0.15% |
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab) under the Plan. All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to the amount set forth in the table below. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab (or, in the case of payments made to Schwab, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described in the table below regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payments received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.
Schwab | ||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||
0.02% | 0.10% | 0.02% | 0.02% | 0.02% |
Although these agreements specify certain fees for these services, CSIM and Schwab have made an additional agreement (“expense limitation”) with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Schwab | ||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||
0.09% | 0.29% | 0.19% | 0.09% | 0.19% |
The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corporation shares owned by the Schwab Equity Index Funds during the report period:
Balance | Balance | Realized | Dividends | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Fund | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 891,781 | 118,200 | — | 1,009,981 | $12,402,567 | $— | $219,259 | |||||||||||||||||||||
Schwab 1000 Index Fund | 373,465 | — | 21,500 | 351,965 | 4,322,130 | 281,316 | 85,762 | |||||||||||||||||||||
Schwab Total Stock Market Index Fund | 111,120 | 14,906 | * | — | �� | 126,026 | 1,547,599 | — | 27,599 |
* | Includes 5,406 shares in connection with a merger between optionsXpress Holdings, Inc. and The Charles Schwab Corporation. |
59
Schwab Equity Index Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentages of each fund shares in this report owned by other Schwab Funds as of October 31, 2011.
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Schwab MarketTrack Portfolios: | ||||||||||||||||||||
Schwab All Equity Portfolio | 2.0% | —% | 8.0% | —% | 10.3% | |||||||||||||||
Schwab Growth Portfolio | 2.4% | —% | 8.8% | —% | 9.4% | |||||||||||||||
Schwab Balanced Portfolio | 1.2% | —% | 4.3% | —% | 4.6% | |||||||||||||||
Schwab Conservative Portfolio | 0.4% | —% | 1.3% | —% | 1.4% | |||||||||||||||
Schwab Annuity Portfolios: | ||||||||||||||||||||
Schwab Growth Portfolio II | 0.1% | 0.1% | 0.4% | —% | 0.4% | |||||||||||||||
Schwab Target Funds: | ||||||||||||||||||||
Schwab Target 2010 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2015 Fund | 0.0% | * | —% | —% | —% | —% | ||||||||||||||
Schwab Target 2020 Fund | 0.3% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2025 Fund | 0.1% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2030 Fund | 0.4% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2035 Fund | 0.1% | —% | —% | —% | —% | |||||||||||||||
Schwab Target 2040 Fund | 0.4% | —% | —% | —% | —% |
* | Less than 0.05% |
The funds may also let a related party own shares of the funds. As of October 31, 2011, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab S&P 500 Index Fund and the Schwab Small Cap Index Fund were 0.8% and 1.7%, respectively.
The funds may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, each fund’s total aggregate security transactions with other Schwab Funds were as follows:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | 63,960,202 | |||
Schwab Small-Cap Index Fund | 63,960,202 | |||
Schwab Total Stock Market Index Fund | — | |||
Schwab International Index Fund | — |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for each fund.
6. Board of Trustees:
Trustees 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 trusts were in compliance with
60
Schwab Equity Index Funds
Financial Notes (continued)
6. Board of Trustees (continued):
these limitations throughout the report period. The trusts did not pay any of these interested persons for their services as trustees, but they did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab S&P 500 Index Fund | $492,313,501 | $342,259,404 | ||||||
Schwab 1000 Index Fund | 240,436,302 | 492,021,116 | ||||||
Schwab Small-Cap Index Fund | 443,793,967 | 399,671,430 | ||||||
Schwab Total Stock Market Index Fund | 228,554,296 | 22,584,214 | ||||||
Schwab International Index Fund | 170,189,048 | 153,492,386 |
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Schwab S&P 500 Index Fund | $176,039 | $141,923 | ||||||
Schwab 1000 Index Fund | 35,850 | 21,488 | ||||||
Schwab Small-Cap Index Fund | 25,087 | 23,624 | ||||||
Schwab Total Stock Market Index Fund | 108,924 | 22,830 | ||||||
Schwab International Index Fund | 16,287 | 23,029 |
61
Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Undistributed ordinary income | $171,566,674 | $68,730,663 | $64,773,787 | $24,780,237 | $44,857,232 | |||||||||||||||
Undistributed long-term capital gains | — | 183,279,668 | 40,731,619 | — | — | |||||||||||||||
Unrealized appreciation on investments | 3,227,324,321 | 2,649,757,514 | 331,444,840 | 505,574,423 | 412,847,229 | |||||||||||||||
Unrealized depreciation on investments | (1,395,386,315 | ) | (134,685,380 | ) | (178,009,691 | ) | (205,568,579 | ) | (189,706,920 | ) | ||||||||||
Other unrealized appreciation/(depreciation) | 1 | 1 | — | — | (1,386,003 | ) | ||||||||||||||
Net unrealized appreciation/(depreciation) | $1,831,938,007 | $2,515,072,135 | $153,435,149 | $300,005,844 | $221,754,306 | |||||||||||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are the tax deferral of losses on wash sales, Passive Foreign Investment Companies (PFIC), partnership investments, non taxable dividends and futures mark to market.
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Expiration Date | Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||
October 31, 2012 | $— | $— | $— | $— | $8,278,017 | |||||||||||||||
October 31, 2013 | 139,485,541 | — | — | — | — | |||||||||||||||
October 31, 2014 | 109,256,533 | — | — | — | — | |||||||||||||||
October 31, 2015 | 89,645,092 | — | — | — | — | |||||||||||||||
October 31, 2016 | 77,879,594 | — | — | 14,465,482 | 3,212,061 | |||||||||||||||
October 31, 2017 | 20,049,252 | — | — | 4,871,496 | 65,689,066 | |||||||||||||||
Total | $436,316,012 | $— | $— | $19,336,978 | $77,179,144 | |||||||||||||||
For the year ended October 31, 2011, the funds had capital losses utilized and capital losses expired as follows:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital losses utilized | $140,361,861 | $— | $— | $7,425,338 | $36,473,979 | |||||||||||||||
Capital losses expired | — | — | — | — | 2,542,199 |
62
Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $191,615,698 | $72,195,700 | $14,248,616 | $26,769,873 | $40,811,469 | |||||||||||||||
Long-term capital gains | — | 59,510,806 | 4,037,352 | — | — | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $130,372,304 | $78,998,534 | $11,038,239 | $20,970,578 | $37,166,734 | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Schwab | ||||||||||||||||||||
Schwab | Schwab | Schwab | Total Stock | Schwab | ||||||||||||||||
S&P 500 | 1000 | Small-Cap | Market | International | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital shares | $— | $11,626,432 | ($1,363 | ) | $— | ($2,542,199 | ) | |||||||||||||
Undistributed net investment income | (823,897 | ) | 6,715,590 | 8,079,022 | (241,860 | ) | (53,238 | ) | ||||||||||||
Net realized capital gains/(losses) | 823,897 | (18,342,022 | ) | (8,077,659 | ) | 241,860 | 2,595,437 |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
63
Schwab Equity Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
11. Other:
During the year, Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund and Schwab Total Stock Market Index Fund received a payment related to state filing fees resulting from revised calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. This payment is presented in the funds’ Statement of Operations as “Payment for state filing fees”.
12. Subsequent Events:
At a meeting held on September 14, 2011, the Board of Trustees approved a change to the Schwab Small-Cap Index Fund’s benchmark index and to its investment strategy to require that the Fund invest 80% of its net assets in stocks that are included in the Russell 2000 Index. This change will be effective on December 14, 2011. At the same meeting, the Board of Trustees approved a reduction in the contractual expense limitation of the investment adviser and its affiliates on the net annual operating expenses of the fund to 0.17%, effective November 1, 2011. For additional information, please refer to the Supplement dated October 14, 2011 to the Summary Prospectus and Statutory Prospectus.
At the same meeting, the Board of Trustees approved a change to the Schwab International Index Fund’s benchmark index and to its investment strategy to require that the Fund invest 80% of its net assets in stocks that are included in the MSCI EAFE Index. This change will be effective on December 20, 2011. For additional information, please refer to the Supplement dated October 14, 2011 to the Summary Prospectus and Statutory Prospectus.
Management has evaluated subsequent events and transactions through the date of the financial statements and determined that no other material events or transactions would require recognition or disclosure in the financial statements as presented.
64
Report of Independent Registered Public Accounting Firm
To the Boards of Trustees and Shareholders of:
Schwab S&P 500 Index Fund
Schwab 1000 Index Fund
Schwab Small-Cap Index Fund
Schwab Total Stock Market Index Fund
Schwab International Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the summary portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab 1000 Index Fund (one of the portfolios constituting Schwab Investments), Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (four of the portfolios constituting Schwab Capital Trust) (hereafter collectively referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
65
Other Federal Tax Information (unaudited)
Schwab International Index Fund may elect to pass on the benefits of the foreign tax credit of $3,198,871 to its shareholders for the year ended October 31, 2011. The respective foreign source income on the fund is $54,455,524.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab S&P 500 Index Fund | 100.00 | ||||
Schwab 1000 Index Fund | 100.00 | ||||
Schwab Small-Cap Index Fund | 66.80 | ||||
Schwab Total Stock Market Index Fund | 95.80 | ||||
Schwab International Index Fund | 0.03 |
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Schwab S&P 500 Index Fund | $216,804,351 | |||
Schwab 1000 Index Fund | 73,512,773 | |||
Schwab Small-Cap Index Fund | 9,845,277 | |||
Schwab Total Stock Market Index Fund | 21,436,759 | |||
Schwab International Index Fund | 33,672,279 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2011:
Schwab S&P 500 Index Fund | $— | |||
Schwab 1000 Index Fund | 70,253,473 | |||
Schwab Small-Cap Index Fund | 4,037,352 | |||
Schwab Total Stock Market Index Fund | — | |||
Schwab International Index Fund | — |
66
Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreements between Schwab Capital Trust and Schwab Investments (collectively, the “Trusts”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreements”) with respect to the existing funds in the Trusts, including Schwab S&P 500 Index Fund, Schwab 1000 Index Fund, Schwab Small- Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreements with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer
67
category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreements with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreements with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab 1000 Index Fund that include lower fees at higher graduated asset levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
68
Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust and 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, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993 and Schwab Investments since 1991.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust and Schwab Investments since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
70
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust and Schwab Investments since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust and Schwab Investments since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust and Schwab Investments since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
71
Officers of the Trust (continued)
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust and Schwab Investments since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust and Schwab Investments since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
72
Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Index An index that measures the performance of the large-cap segment of the U.S. equity universe.
Russell 2000 Index An index that measures the performance of the small-cap segment of the U.S. equity universe.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
73
PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
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How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
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• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2011 Schwab Funds. All rights reserved.
Notes
Notes
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large* Company Index Fund
Schwab Fundamental US Small-Mid* Company Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab® Premier Income Fund
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Investment Adviser
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Funds
Schwab Funds®
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Prospectus Supplement and
Annual Report Enclosed
Annual report dated October 31, 2011, enclosed.
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
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This supplement is not part of the shareholder report.
SCHWAB CAPITAL TRUST
Laudus MarketMasters Funds®
Supplement dated December 19, 2011 to the
Prospectus dated February 28, 2011 as amended May 16, 2011
Prospectus dated February 28, 2011 as amended May 16, 2011
This supplement provides new and additional information beyond that contained in the Prospectus
and should be read in conjunction with the Prospectus.
and should be read in conjunction with the Prospectus.
Effective December 8, 2011, the Board has approved certain changes to underlying investment managers in the Laudus MarketMasters Funds. Specifically, with respect to the Laudus Small-Cap MarketMasters Fund, the Board has approved the termination of two of the fund’s investment managers and approved the hiring of a new investment manager, Mellon Capital Management Corp. With respect to the Laudus International MarketMasters Fund, the Board has approved the hiring of a new investment manager, Mellon Capital Management Corp.
In addition, currently each fund reserves the right to automatically redeem your shares if the value of your investment in the Select Shares falls below the stated minimum balance requirement. Effective January 19, 2012, each fund will also have the option to instead convert the holdings of any existing shareholders who no longer meet the eligibility requirements (including minimum account balances) of Select Shares of a fund to Investor Shares of the same fund.
Accordingly, the following changes are made to the Prospectus:
On page 2, the third paragraph of the section entitled “Principal investment strategies” is deleted and the following language is inserted.
CSIM may also directly manage portions of the fund during transitions between investment managers.
Each investment manager uses its own securities selection process and has discretion to select portfolio securities for its allocation of the funds’ assets. At the same time, each investment manager invests within a specific market capitalization range and investment style under the general supervision of CSIM. CSIM has developed parameters for each investment manager based on CSIM’s assessment of the investment manager’s investment style and expertise. By assigning more specific parameters to each investment manager, CSIM attempts to capitalize on the strengths of each investment manager and to combine their investment activities in a complementary fashion.
CSIM may use derivatives, primarily futures contracts, to seek returns on the fund’s otherwise uninvested cash assets. In addition, the investment managers may use futures contracts as a substitute for investing directly in an underlying asset or to increase returns.
On page 4, in the section entitled “Portfolio manager”, all references to Caroline Lee-Tsao shall be deleted.
1
On page 4, in the section entitled “Investment managers”, the current language is deleted and replaced with the following language.
The fund has three investment managers: Mellon Capital Management Corp., Neuberger Berman Management LLC, and TAMRO Capital Partners LLC. The table below shows investment managers that are (or are expected to be) responsible for managing more than 30% of the fund’s assets, and the portfolio managers serving as portfolio managers for those investment managers.
Year founded/assets | |||||||||
Investment manager | under management | Employment | |||||||
and address | (as of 12/31/10) | Portfolio manager(s) | experience | ||||||
Neuberger Berman Management LLC 605 Third Avenue New York, NY 10158 | Founded: 1939 $32.2 billion | David H. Burshtan, Vice President | David Burshtan is a portfolio manager on the Growth Equity team. He joined the firm in 2002. Previously, he held portfolio manager and analyst positions at Northern Trust, Scudder-Kemper Investments and Texas Commerce Bank. | ||||||
TAMRO Capital Partners LLC 1701 Duke Street Suite 250 Alexandria, VA 22314 | Founded: 2000 Successor Founded: 2007 $1.44 billion | Philip D. Tasho, CFA, Principal, Chief Executive Officer and Chief Investment Officer Timothy A. Holland, CFA Partner, Co-Portfolio Manager | Began investment career in 1980. Co-founded TAMRO in 2000. From 1995 to 2000, Chairman, Chief Executive Officer and Chief Investment Officer of Riggs Investment Management Co. (RIMCO). Began investment career in 2000. Joined TAMRO in 2005 as an equity analyst. Promoted to co-portfolio manager in 2010. From 1993 to 2000 worked in financial services public relations. | ||||||
For more information on the fund’s other investment managers, please see the “Fund management” and “Fund details” sections in the prospectus.
On page 6, the third paragraph of the section entitled “Principal investment strategies” is deleted and the following language is inserted.
CSIM may also directly manage portions of the fund during transitions between investment managers.
Each investment manager uses its own securities selection process and has discretion to select portfolio securities for its allocation of the funds’ assets. At the same time, each investment manager invests within a specific market capitalization range and investment style under the general supervision of CSIM. CSIM has developed parameters for each investment manager based on CSIM’s assessment of the investment manager’s investment style and expertise. By assigning more specific parameters to each investment manager, CSIM attempts to capitalize on the strengths of each investment manager and to combine their investment activities in a complementary fashion.
CSIM may use derivatives, primarily futures contracts, to seek returns on the fund’s otherwise uninvested cash assets. In addition, the investment managers may use futures contracts as a substitute for investing directly in an underlying asset or to increase returns.
On page 8, in the section entitled “Portfolio manager”, all references to Caroline Lee-Tsao shall be deleted.
On page 8, in the section entitled “Investment managers”, the current language is deleted and replaced with the following language.
The fund has six investment managers: American Century Investment Management, Inc., Harris Associates, L.P., Mellon Capital Management Corp., Mondrian Investment Partners Limited, Wentworth, Hauser and Violich, Inc./Hirayama Investments, LLC, and William Blair & Company, LLC. As of December 12, 2011, none of the investment managers managed more than 30% of the fund’s assets nor are any expected to manage more than 30% of the fund’s assets. For information on the fund’s investment managers, please see the “Fund management” and “Fund details” sections in the prospectus.
2
On page 9, in the section entitled “Investment strategy”, the third paragraph is deleted and the following is inserted.
CSIM may also directly manage portions of the fund during transitions between investment managers.
Each investment manager uses its own securities selection process and has discretion to select portfolio securities for its allocation of the funds’ assets. At the same time, each investment manager invests within a specific market capitalization range and investment style under the general supervision of CSIM. CSIM has developed parameters for each investment manager based on CSIM’s assessment of the investment manager’s investment style and expertise. By assigning more specific parameters to each investment manager, CSIM attempts to capitalize on the strengths of each investment manager and to combine their investment activities in a complementary fashion.
CSIM may use derivatives, primarily futures contracts, to seek returns on the fund’s otherwise uninvested cash assets. In addition, the investment managers may use futures contracts as a substitute for investing directly in an underlying asset or to increase returns.
On page 9, under “Investment strategy”, the sixth paragraph of that section (the introductory sentence to the table displaying the fund’s investment managers) is modified as follows, and the existing table replaced with the following table.
The following table identifies the fund’s investment managers as of December 9, 2011, their areas of focus, and approximate asset allocation.
Investment manager | Investment style | Approximate allocation of net assets (%) | ||||
Mellon Capital Management Corp. | Small-cap blend | 0%1 | ||||
Neuberger Berman Management LCL | Small-cap growth | 25% | ||||
TAMRO Capital Partners LLC | Small-cap blend | 62% | ||||
Cash and other assets | — | 13% | ||||
1 Although Mellon Capital Management Corp. was approved by the Board on December 8, 2011 as a new investment manager, CSIM does not expect to allocate any assets to Mellon Capital until after January 1, 2012.
On page 10, all references to TCW Investment Management Company and Toqueville Asset Management LP are deleted. The following information regarding the new investment manager is inserted:
Mellon Capital Management Corp. (“Mellon Capital”) seeks to track the returns of the Russell 2000 Index. The Russell 2000 Index measures the performance of the 2,000 smallest companies in the Russell 3000 Index, which is made up of 3,000 of the biggest U.S. stocks. Mellon Capital’s experienced team of portfolio managers seeks to execute on this strategy by employing a risk-controlled, cost-effective approach. Specifically, in managing their allocation from the fund, the portfolio managers intend to employ a full index replication approach for assets greater than $50 million, and index sampling where assets allocated to Mellon Capital fall below $50 million.
When trading in the open market, Mellon Capital employs a strategic trading approach to minimize transaction costs and preserve value. This approach allows the portfolio managers to minimize market impact by trading small blocks and to take advantage of any favorable movement of the stock price when other managers move into and out of the market.
Furthermore, when index composition changes as a result of corporate actions, Mellon Capital’s portfolio managers screen all potential trades against a list of securities that have pending corporate action activities and evaluate the terms of the corporate action to determine whether the security should be traded or omitted from the trade. The economic value of the alternatives is thoroughly analyzed to maximize the value of client portfolios.
Additionally, when portfolio managers anticipate upcoming changes to the composition of an index, they use dividend cash flows to fund shares purchases to the extent possible. Mellon Capital continually looks for opportunities to allocate cash inflows towards expected index constituent changes in order to minimize transaction costs.
On page 11, in the section entitled “Investment strategy”, the third paragraph is deleted and the following is inserted.
CSIM may also directly manage portions of the fund during transitions between investment managers.
Each investment manager uses its own securities selection process and has discretion to select portfolio securities for its allocation of the funds’ assets. At the same time, each investment manager invests within a specific market capitalization range and investment style under the general supervision of CSIM. CSIM has developed parameters
3
for each investment manager based on CSIM’s assessment of the investment manager’s investment style and expertise. By assigning more specific parameters to each investment manager, CSIM attempts to capitalize on the strengths of each investment manager and to combine their investment activities in a complementary fashion.
CSIM may use derivatives, primarily futures contracts, to seek returns on the fund’s otherwise uninvested cash assets. In addition, the investment managers may use futures contracts as a substitute for investing directly in an underlying asset or to increase returns.
On page 12, under “Investment strategy”, the sixth paragraph of that section (introductory sentence to table displaying the fund’s investment managers) is modified as follows, and the existing table replaced with the following table.
The following table identifies the fund’s investment managers as of December 9, 2011, their areas of focus, and approximate asset allocation.
Investment manager | Investment style | Approximate allocation of net assets (%) | ||||
American Century Investment Management, Inc. | International small-/mid-cap growth | 24% | ||||
Harris Associates L.P. | International large-cap value | 18% | ||||
Mellon Capital Management Corp. | International blend | 0%1 | ||||
Mondrian Investment Partners Limited | International small-cap value | 25% | ||||
Wentworth, Hauser and Violich, Inc./Hirayama Investments LLC | International large-cap growth | 11% | ||||
William Blair & Company LLC | International multi-cap growth | 20% | ||||
Cash and other assets | — | 2% | ||||
1 Although Mellon Capital Management Corp. was approved by the Board on December 8, 2011 as a new investment manager, CSIM does not expect to allocate any assets to Mellon Capital until after January 1, 2012.
On page 13, the following information regarding the new investment manager is inserted.
Mellon Capital Management Corp. (“Mellon Capital”) seeks to track the returns of the MSCI-EAFE Index. This index is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Mellon Capital’s experienced team of portfolio managers seeks to execute on this strategy by employing a risk-controlled, cost-effective approach. Specifically, in managing their allocation from the fund, the portfolio managers intend to employ a full index replication approach for assets greater than $50 million, and index sampling where assets allocated to Mellon Capital fall below $50 million.
When trading in the open market, Mellon Capital employs a strategic trading approach to minimize transaction costs and preserve value. This approach allows the portfolio managers to minimize market impact by trading small blocks and to take advantage of any favorable movement of the stock price when other managers move into and out of the market.
Furthermore, when index composition changes as a result of corporate actions, Mellon Capital’s portfolio managers screen all potential trades against a list of securities that have pending corporate action activities and evaluate the terms of the corporate action to determine whether the security should be traded or omitted from the trade. The economic value of the alternatives is thoroughly analyzed to maximize the value of client portfolios.
Additionally, when portfolio managers anticipate upcoming changes to the composition of an index, they use dividend cash flows to fund shares purchases to the extent possible. Mellon Capital continually looks for opportunities to allocate cash inflows towards expected index constituent changes in order to minimize transaction costs.
On page 18, under the section entitled “Fund management”, all references to Caroline Lee-Tsao shall be deleted.
4
On pages 18-19, under the section entitled “The funds’ investment managers”, “Laudus Small-Cap MarketMasters”, all references to TCW Investment Management Company and Toqueville Asset Management LP are deleted. The following is inserted as a new row in the table.
Year founded/assets | |||||||||
Investment manager | under management | Employment | |||||||
and address | (as of 9/30/11) | Portfolio manager(s) | experience | ||||||
Mellon Capital Management Corp. 50 Fremont St., Suite 3900 San Francisco, CA 94105 | Founded: 1983 $195.1 billion | Karen Q. Wong, CFA Managing Director, Head of Equity Portfolio Management | Ms. Wong is a managing director of equity index strategies with Mellon Capital, where she has been employed since 2000. She received an MBA from San Francisco State University in Finance, and a BS from San Francisco State University in Accounting and Statistics. | ||||||
Richard A. Brown, CFA Director, Senior Portfolio Manager, Team Leader | Mr. Brown is a director of equity portfolio management with Mellon Capital, where he has been employed since 1995. He holds an MBA from California State University at Hayward. | ||||||||
Thomas J. Durante, CFA Director, Senior Portfolio Manager, Team Leader | Mr. Durante is a senior portfolio manager with Mellon Capital, where he has been employed since January 2000. He holds a B.A. degree from Fairfield University in Accounting. | ||||||||
On page 20, under the section entitled “The funds’ investment managers”, “Laudus International MarketMasters”, the following is inserted as a new row in the table.
Year founded/assets | |||||||||
Investment manager | under management | Employment | |||||||
and address | (as of 9/30/11) | Portfolio manager(s) | experience | ||||||
Mellon Capital Management Corp. 50 Fremont St., Suite 3900 San Francisco, CA 94105 | Founded: 1983 $195.1 billion | Karen Q. Wong, CFA Managing Director, Head of Equity Portfolio Management | Ms. Wong is a managing director of equity index strategies with Mellon Capital, where she has been employed since 2000. She received an MBA from San Francisco State University in Finance, and a BS from San Francisco State University in Accounting and Statistics. | ||||||
Richard A. Brown, CFA Director, Senior Portfolio Manager, Team Leader | Mr. Brown is a director of equity portfolio management with Mellon Capital, where he has been employed since 1995. He holds an MBA from California State University at Hayward. | ||||||||
Thomas J. Durante, CFA Director, Senior Portfolio Manager, Team Leader | Mr. Durante is a senior portfolio manager with Mellon Capital, where he has been employed since January 2000. He holds a B.A. degree from Fairfield University in Accounting. | ||||||||
5
On page 25 of the prospectus, the seventh sentence under the section entitled, “Choose a fund and share class” is replaced in its entirety with the following:
If you no longer meet the minimum balance requirement for Select Shares, each fund reserves the right to (i) convert your Select Share holdings to Investor Shares of the same fund; or (ii) redeem your holdings. A fund will notify you in writing 60 days before any automatic conversion or redemption occurs.
On page 26 of the prospectus, the following are added as the first and second bullets under the heading “Each fund reserves certain rights, including the following:”
• | If your account balance falls below the stated minimum balance requirement for the Select Shares for any reason, to automatically convert your holdings to Investor Shares of that same fund upon 60 days written notice. | |
• | If your account balance falls below the stated minimum balance, to automatically redeem your shares upon 60 days written notice. |
PLEASE RETAIN THIS SUPPLEMENT FOR YOUR RECORDS.
![(LAUDUS LOGO)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctf41800laudus.gif)
Charles Schwab & Co., Inc. Member SIPC
REG65085-00 (12/11) ©2011 All Rights Reserved
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Annual Report October 31, 2011 | ![]() |
COMMAND PERFORMANCETM
Laudus MarketMasters Fundstm
Laudus Small-Cap MarketMasters Fundtm
Laudus International MarketMasters Fundtm
This page is intentionally left blank.
Two distinct Funds, each combining the expertise of leading
investment managers with CSIM’s overall supervision.
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Laudus Small-Cap MarketMasters Fund™ | 6 | |
Laudus International MarketMasters Fund™ | 8 | |
Fund Expenses | 10 | |
Financial Statements and Portfolio Holdings | ||
Laudus Small-Cap MarketMasters Fund™ | 11 | |
Laudus International MarketMasters Fund™ | 19 | |
Financial Notes | 35 | |
Report of Independent Registered Public Accounting Firm | 48 | |
Other Tax Information | 49 | |
Approval of Investment Advisory and Sub-Advisory Agreements | 50 | |
Trustees and Officers | 53 | |
Glossary | 56 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.laudusfunds.com/prospectus.
Total Return for the Report Period | ||||
Laudus Small-Cap MarketMasters Fundtm | ||||
Investor Shares (Ticker Symbol: SWOSX) | 4.08% | |||
Select Shares® (Ticker Symbol: SWMSX) | 4.30% | |||
Russell 2000® Index* | 6.71% | |||
Fund Category: Morningstar Small-Cap Growth | 8.84% | |||
Performance Details | pages 6-7 | |||
Laudus International MarketMasters Fundtm | ||||
Investor Shares (Ticker Symbol: SWOIX)1 | -3.87% | |||
Select Shares® (Ticker Symbol: SWMIX)1 | -3.76% | |||
MSCI EAFE® Index** | -3.64% | |||
Fund Category: Morningstar Foreign Large-Cap Growth | -3.95% | |||
Performance Details | pages 8-9 | |||
Minimum Initial Investment2 | ||||
Investor Shares | $ 100 | |||
Select Shares® | $ 50,000 | |||
All fund and index 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the funds’ returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Small-company stocks are subject to greater volatility than other asset categories.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
* | The Russell 2000 Index measures the performance of the small-cap segment of the U.S. equity universe. It includes approximately 2000 of the smallest securities based on a combination of their market cap and current index membership. |
** | The Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE Index®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs. |
1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations, see financial note 2 for more information. |
2 | Please see prospectus for further details and eligibility requirements. |
2 Laudus MarketMasters Funds
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst09.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Laudus MarketMasters Funds 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Laudus MarketMasters Funds. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.laudusfunds.com. We are also happy to hear from you at 1-800-447-3332.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Laudus MarketMasters Funds
Fund Management
![]() | Omar Aguilar, Senior Vice President and Chief Investment Officer of Equities of the investment adviser, manages the funds. Prior to joining the firm in April 2011, he was head of the portfolio management group and Vice President of Portfolio Management at a large retirement asset planning and management firm. From 2004 to 2009, he was Senior Vice President, Head of Quantitative Equity and Senior Portfolio Manager at a large banking and asset management firm. He has over 16 years of quantitative investment experience. |
Laudus MarketMasters Funds 5
Laudus Small-Cap MarketMasters Fund™
The Laudus MarketMasters Funds use a multi-manager strategy. Charles Schwab Investment Management, Inc. (CSIM)—the fund’s investment manager—selects investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds. Each sub-adviser manages their respective portfolio relative to a comparative index that reflects their individual process and philosophy. The sub-adviser indices may differ from the comparative index of the overall fund.
The Laudus Small-Cap MarketMasters Fund Investor Shares (the fund) returned 4.08% for the 12 months ended October 31, 2011, while its comparative index, the Russell 2000 Index, returned 6.71%. Unlike the return of the fund, the return of the index does not include operational and transactional costs.
Turning to the market backdrop, lackluster economic growth domestically and abroad and limited job growth in the United States, where the unemployment rate hovered around 9.0%, represented key market obstacles. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01% and outperformed the small-cap Russell 2000 Index, which generated a gain of 6.71%.
In looking at absolute performance, most sectors in the index produced positive returns. Consumer Staples, Energy, and Utilities were the best performers in the index, each enjoying double-digit gains. On the other end of the performance spectrum, Telecommunication Services and Materials were two of the worst performers in the index.
Within the fund, poor stock selection in Information Technology, Consumer Discretionary, and Health Care—collectively representing approximately 45% of the portfolio—was a key reason that the fund underperformed its comparative index. Helping to counter that result was the fund’s slight overweight in the Energy sector compared with the Russell 2000 Index, which helped fund performance because Energy was the second-best performer during the period. Well-considered stock selection in the Energy sector also boosted the fund’s relative and absolute performance, as did stock selection within the Industrials sector.
The fund’s sub-advisers generated mixed returns. For example, Tocqueville Asset Management LP returned -5.35% and substantially underperformed the Russell 2000 Index. TCW Investment Management Company returned 3.80%, underperforming the 5.83% return of the Russell Midcap Value Index. On the other hand, TAMRO Capital Partners LLC returned 9.69% and comfortably outperformed the Russell 2000 Index. Lastly, Neuberger Berman, LLC, returned 14.09% compared with the 9.84% return of the Russell 2000 Growth Index.
As of 10/31/11:
Statistics
Number of Holdings | 251 | |
Weighted Average Market Cap ($ x 1,000,000) | $2,286 | |
Price/Earnings Ratio (P/E) | 27.4 | |
Price/Book Ratio (P/B) | 1.8 | |
Portfolio Turnover Rate | 95% |
Sector Weightings % of Investments
Information Technology | 17.8% | |
Financials | 15.2% | |
Industrials | 14.6% | |
Consumer Discretionary | 14.0% | |
Health Care | 11.5% | |
Energy | 9.6% | |
Materials | 5.1% | |
Consumer Staples | 3.6% | |
Telecommunication Services | 1.5% | |
Utilities | 0.8% | |
Other | 6.3% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
IBERIABANK Corp. | 1.3% | |
Colfax Corp. | 1.0% | |
NETGEAR, Inc. | 0.9% | |
Terex Corp. | 0.9% | |
Stifel Financial Corp. | 0.9% | |
Colonial Properties Trust | 0.9% | |
Morningstar, Inc. | 0.9% | |
Bank of the Ozarks, Inc. | 0.9% | |
TreeHouse Foods, Inc. | 0.9% | |
LaSalle Hotel Properties | 0.9% | |
Total | 9.5% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset categories.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Laudus MarketMasters Funds
Laudus Small-Cap MarketMasters Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.laudusfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctlsmcap01.gif)
June 9, 2004 – October 31, 2011
Performance of a Hypothetical
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctlsmcap02.gif)
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||||||
Investor Shares (9/16/97) | 4.08 | % | 0.41 | % | 6.13 | % | 4.68% | |||||||||||||
Select Shares (6/9/04) | 4.30 | % | 0.57 | % | n/a | 3.79% | ||||||||||||||
Russell 2000® Index | 6.71 | % | 0.68 | % | 7.02 | % | (9/16/97) 5.10% | |||||||||||||
(6/9/04) 4.77% | ||||||||||||||||||||
Fund Category: Morningstar Small-Cap Growth | 8.84 | % | 2.10 | % | 5.83 | % | (9/16/97) 5.35% | |||||||||||||
(6/9/04) 5.13% |
Fund Expense Ratios3: Investor Shares: Net 1.46% ; Gross 1.50% / Select Shares: Net 1.31%; Gross 1.45%
Investment Managers and Allocations
% of | ||||||
Investment Manager | Investment Style | Net Assets | ||||
TAMRO Capital Partners LLC | Small—Cap Blend | 38.6% | ||||
TCW Investment Management Company | Small/Mid—Cap Value | 22.3% | ||||
Tocqueville Asset Management L.P. | Small—Cap Blend/Value | 16.2% | ||||
Neuberger Berman Management LLC | Small—Cap Growth | 18.5% | ||||
Cash and other assets | — | 4.4% | ||||
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Because the fund originally used a multi-fund strategy, performance of the Investor Shares prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Laudus MarketMasters Funds 7
Laudus International MarketMasters Fund™
The Laudus MarketMasters Funds use a multi-manager strategy. Charles Schwab Investment Management, Inc. (CSIM)—the fund’s investment manager—selects investment managers with proven long-term track records to manage a portion of each fund’s assets. In addition to selecting the investment managers and allocating assets among them, CSIM is responsible for monitoring and coordinating the overall management of the funds. Each sub-adviser manages their respective portfolio relative to a comparative index that reflects their individual process and philosophy. The sub-adviser indices may differ from the comparative index of the overall fund.
The Laudus International MarketMasters Fund Investor Shares (the fund) returned -3.87% for the 12 months ended October 31, 2011, while its comparative index, the MSCI EAFE Index (the index), returned -3.64%. Unlike the return of the fund, the return of the index does not include operational and transactional costs. Timing differences in foreign exchange calculations represented part of why the fund underperformed the index.* Fair valuation of the fund’s holdings on the last trading day of the current period also reduced the fund’s relative performance (please see financial note 2 for more information).
Turning to the market backdrop, limited global growth and Europe’s ongoing and largely unresolved sovereign debt crisis tempered the performance of global stock markets. As a result, international equities in developed markets posted slightly negative returns as measured by the MSCI EAFE Index.
The fund’s security selection was positive in six out of 10 sectors, with the strongest performers coming from Materials, Information Technology, and Consumer Discretionary. By comparison, selection was weakest in Energy, Financials, and Health Care. In addition, the fund maintained an average weight of at least one-third less exposure to the Financials sector than the index, and this helped the fund’s performance. On the other side of the performance spectrum, the fund maintained a lower average weight in Consumer Staples, which detracted from the fund’s performance compared with that of the index.
Looking at performance from the standpoint of regional allocations compared with the index, the fund’s underweight in Europe, as well as in the Asia and Pacific Basin, helped the fund’s performance as investments from both areas posted negative total returns. Within these regions, security selection was another positive for the fund. On a country-specific basis, poor stock selection in Switzerland, Hong Kong, and Ireland detracted from the fund’s performance compared with that of the index, while the fund’s non-index, Canadian-based investments helped.
The fund’s sub-advisers generated mixed returns. For example, Mondrian Investment Partners Limited returned 2.50%, outperforming the -1.67% return of the MSCI World ex U.S. Small Index. Wentworth, Hauser, and Violich, Inc./Hirayama Investments, LLC, returned -0.03%, compared with the -3.64% return of the MSCI EAFE Index. On the other hand, William Blair & Company, LLC, returned -5.75% compared with the -3.85% return of the MSCI AC World IMI Growth Index. Harris Associates L.P. also underperformed, returning -4.64% compared with the -3.25% return of the MSCI World ex U.S. Index. Lastly, American Century Investment Management, Inc. returned -3.93%, falling slightly more than the -3.75% return of the MSCI AC World ex U.S. Small/Mid-Cap Growth index.
As of 10/31/11:
Country Weightings % of Investments
United Kingdom | 18.5% | |||
Japan | 12.8% | |||
Canada | 7.9% | |||
Germany | 7.6% | |||
Switzerland | 7.6% | |||
France | 6.5% | |||
Australia | 4.9% | |||
Netherlands | 4.8% | |||
Singapore | 3.7% | |||
United States | 3.5% | |||
Other | 22.2% | |||
Total | 100.0% |
Statistics
Number of Holdings | 504 | |
Weighted Average Market Cap ($ x 1,000,000) | $20,336 | |
Price/Earnings Ratio (P/E) | 15.9 | |
Price/Book Ratio (P/B) | 1.6 | |
Portfolio Turnover Rate | 78% |
Sector Weightings % of Investments
Industrials | 20.9% | |
Consumer Discretionary | 15.0% | |
Materials | 13.7% | |
Financials | 13.1% | |
Information Technology | 11.3% | |
Energy | 8.1% | |
Health Care | 6.1% | |
Consumer Staples | 6.0% | |
Utilities | 1.4% | |
Telecommunication Services | 0.9% | |
Other | 3.5% | |
Total | 100.0% |
Top Equity Holdings % of Net Assets1
Croda International plc | 1.1% | |
Koninklijke Boskalis Westminster N.V. | 0.9% | |
Potash Corp. of Saskatchewan, Inc. | 0.9% | |
Rotork plc | 0.9% | |
Neopost S.A. | 0.9% | |
BNP Paribas S.A. | 0.8% | |
BHP Billiton Ltd. ADR | 0.8% | |
SAP AG | 0.8% | |
Spectris plc | 0.8% | |
Commonwealth Property Office Fund | 0.8% | |
Total | 8.7% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
* | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
8 Laudus MarketMasters Funds
Laudus International MarketMasters Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.laudusfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
Performance of a Hypothetical
$10,000 Investment in Investor Shares1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctlintl01.gif)
April 2, 2004 – October 31, 2011
Performance of a Hypothetical
$50,000 Investment in Select Shares1
Performance of a Hypothetical
$50,000 Investment in Select Shares1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctlintl02.gif)
Average Annual Total Returns1,2
Fund Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||||||
Investor Shares (10/16/96) | -3.87 | % | 1.54 | % | 8.40 | % | 8.36% | |||||||||||||
Select Shares (4/2/04) | -3.76 | % | 1.67 | % | n/a | 7.06% | ||||||||||||||
MSCI EAFE Index®* | -3.64 | % | -1.95 | % | 6.19 | % | (10/16/96) 4.30% | |||||||||||||
(4/2/04) 4.61% | ||||||||||||||||||||
Fund Category: Morningstar Foreign Large-Cap Growth | -3.95 | % | -0.28 | % | 6.44 | % | (10/16/96) 5.54% | |||||||||||||
(4/2/04) 5.32% |
Fund Expense Ratios3: Investor Shares: 1.61% / Select Shares: Net 1.48%; Gross 1.50%
Investment Managers and Allocations
% of | ||||||
Investment Manager | Investment Style | Net Assets | ||||
American Century Investment Management, Inc. | International Small/Mid—Cap Growth | 23.9% | ||||
Wentworth, Hauser and Violich, Inc./Hirayama Investments, LLC | International Large—Cap Growth | 10.6% | ||||
Harris Associates L.P. | International Large—Cap Value | 18.2% | ||||
William Blair & Company, LLC | International Multi—Cap Growth | 19.4% | ||||
Mondrian Investment Partners Limited | International Small—Cap Value | 26.3% | ||||
Cash and other assets | — | 1.6% | ||||
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Because the fund originally used a multi-fund strategy, performance of the Investor Shares prior to June 3, 2002 does not reflect the current strategy and may have been different if it did.
* | The Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE Index®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Laudus MarketMasters Funds 9
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Laudus Small-Cap MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.46% | $ | 1,000 | $ | 847.90 | $ | 6.80 | |||||||||
Hypothetical 5% Return | 1.46% | $ | 1,000 | $ | 1,017.85 | $ | 7.43 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.31% | $ | 1,000 | $ | 848.40 | $ | 6.10 | |||||||||
Hypothetical 5% Return | 1.31% | $ | 1,000 | $ | 1,018.60 | $ | 6.67 | |||||||||
Laudus International MarketMasters Fundtm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 1.60% | $ | 1,000 | $ | 839.70 | $ | 7.42 | |||||||||
Hypothetical 5% Return | 1.60% | $ | 1,000 | $ | 1,017.14 | $ | 8.13 | |||||||||
Select Shares | ||||||||||||||||
Actual Return | 1.45% | $ | 1,000 | $ | 840.20 | $ | 6.73 | |||||||||
Hypothetical 5% Return | 1.45% | $ | 1,000 | $ | 1,017.90 | $ | 7.37 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. | |
2 | Expenses for each fund or share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
10 Laudus MarketMasters Funds
Laudus Small-Cap MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
Investor Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.52 | 9.40 | 8.78 | 13.74 | 14.20 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.09 | )1 | (0.08 | )1 | (0.05 | )1 | (0.04 | )1 | (0.08 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 0.56 | 2.20 | 0.67 | (4.59 | ) | 1.81 | ||||||||||||||||
Total from investment operations | 0.47 | 2.12 | 0.62 | (4.63 | ) | 1.73 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | (0.00 | )2 | — | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | (0.33 | ) | (2.19 | ) | |||||||||||||||
Total distributions | — | — | (0.00 | )2 | (0.33 | ) | (2.19 | ) | ||||||||||||||
Net asset value at end of period | 11.99 | 11.52 | 9.40 | 8.78 | 13.74 | |||||||||||||||||
Total return (%) | 4.08 | 22.55 | 7.10 | (34.34 | ) | 13.79 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.46 | 1.46 | 1.48 | 3 | 1.48 | 1.51 | 4 | |||||||||||||||
Gross operating expenses | 1.51 | 1.50 | 1.50 | 1.48 | 1.59 | |||||||||||||||||
Net investment income (loss) | (0.70 | ) | (0.72 | ) | (0.64 | ) | (0.38 | ) | (0.60 | ) | ||||||||||||
Portfolio turnover rate | 95 | 78 | 129 | 134 | 83 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 62 | 68 | 64 | 64 | 99 |
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
Select Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.64 | 9.49 | 8.86 | 13.85 | 14.27 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.07 | )1 | (0.06 | )1 | (0.04 | )1 | (0.04 | )1 | (0.04 | )1 | ||||||||||||
Net realized and unrealized gains (losses) | 0.57 | 2.21 | 0.68 | (4.62 | ) | 1.81 | ||||||||||||||||
Total from investment operations | 0.50 | 2.15 | 0.64 | (4.66 | ) | 1.77 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | (0.01 | ) | — | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | (0.33 | ) | (2.19 | ) | |||||||||||||||
Total distributions | — | — | (0.01 | ) | (0.33 | ) | (2.19 | ) | ||||||||||||||
Net asset value at end of period | 12.14 | 11.64 | 9.49 | 8.86 | 13.85 | |||||||||||||||||
Total return (%) | 4.30 | 22.66 | 7.29 | (34.28 | ) | 14.04 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.31 | 1.32 | 5 | 1.33 | 3 | 1.37 | 1.36 | 6 | ||||||||||||||
Gross operating expenses | 1.45 | 1.45 | 1.45 | 1.44 | 1.66 | |||||||||||||||||
Net investment income (loss) | (0.54 | ) | (0.58 | ) | (0.48 | ) | (0.31 | ) | (0.29 | ) | ||||||||||||
Portfolio turnover rate | 95 | 78 | 129 | 134 | 83 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 219 | 337 | 292 | 260 | 437 |
1 Calculated based on the average shares outstanding during the period.
2 Per share amount was less than $0.01.
3 Effective February 28, 2009, the operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The ratio of net operating expenses would have been 1.55% if custody credits had not been incurred.
5 The ratio of net operating expenses would have been 1.31% if certain non-routine expense had not been incurred.
6 The ratio of net operating expenses would have been 1.37% if custody credits had not been incurred.
See financial notes 11
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.laudusfunds.com.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
93 | .5% | Common Stock | 235,112,156 | 263,039,303 | ||||||||
0 | .5% | Foreign Common Stock | 1,118,911 | 1,467,033 | ||||||||
5 | .8% | Other Investment Company | 16,453,477 | 16,453,477 | ||||||||
0 | .5% | Short-Term Investment | 1,295,000 | 1,295,000 | ||||||||
100 | .3% | Total Investments | 253,979,544 | 282,254,813 | ||||||||
(0 | .3)% | Other Assets and Liabilities, Net | (811,712 | ) | ||||||||
100 | .0% | Net Assets | 281,443,101 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 93.5% of net assets | ||||||||
Automobiles & Components 0.4% | ||||||||
Dana Holding Corp. * | 86,800 | 1,227,352 | ||||||
Banks 7.8% | ||||||||
Bank of the Ozarks, Inc. | 98,373 | 2,446,536 | ||||||
Comerica, Inc. | 21,900 | 559,545 | ||||||
East West Bancorp, Inc. | 121,520 | 2,365,994 | ||||||
First Horizon National Corp. | 57,539 | 402,198 | ||||||
Fulton Financial Corp. | 97,700 | 922,288 | ||||||
Glacier Bancorp, Inc. | 90,139 | 1,023,078 | ||||||
IBERIABANK Corp. | 69,165 | 3,577,214 | ||||||
KeyCorp | 73,500 | 518,910 | ||||||
MB Financial, Inc. | 56,500 | 936,205 | ||||||
Pinnacle Financial Partners, Inc. * | 128,800 | 1,933,288 | ||||||
Renasant Corp. | 34,000 | 490,280 | ||||||
Susquehanna Bancshares, Inc. | 129,900 | 943,074 | ||||||
Synovus Financial Corp. | 408,540 | 612,810 | ||||||
TCF Financial Corp. | 66,600 | 708,624 | ||||||
Texas Capital Bancshares, Inc. * | 35,600 | 996,800 | ||||||
UMB Financial Corp. | 61,410 | 2,264,187 | ||||||
Umpqua Holdings Corp. | 111,500 | 1,276,675 | ||||||
21,977,706 | ||||||||
Capital Goods 10.3% | ||||||||
Actuant Corp., Class A | 53,300 | 1,199,250 | ||||||
Aerovironment, Inc. * | 59,970 | 1,980,809 | ||||||
Ceradyne, Inc. * | 40,000 | 1,338,400 | ||||||
Chicago Bridge & Iron Co., N.V., NY Shares | 63,827 | 2,334,792 | ||||||
Colfax Corp. * | 111,771 | 2,823,335 | ||||||
Dover Corp. | 17,500 | 971,775 | ||||||
ESCO Technologies, Inc. | 35,033 | 1,070,959 | ||||||
Fortune Brands Home & Security, Inc. * | 7,200 | 104,616 | ||||||
Franklin Electric Co., Inc. | 50,048 | 2,298,204 | ||||||
Gardner Denver, Inc. | 3,200 | 247,456 | ||||||
HEICO Corp. | 26,956 | 1,537,031 | ||||||
Jacobs Engineering Group, Inc. * | 25,507 | 989,672 | ||||||
Joy Global, Inc. | 6,700 | 584,240 | ||||||
Kennametal, Inc. | 36,300 | 1,411,707 | ||||||
Layne Christensen Co. * | 10,125 | 255,049 | ||||||
MasTec, Inc. * | 23,700 | 512,394 | ||||||
MSC Industrial Direct Co., Class A | 10,500 | 714,105 | ||||||
Regal-Beloit Corp. | 11,100 | 589,743 | ||||||
Rockwell Collins, Inc. | 7,000 | 390,810 | ||||||
SPX Corp. | 15,860 | 866,115 | ||||||
Terex Corp. * | 157,700 | 2,624,128 | ||||||
Textron, Inc. | 57,900 | 1,124,418 | ||||||
Triumph Group, Inc. | 16,700 | 970,270 | ||||||
Wabtec Corp. | 31,475 | 2,114,490 | ||||||
29,053,768 | ||||||||
Commercial & Professional Supplies 2.6% | ||||||||
Clean Harbors, Inc. * | 9,700 | 565,219 | ||||||
CoStar Group, Inc. * | 9,300 | 572,229 | ||||||
Insperity, Inc. | 65,100 | 1,678,278 | ||||||
The Advisory Board Co. * | 35,223 | 2,157,409 | ||||||
The Corporate Executive Board Co. | 66,307 | 2,426,173 | ||||||
7,399,308 | ||||||||
Consumer Durables & Apparel 2.5% | ||||||||
Brunswick Corp. | 25,500 | 450,330 | ||||||
Deckers Outdoor Corp. * | 4,600 | 530,104 | ||||||
Harman International Industries, Inc. | 52,734 | 2,275,999 | ||||||
Jarden Corp. | 46,000 | 1,473,380 | ||||||
Lennar Corp., Class A | 73,700 | 1,218,998 | ||||||
Toll Brothers, Inc. * | 64,500 | 1,124,880 | ||||||
7,073,691 | ||||||||
Consumer Services 6.0% | ||||||||
BJ’s Restaurants, Inc. * | 45,765 | 2,422,341 | ||||||
Buffalo Wild Wings, Inc. * | 8,200 | 543,004 | ||||||
Coinstar, Inc. * | 36,181 | 1,727,281 | ||||||
Grand Canyon Education, Inc. * | 121,058 | 1,974,456 | ||||||
International Speedway Corp., Class A | 40,012 | 954,686 | ||||||
Jack in the Box, Inc. * | 48,000 | 987,840 | ||||||
Krispy Kreme Doughnuts, Inc. * | 92,000 | 649,520 | ||||||
Marriott International, Inc., Class A | 20,943 | 659,705 | ||||||
Orient-Express Hotels Ltd., Class A * | 152,900 | 1,304,237 | ||||||
P.F. Chang’s China Bistro, Inc. | 22,100 | 687,310 | ||||||
Peet’s Coffee & Tea, Inc. * | 9,200 | 586,224 | ||||||
Pinnacle Entertainment, Inc. * | 44,900 | 508,268 | ||||||
Red Robin Gourmet Burgers, Inc. * | 55,525 | 1,392,012 | ||||||
Steiner Leisure Ltd. * | 13,400 | 645,612 | ||||||
Texas Roadhouse, Inc. | 119,265 | 1,709,067 | ||||||
16,751,563 |
12 See financial notes
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Diversified Financials 2.3% | ||||||||
DFC Global Corp. * | 27,700 | 607,184 | ||||||
First Cash Financial Services, Inc. * | 15,800 | 655,700 | ||||||
GAMCO Investors, Inc., Class A | 19,718 | 928,718 | ||||||
Invesco Ltd. | 33,305 | 668,431 | ||||||
Knight Capital Group, Inc., Class A * | 88,360 | 1,103,617 | ||||||
Stifel Financial Corp. * | 81,145 | 2,586,091 | ||||||
6,549,741 | ||||||||
Energy 9.6% | ||||||||
Arch Coal, Inc. | 23,300 | 424,526 | ||||||
Atwood Oceanics, Inc. * | 50,480 | 2,157,515 | ||||||
Bill Barrett Corp. * | 43,437 | 1,806,979 | ||||||
Carrizo Oil & Gas, Inc. * | 22,300 | 606,560 | ||||||
Comstock Resources, Inc. * | 114,306 | 2,084,941 | ||||||
Contango Oil & Gas Co. * | 29,396 | 1,891,339 | ||||||
Denbury Resources, Inc. * | 60,400 | 948,280 | ||||||
Ensco PLC ADR | 14,000 | 695,240 | ||||||
Gastar Exploration Ltd. * | 509,100 | 1,883,670 | ||||||
Global Geophysical Services, Inc. * | 55,013 | 524,824 | ||||||
Hornbeck Offshore Services, Inc. * | 18,800 | 617,392 | ||||||
ION Geophysical Corp. * | 79,500 | 605,790 | ||||||
Murphy Oil Corp. | 13,850 | 766,875 | ||||||
Nabors Industries Ltd. * | 46,100 | 845,013 | ||||||
Northern Oil & Gas, Inc. * | 33,600 | 812,112 | ||||||
Oasis Petroleum, Inc. * | 19,800 | 580,932 | ||||||
Overseas Shipholding Group, Inc. | 36,016 | 449,480 | ||||||
Precision Drilling Corp. * | 200,995 | 2,325,512 | ||||||
Rosetta Resources, Inc. * | 19,800 | 877,932 | ||||||
Tesoro Corp. * | 26,900 | 697,786 | ||||||
TETRA Technologies, Inc. * | 102,000 | 969,000 | ||||||
Unit Corp. * | 23,500 | 1,152,910 | ||||||
VAALCO Energy, Inc. * | 265,500 | 1,808,055 | ||||||
Weatherford International Ltd. * | 55,600 | 861,800 | ||||||
World Fuel Services Corp. | 18,100 | 721,285 | ||||||
27,115,748 | ||||||||
Food & Staples Retailing 1.4% | ||||||||
PriceSmart, Inc. | 18,900 | 1,437,156 | ||||||
United Natural Foods, Inc. * | 46,918 | 1,712,976 | ||||||
Winn-Dixie Stores, Inc. * | 126,300 | 800,742 | ||||||
3,950,874 | ||||||||
Food, Beverage & Tobacco 1.5% | ||||||||
Beam, Inc. | 10,200 | 504,186 | ||||||
Diamond Foods, Inc. | 9,200 | 604,900 | ||||||
Molson Coors Brewing Co., Class B | 12,000 | 508,080 | ||||||
TreeHouse Foods, Inc. * | 39,770 | 2,439,492 | ||||||
4,056,658 | ||||||||
Health Care Equipment & Services 7.3% | ||||||||
Accretive Health, Inc. * | 23,800 | 566,678 | ||||||
Air Methods Corp. * | 11,800 | 953,676 | ||||||
Allscripts Healthcare Solutions, Inc. * | 22,300 | 427,045 | ||||||
AMERIGROUP Corp. * | 31,011 | 1,725,142 | ||||||
Analogic Corp. | 42,729 | 2,310,784 | ||||||
athenahealth, Inc. * | 38,549 | 2,039,628 | ||||||
Coventry Health Care, Inc. * | 35,400 | 1,126,074 | ||||||
Health Management Associates, Inc., Class A * | 153,745 | 1,346,806 | ||||||
HMS Holdings Corp. * | 20,900 | 510,796 | ||||||
Hologic, Inc. * | 47,400 | 764,088 | ||||||
MAKO Surgical Corp. * | 15,400 | 592,130 | ||||||
Masimo Corp. | 8,200 | 169,576 | ||||||
Neogen Corp. * | 14,900 | 575,885 | ||||||
Omnicell, Inc. * | 32,000 | 478,400 | ||||||
Quality Systems, Inc. | 43,898 | 1,708,071 | ||||||
Sirona Dental Systems, Inc. * | 15,300 | 732,870 | ||||||
SXC Health Solutions Corp. * | 13,400 | 627,388 | ||||||
Teleflex, Inc. | 37,050 | 2,217,813 | ||||||
Tenet Healthcare Corp. * | 101,000 | 477,730 | ||||||
Tornier N.V. * | 23,600 | 548,464 | ||||||
U.S. Physical Therapy, Inc. | 29,800 | 581,696 | ||||||
20,480,740 | ||||||||
Household & Personal Products 0.8% | ||||||||
Elizabeth Arden, Inc. * | 21,400 | 733,592 | ||||||
Energizer Holdings, Inc. * | 19,970 | 1,473,586 | ||||||
2,207,178 | ||||||||
Insurance 0.8% | ||||||||
Arch Capital Group Ltd. * | 37,862 | 1,361,896 | ||||||
PartnerRe Ltd. | 5,700 | 354,654 | ||||||
Reinsurance Group of America, Inc. | 9,600 | 501,408 | ||||||
2,217,958 | ||||||||
Materials 5.1% | ||||||||
Albemarle Corp. | 9,900 | 527,571 | ||||||
Calgon Carbon Corp. * | 57,000 | 909,150 | ||||||
Carpenter Technology Corp. | 13,100 | 743,032 | ||||||
Celanese Corp., Series A | 18,670 | 813,078 | ||||||
Cliffs Natural Resources, Inc. | 10,800 | 736,776 | ||||||
Commercial Metals Co. | 91,600 | 1,138,588 | ||||||
Cytec Industries, Inc. | 29,850 | 1,333,399 | ||||||
Horsehead Holding Corp. * | 192,800 | 1,673,504 | ||||||
International Flavors & Fragrances, Inc. | 20,600 | 1,247,536 | ||||||
Materion Corp. * | 39,800 | 1,052,312 | ||||||
Minerals Technologies, Inc. | 23,500 | 1,288,740 | ||||||
Royal Gold, Inc. | 14,515 | 1,038,984 | ||||||
Silgan Holdings, Inc. | 16,700 | 626,918 | ||||||
Westlake Chemical Corp. | 24,694 | 1,017,640 | ||||||
Worthington Industries, Inc. | 16,700 | 288,576 | ||||||
14,435,804 | ||||||||
Media 1.5% | ||||||||
Morningstar, Inc. | 42,076 | 2,481,222 | ||||||
The E.W. Scripps Co., Class A * | 212,294 | 1,770,532 | ||||||
4,251,754 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 4.3% | ||||||||
Akorn, Inc. * | 83,600 | 751,564 | ||||||
Cepheid, Inc. * | 14,300 | 513,084 | ||||||
Covance, Inc. * | 27,100 | 1,374,783 | ||||||
Cubist Pharmaceuticals, Inc. * | 20,000 | 756,200 | ||||||
eResearch Technology, Inc. * | 285,650 | 1,459,671 |
See financial notes 13
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Isis Pharmaceuticals, Inc. * | 82,500 | 683,925 | ||||||
Jazz Pharmaceuticals, Inc. * | 14,600 | 568,816 | ||||||
Medicis Pharmaceutical Corp., Class A | 19,100 | 731,339 | ||||||
Mylan, Inc. * | 35,600 | 696,692 | ||||||
PAREXEL International Corp. * | 67,100 | 1,478,213 | ||||||
Pharmaceutical Product Development, Inc. | 43,200 | 1,425,168 | ||||||
Salix Pharmaceuticals Ltd. * | 16,500 | 565,208 | ||||||
United Therapeutics Corp. * | 22,910 | 1,001,854 | ||||||
12,006,517 | ||||||||
Real Estate 3.9% | ||||||||
Boston Properties, Inc. | 2,600 | 257,374 | ||||||
Colonial Properties Trust | 123,068 | 2,495,819 | ||||||
Digital Realty Trust, Inc. | 8,960 | 558,477 | ||||||
Health Care REIT, Inc. | 10,009 | 527,374 | ||||||
Home Properties, Inc. | 15,100 | 889,390 | ||||||
Jones Lang LaSalle, Inc. | 13,500 | 872,370 | ||||||
Kilroy Realty Corp. | 12,960 | 475,502 | ||||||
Kimco Realty Corp. | 47,800 | 835,066 | ||||||
LaSalle Hotel Properties | 101,672 | 2,430,978 | ||||||
Liberty Property Trust | 29,005 | 928,160 | ||||||
Regency Centers Corp. | 13,060 | 534,938 | ||||||
10,805,448 | ||||||||
Retailing 3.6% | ||||||||
Aaron’s, Inc. | 86,019 | 2,301,868 | ||||||
American Eagle Outfitters, Inc. | 94,965 | 1,246,891 | ||||||
DSW, Inc., Class A | 14,300 | 748,462 | ||||||
Expedia, Inc. | 28,300 | 743,158 | ||||||
Foot Locker, Inc. | 34,100 | 745,426 | ||||||
GameStop Corp., Class A * | 17,100 | 437,247 | ||||||
Hibbett Sports, Inc. * | 13,600 | 560,184 | ||||||
Sally Beauty Holdings, Inc. * | 26,800 | 514,292 | ||||||
Shutterfly, Inc. * | 11,000 | 458,370 | ||||||
The Gap, Inc. | 25,300 | 478,170 | ||||||
Tractor Supply Co. | 9,700 | 688,118 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 8,700 | 585,423 | ||||||
Vitamin Shoppe, Inc. * | 16,500 | 622,215 | ||||||
10,129,824 | ||||||||
Semiconductors & Semiconductor Equipment 2.3% | ||||||||
Cavium, Inc. * | 18,800 | 614,572 | ||||||
Cymer, Inc. * | 13,200 | 573,540 | ||||||
EZchip Semiconductor Ltd. * | 15,300 | 557,379 | ||||||
IXYS Corp. * | 50,500 | 690,335 | ||||||
Maxim Integrated Products, Inc. | 39,075 | 1,022,202 | ||||||
Mellanox Technologies Ltd. * | 16,300 | 527,468 | ||||||
Rudolph Technologies, Inc. * | 100,100 | 737,737 | ||||||
Ultratech, Inc. * | 78,300 | 1,706,940 | ||||||
6,430,173 | ||||||||
Software & Services 9.2% | ||||||||
Ariba, Inc. * | 20,400 | 646,272 | ||||||
BroadSoft, Inc. * | 15,700 | 565,200 | ||||||
CIBER, Inc. * | 64,500 | 224,460 | ||||||
CommVault Systems, Inc. * | 50,137 | 2,134,833 | ||||||
Concur Technologies, Inc. * | 14,500 | 674,540 | ||||||
DemandTec, Inc. * | 92,020 | 695,671 | ||||||
Digital River, Inc. * | 46,500 | 852,345 | ||||||
Echo Global Logistics, Inc. * | 37,600 | 580,544 | ||||||
Heartland Payment Systems, Inc. | 24,800 | 539,648 | ||||||
Keynote Systems, Inc. | 35,800 | 854,546 | ||||||
Lionbridge Technologies, Inc. * | 374,935 | 1,016,074 | ||||||
LivePerson, Inc. * | 51,800 | 652,162 | ||||||
Mitek Systems, Inc. * | 42,100 | 425,631 | ||||||
Parametric Technology Corp. * | 59,700 | 1,243,551 | ||||||
QLIK Technologies, Inc. * | 22,200 | 634,254 | ||||||
Rackspace Hosting, Inc. * | 16,700 | 691,213 | ||||||
RightNow Technologies, Inc. * | 38,930 | 1,674,379 | ||||||
Rosetta Stone, Inc. * | 52,142 | 517,770 | ||||||
SeaChange International, Inc. * | 162,586 | 1,372,226 | ||||||
ServiceSource International, Inc. * | 31,100 | 413,941 | ||||||
SuccessFactors, Inc. * | 72,505 | 1,935,884 | ||||||
TeleCommunication Systems, Inc., Class A * | 306,000 | 1,009,800 | ||||||
The Ultimate Software Group, Inc. * | 27,400 | 1,648,932 | ||||||
TIBCO Software, Inc. * | 24,400 | 704,916 | ||||||
Unisys Corp. * | 5,700 | 148,143 | ||||||
VASCO Data Security International, Inc. * | 199,290 | 1,646,135 | ||||||
VeriFone Systems, Inc. * | 15,900 | 671,139 | ||||||
Websense, Inc. * | 95,057 | 1,695,817 | ||||||
25,870,026 | ||||||||
Technology Hardware & Equipment 6.3% | ||||||||
Acme Packet, Inc. * | 54,263 | 1,964,863 | ||||||
Aruba Networks, Inc. * | 23,900 | 566,191 | ||||||
Aviat Networks, Inc. * | 352,500 | 722,625 | ||||||
Avnet, Inc. * | 38,400 | 1,163,904 | ||||||
Blue Coat Systems, Inc. * | 1,874 | 30,171 | ||||||
Brocade Communications Systems, Inc. * | 281,200 | 1,231,656 | ||||||
Ceragon Networks Ltd. * | 145,206 | 1,465,129 | ||||||
Echelon Corp. * | 178,200 | 1,204,632 | ||||||
Electro Scientific Industries, Inc. * | 68,174 | 837,859 | ||||||
Ixia * | 157,198 | 1,781,053 | ||||||
Meru Networks, Inc. * | 74,080 | 402,254 | ||||||
NETGEAR, Inc. * | 74,944 | 2,657,514 | ||||||
Power-One, Inc. * | 156,850 | 776,408 | ||||||
Powerwave Technologies, Inc. * | 122,200 | 441,142 | ||||||
Seagate Technology plc | 107,500 | 1,736,125 | ||||||
The Western Digital Corp. * | 31,800 | 847,152 | ||||||
17,828,678 | ||||||||
Telecommunication Services 1.5% | ||||||||
Cbeyond, Inc. * | 124,340 | 1,024,562 | ||||||
Cogent Communications Group, Inc. * | 119,400 | 1,916,370 | ||||||
Sprint Nextel Corp. * | 61,900 | 159,083 | ||||||
Windstream Corp. | 93,600 | 1,139,112 | ||||||
4,239,127 | ||||||||
Transportation 1.6% | ||||||||
Arkansas Best Corp. | 48,800 | 1,005,280 | ||||||
Forward Air Corp. | 67,475 | 2,209,806 |
14 See financial notes
Laudus Small-Cap MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hub Group, Inc., Class A * | 16,500 | 515,790 | ||||||
Old Dominion Freight Line, Inc. * | 23,900 | 874,023 | ||||||
4,604,899 | ||||||||
Utilities 0.9% | ||||||||
Hawaiian Electric Industries, Inc. | 53,935 | 1,366,174 | ||||||
Portland General Electric Co. | 41,100 | 1,008,594 | ||||||
2,374,768 | ||||||||
Total Common Stock | ||||||||
(Cost $235,112,156) | 263,039,303 | |||||||
Foreign Common Stock 0.5% of net assets | ||||||||
United Kingdom 0.5% | ||||||||
Insurance 0.5% | ||||||||
Willis Group Holdings plc | 40,403 | 1,467,033 | ||||||
Total Foreign Common Stock | ||||||||
(Cost $1,118,911) | 1,467,033 | |||||||
Other Investment Company 5.8% of net assets | ||||||||
Money Market Fund 5.8% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 16,453,477 | 16,453,477 | ||||||
Total Other Investment Company | ||||||||
(Cost $16,453,477) | 16,453,477 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
U.S. Treasury Obligation 0.5% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (a)(b) | 1,295,000 | 1,295,000 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,295,000) | 1,295,000 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $259,495,069 and the unrealized appreciation and depreciation were $40,807,633 and ($18,047,889), respectively, with a net appreciation of $22,759,744.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
ADR — | American Depositary Receipt | |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 170 | 12,568,100 | 817,872 |
See financial notes 15
Laudus Small-Cap MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $253,979,544) | $282,254,813 | |||||
Receivables: | ||||||
Investments sold | 4,914,074 | |||||
Fund shares sold | 103,831 | |||||
Dividends | 29,258 | |||||
Interest | 1,377 | |||||
Prepaid expenses | + | 9,852 | ||||
Total assets | 287,313,205 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 5,255,820 | |||||
Investment adviser and administrator fees | 46,141 | |||||
Due to brokers for futures | 343,400 | |||||
Fund shares redeemed | 164,101 | |||||
Accrued expenses | + | 60,642 | ||||
Total liabilities | 5,870,104 | |||||
Net Assets | ||||||
Total assets | 287,313,205 | |||||
Total liabilities | − | 5,870,104 | ||||
Net assets | $281,443,101 | |||||
Net Assets by Source | ||||||
Capital received from investors | 322,029,952 | |||||
Net realized capital losses | (69,679,992 | ) | ||||
Net unrealized capital gains | 29,093,141 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $62,355,775 | 5,200,649 | $11.99 | |||||||||||
Select Shares | $219,087,326 | 18,048,187 | $12.14 |
16 See financial notes
Laudus Small-Cap MarketMasters Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,196) | $2,439,759 | |||||
Interest | + | 26,663 | ||||
Total investment income | 2,466,422 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,753,731 | |||||
Shareholder service fees: | ||||||
Investor Shares | 173,123 | |||||
Select Shares | 461,246 | |||||
Portfolio accounting fees | 69,352 | |||||
Shareholder reports | 50,404 | |||||
Transfer agent fees | 44,448 | |||||
Professional fees | 43,630 | |||||
Registration fees | 34,492 | |||||
Custodian fees | 33,527 | |||||
Trustees’ fees | 8,363 | |||||
Interest expense | 181 | |||||
Other expenses | + | 10,774 | ||||
Total expenses | 4,683,271 | |||||
Expense reduction by CSIM and its affiliates | − | 375,005 | ||||
Payment for state filing fees (see financial note 12) | − | 216 | ||||
Custody credits | − | 19 | ||||
Net expenses | − | 4,308,031 | ||||
Net investment loss | (1,841,609 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 57,272,591 | |||||
Net realized gains on futures contracts | + | 203,317 | ||||
Net realized gains | 57,475,908 | |||||
Net unrealized losses on investments | (36,422,892 | ) | ||||
Net unrealized losses on futures contracts | + | (48,829 | ) | |||
Net unrealized losses | + | (36,471,721 | ) | |||
Net realized and unrealized gains | 21,004,187 | |||||
Increase in net assets resulting from operations | $19,162,578 |
See financial notes 17
Laudus Small-Cap MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment loss | ($1,841,609 | ) | ($2,384,880 | ) | ||||||
Net realized gains | 57,475,908 | 39,071,941 | ||||||||
Net unrealized gains (losses) | + | (36,471,721 | ) | 42,387,245 | ||||||
Increase in net assets from operations | $19,162,578 | $79,074,306 |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 126,703 | $1,624,965 | 148,721 | $1,584,530 | ||||||||||||||
Select Shares | + | 2,023,632 | 24,972,114 | 4,204,773 | 44,602,776 | |||||||||||||
Total shares sold | 2,150,335 | $26,597,079 | 4,353,494 | $46,187,306 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (827,089 | ) | ($10,514,720 | ) | (1,098,259 | ) | ($11,641,939 | ) | ||||||||||
Select Shares | + | (12,892,563 | ) | (158,472,758 | ) | (6,096,263 | ) | (65,834,703 | ) | |||||||||
Total shares redeemed | (13,719,652 | ) | ($168,987,478 | ) | (7,194,522 | ) | ($77,476,642 | ) | ||||||||||
Net transactions in fund shares | (11,569,317 | ) | ($142,390,399 | ) | (2,841,028 | ) | ($31,289,336 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 34,818,153 | $404,670,922 | 37,659,181 | $356,885,952 | ||||||||||||||
Total increase or decrease | + | (11,569,317 | ) | (123,227,821 | ) | (2,841,028 | ) | 47,784,970 | ||||||||||
End of period | 23,248,836 | $281,443,101 | 34,818,153 | $404,670,922 | ||||||||||||||
Net investment income not yet distributed | $— | $5,385 |
18 See financial notes
Laudus International MarketMasters Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
Investor Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.36 | 15.04 | 11.78 | 25.96 | 20.73 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.16 | 0.09 | 0.14 | 0.20 | 0.14 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.85 | ) | 3.41 | 3.63 | (12.25 | ) | 6.84 | |||||||||||||||
Total from investment operations | (0.69 | ) | 3.50 | 3.77 | (12.05 | ) | 6.98 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.18 | ) | (0.51 | ) | (0.10 | ) | (0.16 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (2.03 | ) | (1.59 | ) | |||||||||||||||
Total distributions | (0.22 | ) | (0.18 | ) | (0.51 | ) | (2.13 | ) | (1.75 | ) | ||||||||||||
Net asset value at end of period | 17.45 | 18.36 | 15.04 | 11.78 | 25.96 | |||||||||||||||||
Total return (%) | (3.87 | ) | 23.47 | 33.64 | (49.97 | ) | 36.01 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.59 | 1.60 | 1.62 | 1.59 | 1.56 | 1 | ||||||||||||||||
Gross operating expenses | 1.60 | 1.62 | 1.63 | 1.59 | 1.59 | |||||||||||||||||
Net investment income (loss) | 0.80 | 0.53 | 0.95 | 0.95 | 0.62 | |||||||||||||||||
Portfolio turnover rate | 78 | 83 | 96 | 88 | 71 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 665 | 849 | 931 | 918 | 2,297 |
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
Select Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 18.38 | 15.05 | 11.80 | 26.00 | 20.77 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.10 | 0.15 | 0.23 | 0.15 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.86 | ) | 3.43 | 3.64 | (12.27 | ) | 6.86 | |||||||||||||||
Total from investment operations | (0.67 | ) | 3.53 | 3.79 | (12.04 | ) | 7.01 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.20 | ) | (0.54 | ) | (0.13 | ) | (0.19 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (2.03 | ) | (1.59 | ) | |||||||||||||||
Total distributions | (0.25 | ) | (0.20 | ) | (0.54 | ) | (2.16 | ) | (1.78 | ) | ||||||||||||
Net asset value at end of period | 17.46 | 18.38 | 15.05 | 11.80 | 26.00 | |||||||||||||||||
Total return (%) | (3.76 | ) | 23.68 | 33.82 | (49.91 | ) | 36.16 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.45 | 1.48 | 2 | 1.47 | 1.48 | 2 | 1.44 | 3 | ||||||||||||||
Gross operating expenses | 1.47 | 1.50 | 1.58 | 1.54 | 1.55 | |||||||||||||||||
Net investment income (loss) | 0.99 | 0.69 | 1.08 | 1.08 | 0.73 | |||||||||||||||||
Portfolio turnover rate | 78 | 83 | 96 | 88 | 71 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 961 | 948 | 630 | 540 | 1,255 |
1 The ratio of net operating expenses would have been 1.59% if custody credits had not been included.
2 The ratio of net operating expenses would have been 1.47% if certain non-routine expenses had not been incurred.
3 The ratio of net operating expenses would have been 1.47% if custody credits had not been included.
See financial notes 19
Laudus International MarketMasters Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.laudusfunds.com.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
95 | .8% | Common Stock | 1,415,129,916 | 1,557,227,737 | ||||||||
0 | .1% | Preferred Stock | 998,553 | 1,267,690 | ||||||||
3 | .2% | Other Investment Company | 52,203,538 | 52,203,538 | ||||||||
0 | .0% | Corporate Bond | 117,495 | 67,455 | ||||||||
0 | .0% | Rights | 142,609 | 141,070 | ||||||||
0 | .1% | Short-Term Investment | 2,705,000 | 2,705,000 | ||||||||
99 | .2% | Total Investments | 1,471,297,111 | 1,613,612,490 | ||||||||
0 | .8% | Other Assets and Liabilities, Net | 12,223,173 | |||||||||
100 | .0% | Net Assets | 1,625,835,663 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 95.8% of net assets | ||||||||
Australia 4.9% | ||||||||
Capital Goods 0.4% | ||||||||
Boart Longyear Group | 282,900 | 943,969 | ||||||
Monadelphous Group Ltd. | 289,694 | 5,509,757 | ||||||
6,453,726 | ||||||||
Commercial & Professional Supplies 1.0% | ||||||||
Campbell Brothers Ltd. | 149,561 | 7,199,867 | ||||||
SAI Global Ltd. | 353,815 | 1,762,503 | ||||||
Transfield Services Ltd. | 3,382,126 | 8,071,706 | ||||||
17,034,076 | ||||||||
Energy 0.1% | ||||||||
Bandanna Energy Ltd. * | 1,079,826 | 921,626 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca-Cola Amatil Ltd. | 7,900 | 101,980 | ||||||
Treasury Wine Estates | 134,333 | 524,500 | ||||||
626,480 | ||||||||
Materials 2.0% | ||||||||
Amcor Ltd. | 1,014,500 | 7,422,315 | ||||||
Atlas Iron Ltd. | 557,505 | 1,808,199 | ||||||
BHP Billiton Ltd. ADR | 170,475 | 13,310,688 | ||||||
Iluka Resources Ltd. | 176,915 | 2,941,158 | ||||||
Medusa Mining Ltd. | 315,040 | 2,214,602 | ||||||
Orica Ltd. | 157,300 | 4,260,559 | ||||||
PanAust Ltd. * | 206,820 | 698,867 | ||||||
32,656,388 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Mesoblast Ltd. * | 314,821 | 2,676,606 | ||||||
Real Estate 0.8% | ||||||||
Commonwealth Property Office Fund | 13,182,186 | 12,858,945 | ||||||
Retailing 0.4% | ||||||||
David Jones Ltd. | 1,798,275 | 6,348,200 | ||||||
79,576,047 | ||||||||
Austria 0.2% | ||||||||
Energy 0.2% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 33,902 | 2,678,650 | ||||||
Belgium 0.0% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
UCB S.A. | 14,800 | 650,232 | ||||||
Brazil 1.8% | ||||||||
Capital Goods 0.2% | ||||||||
Iochpe-Maxion S.A. | 37,300 | 525,765 | ||||||
Mills Estruturas e Servicos de Engenharia S.A. | 302,200 | 3,018,744 | ||||||
3,544,509 | ||||||||
Diversified Financials 0.2% | ||||||||
CETIP SA - Balcao Organizado de Ativos e Derivativos | 214,174 | 2,956,533 | ||||||
Energy 0.4% | ||||||||
OGX Petroleo e Gas Participacoes S.A. * | 228,400 | 1,889,088 | ||||||
Petroleo Brasileiro S.A. - Petrobras | 338,400 | 4,549,187 | ||||||
6,438,275 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
OdontoPrev S.A. | 53,800 | 846,711 | ||||||
Insurance 0.0% | ||||||||
Sul America S.A. | 57,900 | 465,061 | ||||||
Materials 0.5% | ||||||||
Vale S.A. ADR | 343,500 | 8,728,335 | ||||||
Media 0.0% | ||||||||
T4F Entretenimento S.A. * | 35,700 | 249,527 | ||||||
Real Estate 0.1% | ||||||||
BR Malls Participacoes S.A. | 96,100 | 1,038,329 | ||||||
BR Properties S.A. | 62,400 | 628,779 | ||||||
1,667,108 | ||||||||
Retailing 0.1% | ||||||||
Cia. Hering | 82,700 | 1,847,305 | ||||||
Transportation 0.1% | ||||||||
CCR S.A. | 47,000 | 1,293,503 | ||||||
Utilities 0.1% | ||||||||
Tractebel Energia S.A. | 50,500 | 808,894 | ||||||
28,845,761 | ||||||||
Canada 7.9% | ||||||||
Banks 0.3% | ||||||||
Canadian Western Bank | 137,499 | 3,931,499 |
20 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Home Capital Group, Inc. | 6,868 | 310,619 | ||||||
4,242,118 | ||||||||
Capital Goods 0.1% | ||||||||
Finning International, Inc. | 66,550 | 1,555,671 | ||||||
Consumer Services 0.1% | ||||||||
Tim Hortons, Inc. | 39,740 | 1,956,001 | ||||||
Diversified Financials 0.1% | ||||||||
CI Financial Corp. | 62,837 | 1,260,838 | ||||||
Energy 2.1% | ||||||||
Canadian Natural Resources Ltd. | 116,550 | 4,120,043 | ||||||
Celtic Exploration Ltd. * | 12,196 | 302,101 | ||||||
Crescent Point Energy Corp. | 30,546 | 1,304,583 | ||||||
Legacy Oil + Gas, Inc. * | 355,474 | 3,216,830 | ||||||
Pason Systems, Inc. | 595,500 | 8,077,412 | ||||||
Penn West Petroleum Ltd. | 49,900 | 894,208 | ||||||
Petrominerales Ltd. | 128,357 | 3,386,796 | ||||||
Peyto Exploration & Development Corp. | 41,773 | 911,525 | ||||||
Precision Drilling Corp. * | 95,700 | 1,109,899 | ||||||
Suncor Energy, Inc. | 181,975 | 5,806,822 | ||||||
Trican Well Service Ltd. | 283,581 | 5,015,835 | ||||||
34,146,054 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 67,161 | 2,021,400 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Saputo, Inc. | 42,949 | 1,774,407 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
SXC Health Solutions Corp. * | 67,128 | 3,116,813 | ||||||
Insurance 0.1% | ||||||||
Intact Financial Corp. | 15,312 | 854,430 | ||||||
Intact Financial Corp. (Subscription Receipt) | 6,173 | 344,462 | ||||||
Manulife Financial Corp. | 52,625 | 695,176 | ||||||
1,894,068 | ||||||||
Materials 2.1% | ||||||||
Agrium, Inc. | 21,800 | 1,793,922 | ||||||
AuRico Gold, Inc. * | 281,345 | 2,723,832 | ||||||
Copper Mountain Mining Corp. * | 166,543 | 888,897 | ||||||
Detour Gold Corp. | 63,792 | 2,112,000 | ||||||
First Quantum Minerals Ltd. | 81,400 | 1,707,624 | ||||||
Franco-Nevada Corp. | 11,900 | 471,463 | ||||||
IAMGOLD Corp. | 18,500 | 397,748 | ||||||
Major Drilling Group International, Inc. | 458,679 | 6,134,127 | ||||||
New Gold, Inc. * | 250,024 | 3,097,864 | ||||||
Potash Corp. of Saskatchewan, Inc. | 312,675 | 14,798,908 | ||||||
34,126,385 | ||||||||
Media 0.2% | ||||||||
Thomson Reuters Corp. | 119,000 | 3,520,752 | ||||||
Real Estate 0.8% | ||||||||
Brookfield Asset Management, Inc., Class A | 160,661 | 4,659,169 | ||||||
Morguard REIT | 223,790 | 3,403,718 | ||||||
Northern Property REIT | 160,700 | 4,644,863 | ||||||
12,707,750 | ||||||||
Retailing 0.4% | ||||||||
Dollarama, Inc. | 177,606 | 6,685,505 | ||||||
Software & Services 0.1% | ||||||||
CGI Group, Inc., Class A * | 18,200 | 372,491 | ||||||
Open Text Corp. * | 19,700 | 1,202,094 | ||||||
1,574,585 | ||||||||
Transportation 1.1% | ||||||||
Canadian National Railway Co. | 129,925 | 10,188,719 | ||||||
Canadian Pacific Railway Ltd. | 116,725 | 7,222,943 | ||||||
17,411,662 | ||||||||
127,994,009 | ||||||||
Chile 0.3% | ||||||||
Banks 0.1% | ||||||||
Banco Santander Chile ADR | 13,935 | 1,138,211 | ||||||
Materials 0.1% | ||||||||
Sociedad Quimica y Minera de Chile S.A. ADR | 22,525 | 1,317,713 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
CFR Pharmaceuticals S.A. * | 2,118,794 | 501,643 | ||||||
Real Estate 0.1% | ||||||||
Parque Arauco S.A. | 527,836 | 1,011,609 | ||||||
Software & Services 0.0% | ||||||||
Sonda S.A. | 124,905 | 304,901 | ||||||
4,274,077 | ||||||||
China 1.4% | ||||||||
Automobiles & Components 0.0% | ||||||||
Great Wall Motor Co., Ltd., Class H | 86,000 | 116,780 | ||||||
Capital Goods 0.0% | ||||||||
Haitian International Holdings Ltd. | 240,000 | 213,239 | ||||||
Commercial & Professional Supplies 0.2% | ||||||||
51job, Inc. * | 49,548 | 2,288,126 | ||||||
Consumer Services 0.0% | ||||||||
New Oriental Education & Technology Group, Inc. ADR * | 16,700 | 494,988 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Sun Art Retail Group Ltd. * | 251,000 | 325,026 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
China Minzhong Food Corp., Ltd. * | 204,000 | 168,164 | ||||||
Shenguan Holdings Group Ltd. | 3,738,000 | 2,008,260 | ||||||
2,176,424 | ||||||||
Insurance 0.1% | ||||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 258,500 | 1,917,139 | ||||||
Materials 0.4% | ||||||||
AMVIG Holdings Ltd. | 6,666,000 | 4,159,238 |
See financial notes 21
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
China Lumena New Materials Corp. | 4,722,310 | 1,039,304 | ||||||
Dongyue Group | 2,252,000 | 1,743,811 | ||||||
6,942,353 | ||||||||
Media 0.1% | ||||||||
Focus Media Holding Ltd. ADR * | 71,643 | 1,947,257 | ||||||
Real Estate 0.1% | ||||||||
China Overseas Land & Investment Ltd. | 892,000 | 1,650,547 | ||||||
Evergrande Real Estate Group Ltd. | 675,000 | 291,916 | ||||||
1,942,463 | ||||||||
Retailing 0.1% | ||||||||
China ZhengTong Auto Services Holdings Ltd. * | 1,553,000 | 1,681,607 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Spreadtrum Communications, Inc. | 31,000 | 823,670 | ||||||
Software & Services 0.1% | ||||||||
21Vianet Group Inc. ADR * | 63,380 | 562,181 | ||||||
Tencent Holdings Ltd. | 66,600 | 1,540,296 | ||||||
2,102,477 | ||||||||
22,971,549 | ||||||||
Denmark 0.7% | ||||||||
Capital Goods 0.0% | ||||||||
FLSmidth & Co. A/S | 3,100 | 196,333 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Coloplast A/S, Class B | 11,684 | 1,699,106 | ||||||
Materials 0.6% | ||||||||
Christian Hansen Holding A/S | 451,123 | 9,816,212 | ||||||
Software & Services 0.0% | ||||||||
SimCorp A/S | 2,812 | 481,894 | ||||||
12,193,545 | ||||||||
Finland 0.5% | ||||||||
Automobiles & Components 0.2% | ||||||||
Nokian Renkaat Oyj | 70,145 | 2,569,151 | ||||||
Capital Goods 0.2% | ||||||||
Outotec Oyj | 87,174 | 4,046,730 | ||||||
Materials 0.1% | ||||||||
UPM-Kymmene Oyj | 135,473 | 1,584,105 | ||||||
8,199,986 | ||||||||
France 6.5% | ||||||||
Banks 0.8% | ||||||||
BNP Paribas S.A. | 305,917 | 13,660,682 | ||||||
Capital Goods 0.9% | ||||||||
Compagnie de Saint-Gobain | 38,441 | 1,776,646 | ||||||
Mersen S.A. | 131,094 | 5,117,655 | ||||||
Nexans S.A. | 76,015 | 4,781,539 | ||||||
Safran S.A. | 37,800 | 1,234,398 | ||||||
Zodiac Aerospace | 11,500 | 901,699 | ||||||
13,811,937 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Edenred | 47,400 | 1,337,013 | ||||||
Consumer Services 0.0% | ||||||||
Sodexo | 3,700 | 267,157 | ||||||
Energy 0.1% | ||||||||
Technip S.A. | 21,000 | 1,985,697 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
DANONE S.A. | 26,800 | 1,857,854 | ||||||
Health Care Equipment & Services 0.4% | ||||||||
Essilor International S.A. | 43,266 | 3,127,016 | ||||||
Medica S.A. | 164,058 | 3,267,530 | ||||||
6,394,546 | ||||||||
Insurance 0.3% | ||||||||
AXA S.A. | 328,286 | 5,280,132 | ||||||
Materials 0.2% | ||||||||
Air Liquide S.A. | 13,562 | 1,751,088 | ||||||
Arkema | 8,380 | 569,497 | ||||||
2,320,585 | ||||||||
Media 1.0% | ||||||||
Eutelsat Communications | 10,900 | 448,884 | ||||||
Ipsos | 174,017 | 5,694,256 | ||||||
Publicis Groupe | 168,000 | 8,104,491 | ||||||
Societe Television Francaise 1 | 157,900 | 2,120,108 | ||||||
16,367,739 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Boiron S.A. | 78,450 | 2,232,415 | ||||||
Eurofins Scientific | 33,999 | 3,053,996 | ||||||
5,286,411 | ||||||||
Retailing 0.4% | ||||||||
PPR | 38,900 | 6,036,323 | ||||||
Software & Services 0.1% | ||||||||
Alten | 26,957 | 767,635 | ||||||
�� | ||||||||
Technology Hardware & Equipment 1.4% | ||||||||
Gemalto N.V. | 23,400 | 1,064,336 | ||||||
Ingenico S.A. | 210,639 | 8,327,034 | ||||||
Neopost S.A. | 181,764 | 13,824,500 | ||||||
23,215,870 | ||||||||
Utilities 0.4% | ||||||||
Rubis | 76,595 | 4,352,794 | ||||||
Suez Environnement Co. | 160,269 | 2,514,292 | ||||||
6,867,086 | ||||||||
105,456,667 | ||||||||
Germany 7.5% | ||||||||
Automobiles & Components 1.1% | ||||||||
Bayerische Motoren Werke AG | 53,360 | 4,334,652 | ||||||
Daimler AG - Reg’d | 176,400 | 8,959,191 | ||||||
ElringKlinger AG | 183,467 | 5,062,498 | ||||||
18,356,341 | ||||||||
Capital Goods 1.5% | ||||||||
Bilfinger Berger SE | 111,789 | 9,978,123 | ||||||
GEA Group AG | 27,400 | 751,332 |
22 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Gildemeister AG * | 139,553 | 2,026,561 | ||||||
KUKA AG * | 74,820 | 1,423,605 | ||||||
MTU Aero Engines Holding AG | 102,753 | 6,880,843 | ||||||
Rational AG | 14,019 | 3,227,604 | ||||||
24,288,068 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Gerry Weber International AG | 137,319 | 4,263,088 | ||||||
Insurance 0.6% | ||||||||
Allianz SE - Reg’d | 79,600 | 8,856,462 | ||||||
Materials 1.3% | ||||||||
BASF SE | 27,662 | 2,019,209 | ||||||
BASF SE ADR | 76,750 | 5,629,613 | ||||||
Lanxess AG | 32,112 | 1,875,531 | ||||||
Symrise AG | 461,183 | 11,937,700 | ||||||
21,462,053 | ||||||||
Media 0.3% | ||||||||
GfK SE | 101,386 | 4,688,222 | ||||||
Kabel Deutschland Holding AG * | 14,500 | 822,429 | ||||||
5,510,651 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Bayer AG - Reg’d | 72,599 | 4,625,425 | ||||||
QIAGEN N.V. * | 271,115 | 3,770,874 | ||||||
8,396,299 | ||||||||
Retailing 0.5% | ||||||||
Delticom AG | 14,969 | 1,667,905 | ||||||
Fielmann AG | 59,597 | 6,261,877 | ||||||
7,929,782 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
Aixtron SE | 40,740 | 576,835 | ||||||
Infineon Technologies AG | 264,494 | 2,381,294 | ||||||
2,958,129 | ||||||||
Software & Services 0.9% | ||||||||
SAP AG | 217,204 | 13,133,874 | ||||||
XING AG * | 24,809 | 2,075,819 | ||||||
15,209,693 | ||||||||
Technology Hardware & Equipment 0.2% | ||||||||
Wincor Nixdorf AG | 65,021 | 3,641,049 | ||||||
Transportation 0.1% | ||||||||
Fraport AG | 13,600 | 856,281 | ||||||
121,727,896 | ||||||||
Hong Kong 1.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Brilliance China Automotive Holdings Ltd. * | 964,000 | 1,033,467 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Arts Optical International Holdings Ltd. | 1,698,000 | 548,602 | ||||||
Diversified Financials 0.0% | ||||||||
Value Partners Group Ltd. | 828,000 | 476,453 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Biostime International Holdings Ltd. | 1,729,500 | 3,084,185 | ||||||
Insurance 0.2% | ||||||||
AIA Group Ltd. | 760,400 | 2,325,104 | ||||||
Materials 0.1% | ||||||||
China Resources Cement Holdings Ltd. | 210,000 | 166,637 | ||||||
China Shanshui Cement Group | 2,057,000 | 1,575,613 | ||||||
Yingde Gases | 309,000 | 329,529 | ||||||
2,071,779 | ||||||||
Real Estate 0.1% | ||||||||
China Overseas Grand Oceans Group Ltd. | 2,181,500 | 1,663,994 | ||||||
Retailing 0.3% | ||||||||
Giordano International Ltd. | 3,384,000 | 2,552,497 | ||||||
Golden Eagle Retail Group Ltd. | 316,000 | 794,166 | ||||||
Luk Fook Holdings International Ltd. | 411,000 | 1,762,121 | ||||||
Sa Sa International Holdings Ltd. | 546,000 | 324,594 | ||||||
5,433,378 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASM Pacific Technology Ltd. | 312,500 | 3,431,525 | ||||||
Technology Hardware & Equipment 0.2% | ||||||||
AAC Technologies Holdings, Inc. | 1,156,000 | 2,646,097 | ||||||
China High Precision Automation Group Ltd. (a) | 234,000 | 82,530 | ||||||
Lenovo Group Ltd. | 1,626,000 | 1,093,166 | ||||||
3,821,793 | ||||||||
Telecommunication Services 0.1% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 1,932,000 | 686,889 | ||||||
SmarTone Telecommunications Holdings Ltd. | 404,000 | 746,176 | ||||||
1,433,065 | ||||||||
Transportation 0.4% | ||||||||
Pacific Basin Shipping Ltd. | 12,527,000 | 5,711,940 | ||||||
31,035,285 | ||||||||
India 1.1% | ||||||||
Banks 0.3% | ||||||||
Axis Bank Ltd. | 38,377 | 904,909 | ||||||
HDFC Bank Ltd. | 126,340 | 1,259,593 | ||||||
Indian Bank | 540,251 | 2,394,805 | ||||||
4,559,307 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Titan Industries Ltd. | 130,604 | 579,687 | ||||||
TTK Prestige Ltd. | 38,271 | 2,055,170 | ||||||
V.I.P. Industries Ltd. | 413,715 | 1,471,515 | ||||||
4,106,372 | ||||||||
Consumer Services 0.1% | ||||||||
Jubilant Foodworks Ltd. * | 93,058 | 1,538,392 | ||||||
Diversified Financials 0.0% | ||||||||
Shriram Transport Finance Co., Ltd. | 58,695 | 733,084 | ||||||
Energy 0.1% | ||||||||
Petronet LNG Ltd. | 566,754 | 1,878,854 |
See financial notes 23
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Household & Personal Products 0.0% | ||||||||
Dabur India Ltd. | 157,100 | 325,857 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Lupin Ltd. | 74,367 | 715,324 | ||||||
Sun Pharmaceutical Industries Ltd. | 101,029 | 1,042,512 | ||||||
1,757,836 | ||||||||
Software & Services 0.2% | ||||||||
Tata Consultancy Services Ltd. | 135,770 | 3,090,836 | ||||||
17,990,538 | ||||||||
Indonesia 0.4% | ||||||||
Banks 0.1% | ||||||||
PT Bank Danamon Indonesia Tbk | 651,613 | 363,117 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 2,735,500 | 2,056,685 | ||||||
2,419,802 | ||||||||
Capital Goods 0.1% | ||||||||
PT United Tractors Tbk | 550,893 | 1,515,261 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
PT Kalbe Farma Tbk | 2,072,500 | 806,722 | ||||||
Retailing 0.1% | ||||||||
Mitra Adiperkasa Tbk PT | 2,677,500 | 1,474,669 | ||||||
6,216,454 | ||||||||
Ireland 1.7% | ||||||||
Banks 0.3% | ||||||||
The Governor & Company of the Bank of Ireland * | 40,143,680 | 5,701,936 | ||||||
Capital Goods 0.5% | ||||||||
Cooper Industries plc | 117,800 | 6,179,788 | ||||||
Ingersoll-Rand plc | 43,200 | 1,344,816 | ||||||
7,524,604 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Experian plc | 179,473 | 2,331,489 | ||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 15,429 | 848,688 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Glanbia plc | 673,843 | 4,355,994 | ||||||
Materials 0.2% | ||||||||
Kenmare Resources plc * | 5,373,919 | 3,492,219 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Elan Corp. plc * | 88,000 | 1,055,120 | ||||||
Shire plc | 57,991 | 1,820,081 | ||||||
2,875,201 | ||||||||
27,130,131 | ||||||||
Israel 0.4% | ||||||||
Semiconductors & Semiconductor Equipment 0.3% | ||||||||
Mellanox Technologies Ltd. * | 134,781 | 4,361,513 | ||||||
Software & Services 0.1% | ||||||||
Check Point Software Technologies Ltd. * | 27,085 | 1,560,909 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Orbotech Ltd. * | 25,000 | 266,250 | ||||||
6,188,672 | ||||||||
Italy 1.7% | ||||||||
Automobiles & Components 0.5% | ||||||||
Pirelli & C. S.p.A. | 965,629 | 8,522,072 | ||||||
Banks 0.6% | ||||||||
Intesa Sanpaolo | 5,687,670 | 10,038,749 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
Salvatore Ferragamo Italia S.p.A. * | 208,252 | 3,374,334 | ||||||
Consumer Services 0.1% | ||||||||
Lottomatica S.p.A. * | 53,082 | 1,013,332 | ||||||
Diversified Financials 0.2% | ||||||||
Banca Generali S.p.A. | 325,012 | 3,249,419 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Davide Campari - Milano S.p.A. | 164,354 | 1,269,712 | ||||||
Transportation 0.0% | ||||||||
Ansaldo STS S.p.A. | 3,253 | 34,415 | ||||||
27,502,033 | ||||||||
Japan 12.7% | ||||||||
Automobiles & Components 2.1% | ||||||||
Daihatsu Motor Co., Ltd. | 21,000 | 369,547 | ||||||
EXEDY Corp. | 32,900 | 953,132 | ||||||
F.C.C. Co., Ltd. | 391,411 | 8,269,794 | ||||||
Honda Motor Co., Ltd. | 209,500 | 6,264,833 | ||||||
Nifco, Inc. | 373,200 | 9,733,543 | ||||||
Toyota Motor Corp. | 271,400 | 9,010,688 | ||||||
34,601,537 | ||||||||
Banks 0.6% | ||||||||
Sumitomo Mitsui Financial Group, Inc. | 338,400 | 9,458,789 | ||||||
Capital Goods 1.2% | ||||||||
Chiyoda Corp. | 91,000 | 1,047,929 | ||||||
Fanuc Ltd. | 18,700 | 3,023,606 | ||||||
JGC Corp. | 29,000 | 816,991 | ||||||
Makino Milling Machine Co., Ltd. | 511,000 | 3,391,898 | ||||||
Misumi Group, Inc. | 26,000 | 540,990 | ||||||
Miura Co., Ltd. | 110,000 | 2,951,219 | ||||||
NGK Insulators Ltd. | 19,000 | 219,031 | ||||||
Okuma Corp. | 16,000 | 117,768 | ||||||
SMC Corp. | 9,500 | 1,477,647 | ||||||
Tsubakimoto Chain Co. | 598,000 | 3,069,055 | ||||||
Ushio, Inc. | 266,400 | 3,938,680 | ||||||
20,594,814 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Meitec Corp. | 120,000 | 2,234,591 | ||||||
Park24 Co., Ltd. | 49,400 | 567,990 | ||||||
Secom Co., Ltd. | 107,500 | 5,084,011 | ||||||
7,886,592 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Asics Corp. | 57,100 | 756,984 | ||||||
Sharp Corp. | 23,000 | 212,015 |
24 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tamron Co., Ltd. | 155,000 | 4,173,034 | ||||||
5,142,033 | ||||||||
Consumer Services 0.1% | ||||||||
Round One Corp. | 191,400 | 1,397,448 | ||||||
Diversified Financials 0.8% | ||||||||
Credit Saison Co., Ltd. | 23,300 | 454,673 | ||||||
Daiwa Securities Group, Inc. | 2,726,000 | 9,538,191 | ||||||
ORIX Corp. | 30,730 | 2,681,969 | ||||||
12,674,833 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
FamilyMart Co., Ltd. | 18,800 | 739,072 | ||||||
Lawson, Inc. | 8,800 | 495,173 | ||||||
1,234,245 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Ariake Japan Co., Ltd. | 171,000 | 2,964,486 | ||||||
Health Care Equipment & Services 1.5% | ||||||||
Hogy Medical Co., Ltd. | 156,500 | 6,630,778 | ||||||
M3, Inc. | 637 | 2,880,784 | ||||||
Miraca Holdings, Inc. | 154,500 | 5,892,288 | ||||||
Nihon Kohden Corp. | 134,800 | 3,147,044 | ||||||
Olympus Corp. | 227,000 | 3,459,243 | ||||||
Ship Healthcare Holdings, Inc. | 86,300 | 2,098,066 | ||||||
Sysmex Corp. | 13,300 | 437,172 | ||||||
24,545,375 | ||||||||
Household & Personal Products 0.1% | ||||||||
Dr. Ci:Labo Co., Ltd. | 494 | 2,657,901 | ||||||
Materials 0.2% | ||||||||
Taiyo Holdings Co., Ltd. | 108,300 | 2,831,440 | ||||||
Zeon Corp. | 82,000 | 755,249 | ||||||
3,586,689 | ||||||||
Media 0.5% | ||||||||
CyberAgent, Inc. | 2,149 | 7,242,803 | ||||||
Nippon Television Network Corp. | 2,900 | 410,457 | ||||||
7,653,260 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Kaken Pharmaceutical Co., Ltd. | 39,000 | 489,516 | ||||||
Sawai Pharmaceutical Co., Ltd. | 7,100 | 664,143 | ||||||
1,153,659 | ||||||||
Real Estate 0.1% | ||||||||
Daito Trust Construction Co., Ltd. | 19,200 | 1,701,130 | ||||||
Retailing 0.9% | ||||||||
Fast Retailing Co., Ltd. | 17,600 | 3,161,581 | ||||||
K’s Holdings Corp. | 33,000 | 1,385,782 | ||||||
Nitori Holdings Co., Ltd. | 25,560 | 2,444,458 | ||||||
Sanrio Co., Ltd. | 102,900 | 5,084,622 | ||||||
Start Today Co., Ltd. | 113,500 | 2,401,004 | ||||||
United Arrows Ltd. | 15,600 | 303,437 | ||||||
14,780,884 | ||||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Rohm Co., Ltd. | 167,200 | 8,519,081 | ||||||
Software & Services 0.7% | ||||||||
Capcom Co., Ltd. | 54,100 | 1,415,271 | ||||||
Gree, Inc. | 48,700 | 1,571,508 | ||||||
Kakaku.com, Inc. | 116,200 | 4,600,937 | ||||||
Net One Systems Co., Ltd. | 1,258 | 3,272,057 | ||||||
10,859,773 | ||||||||
Technology Hardware & Equipment 1.9% | ||||||||
Anritsu Corp. | 457,000 | 5,167,087 | ||||||
Canon, Inc. | 189,400 | 8,598,344 | ||||||
Horiba Ltd. | 228,600 | 7,251,602 | ||||||
Keyence Corp. | 8,500 | 2,160,791 | ||||||
Murata Manufacturing Co., Ltd. | 21,200 | 1,184,190 | ||||||
OMRON Corp. | 280,600 | 6,047,317 | ||||||
30,409,331 | ||||||||
Telecommunication Services 0.3% | ||||||||
SOFTBANK Corp. | 152,500 | 4,949,484 | ||||||
206,771,344 | ||||||||
Luxembourg 0.5% | ||||||||
Energy 0.4% | ||||||||
Subsea 7 S.A. * | 65,300 | 1,408,080 | ||||||
Tenaris S.A. ADR | 176,900 | 5,627,189 | ||||||
7,035,269 | ||||||||
Retailing 0.0% | ||||||||
L’Occitane International S.A. | 42,500 | 93,704 | ||||||
Telecommunication Services 0.1% | ||||||||
Millicom International Cellular S.A. | 15,715 | 1,733,150 | ||||||
8,862,123 | ||||||||
Malaysia 0.0% | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kuala Lumpur Kepong Berhad | 15,900 | 108,490 | ||||||
Mexico 0.5% | ||||||||
Diversified Financials 0.1% | ||||||||
Compartamos S.A.B. de C.V. | 464,667 | 718,252 | ||||||
Media 0.1% | ||||||||
Grupo Televisa S.A. ADR | 91,300 | 1,947,429 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Genomma Lab Internacional S.A., Class B * | 2,592,902 | 5,350,402 | ||||||
8,016,083 | ||||||||
Netherlands 4.8% | ||||||||
Capital Goods 1.5% | ||||||||
Aalberts Industries N.V. | 113,535 | 1,996,777 | ||||||
Koninklijke Boskalis Westminster N.V. | 424,513 | 14,837,866 | ||||||
Koninklijke Philips Electronics N.V. | 393,600 | 8,193,456 | ||||||
25,028,099 | ||||||||
Energy 1.6% | ||||||||
Core Laboratories N.V. | 46,100 | 4,990,786 | ||||||
Royal Dutch Shell plc, B Shares | 180,496 | 6,475,863 | ||||||
SBM Offshore N.V. | 170,472 | 3,745,676 |
See financial notes 25
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Schlumberger Ltd. | 138,325 | 10,162,738 | ||||||
25,375,063 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Koninklijke Ahold N.V. | 369,300 | 4,718,312 | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Heineken Holding N.V. | 91,700 | 3,922,858 | ||||||
Unilever N.V. CVA | 156,899 | 5,416,727 | ||||||
Unilever N.V., NY Shares | 43,850 | 1,514,141 | ||||||
10,853,726 | ||||||||
Materials 0.5% | ||||||||
Akzo Nobel N.V. | 159,600 | 8,392,092 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASML Holding N.V. | 59,502 | 2,496,048 | ||||||
Transportation 0.0% | ||||||||
Koninklijke Vopak N.V. | 13,200 | 680,355 | ||||||
77,543,695 | ||||||||
New Zealand 0.8% | ||||||||
Consumer Services 0.3% | ||||||||
Sky City Entertainment Group Ltd. | 1,422,325 | 4,046,674 | ||||||
Health Care Equipment & Services 0.3% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 2,369,299 | 4,406,844 | ||||||
Transportation 0.2% | ||||||||
Auckland International Airport Ltd. | 2,088,250 | 3,942,865 | ||||||
12,396,383 | ||||||||
Norway 0.9% | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Tomra Systems A.S.A. | 683,547 | 5,012,120 | ||||||
Energy 0.4% | ||||||||
Farstad Shipping A.S.A. | 107,898 | 2,951,456 | ||||||
Statoil A.S.A. | 87,400 | 2,217,692 | ||||||
TGS Nopec Geophysical Co., A.S.A. | 67,699 | 1,533,565 | ||||||
6,702,713 | ||||||||
Materials 0.1% | ||||||||
Yara International A.S.A. ADR | 14,200 | 670,382 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Algeta A.S.A. * | 47,819 | 1,666,027 | ||||||
Software & Services 0.0% | ||||||||
Opera Software A.S.A. | 61,303 | 275,870 | ||||||
Transportation 0.0% | ||||||||
Norwegian Air Shuttle A.S.A. * | 28,700 | 375,560 | ||||||
14,702,672 | ||||||||
Panama 0.0% | ||||||||
Transportation 0.0% | ||||||||
Copa Holdings S.A., Class A | 7,880 | 544,272 | ||||||
Papua New Guinea 0.1% | ||||||||
Energy 0.1% | ||||||||
Oil Search Ltd. | 152,457 | 1,040,092 | ||||||
Peru 0.1% | ||||||||
Banks 0.1% | ||||||||
Credicorp Ltd. | 17,103 | 1,860,464 | ||||||
Philippines 0.1% | ||||||||
Capital Goods 0.1% | ||||||||
Alliance Global Group, Inc. | 3,331,000 | 815,540 | ||||||
Transportation 0.0% | ||||||||
International Container Terminal Services, Inc. | 524,100 | 676,646 | ||||||
1,492,186 | ||||||||
Poland 0.0% | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Eurocash S.A. | 18,419 | 147,247 | ||||||
Republic of Korea 2.2% | ||||||||
Automobiles & Components 0.6% | ||||||||
Hyundai Mobis | 7,323 | 2,095,779 | ||||||
Hyundai Motor Co. | 12,336 | 2,484,328 | ||||||
Mando Corp. | 28,800 | 4,932,899 | ||||||
9,513,006 | ||||||||
Capital Goods 0.1% | ||||||||
Samsung Engineering Co., Ltd. | 7,594 | 1,551,070 | ||||||
Consumer Durables & Apparel 0.2% | ||||||||
Handsome Co., Ltd. | 132,990 | 3,241,434 | ||||||
Food & Staples Retailing 0.0% | ||||||||
E-Mart Co., Ltd. * | 1,600 | 417,975 | ||||||
Insurance 0.5% | ||||||||
Dongbu Insurance Co., Ltd. | 21,300 | 896,716 | ||||||
Hyundai Marine & Fire Insurance Co., Ltd. | 187,440 | 5,427,477 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 11,508 | 2,447,004 | ||||||
8,771,197 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Celltrion, Inc. | 42,221 | 1,413,428 | ||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Samsung Electronics Co., Ltd. | 10,025 | 8,630,127 | ||||||
Software & Services 0.1% | ||||||||
NCSoft Corp. | 6,100 | 1,917,677 | ||||||
Transportation 0.1% | ||||||||
Hyundai Glovis Co., Ltd. | 6,000 | 1,123,849 | ||||||
36,579,763 | ||||||||
Singapore 3.7% | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 247,500 | 1,852,814 |
26 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.1% | ||||||||
Ezra Holdings Ltd. | 2,713,000 | 2,086,221 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Biosensors International Group Ltd. * | 3,334,000 | 3,716,616 | ||||||
Real Estate 1.4% | ||||||||
Ascendas REIT | 4,307,000 | 7,007,243 | ||||||
CapitaMall Trust | 8,301,200 | 12,333,732 | ||||||
CapitaMalls Asia Ltd. | 1,081,000 | 1,164,787 | ||||||
Global Logistic Properties Ltd. * | 1,090,000 | 1,517,639 | ||||||
22,023,401 | ||||||||
Telecommunication Services 0.4% | ||||||||
StarHub Ltd. | 3,172,000 | 7,099,628 | ||||||
Transportation 1.2% | ||||||||
SATS Ltd. | 4,027,000 | 7,846,219 | ||||||
SIA Engineering Co., Ltd. | 2,926,000 | 8,553,028 | ||||||
SMRT Corp., Ltd. | 1,885,553 | 2,761,059 | ||||||
19,160,306 | ||||||||
Utilities 0.3% | ||||||||
Hyflux Ltd. | 3,642,000 | 4,135,983 | ||||||
60,074,969 | ||||||||
South Africa 0.2% | ||||||||
Capital Goods 0.0% | ||||||||
Wilson Bayly Holmes-Ovcon Ltd. | 21,210 | 287,617 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Shoprite Holdings Ltd. | 89,224 | 1,306,219 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Life Healthcare Group Holdings Pte Ltd. | 294,756 | 714,507 | ||||||
Retailing 0.1% | ||||||||
Clicks Group Ltd. | 46,448 | 242,691 | ||||||
The Foschini Group Ltd. | 82,504 | 1,035,466 | ||||||
1,278,157 | ||||||||
3,586,500 | ||||||||
Spain 1.1% | ||||||||
Banks 0.5% | ||||||||
Banco Santander S.A. | 898,614 | 7,605,740 | ||||||
Commercial & Professional Supplies 0.3% | ||||||||
Prosegur, Compania de Seguridad S.A. - Reg’d | 91,408 | 4,544,593 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Viscofan S.A. | 20,201 | 775,649 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Grifols S.A. * | 56,400 | 1,048,615 | ||||||
Retailing 0.2% | ||||||||
Industria de Diseno Textil S.A. | 41,675 | 3,783,234 | ||||||
17,757,831 | ||||||||
Sweden 1.4% | ||||||||
Capital Goods 0.6% | ||||||||
Assa Abloy AB, B Shares | 370,400 | 8,995,150 | ||||||
NIBE Industrier AB, B Shares | 30,949 | 462,477 | ||||||
9,457,627 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
AF AB, B Shares | 218,592 | 3,682,431 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
JM AB | 27,447 | 498,009 | ||||||
Diversified Financials 0.1% | ||||||||
Kinnevik Investment AB, B Shares | 58,800 | 1,228,736 | ||||||
Energy 0.1% | ||||||||
Lundin Petroleum AB * | 105,600 | 2,577,148 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Swedish Match AB | 30,700 | 1,060,069 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Elekta AB, B Shares | 36,384 | 1,452,963 | ||||||
Getinge AB, B Shares | 80,307 | 2,083,250 | ||||||
3,536,213 | ||||||||
Retailing 0.1% | ||||||||
Mekonomen AB | 32,022 | 1,168,315 | ||||||
23,208,548 | ||||||||
Switzerland 7.5% | ||||||||
Capital Goods 0.3% | ||||||||
ABB Ltd. - Reg’d * | 134,650 | 2,534,841 | ||||||
Geberit AG - Reg’d * | 10,700 | 2,191,332 | ||||||
Meyer Burger Technology AG * | 12,911 | 309,043 | ||||||
Rieter Holding AG - Reg’d * | 1,618 | 336,638 | ||||||
5,371,854 | ||||||||
Commercial & Professional Supplies 0.8% | ||||||||
Adecco S.A. - Reg’d * | 224,700 | 10,791,717 | ||||||
SGS S.A. - Reg’d | 898 | 1,540,454 | ||||||
12,332,171 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 86,900 | 4,950,223 | ||||||
Consumer Services 0.0% | ||||||||
Orascom Development Holding AG * | 14,366 | 317,774 | ||||||
Diversified Financials 0.9% | ||||||||
Credit Suisse Group AG - Reg’d * | 423,500 | 12,214,178 | ||||||
Julius Baer Group Ltd. * | 37,880 | 1,423,333 | ||||||
Partners Group Holding AG | 8,154 | 1,525,322 | ||||||
15,162,833 | ||||||||
Energy 1.4% | ||||||||
Noble Corp. * | 270,400 | 9,718,176 | ||||||
Transocean Ltd. | 114,121 | 6,522,015 | ||||||
Weatherford International Ltd. * | 416,125 | 6,449,938 | ||||||
22,690,129 | ||||||||
Food, Beverage & Tobacco 1.5% | ||||||||
Aryzta AG | 22,000 | 1,060,800 |
See financial notes 27
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nestle S.A. - Reg’d | 181,355 | 10,489,149 | ||||||
Nestle S.A. - Reg’d ADR | 207,512 | 11,985,893 | ||||||
23,535,842 | ||||||||
Materials 1.2% | ||||||||
Givaudan S.A. - Reg’d * | 8,240 | 7,494,429 | ||||||
Glencore International plc | 623,747 | 4,366,521 | ||||||
Holcim Ltd. - Reg’d * | 91,900 | 5,819,665 | ||||||
Sika AG - BR | 604 | 1,183,729 | ||||||
18,864,344 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Novartis AG - Reg’d | 95,404 | 5,374,610 | ||||||
Novartis AG ADR | 59,775 | 3,375,494 | ||||||
Roche Holding AG | 12,700 | 2,083,681 | ||||||
10,833,785 | ||||||||
Retailing 0.0% | ||||||||
Dufry Group - Reg’d * | 5,794 | 620,235 | ||||||
Transportation 0.4% | ||||||||
Kuehne & Nagel International AG - Reg’d | 56,100 | 6,950,293 | ||||||
121,629,483 | ||||||||
Taiwan 1.1% | ||||||||
Capital Goods 0.2% | ||||||||
Yungtay Engineering Co., Ltd. | 1,590,000 | 2,570,290 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
St. Shine Optical Co., Ltd. | 177,000 | 2,223,529 | ||||||
Materials 0.1% | ||||||||
Taiwan Hon Chuan Enterprise Co., Ltd. | 680,534 | 1,467,847 | ||||||
Software & Services 0.2% | ||||||||
PChome Online, Inc. | 524,000 | 3,429,753 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
Catcher Technology Co., Ltd. | 532,490 | 2,966,770 | ||||||
Compal Communications, Inc. | 543,000 | 775,674 | ||||||
E Ink Holdings, Inc. | 1,223,000 | 2,496,687 | ||||||
Largan Precision Co., Ltd. | 34,000 | 760,113 | ||||||
TPK Holding Co., Ltd. * | 36,750 | 615,398 | ||||||
7,614,642 | ||||||||
17,306,061 | ||||||||
Thailand 0.1% | ||||||||
Banks 0.1% | ||||||||
Kasikornbank Public Co., Ltd. | 317,500 | 1,282,235 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Bangkok Dusit Medical Services PCL | 240,300 | 527,488 | ||||||
1,809,723 | ||||||||
Turkey 0.3% | ||||||||
Automobiles & Components 0.0% | ||||||||
Tofas Turk Otomobil Fabrikasi A/S | 87,036 | 334,511 | ||||||
Banks 0.1% | ||||||||
Turkiye Halk Bankasi A/S | 199,159 | 1,223,900 | ||||||
Food & Staples Retailing 0.2% | ||||||||
BIM Birlesik Magazalar A/S | 25,921 | 787,951 | ||||||
Bizim Toptan Satis Magazalari AS | 183,706 | 2,353,049 | ||||||
3,141,000 | ||||||||
4,699,411 | ||||||||
United Kingdom 18.4% | ||||||||
Banks 0.1% | ||||||||
Barclays plc | 565,707 | 1,753,659 | ||||||
Capital Goods 3.9% | ||||||||
Ashtead Group plc | 1,897,143 | 4,720,859 | ||||||
BAE Systems plc | 398,400 | 1,766,762 | ||||||
Bodycote plc | 1,079,498 | 4,884,033 | ||||||
Cobham plc | 1,539,624 | 4,442,996 | ||||||
Fenner plc | 337,924 | 1,843,557 | ||||||
Interserve plc | 565,576 | 2,997,377 | ||||||
Kentz Corp., Ltd. | 198,964 | 1,551,312 | ||||||
Meggitt plc | 191,970 | 1,184,762 | ||||||
Rolls-Royce Holdings plc * | 251,024 | 2,825,642 | ||||||
Rolls-Royce Holdings plc, C Shares (a)(b)* | 17,320,656 | 27,850 | ||||||
Rotork plc | 529,455 | 14,280,653 | ||||||
Spirax-Sarco Engineering plc | 228,428 | 7,017,118 | ||||||
The Weir Group plc | 115,581 | 3,541,030 | ||||||
Ultra Electronics Holdings plc | 323,123 | 8,244,158 | ||||||
Wolseley plc | 165,100 | 4,760,835 | ||||||
64,088,944 | ||||||||
Commercial & Professional Supplies 1.7% | ||||||||
Aggreko plc | 99,555 | 2,729,180 | ||||||
Babcock International Group plc | 240,096 | 2,713,462 | ||||||
Capita Group plc | 135,305 | 1,578,659 | ||||||
CPP Group plc | 692,512 | 1,632,655 | ||||||
De La Rue plc | 703,812 | 9,534,541 | ||||||
G4S plc | 929,100 | 3,632,494 | ||||||
RPS Group plc | 169,672 | 491,376 | ||||||
Serco Group plc | 538,813 | 4,486,974 | ||||||
26,799,341 | ||||||||
Consumer Durables & Apparel 0.6% | ||||||||
Bellway plc | 302,174 | 3,438,418 | ||||||
Burberry Group plc | 135,905 | 2,917,553 | ||||||
Persimmon plc | 161,600 | 1,288,703 | ||||||
The Berkeley Group Holdings plc * | 74,483 | 1,493,593 | ||||||
9,138,267 | ||||||||
Consumer Services 0.2% | ||||||||
Greene King plc | 344,905 | 2,486,984 | ||||||
Restaurant Group plc | 72,302 | 347,913 | ||||||
Whitbread plc | 33,700 | 895,456 | ||||||
3,730,353 | ||||||||
Diversified Financials 0.9% | ||||||||
Aberdeen Asset Management plc | 1,674,031 | 5,154,534 | ||||||
Ashmore Group plc | 314,754 | 1,743,458 | ||||||
Hargreaves Lansdown plc | 54,886 | 441,055 | ||||||
IG Group Holdings plc | 127,916 | 953,867 | ||||||
Jupiter Fund Management plc | 134,864 | 507,244 |
28 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Schroders plc | 221,100 | 5,060,578 | ||||||
13,860,736 | ||||||||
Energy 0.8% | ||||||||
AMEC plc | 118,669 | 1,758,606 | ||||||
BG Group plc | 208,149 | 4,513,505 | ||||||
Enquest plc * | 29,654 | 51,269 | ||||||
John Wood Group plc | 253,140 | 2,506,291 | ||||||
Petrofac Ltd. | 140,915 | 3,236,936 | ||||||
Tullow Oil plc | 70,284 | 1,579,135 | ||||||
13,645,742 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Tesco plc | 35,300 | 227,594 | ||||||
Food, Beverage & Tobacco 1.4% | ||||||||
British American Tobacco plc ADR | 76,850 | 7,089,412 | ||||||
Diageo plc | 566,949 | 11,733,443 | ||||||
Diageo plc ADR | 42,525 | 3,524,472 | ||||||
22,347,327 | ||||||||
Insurance 0.3% | ||||||||
Amlin plc | 189,796 | 875,405 | ||||||
Hiscox Ltd. | 95,007 | 580,641 | ||||||
Lancashire Holdings Ltd. | 109,547 | 1,257,682 | ||||||
Prudential plc | 155,527 | 1,606,455 | ||||||
St. James’s Place plc | 86,176 | 487,370 | ||||||
Willis Group Holdings plc | 22,300 | 809,713 | ||||||
5,617,266 | ||||||||
Materials 4.0% | ||||||||
AZ Electronic Materials S.A. | 1,528,200 | 6,088,926 | ||||||
BHP Billiton plc | 185,365 | 5,837,047 | ||||||
Croda International plc | 658,635 | 18,516,413 | ||||||
Johnson Matthey plc | 94,770 | 2,850,584 | ||||||
London Mining plc * | 325,103 | 1,668,826 | ||||||
Randgold Resources Ltd. ADR | 14,995 | 1,643,002 | ||||||
Rexam plc | 2,259,112 | 12,522,245 | ||||||
Rio Tinto plc ADR | 170,750 | 9,230,745 | ||||||
Victrex plc | 294,066 | 5,981,496 | ||||||
64,339,284 | ||||||||
Media 0.5% | ||||||||
British Sky Broadcasting Group plc | 18,304 | 206,386 | ||||||
Reed Elsevier plc | 334,100 | 2,860,171 | ||||||
Rightmove plc | 203,118 | 4,249,843 | ||||||
7,316,400 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Abcam plc | 195,322 | 1,161,487 | ||||||
GlaxoSmithKline plc | 46,300 | 1,039,081 | ||||||
2,200,568 | ||||||||
Real Estate 0.1% | ||||||||
Shaftesbury plc | 236,666 | 1,912,459 | ||||||
Retailing 0.7% | ||||||||
ASOS plc * | 73,753 | 1,838,818 | ||||||
Carphone Warehouse Group plc | 208,546 | 1,172,982 | ||||||
Dunelm Group plc | 103,193 | 830,507 | ||||||
Next plc | 55,695 | 2,282,726 | ||||||
Ocado Group plc * | 333,824 | 500,262 | ||||||
Signet Jewelers Ltd. * | 112,500 | 4,849,875 | ||||||
Sports Direct International plc * | 6,864 | 25,284 | ||||||
11,500,454 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ARM Holdings plc | 131,671 | 1,235,454 | ||||||
Software & Services 0.3% | ||||||||
Moneysupermarket.com Group plc | 174,849 | 300,082 | ||||||
Telecity Group plc * | 497,649 | 4,767,768 | ||||||
5,067,850 | ||||||||
Technology Hardware & Equipment 2.1% | ||||||||
Diploma plc | 749,601 | 3,866,654 | ||||||
Domino Printing Sciences plc | 198,596 | 1,829,651 | ||||||
Halma plc | 993,840 | 5,340,571 | ||||||
Imagination Technologies Group plc * | 362,696 | 2,666,421 | ||||||
Laird plc | 1,849,102 | 4,423,843 | ||||||
Spectris plc | 637,761 | 13,030,355 | ||||||
TT Electronics plc | 1,164,116 | 2,936,380 | ||||||
34,093,875 | ||||||||
Utilities 0.6% | ||||||||
Centrica plc | 905,874 | 4,312,502 | ||||||
Drax Group plc | 213,365 | 1,857,354 | ||||||
SSE plc | 197,900 | 4,275,860 | ||||||
10,445,716 | ||||||||
299,321,289 | ||||||||
United States 0.4% | ||||||||
Energy 0.1% | ||||||||
Golar LNG Ltd. | 53,871 | 2,178,005 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Bunge Ltd. | 31,150 | 1,924,135 | ||||||
Household & Personal Products 0.1% | ||||||||
Herbalife Ltd. | 16,800 | 1,047,648 | ||||||
Insurance 0.1% | ||||||||
PartnerRe Ltd. | 27,375 | 1,703,273 | ||||||
Software & Services 0.0% | ||||||||
SINA Corp. * | 3,500 | 284,515 | ||||||
7,137,576 | ||||||||
Total Common Stock | ||||||||
(Cost $1,415,129,916) | 1,557,227,737 | |||||||
Preferred Stock 0.1% of net assets | ||||||||
Germany 0.1% | ||||||||
Hugo Boss AG | 13,350 | 1,267,690 | ||||||
Total Preferred Stock | ||||||||
(Cost $998,553) | 1,267,690 | |||||||
See financial notes 29
Laudus International MarketMasters Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Company 3.2% of net assets | ||||||||
Money Market Fund 3.2% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 52,203,538 | 52,203,538 | ||||||
Total Other Investment Company | ||||||||
(Cost $52,203,538) | 52,203,538 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | Local Currency | ($) | ||||||
Corporate Bond 0.0% of net assets | ||||||||
Brazil 0.0% | ||||||||
Lupatech S.A. (a)(b) | ||||||||
6.50%, 04/15/18 | 226,000 | 67,455 | ||||||
Total Corporate Bond | ||||||||
(Cost $117,495) | 67,455 | |||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Rights 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Banco Santander S.A. * | 815,607 | 141,070 | ||||||
Total Rights | ||||||||
(Cost $142,609) | 141,070 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bills 0.00%, 12/15/11 (c)(d) | 2,705,000 | 2,705,000 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,705,000) | 2,705,000 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $1,508,785,187 and the unrealized appreciation and depreciation were $197,189,632 and ($92,362,329), respectively, with a net unrealized appreciation of $104,827,303.
At 10/31/11, the values of certain foreign securities held by the fund aggregating $1,235,668,568 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $95,305 or 0.0% of net assets. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
ADR — | American Depositary Receipt | |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust |
In addition to the above the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 180 | 13,307,400 | 1,489,245 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 210 | 13,117,650 | 1,010,320 | |||||||||
Net unrealized gains | 2,499,565 | |||||||||||
30 See financial notes
Laudus International MarketMasters Fund
Portfolio Holdings continued
Amount of | Amount of | Unrealized | ||||||||||||||||||||
Currency | Currency | Currency | Currency | Gains / | ||||||||||||||||||
Expiration | to be | to be | to be | to be | (Losses) | |||||||||||||||||
Date | Counterparty | Received | Received | Delivered | Delivered | ($) | ||||||||||||||||
Forward Foreign Currency Contracts | ||||||||||||||||||||||
06/20/2012 | State Street Bank & Trust Co. | AUD | 370,000 | USD | 380,321 | 28,558 | ||||||||||||||||
06/20/2012 | State Street Bank & Trust Co. | AUD | 910,000 | USD | 935,384 | 97,301 | ||||||||||||||||
12/19/2011 | Northern Trust Co. | CHF | 2,084,000 | USD | 2,375,965 | 43,042 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | CHF | 1,600,000 | USD | 1,828,318 | (309,862 | ) | |||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | CHF | 11,800,000 | USD | 13,483,845 | (186,537 | ) | |||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | CHF | 5,400,000 | USD | 6,170,573 | 290,910 | ||||||||||||||||
01/31/2012 | State Street Bank & Trust Co. | USD | 12,857,297 | AUD | 12,331,000 | (315,930 | ) | |||||||||||||||
01/31/2012 | State Street Bank & Trust Co. | USD | 7,383,223 | AUD | 7,081,000 | 92,189 | ||||||||||||||||
06/20/2012 | State Street Bank & Trust Co. | USD | 8,634,315 | AUD | 8,400,000 | (279,675 | ) | |||||||||||||||
12/19/2011 | Northern Trust Co. | USD | 2,375,965 | CHF | 2,084,000 | 24,542 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 12,912,495 | CHF | 11,300,000 | 126,774 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 25,127,944 | CHF | 21,990,000 | 1,026,497 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 5,801,481 | CHF | 5,077,000 | 279,050 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 12,683,955 | CHF | 11,100,000 | 892,033 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 3,313,826 | CHF | 2,900,000 | 73,233 | ||||||||||||||||
12/21/2011 | Deutsche Bank AG | USD | 5,657,057 | EUR | 4,090,000 | 133,340 | ||||||||||||||||
12/21/2011 | Deutsche Bank AG | USD | 6,491,092 | EUR | 4,693,000 | 36,918 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 15,211,952 | EUR | 11,000,000 | 493,892 | ||||||||||||||||
03/21/2012 | State Street Bank & Trust Co. | USD | 4,010,424 | EUR | 2,900,000 | 204,958 | ||||||||||||||||
12/22/2011 | State Street Bank & Trust Co. | USD | 17,295,091 | GBP | 10,762,000 | 41,307 | ||||||||||||||||
12/20/2011 | Bank of New York Mellon | USD | 7,751,775 | JPY | 605,471,000 | 175,780 | ||||||||||||||||
12/20/2011 | Bank of New York Mellon | USD | 8,337,955 | JPY | 651,256,000 | 175,896 | ||||||||||||||||
09/19/2012 | State Street Bank & Trust Co. | USD | 3,477,537 | JPY | 270,000,000 | 81,604 | ||||||||||||||||
09/19/2012 | State Street Bank & Trust Co. | USD | 4,765,514 | JPY | 370,000,000 | 81,415 | ||||||||||||||||
09/19/2012 | State Street Bank & Trust Co. | USD | 39,798,482 | JPY | 3,090,000,000 | 779,325 | ||||||||||||||||
12/21/2011 | State Street Bank & Trust Co. | USD | 2,072,272 | SEK | 13,541,000 | 6,992 | ||||||||||||||||
12/21/2011 | State Street Bank & Trust Co. | USD | 520,325 | SEK | 3,400,000 | 9,064 | ||||||||||||||||
12/21/2011 | State Street Bank & Trust Co. | USD | 581,540 | SEK | 3,800,000 | 41,003 | ||||||||||||||||
Net unrealized gains on Forward Foreign Currency Contracts | 4,143,619 | |||||||||||||||||||||
See financial notes 31
Laudus International MarketMasters Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $1,471,297,111) | $1,613,612,490 | |||||
Foreign currency, at value (cost $1,000,336) | 1,006,589 | |||||
Cash | 29,789 | |||||
Receivables: | ||||||
Investments sold | 18,949,390 | |||||
Dividends | 3,336,515 | |||||
Fund shares sold | 1,081,583 | |||||
Foreign tax reclaims | 690,881 | |||||
Interest | 9,353 | |||||
Unrealized gains on forward foreign currency contracts | 5,235,623 | |||||
Prepaid expenses | + | 170,451 | ||||
Total assets | 1,644,122,664 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 14,979,310 | |||||
Investment adviser and administrator fees | 184,231 | |||||
Shareholder service fees | 345,877 | |||||
Fund shares redeemed | 1,172,119 | |||||
Due to brokers for futures | 513,460 | |||||
Unrealized losses on forward foreign currency contracts | + | 1,092,004 | ||||
Total liabilities | 18,287,001 | |||||
Net Assets | ||||||
Total assets | 1,644,122,664 | |||||
Total liabilities | − | 18,287,001 | ||||
Net assets | $1,625,835,663 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,876,734,143 | |||||
Net investment income not yet distributed | 2,951,994 | |||||
Net realized capital losses | (402,866,460 | ) | ||||
Net unrealized capital gains | 149,015,986 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $665,175,980 | 38,114,386 | $17.45 | |||||||||||
Select Shares | $960,659,683 | 55,009,474 | $17.46 |
32 See financial notes
Laudus International MarketMasters Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $3,305,444) | $43,675,858 | |||||
Interest (net of foreign withholding taxes of $3,068) | + | 139,078 | ||||
Total investment income | 43,814,936 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 22,960,893 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,873,962 | |||||
Select Shares | 1,022,837 | |||||
Custodian fees | 1,050,430 | |||||
Transfer agent fees | 211,538 | |||||
Portfolio accounting fees | 144,950 | |||||
Professional fees | 95,602 | |||||
Shareholder reports | 93,756 | |||||
Registration fees | 77,635 | |||||
Trustees’ fees | 25,188 | |||||
Interest expense | 1,672 | |||||
Other expenses | + | 74,509 | ||||
Total expenses | 27,632,972 | |||||
Expense reduction by CSIM and its affiliates | − | 220,433 | ||||
Payment for state filing fees (see financial note 12) | − | 21,784 | ||||
Custody credits | − | 41 | ||||
Net expenses | − | 27,390,714 | ||||
Net investment income | 16,424,222 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments (net of foreign capital gain tax of $170,638) | 119,164,860 | |||||
Net realized gains on futures contracts | 6,613,548 | |||||
Net realized losses on foreign currency transactions | + | (13,783,479 | ) | |||
Net realized gains | 111,994,929 | |||||
Net unrealized losses on investments (net of foreign capital gain tax of $302,279) | (190,092,528 | ) | ||||
Net unrealized losses on futures contracts | (1,832,556 | ) | ||||
Net unrealized gains on foreign currency translations | + | 8,333,548 | ||||
Net unrealized losses | + | (183,591,536 | ) | |||
Net realized and unrealized losses | (71,596,607 | ) | ||||
Decrease in net assets resulting from operations | ($55,172,385 | ) |
See financial notes 33
Laudus International MarketMasters Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $16,424,222 | $9,689,033 | ||||||||
Net realized gains | 111,994,929 | 128,801,583 | ||||||||
Net unrealized gains (losses) | + | (183,591,536 | ) | 205,379,360 | ||||||
Increase (Decrease) in net assets from operations | (55,172,385 | ) | 343,869,976 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | (9,898,208 | ) | (10,988,186 | ) | ||||||
Select Shares | + | (12,886,046 | ) | (8,268,447 | ) | |||||
Total distributions from net investment income | ($22,784,254 | ) | ($19,256,633 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 5,069,725 | $93,748,039 | 8,143,298 | $137,057,352 | ||||||||||||||
Select Shares | + | 14,896,939 | 281,255,337 | 19,260,215 | 332,599,745 | |||||||||||||
Total shares sold | 19,966,664 | $375,003,376 | 27,403,513 | $469,657,097 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 484,093 | $9,134,831 | 559,839 | $8,767,079 | ||||||||||||||
Select Shares | + | 489,574 | 9,233,362 | 363,514 | 5,692,624 | |||||||||||||
Total shares reinvested | 973,667 | $18,368,193 | 923,353 | $14,459,703 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (13,644,152 | ) | ($260,043,586 | ) | (24,384,156 | ) | ($412,672,886 | ) | ||||||||||
Select Shares | + | (11,964,535 | ) | (226,246,386 | ) | (9,864,402 | ) | (159,927,165 | ) | |||||||||
Total shares redeemed | (25,608,687 | ) | ($486,289,972 | ) | (34,248,558 | ) | ($572,600,051 | ) | ||||||||||
Net transactions in fund shares | (4,668,356 | ) | ($92,918,403 | ) | (5,921,692 | ) | ($88,483,251 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 97,792,216 | $1,796,710,705 | 103,713,908 | $1,560,580,613 | ||||||||||||||
Total increase or decrease | + | (4,668,356 | ) | (170,875,042 | ) | (5,921,692 | ) | 236,130,092 | ||||||||||
End of period | 93,123,860 | $1,625,835,663 | 97,792,216 | $1,796,710,705 | ||||||||||||||
Net investment income not yet distributed | $2,951,994 | $16,631,062 |
34 See financial notes
Laudus MarketMasters Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (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 Capital Trust (organized May 7, 1993) | Schwab Financial Services Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Health Care Fund | |||
Laudus International MarketMasters Fund | Schwab International Core Equity Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2010 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2015 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2020 Fund | |||
Schwab International Index Fund | Schwab Target 2025 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2030 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2035 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2040 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Fundamental US Large Company Index Fund | |||
Schwab Balanced Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab Premier Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab Small-Cap Equity Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund-Maximum Payout | |||
Each of the Laudus MarketMasters Funds offers two share classes: Investor Shares and Select Shares®. Shares of each class represent an interest in the same portfolio, but each class has different expenses and investment minimums.
Shares are bought and sold (subject to a redemption fee, see financial note 10) at closing net asset value (“NAV”), which is the price for all outstanding shares of a fund or share class, as applicable. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the valuation date exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board of Trustees has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when a security is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | International fair valuation: The Board of Trustees has adopted procedures to fair value foreign equity securities that trade in markets that close prior to when the funds value their holdings. By fair valuing securities whose prices may have |
35
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the net asset value of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. |
• | Underlying funds: valued at their respective net asset values. | |
• | Futures and forward contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a value based on that day’s exchange rates (for forwards). | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and futures contracts. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the |
36
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of October 31, 2011:
Laudus Small-Cap MarketMasters Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $263,039,303 | $— | $— | $263,039,303 | ||||||||||||
Foreign Common Stock(a) | 1,467,033 | — | — | 1,467,033 | ||||||||||||
Other Investment Company(a) | 16,453,477 | — | — | 16,453,477 | ||||||||||||
Short-Term Investment(a) | — | 1,295,000 | — | 1,295,000 | ||||||||||||
Total | $280,959,813 | $1,295,000 | $— | $282,254,813 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract* | $817,872 | $— | $— | $817,872 |
Laudus International MarketMasters Fund
Assets Valuation Input
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $— | $483,984,596 | $— | $483,984,596 | ||||||||||||
Australia(a) | — | 46,919,659 | — | 46,919,659 | ||||||||||||
Materials | 13,310,688 | 19,345,700 | — | 32,656,388 | ||||||||||||
Brazil(a) | 28,845,761 | — | — | 28,845,761 | ||||||||||||
Canada(a) | 127,994,009 | — | — | 127,994,009 | ||||||||||||
Chile(a) | 4,274,077 | — | — | 4,274,077 | ||||||||||||
China(a) | — | 14,990,005 | — | 14,990,005 | ||||||||||||
Commercial & Professional Supplies | 2,288,126 | — | — | 2,288,126 | ||||||||||||
Consumer Services | 494,988 | — | — | 494,988 | ||||||||||||
Food & Staples Retailing | 325,026 | — | — | 325,026 | ||||||||||||
Media | 1,947,257 | — | — | 1,947,257 | ||||||||||||
Semiconductors & Semiconductor Equipment | 823,670 | — | — | 823,670 | ||||||||||||
Software & Services | 562,181 | 1,540,296 | — | 2,102,477 | ||||||||||||
Germany(a) | — | 100,265,843 | — | 100,265,843 | ||||||||||||
Materials | 5,629,613 | 15,832,440 | — | 21,462,053 | ||||||||||||
Hong Kong(a) | — | 26,664,890 | — | 26,664,890 | ||||||||||||
Consumer Durables & Apparel | 548,602 | — | — | 548,602 | ||||||||||||
Technology Hardware & Equipment | — | 3,739,263 | 82,530 | 3,821,793 | ||||||||||||
India(a) | — | 13,884,166 | — | 13,884,166 | ||||||||||||
Consumer Durables & Apparel | 1,471,515 | 2,634,857 | — | 4,106,372 |
37
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Ireland(a) | $— | $16,730,326 | $— | $16,730,326 | ||||||||||||
Capital Goods | 7,524,604 | — | — | 7,524,604 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 1,055,120 | 1,820,081 | — | 2,875,201 | ||||||||||||
Israel(a) | 6,188,672 | — | — | 6,188,672 | ||||||||||||
Italy(a) | — | 24,127,699 | — | 24,127,699 | ||||||||||||
Consumer Durables & Apparel | 3,374,334 | — | — | 3,374,334 | ||||||||||||
Luxembourg(a) | — | 1,826,854 | — | 1,826,854 | ||||||||||||
Energy | 5,627,189 | 1,408,080 | — | 7,035,269 | ||||||||||||
Mexico(a) | 8,016,083 | — | — | 8,016,083 | ||||||||||||
Netherlands(a) | — | 41,314,906 | — | 41,314,906 | ||||||||||||
Energy | 15,153,524 | 10,221,539 | — | 25,375,063 | ||||||||||||
Food, Beverage & Tobacco | 1,514,141 | 9,339,585 | — | 10,853,726 | ||||||||||||
Norway(a) | — | 14,032,290 | — | 14,032,290 | ||||||||||||
Materials | 670,382 | — | — | 670,382 | ||||||||||||
Panama(a) | 544,272 | — | — | 544,272 | ||||||||||||
Peru(a) | 1,860,464 | — | — | 1,860,464 | ||||||||||||
Republic of Korea(a) | — | 36,161,788 | — | 36,161,788 | ||||||||||||
Food & Staples Retailing | 417,975 | — | — | 417,975 | ||||||||||||
Switzerland(a) | — | 64,569,727 | — | 64,569,727 | ||||||||||||
Energy | 22,690,129 | — | — | 22,690,129 | ||||||||||||
Food, Beverage & Tobacco | 11,985,893 | 11,549,949 | — | 23,535,842 | ||||||||||||
Pharmaceuticals, Biotechnology & Life Sciences | 3,375,494 | 7,458,291 | — | 10,833,785 | ||||||||||||
Thailand(a) | — | 1,282,235 | — | 1,282,235 | ||||||||||||
Health Care Equipment & Services | 527,488 | — | — | 527,488 | ||||||||||||
United Kingdom(a) | — | 104,628,673 | — | 104,628,673 | ||||||||||||
Capital Goods | — | 64,061,094 | 27,850 | 64,088,944 | ||||||||||||
Commercial & Professional Supplies | 1,632,655 | 25,166,686 | — | 26,799,341 | ||||||||||||
Food, Beverage & Tobacco | 10,613,884 | 11,733,443 | — | 22,347,327 | ||||||||||||
Insurance | 809,713 | 4,807,553 | — | 5,617,266 | ||||||||||||
Materials | 18,631,499 | 45,707,785 | — | 64,339,284 | ||||||||||||
Retailing | 4,849,875 | 6,650,579 | — | 11,500,454 | ||||||||||||
United States(a) | 7,137,576 | — | — | 7,137,576 | ||||||||||||
Preferred Stock(a) | — | 1,267,690 | — | 1,267,690 | ||||||||||||
Other Investment Company(a) | 52,203,538 | — | — | 52,203,538 | ||||||||||||
Rights(a) | 141,070 | — | — | 141,070 | ||||||||||||
Short-Term Investments(a) | — | 2,705,000 | — | 2,705,000 | ||||||||||||
Corporate Bond(a) | — | — | 67,455 | 67,455 | ||||||||||||
Total | $375,061,087 | $1,238,373,568 | $177,835 | $1,613,612,490 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts* | $2,499,565 | $— | $— | $2,499,565 | ||||||||||||
Forward Foreign Currency Contracts* | 5,235,623 | — | — | 5,235,623 | ||||||||||||
38
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Liabilities Valuation Input | ||||||||||||||||
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Forward Foreign Currency Contracts* | ($1,092,004 | ) | $— | $— | ($1,092,004 | ) |
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||||||
as of | Accrued | Realized | Unrealized | Gross | Gross | as of | ||||||||||||||||||||||||||||||
October 31, | Discounts | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | ||||||||||||||||||||||||||||
Investments in Securities | 2010 | (Premiums) | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | |||||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||||||
Hong Kong | $— | $— | ($117,946 | ) | ($72,917 | ) | $359,883 | ($86,490 | ) | $— | $— | $82,530 | ||||||||||||||||||||||||
United Kingdom | 42,232 | — | 9 | (536 | ) | 27,703 | (41,558 | ) | — | — | 27,850 | |||||||||||||||||||||||||
Corporate Bonds | ||||||||||||||||||||||||||||||||||||
Brazil | 136,224 | (328 | ) | — | (68,441 | ) | — | — | — | — | 67,455 | |||||||||||||||||||||||||
Total | $178,456 | ($328 | ) | ($117,937 | ) | ($141,894 | ) | $387,586 | ($128,048 | ) | $— | $— | $177,835 | |||||||||||||||||||||||
* | Futures Contracts and Forward Foreign Currency Contracts are not included in Investments and are valued at unrealized appreciation or depreciation. | |
** | All security transfers in and out of Level 3 from Level 1 or Level 2 were the result of fair valued securities for which no quoted value was available. | |
(a) | As categorized in Portfolio Holdings. |
All net realized and change in unrealized gains (losses) in the tables above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investments held by the fund at October 31, 2011 are ($141,211).
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
(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 (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value changes daily.
Forward Foreign Currency Contracts: “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. The value of the forward foreign currency contracts are accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The funds mitigate this risk by ensuring that the funds’ repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. All collateral is held by the funds’ custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counterparty.
39
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forwards 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. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
The funds have an arrangement with their custodian bank, State Street Bank and Trust Company, under which the funds receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. Notwithstanding this, shareholders should understand that in order to follow these principles, fund management has
40
Laudus MarketMasters Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges, capital gains on investments on currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2011, if any, are reflected in the funds’ Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(l) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in a fund will fluctuate, which means that you could lose money.
The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
41
Laudus MarketMasters Funds
Financial Notes (continued)
3. Risk Factors (continued):
Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — large-cap and mid-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.
Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more vulnerable to adverse business or economic events than larger, more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments — small-cap stocks, for instance — a fund’s large- and mid-cap holdings could reduce performance.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Such countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with a fund’s investments in emerging market countries.
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 and could cause the fund to lose more than the principal amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund.
Although CSIM monitors and seeks to coordinate the overall management of a fund, each investment manager makes investment decisions independently, and it is possible that the investment styles of the investment managers may not complement one another. As a result, a fund’s exposure to a given stock, industry or investment style could unintentionally be smaller or larger than if a fund had a single manager.
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. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and the trust.
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Laudus Small-Cap | Laudus International | |||||||
% of Average Daily Net Assets | MarketMasters Fund | MarketMasters Fund | ||||||
First $500 million | 1.17% | 1.29% | ||||||
$500 million to $1 billion | 1.13% | 1.275% | ||||||
Over $1 billion | 1.07% | 1.25% |
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab) under the Plan. All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.
42
Laudus MarketMasters Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to 0.25% for Investor Shares and 0.20% for Select Shares. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab (or, in the case of payments made to Schwab, pursuant to Schwab’s written agreement with the funds), and the funds will pay no more than 0.25% for Investor Shares and 0.20% for Select Shares of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service providers. Payments under the Plan are made as described above regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payments received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.
Although these agreements specify certain fees for these services, CSIM and Schwab have made an additional agreement (“expense limitation”) with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Investor Shares | 1.46% | 1.65% | ||||||
Select Shares | 1.31% | 1.47% |
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentage of each fund shares in this report owned by other Schwab Funds as of October 31, 2011.
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Schwab Target Funds: | ||||||||
Schwab Target 2010 Fund | 0.3% | 0.1% | ||||||
Schwab Target 2015 Fund | 0.4% | 0.1% | ||||||
Schwab Target 2020 Fund | 2.5% | 0.9% | ||||||
Schwab Target 2025 Fund | 1.1% | 0.4% | ||||||
Schwab Target 2030 Fund | 4.9% | 1.5% | ||||||
Schwab Target 2035 Fund | 1.1% | 0.3% | ||||||
Schwab Target 2040 Fund | 5.1% | 1.5% | ||||||
Schwab Monthly Income Funds: | ||||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.1% | ||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.1% | ||||||
Schwab Balanced Fund | 3.9% | —% |
The funds may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, each fund’s total aggregate security transactions with other Schwab Funds were as follows:
Laudus Small-Cap MarketMasters Fund | $237,359 | |||
Laudus International MarketMasters Fund | 414,093 |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
43
Laudus MarketMasters Funds
Financial Notes (continued)
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for each fund.
6. Board of Trustees:
Trustees 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 trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Laudus Small-Cap MarketMasters Fund | $291,521,005 | $418,669,279 | ||||||
Laudus International MarketMasters Fund | 1,361,220,299 | 1,441,960,631 |
9. Disclosures about Derivative Instruments and Hedging Activities:
During the period ended October 31, 2011, the funds invested in equity index futures contracts and the Laudus International MarketMasters Fund also invested in forward foreign currency exchange contracts. The fair value, due to brokers for futures and the realized/unrealized gains (losses) on derivatives contracts held by the funds are presented on the face of each fund’s Portfolio Holdings, Statement of Assets and Liabilities and Statement of Operations. Investments in forward foreign currency contracts subject the Laudus International MarketMasters Fund to foreign currency risk and risk of default by the counterparty. Refer to Financial Note 2(b) for the funds’ accounting policies with respect to derivatives contracts and Financial Note 3 for additional disclosures concerning the risks of investing in derivatives contracts.
The funds invested in futures contracts to seek returns on the funds’ otherwise uninvested cash assets. The Laudus International MarketMasters Fund invested in forward foreign currency contracts in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates.
During the period ending October 31, 2011, the monthly average contract value of futures contracts and the monthly average number of contracts held by the funds were as follows:
Contract Values | Number of Contracts | |||||||
Laudus Small-Cap MarketMasters Fund | $13,457,066 | 171 | ||||||
Laudus International MarketMasters Fund | 45,313,950 | 618 |
During the period ended October 31, 2011, the monthly average notional amount and the monthly average unrealized gains (losses) on the Laudus International MarketMasters Fund’s investment in forward foreign currency exchange contracts were $230,777,194 and ($4,298,719), respectively.
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Laudus MarketMasters Funds
Financial Notes (continued)
9. Disclosures about Derivative Instruments and Hedging Activities (continued):
As of October 31, 2011, the derivatives contracts held by the Laudus International MarketMasters Fund, categorized by primary risk exposure, were:
Asset Derivatives | Fair Value | |||
Equity Index - Futures Contracts1 | $2,499,565 | |||
Foreign Exchange - Forward Contracts2 | 5,235,623 | |||
Total | $7,735,188 | |||
Liability Derivatives | Fair Value | |||
Foreign Exchange - Forward Contracts3 | $1,092,004 |
1 | Includes cumulative unrealized losses of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets & Liabilities. | |
2 | Statement of Assets and Liabilities location: Unrealized gains on forward foreign currency contracts. | |
3 | Statement of Assets and Liabilities location: Unrealized losses on forward foreign currency contracts. |
During the period ending October 31, 2011, the derivatives held by the Laudus International MarketMasters Fund, categorized by primary risk exposure, were:
Equity Index | Foreign Exchange – | |||||||
Futures Contracts | Forward Contracts | |||||||
Realized Gain (Losses)1 | $6,613,548 | (12,759,625 | ) | |||||
Change in Unrealized Gains (Losses)2 | (1,832,555 | ) | 8,393,012 |
1 | Statement of Operations location: Net realized gains/losses on futures contracts and net realized gains/losses on foreign currency transactions. | |
2 | Statement of Operations location: Net unrealized gains/losses on futures contracts and net unrealized gains/losses on foreign currency translations. |
10. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Laudus Small-Cap MarketMasters Fund | $3,545 | $4,162 | ||||||
Laudus International MarketMasters Fund | 32,578 | 6,103 |
11. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Undistributed ordinary income | $— | $14,967,812 | ||||||
Undistributed long-term capital gains | — | — | ||||||
Unrealized appreciation on investments | 40,807,633 | 197,189,632 | ||||||
Unrealized depreciation on investments | (18,047,889 | ) | (92,362,329 | ) | ||||
Other unrealized appreciation/(depreciation) | — | (34,842 | ) | |||||
Net unrealized appreciation/(depreciation) | $22,759,744 | $104,792,461 | ||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are Passive Foreign Investment Companies (PFIC), Partnerships and the tax defferal of losses on wash sale.
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Laudus MarketMasters Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Laudus Small-Cap | Laudus International | |||||||
Expiration Date | MarketMasters Fund | MarketMasters Fund | ||||||
October 31, 2016 | $3,679,494 | $4,009,455 | ||||||
October 31, 2017 | 59,667,102 | 366,649,297 | ||||||
Total | $63,346,596 | $370,658,752 | ||||||
For the year ended October 31, 2011, the funds had capital losses utilized as follows:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital losses utilized | $55,366,378 | $111,719,333 |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Current period distributions | ||||||||
Ordinary income | $— | $22,784,254 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — | ||||||
Prior period distributions | ||||||||
Ordinary income | $— | $19,256,633 | ||||||
Long-term capital gains | — | — | ||||||
Return of capital | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Laudus Small-Cap | Laudus International | |||||||
MarketMasters Fund | MarketMasters Fund | |||||||
Capital shares | ($1,841,608 | ) | $4 | |||||
Undistributed net investment income | 1,836,224 | (7,319,036 | ) | |||||
Net realized capital gains/(losses) | 5,384 | 7,319,032 |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
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Laudus MarketMasters Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
12. Other:
During the period, the funds received a payment related to state filing fees resulting from revised calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. This payment is presented in the funds’ Statement of Operations as “Payment for state filing fees”.
13. Subsequent Events:
On November 29, 2011, subsequent to the Laudus Small-Cap MarketMasters Fund’s fiscal year-end, approximately 11 million shares valued at $125,279,678 were redeemed from the fund. This redemption represented approximately 48% of the fund’s net assets as of that date.
In addition, effective December 8, 2011, the Board of Trustees approved certain changes to the sub-advisers of both the Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund. Specifically, with respect to the Laudus Small-Cap MarketMasters Fund, the Board of Trustees approved the termination of two of the fund’s sub-advisers and approved the hiring of a new sub-adviser, Mellon Capital Management Corp. With respect to the Laudus International MarketMasters Fund, the Board of Trustees has approved the hiring of a new sub-adviser, Mellon Capital Management Corp. For additional information, please refer to the prospectus supplement dated December 19, 2011 which is included with this report.
Management has evaluated subsequent events and transactions through the date of the financial statements and determined that no other material events or transactions would require recognition or disclosure in the financial statements as presented.
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Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Laudus Small-Cap MarketMasters Fund
Laudus International MarketMasters Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (two of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
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Other Federal Tax Information (unaudited)
The Laudus International MarketMaster Fund elects to pass through, under section 853 of the Internal Revenue Code, the foreign tax credit of $3,202,262 to its shareholders for the year ended October 31, 2011. The respective foreign source income on the fund is $46,981,302.
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Laudus Small-Cap MarketMasters Fund | $— | |||
Laudus International MarketMasters Fund | 25,986,515 |
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Approval of Investment Advisory and Sub-Advisory Agreements
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreements must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund1, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreements or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreements.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in part, to considering whether to renew the investment advisory agreements between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) with respect to the existing funds in the Trust, including Laudus Small-Cap MarketMasters Fund and Laudus International MarketMasters Fund (the “Funds”), and the individual subadvisory agreements between CSIM and Neuberger Berman Management LLC, TAMRO Capital Partners, LLC, TCW Investment Management Company and Tocqueville Asset Management L.P. relating to Laudus Small-Cap MarketMasters Fund; and CSIM and American Century Global Investment Management, Inc., Harris Associates L.P., William Blair & Company, LLC, Mondrian Investment Partners Limited and Wentworth, Hauser & Violich relating to the Laudus International MarketMasters Fund (collectively, the “Sub-Advisers”). Such investment advisory and sub-advisory agreements are collectively referred to herein as the “Agreements”. The Trustees also review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM and the Sub-Advisers, including information about their affiliates, personnel and operations. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM. The Board also discusses with CSIM the Funds’ operations and CSIM’s ability, consistent with the “manager of managers” structure of each of the Funds to (i) identify and recommend to the Trustees sub-advisers for each Fund, (ii) monitor and oversee the performance and investment capabilities of each sub-adviser, and (iii) recommend the replacement of a sub-adviser when appropriate. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM and CSIM sends an information request letter to each of the Sub-Advisers seeking certain relevant information. The responses by CSIM and the Sub-Advisers are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreements with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreements with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreements with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreements, including the resources of CSIM and its affiliates, and the Sub-Advisers, dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, and other types of accounts; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates, as well as the profitability of the Sub-Advisers; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreements reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund
50
infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. In addition, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. The Board also considered the nature, extent and quality of the sub-advisory services provided by the Sub-Advisers to the Funds and the resources each dedicates to the Funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM and the Sub-Advisers to the Funds and the resources of CSIM, and its affiliates, and the Sub-Advisers dedicated to the Funds supported renewal of the Agreements with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreements with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. In addition, the Trustees considered whether irrespective of relative performance, each Sub-Adviser’s absolute performance was consistent with expectations for such Sub-Adviser’s unique investment methodology. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser and Sub-Adviser profitability discussed below. Laudus Small-Cap MarketMasters Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Laudus Small-Cap MarketMasters Fund. These factors included the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreements with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreements, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM and the Sub-Advisers to other mutual funds, and to other types of accounts, such as separate accounts, pooled vehicles, wrap accounts and offshore funds, but, with respect to such other types of accounts, accorded less weight to such comparisons due to the different legal, regulatory, compliance and operating features of mutual funds as compared to these other types of accounts. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreements with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to CSIM, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM, and its respective affiliates. The Trustees also considered the compensation flowing to the Sub-Advisers, directly or indirectly. The Trustees also considered any other benefits derived by the Sub-Advisers from their relationship with the Funds, such as whether, by virtue of its management of the Funds, any Sub-Adviser obtains investment information or other research resources that aid it in providing advisory services to other clients. With respect to the Sub-Advisers, the Trustees considered whether the varied levels of compensation and profitability under the Agreements and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by the Sub-Advisers, and their respective affiliates. The Board also considered the profitability of the Sub-Advisers with respect to the sub-advisory services they provide to the Funds, although, when doing so, the Board took into account the fact that the Sub-Advisers are compensated by CSIM, and not by the Funds directly, and such compensation with respect to any Sub-Adviser reflects an arms-length negotiation between the Sub-Adviser and CSIM. Based on this evaluation, the Board concluded, within the context of its
51
full deliberations, that the profitability of CSIM and the Sub-Advisers is reasonable and supported renewal of the Agreements with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreements with respect to the Funds and concluded that the compensation under the Agreements with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
1 | Laudus MarketMasters Funds and the investment adviser have received exemptive relief from the Securities and Exchange Commission to permit the investment adviser and the Funds to hire or terminate investment managers without shareholder approval, subject to certain conditions. One of the conditions requires approval by the Funds’ Board of Trustees before any such hiring is implemented. |
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Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
55
Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 2000 Index An index that measures the performance of the small-cap segment of the U.S. equity universe.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
56
PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
• | WEBSITE USAGE. |
When you visit our websites, we may use devices known as “cookies,” graphic interchange format files (GIFs), or other similar web tools to enhance your web experience. These tools help us to recognize you, maintain your web session, and provide a more personalized experience. To learn more, please click the Privacy link on our website.
How We Share and Use Your Information
We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
State Laws
We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Laudus Funds® direct investors: 1-800-447-3332
© 2011 Laudus Funds. All rights reserved.
Notes
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 Laudus Funds’ website at www.laudusfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Laudus Funds at 1-800-447-3332.
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.laudusfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Laudus Fundstm
Laudus Growth Investors
Laudus Growth Investors U.S. Large Cap Growth Fund
Laudus MarketMasters Fundstm
Laudus International MarketMasters Fundtm
Laudus Small-Cap MarketMasters Fundtm
Laudus Mondrian Fundstm
Laudus Mondrian Emerging Markets Fund
Laudus Mondrian Global Equity Fund
Laudus Mondrian International Fixed Income Fund
Laudus Mondrian Institutional Fundstm
Laudus Mondrian Institutional Emerging Markets Fund
Laudus Mondrian Institutional International Equity Fund
The Laudus Funds includes the Laudus Growth Investors U.S. Large Cap Growth Fund and the Laudus Mondrian Funds, which are part of the Laudus Trust and Laudus Institutional Trust and distributed by ALPS Distributors Inc.; and the Laudus MarketMasters Funds, which are part of the Schwab Capital Trust, and distributed by Charles Schwab & Co., Inc. Charles Schwab & Co., Inc. and ALPS Distributors Inc. are unaffiliated entities.
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For More Information about the Funds:
Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Laudus MarketMasters Funds
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors unless preceded or accompanied by a current prospectus.
© 2011 Charles Schwab & Co., Inc. All rights reserved. Member SIPC®. Printed on recycled paper. | MFR13812-14 |
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COMMAND PERFORMANCETM
Annual report dated October 31, 2011, enclosed.
Schwab MarketTrack Portfolios ®
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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This wrapper is not part of the shareholder report.
Schwab MarketTrack Portfolios ®
Annual Report
October 31, 2011
Schwab MarketTrack
All Equity Portfoliotm
Schwab MarketTrack
Growth Portfoliotm
Schwab MarketTrack
Balanced Portfoliotm
Schwab MarketTrack
Conservative Portfoliotm
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This page is intentionally left blank.
Four portfolios that combine the power of
indexing with the benefits of asset allocation.
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Schwab MarketTrack All Equity Portfolio™ | 6 | |
Schwab MarketTrack Growth Portfolio™ | 8 | |
Schwab MarketTrack Balanced Portfolio™ | 10 | |
Schwab MarketTrack Conservative Portfolio™ | 12 | |
Fund Expenses | 14 | |
Financial Statements and Portfolio Holdings | ||
Schwab MarketTrack All Equity Portfolio™ | 15 | |
Schwab MarketTrack Growth Portfolio™ | 20 | |
Schwab MarketTrack Balanced Portfolio™ | 25 | |
Schwab MarketTrack Conservative Portfolio™ | 30 | |
Financial Notes | 35 | |
Report of Independent Registered Public Accounting Firm | 47 | |
Other Federal Tax Information | 48 | |
Investment Advisory Agreement Approval | 49 | |
Trustees and Officers | 51 | |
Glossary | 54 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab MarketTrack All Equity Portfoliotm (Ticker Symbol: SWEGX) | 3.76% | |||
All Equity Composite Index | 4.35% | |||
Fund Category: Morningstar Large-Cap Blend | 5.33% | |||
Performance Details | pages 6-7 | |||
Schwab MarketTrack Growth Portfoliotm | ||||
Investor Shares (Ticker Symbol: SWHGX) | 4.55% | |||
P Shares (Ticker Symbol: SWPGX) | 4.77% | |||
Growth Composite Index | 5.03% | |||
Fund Category: Morningstar Large-Cap Blend | 5.33% | |||
Performance Details | pages 8-9 | |||
Schwab MarketTrack Balanced Portfoliotm (Ticker Symbol: SWBGX) | 4.80% | |||
Balanced Composite Index | 5.20% | |||
Fund Category: Morningstar Moderate Allocation | 3.97% | |||
Performance Details | pages 10-11 | |||
Schwab MarketTrack Conservative Portfoliotm (Ticker Symbol: SWCGX) | 4.72% | |||
Conservative Composite Index | 5.22% | |||
Fund Category: Morningstar Conservative Allocation | 3.42% | |||
Performance Details | pages 12-13 | |||
Minimum Initial Investment1 | ||||
Investor Shares | $ 100 | |||
P Shares | $100,000 | |||
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares.
The All Equity Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 70% Dow Jones U.S. Total Stock Market Index and 30% MSCI EAFE Index. The index is maintained by Charles Schwab Investment Management, Inc.
The Growth Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 60% Dow Jones U.S. Total Stock Market Index, 20% MSCI EAFE Index, 15% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc.
The Balanced Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 45% Dow Jones U.S. Total Stock Market Index, 15% MSCI EAFE Index, 35% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc.
The Conservative Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 30% Dow Jones U.S. Total Stock Market Index, 10% MSCI EAFE Index, 55% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
1 | Please see prospectus for further details and eligibility requirements. |
2 Schwab MarketTrack Portfolios
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst04.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab MarketTrack Portfolios 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab MarketTrack Portfolios. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab MarketTrack Portfolios
Portfolio Management
![]() | Jake M. Gilliam, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the funds. He was appointed portfolio manager in 2011. Since 2007, he has been a portfolio manager with the Schwab Institutional Asset Management team. |
Schwab MarketTrack Portfolios 5
Schwab MarketTrack All Equity Portfolio™
The Schwab MarketTrack All Equity Portfolio (the portfolio) seeks high capital growth through an all-stock portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation is 100% in stock investments, with certain percentages for different segments of the stock market. The portfolio seeks to remain close to the target allocations of 45% in large-cap, 30% in international, and 25% in small-cap stocks, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds, including index funds, which seek to track the total returns of various market indices. (For more information concerning the portfolio’s objective, strategy, and risks, please see the portfolio’s prospectus.)
The portfolio returned 3.76% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the All Equity Composite Index, returned 4.35%. Unlike the return of the portfolio, the return of the All Equity Composite Index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of All Equity Composite Index, a comparative overweight in U.S. small-cap stocks improved both absolute and relative portfolio performance compared with the All Equity Composite Index. (Please refer to footnote 3 on the following page for current index allocations.)
Turning to the market backdrop, U.S. equities returned 8.10% as measured by the Dow Jones U.S. Total Stock Market Index. That return readily surpassed the performance of international stocks in developed markets, where equities returned -3.64% as measured by the MSCI EAFE Index. Within the U.S. equity market, the large-cap Russell 1000 index returned 8.01%, comfortably outpacing the 6.71% gain of the small-cap Russell 2000 Index.
Within the portfolio, the Schwab S&P 500 Index Fund represented the largest position and had the most impact on the portfolio’s total return. This index fund returned 7.97%, compared with the 8.09% gain posted by its comparative index, the S&P 500 Index. As a result, this investment slice contributed positively to the portfolio’s overall total return. However, the index fund’s modest underperformance versus the Dow Jones U.S. Total Stock Market Index meant that this allocation subtracted from the portfolio’s performance compared with that of the All Equity Composite Index.
The next largest contributor to the portfolio’s total return was the Schwab Small-Cap Index Fund, which represented a comparatively smaller position. This index fund returned 8.45%, narrowly underperforming the 8.59% generated by its comparative index, the Schwab Small-Cap Index. Nevertheless, the Schwab Small-Cap Index Fund comfortably outperformed not only the broader small-cap stock market (as gauged by the Russell 2000 Index), but also the Dow Jones U.S. Total Stock Market Index. As a result, this holding boosted the portfolio’s absolute and relative performance.
Unlike U.S. stocks, global equities lost ground for the 12 months, weighed down in part by Europe’s ongoing and largely unresolved sovereign debt crisis. The Schwab International Index Fund returned -4.83%, roughly a full percentage point worse than its comparative index, the Schwab International Index. This international index fund’s performance was also more than a full percentage point below the return of the MSCI EAFE Index, which is used by the portfolio to gauge the performance of international stocks. As a result, this investment slice was the biggest detractor from the portfolio’s overall total return, while concurrently reducing the portfolio’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 4 | |
Portfolio Turnover Rate | 12% |
Asset Class Weightings % of Investments
Equity Funds - Large-Cap | 44.9% | |
Equity Funds - International | 29.6% | |
Equity Funds - Small-Cap | 25.1% | |
Short-Term Investments | 0.4% | |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab S&P 500 Index Fund | 44.9% | |
Schwab International Index Fund | 29.6% | |
Schwab Small-Cap Index Fund | 25.1% | |
Total | 99.6% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab MarketTrack Portfolios
Schwab MarketTrack All Equity Portfoliotm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctmteqty01.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack All Equity Portfoliotm (5/19/98) | 3.76 | % | -0.29 | % | 4.69 | % | |||||||||
All Equity Composite Index3 | 4.35 | % | -0.07 | % | 5.13 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % |
Portfolio Expense Ratios4: Net 0.64%; Gross 0.68%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The All Equity Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 70% Dow Jones U.S. Total Stock Market Index and 30% MSCI EAFE Index. The index is maintained by Charles Schwab Investment Management, Inc. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.14%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios 7
Schwab MarketTrack Growth Portfolio™
The Schwab MarketTrack Growth Portfolio (the portfolio) seeks high capital growth with less volatility than an all-stock portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes stock, bond, and cash investments. The portfolio seeks to remain close to the target allocations of 80% stocks, 15% bonds, and 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds, including index funds, which seek to track the total returns of various market indices. (For more information concerning the portfolio’s objective, strategy, and risks, please see the portfolio’s prospectus.)
The portfolio’s Investor Shares returned 4.55% for the 12 months ended October 31, 2011. The portfolio’s internally calculated comparative index, the Growth Composite Index, returned 5.03%. Unlike the return of the portfolio, the return of the Growth Composite Index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of Growth Composite Index, a comparative overweight in U.S. small-cap stocks improved both total and relative portfolio performance. (Please refer to footnote 3 on the following page for current index allocations.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities and U.S. fixed income securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%, while the MSCI EAFE Index lost ground, returning -3.64%. Within the U.S. equity market, the large-cap Russell 1000 index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index was considerably more than the 0.09% return of the Treasury Bill sector of the Barclays Capital U.S. Aggregate Bond Index.
Within the portfolio, the Schwab S&P 500 Index Fund represented the largest allocation, and had the most impact on the portfolio’s overall total return. This index fund returned 7.97%, less than the 8.09% advance generated by the fund’s comparative index, the S&P 500 Index. This index fund also underperformed the Dow Jones U.S. Total Stock Market Index by a similar margin. As a result, this investment slice slightly subtracted from the portfolio’s relative performance.
The next largest contributor to the portfolio’s total return was the Schwab Small-Cap Index Fund, which returned 8.45% and narrowly underperformed the 8.59% return of its comparative index. However, this index fund solidly outperformed the small-cap Russell 2000 Index, while contributing less to the portfolio’s overall total return than the Schwab S&P 500 Index Fund due to its comparatively smaller weighting. Nevertheless, because the Schwab Small-Cap Index Fund generated a higher return than the Dow Jones U.S. Total Stock Market Index, this investment slice boosted the portfolio’s performance compared with the Growth Composite Index.
The fixed income allocation also generated positive returns that boosted the portfolio’s total return. The Schwab Total Bond Market Fund returned 4.47%, but underperformed the 5.00% return of its index, the Barclays Capital U.S. Aggregate Bond Index (the same index used within the Growth Composite Index to gauge U.S. bond performance). As a result, this allocation slightly detracted from the portfolio’s relative performance.
Unlike U.S. stocks, global equities lost ground for the 12 months, weighed down in part by Europe’s ongoing and largely unresolved sovereign debt crisis. The Schwab International Index Fund returned -4.83%, roughly a full percentage point worse than its comparative index, the Schwab International Index. This international index fund’s performance was also more than a full percentage point below the return of the MSCI EAFE Index, which is used by the portfolio to gauge the performance of international stocks. As a result, this investment slice was the biggest detractor from the portfolio’s overall total return, while concurrently reducing the portfolio’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 6 | |
Portfolio Turnover Rate | 17% |
Asset Class Weightings % of Investments
Equity Funds - Large-Cap | 40.0% | |
Equity Funds - Small-Cap | 20.1% | |
Equity Funds - International | 19.7% | |
Fixed Income Funds - Intermediate-Term Bond | 15.2% | |
Money Market Funds | 3.8% | |
Short-Term Investments | 1.2% | |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab S&P 500 Index Fund | 40.0% | |
Schwab Small-Cap Index Fund | 20.2% | |
Schwab International Index Fund | 19.7% | |
Schwab Total Bond Market Fund | 15.2% | |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3.8% | |
Total | 98.9% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab MarketTrack Portfolios
Schwab MarketTrack Growth Portfoliotm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment in Investor Shares1,3
Performance of a Hypothetical
$10,000 Investment in Investor Shares1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctmtgrth01.gif)
April 6, 2006 – October 31, 2011
Performance of a Hypothetical
$100,000 Investment in P Shares1,3
Performance of a Hypothetical
$100,000 Investment in P Shares1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctmtgrth02.gif)
Average Annual Total Returns1,2
Portfolio Class and Inception Date | 1 Year | 5 Years | 10 Years | Since Inception | ||||||||||||||||
Investor Shares (11/20/95) | 4.55 | % | 0.88 | % | 4.64 | % | 5.98 | % | ||||||||||||
P Shares (4/6/06) | 4.77 | % | 1.03 | % | n/a | 1.76 | % | |||||||||||||
Growth Composite Index3 | 5.03 | % | 1.41 | % | 5.22 | % | (11/20/95) 6.38% | |||||||||||||
(4/6/06) 2.18% | ||||||||||||||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | (11/20/95) 6.63% | |||||||||||||
(4/6/06) 1.30% | ||||||||||||||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.46 | % | (11/20/95) 6.25% | |||||||||||||
(4/6/06) 6.54% | ||||||||||||||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % | (11/20/95) 6.35% | |||||||||||||
(4/6/06) 0.58% |
Portfolio Expense Ratios4: Investor Shares: Net 0.70%; Gross 0.72% / P Shares: Net 0.55%; Gross 0.57%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Growth Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 60% Dow Jones U.S. Total Stock Market Index, 20% MSCI EAFE Index, 15% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.20%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios 9
Schwab MarketTrack Balanced Portfolio™
The Schwab MarketTrack Balanced Portfolio (the portfolio) seeks both capital growth and income. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes bond, stock, and cash investments. The portfolio seeks to remain close to the target allocations of 60% stocks, 35% bonds, and 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds, including index funds, which seek to track the total returns of various market indices. (For more information concerning the portfolio’s objective, strategy, and risks, please see the portfolio’s prospectus.)
The portfolio returned 4.80% for the 12 months ended October 31, 2011. Its internally calculated comparative index, the Balanced Composite Index, returned 5.20%. Unlike the return of the portfolio, the return of the Balanced Composite Index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the Balanced Composite Index, a comparative overweight in U.S. small-cap stocks improved both absolute and relative portfolio performance. (Please refer to footnote 3 on the following page for current index allocations.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities and U.S. fixed income securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%, while the MSCI EAFE Index lost ground, returning -3.64%. Within the U.S. equity market, the large-cap Russell 1000 index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index was considerably more than the 0.09% return of the Treasury Bill sector of the Barclays Capital U.S. Aggregate Bond Index.
Within the portfolio, the Schwab S&P 500 Index Fund represented the largest allocation, and had the most impact on the portfolio’s overall total return. This index fund returned 7.97%, less than the 8.09% advance generated by its comparative index, the S&P 500 Index. In addition, this allocation underperformed the Dow Jones U.S. Total Stock Market Index by a similar margin, and in doing so, slightly detracted from the portfolio’s performance compared with that of the Balanced Composite Index.
The next largest contributor to the portfolio’s total return was the Schwab Total Bond Market Fund. Although this fund added to the portfolio’s overall total return, its 4.47% return was less than the 5.00% return of its index, the Barclays Capital U.S. Aggregate Bond Index (the same index used within the Balanced Composite Index to gauge bond performance). As a result, this allocation slightly detracted from the portfolio’s relative performance.
An allocation in the Schwab Small-Cap Index Fund, which returned 8.45%, also contributed to the portfolio’s total return. Although this index fund narrowly underperformed the 8.59% return of its comparative index, the Schwab Small-Cap Index, it solidly outperformed the small-cap Russell 2000 Index. In addition, this index fund’s higher return than the Dow Jones U.S. Total Stock Market Index meant that this investment slice boosted the portfolio’s performance compared with the Balanced Composite Index.
Unlike U.S. stocks, global equities lost ground for the 12 months, weighed down in part by Europe’s ongoing and largely unresolved sovereign debt crisis. The Schwab International Index Fund returned -4.83%, roughly a full percentage point worse than its comparative index, the Schwab International Index. This international index fund’s performance was also more than a full percentage point below the return of the MSCI EAFE Index, which is used by the portfolio to gauge the performance of international stocks. As a result, this investment slice was the biggest detractor from the portfolio’s overall total return, while concurrently reducing the portfolio’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 6 | |
Portfolio Turnover Rate | 25% |
Asset Class Weightings % of Investments
Fixed Income Fund -Intermediate-Term Bond | 35.4% | |
Equity Funds - Large-Cap | 30.0% | |
Equity Funds - Small-Cap | 15.0% | |
Equity Funds - International | 14.7% | |
Money Market Funds | 3.9% | |
Short-Term Investments | 1.0% | |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab Total Bond Market Fund | 35.4% | |
Schwab S&P 500 Index Fund | 30.0% | |
Schwab Small-Cap Index Fund | 15.0% | |
Schwab International Index Fund | 14.7% | |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3.9% | |
Total | 99.0% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab MarketTrack Portfolios
Schwab MarketTrack Balanced Portfoliotm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctmtbald01.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95) | 4.80 | % | 1.70 | % | 4.54 | % | |||||||||
Balanced Composite Index3 | 5.20 | % | 2.83 | % | 5.43 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.46 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 3.97 | % | 1.96 | % | 4.44 | % |
Portfolio Expense Ratios4: Net 0.78%; Gross 0.80%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Balanced Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 45% Dow Jones U.S. Total Stock Market Index, 15% MSCI EAFE Index, 35% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the Portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.28%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios 11
Schwab MarketTrack Conservative Portfolio™
The Schwab MarketTrack Conservative Portfolio (the portfolio) seeks income and more growth potential than an all-bond portfolio. To pursue its goal, the portfolio maintains a defined asset allocation. The portfolio’s target allocation includes bond, stock, and cash investments. The portfolio seeks to remain close to the target allocations of 55% bonds, 40% stocks, 5% cash, and typically does not change its target allocation. The portfolio invests mainly in other Schwab Funds, including index funds, which seek to track the total returns of various market indices. (For more information concerning the portfolio’s objective, strategy, and risks, please see the portfolio’s prospectus.)
The portfolio returned 4.72% for the 12 months ended October 31, 2011. Its internally calculated comparative index, the Conservative Composite Index, returned 5.22%. Unlike the return of the portfolio, the return of the Conservative Composite Index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the Conservative Composite Index, a comparative overweight in U.S. small-cap stocks improved both absolute and relative portfolio performance. (Please refer to footnote 3 on the following page for current index allocations.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities and U.S. fixed income securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%, while the MSCI EAFE Index lost ground, returning -3.64%. Within the U.S. equity market, the large-cap Russell 1000 index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index was considerably more than the 0.09% return of the Treasury Bill sector of the Barclays Capital U.S. Aggregate Bond Index.
Within the portfolio, the Schwab Total Bond Market Fund represented the largest allocation, and had the most impact on the portfolio’s overall total return. However, this index fund’s 4.47% return was less than the 5.00% return of the Barclays Capital U.S. Aggregate Bond Index (the same index used within the Conservative Composite Index to gauge bond performance). As a result, this allocation slightly detracted from the portfolio’s relative performance.
The portfolio’s equity holdings provided mixed results. Within this investment slice, the Schwab S&P 500 Index Fund returned 7.97%, less than the 8.09% advance generated by its comparative index, the S&P 500 Index. An allocation in the Schwab Small-Cap Index Fund, which returned 8.45% and fell only slightly short of the 8.59% return of its comparative index, the Schwab Small-Cap Index, also added to the portfolio’s total return. This index fund also solidly outperformed the small-cap Russell 2000 Index. Such a positive performance was not shared by the Schwab International Index Fund, which returned -4.83%, roughly a full percentage point worse than its comparative index, the Schwab International Index. This international index fund also underperformed the MSCI EAFE Index—used by the portfolio to gauge the performance of international stocks—by more than a full percentage point. As a result, this international stock index fund was the biggest detractor from the portfolio’s return, while concurrently reducing relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 6 | |
Portfolio Turnover Rate | 30% |
Asset Class Weightings % of Investments
Fixed-Income Funds - Intermediate-Term Bond | 55.6% | |
Equity Funds - Large-Cap | 19.9% | |
Equity Funds - Small-Cap | 9.9% | |
Equity Funds - International | 9.7% | |
Money Market Funds | 3.7% | |
Short-Term Investments | 1.2% | |
Total | 100.0% |
Top Holdings % Net Assets1
Schwab Total Bond Market Fund | 55.6% | |
Schwab S&P 500 Index Fund | 19.9% | |
Schwab Small-Cap Index Fund | 9.9% | |
Schwab International Index Fund | 9.7% | |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3.7% | |
Total | 98.8% |
Manager views and portfolio holdings may have changed since the report date.
Small-company stocks are subject to greater volatility than other asset categories. Foreign securities can involve risks such as political and economic instability and currency risk.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab MarketTrack Portfolios
Schwab MarketTrack Conservative Portfoliotm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctmtcons01.gif)
Average Annual Total Returns1,2
Portfolio and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Portfolio: Schwab MarketTrack Conservative Portfoliotm (11/20/95) | 4.72 | % | 2.38 | % | 4.34 | % | |||||||||
Conservative Composite Index3 | 5.22 | % | 4.10 | % | 5.51 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.46 | % | |||||||||
Fund Category: Morningstar Conservative Allocation | 3.42 | % | 3.11 | % | 4.44 | % |
Portfolio Expense Ratios4: Net 0.87%; Gross 0.93%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Portfolio expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the portfolio’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or the redemption of portfolio shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Conservative Composite Index is a custom blended index developed by CSIM based on a comparable portfolio asset allocation and calculated using the following portion allocations: 30% Dow Jones U.S. Total Stock Market Index, 10% MSCI EAFE Index, 55% Barclays Capital U.S. Aggregate Bond Index, and 5% Barclays Capital U.S. Treasury Bills: 1-3 Months Index. The index is maintained by Charles Schwab Investment Management, Inc. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the Portfolio invests. The annualized weighted average expense ratio of the underlying funds was 0.37%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab MarketTrack Portfolios 13
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab MarketTrack All Equity Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 887.40 | $ | 2.38 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Growth Portfoliotm | ||||||||||||||||
Investor Shares | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 921.30 | $ | 2.42 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
P Shares | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 922.30 | $ | 1.70 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab MarketTrack Balanced Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 953.60 | $ | 2.46 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 | |||||||||
Schwab MarketTrack Conservative Portfoliotm | ||||||||||||||||
Actual Return | 0.50% | $ | 1,000 | $ | 984.70 | $ | 2.50 | |||||||||
Hypothetical 5% Return | 0.50% | $ | 1,000 | $ | 1,022.68 | $ | 2.55 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. | |
2 | Expenses for each fund or share class are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
14 Schwab MarketTrack Portfolios
Schwab MarketTrack All Equity Portfolio™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.30 | 9.82 | 9.44 | 15.58 | 13.63 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.16 | 0.12 | 0.30 | 0.20 | 0.21 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.27 | 1.50 | 0.83 | (6.11 | ) | 2.01 | ||||||||||||||||
Total from investment operations | 0.43 | 1.62 | 1.13 | (5.91 | ) | 2.22 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.14 | ) | (0.23 | ) | (0.22 | ) | (0.27 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.52 | ) | (0.01 | ) | — | |||||||||||||||
Total distributions | (0.21 | ) | (0.14 | ) | (0.75 | ) | (0.23 | ) | (0.27 | ) | ||||||||||||
Net asset value at end of period | 11.52 | 11.30 | 9.82 | 9.44 | 15.58 | |||||||||||||||||
Total return (%) | 3.76 | 16.62 | 13.54 | (38.46 | ) | 16.55 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.53 | 0.54 | 0.67 | 0.73 | 0.72 | |||||||||||||||||
Net investment income (loss) | 1.37 | 1.14 | 3.46 | 1.46 | 1.24 | |||||||||||||||||
Portfolio turnover rate | 12 | 8 | 10 | 10 | 0 | 2 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 476 | 489 | 461 | 429 | 682 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 1%.
See financial notes 15
Schwab MarketTrack All Equity Portfolio
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .6% | Other Investment Companies | 416,675,338 | 474,724,731 | ||||||||
0 | .4% | Short-Term Investment | 1,792,677 | 1,792,677 | ||||||||
100 | .0% | Total Investments | 418,468,015 | 476,517,408 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (101,298 | ) | ||||||||
100 | .0% | Total Net Assets | 476,416,110 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.6% of net assets | ||||||||
Equity Funds 99.6% | ||||||||
International 29.6% | ||||||||
Schwab International Index Fund (a) | 8,806,065 | 141,073,166 | ||||||
Large-Cap 44.9% | ||||||||
Schwab S&P 500 Index Fund (a) | 10,805,051 | 214,156,117 | ||||||
Small-Cap 25.1% | ||||||||
Schwab Small-Cap Index Fund (a) | 5,814,864 | 119,495,448 | ||||||
Total Other Investment Companies | ||||||||
(Cost $416,675,338) | 474,724,731 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.4% of net assets | ||||||||
Time Deposit 0.4% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 1,792,677 | 1,792,677 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,792,677) | 1,792,677 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $441,736,025 and the unrealized appreciation and depreciation were $34,781,383 and ($0), respectively, with a net unrealized appreciation of $34,781,383.
(a) | Issuer is affiliated with the fund’s adviser. |
16 See financial notes
Schwab MarketTrack All Equity Portfolio
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $416,675,338) | $474,724,731 | |||||
Investments in unaffiliated issuers, at value (cost $1,792,677) | + | 1,792,677 | ||||
Total investments, at value (cost $418,468,015) | 476,517,408 | |||||
Receivables: | ||||||
Fund shares sold | 150,791 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 14,093 | ||||
Total assets | 476,682,294 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 8,266 | |||||
Shareholder service fees | 10,841 | |||||
Fund shares redeemed | 186,281 | |||||
Accrued expenses | + | 60,796 | ||||
Total liabilities | 266,184 | |||||
Net Assets | ||||||
Total assets | 476,682,294 | |||||
Total liabilities | − | 266,184 | ||||
Net assets | $476,416,110 | |||||
Net Assets by Source | ||||||
Capital received from investors | 492,790,057 | |||||
Net realized capital losses | (74,423,340 | ) | ||||
Net unrealized capital gains | 58,049,393 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$476,416,110 | 41,357,673 | $11.52 |
See financial notes 17
Schwab MarketTrack All Equity Portfolio
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $9,549,078 | |||||
Interest | + | 580 | ||||
Total investment income | 9,549,658 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,173,116 | |||||
Shareholder service fees | 1,254,361 | |||||
Shareholder reports | 79,047 | |||||
Professional fees | 49,347 | |||||
Transfer agent fees | 36,054 | |||||
Portfolio accounting fees | 26,104 | |||||
Registration fees | 25,766 | |||||
Custodian fees | 12,791 | |||||
Trustees’ fees | 9,598 | |||||
Other expenses | + | 46,144 | ||||
Total expenses | 2,712,328 | |||||
Expense reduction by CSIM and its affiliates | − | 162,076 | ||||
Net expenses | − | 2,550,252 | ||||
Net investment income | 6,999,406 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 339,578 | |||||
Net realized gains on sales of affiliated underlying funds | 75,313 | |||||
Net realized gains on unaffiliated investments | + | 318 | ||||
Net realized gains | 415,209 | |||||
Net unrealized gains on affiliated underlying funds | + | 12,035,738 | ||||
Net realized and unrealized gains | 12,450,947 | |||||
Increase in net assets resulting from operations | $19,450,353 |
18 See financial notes
Schwab MarketTrack All Equity Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $6,999,406 | $5,427,072 | ||||||||
Net realized gains (losses) | 415,209 | (12,137,638 | ) | |||||||
Net unrealized gains | + | 12,035,738 | 79,404,855 | |||||||
Increase in net assets from operations | 19,450,353 | 72,694,289 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($9,214,430 | ) | ($6,503,913 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 5,888,921 | $70,518,573 | 4,882,516 | $51,641,399 | ||||||||||||||
Shares reinvested | 719,642 | 8,721,290 | 582,150 | 6,141,683 | ||||||||||||||
Shares redeemed | + | (8,520,403 | ) | �� | (101,904,500 | ) | (9,135,207 | ) | (96,082,498 | ) | ||||||||
Net transactions in fund shares | (1,911,840 | ) | ($22,664,637 | ) | (3,670,541 | ) | ($38,299,416 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 43,269,513 | $488,844,824 | 46,940,054 | $460,953,864 | ||||||||||||||
Total increase or decrease | + | (1,911,840 | ) | (12,428,714 | ) | (3,670,541 | ) | 27,890,960 | ||||||||||
End of period | 41,357,673 | $476,416,110 | 43,269,513 | $488,844,824 | ||||||||||||||
Net investment income not yet distributed | $— | $80,791 |
See financial notes 19
Schwab MarketTrack Growth Portfolio™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
Investor Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.35 | 14.51 | 13.71 | 21.09 | 19.16 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.24 | 0.19 | 0.39 | 0.37 | 0.40 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.51 | 1.95 | 1.25 | (6.94 | ) | 2.16 | ||||||||||||||||
Total from investment operations | 0.75 | 2.14 | 1.64 | (6.57 | ) | 2.56 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.30 | ) | (0.40 | ) | (0.41 | ) | (0.46 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.44 | ) | (0.40 | ) | (0.17 | ) | ||||||||||||||
Total distributions | (0.25 | ) | (0.30 | ) | (0.84 | ) | (0.81 | ) | (0.63 | ) | ||||||||||||
Net asset value at end of period | 16.85 | 16.35 | 14.51 | 13.71 | 21.09 | |||||||||||||||||
Total return (%) | 4.55 | 14.86 | 12.95 | (32.27 | ) | 13.69 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.52 | 0.52 | 0.66 | 0.71 | 0.70 | |||||||||||||||||
Net investment income (loss) | 1.39 | 1.25 | 3.03 | 1.99 | 1.94 | |||||||||||||||||
Portfolio turnover rate | 17 | 14 | 23 | 10 | 4 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 562 | �� | 549 | 507 | 454 | 686 |
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
P Shares | 10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | |||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 16.35 | 14.51 | 13.72 | 21.10 | 19.18 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.26 | 0.21 | 0.43 | 0.37 | 0.42 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.52 | 1.94 | 1.22 | (6.91 | ) | 2.16 | ||||||||||||||||
Total from investment operations | 0.78 | 2.15 | 1.65 | (6.54 | ) | 2.58 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.31 | ) | (0.42 | ) | (0.44 | ) | (0.49 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.44 | ) | (0.40 | ) | (0.17 | ) | ||||||||||||||
Total distributions | (0.27 | ) | (0.31 | ) | (0.86 | ) | (0.84 | ) | (0.66 | ) | ||||||||||||
Net asset value at end of period | 16.86 | 16.35 | 14.51 | 13.72 | 21.10 | |||||||||||||||||
Total return (%) | 4.77 | 15.00 | 13.09 | (32.14 | ) | 13.83 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.35 | 0.35 | 0.35 | 0.35 | 0.35 | |||||||||||||||||
Gross operating expenses1 | 0.38 | 0.37 | 0.51 | 0.56 | 0.55 | |||||||||||||||||
Net investment income (loss) | 1.46 | 1.43 | 3.31 | 2.10 | 2.07 | |||||||||||||||||
Portfolio turnover rate | 17 | 14 | 23 | 10 | 4 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 97 | 88 | 84 | 94 | 138 |
1 The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio.
20 See financial notes
Schwab MarketTrack Growth Portfolio
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .9% | Other Investment Companies | 513,587,530 | 650,541,728 | ||||||||
1 | .2% | Short-Term Investment | 8,047,002 | 8,047,002 | ||||||||
100 | .1% | Total Investments | 521,634,532 | 658,588,730 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (352,697 | ) | ||||||||
100 | .0% | Total Net Assets | 658,236,033 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.9% of net assets | ||||||||
Equity Funds 79.9% | ||||||||
International 19.7% | ||||||||
Schwab International Index Fund (a) | 8,089,359 | 129,591,530 | ||||||
Large-Cap 40.0% | ||||||||
Schwab S&P 500 Index Fund (a) | 13,296,624 | 263,539,078 | ||||||
Small-Cap 20.2% | ||||||||
Schwab Small-Cap Index Fund (a) | 6,450,906 | 132,566,110 | ||||||
525,696,718 | ||||||||
Fixed-Income Fund 15.2% | ||||||||
Intermediate-Term Bond 15.2% | ||||||||
Schwab Total Bond Market Fund (a) | 10,461,993 | 99,807,417 | ||||||
Money Market Fund 3.8% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 25,037,593 | 25,037,593 | ||||||
Total Other Investment Companies | ||||||||
(Cost $513,587,530) | 650,541,728 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.2% of net assets | ||||||||
Time Deposit 1.2% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 8,047,002 | 8,047,002 | ||||||
Total Short-Term Investment | ||||||||
(Cost $8,047,002) | 8,047,002 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $528,210,965 and the unrealized appreciation and depreciation were $130,377,765 and ($0), respectively, with a net unrealized appreciation of $130,377,765 .
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 21
Schwab MarketTrack Growth Portfolio
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $513,587,530) | $650,541,728 | |||||
Investments in unaffiliated issuers, at value (cost $8,047,002) | + | 8,047,002 | ||||
Total investments, at value (cost $521,634,532) | 658,588,730 | |||||
Receivables: | ||||||
Fund shares sold | 365,283 | |||||
Dividends | 218,265 | |||||
Interest | 7 | |||||
Prepaid expenses | + | 18,525 | ||||
Total assets | 659,190,810 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 217,473 | |||||
Investment adviser and administrator fees | 11,332 | |||||
Shareholder service fees | 13,666 | |||||
Fund shares redeemed | 652,677 | |||||
Accrued expenses | + | 59,629 | ||||
Total liabilities | 954,777 | |||||
Net Assets | ||||||
Total assets | 659,190,810 | |||||
Total liabilities | − | 954,777 | ||||
Net assets | $658,236,033 | |||||
Net Assets by Source | ||||||
Capital received from investors | 558,712,291 | |||||
Net realized capital losses | (37,430,456 | ) | ||||
Net unrealized capital gains | 136,954,198 | |||||
Net Asset Value (NAV) by Shares Class |
Shares | ||||||||||||||
Share Class | Net Assets | ÷ | Outstanding | = | NAV | |||||||||
Investor Shares | $561,505,237 | 33,318,642 | $16.85 | |||||||||||
P Shares | $96,730,796 | 5,737,949 | $16.86 |
22 See financial notes
Schwab MarketTrack Growth Portfolio
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $12,690,557 | |||||
Interest | + | 2,914 | ||||
Total investment income | 12,693,471 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,557,415 | |||||
Shareholder service fees: | ||||||
Investor Shares | 1,424,023 | |||||
P Shares | 100,441 | |||||
Shareholder reports | 68,945 | |||||
Professional fees | 54,091 | |||||
Transfer agent fees | 42,392 | |||||
Registration fees | 30,863 | |||||
Portfolio accounting fees | 29,675 | |||||
Custodian fees | 15,746 | |||||
Trustees’ fees | 10,747 | |||||
Other expenses | + | 62,884 | ||||
Total expenses | 3,397,222 | |||||
Expense reduction by CSIM and its affiliates | − | 162,198 | ||||
Net expenses | − | 3,235,024 | ||||
Net investment income | 9,458,447 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 356,861 | |||||
Net realized gains on sales of affiliated underlying funds | 3,218,977 | |||||
Net realized gains on unaffiliated investments | + | 9,004 | ||||
Net realized gains | 3,584,842 | |||||
Net unrealized gains on affiliated underlying funds | + | 16,466,332 | ||||
Net realized and unrealized gains | 20,051,174 | |||||
Increase in net assets resulting from operations | $29,509,621 |
See financial notes 23
Schwab MarketTrack Growth Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $9,458,447 | $7,884,639 | ||||||||
Net realized gains (losses) | 3,584,842 | (2,698,263 | ) | |||||||
Net unrealized gains | + | 16,466,332 | 79,865,539 | |||||||
Increase in net assets from operations | 29,509,621 | 85,051,915 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ||||||||||
Investor Shares | (8,214,913 | ) | (10,262,889 | ) | ||||||
P Shares | + | (1,545,531 | ) | (1,818,947 | ) | |||||
Total distributions from net investment income | ($9,760,444 | ) | ($12,081,836 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares Sold | ||||||||||||||||||
Investor Shares | 4,827,264 | $82,645,614 | 4,875,569 | $75,097,555 | ||||||||||||||
P Shares | 1,047,316 | 17,774,937 | 588,557 | 9,064,298 | ||||||||||||||
Total shares sold | 5,874,580 | $100,420,551 | 5,464,126 | $84,161,853 | ||||||||||||||
Shares Reinvested | ||||||||||||||||||
Investor Shares | 462,317 | $7,831,643 | 642,346 | $9,802,192 | ||||||||||||||
P Shares | + | 91,343 | 1,545,531 | 119,275 | 1,818,947 | |||||||||||||
Total shares reinvested | 553,660 | $9,377,174 | 761,621 | $11,621,139 | ||||||||||||||
Shares Redeemed | ||||||||||||||||||
Investor Shares | (5,542,830 | ) | ($94,754,492 | ) | (6,890,543 | ) | ($105,976,752 | ) | ||||||||||
P Shares | + | (808,713 | ) | (13,850,276 | ) | (1,063,878 | ) | (16,337,229 | ) | |||||||||
Total shares redeemed | (6,351,543 | ) | ($108,604,768 | ) | (7,954,421 | ) | ($122,313,981 | ) | ||||||||||
Net transactions in fund shares | 76,697 | $1,192,957 | (1,728,674 | ) | ($26,530,989 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 38,979,894 | $637,293,899 | 40,708,568 | $590,854,809 | ||||||||||||||
Total increase or decrease | + | 76,697 | 20,942,134 | (1,728,674 | ) | 46,439,090 | ||||||||||||
End of period | 39,056,591 | $658,236,033 | 38,979,894 | $637,293,899 | ||||||||||||||
Net investment income not yet distributed | $— | $45,521 |
24 See financial notes
Schwab MarketTrack Balanced Portfolio™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.96 | 13.54 | 12.74 | 18.13 | 17.04 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 0.23 | 0.38 | 0.42 | 0.47 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.46 | 1.50 | 1.11 | (5.06 | ) | 1.41 | ||||||||||||||||
Total from investment operations | 0.71 | 1.73 | 1.49 | (4.64 | ) | 1.88 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.26 | ) | (0.31 | ) | (0.44 | ) | (0.48 | ) | (0.50 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.25 | ) | (0.27 | ) | (0.29 | ) | ||||||||||||||
Total distributions | (0.26 | ) | (0.31 | ) | (0.69 | ) | (0.75 | ) | (0.79 | ) | ||||||||||||
Net asset value at end of period | 15.41 | 14.96 | 13.54 | 12.74 | 18.13 | |||||||||||||||||
Total return (%) | 4.80 | 12.92 | 12.41 | (26.59 | ) | 11.38 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.52 | 0.52 | 0.66 | 0.72 | 0.72 | |||||||||||||||||
Net investment income (loss) | 1.64 | 1.59 | 3.09 | 2.57 | 2.65 | |||||||||||||||||
Portfolio turnover rate | 25 | 22 | 30 | 17 | 6 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 432 | 450 | 434 | 405 | 598 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
See financial notes 25
Schwab MarketTrack Balanced Portfolio
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Other Investment Companies | 336,555,940 | 428,079,256 | ||||||||
1 | .0% | Short-Term Investment | 4,355,392 | 4,355,392 | ||||||||
100 | .0% | Total Investments | 340,911,332 | 432,434,648 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (100,515 | ) | ||||||||
100 | .0% | Total Net Assets | 432,334,133 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.0% of net assets | ||||||||
Equity Funds 59.7% | ||||||||
International 14.7% | ||||||||
Schwab International Index Fund (a) | 3,955,647 | 63,369,460 | ||||||
Large-Cap 30.0% | ||||||||
Schwab S&P 500 Index Fund (a) | 6,549,863 | 129,818,275 | ||||||
Small-Cap 15.0% | ||||||||
Schwab Small-Cap Index Fund (a) | 3,148,403 | 64,699,679 | ||||||
257,887,414 | ||||||||
Fixed-Income Fund 35.4% | ||||||||
Intermediate-Term Bond 35.4% | ||||||||
Schwab Total Bond Market Fund (a) | 16,055,272 | 153,167,293 | ||||||
Money Market Fund 3.9% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 17,024,549 | 17,024,549 | ||||||
Total Other Investment Companies | ||||||||
(Cost $336,555,940) | 428,079,256 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.0% of net assets | ||||||||
Time Deposit 1.0% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 4,355,392 | 4,355,392 | ||||||
Total Short-Term Investment | ||||||||
(Cost $4,355,392) | 4,355,392 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $350,008,102 and the unrealized appreciation and depreciation were $82,426,546 and ($0), respectively, with a net unrealized appreciation of $82,426,546.
(a) | Issuer is affiliated with the fund’s adviser. |
26 See financial notes
Schwab MarketTrack Balanced Portfolio
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $336,555,940) | $428,079,256 | |||||
Investments in unaffiliated issuers, at value (cost $4,355,392) | + | 4,355,392 | ||||
Total investments, at value (cost $340,911,332) | 432,434,648 | |||||
Receivables: | ||||||
Dividends | 339,936 | |||||
Fund shares sold | 252,778 | |||||
Interest | 4 | |||||
Prepaid expenses | + | 12,894 | ||||
Total assets | 433,040,260 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 338,791 | |||||
Investment adviser and administrator fees | 7,669 | |||||
Shareholder service fees | 9,673 | |||||
Fund shares redeemed | 314,716 | |||||
Accrued expenses | + | 35,278 | ||||
Total liabilities | 706,127 | |||||
Net Assets | ||||||
Total assets | 433,040,260 | |||||
Total liabilities | − | 706,127 | ||||
Net assets | $432,334,133 | |||||
Net Assets by Source | ||||||
Capital received from investors | 362,590,914 | |||||
Net investment income not yet distributed | 1,914,159 | |||||
Net realized capital losses | (23,694,256 | ) | ||||
Net unrealized capital gains | 91,523,316 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$432,334,133 | 28,056,680 | $15.41 |
See financial notes 27
Schwab MarketTrack Balanced Portfolio
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $9,677,546 | |||||
Interest | + | 2,065 | ||||
Total investment income | 9,679,611 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,040,524 | |||||
Shareholder service fees | 1,117,705 | |||||
Professional fees | 48,154 | |||||
Shareholder reports | 36,129 | |||||
Registration fees | 28,385 | |||||
Portfolio accounting fees | 24,767 | |||||
Transfer agent fees | 22,331 | |||||
Custodian fees | 11,922 | |||||
Trustees’ fees | 9,104 | |||||
Other expenses | + | 29,695 | ||||
Total expenses | 2,368,716 | |||||
Expense reduction by CSIM and its affiliates | − | 106,708 | ||||
Net expenses | − | 2,262,008 | ||||
Net investment income | 7,417,603 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from unaffiliated underlying funds | 184,625 | |||||
Net realized gains on sales of affiliated underlying funds | 4,683,475 | |||||
Net realized gains on unaffiliated investments | + | 5,365 | ||||
Net realized gains | 4,873,465 | |||||
Net unrealized gains on affiliated underlying funds | + | 8,580,707 | ||||
Net realized and unrealized gains | 13,454,172 | |||||
Increase in net assets resulting from operations | $20,871,775 |
28 See financial notes
Schwab MarketTrack Balanced Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $7,417,603 | $7,133,210 | ||||||||
Net realized gains (losses) | 4,873,465 | (128,108 | ) | |||||||
Net unrealized gains | + | 8,580,707 | 47,433,595 | |||||||
Increase in net assets from operations | 20,871,775 | 54,438,697 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($7,870,626 | ) | ($9,784,254 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,114,207 | $63,537,948 | 5,532,474 | $78,152,749 | ||||||||||||||
Shares reinvested | 488,528 | 7,420,735 | 663,279 | 9,246,104 | ||||||||||||||
Shares redeemed | + | (6,613,253 | ) | (101,539,037 | ) | (8,151,500 | ) | (115,669,242 | ) | |||||||||
Net transactions in fund shares | (2,010,518 | ) | ($30,580,354 | ) | (1,955,747 | ) | ($28,270,389 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 30,067,198 | $449,913,338 | 32,022,945 | $433,529,284 | ||||||||||||||
Total increase or decrease | + | (2,010,518 | ) | (17,579,205 | ) | (1,955,747 | ) | 16,384,054 | ||||||||||
End of period | 28,056,680 | $432,334,133 | 30,067,198 | $449,913,338 | ||||||||||||||
Net investment income not yet distributed | $1,914,159 | $2,367,182 |
See financial notes 29
Schwab MarketTrack Conservative Portfolio™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.22 | 12.15 | 11.34 | 14.90 | 14.33 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.25 | 0.24 | 0.37 | 0.43 | 0.49 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.37 | 1.08 | 0.91 | (3.40 | ) | 0.78 | ||||||||||||||||
Total from investment operations | 0.62 | 1.32 | 1.28 | (2.97 | ) | 1.27 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.25 | ) | (0.38 | ) | (0.46 | ) | (0.51 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.09 | ) | (0.13 | ) | (0.19 | ) | ||||||||||||||
Total distributions | (0.25 | ) | (0.25 | ) | (0.47 | ) | (0.59 | ) | (0.70 | ) | ||||||||||||
Net asset value at end of period | 13.59 | 13.22 | 12.15 | 11.34 | 14.90 | |||||||||||||||||
Total return (%) | 4.72 | 10.98 | 11.72 | (20.59 | ) | 9.12 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.50 | 0.50 | 0.50 | 0.50 | 0.50 | |||||||||||||||||
Gross operating expenses1 | 0.55 | 0.56 | 0.68 | 0.74 | 0.73 | |||||||||||||||||
Net investment income (loss) | 1.84 | 1.93 | 3.31 | 3.12 | 3.37 | |||||||||||||||||
Portfolio turnover rate | 30 | 25 | 25 | 16 | 4 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 198 | 194 | 181 | 182 | 252 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
30 See financial notes
Schwab MarketTrack Conservative Portfolio
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Other Investment Companies | 163,460,335 | 195,719,306 | ||||||||
1 | .2% | Short-Term Investment | 2,351,549 | 2,351,549 | ||||||||
100 | .0% | Total Investments | 165,811,884 | 198,070,855 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (14,333 | ) | ||||||||
100 | .0% | Total Net Assets | 198,056,522 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.8% of net assets | ||||||||
Equity Funds 39.5% | ||||||||
International 9.7% | ||||||||
Schwab International Index Fund (a) | 1,197,306 | 19,180,841 | ||||||
Large-Cap 19.9% | ||||||||
Schwab S&P 500 Index Fund (a) | 1,989,652 | 39,434,907 | ||||||
Small-Cap 9.9% | ||||||||
Schwab Small-Cap Index Fund (a) | 957,292 | 19,672,347 | ||||||
78,288,095 | ||||||||
Fixed-Income Fund 55.6% | ||||||||
Intermediate-Term Bond 55.6% | ||||||||
Schwab Total Bond Market Fund (a) | 11,540,635 | 110,097,658 | ||||||
Money Market Fund 3.7% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 7,333,553 | 7,333,553 | ||||||
Total Other Investment Companies | ||||||||
(Cost $163,460,335) | 195,719,306 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.2% of net assets | ||||||||
Time Deposit 1.2% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 2,351,549 | 2,351,549 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,351,549) | 2,351,549 | |||||||
End of Investments. |
At 10/31/11 the tax basis cost of the fund’s investments was $174,367,968 and the unrealized appreciation and depreciation were $23,702,887 and ($0), respectively, with a net unrealized appreciation of $23,702,887.
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 31
Schwab MarketTrack Conservative Portfolio
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $163,460,335) | $195,719,306 | |||||
Investments in unaffiliated issuers, at value (cost $2,351,549) | + | 2,351,549 | ||||
Total investments, at value (cost $165,811,884) | 198,070,855 | |||||
Receivables: | ||||||
Dividends | 243,726 | |||||
Fund shares sold | 125,554 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 5,522 | ||||
Total assets | 198,445,659 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 242,921 | |||||
Investment adviser and administrator fees | 3,134 | |||||
Shareholder service fees | 5,016 | |||||
Fund shares redeemed | 102,751 | |||||
Accrued expenses | + | 35,315 | ||||
Total liabilities | 389,137 | |||||
Net Assets | ||||||
Total assets | 198,445,659 | |||||
Total liabilities | − | 389,137 | ||||
Net assets | $198,056,522 | |||||
Net Assets by Source | ||||||
Capital received from investors | 185,221,250 | |||||
Net investment income not yet distributed | 175,220 | |||||
Net realized capital losses | (19,598,919 | ) | ||||
Net unrealized capital gains | 32,258,971 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$198,056,522 | 14,575,263 | $13.59 |
32 See financial notes
Schwab MarketTrack Conservative Portfolio
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,570,374 | |||||
Interest | + | 683 | ||||
Total investment income | 4,571,057 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 449,256 | |||||
Shareholder service fees | 480,818 | |||||
Professional fees | 41,435 | |||||
Registration fees | 25,684 | |||||
Portfolio accounting fees | 19,186 | |||||
Transfer agent fees | 18,374 | |||||
Shareholder reports | 15,758 | |||||
Trustees’ fees | 7,253 | |||||
Custodian fees | 7,011 | |||||
Other expenses | + | 14,262 | ||||
Total expenses | 1,079,037 | |||||
Expense reduction by CSIM and its affiliates | − | 102,394 | ||||
Net expenses | − | 976,643 | ||||
Net investment income | 3,594,414 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 52,566 | |||||
Net realized gains on sales of affiliated underlying funds | 1,419,480 | |||||
Net realized gains on unaffiliated investments | + | 1,186 | ||||
Net realized gains | 1,473,232 | |||||
Net unrealized gains on affiliated underlying funds | + | 3,857,853 | ||||
Net realized and unrealized gains | 5,331,085 | |||||
Increase in net assets resulting from operations | $8,925,499 |
See financial notes 33
Schwab MarketTrack Conservative Portfolio
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $3,594,414 | $3,617,325 | ||||||||
Net realized gains | 1,473,232 | 576,992 | ||||||||
Net unrealized gains | + | 3,857,853 | 15,393,384 | |||||||
Increase in net assets from operations | 8,925,499 | 19,587,701 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($3,583,353 | ) | ($3,682,697 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,029,561 | $40,809,530 | 2,981,834 | $37,612,079 | ||||||||||||||
Shares reinvested | 250,464 | 3,340,890 | 274,287 | 3,440,538 | ||||||||||||||
Shares redeemed | + | (3,372,192 | ) | (45,344,064 | ) | (3,459,761 | ) | (43,727,266 | ) | |||||||||
Net transactions in fund shares | (92,167 | ) | ($1,193,644 | ) | (203,640 | ) | ($2,674,649 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 14,667,430 | $193,908,020 | 14,871,070 | $180,677,665 | ||||||||||||||
Total increase or decrease | + | (92,167 | ) | 4,148,502 | (203,640 | ) | 13,230,355 | |||||||||||
End of period | 14,575,263 | $198,056,522 | 14,667,430 | $193,908,020 | ||||||||||||||
Net investment income not yet distributed | $175,220 | $164,159 |
34 See financial notes
Schwab MarketTrack Portfolios
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (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 Capital Trust (organized May 7, 1993) | Schwab Financial Services Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Health Care Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab International Core Equity Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2010 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2015 Fund | |||
Schwab S&P 500 Index Fund | Schwab Target 2020 Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2025 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2030 Fund | |||
Schwab International Index Fund | Schwab Target 2035 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Target 2040 Fund | |||
Laudus International MarketMasters Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Balanced Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab Premier Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab Small-Cap Equity Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund-Maximum Payout | |||
The Schwab MarketTrack Portfolios are primarily “fund of funds”. Each of the funds seeks to achieve its investment objective by investing mainly in a combination of other Schwab Funds (underlying funds) in accordance with its target portfolio allocation. The funds may also invest directly in equity or fixed income securities, cash equivalents and futures to achieve their investment objectives. Each fund bears its share of the allocable expenses of the underlying funds in which they invest.
Schwab MarketTrack Growth Portfolio offers two share classes: Investor Shares and P Shares. Shares of each class represent an interest in the same fund, but each class has different expenses and investment minimums. Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio, each offer one share class.
Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”) which is the price for all outstanding shares of a fund or share class, as applicable. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the Securities Exchange Commission (“SEC”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Underlying funds: valued at their respective net asset values. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value.
35
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
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 the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted prices. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of October 31, 2011:
Schwab MarketTrack All Equity Portfolio
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $474,724,731 | $— | $— | $474,724,731 | ||||||||||||
Short-Term Investment(a) | — | 1,792,677 | — | 1,792,677 | ||||||||||||
Total | $474,724,731 | $1,792,677 | $— | $476,517,408 | ||||||||||||
36
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab MarketTrack Growth Portfolio
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $650,541,728 | $— | $— | $650,541,728 | ||||||||||||
Short-Term Investment(a) | — | 8,047,002 | — | 8,047,002 | ||||||||||||
Total | $650,541,728 | $8,047,002 | $— | $658,588,730 | ||||||||||||
Schwab MarketTrack Balanced Portfolio
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $428,079,256 | $— | $— | $428,079,256 | ||||||||||||
Short-Term Investment(a) | — | 4,355,392 | — | 4,355,392 | ||||||||||||
Total | $428,079,256 | $4,355,392 | $— | $432,434,648 | ||||||||||||
Schwab MarketTrack Conservative Portfolio
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $195,719,306 | $— | $— | $195,719,306 | ||||||||||||
Short-Term Investment(a) | — | 2,351,549 | — | 2,351,549 | ||||||||||||
Total | $195,719,306 | $2,351,549 | $— | $198,070,855 | ||||||||||||
* | The fund had no Other Financial Instruments. | |
(a) | As categorized in Portfolio Holdings. |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
(b) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
For funds offering multiple share classes, the net investment income, other than class specific expenses, and the realized and unrealized gains or losses, are allocated daily to each class in proportion to their average daily net assets.
37
Schwab MarketTrack Portfolios
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year, except for the Schwab MarketTrack Conservative Portfolio, which makes distributions from net investment income quarterly.
(f) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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.
(g) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year except for the Schwab MarketTrack Conservative Portfolio, which typically makes distributions at the end of every calendar quarter. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(h) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(i) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of a fund’s assets among the various asset classes and market segments will cause the funds to underperform other funds with a similar investment objective.
38
Schwab MarketTrack Portfolios
Financial Notes (continued)
3. Risk Factors (continued):
Market Risk. Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of an investment in the funds will fluctuate, which means that an investor could lose money.
Underlying Fund Investment Risk. The value of your investment in the funds is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although a fund’s exposure to a particular risk will be proportionate to the fund’s overall asset allocation and underlying fund allocation.
• | Investment Risk. An investment in an underlying fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective. | |
• | Investment Style Risk. The underlying funds seek to track the performance of various segments of the stock market, as measured by their respective indices. Each underlying fund follows these stocks during upturns as well as downturns. Because of their indexing strategy, the underlying funds do not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of an underlying fund’s expenses, the underlying fund’s performance is normally below that of the index. | |
• | Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time. | |
• | Tracking Error Risk. As an index fund, each underlying fund seeks to track the performance of its benchmark indices, although it may not be successful in doing so. The divergence between the performance of a fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant. | |
• | Large-Cap Risk. Many of the risks of the underlying funds are associated with their investment in the large-cap segments of the stock market. Large-cap stocks tend to go in and out of favor based on market and economic conditions. During a period when large-cap stocks fall behind other types of investments - bonds or mid- or small- cap stocks, for instance - an underlying fund’s large-cap holdings could reduce performance. | |
• | Small-Cap Risk. Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments - large-cap and mid-cap stocks, for instance - an underlying fund’s small-cap holdings could reduce performance. | |
• | Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. | |
• | Currency Risk. As a result of an underlying fund’s investments in securities denominated in, and/or receiving revenues in foreign currencies, the fund will be subject to currency risk. This is the risk that those currencies will decline in value relative to the U.S. dollar, or, in the case of hedging positions, that the U.S. dollar will decline in value relative to the currency hedged. In either event, the dollar value of an investment in a fund would be adversely affected. | |
• | Derivatives Risk. An underlying fund’s use of derivatives instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could cause the fund to lose more than the principal amount invested. |
39
Schwab MarketTrack Portfolios
Financial Notes (continued)
3. Risk Factors (continued):
• | Debt Securities Risk. Bond prices generally fall when interest rates rise. Bonds with longer maturities tend to be more sensitive to this risk. Underlying fund performance also could be affected if an issuer or guarantor of a bond held by a fund fails to make timely principal or interest payments or otherwise honor its obligations. Lower-quality bonds are considered speculative with respect to their issuer’s ability to make timely payments or otherwise honor their obligations. In addition, prices of lower-quality bonds tend to be more volatile than those of investment-grade bonds, and may fall based on bad news about the issuer, an industry or the overall economy. | |
• | Liquidity Risk. A particular investment may be difficult to purchase or sell. An underlying fund may be unable to sell illiquid securities at an advantageous time or price. | |
• | Securities Lending Risk. Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent. |
Direct Investment Risk. A fund may invest directly in individual securities to maintain its allocations. A fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same security.
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. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and the trust.
For its advisory and administrative services to each fund, CSIM is entitled to receive an annual fee of 0.23% payable monthly based on each fund’s average daily net assets.
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab) under the Plan. All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to 0.25% except for the Schwab MarketTrack Growth Portfolio’s P Shares, which is subject to such annual fee up to 0.10%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab (or, in the case of payments made to Schwab, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described above regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payments received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.
Although these agreements specify certain fees for these services, CSIM and Schwab have made an additional agreement (“expense limitation”) with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Investor Shares | 0.50% | 0.50% | 0.50% | 0.50% | ||||||||||||
P Shares* | n/a | 0.35% | n/a | n/a |
* | P Shares are currently only offered by Schwab MarketTrack Growth Portfolio |
40
Schwab MarketTrack Portfolios
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2011, the percentages of shares of other related funds owned by each Schwab MarketTrack Portfolio are:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Equity Funds: | ||||||||||||||||
International: | ||||||||||||||||
Schwab International Index Fund | 10.3% | 9.4% | 4.6% | 1.4% | ||||||||||||
Large-Cap: | ||||||||||||||||
Schwab S&P 500 Index Fund | 2.0% | 2.4% | 1.2% | 0.4% | ||||||||||||
Small-Cap: | ||||||||||||||||
Schwab Small-Cap Index Fund | 8.0% | 8.8% | 4.3% | 1.3% | ||||||||||||
Fixed-Income Funds: | ||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||
Schwab Total Bond Market Fund | —% | 10.8% | 16.6% | 11.9% | ||||||||||||
Money Market Fund: | ||||||||||||||||
Schwab Value Advantage Money Fund | —% | 0.1% | 0.1% | 0.0% | * |
* | Less than 0.05% |
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 2011.
Schwab MarketTrack All Equity Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 8,401,452 | 1,943,824 | (1,539,211 | ) | 8,806,065 | $141,073,166 | $334,625 | $4,173,679 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 11,775,575 | 623,096 | (1,593,620 | ) | 10,805,051 | 214,156,117 | (1,875,757 | ) | 4,174,704 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 6,355,194 | 816,006 | (1,356,336 | ) | 5,814,864 | 119,495,448 | 1,616,445 | 1,540,273 | ||||||||||||||||||||
Total | $474,724,731 | $75,313 | $9,888,656 | |||||||||||||||||||||||||
41
Schwab MarketTrack Portfolios
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab MarketTrack Growth Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 7,394,953 | 1,771,780 | (1,077,374 | ) | 8,089,359 | $129,591,530 | $120,194 | $3,617,204 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 13,732,839 | 819,034 | (1,255,249 | ) | 13,296,624 | 263,539,078 | 422,199 | 4,865,275 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 6,678,878 | 1,373,401 | (1,601,373 | ) | 6,450,906 | 132,566,110 | 3,062,849 | 1,618,665 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 10,027,378 | 4,349,965 | (3,915,350 | ) | 10,461,993 | 99,807,417 | (386,265 | ) | 2,928,857 | |||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 23,018,711 | 2,018,882 | — | 25,037,593 | 25,037,593 | — | 17,417 | |||||||||||||||||||||
Total | $650,541,728 | $3,218,977 | $13,047,418 | |||||||||||||||||||||||||
Schwab MarketTrack Balanced Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 3,918,369 | 1,033,418 | (996,140 | ) | 3,955,647 | $63,369,460 | $765,161 | $1,895,524 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 7,219,661 | 1,173,813 | (1,843,611 | ) | 6,549,863 | 129,818,275 | 1,068,260 | 2,531,772 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 3,537,995 | 1,013,423 | (1,403,015 | ) | 3,148,403 | 64,699,679 | 3,472,051 | 837,432 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 16,731,545 | 5,488,627 | (6,164,900 | ) | 16,055,272 | 153,167,293 | (621,997 | ) | 4,586,049 | |||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 15,012,203 | 2,012,346 | — | 17,024,549 | 17,024,549 | — | 11,394 | |||||||||||||||||||||
Total | $428,079,256 | $4,683,475 | $9,862,171 | |||||||||||||||||||||||||
42
Schwab MarketTrack Portfolios
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab MarketTrack Conservative Portfolio: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Schwab International Index Fund | 1,123,022 | 474,158 | (399,874 | ) | 1,197,306 | $19,180,841 | $240,479 | $543,011 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Schwab S&P 500 Index Fund | 2,098,017 | 628,376 | (736,741 | ) | 1,989,652 | 39,434,907 | 812,669 | 720,337 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Schwab Small-Cap Index Fund | 1,015,787 | 423,537 | (482,032 | ) | 957,292 | 19,672,347 | 938,697 | 238,430 | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Total Bond Market Fund | 11,315,522 | 3,325,845 | (3,100,732 | ) | 11,540,635 | 110,097,658 | (572,365 | ) | 3,115,649 | |||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 7,327,572 | 5,981 | — | 7,333,553 | 7,333,553 | — | 5,513 | |||||||||||||||||||||
Total | $195,719,306 | $1,419,480 | $4,622,940 | |||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains from the underlying funds. |
The funds may also let a related party own shares of the funds. As of October 31, 2011, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab MarketTrack Growth Portfolio is 14.7%.
The funds may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, the funds had no direct security transactions with other Schwab Funds.
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for each fund.
6. Board of Trustees:
Trustees 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 trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
43
Schwab MarketTrack Portfolios
Financial Notes (continued)
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab MarketTrack All Equity Portfolio | $61,688,656 | $86,600,000 | ||||||
Schwab MarketTrack Growth Portfolio | 113,568,749 | 112,900,000 | ||||||
Schwab MarketTrack Balanced Portfolio | 112,062,983 | 140,230,000 | ||||||
Schwab MarketTrack Conservative Portfolio | 58,928,268 | 60,335,000 |
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Schwab MarketTrack All Equity Portfolio | $100,836 | $9,734 | ||||||
Schwab MarketTrack Growth Portfolio | 9,915 | 14,346 | ||||||
Schwab MarketTrack Balanced Portfolio | 5,707 | 4,075 | ||||||
Schwab MarketTrack Conservative Portfolio | 10,851 | 3,235 |
10. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Undistributed ordinary income | $— | $— | $1,914,160 | $175,221 | ||||||||||||
Undistributed long-term capital gains | — | — | — | — | ||||||||||||
Unrealized appreciation on investments | 34,781,383 | 130,377,765 | 82,426,546 | 23,702,887 | ||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | ||||||||||||
Net unrealized appreciation/(depreciation) | $34,781,383 | $130,377,765 | $82,426,546 | $23,702,887 | ||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
44
Schwab MarketTrack Portfolios
Financial Notes (continued)
10. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Expiration Date | Portfolio* | Portfolio | Portfolio | Portfolio | ||||||||||||
October 31, 2016 | $11,526,446 | $— | $— | $— | ||||||||||||
October 31, 2017 | 31,279,738 | 29,935,589 | 14,597,486 | 11,042,838 | ||||||||||||
October 31, 2018 | 8,349,147 | 918,434 | — | — | ||||||||||||
Total | $51,155,331 | $30,854,023 | $14,597,486 | $11,042,838 | ||||||||||||
For the year ended October 31, 2011, the funds had capital losses utilized as follows:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio* | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital losses utilized | $988,013 | $4,153,324 | $4,538,084 | $1,732,221 |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Current period distributions | ||||||||||||||||
Ordinary income | $9,214,430 | $9,760,444 | $7,870,626 | $3,583,353 | ||||||||||||
Long-term capital gains | — | — | — | — | ||||||||||||
Return of capital | — | — | — | — | ||||||||||||
Prior period distributions | ||||||||||||||||
Ordinary income | $6,503,913 | $12,081,836 | $9,784,254 | $3,682,697 | ||||||||||||
Long-term capital gains | — | — | — | — | ||||||||||||
Return of capital | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
45
Schwab MarketTrack Portfolios
Financial Notes (continued)
10. Federal Income Taxes (continued):
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | |||||||||||||
MarketTrack | MarketTrack | MarketTrack | MarketTrack | |||||||||||||
All Equity | Growth | Balanced | Conservative | |||||||||||||
Portfolio | Portfolio | Portfolio | Portfolio | |||||||||||||
Capital shares | ($2,129,528 | ) | ($256,476 | ) | $— | $— | ||||||||||
Undistributed net investment income | 2,134,233 | 256,476 | — | — | ||||||||||||
Net realized capital gains/(losses) | (4,705 | ) | — | — | — |
* | During 2011, Schwab MarketTrack All Equity Portfolio changed its tax year end from December 31st to October 31st. |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
46
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab MarketTrack All Equity Portfolio
Schwab MarketTrack Growth Portfolio
Schwab MarketTrack Balanced Portfolio
Schwab MarketTrack Conservative Portfolio
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio, and Schwab MarketTrack Conservative Portfolio (four of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2011 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
47
Other Federal Tax Information (unaudited)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab MarketTrack All Equity Portfolio | 82.28 | ||||
Schwab MarketTrack Growth Portfolio | 68.13 | ||||
Schwab MarketTrack Balanced Portfolio | 41.66 | ||||
Schwab MarketTrack Conservative Portfolio | 26.18 |
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under 1(h)(ii) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Schwab MarketTrack All Equity Portfolio | $3,211,774 | |||
Schwab MarketTrack Growth Portfolio | 9,757,149 | |||
Schwab MarketTrack Balanced Portfolio | 5,118,578 | |||
Schwab MarketTrack Conservative Portfolio | 1,442,723 |
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Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”)requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab MarketTrack All Equity Portfolio, Schwab MarketTrack Growth Portfolio, Schwab MarketTrack Balanced Portfolio and Schwab MarketTrack Conservative Portfolio (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition
49
of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. The Funds had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Funds. These factors varied from, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with each Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
50
Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
51
Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
52
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all U.S. equity securities with readily available prices.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
Russell 1000 Index An index that measures the performance of the large-cap segment of the U.S. equity universe.
Russell 2000 Index An index that measures the performance of the small-cap segment of the U.S. equity universe.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
54
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THIS IS NOT PART OF THE SHAREHOLDER REPORT
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Notes
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large* Company Index Fund
Schwab Fundamental US Small-Mid* Company Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab® Premier Income Fund
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Investment Adviser
Charles Schwab Investment Management, Inc.
211 Main Street, San Francisco, CA 94105
Funds
Schwab Funds®
P.O. Box 3812, Englewood, CO 80155–3812
This report is not authorized for distribution to prospective investors
unless preceded or accompanied by a current prospectus.
© 2011 Charles Schwab & Co., Inc. All rights reserved.
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MFR13813-14
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Annual report dated October 31, 2011, enclosed.
Schwab Active Equity Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core
Equity Fund
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This wrapper is not part of the shareholder report.
Schwab Active Equity Funds
Annual Report
October 31, 2011
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core
Equity Fund
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This page is intentionally left blank.
Schwab Active Equity Funds
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Schwab Premier Equity Fund® | 6 | |
Schwab Core Equity Fund™ | 8 | |
Schwab Dividend Equity Fund™ | 10 | |
Schwab Large-Cap Growth Fund™ | 12 | |
Schwab Small-Cap Equity Fund™ | 14 | |
Schwab Hedged Equity Fund™ | 16 | |
Schwab Financial Services Fund™ | 18 | |
Schwab Health Care Fund™ | 20 | |
Schwab® International Core Equity Fund | 22 | |
Fund Expenses | 24 | |
Financial Statements and Portfolio Holdings | ||
Schwab Premier Equity Fund® | 25 | |
Schwab Core Equity Fund™ | 32 | |
Schwab Dividend Equity Fund™ | 39 | |
Schwab Large-Cap Growth Fund™ | 46 | |
Schwab Small-Cap Equity Fund™ | 53 | |
Schwab Hedged Equity Fund™ | 61 | |
Schwab Financial Services Fund™ | 70 | |
Schwab Health Care Fund™ | 76 | |
Schwab® International Core Equity Fund | 82 | |
Financial Notes | 91 | |
Report of Independent Registered Public Accounting Firm | 108 | |
Other Federal Tax Information | 109 | |
Investment Advisory Agreement Approval | 110 | |
Trustees and Officers | 112 | |
Glossary | 115 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for | ||
the Report Period | ||
Schwab Premier Equity Fund® | ||
(Ticker Symbol: SWPSX) | 6.74% | |
S&P 500® Index | 8.09% | |
Fund Category: Morningstar Large-Cap Blend | 5.33% | |
Performance Details | pages 6-7 | |
Schwab Core Equity Fundtm | ||
(Ticker Symbol: SWANX) | 7.60% | |
S&P 500® Index | 8.09% | |
Fund Category: Morningstar Large-Cap Blend | 5.33% | |
Performance Details | pages 8-9 | |
Schwab Dividend Equity Fundtm | ||
(Ticker Symbol: SWDSX) | 10.73% | |
S&P 500® Index | 8.09% | |
Fund Category: Morningstar Large-Cap Value | 5.07% | |
Performance Details | pages 10-11 | |
Schwab Large-Cap Growth Fundtm | ||
(Ticker Symbol: SWLSX) | 7.25% | |
Russell 1000 Growth Index | 9.92% | |
Fund Category: Morningstar Large-Cap Growth | 6.33% | |
Performance Details | pages 12-13 | |
Schwab Small-Cap Equity Fundtm | ||
(Ticker Symbol: SWSCX) | 11.82% | |
Russell 2000® Index | 6.71% | |
Fund Category: Morningstar Small-Cap Blend | 6.60% | |
Performance Details | pages 14-15 | |
Schwab Hedged Equity Fundtm | ||
(Ticker Symbol: SWHEX) | 3.58% | |
S&P 500® Index | 8.09% | |
Fund Category: Morningstar Long-Short | -0.50% | |
Performance Details | pages 16-17 | |
Schwab Financial Services Fundtm | ||
(Ticker Symbol: SWFFX) | -5.51% | |
S&P 1500 SuperComposite Financials Sector Index | -4.69% | |
Fund Category: Morningstar Financial Services | -6.80% | |
Performance Details | pages 18-19 | |
Schwab Health Care Fundtm | ||
(Ticker Symbol: SWHFX)1 | 13.00% | |
Dow Jones Global Health Care Index | 7.72% | |
Fund Category: Morningstar Health Care | 9.09% | |
Performance Details | pages 20-21 | |
Schwab® International Core Equity Fund | ||
(Ticker Symbol: SICNX)1 | -3.89% | |
MSCI EAFE Index®* | -3.64% | |
Fund Category: Morningstar Foreign Large-Cap Blend | -6.43% | |
Performance Details | pages 22-23 | |
Minimum Initial Investment2 | $100 | |
All fund and index 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
* | The Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE Index®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs. |
1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations, see financial note 2 for more information. |
2 | Please see prospectus for further details and eligibility requirements. |
2 Schwab Active Equity Funds
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst01.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Active Equity Funds 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab Active Equity Funds. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Active Equity Funds
Fund Management
![]() | Larry Mano, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds, except for the Schwab International Core Equity Fund. Prior to joining the firm in November 1998, he worked for 20 years in equity management. | |
![]() | Paul Alan Davis, CFA, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds. Prior to joining the firm in 2003, he worked for more than 12 years in portfolio management. |
Schwab Active Equity Funds 5
Schwab Premier Equity Fund®
The Schwab Premier Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in U.S. common stocks. The fund generally seeks to invest in the stocks of approximately 100 companies, but it may hold fewer or more stocks at a particular time. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 6.74% for the 12 months ended October 31, 2011, while its comparative index, the S&P 500 Index (the index), returned 8.09%.
During the review period, although tepid economic growth continued in the United States, stocks garnered positive investment returns. Nearly all sectors of the U.S. stock market generated positive investment returns, with the notable exception of the Financials sector.
Stocks with total stock-market values over $150 billion—those with the largest market capitalizations (market cap)—made up nearly one quarter of the index. These large cap stocks generated better investment returns than stocks with smaller market caps. In addition, stocks with higher growth characteristics, as measured by their market price relative to their book values, generally had better returns than stocks with lower price-to-book value ratios.
The fund allocated less of its assets to the largest market cap stocks and higher growth stocks, which had a negative affect on its investment performance relative to the index. However, the fund’s sector weightings compared with those of the index helped the fund’s performance modestly. For example, the fund had a larger allocation in the Utility sector and an underweight allocation to the poorly performing Financials sector, which enhanced the fund’s performance. By comparison, the fund’s greater exposure to the Materials and Industrials sectors compared with the index detracted from relative performance, as these sectors finished toward the middle and bottom half of the performance spectrum, respectively.
Stock selection in the fund’s mid-cap stocks—those with $5 to $10 billion in market cap—subtracted from the fund’s performance compared with that of the index, but the fund’s market cap weightings compared with the index helped performance, overall.
As of 10/31/11:
Statistics
Number of Holdings | 102 | |
Weighted Average Market Cap ($ x 1,000,000) | $36,735 | |
Price/Earnings Ratio (P/E) | 14.7 | |
Price/Book Ratio (P/B) | 1.7 | |
Portfolio Turnover Rate | 77% |
Sector Weightings % of Investments
Information Technology | 17.0% | |
Health Care | 14.5% | |
Financials | 11.5% | |
Energy | 10.4% | |
Consumer Staples | 10.0% | |
Consumer Discretionary | 9.0% | |
Industrials | 8.5% | |
Materials | 6.5% | |
Utilities | 6.4% | |
Telecommunication Services | 3.0% | |
Other | 3.2% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Humana, Inc. | 1.3% | |
Macy’s, Inc. | 1.3% | |
Chevron Corp. | 1.3% | |
American Financial Group, Inc. | 1.2% | |
McKesson Corp. | 1.2% | |
Tyson Foods, Inc., Class A | 1.2% | |
Alaska Air Group, Inc. | 1.2% | |
Tech Data Corp. | 1.2% | |
Valero Energy Corp. | 1.2% | |
Anadarko Petroleum Corp. | 1.2% | |
Total | 12.3% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Active Equity Funds
Schwab Premier Equity Fund®
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
March 21, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaeprem01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Premier Equity Fund® (3/21/05) | 6.74 | % | -2.08 | % | 1.87 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 2.88 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 2.51 | % |
Fund Expense Ratios4: Net 1.02%; Gross 1.03%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 7
Schwab Core Equity Fund™
The Schwab Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in U.S. stocks. The fund expects to hold the common stocks of U.S. companies that have market capitalizations of approximately $500 million or more. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 7.60% for the 12 months ended October 31, 2011, while its comparative index, the S&P 500 Index (the index), returned 8.09%.
During the review period, U.S. unemployment remained around 9% and uncertainty about the stability of global financial institutions continued. In this environment, Utilities, Energy, and Information Technology were the top performing sectors and, as the latter two sectors have large weights in the index, they provided a boost to index returns. Stocks with lower price-to-earnings ratios and lower price-to-book value ratios contributed more to the index’s return than those with higher ratios. Investment returns in the index generally spread evenly across market capitalization (market cap) groups within the index, from smaller to larger capitalization companies.
For the fund, active security selection generated positive results relative to the index in some areas and detracted in others. Security selection in the Information Technology sector, in stocks with low price-to-earnings ratios, and in smaller firms (those below $10 billion in market cap) detracted from the fund’s return relative to the index. Allocation among sectors also detracted from relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 135 | |
Weighted Average Market Cap ($ x 1,000,000) | $69,263 | |
Price/Earnings Ratio (P/E) | 14.0 | |
Price/Book Ratio (P/B) | 1.9 | |
Portfolio Turnover Rate | 35% |
Sector Weightings % of Investments
Information Technology | 19.4% | |
Financials | 15.1% | |
Energy | 13.4% | |
Health Care | 13.4% | |
Consumer Staples | 9.5% | |
Industrials | 9.1% | |
Consumer Discretionary | 8.0% | |
Telecommunication Services | 4.9% | |
Materials | 3.5% | |
Utilities | 2.7% | |
Other | 1.0% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
International Business Machines Corp. | 4.0% | |
Chevron Corp. | 3.1% | |
Wells Fargo & Co. | 3.0% | |
JPMorgan Chase & Co. | 3.0% | |
Verizon Communications, Inc. | 2.9% | |
Anadarko Petroleum Corp. | 2.4% | |
Bristol-Myers Squibb Co. | 2.3% | |
Tyson Foods, Inc., Class A | 2.1% | |
General Electric Co. | 2.0% | |
The Kroger Co. | 2.0% | |
Total | 26.8% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Active Equity Funds
Schwab Core Equity Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1
Performance of a Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaecore01.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Core Equity Fundtm (7/1/96) | 7.60 | % | -0.37 | % | 4.11 | % | |||||||||
S&P 500®Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Large-Cap Blend | 5.33 | % | -0.31 | % | 3.46 | % |
Fund Expense Ratio3: 0.74%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 9
Schwab Dividend Equity Fund™
The Schwab Dividend Equity Fund (the fund) seeks current income and capital appreciation. Under normal circumstances, the fund invests at least 80% of its net assets in dividend paying common and preferred stocks. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 10.73% for the 12 months ended October 31, 2011, while its comparative index, the S&P 500 Index (the index), returned 8.09%. As of the end of the period, the fund’s dividend yield and 30-Day SEC yield were 2.75% and 1.73%, respectively, while the index’s dividend yield was 2.14%.
As markets in the United States and most of the world weathered volatility and disappointing economic data, Utilities, Energy, and Information Technology sectors were the top performing sectors. As the latter two sectors have large weights in the index, they provided a boost to index returns. Stocks with lower price-to-earnings ratios and lower price-to-book value ratios contributed more to the index’s return than those with higher ratios. Investment returns in the index generally spread evenly across market capitalization (market cap) groups, from smaller to larger capitalization companies.
In this environment, investors generally added to their holdings in dividend-paying stocks, which increased the fund’s returns relative to its index. In addition, the fund’s active management approach benefited performance in most areas. Relative to the index, security selection generated positive investment results across a majority of the sectors and allocation among sectors also contributed to performance.
An overweight allocation to stocks with lower price-to-earnings ratios added to returns. Security selection that favored stocks with lower price-to-book ratios also added relative value, although security selection in stocks with low price-to-earnings ratios detracted from relative returns. The fund’s stock selections among smaller firms (those below $5 billion in market cap) and larger firms (those above $150 billion in market cap) detracted from return relative to the index, as these areas were generally the better-performing market cap groups in the index.
As of 10/31/11:
Statistics
Number of Holdings | 106 | |
Weighted Average Market Cap ($ x 1,000,000) | $70,666 | |
Price/Earnings Ratio (P/E) | 13.2 | |
Price/Book Ratio (P/B) | 2.0 | |
Portfolio Turnover Rate | 31% |
Sector Weightings % of Investments
Information Technology | 17.4% | |
Health Care | 13.0% | |
Energy | 12.0% | |
Financials | 11.9% | |
Consumer Staples | 10.2% | |
Industrials | 8.6% | |
Consumer Discretionary | 8.1% | |
Utilities | 6.5% | |
Telecommunication Services | 5.3% | |
Materials | 4.8% | |
Other | 2.2% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
International Business Machines Corp. | 3.7% | |
Chevron Corp. | 3.7% | |
Verizon Communications, Inc. | 2.8% | |
JPMorgan Chase & Co. | 2.8% | |
AT&T, Inc. | 2.5% | |
Bristol-Myers Squibb Co. | 2.2% | |
The Boeing Co. | 2.2% | |
Eli Lilly & Co. | 2.2% | |
Intel Corp. | 2.1% | |
DTE Energy Co. | 2.0% | |
Total | 26.2% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Active Equity Funds
Schwab Dividend Equity Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
September 2, 2003 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaedivd01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Dividend Equity Fundtm (9/2/03) | 10.73 | % | 0.46 | % | 6.31 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 4.78 | % | |||||||||
Fund Category: Morningstar Large-Cap Value | 5.07 | % | -1.44 | % | 4.55 | % |
Fund Expense Ratio4: 0.89%
Yields1
30-Day SEC Yield | 1.73% | |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Reflects the total annual operating expenses without contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 11
Schwab Large-Cap Growth Fund™
The Schwab Large-Cap Growth Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in U.S. common stocks. Under normal circumstances, the fund invests at least 80% of its net assets in large-cap stocks of U.S. companies. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 7.25% for the 12 months ended October 31, 2011, while its comparative index, the Russell 1000 Growth Index (the index), returned 9.92%.
Both sector emphasis and stock selection generally reduced the fund’s performance compared with that of the index. An allocation to stocks with lower price-to-earnings ratios slightly detracted from results, as did a larger allocation to stocks with lower price-to-book value ratios. The fund’s stock selections among smaller firms (those below $10 billion in market cap) and larger firms (those above $150 billion in market cap) detracted from its return relative to the index, as these areas were generally the better-performing market cap groups in the index.
The Utilities, Energy, and Consumer Discretionary sectors were the top performing sectors in the index. Stocks with lower to middle price-to-earnings ratios and middle price-to-book value ratios contributed more to the index’s return than other stocks.
As of 10/31/11:
Statistics
Number of Holdings | 102 | |
Weighted Average Market Cap ($ x 1,000,000) | $76,173 | |
Price/Earnings Ratio (P/E) | 13.7 | |
Price/Book Ratio (P/B) | 3.0 | |
Portfolio Turnover Rate | 62% |
Sector Weightings % of Investments
Information Technology | 29.1% | |
Consumer Discretionary | 12.5% | |
Consumer Staples | 12.1% | |
Health Care | 11.3% | |
Energy | 11.2% | |
Industrials | 10.2% | |
Materials | 7.0% | |
Financials | 3.9% | |
Telecommunication Services | 1.7% | |
Utilities | 0.1% | |
Other | 0.9% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
International Business Machines Corp. | 5.2% | |
Exxon Mobil Corp. | 4.4% | |
Apple, Inc. | 2.6% | |
The Boeing Co. | 2.5% | |
MasterCard, Inc., Class A | 2.4% | |
Dell, Inc. | 2.3% | |
Accenture plc, Class A | 2.3% | |
Herbalife Ltd. | 2.2% | |
PetSmart, Inc. | 2.1% | |
Microsoft Corp. | 2.1% | |
Total | 28.1% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Active Equity Funds
Schwab Large-Cap Growth Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 3, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaelcgr01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Large-Cap Growth Fundtm (10/3/05) | 7.25 | % | 0.65 | % | 2.26 | % | |||||||||
Russell 1000 Growth Index | 9.92 | % | 3.04 | % | 4.07 | % | |||||||||
Fund Category: Morningstar Large-Cap Growth | 6.33 | % | 1.77 | % | 2.87 | % |
Fund Expense Ratios4: Net 0.99%; Gross 1.04%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 7, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 13
Schwab Small-Cap Equity Fund™
The Schwab Small-Cap Equity Fund (the fund) seeks long-term capital growth. Under normal circumstances, the fund invests at least 80% of its net assets in small-cap equity securities. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 11.82% for the 12 months ended October 31, 2011, while its comparative index, the Russell 2000 Index (the index), returned 6.71%.
All sectors of the index posted positive returns for the 12-month period under review. The best-performing sectors included Consumer Staples, Energy, and Utilities; lagging sectors included Financials, Materials, and Telecommunication Services. Both the index and the fund are primarily comprised of stocks with total market values, or market capitalization (market cap), of less than $3 billion. Of those companies, the companies at the upper end of the market cap spectrum generally posted better investment results than those at the lower end.
The fund’s outperformance versus the index came primarily from active security selection in most areas of the portfolio. Security selection within certain sectors, particularly the Energy, Financials, Health Care, and Information Technology, contributed to performance markedly. Security selection detracted from performance only in two sectors, Consumer Staples and Materials. In stocks with market caps below $1.5 billion, security selection proved positive enough to make up for underperformance from stock selection in the range between $1.5 and $3 billion.
The fund allocated less of its net assets, relative to its index, to stocks with market caps between $1.5 billion to $3 billion and instead favored stocks below that level. In the end, this decision weighed on the fund’s investment results as the upper range of small-cap stocks finished the period as the best performing segment in the index. During the period, the fund maintained its overall sector weightings at levels close to the index. As a result, these weightings had only a minor impact on relative investment performance.
Relative to its index, the fund held underweight positions in stocks with certain growth characteristics, such as stocks with price-to-earnings ratios over 35. In contrast, the fund held an overweight position in stocks with price-to-book ratios below 2. Both of these positions detracted from performance. Nevertheless, security selection overall generated enough positive investment performance to make up for the effect of the underweights.
As of 10/31/11:
Statistics
Number of Holdings | 273 | |
Weighted Average Market Cap ($ x 1,000,000) | $1,180 | |
Price/Earnings Ratio (P/E) | 17.6 | |
Price/Book Ratio (P/B) | 1.6 | |
Portfolio Turnover Rate | 72% |
Sector Weightings % of Investments
Financials | 18.1% | |
Information Technology | 17.7% | |
Consumer Discretionary | 15.4% | |
Industrials | 14.4% | |
Health Care | 11.8% | |
Energy | 7.6% | |
Materials | 4.7% | |
Utilities | 3.5% | |
Consumer Staples | 2.3% | |
Telecommunication Services | 1.0% | |
Other | 3.5% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Select Comfort Corp. | 1.0% | |
Alaska Air Group, Inc. | 0.9% | |
Complete Production Services, Inc. | 0.9% | |
Pier 1 Imports, Inc. | 0.8% | |
Brunswick Corp. | 0.8% | |
Medicis Pharmaceutical Corp., Class A | 0.8% | |
Manhattan Associates, Inc. | 0.8% | |
FEI Co. | 0.8% | |
Sauer-Danfoss, Inc. | 0.8% | |
Southwest Gas Corp. | 0.8% | |
Total | 8.4% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small company stocks are subject to greater volatility than the broad market.
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Active Equity Funds
Schwab Small-Cap Equity Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
July 1, 2003 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaesceq01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Small-Cap Equity Fundtm (7/1/03) | 11.82 | % | -1.21 | % | 8.31 | % | |||||||||
Russell 2000® Index | 6.71 | % | 0.68 | % | 7.57 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | 6.60 | % | 0.77 | % | 7.59 | % |
Fund Expense Ratios4: Net 1.12%; Gross 1.13%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 15
Schwab Hedged Equity Fund™
The Schwab Hedged Equity Fund (the fund) seeks long-term capital appreciation over market cycles with lower volatility than the broad equity market. To pursue its investment objective, the fund will establish long and short positions in equity securities issued by U.S. companies. The fund typically purchases or sells short stocks of companies that have market capitalizations of $1 billion or more at the time the stock is purchased or sold short. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 3.58% for the 12 months ended October 31, 2011, while its comparative index, the S&P 500 Index (the index), returned 8.09%.
Disappointing economic data in the United States and sovereign debt worries in Europe coincided with high trading volatility in U.S. stock markets throughout most of the review period. Uncertainty about the stability of global financial institutions particularly roiled markets during the second half of the period.
Despite these events, nearly all sectors of the U.S. stock market generated positive investment returns, with the notable exception of the Financials sector. The Utilities and Energy sectors led the way in investment performance and gave a boost to index returns. Investment results in the index generally spread evenly across market cap groups, from smaller to larger capitalization companies, although the largest companies had the strongest showing.
Throughout the period, the fund held short positions of approximately 36% of net assets on average. In a rising stock market, this level of short positions detracted from returns relative to the index.
The fund’s underweight position in stocks with the largest total market values detracted from performance, as stocks above $150 billion in market cap outperformed the index overall. Compared to the index, the fund allocated more weight to small stocks with less than $5 billion in market cap on both the long and short side of the portfolio. This positioning detracted from performance in long positions but contributed to performance in short positions, as stocks in this size range underperformed the index.
Security selection in long positions in the Consumer Discretionary and Information Technology sectors proved negative for investment performance but security selection added to returns in the Financials and Health Care sectors.
As of 10/31/11:
Statistics
Number of Holdings | ||
Long Holdings | 114 | |
Short Positions | 74 | |
Weighted Average Market Cap ($ x 1,000,000) | ||
Long Holdings | $42,529 | |
Short Positions | $5,113 | |
Price/Earnings Ratio (P/E) | ||
Long Holdings | 14.1 | |
Short Positions | 190.3 | |
Price/Book Ratio (P/B) | ||
Long Holdings | 1.6 | |
Short Positions | 2.6 | |
Portfolio Turnover Rate | 98% | |
Portfolio Turnover Rate excluding short sales | 52% |
Top Equity Long Holdings
% of Net Assets1
International Business Machines Corp. | 3.1% | |
Chevron Corp. | 2.6% | |
Pfizer, Inc. | 2.3% | |
JPMorgan Chase & Co. | 2.2% | |
American Financial Group, Inc. | 1.9% | |
Total | 12.1% |
Top Equity Short Holdings
% of Net Assets1
iShares S&P 100 Index Fund | 2.3% | |
Universal Display Corp. | 0.8% | |
C.H. Robinson Worldwide, Inc. | 0.8% | |
Gentex Corp. | 0.8% | |
Allied Nevada Gold Corp. | 0.7% | |
Total | 5.4% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
16 Schwab Active Equity Funds
Schwab Hedged Equity Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
September 3, 2002 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaehegd01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Hedged Equity Fundtm (9/3/02) | 3.58 | % | -0.53 | % | 5.73 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 5.55 | % | |||||||||
Fund Category: Morningstar Long-Short | -0.50 | % | -0.50 | % | 5.22 | % |
Fund Expense Ratio4: 1.99%
The Hedged Equity Fund’s long positions can decline in value at the same time the value of its shorted stocks increases, thereby increasing the potential for loss. The potential loss associated with short positions is much greater than the original value of the securities sold. The use of borrowing and short sales may cause the fund to have higher expenses than those of equity funds that do not use such techniques.
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On September 28, 2009, the Investor Share class and Select Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Select Shares. Accordingly, the past performance shown is that of the fund’s former Select Shares. | |
4 | As stated in the prospectus. Includes dividend expense on securities sold short. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 17
Schwab Financial Services Fund™
The Schwab Financial Services Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in equity securities issued by companies in the financial services sector. To aid its stock selection, the fund uses Schwab Equity Ratings®. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -5.51% for the 12 months ended October 31, 2011, while its comparative index, the S&P 1500 SuperComposite Financials Sector Index (the index), returned -4.69%.
The financial services sector of the U.S. stock market delivered negative investment performance as slow economic growth continued in the United States and most of the world. Financial companies struggled to boost their businesses as unemployment in the United States remained around 9% and uncertainty about the stability of global financial institutions roiled stock and bond markets.
The negative economic environment weighed on investment results in the Financials sector. The three largest industries within the index posted negative investment returns, including Diversified Financials, Regional Banks, and Life & Health Insurance. Investment Banking, a smaller sector, was the worst performing sector in the index. Consumer Finance and Specialized REITs delivered positive returns.
In the fund, security selection in the Regional Banks sector detracted from investment results relative to the index. The fund had an overweight allocation to the positively performing Consumer Finance category but its stock selections underperformed the index’s securities in this sector. An underweight allocation to stocks with the highest price-to-earnings ratios hurt performance, as this group delivered strong returns during the period, and stock selection here also detracted. The fund benefited from both its underweight allocation compared to the index to one of the worst performing sectors, Diversified Financials, and to its stock selection in this category. In the Investment Banking sector, the fund’s lower weighting and stock selection helped investment results. Compared to the index, the fund had a higher allocation to smaller-capitalization stocks, those below $5 billion in total market value, and, coupled with security selection, returns here proved positive.
As of 10/31/11:
Statistics
Number of Holdings | 68 | |
Weighted Average Market Cap ($ x 1,000,000) | $32,983 | |
Price/Earnings Ratio (P/E) | 13.7 | |
Price/Book Ratio (P/B) | 1.0 | |
Portfolio Turnover | 77% |
Industry Weightings % of Investments
Diversified Financials | 34.3% | |
Insurance | 27.4% | |
Banks | 22.2% | |
Real Estate | 15.1% | |
Short Term Investment | 1.0% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
JPMorgan Chase & Co. | 6.8% | |
Wells Fargo & Co. | 6.3% | |
Berkshire Hathaway, Inc., Class B | 4.5% | |
American Express Co. | 3.8% | |
Capital One Financial Corp. | 3.7% | |
Fifth Third Bancorp | 3.2% | |
The NASDAQ OMX Group, Inc. | 3.0% | |
American Financial Group, Inc. | 3.0% | |
SLM Corp. | 2.8% | |
Legg Mason, Inc. | 2.7% | |
Total | 39.8% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector and Industry Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
18 Schwab Active Equity Funds
Schwab Financial Services Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1
Performance of a Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaefins01.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Financial Services Fundtm (7/3/00) | -5.51 | % | -9.07 | % | 1.71 | % | |||||||||
S&P 1500 SuperComposite Financials Sector Index | -4.69 | % | -14.29 | % | -2.42 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Financial Services | -6.80 | % | -8.87 | % | 0.57 | % |
Fund Expense Ratios3: Net 0.94%; Gross 1.04%
Since the Financial Services Fund focuses its investments on companies involved in specific sectors, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 19
Schwab Health Care Fund™
The Schwab Health Care Fund (the fund) seeks long-term capital growth. To pursue its goal, the fund primarily invests in equity securities issued by companies in the health care sector. The fund uses Schwab Equity Ratings® to aid its U.S. stock selection and Schwab’s proprietary international stock research to aid its international stock selection. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 13.00% for the 12 months ended October 31, 2011, while its comparative index, the Dow Jones Global Health Care Index (the index), returned 7.72%.
In the United States and most of the world, economic growth remained sluggish. During the second half of the review period, uncertainty about the stability of global financial institutions roiled stock markets. As investors and governments focused on these concerns, some of the political headwinds that often affect health care stocks abated.
The index is heavily weighted to its three largest industries, Pharmaceuticals, Biotechnology, and Health Care Equipment, with Pharmaceuticals alone making up 60% of the index. All three areas registered positive investment results. Except for the two largest companies in the index, Pfizer and Johnson & Johnson, health care stocks generally posted positive investment returns.
In the fund, security selection was the primary driver of returns, especially in Biotechnology, which strongly outperformed the index in this category. The fund also benefited from its underweight allocation to companies with over $150 billion in market cap. On the other hand, an underweight to the next size category of stocks, the $100 to $150 billion range, detracted from relative performance. The fund added to performance over the index with its position in several stocks with total market caps of less than $5 billion, which were not included in the index.
Compared to its index, the fund’s higher allocation to U.S. stocks added to its relative performance, as international health care stocks generally underperformed those of the United States during this period. Nevertheless, the fund’s underweight to equities in the United Kingdom and Canada detracted from returns compared to the index.
The fund’s greater allocation to Biotechnology stocks versus Pharmaceuticals added to relative performance. Otherwise, allocations to industries were neutral in their effect on relative performance overall, with positive results from underweights to Pharmaceuticals and Health Care Services offsetting negative results from overweights to Life Sciences Tools and Services and Health Care Distributors.
As of 10/31/11:
Statistics
Number of Holdings | 82 | |
Weighted Average Market Cap ($ x 1,000,000) | $50,119 | |
Price/Earnings Ratio (P/E) | 16.2 | |
Price/Book Ratio (P/B) | 2.4 | |
Portfolio Turnover | 24% |
Industry Weightings % of Investments
Pharmaceuticals, Biotechnology& Life Sciences | 70.3% | |
Health Care - Services Materials | 26.8% | |
Short-Term Investments | 2.9% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Johnson & Johnson | 5.1% | |
Pfizer, Inc. | 4.1% | |
Bristol-Myers Squibb Co. | 4.1% | |
Amgen, Inc. | 4.1% | |
Sanofi | 3.5% | |
Merck & Co., Inc. | 3.5% | |
Eli Lilly & Co. | 3.2% | |
Biogen Idec, Inc. | 3.1% | |
UnitedHealth Group, Inc. | 3.1% | |
Roche Holding AG | 2.9% | |
Total | 36.7% |
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Manager views and portfolio holdings may have changed since the report date.
Source of Sector and Industry Classification: S&P and MSCI.
1 | This list is not a recommendation of any security by the investment adviser. |
20 Schwab Active Equity Funds
Schwab Health Care Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1
Performance of a Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctaehlth01.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Health Care Fundtm (7/3/00) | 13.00 | % | 3.76 | % | 7.29 | % | |||||||||
Dow Jones Global Health Care Index | 7.72 | % | 2.36 | % | 3.78 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Fund Category: Morningstar Health Care | 9.09 | % | 3.39 | % | 4.12 | % |
Fund Expense Ratios3: Net 0.82%; Gross 0.86%
Since the Health Care Fund focuses its investments on companies involved in specific sectors, this fund may involve a greater degree of risk than an investment in mutual funds that do not concentrate their investments.
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 21
Schwab® International Core Equity Fund
The Schwab International Core Equity Fund (the fund) seeks long-term capital growth. To pursue its investment objective, the fund invests primarily in the stocks of publicly traded companies located in developed countries excluding the United States. To aid its stock selection, the fund uses Schwab’s proprietary international stock research. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -3.89% for the 12 months ended October 31, 2011, while its comparative index, the MSCI EAFE Index (the index), returned -3.64%. A part of the fund’s underperformance was attributed to timing differences in foreign exchange calculations.* Fair valuation of the fund’s holdings on the last trading day of the current period also reduced the fund’s relative performance (please see financial note 2 for more information).
For the index, investment performance benefited from stocks’ rising values across countries including the United Kingdom, Switzerland, Ireland, and New Zealand. On the other hand, stocks produced negative returns in Japan, France, Germany, Hong Kong, Netherlands, and Italy. Stocks with total stock-market values between $100 and $150 billion—those with large market capitalizations (market cap)—generated positive investment returns, while all other market cap categories delivered negative returns. In addition, stocks with higher growth characteristics, as measured by their market price relative to their book values, generally had better investment performance than stocks with lower price-to-book value ratios.
In the European region, the fund held better-performing stocks than its index, which proved positive for the fund, but the fund’s overall allocation to Europe over the period detracted. Security selection in stocks in the Asia Pacific region also boosted the fund’s relative investment performance. In the Americas, the fund’s holdings in Canada, a country that is not in the index, performed poorly and reduced relative return. In addition, the fund held stocks in Brazil and Mexico that are not included in the index and these proved positive for investment results.
The fund’s security selection generated positive results compared to the index in the Energy, Financials, Industrial, and Consumer Discretionary sectors. The fund’s underweight allocation to Consumer Staples detracted from performance, but an underweight to the poorly performing Financials sector helped.
As of 10/31/11:
Statistics
Number of Holdings | 168 | |
Weighted Average Market Cap ($ x 1,000,000) | $25,627 | |
Price/Earnings Ratio (P/E) | 13.4 | |
Price/Book Ratio (P/B) | 1.2 | |
Portfolio Turnover Rate | 86% |
Sector Weightings % of Investments
Financials | 19.1% | |
Industrials | 16.1% | |
Consumer Discretionary | 11.0% | |
Health Care | 11.0% | |
Materials | 10.2% | |
Energy | 8.4% | |
Information Technology | 8.0% | |
Consumer Staples | 7.1% | |
Telecommunication Services | 4.1% | |
Utilities | 3.0% | |
Other | 2.0% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Total S.A. | 1.8% | |
BHP Billition Ltd. | 1.6% | |
Vodafone Group plc | 1.6% | |
iShares MSCI EAFE Index Fund | 1.5% | |
Roche Holding AG | 1.5% | |
AstraZeneca plc | 1.4% | |
Royal Dutch Shell plc, B Shares | 1.3% | |
Sanofi | 1.3% | |
Rio Tinto plc | 1.2% | |
Bayer AG - Reg’d | 1.1% | |
Total | 14.3% |
Manager views and portfolio holdings may have changed since the report date.
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Source of Sector Classification: S&P and MSCI.
Foreign securities can involve risks such as political and economic instability and currency risk.
* | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
22 Schwab Active Equity Funds
Schwab® International Core Equity Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
May 30, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcoreeq01.gif)
Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab® International Core Equity Fund (5/30/08) | -3.89 | % | 10.05 | % | -7.00 | % | |||||||||
MSCI EAFE Index®* | -3.64 | % | 10.42 | % | -6.67 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Blend | -6.43 | % | 9.84 | % | -7.78 | % |
Fund Expense Ratios4: Net 0.87%; Gross 1.27%
Country Weightings % of Equity Investments
United Kingdom | 20.4% | |||
Japan | 19.0% | |||
France | 8.4% | |||
Germany | 6.2% | |||
Australia | 5.5% | |||
Switzerland | 5.5% | |||
Hong Kong | 5.4% | |||
Sweden | 2.6% | |||
Austria | 2.6% | |||
Netherlands | 2.5% | |||
Other Countries | 21.9% | |||
Total | 100.0% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | The Morgan Stanley Capital International Europe, Australasia, Far East Index (MSCI EAFE Index®) is a free float-adjusted market capitalization index that is designed to measure market equity performance in 22 developed market countries, excluding the U.S. and Canada. Investors cannot invest directly in any index and index figures do not include trading and management costs. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 7, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. On December 3, 2009, the Laudus Rosenberg International Equity Fund merged into the fund. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Active Equity Funds 23
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab Premier Equity Fund® | ||||||||||||||||
Actual Return | 1.02% | $ | 1,000 | $ | 877.80 | $ | 4.83 | |||||||||
Hypothetical 5% Return | 1.02% | $ | 1,000 | $ | 1,020.06 | $ | 5.19 | |||||||||
Schwab Core Equity Fundtm | ||||||||||||||||
Actual Return | 0.73% | $ | 1,000 | $ | 902.80 | $ | 3.50 | |||||||||
Hypothetical 5% Return | 0.73% | $ | 1,000 | $ | 1,021.53 | $ | 3.72 | |||||||||
Schwab Dividend Equity Fundtm | ||||||||||||||||
Actual Return | 0.89% | $ | 1,000 | $ | 943.20 | $ | 4.36 | |||||||||
Hypothetical 5% Return | 0.89% | $ | 1,000 | $ | 1,020.72 | $ | 4.53 | |||||||||
Schwab Large-Cap Growth Fundtm | ||||||||||||||||
Actual Return | 0.99% | $ | 1,000 | $ | 911.20 | $ | 4.77 | |||||||||
Hypothetical 5% Return | 0.99% | $ | 1,000 | $ | 1,020.21 | $ | 5.04 | |||||||||
Schwab Small-Cap Equity Fundtm | ||||||||||||||||
Actual Return | 1.11% | $ | 1,000 | $ | 885.40 | $ | 5.27 | |||||||||
Hypothetical 5% Return | 1.11% | $ | 1,000 | $ | 1,019.61 | $ | 5.65 | |||||||||
Schwab Hedged Equity Fundtm | ||||||||||||||||
Actual Return | 1.88% | $ | 1,000 | $ | 936.40 | $ | 9.18 | |||||||||
Hypothetical 5% Return | 1.88% | $ | 1,000 | $ | 1,015.73 | $ | 9.55 | |||||||||
Schwab Financial Services Fundtm | ||||||||||||||||
Actual Return | 0.94% | $ | 1,000 | $ | 842.10 | $ | 4.36 | |||||||||
Hypothetical 5% Return | 0.94% | $ | 1,000 | $ | 1,020.47 | $ | 4.79 | |||||||||
Schwab Health Care Fundtm | ||||||||||||||||
Actual Return | 0.80% | $ | 1,000 | $ | 949.50 | $ | 3.93 | |||||||||
Hypothetical 5% Return | 0.80% | $ | 1,000 | $ | 1,021.17 | $ | 4.08 | |||||||||
Schwab® International Core Equity Fund | ||||||||||||||||
Actual Return | 0.75% | $ | 1,000 | $ | 852.20 | $ | 3.50 | |||||||||
Hypothetical 5% Return | 0.75% | $ | 1,000 | $ | 1,021.42 | $ | 3.82 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
24 Schwab Active Equity Funds
Schwab Premier Equity Fund®
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/081– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.67 | 8.46 | 8.05 | 14.01 | 12.51 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.07 | 0.04 | 0.04 | 0.06 | 0.04 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.58 | 1.22 | 0.43 | (5.11 | ) | 1.48 | ||||||||||||||||
Total from investment operations | 0.65 | 1.26 | 0.47 | (5.05 | ) | 1.52 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.05 | ) | (0.05 | ) | (0.06 | ) | (0.05 | ) | (0.02 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.86 | ) | — | ||||||||||||||||
Total distributions | (0.05 | ) | (0.05 | ) | (0.06 | ) | (0.91 | ) | (0.02 | ) | ||||||||||||
Net asset value at end of period | 10.27 | 9.67 | 8.46 | 8.05 | 14.01 | |||||||||||||||||
Total return (%) | 6.74 | 14.96 | 6.01 | (38.32 | ) | 12.20 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.01 | 2 | 1.02 | 1.04 | 3 | 1.02 | 1.01 | |||||||||||||||
Gross operating expenses | 1.04 | 1.04 | 1.04 | 1.02 | 1.01 | |||||||||||||||||
Net investment income (loss) | 0.65 | 0.34 | 0.54 | 0.50 | 0.32 | |||||||||||||||||
Portfolio turnover rate | 77 | 80 | 98 | 92 | 72 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 235 | 292 | 365 | 441 | 983 |
1 Effective September 28, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 The ratio of net operating expenses would have been 1.02%, if payment for state filing fees had not been included. (See financial note 11)
3 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
See financial notes 25
Schwab Premier Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .6% | Common Stock | 214,728,031 | 227,229,480 | ||||||||
3 | .0% | Other Investment Company | 6,955,881 | 6,955,881 | ||||||||
0 | .3% | Short-Term Investment | 700,000 | 700,000 | ||||||||
99 | .9% | Total Investments | 222,383,912 | 234,885,361 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 330,172 | |||||||||
100 | .0% | Total Net Assets | 235,215,533 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.6% of net assets | ||||||||
Automobiles & Components 2.6% | ||||||||
Ford Motor Co. * | 210,000 | 2,452,800 | ||||||
The Goodyear Tire & Rubber Co. * | 170,000 | 2,441,200 | ||||||
TRW Automotive Holdings Corp. * | 27,000 | 1,136,700 | ||||||
6,030,700 | ||||||||
Banks 3.4% | ||||||||
Commerce Bancshares, Inc. | 37,000 | 1,435,600 | ||||||
Fifth Third Bancorp | 165,000 | 1,981,650 | ||||||
U.S. Bancorp | 75,000 | 1,919,250 | ||||||
Wells Fargo & Co. | 105,000 | 2,720,550 | ||||||
8,057,050 | ||||||||
Capital Goods 5.2% | ||||||||
AGCO Corp. * | 42,000 | 1,840,860 | ||||||
Cubic Corp. | 30,000 | 1,413,600 | ||||||
General Electric Co. | 164,000 | 2,740,440 | ||||||
KBR, Inc. | 65,000 | 1,814,150 | ||||||
Parker Hannifin Corp. | 25,000 | 2,038,750 | ||||||
The Boeing Co. | 35,000 | 2,302,650 | ||||||
12,150,450 | ||||||||
Consumer Services 0.9% | ||||||||
Hyatt Hotels Corp., Class A * | 54,000 | 2,008,260 | ||||||
Diversified Financials 5.0% | ||||||||
American Express Co. | 40,000 | 2,024,800 | ||||||
Capital One Financial Corp. | 53,000 | 2,419,980 | ||||||
Interactive Brokers Group, Inc., Class A | 173,000 | 2,660,740 | ||||||
JPMorgan Chase & Co. | 73,000 | 2,537,480 | ||||||
SLM Corp. | 151,000 | 2,064,170 | ||||||
11,707,170 | ||||||||
Energy 10.4% | ||||||||
Anadarko Petroleum Corp. | 36,000 | 2,826,000 | ||||||
Apache Corp. | 25,000 | 2,490,750 | ||||||
Chevron Corp. | 28,000 | 2,941,400 | ||||||
Exxon Mobil Corp. | 34,000 | 2,655,060 | ||||||
Hess Corp. | 43,000 | 2,690,080 | ||||||
Murphy Oil Corp. | 42,000 | 2,325,540 | ||||||
Oceaneering International, Inc. | 55,000 | 2,300,650 | ||||||
SEACOR Holdings, Inc. | 13,000 | 1,106,950 | ||||||
Sunoco, Inc. | 62,000 | 2,308,260 | ||||||
Valero Energy Corp. | 117,000 | 2,878,200 | ||||||
24,522,890 | ||||||||
Food & Staples Retailing 6.0% | ||||||||
Costco Wholesale Corp. | 26,000 | 2,164,500 | ||||||
CVS Caremark Corp. | 62,000 | 2,250,600 | ||||||
Ruddick Corp. | 62,000 | 2,710,020 | ||||||
Safeway, Inc. | 75,000 | 1,452,750 | ||||||
The Kroger Co. | 118,000 | 2,735,240 | ||||||
Whole Foods Market, Inc. | 39,000 | 2,812,680 | ||||||
14,125,790 | ||||||||
Food, Beverage & Tobacco 3.9% | ||||||||
Bunge Ltd. | 20,000 | 1,235,400 | ||||||
Constellation Brands, Inc., Class A * | 123,000 | 2,487,060 | ||||||
Corn Products International, Inc. | 54,000 | 2,619,000 | ||||||
Tyson Foods, Inc., Class A | 152,000 | 2,933,600 | ||||||
9,275,060 | ||||||||
Health Care Equipment & Services 6.3% | ||||||||
Cardinal Health, Inc. | 63,000 | 2,789,010 | ||||||
DaVita, Inc. * | 30,000 | 2,100,000 | ||||||
Hologic, Inc. * | 80,000 | 1,289,600 | ||||||
Humana, Inc. | 35,000 | 2,971,150 | ||||||
McKesson Corp. | 36,000 | 2,935,800 | ||||||
UnitedHealth Group, Inc. | 56,000 | 2,687,440 | ||||||
14,773,000 | ||||||||
Insurance 3.0% | ||||||||
Aflac, Inc. | 53,000 | 2,389,770 | ||||||
American Financial Group, Inc. | 82,000 | 2,938,060 | ||||||
Reinsurance Group of America, Inc. | 35,000 | 1,828,050 | ||||||
7,155,880 | ||||||||
Materials 6.5% | ||||||||
Alcoa, Inc. | 179,000 | 1,926,040 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 67,000 | 2,697,420 | ||||||
International Paper Co. | 99,000 | 2,742,300 | ||||||
MeadWestvaco Corp. | 95,000 | 2,651,450 | ||||||
Minerals Technologies, Inc. | 21,000 | 1,151,640 | ||||||
PPG Industries, Inc. | 22,000 | 1,901,020 |
26 See financial notes
Schwab Premier Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Dow Chemical Co. | 77,000 | 2,146,760 | ||||||
15,216,630 | ||||||||
Media 2.4% | ||||||||
Liberty Global, Inc., Series A * | 52,000 | 2,089,360 | ||||||
News Corp., Class A | 110,000 | 1,927,200 | ||||||
Viacom Inc., Class B | 36,000 | 1,578,600 | ||||||
5,595,160 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.2% | ||||||||
Agilent Technologies, Inc. * | 55,000 | 2,038,850 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 12,000 | 1,194,600 | ||||||
Bristol-Myers Squibb Co. | 68,000 | 2,148,120 | ||||||
Eli Lilly & Co. | 71,000 | 2,638,360 | ||||||
Johnson & Johnson | 30,000 | 1,931,700 | ||||||
Merck & Co., Inc. | 69,000 | 2,380,500 | ||||||
Par Pharmaceutical Cos., Inc. * | 63,000 | 1,927,800 | ||||||
Pfizer, Inc. | 133,000 | 2,561,580 | ||||||
Watson Pharmaceuticals, Inc. * | 38,000 | 2,552,080 | ||||||
19,373,590 | ||||||||
Retailing 3.2% | ||||||||
Liberty Interactive Corp., Class A * | 124,000 | 2,037,320 | ||||||
Macy’s, Inc. | 97,000 | 2,961,410 | ||||||
PetSmart, Inc. | 53,000 | 2,488,350 | ||||||
7,487,080 | ||||||||
Semiconductors & Semiconductor Equipment 1.1% | ||||||||
Fairchild Semiconductor International, Inc. * | 175,000 | 2,619,750 | ||||||
Software & Services 9.0% | ||||||||
Activision Blizzard, Inc. | 203,000 | 2,718,170 | ||||||
Computer Sciences Corp. | 67,000 | 2,107,820 | ||||||
International Business Machines Corp. | 15,000 | 2,769,450 | ||||||
MasterCard, Inc., Class A | 8,000 | 2,777,920 | ||||||
Microsoft Corp. | 45,000 | 1,198,350 | ||||||
Symantec Corp. * | 154,000 | 2,619,540 | ||||||
Synopsys, Inc. * | 102,000 | 2,734,620 | ||||||
TeleTech Holdings, Inc. * | 115,000 | 2,010,200 | ||||||
Visa, Inc., Class A | 24,000 | 2,238,240 | ||||||
21,174,310 | ||||||||
Technology Hardware & Equipment 6.9% | ||||||||
AVX Corp. | 150,000 | 2,011,500 | ||||||
Brocade Communications Systems, Inc. * | 448,000 | 1,962,240 | ||||||
Dell, Inc. * | 155,000 | 2,450,550 | ||||||
NCR Corp. * | 148,000 | 2,817,920 | ||||||
Tech Data Corp. * | 59,000 | 2,901,620 | ||||||
The Western Digital Corp. * | 77,000 | 2,051,280 | ||||||
Xerox Corp. | 247,000 | 2,020,460 | ||||||
16,215,570 | ||||||||
Telecommunication Services 3.0% | ||||||||
AT&T, Inc. | 71,000 | 2,081,010 | ||||||
Telephone & Data Systems, Inc. | 95,000 | 2,202,100 | ||||||
Verizon Communications, Inc. | 72,000 | 2,662,560 | ||||||
6,945,670 | ||||||||
Transportation 3.3% | ||||||||
Alaska Air Group, Inc. * | 44,000 | 2,927,320 | ||||||
Delta Air Lines, Inc. * | 291,000 | 2,479,320 | ||||||
FedEx Corp. | 30,000 | 2,454,900 | ||||||
7,861,540 | ||||||||
Utilities 6.3% | ||||||||
Ameren Corp. | 85,000 | 2,709,800 | ||||||
CMS Energy Corp. | 104,000 | 2,165,280 | ||||||
DTE Energy Co. | 24,000 | 1,250,640 | ||||||
Edison International | 44,000 | 1,786,400 | ||||||
FirstEnergy Corp. | 44,000 | 1,978,240 | ||||||
NiSource, Inc. | 105,000 | 2,319,450 | ||||||
Southwest Gas Corp. | 69,000 | 2,724,120 | ||||||
14,933,930 | ||||||||
Total Common Stock | ||||||||
(Cost $214,728,031) | 227,229,480 | |||||||
Other Investment Company 3.0% of net assets | ||||||||
Money Market Fund 3.0% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 6,955,881 | 6,955,881 | ||||||
Total Other Investment Company | ||||||||
(Cost $6,955,881) | 6,955,881 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.3% of net assets | ||||||||
U.S. Treasury Obligation 0.3% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (a)(b) | 700,000 | 700,000 | ||||||
Total Short-Term Investment | ||||||||
(Cost $700,000) | 700,000 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $222,869,753 and the unrealized appreciation and depreciation were $26,506,402 and ($14,490,794), respectively, with a net unrealized appreciation of $12,015,608.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. |
See financial notes 27
Schwab Premier Equity Fund
Portfolio Holdings continued
(b) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 110 | 6,871,150 | 533,583 |
28 See financial notes
Schwab Premier Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $222,383,912) | $234,885,361 | |||||
Receivables: | ||||||
Investments sold | 2,823,314 | |||||
Dividends | 161,330 | |||||
Interest | 787 | |||||
Fund shares sold | 744 | |||||
Prepaid expenses | + | 7,956 | ||||
Total assets | 237,879,492 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,056,428 | |||||
Investment adviser and administrator fees | 14,802 | |||||
Shareholder service fees | 5,297 | |||||
Fund shares redeemed | 369,054 | |||||
Due to brokers for futures | 173,800 | |||||
Accrued expenses | + | 44,578 | ||||
Total liabilities | 2,663,959 | |||||
Net Assets | ||||||
Total assets | 237,879,492 | |||||
Total liabilities | − | 2,663,959 | ||||
Net assets | $235,215,533 | |||||
Net Assets by Source | ||||||
Capital received from investors | 367,790,694 | |||||
Net investment income not yet distributed | 919,101 | |||||
Net realized capital losses | (146,529,294 | ) | ||||
Net unrealized capital gains | 13,035,032 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$235,215,533 | 22,910,333 | $10.27 |
See financial notes 29
Schwab Premier Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $4,575,521 | |||||
Interest | 14,721 | |||||
Securities on loan | + | 936 | ||||
Total investment income | 4,591,178 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,021,939 | |||||
Shareholder service fees | 681,684 | |||||
Portfolio accounting fees | 42,216 | |||||
Professional fees | 39,578 | |||||
Shareholder reports | 25,233 | |||||
Transfer agent fees | 22,483 | |||||
Registration fees | 20,283 | |||||
Custodian fees | 10,009 | |||||
Trustees’ fees | 7,970 | |||||
Interest expense | 46 | |||||
Other expenses | + | 7,665 | ||||
Total expenses | 2,879,106 | |||||
Expense reduction by CSIM and its affiliates | − | 53,884 | ||||
Payment for state filing fees (see financial note 11) | − | 30,614 | ||||
Custody credits | − | 9 | ||||
Net expenses | − | 2,794,599 | ||||
Net investment income | 1,796,579 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 43,920,022 | |||||
Net realized gains on futures contracts | + | 611,730 | ||||
Net realized gains | 44,531,752 | |||||
Net unrealized losses on investments | (24,655,709 | ) | ||||
Net unrealized losses on futures contracts | + | (169,771 | ) | |||
Net unrealized losses | + | (24,825,480 | ) | |||
Net realized and unrealized gains | 19,706,272 | |||||
Increase in net assets resulting from operations | $21,502,851 |
30 See financial notes
Schwab Premier Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,796,579 | $1,103,572 | ||||||||
Net realized gains | 44,531,752 | 34,019,135 | ||||||||
Net unrealized gains (losses) | + | (24,825,480 | ) | 12,056,239 | ||||||
Increase in net assets from operations | 21,502,851 | 47,178,946 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,518,547 | ) | ($2,109,100 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 531,893 | $5,739,431 | 653,658 | $5,945,565 | ||||||||||||||
Shares reinvested | 122,796 | 1,291,812 | 200,408 | 1,815,696 | ||||||||||||||
Shares redeemed | + | (7,918,946 | ) | (83,668,298 | ) | (13,864,989 | ) | (126,118,689 | ) | |||||||||
Net transactions in fund shares | (7,264,257 | ) | ($76,637,055 | ) | (13,010,923 | ) | ($118,357,428 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 30,174,590 | $291,868,284 | 43,185,513 | $365,155,866 | ||||||||||||||
Total decrease | + | (7,264,257 | ) | (56,652,751 | ) | (13,010,923 | ) | (73,287,582 | ) | |||||||||
End of period | 22,910,333 | $235,215,533 | 30,174,590 | $291,868,284 | ||||||||||||||
Net investment income not yet distributed | $919,101 | $630,576 |
See financial notes 31
Schwab Core Equity Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.78 | 14.26 | 13.43 | 20.49 | 18.40 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.17 | 0.17 | 0.23 | 0.16 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.01 | 1.50 | 0.88 | (7.06 | ) | 2.35 | ||||||||||||||||
Total from investment operations | 1.20 | 1.67 | 1.05 | (6.83 | ) | 2.51 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.17 | ) | (0.15 | ) | (0.22 | ) | (0.18 | ) | (0.10 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.05 | ) | (0.32 | ) | |||||||||||||||
Total distributions | (0.17 | ) | (0.15 | ) | (0.22 | ) | (0.23 | ) | (0.42 | ) | ||||||||||||
Net asset value at end of period | 16.81 | 15.78 | 14.26 | 13.43 | 20.49 | |||||||||||||||||
Total return (%) | 7.60 | 11.77 | 8.11 | (33.71 | ) | 13.88 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.73 | 0.73 | 0.75 | 0.75 | 0.75 | |||||||||||||||||
Gross operating expenses | 0.73 | 0.74 | 0.78 | 0.78 | 0.78 | |||||||||||||||||
Net investment income (loss) | 1.06 | 1.05 | 1.39 | 1.28 | 0.91 | |||||||||||||||||
Portfolio turnover rate | 35 | 49 | 41 | 1 | 35 | 18 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,719 | 1,792 | 1,770 | 1,449 | 2,133 |
1 Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.
32 See financial notes
Schwab Core Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .9% | Common Stock | 1,516,225,515 | 1,699,970,289 | ||||||||
0 | .9% | Other Investment Company | 16,169,233 | 16,169,233 | ||||||||
0 | .1% | Short-Term Investment | 1,830,000 | 1,830,000 | ||||||||
99 | .9% | Total Investments | 1,534,224,748 | 1,717,969,522 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 1,051,881 | |||||||||
100 | .0% | Total Net Assets | 1,719,021,403 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.9% of net assets | ||||||||
Banks 4.4% | ||||||||
Fifth Third Bancorp | 30,327 | 364,227 | ||||||
KeyCorp | 900,000 | 6,354,000 | ||||||
PNC Financial Services Group, Inc. | 300,000 | 16,113,000 | ||||||
SunTrust Banks, Inc. | 83,600 | 1,649,428 | ||||||
Wells Fargo & Co. | 1,994,500 | 51,677,495 | ||||||
76,158,150 | ||||||||
Capital Goods 7.1% | ||||||||
Caterpillar, Inc. | 175,000 | 16,530,500 | ||||||
Eaton Corp. | 223,000 | 9,994,860 | ||||||
Fluor Corp. | 105,000 | 5,969,250 | ||||||
General Dynamics Corp. | 95,000 | 6,098,050 | ||||||
General Electric Co. | 2,075,000 | 34,673,250 | ||||||
Parker Hannifin Corp. | 35,000 | 2,854,250 | ||||||
Textron, Inc. | 190,000 | 3,689,800 | ||||||
The Boeing Co. | 375,000 | 24,671,250 | ||||||
The Timken Co. | 110,000 | 4,633,200 | ||||||
United Technologies Corp. | 150,000 | 11,697,000 | ||||||
URS Corp. * | 52,500 | 1,874,250 | ||||||
122,685,660 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Avery Dennison Corp. | 304,800 | 8,107,680 | ||||||
Towers Watson & Co., Class A | 65,500 | 4,303,350 | ||||||
12,411,030 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Jarden Corp. | 135,000 | 4,324,050 | ||||||
Consumer Services 2.0% | ||||||||
Hyatt Hotels Corp., Class A * | 95,000 | 3,533,050 | ||||||
McDonald’s Corp. | 175,000 | 16,248,750 | ||||||
Starbucks Corp. | 110,000 | 4,657,400 | ||||||
Wynn Resorts Ltd. | 50,500 | 6,706,400 | ||||||
Yum! Brands, Inc. | 65,000 | 3,482,050 | ||||||
34,627,650 | ||||||||
Diversified Financials 6.5% | ||||||||
American Express Co. | 260,500 | 13,186,510 | ||||||
Capital One Financial Corp. | 175,000 | 7,990,500 | ||||||
Discover Financial Services | 402,050 | 9,472,298 | ||||||
JPMorgan Chase & Co. | 1,463,540 | 50,872,650 | ||||||
Lazard Ltd., Class A | 155,000 | 4,237,700 | ||||||
Legg Mason, Inc. | 310,000 | 8,525,000 | ||||||
SLM Corp. | 1,260,000 | 17,224,200 | ||||||
111,508,858 | ||||||||
Energy 13.4% | ||||||||
Anadarko Petroleum Corp. | 516,600 | 40,553,100 | ||||||
Apache Corp. | 50,000 | 4,981,500 | ||||||
Chevron Corp. | 510,000 | 53,575,500 | ||||||
El Paso Corp. | 200,000 | 5,002,000 | ||||||
Exxon Mobil Corp. | 290,000 | 22,646,100 | ||||||
Halliburton Co. | 125,000 | 4,670,000 | ||||||
Hess Corp. | 50,000 | 3,128,000 | ||||||
Murphy Oil Corp. | 351,365 | 19,455,080 | ||||||
Nabors Industries Ltd. * | 210,000 | 3,849,300 | ||||||
National Oilwell Varco, Inc. | 148,950 | 10,624,603 | ||||||
Occidental Petroleum Corp. | 261,690 | 24,321,469 | ||||||
The Williams Cos., Inc. | 807,500 | 24,313,825 | ||||||
Valero Energy Corp. | 550,000 | 13,530,000 | ||||||
230,650,477 | ||||||||
Food & Staples Retailing 4.0% | ||||||||
Costco Wholesale Corp. | 200,000 | 16,650,000 | ||||||
CVS Caremark Corp. | 115,000 | 4,174,500 | ||||||
The Kroger Co. | 1,487,000 | 34,468,660 | ||||||
Wal-Mart Stores, Inc. | 56,800 | 3,221,696 | ||||||
Whole Foods Market, Inc. | 150,000 | 10,818,000 | ||||||
69,332,856 | ||||||||
Food, Beverage & Tobacco 4.9% | ||||||||
Bunge Ltd. | 93,900 | 5,800,203 | ||||||
ConAgra Foods, Inc. | 90,000 | 2,279,700 | ||||||
Corn Products International, Inc. | 185,000 | 8,972,500 | ||||||
Dr Pepper Snapple Group, Inc. | 50,000 | 1,872,500 | ||||||
H.J. Heinz Co. | 198,350 | 10,599,824 | ||||||
Philip Morris International, Inc. | 111,000 | 7,755,570 | ||||||
Smithfield Foods, Inc. * | 425,000 | 9,715,500 | ||||||
Tyson Foods, Inc., Class A | 1,895,400 | 36,581,220 | ||||||
83,577,017 | ||||||||
Health Care Equipment & Services 3.7% | ||||||||
AmerisourceBergen Corp. | 150,000 | 6,120,000 | ||||||
Cardinal Health, Inc. | 190,000 | 8,411,300 | ||||||
CIGNA Corp. | 101,760 | 4,512,038 |
See financial notes 33
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
DaVita, Inc. * | 85,000 | 5,950,000 | ||||||
Hologic, Inc. * | 125,000 | 2,015,000 | ||||||
Humana, Inc. | 287,240 | 24,383,804 | ||||||
McKesson Corp. | 57,150 | 4,660,583 | ||||||
UnitedHealth Group, Inc. | 175,000 | 8,398,250 | ||||||
64,450,975 | ||||||||
Household & Personal Products 0.6% | ||||||||
Energizer Holdings, Inc. * | 132,300 | 9,762,417 | ||||||
Insurance 2.4% | ||||||||
Aflac, Inc. | 65,000 | 2,930,850 | ||||||
American Financial Group, Inc. | 79,290 | 2,840,961 | ||||||
Berkshire Hathaway, Inc., Class B * | 140,000 | 10,900,400 | ||||||
Prudential Financial, Inc. | 241,090 | 13,067,078 | ||||||
The Travelers Cos., Inc. | 205,140 | 11,969,919 | ||||||
41,709,208 | ||||||||
Materials 3.5% | ||||||||
Alcoa, Inc. | 350,000 | 3,766,000 | ||||||
International Paper Co. | 1,075,000 | 29,777,500 | ||||||
MeadWestvaco Corp. | 115,000 | 3,209,650 | ||||||
PPG Industries, Inc. | 267,200 | 23,088,752 | ||||||
59,841,902 | ||||||||
Media 0.6% | ||||||||
Liberty Global, Inc., Series A * | 250,000 | 10,045,000 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 9.6% | ||||||||
Agilent Technologies, Inc. * | 190,000 | 7,043,300 | ||||||
Allergan, Inc. | 46,700 | 3,928,404 | ||||||
Amgen, Inc. | 200,000 | 11,454,000 | ||||||
Bristol-Myers Squibb Co. | 1,225,000 | 38,697,750 | ||||||
Eli Lilly & Co. | 337,505 | 12,541,686 | ||||||
Johnson & Johnson | 146,400 | 9,426,696 | ||||||
Life Technologies Corp. * | 251,637 | 10,234,077 | ||||||
Merck & Co., Inc. | 317,080 | 10,939,260 | ||||||
Mylan, Inc. * | 100,000 | 1,957,000 | ||||||
Pfizer, Inc. | 1,000,000 | 19,260,000 | ||||||
Thermo Fisher Scientific, Inc. * | 245,400 | 12,336,258 | ||||||
Watson Pharmaceuticals, Inc. * | 411,000 | 27,602,760 | ||||||
165,421,191 | ||||||||
Real Estate 1.7% | ||||||||
CBRE Group, Inc. * | 863,800 | 15,358,364 | ||||||
Jones Lang LaSalle, Inc. | 126,800 | 8,193,816 | ||||||
Vornado Realty Trust REIT | 75,000 | 6,210,750 | ||||||
29,762,930 | ||||||||
Retailing 5.2% | ||||||||
AutoZone, Inc. * | 10,000 | 3,235,900 | ||||||
Bed Bath & Beyond, Inc. * | 40,000 | 2,473,600 | ||||||
Dollar Tree, Inc. * | 55,200 | 4,413,792 | ||||||
Macy’s, Inc. | 480,000 | 14,654,400 | ||||||
O’Reilly Automotive, Inc. * | 100,000 | 7,605,000 | ||||||
PetSmart, Inc. | 390,000 | 18,310,500 | ||||||
Target Corp. | 175,000 | 9,581,250 | ||||||
The Gap, Inc. | 480,000 | 9,072,000 | ||||||
The Home Depot, Inc. | 100,000 | 3,580,000 | ||||||
The TJX Cos., Inc. | 275,000 | 16,205,750 | ||||||
89,132,192 | ||||||||
Semiconductors & Semiconductor Equipment 1.5% | ||||||||
Intel Corp. | 754,685 | 18,519,970 | ||||||
Lam Research Corp. * | 34,700 | 1,491,753 | ||||||
Micron Technology, Inc. * | 900,000 | 5,031,000 | ||||||
25,042,723 | ||||||||
Software & Services 11.7% | ||||||||
Activision Blizzard, Inc. | 1,940,000 | 25,976,600 | ||||||
BMC Software, Inc. * | 400,640 | 13,926,246 | ||||||
CA, Inc. | 650,000 | 14,079,000 | ||||||
Computer Sciences Corp. | 400,000 | 12,584,000 | ||||||
International Business Machines Corp. | 367,900 | 67,925,377 | ||||||
Microsoft Corp. | 450,000 | 11,983,500 | ||||||
Oracle Corp. | 689,800 | 22,604,746 | ||||||
Symantec Corp. * | 1,625,000 | 27,641,250 | ||||||
Synopsys, Inc. * | 160,342 | 4,298,769 | ||||||
201,019,488 | ||||||||
Technology Hardware & Equipment 6.3% | ||||||||
Apple, Inc. * | 60,000 | 24,286,800 | ||||||
Avnet, Inc. * | 71,500 | 2,167,165 | ||||||
Dell, Inc. * | 1,000,000 | 15,810,000 | ||||||
EMC Corp. * | 782,000 | 19,166,820 | ||||||
Hewlett-Packard Co. | 530,100 | 14,105,961 | ||||||
SanDisk Corp. * | 170,000 | 8,613,900 | ||||||
The Western Digital Corp. * | 520,000 | 13,852,800 | ||||||
Xerox Corp. | 1,169,533 | 9,566,780 | ||||||
107,570,226 | ||||||||
Telecommunication Services 4.9% | ||||||||
AT&T, Inc. | 1,000,000 | 29,310,000 | ||||||
Telephone & Data Systems, Inc. | 204,390 | 4,737,760 | ||||||
Verizon Communications, Inc. | 1,335,000 | 49,368,300 | ||||||
83,416,060 | ||||||||
Transportation 1.2% | ||||||||
FedEx Corp. | 165,000 | 13,501,950 | ||||||
Ryder System, Inc. | 100,000 | 5,094,000 | ||||||
United Parcel Service, Inc., Class B | 35,000 | 2,458,400 | ||||||
21,054,350 | ||||||||
Utilities 2.7% | ||||||||
Ameren Corp. | 680,000 | 21,678,400 | ||||||
CMS Energy Corp. | 200,000 | 4,164,000 | ||||||
DTE Energy Co. | 123,900 | 6,456,429 | ||||||
NiSource, Inc. | 275,000 | 6,074,750 | ||||||
Pinnacle West Capital Corp. | 100,000 | 4,558,000 |
34 See financial notes
Schwab Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The AES Corp. * | 315,000 | 3,534,300 | ||||||
46,465,879 | ||||||||
Total Common Stock | ||||||||
(Cost $1,516,225,515) | 1,699,970,289 | |||||||
Other Investment Company 0.9% of net assets | ||||||||
Money Market Fund 0.9% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 16,169,233 | 16,169,233 | ||||||
Total Other Investment Company | ||||||||
(Cost $16,169,233) | 16,169,233 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.1% of net assets | ||||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (a)(b) | 1,830,000 | 1,830,000 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,830,000) | 1,830,000 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $1,538,041,338 and the unrealized appreciation and depreciation were $260,589,450 and ($80,661,266), respectively, with a net unrealized appreciation of $179,928,184.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 210 | 13,117,650 | 1,018,658 |
See financial notes 35
Schwab Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $1,534,224,748) | $1,717,969,522 | |||||
Receivables: | ||||||
Investments sold | 6,364,028 | |||||
Dividends | 2,051,928 | |||||
Fund shares sold | 1,252,439 | |||||
Interest | 1,850 | |||||
Prepaid expenses | + | 49,882 | ||||
Total assets | 1,727,689,649 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 6,924,041 | |||||
Investment adviser and administrator fees | 71,162 | |||||
Shareholder service fees | 50,894 | |||||
Fund shares redeemed | 1,176,126 | |||||
Due to brokers for futures | 331,800 | |||||
Accrued expenses | + | 114,223 | ||||
Total liabilities | 8,668,246 | |||||
Net Assets | ||||||
Total assets | 1,727,689,649 | |||||
Total liabilities | − | 8,668,246 | ||||
Net assets | $1,719,021,403 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,733,850,719 | |||||
Net investment income not yet distributed | 12,260,865 | |||||
Net realized capital losses | (211,853,613 | ) | ||||
Net unrealized capital gains | 184,763,432 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,719,021,403 | 102,249,740 | $16.81 |
36 See financial notes
Schwab Core Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $32,509,734 | |||||
Interest | 24,980 | |||||
Securities on loan | + | 9,134 | ||||
Total investment income | 32,543,848 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,565,120 | |||||
Shareholder service fees | 4,348,115 | |||||
Shareholder reports | 115,771 | |||||
Transfer agent fees | 79,709 | |||||
Portfolio accounting fees | 76,010 | |||||
Professional fees | 43,048 | |||||
Custodian fees | 37,756 | |||||
Registration fees | 31,995 | |||||
Trustees’ fees | 19,289 | |||||
Interest expense | 51 | |||||
Other expenses | + | 46,755 | ||||
Total expenses | 13,363,619 | |||||
Expense reduction by CSIM and its affiliates | − | 79,709 | ||||
Custody credits | − | 49 | ||||
Net expenses | − | 13,283,861 | ||||
Net investment income | 19,259,987 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 114,135,295 | |||||
Net realized losses on futures contracts | (1,543,012 | ) | ||||
Net realized gains on foreign currency transactions | + | 32 | ||||
Net realized gains | 112,592,315 | |||||
Net unrealized gains on investments | 7,141,526 | |||||
Net unrealized gains on futures contracts | 741,579 | |||||
Net unrealized losses on foreign currency translations | + | (29 | ) | |||
Net unrealized gains | + | 7,883,076 | ||||
Net realized and unrealized gains | 120,475,391 | |||||
Increase in net assets resulting from operations | $139,735,378 |
See financial notes 37
Schwab Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $19,259,987 | $19,211,448 | ||||||||
Net realized gains | 112,592,315 | 25,984,048 | ||||||||
Net unrealized gains | + | 7,883,076 | 155,560,330 | |||||||
Increase in net assets from operations | 139,735,378 | 200,755,826 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($18,535,012 | ) | ($18,916,913 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 12,323,341 | $209,712,682 | 15,179,714 | $229,787,494 | ||||||||||||||
Shares reinvested | 518,572 | 8,706,829 | 668,254 | 10,164,135 | ||||||||||||||
Shares redeemed | + | (24,183,912 | ) | (413,021,730 | ) | (26,352,231 | ) | (399,147,122 | ) | |||||||||
Net transactions in fund shares | (11,341,999 | ) | ($194,602,219 | ) | (10,504,263 | ) | ($159,195,493 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 113,591,739 | $1,792,423,256 | 124,096,002 | $1,769,779,836 | ||||||||||||||
Total increase or decrease | + | (11,341,999 | ) | (73,401,853 | ) | (10,504,263 | ) | 22,643,420 | ||||||||||
End of period | 102,249,740 | $1,719,021,403 | 113,591,739 | $1,792,423,256 | ||||||||||||||
Net investment income not yet distributed | $12,260,865 | $13,724,065 |
38 See financial notes
Schwab Dividend Equity Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 12.08 | 10.94 | 10.63 | 15.66 | 14.60 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.21 | 0.25 | 0.32 | 0.28 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.06 | 1.14 | 0.31 | (4.97 | ) | 1.37 | ||||||||||||||||
Total from investment operations | 1.29 | 1.35 | 0.56 | (4.65 | ) | 1.65 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.22 | ) | (0.21 | ) | (0.25 | ) | (0.33 | ) | (0.28 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.05 | ) | (0.31 | ) | |||||||||||||||
Total distributions | (0.22 | ) | (0.21 | ) | (0.25 | ) | (0.38 | ) | (0.59 | ) | ||||||||||||
Net asset value at end of period | 13.15 | 12.08 | 10.94 | 10.63 | 15.66 | |||||||||||||||||
Total return (%) | 10.73 | 12.42 | 5.62 | (30.23 | ) | 11.55 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.89 | 0.89 | 0.90 | 2 | 0.89 | 0.89 | ||||||||||||||||
Gross operating expenses | 0.89 | 0.89 | 0.91 | 0.89 | 0.89 | |||||||||||||||||
Net investment income (loss) | 1.77 | 1.74 | 2.40 | 2.33 | 1.83 | |||||||||||||||||
Portfolio turnover rate | 31 | 37 | 39 | 22 | 18 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,325 | 1,322 | 1,297 | 824 | 1,340 |
1 Effective October 7, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
See financial notes 39
Schwab Dividend Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .8% | Common Stock | 1,109,378,948 | 1,295,240,694 | ||||||||
2 | .1% | Short-Term Investments | 28,666,439 | 28,666,439 | ||||||||
99 | .9% | Total Investments | 1,138,045,387 | 1,323,907,133 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 685,316 | |||||||||
100 | .0% | Total Net Assets | 1,324,592,449 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.8% of net assets | ||||||||
Banks 3.3% | ||||||||
Commerce Bancshares, Inc. | 169,750 | 6,586,300 | ||||||
Fifth Third Bancorp | 225,000 | 2,702,250 | ||||||
M&T Bank Corp. | 50,000 | 3,805,500 | ||||||
PNC Financial Services Group, Inc. | 250,000 | 13,427,500 | ||||||
Wells Fargo & Co. | 650,000 | 16,841,500 | ||||||
43,363,050 | ||||||||
Capital Goods 7.4% | ||||||||
Caterpillar, Inc. | 100,000 | 9,446,000 | ||||||
Eaton Corp. | 215,000 | 9,636,300 | ||||||
General Dynamics Corp. | 75,000 | 4,814,250 | ||||||
General Electric Co. | 1,200,000 | 20,052,000 | ||||||
KBR, Inc. | 80,000 | 2,232,800 | ||||||
Northrop Grumman Corp. | 30,400 | 1,755,600 | ||||||
The Boeing Co. | 447,000 | 29,408,130 | ||||||
The Timken Co. | 125,000 | 5,265,000 | ||||||
United Technologies Corp. | 200,000 | 15,596,000 | ||||||
98,206,080 | ||||||||
Commercial & Professional Supplies 0.0% | ||||||||
Towers Watson & Co., Class A | 10,000 | 657,000 | ||||||
Consumer Durables & Apparel 0.5% | ||||||||
Whirlpool Corp. | 120,700 | 6,132,767 | ||||||
Consumer Services 1.7% | ||||||||
McDonald’s Corp. | 221,500 | 20,566,275 | ||||||
Yum! Brands, Inc. | 30,000 | 1,607,100 | ||||||
22,173,375 | ||||||||
Diversified Financials 5.9% | ||||||||
American Express Co. | 330,000 | 16,704,600 | ||||||
Capital One Financial Corp. | 224,000 | 10,227,840 | ||||||
JPMorgan Chase & Co. | 1,052,084 | 36,570,440 | ||||||
SLM Corp. | 1,100,000 | 15,037,000 | ||||||
78,539,880 | ||||||||
Energy 12.0% | ||||||||
Anadarko Petroleum Corp. | 250,000 | 19,625,000 | ||||||
Apache Corp. | 50,000 | 4,981,500 | ||||||
Chevron Corp. | 460,500 | 48,375,525 | ||||||
Exxon Mobil Corp. | 308,500 | 24,090,765 | ||||||
Halliburton Co. | 50,000 | 1,868,000 | ||||||
Murphy Oil Corp. | 175,000 | 9,689,750 | ||||||
Occidental Petroleum Corp. | 200,000 | 18,588,000 | ||||||
The Williams Cos., Inc. | 500,000 | 15,055,000 | ||||||
Valero Energy Corp. | 675,000 | 16,605,000 | ||||||
158,878,540 | ||||||||
Food & Staples Retailing 3.9% | ||||||||
Costco Wholesale Corp. | 300,000 | 24,975,000 | ||||||
CVS Caremark Corp. | 160,000 | 5,808,000 | ||||||
The Kroger Co. | 400,000 | 9,272,000 | ||||||
Wal-Mart Stores, Inc. | 200,000 | 11,344,000 | ||||||
51,399,000 | ||||||||
Food, Beverage & Tobacco 4.7% | ||||||||
ConAgra Foods, Inc. | 400,000 | 10,132,000 | ||||||
Corn Products International, Inc. | 222,600 | 10,796,100 | ||||||
H.J. Heinz Co. | 269,300 | 14,391,392 | ||||||
Philip Morris International, Inc. | 60,500 | 4,227,135 | ||||||
The Hershey Co. | 68,000 | 3,891,640 | ||||||
Tyson Foods, Inc., Class A | 975,000 | 18,817,500 | ||||||
62,255,767 | ||||||||
Health Care Equipment & Services 4.4% | ||||||||
AmerisourceBergen Corp. | 150,000 | 6,120,000 | ||||||
Becton, Dickinson & Co. | 214,600 | 16,788,158 | ||||||
Cardinal Health, Inc. | 275,000 | 12,174,250 | ||||||
McKesson Corp. | 250,000 | 20,387,500 | ||||||
UnitedHealth Group, Inc. | 50,000 | 2,399,500 | ||||||
57,869,408 | ||||||||
Household & Personal Products 1.7% | ||||||||
Herbalife Ltd. | 120,000 | 7,483,200 | ||||||
Kimberly-Clark Corp. | 171,000 | 11,920,410 | ||||||
Nu Skin Enterprises, Inc., Class A | 50,000 | 2,526,500 | ||||||
21,930,110 | ||||||||
Insurance 2.5% | ||||||||
Marsh & McLennan Cos., Inc. | 57,500 | 1,760,650 | ||||||
MetLife, Inc. | 65,000 | 2,285,400 | ||||||
Prudential Financial, Inc. | 150,000 | 8,130,000 | ||||||
The Chubb Corp. | 169,000 | 11,331,450 |
40 See financial notes
Schwab Dividend Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Travelers Cos., Inc. | 166,000 | 9,686,100 | ||||||
33,193,600 | ||||||||
Materials 4.7% | ||||||||
Eastman Chemical Co. | 111,000 | 4,361,190 | ||||||
International Paper Co. | 824,500 | 22,838,650 | ||||||
MeadWestvaco Corp. | 486,500 | 13,578,215 | ||||||
PPG Industries, Inc. | 256,000 | 22,120,960 | ||||||
62,899,015 | ||||||||
Media 1.4% | ||||||||
Gannett Co., Inc. | 100,000 | 1,169,000 | ||||||
Time Warner, Inc. | 313,000 | 10,951,870 | ||||||
Viacom Inc., Class B | 140,000 | 6,139,000 | ||||||
18,259,870 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.6% | ||||||||
Abbott Laboratories | 200,000 | 10,774,000 | ||||||
Bristol-Myers Squibb Co. | 935,000 | 29,536,650 | ||||||
Eli Lilly & Co. | 768,000 | 28,538,880 | ||||||
Johnson & Johnson | 230,000 | 14,809,700 | ||||||
Merck & Co., Inc. | 518,000 | 17,871,000 | ||||||
Pfizer, Inc. | 647,500 | 12,470,850 | ||||||
114,001,080 | ||||||||
Real Estate 0.2% | ||||||||
Rayonier, Inc. REIT | 73,500 | 3,067,155 | ||||||
Retailing 4.6% | ||||||||
Kohl’s Corp. | 20,500 | 1,086,705 | ||||||
Macy’s, Inc. | 548,500 | 16,745,705 | ||||||
PetSmart, Inc. | 155,000 | 7,277,250 | ||||||
Target Corp. | 165,000 | 9,033,750 | ||||||
The Home Depot, Inc. | 377,000 | 13,496,600 | ||||||
The TJX Cos., Inc. | 200,000 | 11,786,000 | ||||||
Williams-Sonoma, Inc. | 45,000 | 1,689,300 | ||||||
61,115,310 | ||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||
Intel Corp. | 1,125,000 | 27,607,500 | ||||||
KLA-Tencor Corp. | 340,000 | 16,010,600 | ||||||
43,618,100 | ||||||||
Software & Services 9.2% | ||||||||
Activision Blizzard, Inc. | 650,000 | 8,703,500 | ||||||
Automatic Data Processing, Inc. | 179,800 | 9,408,934 | ||||||
CA, Inc. | 650,000 | 14,079,000 | ||||||
Computer Sciences Corp. | 275,000 | 8,651,500 | ||||||
Fidelity National Information Services, Inc. | 50,000 | 1,309,000 | ||||||
International Business Machines Corp. | 264,000 | 48,742,320 | ||||||
MasterCard, Inc., Class A | 20,000 | 6,944,800 | ||||||
Microsoft Corp. | 295,000 | 7,855,850 | ||||||
Oracle Corp. | 392,000 | 12,845,840 | ||||||
Visa, Inc., Class A | 35,000 | 3,264,100 | ||||||
121,804,844 | ||||||||
Technology Hardware & Equipment 4.9% | ||||||||
Hewlett-Packard Co. | 450,000 | 11,974,500 | ||||||
Jabil Circuit, Inc. | 623,500 | 12,819,160 | ||||||
Molex, Inc. | 160,000 | 3,950,400 | ||||||
QUALCOMM, Inc. | 95,000 | 4,902,000 | ||||||
TE Connectivity Ltd. | 276,000 | 9,811,800 | ||||||
Xerox Corp. | 2,585,000 | 21,145,300 | ||||||
64,603,160 | ||||||||
Telecommunication Services 5.3% | ||||||||
AT&T, Inc. | 1,152,407 | 33,777,049 | ||||||
Verizon Communications, Inc. | 987,500 | 36,517,750 | ||||||
70,294,799 | ||||||||
Transportation 1.1% | ||||||||
Ryder System, Inc. | 75,000 | 3,820,500 | ||||||
United Parcel Service, Inc., Class B | 150,000 | 10,536,000 | ||||||
14,356,500 | ||||||||
Utilities 6.5% | ||||||||
Ameren Corp. | 367,000 | 11,699,960 | ||||||
DTE Energy Co. | 506,200 | 26,378,082 | ||||||
Edison International | 175,000 | 7,105,000 | ||||||
Integrys Energy Group, Inc. | 201,200 | 10,645,492 | ||||||
NiSource, Inc. | 625,000 | 13,806,250 | ||||||
Pepco Holdings, Inc. | 340,000 | 6,732,000 | ||||||
Pinnacle West Capital Corp. | 225,000 | 10,255,500 | ||||||
86,622,284 | ||||||||
Total Common Stock | ||||||||
(Cost $1,109,378,948) | 1,295,240,694 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.1% of net assets | ||||||||
Time Deposit 2.0% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 27,031,439 | 27,031,439 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.01%, 12/15/11 (a)(b) | 1,635,000 | 1,635,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $28,666,439) | 28,666,439 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $1,138,900,268 and the unrealized appreciation and
See financial notes 41
Schwab Dividend Equity Fund
Portfolio Holdings continued
depreciation were $219,534,743 and ($34,527,878), respectively, with a net unrealized appreciation of $185,006,865.
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 365 | 22,799,725 | 1,770,524 |
42 See financial notes
Schwab Dividend Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $1,138,045,387) | $1,323,907,133 | |||||
Receivables: | ||||||
Investments sold | 5,380,467 | |||||
Dividends | 2,125,524 | |||||
Fund shares sold | 783,825 | |||||
Interest | 22 | |||||
Prepaid expenses | + | 39,986 | ||||
Total assets | 1,332,236,957 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 5,702,151 | |||||
Investment adviser and administrator fees | 71,889 | |||||
Shareholder service fees | 28,531 | |||||
Fund shares redeemed | 1,170,438 | |||||
Due to brokers for futures | 576,700 | |||||
Accrued expenses | + | 94,799 | ||||
Total liabilities | 7,644,508 | |||||
Net Assets | ||||||
Total assets | 1,332,236,957 | |||||
Total liabilities | − | 7,644,508 | ||||
Net assets | $1,324,592,449 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,310,134,750 | |||||
Net investment income not yet distributed | 2,539,120 | |||||
Net realized capital losses | (175,713,691 | ) | ||||
Net unrealized capital gains | 187,632,270 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,324,592,449 | 100,761,656 | $13.15 |
See financial notes 43
Schwab Dividend Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $36,363,334 | |||||
Interest | + | 4,756 | ||||
Total investment income | 36,368,090 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 8,486,414 | |||||
Shareholder service fees | 3,353,056 | |||||
Shareholder reports | 89,418 | |||||
Portfolio accounting fees | 68,739 | |||||
Professional fees | 44,349 | |||||
Transfer agent fees | 39,322 | |||||
Registration fees | 35,077 | |||||
Custodian fees | 29,365 | |||||
Trustees’ fees | 15,877 | |||||
Other expenses | + | 35,218 | ||||
Total expenses | 12,196,835 | |||||
Expense reduction by CSIM and its affiliates | − | 50,141 | ||||
Payment for state filing fees (see financial note 11) | − | 24,043 | ||||
Net expenses | − | 12,122,651 | ||||
Net investment income | 24,245,439 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 43,711,593 | |||||
Net realized losses on futures contracts | + | (145,145 | ) | |||
Net realized gains | 43,566,448 | |||||
Net unrealized gains on investments | 70,230,633 | |||||
Net unrealized gains on futures contracts | + | 1,237,680 | ||||
Net unrealized gains | + | 71,468,313 | ||||
Net realized and unrealized gains | 115,034,761 | |||||
Increase in net assets resulting from operations | $139,280,200 |
44 See financial notes
Schwab Dividend Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $24,245,439 | $23,338,283 | ||||||||
Net realized gains | 43,566,448 | 29,546,200 | ||||||||
Net unrealized gains | + | 71,468,313 | 100,905,343 | |||||||
Increase in net assets from operations | 139,280,200 | 153,789,826 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($23,212,957 | ) | ($23,865,611 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 13,544,141 | $176,264,263 | 14,952,206 | $175,992,941 | ||||||||||||||
Shares reinvested | 949,738 | 12,332,976 | 1,093,635 | 12,717,783 | ||||||||||||||
Shares redeemed | + | (23,171,863 | ) | (301,886,000 | ) | (25,189,162 | ) | (294,251,289 | ) | |||||||||
Net transactions in fund shares | (8,677,984 | ) | ($113,288,761 | ) | (9,143,321 | ) | ($105,540,565 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 109,439,640 | $1,321,813,967 | 118,582,961 | $1,297,430,317 | ||||||||||||||
Total increase or decrease | + | (8,677,984 | ) | 2,778,482 | (9,143,321 | ) | 24,383,650 | |||||||||||
End of period | 100,761,656 | $1,324,592,449 | 109,439,640 | $1,321,813,967 | ||||||||||||||
Net investment income not yet distributed | $2,539,120 | $121,782 |
See financial notes 45
Schwab Large-Cap Growth Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.48 | 9.10 | 8.22 | 12.77 | 11.09 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.07 | 0.05 | 0.05 | 0.06 | 0.04 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.69 | 1.39 | 0.87 | (4.56 | ) | 1.67 | ||||||||||||||||
Total from investment operations | 0.76 | 1.44 | 0.92 | (4.50 | ) | 1.71 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.06 | ) | (0.06 | ) | (0.04 | ) | (0.05 | ) | (0.03 | ) | ||||||||||||
Net asset value at end of period | 11.18 | 10.48 | 9.10 | 8.22 | 12.77 | |||||||||||||||||
Total return (%) | 7.25 | 15.83 | 11.36 | (35.36 | ) | 15.47 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.99 | 1.00 | 2 | 0.99 | 0.99 | 0.99 | ||||||||||||||||
Gross operating expenses | 1.05 | 1.04 | 1.03 | 1.01 | 1.03 | |||||||||||||||||
Net investment income (loss) | 0.56 | 0.39 | 0.65 | 0.53 | 0.33 | |||||||||||||||||
Portfolio turnover rate | 62 | 57 | 63 | 49 | 30 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 213 | 219 | 360 | 332 | 492 |
1 Effective October 7, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 The ratio of net operating expenses would have been 0.99%, if certain non-routine expenses had not been incurred.
46 See financial notes
Schwab Large-Cap Growth Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .1% | Common Stock | 179,902,045 | 211,308,854 | ||||||||
0 | .8% | Short-Term Investments | 1,857,337 | 1,857,337 | ||||||||
99 | .9% | Total Investments | 181,759,382 | 213,166,191 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 114,669 | |||||||||
100 | .0% | Total Net Assets | 213,280,860 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.1% of net assets | ||||||||
Automobiles & Components 0.3% | ||||||||
Ford Motor Co. * | 52,500 | 613,200 | ||||||
Banks 0.7% | ||||||||
Wells Fargo & Co. | 56,900 | 1,474,279 | ||||||
Capital Goods 9.0% | ||||||||
AGCO Corp. * | 92,000 | 4,032,360 | ||||||
Caterpillar, Inc. | 33,000 | 3,117,180 | ||||||
Fluor Corp. | 10,000 | 568,500 | ||||||
General Electric Co. | 75,000 | 1,253,250 | ||||||
Honeywell International, Inc. | 40,000 | 2,096,000 | ||||||
KBR, Inc. | 10,000 | 279,100 | ||||||
Parker Hannifin Corp. | 11,100 | 905,205 | ||||||
The Boeing Co. | 82,000 | 5,394,780 | ||||||
The Timken Co. | 35,000 | 1,474,200 | ||||||
19,120,575 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
NIKE, Inc., Class B | 15,000 | 1,445,250 | ||||||
Tempur-Pedic International, Inc. * | 12,200 | 830,332 | ||||||
2,275,582 | ||||||||
Consumer Services 4.6% | ||||||||
Apollo Group, Inc., Class A * | 45,000 | 2,130,750 | ||||||
McDonald’s Corp. | 38,400 | 3,565,440 | ||||||
Wynn Resorts Ltd. | 13,000 | 1,726,400 | ||||||
Yum! Brands, Inc. | 43,500 | 2,330,295 | ||||||
9,752,885 | ||||||||
Diversified Financials 1.3% | ||||||||
American Express Co. | 10,800 | 546,696 | ||||||
JPMorgan Chase & Co. | 18,300 | 636,108 | ||||||
SLM Corp. | 116,000 | 1,585,720 | ||||||
2,768,524 | ||||||||
Energy 11.2% | ||||||||
Anadarko Petroleum Corp. | 39,200 | 3,077,200 | ||||||
Chevron Corp. | 40,000 | 4,202,000 | ||||||
El Paso Corp. | 60,000 | 1,500,600 | ||||||
Exxon Mobil Corp. | 119,000 | 9,292,710 | ||||||
Halliburton Co. | 30,000 | 1,120,800 | ||||||
Hess Corp. | 20,000 | 1,251,200 | ||||||
Murphy Oil Corp. | 28,000 | 1,550,360 | ||||||
National Oilwell Varco, Inc. | 3,400 | 242,522 | ||||||
Valero Energy Corp. | 65,000 | 1,599,000 | ||||||
23,836,392 | ||||||||
Food & Staples Retailing 2.0% | ||||||||
Costco Wholesale Corp. | 30,000 | 2,497,500 | ||||||
Whole Foods Market, Inc. | 25,000 | 1,803,000 | ||||||
4,300,500 | ||||||||
Food, Beverage & Tobacco 6.5% | ||||||||
Bunge Ltd. | 5,000 | 308,850 | ||||||
Coca-Cola Enterprises, Inc. | 28,000 | 750,960 | ||||||
ConAgra Foods, Inc. | 55,000 | 1,393,150 | ||||||
Dr Pepper Snapple Group, Inc. | 50,000 | 1,872,500 | ||||||
H.J. Heinz Co. | 39,300 | 2,100,192 | ||||||
Philip Morris International, Inc. | 57,000 | 3,982,590 | ||||||
The Hershey Co. | 14,000 | 801,220 | ||||||
Tyson Foods, Inc., Class A | 136,600 | 2,636,380 | ||||||
13,845,842 | ||||||||
Health Care Equipment & Services 6.2% | ||||||||
AmerisourceBergen Corp. | 25,000 | 1,020,000 | ||||||
Cardinal Health, Inc. | 31,900 | 1,412,213 | ||||||
DaVita, Inc. * | 48,000 | 3,360,000 | ||||||
Henry Schein, Inc. * | 21,600 | 1,497,312 | ||||||
Humana, Inc. | 34,000 | 2,886,260 | ||||||
McKesson Corp. | 39,000 | 3,180,450 | ||||||
13,356,235 | ||||||||
Household & Personal Products 3.6% | ||||||||
Energizer Holdings, Inc. * | �� | 41,900 | 3,091,801 | |||||
Herbalife Ltd. | 75,200 | 4,689,472 | ||||||
7,781,273 | ||||||||
Insurance 1.0% | ||||||||
Aflac, Inc. | 47,500 | 2,141,775 | ||||||
Materials 7.0% | ||||||||
Celanese Corp., Series A | 38,200 | 1,663,610 | ||||||
CF Industries Holdings, Inc. | 14,900 | 2,417,823 |
See financial notes 47
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Freeport-McMoran Copper & Gold, Inc. | 96,000 | 3,864,960 | ||||||
International Paper Co. | 88,300 | 2,445,910 | ||||||
MeadWestvaco Corp. | 100,000 | 2,791,000 | ||||||
PPG Industries, Inc. | 20,000 | 1,728,200 | ||||||
14,911,503 | ||||||||
Media 0.8% | ||||||||
DISH Network Corp., Class A * | 10,000 | 241,700 | ||||||
Liberty Global, Inc., Series A * | 34,500 | 1,386,210 | ||||||
1,627,910 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.0% | ||||||||
Abbott Laboratories | 30,000 | 1,616,100 | ||||||
Agilent Technologies, Inc. * | 15,000 | 556,050 | ||||||
Allergan, Inc. | 25,900 | 2,178,708 | ||||||
Bristol-Myers Squibb Co. | 18,000 | 568,620 | ||||||
Eli Lilly & Co. | 18,000 | 668,880 | ||||||
Johnson & Johnson | 20,000 | 1,287,800 | ||||||
Mylan, Inc. * | 55,000 | 1,076,350 | ||||||
Perrigo Co. | 10,000 | 902,800 | ||||||
Thermo Fisher Scientific, Inc. * | 9,000 | 452,430 | ||||||
Watson Pharmaceuticals, Inc. * | 20,500 | 1,376,780 | ||||||
10,684,518 | ||||||||
Real Estate 0.9% | ||||||||
CBRE Group, Inc. * | 45,000 | 800,100 | ||||||
Jones Lang LaSalle, Inc. | 17,400 | 1,124,388 | ||||||
1,924,488 | ||||||||
Retailing 5.8% | ||||||||
Dollar Tree, Inc. * | 17,600 | 1,407,296 | ||||||
Kohl’s Corp. | 13,000 | 689,130 | ||||||
Macy’s, Inc. | 105,000 | 3,205,650 | ||||||
PetSmart, Inc. | 94,900 | 4,455,555 | ||||||
Target Corp. | 9,000 | 492,750 | ||||||
The TJX Cos., Inc. | 35,000 | 2,062,550 | ||||||
12,312,931 | ||||||||
Semiconductors & Semiconductor Equipment 1.4% | ||||||||
Applied Materials, Inc. | 35,000 | 431,200 | ||||||
Intel Corp. | 62,000 | 1,521,480 | ||||||
Lam Research Corp. * | 27,000 | 1,160,730 | ||||||
3,113,410 | ||||||||
Software & Services 18.0% | ||||||||
Accenture plc, Class A | 80,000 | 4,820,800 | ||||||
BMC Software, Inc. * | 45,000 | 1,564,200 | ||||||
CA, Inc. | 130,000 | 2,815,800 | ||||||
Google, Inc., Class A * | 3,600 | 2,133,504 | ||||||
International Business Machines Corp. | 60,000 | 11,077,800 | ||||||
Intuit, Inc. | 30,700 | 1,647,669 | ||||||
MasterCard, Inc., Class A | 15,000 | 5,208,600 | ||||||
Microsoft Corp. | 165,000 | 4,393,950 | ||||||
Oracle Corp. | 77,300 | 2,533,121 | ||||||
Symantec Corp. * | 98,000 | 1,666,980 | ||||||
Visa, Inc., Class A | 5,000 | 466,300 | ||||||
38,328,724 | ||||||||
Technology Hardware & Equipment 9.6% | ||||||||
Apple, Inc. * | 13,500 | 5,464,530 | ||||||
Dell, Inc. * | 308,000 | 4,869,480 | ||||||
EMC Corp. * | 133,200 | 3,264,732 | ||||||
Hewlett-Packard Co. | 50,200 | 1,335,822 | ||||||
SanDisk Corp. * | 20,000 | 1,013,400 | ||||||
TE Connectivity Ltd. | 60,000 | 2,133,000 | ||||||
The Western Digital Corp. * | 94,000 | 2,504,160 | ||||||
20,585,124 | ||||||||
Telecommunication Services 1.7% | ||||||||
MetroPCS Communications, Inc. * | 33,700 | 286,450 | ||||||
Verizon Communications, Inc. | 89,500 | 3,309,710 | ||||||
3,596,160 | ||||||||
Transportation 1.3% | ||||||||
Delta Air Lines, Inc. * | 188,000 | 1,601,760 | ||||||
United Parcel Service, Inc., Class B | 16,100 | 1,130,864 | ||||||
2,732,624 | ||||||||
Utilities 0.1% | ||||||||
The AES Corp. * | 20,000 | 224,400 | ||||||
Total Common Stock | ||||||||
(Cost $179,902,045) | 211,308,854 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.8% of net assets | ||||||||
Time Deposit 0.7% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 1,717,337 | 1,717,337 | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (a)(b) | 140,000 | 140,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $1,857,337) | 1,857,337 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $181,989,566 and the unrealized appreciation and depreciation were $36,076,093 and ($4,899,468), respectively, with a net unrealized appreciation of $31,176,625.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
48 See financial notes
Schwab Large-Cap Growth Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 15 | 936,975 | 72,761 |
See financial notes 49
Schwab Large-Cap Growth Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $181,759,382) | $213,166,191 | |||||
Receivables: | ||||||
Dividends | 214,778 | |||||
Fund shares sold | 180,327 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 9,057 | ||||
Total assets | 213,570,354 | |||||
Liabilities | ||||||
Payables: | ||||||
Investment adviser and administrator fees | 12,482 | |||||
Shareholder service fees | 4,616 | |||||
Fund shares redeemed | 186,616 | |||||
Due to brokers for futures | 23,700 | |||||
Accrued expenses | + | 62,080 | ||||
Total liabilities | 289,494 | |||||
Net Assets | ||||||
Total assets | 213,570,354 | |||||
Total liabilities | − | 289,494 | ||||
Net assets | $213,280,860 | |||||
Net Assets by Source | ||||||
Capital received from investors | 256,381,479 | |||||
Net investment income not yet distributed | 724,127 | |||||
Net realized capital losses | (75,304,316 | ) | ||||
Net unrealized capital gains | 31,479,570 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$213,280,860 | 19,071,970 | $11.18 |
50 See financial notes
Schwab Large-Cap Growth Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $3,539,977 | |||||
Interest | 1,562 | |||||
Securities on loan | + | 1,037 | ||||
Total investment income | 3,542,576 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,643,311 | |||||
Shareholder service fees | 563,657 | |||||
Shareholder reports | 47,377 | |||||
Portfolio accounting fees | 40,760 | |||||
Professional fees | 32,921 | |||||
Registration fees | 24,945 | |||||
Transfer agent fees | 21,746 | |||||
Trustees’ fees | 7,527 | |||||
Custodian fees | 7,199 | |||||
Other expenses | + | 6,606 | ||||
Total expenses | 2,396,049 | |||||
Expense reduction by CSIM and its affiliates | − | 136,498 | ||||
Net expenses | − | 2,259,551 | ||||
Net investment income | 1,283,025 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 22,077,074 | |||||
Net realized gains on futures contracts | + | 599,188 | ||||
Net realized gains | 22,676,262 | |||||
Net unrealized losses on investments | (7,671,591 | ) | ||||
Net unrealized losses on futures contracts | + | (225,632 | ) | |||
Net unrealized losses | + | (7,897,223 | ) | |||
Net realized and unrealized gains | 14,779,039 | |||||
Increase in net assets resulting from operations | $16,062,064 |
See financial notes 51
Schwab Large-Cap Growth Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,283,025 | $1,222,042 | ||||||||
Net realized gains | 22,676,262 | 19,541,476 | ||||||||
Net unrealized gains (losses) | + | (7,897,223 | ) | 20,023,881 | ||||||
Increase in net assets from operations | 16,062,064 | 40,787,399 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,241,602 | ) | ($2,274,429 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,665,376 | $41,539,298 | 5,456,543 | $53,850,747 | ||||||||||||||
Shares reinvested | 51,489 | 572,556 | 67,864 | 671,851 | ||||||||||||||
Shares redeemed | + | (5,580,743 | ) | (63,063,162 | ) | (24,147,177 | ) | (233,766,378 | ) | |||||||||
Net transactions in fund shares | (1,863,878 | ) | ($20,951,308 | ) | (18,622,770 | ) | ($179,243,780 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 20,935,848 | $219,411,706 | 39,558,618 | $360,142,516 | ||||||||||||||
Total decrease | + | (1,863,878 | ) | (6,130,846 | ) | (18,622,770 | ) | (140,730,810 | ) | |||||||||
End of period | 19,071,970 | $213,280,860 | 20,935,848 | $219,411,706 | ||||||||||||||
Net investment income not yet distributed | $724,127 | $682,704 |
52 See financial notes
Schwab Small-Cap Equity Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 13.96 | 11.14 | 10.55 | 18.22 | 17.80 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.01 | ) | (0.04 | ) | (0.02 | ) | (0.01 | ) | (0.10 | ) | ||||||||||||
Net realized and unrealized gains (losses) | 1.66 | 2.86 | 0.61 | (6.59 | ) | 0.60 | ||||||||||||||||
Total from investment operations | 1.65 | 2.82 | 0.59 | (6.60 | ) | 0.50 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | (0.00 | )2 | — | — | ||||||||||||||||
Distributions from net realized gains | — | — | — | (1.07 | ) | (0.08 | ) | |||||||||||||||
Total distributions | — | — | (0.00 | )2 | (1.07 | ) | (0.08 | ) | ||||||||||||||
Net asset value at end of period | 15.61 | 13.96 | 11.14 | 10.55 | 18.22 | |||||||||||||||||
Total return (%) | 11.82 | 25.31 | 5.65 | (38.16 | ) | 2.80 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 1.11 | 1.12 | 1.12 | 1.11 | 1.09 | |||||||||||||||||
Gross operating expenses | 1.12 | 1.14 | 1.17 | 1.12 | 1.09 | |||||||||||||||||
Net investment income (loss) | (0.05 | ) | (0.26 | ) | (0.16 | ) | (0.09 | ) | (0.28 | ) | ||||||||||||
Portfolio turnover rate | 72 | 64 | 85 | 50 | 106 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 226 | 219 | 202 | 79 | 228 |
1 Effective September 28, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Amount is less than $0.01.
See financial notes 53
Schwab Small-Cap Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
96 | .7% | Common Stock | 204,655,864 | 218,836,468 | ||||||||
3 | .4% | Short-Term Investments | 7,798,517 | 7,798,517 | ||||||||
100 | .1% | Total Investments | 212,454,381 | 226,634,985 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 187,388 | 187,388 | ||||||||
(0 | .2)% | Other Assets and Liabilities, Net | (421,441 | ) | ||||||||
100 | .0% | Total Net Assets | 226,400,932 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 96.7% of net assets | ||||||||
Automobiles & Components 0.6% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 112,800 | 1,093,032 | ||||||
Standard Motor Products, Inc. | 10,400 | 161,720 | ||||||
1,254,752 | ||||||||
Banks 4.3% | ||||||||
1st Source Corp. | 19,600 | 471,184 | ||||||
BancFirst Corp. | 26,800 | 1,037,160 | ||||||
Bank of Kentucky Financial Corp. | 9,300 | 200,880 | ||||||
Banner Corp. | 48,471 | 851,635 | ||||||
Capital City Bank Group, Inc. (a) | 4,200 | 42,798 | ||||||
Chemical Financial Corp. | 17,400 | 350,262 | ||||||
Community Trust Bancorp, Inc. | 3,400 | 96,322 | ||||||
Enterprise Financial Services Corp. | 4,600 | 70,978 | ||||||
First Busey Corp. | 35,600 | 181,560 | ||||||
First Citizens BancShares, Inc., Class A | 7,600 | 1,239,180 | ||||||
First Defiance Financial Corp. * | 16,800 | 238,728 | ||||||
First Interstate BancSystem, Inc. | 5,312 | 67,144 | ||||||
First Merchants Corp. | 20,400 | 164,424 | ||||||
Great Southern Bancorp, Inc. | 2,200 | 43,758 | ||||||
Heritage Commerce Corp. * | 36,500 | 176,295 | ||||||
MainSource Financial Group, Inc. | 19,800 | 185,724 | ||||||
Metro Bancorp, Inc. * | 12,400 | 102,548 | ||||||
Renasant Corp. | 12,500 | 180,250 | ||||||
Republic Bancorp, Inc., Class A | 25,300 | 514,602 | ||||||
StellarOne Corp. | 11,800 | 141,482 | ||||||
UMB Financial Corp. | 30,300 | 1,117,161 | ||||||
Union First Market Bankshares Corp. | 4,400 | 56,408 | ||||||
Virginia Commerce Bancorp, Inc. * | 34,100 | 216,876 | ||||||
Webster Financial Corp. | 54,900 | 1,078,236 | ||||||
WesBanco, Inc. | 12,600 | 250,236 | ||||||
West Bancorp, Inc. | 5,100 | 50,184 | ||||||
Western Alliance Bancorp * | 91,500 | 594,750 | ||||||
9,720,765 | ||||||||
Capital Goods 8.6% | ||||||||
Aircastle Ltd. | 111,870 | 1,356,983 | ||||||
Alamo Group, Inc. | 45,900 | 1,094,715 | ||||||
Albany International Corp., Class A | 25,100 | 567,009 | ||||||
Astec Industries, Inc. * | 16,600 | 551,950 | ||||||
Blount International, Inc. * | 37,800 | 587,034 | ||||||
Cascade Corp. | 13,600 | 586,160 | ||||||
Cubic Corp. | 26,700 | 1,258,104 | ||||||
DXP Enterprises, Inc. * | 10,700 | 267,286 | ||||||
Esterline Technologies Corp. * | 22,900 | 1,280,110 | ||||||
General Cable Corp. * | 24,400 | 684,176 | ||||||
GeoEye, Inc. * | 29,200 | 980,244 | ||||||
Great Lakes Dredge & Dock Co. | 156,000 | 803,400 | ||||||
Kadant, Inc. * | 30,000 | 649,500 | ||||||
L.B. Foster Co., Class A | 4,000 | 102,000 | ||||||
Layne Christensen Co. * | 39,900 | 1,005,081 | ||||||
Lydall, Inc. * | 13,000 | 142,480 | ||||||
Miller Industries, Inc. | 13,000 | 265,720 | ||||||
Moog, Inc., Class A * | 34,800 | 1,347,804 | ||||||
NACCO Industries, Inc., Class A | 9,400 | 771,740 | ||||||
Primoris Services Corp. | 72,400 | 942,648 | ||||||
Sauer-Danfoss, Inc. * | 46,100 | 1,784,992 | ||||||
Standex International Corp. | 5,000 | 193,050 | ||||||
Sterling Construction Co., Inc. * | 8,200 | 102,090 | ||||||
Tredegar Corp. | 34,900 | 676,013 | ||||||
TriMas Corp. * | 79,000 | 1,539,710 | ||||||
19,539,999 | ||||||||
Commercial & Professional Supplies 3.8% | ||||||||
A.T. Cross Co., Class A * | 18,200 | 221,312 | ||||||
Consolidated Graphics, Inc. * | 33,800 | 1,539,928 | ||||||
G & K Services, Inc., Class A | 44,400 | 1,347,984 | ||||||
Insperity, Inc. | 46,100 | 1,188,458 | ||||||
Intersections, Inc. | 35,200 | 594,528 | ||||||
Kelly Services, Inc., Class A | 45,600 | 745,560 | ||||||
Kimball International, Inc., Class B | 9,600 | 54,048 | ||||||
Multi-Color Corp. | 9,400 | 249,194 | ||||||
Steelcase, Inc., Class A | 119,000 | 881,790 | ||||||
Sykes Enterprises, Inc. * | 47,100 | 750,303 | ||||||
UniFirst Corp. | 13,400 | 701,490 | ||||||
Viad Corp. | 19,500 | 408,135 | ||||||
8,682,730 | ||||||||
Consumer Durables & Apparel 4.5% | ||||||||
Arctic Cat, Inc. * | 25,300 | 513,843 | ||||||
Brunswick Corp. | 106,100 | 1,873,726 | ||||||
CSS Industries, Inc. | 3,100 | 65,348 | ||||||
Delta Apparel, Inc. * | 6,500 | 117,065 | ||||||
Helen of Troy Ltd. * | 30,200 | 873,686 | ||||||
JAKKS Pacific, Inc. | 80,400 | 1,525,188 | ||||||
Jarden Corp. | 40,100 | 1,284,403 | ||||||
Johnson Outdoors, Inc., Class A * | 2,400 | 44,616 | ||||||
Leapfrog Enterprises, Inc. * | 106,800 | 398,364 | ||||||
Libbey, Inc. * | 65,200 | 825,432 |
54 See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Lifetime Brands, Inc. | 9,100 | 111,293 | ||||||
Movado Group, Inc. | 27,000 | 451,710 | ||||||
Perry Ellis International, Inc. * | 23,800 | 597,380 | ||||||
Quiksilver, Inc. * | 376,681 | 1,261,881 | ||||||
Steinway Musical Instruments, Inc. * | 7,800 | 196,560 | ||||||
10,140,495 | ||||||||
Consumer Services 2.8% | ||||||||
Ameristar Casinos, Inc. | 55,800 | 1,032,300 | ||||||
Biglari Holdings, Inc. * | 3,200 | 1,104,384 | ||||||
Churchill Downs, Inc. | 9,600 | 461,472 | ||||||
Mac-Gray Corp. | 4,000 | 55,520 | ||||||
Papa John’s International, Inc. * | 26,000 | 877,760 | ||||||
Service Corp. International | 135,000 | 1,350,000 | ||||||
Steiner Leisure Ltd. * | 19,800 | 953,964 | ||||||
Town Sports International Holdings, Inc. * | 45,183 | 392,189 | ||||||
6,227,589 | ||||||||
Diversified Financials 3.7% | ||||||||
BGC Partners, Inc., Class A | 223,800 | 1,533,030 | ||||||
Calamos Asset Management, Inc., Class A | 49,400 | 617,006 | ||||||
Cash America International, Inc. | 30,700 | 1,680,825 | ||||||
First Cash Financial Services, Inc. * | 6,014 | 249,581 | ||||||
Interactive Brokers Group, Inc., Class A | 90,600 | 1,393,428 | ||||||
INTL FCStone, Inc. * | 21,900 | 530,856 | ||||||
Nelnet, Inc., Class A | 55,788 | 1,198,326 | ||||||
PHH Corp. * | 57,000 | 1,051,650 | ||||||
Primus Guaranty Ltd. * | 25,700 | 150,088 | ||||||
8,404,790 | ||||||||
Energy 7.6% | ||||||||
Bristow Group, Inc. | 27,600 | 1,373,928 | ||||||
Callon Petroleum Co. * | 163,100 | 768,201 | ||||||
Cloud Peak Energy, Inc. * | 57,500 | 1,319,625 | ||||||
Complete Production Services, Inc. * | 60,200 | 1,974,560 | ||||||
Crosstex Energy, Inc. | 114,100 | 1,486,723 | ||||||
GulfMark Offshore, Inc., Class A * | 24,100 | 1,002,319 | ||||||
Helix Energy Solutions Group, Inc. * | 80,800 | 1,459,248 | ||||||
Newpark Resources, Inc. * | 160,400 | 1,432,372 | ||||||
Parker Drilling Co. * | 73,400 | 405,902 | ||||||
REX American Resources Corp. * | 4,700 | 85,728 | ||||||
SEACOR Holdings, Inc. | 12,000 | 1,021,800 | ||||||
SemGroup Corp. * | 43,700 | 1,222,726 | ||||||
Stone Energy Corp. * | 43,600 | 1,059,044 | ||||||
Teekay Offshore Partners L.P. | 22,900 | 604,102 | ||||||
TETRA Technologies, Inc. * | 109,800 | 1,043,100 | ||||||
W&T Offshore, Inc. | 47,900 | 943,151 | ||||||
17,202,529 | ||||||||
Food, Beverage & Tobacco 1.3% | ||||||||
Coca-Cola Bottling Co. Consolidated | 20,600 | 1,156,072 | ||||||
Dole Food Co., Inc. * | 46,495 | 491,917 | ||||||
Fresh Del Monte Produce, Inc. | 43,900 | 1,117,694 | ||||||
MGP Ingredients, Inc. | 7,900 | 51,824 | ||||||
2,817,507 | ||||||||
Health Care Equipment & Services 3.8% | ||||||||
AMERIGROUP Corp. * | 4,400 | 244,772 | ||||||
ArthroCare Corp. * | 22,600 | 681,390 | ||||||
Cantel Medical Corp. | 36,900 | 1,018,440 | ||||||
Centene Corp. * | 7,300 | 256,595 | ||||||
CryoLife, Inc. * | 46,100 | 212,521 | ||||||
Greatbatch, Inc. * | 28,300 | 631,939 | ||||||
Healthspring, Inc. * | 17,700 | 954,738 | ||||||
Integra LifeSciences Holdings * | 7,400 | 237,244 | ||||||
Invacare Corp. | 39,800 | 893,510 | ||||||
National Healthcare Corp. | 5,200 | 199,212 | ||||||
RTI Biologics, Inc. * | 103,500 | 465,750 | ||||||
The Providence Service Corp. * | 11,700 | 146,250 | ||||||
WellCare Health Plans, Inc. * | 32,400 | 1,587,924 | ||||||
Wright Medical Group, Inc. * | 60,800 | 1,045,152 | ||||||
8,575,437 | ||||||||
Household & Personal Products 1.0% | ||||||||
Elizabeth Arden, Inc. * | 48,100 | 1,648,868 | ||||||
Nature’s Sunshine Products, Inc. * | 25,900 | 449,624 | ||||||
Revlon, Inc., Class A * | 15,900 | 234,207 | ||||||
2,332,699 | ||||||||
Insurance 4.5% | ||||||||
American Equity Investment Life Holding Co. | 90,900 | 985,356 | ||||||
American Financial Group, Inc. | 39,100 | 1,400,953 | ||||||
CNO Financial Group, Inc. * | 170,200 | 1,063,750 | ||||||
FBL Financial Group, Inc., Class A | 21,400 | 698,710 | ||||||
First American Financial Corp. | 107,400 | 1,288,800 | ||||||
Independence Holding Co. | 11,300 | 93,677 | ||||||
Kemper Corp. | 40,100 | 1,078,289 | ||||||
Maiden Holdings Ltd. | 77,900 | 634,885 | ||||||
Meadowbrook Insurance Group, Inc. | 20,400 | 211,344 | ||||||
Presidential Life Corp. | 4,800 | 47,616 | ||||||
ProAssurance Corp. | 23,200 | 1,775,960 | ||||||
Symetra Financial Corp. | 88,000 | 815,760 | ||||||
10,095,100 | ||||||||
Materials 4.7% | ||||||||
AEP Industries, Inc. * | 2,700 | 72,981 | ||||||
Boise, Inc. | 132,900 | 804,045 | ||||||
Buckeye Technologies, Inc. | 47,300 | 1,430,352 | ||||||
Ferro Corp. * | 88,200 | 570,654 | ||||||
Georgia Gulf Corp. * | 43,500 | 787,350 | ||||||
Graphic Packaging Holding Co. * | 109,500 | 483,990 | ||||||
Handy & Harman Ltd. * | 17,500 | 210,000 | ||||||
Minerals Technologies, Inc. | 18,400 | 1,009,056 | ||||||
Neenah Paper, Inc. | 57,300 | 945,450 | ||||||
P.H. Glatfelter Co. | 75,100 | 1,126,500 | ||||||
PolyOne Corp. | 135,300 | 1,514,007 | ||||||
Rockwood Holdings, Inc. * | 38,500 | 1,772,540 | ||||||
10,726,925 | ||||||||
Media 1.7% | ||||||||
AH Belo Corp., Class A | 25,000 | 125,000 | ||||||
Fisher Communications, Inc. * | 9,200 | 267,168 |
See financial notes 55
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Journal Communications, Inc., Class A * | 78,800 | 304,168 | ||||||
Knology, Inc. * | 33,300 | 477,189 | ||||||
LIN TV Corp., Class A * | 53,200 | 165,984 | ||||||
Live Nation Entertainment, Inc. * | 107,600 | 1,010,364 | ||||||
Nexstar Broadcasting Group, Inc., Class A * | 24,700 | 224,770 | ||||||
Sinclair Broadcast Group, Inc., Class A | 106,600 | 1,021,228 | ||||||
The E.W. Scripps Co., Class A * | 40,600 | 338,604 | ||||||
3,934,475 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.0% | ||||||||
Affymetrix, Inc. * | 158,300 | 884,897 | ||||||
Albany Molecular Research, Inc. * | 79,200 | 254,232 | ||||||
Astex Pharmaceuticals * | 179,300 | 346,049 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 12,000 | 1,194,600 | ||||||
Cambrex Corp. * | 105,400 | 580,754 | ||||||
Charles River Laboratories International, Inc. * | 47,300 | 1,526,844 | ||||||
Cornerstone Therapeutics, Inc. * | 11,000 | 67,430 | ||||||
Emergent Biosolutions, Inc. * | 61,400 | 1,158,004 | ||||||
Impax Laboratories, Inc. * | 73,400 | 1,387,994 | ||||||
Luminex Corp. * | 32,500 | 713,700 | ||||||
Medicis Pharmaceutical Corp., Class A | 48,200 | 1,845,578 | ||||||
Myriad Genetics, Inc. * | 69,000 | 1,468,320 | ||||||
Par Pharmaceutical Cos., Inc. * | 55,100 | 1,686,060 | ||||||
PDL BioPharma, Inc. | 184,900 | 1,122,343 | ||||||
PerkinElmer, Inc. | 19,900 | 411,333 | ||||||
Progenics Pharmaceuticals, Inc. * | 22,300 | 146,511 | ||||||
The Medicines Co. * | 85,400 | 1,598,688 | ||||||
ViroPharma, Inc. * | 84,500 | 1,710,280 | ||||||
18,103,617 | ||||||||
Real Estate 5.7% | ||||||||
Acadia Realty Trust | 20,700 | 428,904 | ||||||
American Campus Communities, Inc. | 40,500 | 1,576,665 | ||||||
Apartment Investment & Management Co., Class A | 39,600 | 976,932 | ||||||
Ashford Hospitality Trust | 108,500 | 965,650 | ||||||
CBL & Associates Properties, Inc. | 83,200 | 1,279,616 | ||||||
CubeSmart | 108,400 | 1,063,404 | ||||||
First Industrial Realty Trust, Inc. * | 150,600 | 1,483,410 | ||||||
Home Properties, Inc. | 21,500 | 1,266,350 | ||||||
Pennsylvania REIT | 76,300 | 782,838 | ||||||
RAIT Financial Trust (a) | 33,632 | 174,886 | ||||||
Strategic Hotel & Resorts, Inc. * | 173,700 | 988,353 | ||||||
Sunstone Hotel Investors, Inc. * | 121,100 | 841,645 | ||||||
Taubman Centers, Inc. | 16,800 | 1,028,664 | ||||||
12,857,317 | ||||||||
Retailing 5.9% | ||||||||
Aaron’s, Inc. | 45,200 | 1,209,552 | ||||||
Ascena Retail Group, Inc. * | 47,900 | 1,384,310 | ||||||
Audiovox Corp., Class A * | 31,100 | 221,121 | ||||||
Charming Shoppes, Inc. * | 294,800 | 1,022,956 | ||||||
Core-Mark Holding Co., Inc. * | 8,900 | 298,061 | ||||||
Dillard’s, Inc., Class A | 30,500 | 1,571,665 | ||||||
DSW, Inc., Class A | 21,600 | 1,130,544 | ||||||
Orbitz Worldwide, Inc. * | 58,200 | 109,998 | ||||||
Pier 1 Imports, Inc. * | 150,200 | 1,879,002 | ||||||
Saks, Inc. * | 109,100 | 1,153,187 | ||||||
Select Comfort Corp. * | 108,300 | 2,249,391 | ||||||
Systemax, Inc. * | 14,400 | 217,872 | ||||||
The Cato Corp., Class A | 37,600 | 963,688 | ||||||
13,411,347 | ||||||||
Semiconductors & Semiconductor Equipment 4.3% | ||||||||
Alpha & Omega Semiconductor Ltd. * | 27,200 | 229,840 | ||||||
ATMI, Inc. * | 45,300 | 924,120 | ||||||
Diodes, Inc. * | 23,100 | 516,747 | ||||||
Entegris, Inc. * | 156,400 | 1,401,344 | ||||||
Fairchild Semiconductor International, Inc. * | 111,600 | 1,670,652 | ||||||
International Rectifier Corp. * | 43,700 | 1,061,473 | ||||||
IXYS Corp. * | 26,700 | 364,989 | ||||||
LTX-Credence Corp. * | 158,000 | 1,000,140 | ||||||
MKS Instruments, Inc. | 31,400 | 836,496 | ||||||
Photronics, Inc. * | 268,100 | 1,680,987 | ||||||
9,686,788 | ||||||||
Software & Services 10.1% | ||||||||
ACI Worldwide, Inc. * | 55,100 | 1,689,917 | ||||||
Acxiom Corp. * | 96,100 | 1,267,559 | ||||||
CACI International, Inc., Class A * | 23,200 | 1,273,448 | ||||||
Cardtronics, Inc. * | 69,700 | 1,737,621 | ||||||
Convergys Corp. * | 104,300 | 1,116,010 | ||||||
CoreLogic, Inc. * | 71,300 | 867,721 | ||||||
DST Systems, Inc. | 8,600 | 431,634 | ||||||
Euronet Worldwide, Inc. * | 76,800 | 1,487,616 | ||||||
Heartland Payment Systems, Inc. | 71,900 | 1,564,544 | ||||||
InfoSpace, Inc. * | 43,400 | 380,184 | ||||||
Keynote Systems, Inc. | 20,200 | 482,174 | ||||||
Manhattan Associates, Inc. * | 43,200 | 1,829,520 | ||||||
MAXIMUS, Inc. | 43,200 | 1,742,688 | ||||||
MoneyGram International, Inc. * | 229,000 | 586,240 | ||||||
Monotype Imaging Holdings, Inc. * | 65,000 | 882,050 | ||||||
PRGX Global, Inc. * | 23,600 | 126,024 | ||||||
TeleTech Holdings, Inc. * | 90,300 | 1,578,444 | ||||||
The Hackett Group, Inc. * | 27,500 | 113,575 | ||||||
TIBCO Software, Inc. * | 19,700 | 569,133 | ||||||
TNS, Inc. * | 56,900 | 1,111,257 | ||||||
Unisys Corp. * | 41,240 | 1,071,828 | ||||||
United Online, Inc. | 159,300 | 941,463 | ||||||
22,850,650 | ||||||||
Technology Hardware & Equipment 3.4% | ||||||||
Electro Scientific Industries, Inc. * | 2,300 | 28,267 | ||||||
FEI Co. * | 46,000 | 1,828,960 | ||||||
Insight Enterprises, Inc. * | 93,800 | 1,585,220 | ||||||
KEMET Corp. * | 21,800 | 200,996 | ||||||
Newport Corp. * | 37,200 | 515,220 | ||||||
Oplink Communications, Inc. * | 64,100 | 1,039,702 | ||||||
OSI Systems, Inc. * | 11,600 | 513,880 | ||||||
RadiSys Corp. * | 65,400 | 383,244 | ||||||
Richardson Electronics Ltd. | 15,300 | 198,747 | ||||||
Sanmina-SCI Corp. * | 103,400 | 910,954 |
56 See financial notes
Schwab Small-Cap Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Symmetricom, Inc. * | 74,300 | 382,645 | ||||||
7,587,835 | ||||||||
Telecommunication Services 1.0% | ||||||||
IDT Corp., Class B | 67,000 | 770,500 | ||||||
Premiere Global Services, Inc. * | 30,100 | 272,706 | ||||||
SureWest Communications | 28,300 | 324,601 | ||||||
Telephone & Data Systems, Inc. | 40,800 | 945,744 | ||||||
2,313,551 | ||||||||
Transportation 1.9% | ||||||||
Alaska Air Group, Inc. * | 30,900 | 2,055,777 | ||||||
AMERCO * | 10,100 | 764,671 | ||||||
International Shipholding Corp. | 23,800 | 484,092 | ||||||
Park-Ohio Holdings Corp. * | 12,500 | 202,250 | ||||||
US Airways Group, Inc. * | 149,500 | 862,615 | ||||||
4,369,405 | ||||||||
Utilities 3.5% | ||||||||
Genie Energy Ltd., Class B * | 67,000 | 556,100 | ||||||
NorthWestern Corp. | 36,900 | 1,271,205 | ||||||
PNM Resources, Inc. | 89,700 | 1,612,806 | ||||||
Portland General Electric Co. | 57,100 | 1,401,234 | ||||||
Southwest Gas Corp. | 45,100 | 1,780,548 | ||||||
Unisource Energy Corp. | 34,100 | 1,271,248 | ||||||
WGL Holdings, Inc. | 2,500 | 107,025 | ||||||
8,000,166 | ||||||||
Total Common Stock | ||||||||
(Cost $204,655,864) | 218,836,468 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 3.4% of net assets | ||||||||
Time Deposits 2.9% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 6,688,517 | 6,688,517 | ||||||
U.S. Treasury Obligation 0.5% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (b)(c) | 1,110,000 | 1,110,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $7,798,517) | 7,798,517 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 187,388 | 187,388 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $187,388) | 187,388 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/11, the tax basis cost of the fund’s investments was $212,792,169 and the unrealized appreciation and depreciation were $27,500,929 and ($13,658,113), respectively, with a net unrealized appreciation of $13,842,816.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 65 | 4,805,450 | 475,396 |
See financial notes 57
Schwab Small-Cap Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $212,454,381) including securities on loan of $177,247 | $226,634,985 | |||||
Collateral invested for securities on loan | 187,388 | |||||
Receivables: | ||||||
Dividends | 48,838 | |||||
Fund shares sold | 43,534 | |||||
Income from securities on loan | 760 | |||||
Interest | 6 | |||||
Prepaid expenses | + | 5,670 | ||||
Total assets | 226,921,181 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 187,388 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 16,433 | |||||
Shareholder service fees | 4,794 | |||||
Fund shares redeemed | 138,487 | |||||
Due to brokers for futures | 131,300 | |||||
Accrued expenses | + | 41,847 | ||||
Total liabilities | 520,249 | |||||
Net Assets | ||||||
Total assets | 226,921,181 | |||||
Total liabilities | − | 520,249 | ||||
Net assets | $226,400,932 | |||||
Net Assets by Source | ||||||
Capital received from investors | 260,892,394 | |||||
Distributions in excess of net investment income | (162,424 | ) | ||||
Net realized capital losses | (48,985,038 | ) | ||||
Net unrealized capital gains | 14,656,000 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$226,400,932 | 14,507,077 | $15.61 |
58 See financial notes
Schwab Small-Cap Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $2,464,201 | |||||
Interest | 2,701 | |||||
Securities on loan | + | 22,782 | ||||
Total investment income | 2,489,684 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,896,646 | |||||
Shareholder service fees | 573,708 | |||||
Portfolio accounting fees | 43,086 | |||||
Professional fees | 33,721 | |||||
Shareholder reports | 23,112 | |||||
Transfer agent fees | 17,829 | |||||
Registration fees | 17,820 | |||||
Custodian fees | 13,549 | |||||
Trustees’ fees | 7,555 | |||||
Interest expense | 18 | |||||
Other expenses | + | 5,470 | ||||
Total expenses | 2,632,514 | |||||
Expense reduction by CSIM and its affiliates | − | 24,238 | ||||
Payment for state filing fees (see financial note 11) | − | 10,838 | ||||
Net expenses | − | 2,597,438 | ||||
Net investment loss | (107,754 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 42,706,507 | |||||
Net realized gains on futures contracts | + | 70,760 | ||||
Net realized gains | 42,777,267 | |||||
Net unrealized losses on investments | (15,774,192 | ) | ||||
Net unrealized losses on futures contracts | + | (48,685 | ) | |||
Net unrealized losses | + | (15,822,877 | ) | |||
Net realized and unrealized gains | 26,954,390 | |||||
Increase in net assets resulting from operations | $26,846,636 |
See financial notes 59
Schwab Small-Cap Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment loss | ($107,754 | ) | ($554,304 | ) | ||||||
Net realized gains | 42,777,267 | 19,962,409 | ||||||||
Net unrealized gains (losses) | + | (15,822,877 | ) | 29,183,645 | ||||||
Increase in net assets from operations | $26,846,636 | $48,591,750 |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,170,598 | $33,586,870 | 1,457,019 | $18,515,745 | ||||||||||||||
Shares redeemed | + | (3,345,626 | ) | (52,956,292 | ) | (3,898,642 | ) | (50,114,637 | ) | |||||||||
Net transactions in fund shares | (1,175,028 | ) | ($19,369,422 | ) | (2,441,623 | ) | ($31,598,892 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 15,682,105 | $218,923,718 | 18,123,728 | $201,930,860 | ||||||||||||||
Total increase or decrease | + | (1,175,028 | ) | 7,477,214 | (2,441,623 | ) | 16,992,858 | |||||||||||
End of period | 14,507,077 | $226,400,932 | 15,682,105 | $218,923,718 | ||||||||||||||
Distributions in excess of net investment income | ($162,424 | ) | $— |
60 See financial notes
Schwab Hedged Equity Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 14.79 | 13.45 | 12.55 | 16.39 | 15.98 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | (0.05 | ) | (0.08 | ) | (0.05 | ) | (0.05 | ) | 0.14 | |||||||||||||
Net realized and unrealized gains (losses) | 0.58 | 1.42 | 0.96 | (3.63 | ) | 0.36 | ||||||||||||||||
Total from investment operations | 0.53 | 1.34 | 0.91 | (3.68 | ) | 0.50 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | — | — | (0.01 | ) | (0.16 | ) | (0.09 | ) | ||||||||||||||
Total distributions | — | — | (0.01 | ) | (0.16 | ) | (0.09 | ) | ||||||||||||||
Net asset value at end of period | 15.32 | 14.79 | 13.45 | 12.55 | 16.39 | |||||||||||||||||
Total return (%) | 3.58 | 9.96 | 7.28 | (22.66 | ) | 3.11 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses (including dividend expense on short sales) | 1.86 | 1.97 | 2.07 | 2 | 2.17 | 3 | 2.03 | 3 | ||||||||||||||
Net operating expenses (excluding dividend expense on short sales) | 1.44 | 4 | 1.38 | 5 | 1.62 | 2,5 | 1.77 | 1.77 | ||||||||||||||
Gross operating expenses | 1.88 | 1.99 | 2.29 | 2.19 | 2.04 | |||||||||||||||||
Net investment income (loss) | (0.25 | ) | (0.54 | ) | (0.41 | ) | (0.17 | ) | 0.79 | |||||||||||||
Portfolio turnover rate | 98 | 115 | 169 | 138 | 72 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 236 | 329 | 306 | 343 | 948 |
1 Effective September 28, 2009, the Investor Shares class and the Select Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Select Shares.
2 Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
3 The ratio of net operating expense would have been 2.02% and 2.16% for the periods ended 10/31/07 and 10/31/08, respectively, if interest expense had not been incurred.
4 The ratio of net operating expenses would have been 1.33%, if stock loan fees on short sales and payment for state filing fees (See financial note 11) had not been included.
5 The ratio of net operating expenses would have been 1.47% and 1.31% for the period ended 10/31/09 and 10/31/10, respectively, if stock loan fees on short sales had not been incurred.
See financial notes 61
Schwab Hedged Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
95 | .7% | Common Stock | 207,601,910 | 225,584,125 | ||||||||
0 | .8% | Other Investment Company | 1,800,833 | 1,800,833 | ||||||||
0 | .3% | Short-Term Investments | 675,003 | 675,003 | ||||||||
96 | .8% | Total Investments | 210,077,746 | 228,059,961 | ||||||||
(34 | .7)% | Short Sales | (88,843,419 | ) | (81,814,146 | ) | ||||||
37 | .9% | Other Assets and Liabilities, Net | 89,378,393 | |||||||||
100 | .0% | Total Net Assets | 235,624,208 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 95.7% of net assets | ||||||||
Automobiles & Components 0.3% | ||||||||
Ford Motor Co. * | 64,521 | 753,604 | ||||||
Banks 1.5% | ||||||||
Fifth Third Bancorp | 78,998 | 948,766 | ||||||
SunTrust Banks, Inc. | 13,534 | 267,026 | ||||||
Wells Fargo & Co. (a) | 87,391 | 2,264,301 | ||||||
3,480,093 | ||||||||
Capital Goods 4.4% | ||||||||
AGCO Corp. * | 31,473 | 1,379,462 | ||||||
Cubic Corp. | 40,087 | 1,888,899 | ||||||
General Electric Co. | 100,505 | 1,679,439 | ||||||
KBR, Inc. | 19,618 | 547,538 | ||||||
Textron, Inc. | 24,235 | 470,644 | ||||||
The Boeing Co. | 28,956 | 1,905,015 | ||||||
The Timken Co. | 59,590 | 2,509,931 | ||||||
10,380,928 | ||||||||
Commercial & Professional Supplies 1.5% | ||||||||
Herman Miller, Inc. | 98,722 | 2,038,609 | ||||||
Iron Mountain, Inc. | 1,679 | 51,932 | ||||||
Towers Watson & Co., Class A | 21,926 | 1,440,538 | ||||||
3,531,079 | ||||||||
Consumer Durables & Apparel 2.6% | ||||||||
Brunswick Corp. | 84,978 | 1,500,711 | ||||||
Jarden Corp. (a) | 4,511 | 144,487 | ||||||
Mohawk Industries, Inc. (a)* | 41,020 | 2,159,703 | ||||||
Polaris Industries, Inc. | 35,455 | 2,245,720 | ||||||
6,050,621 | ||||||||
Consumer Services 1.7% | ||||||||
Brinker International, Inc. | 88,126 | 2,018,085 | ||||||
Penn National Gaming, Inc. (a)* | 54,659 | 1,967,724 | ||||||
3,985,809 | ||||||||
Diversified Financials 4.9% | ||||||||
Capital One Financial Corp. | 51,512 | 2,352,038 | ||||||
JPMorgan Chase & Co. | 149,212 | 5,186,609 | ||||||
SLM Corp. | 143,309 | 1,959,034 | ||||||
The NASDAQ OMX Group, Inc. (a)* | 84,244 | 2,110,312 | ||||||
11,607,993 | ||||||||
Energy 11.2% | ||||||||
Anadarko Petroleum Corp. (a) | 33,753 | 2,649,610 | ||||||
Chevron Corp. | 57,596 | 6,050,460 | ||||||
Exxon Mobil Corp. | 47,420 | 3,703,028 | ||||||
Hess Corp. | 61,478 | 3,846,064 | ||||||
Murphy Oil Corp. (a) | 67,353 | 3,729,336 | ||||||
Oceaneering International, Inc. (a) | 34,201 | 1,430,628 | ||||||
SEACOR Holdings, Inc. (a) | 11,540 | 982,631 | ||||||
Sunoco, Inc. (a) | 52,036 | 1,937,300 | ||||||
Tesoro Corp. * | 9,127 | 236,754 | ||||||
Valero Energy Corp. (a) | 77,678 | 1,910,879 | ||||||
26,476,690 | ||||||||
Food & Staples Retailing 2.0% | ||||||||
Ruddick Corp. | 12,904 | 564,034 | ||||||
Safeway, Inc. (a) | 91,483 | 1,772,025 | ||||||
The Kroger Co. | 97,043 | 2,249,457 | ||||||
4,585,516 | ||||||||
Food, Beverage & Tobacco 7.5% | ||||||||
Bunge Ltd. | 30,844 | 1,905,234 | ||||||
Constellation Brands, Inc., Class A * | 102,079 | 2,064,037 | ||||||
Corn Products International, Inc. (a) | 75,949 | 3,683,527 | ||||||
Fresh Del Monte Produce, Inc. | 82,707 | 2,105,720 | ||||||
Smithfield Foods, Inc. (a)* | 156,003 | 3,566,229 | ||||||
Tyson Foods, Inc., Class A (a) | 223,158 | 4,306,949 | ||||||
17,631,696 | ||||||||
Health Care Equipment & Services 2.1% | ||||||||
Cardinal Health, Inc. (a) | 33,467 | 1,481,584 | ||||||
McKesson Corp. | 43,328 | 3,533,398 | ||||||
5,014,982 | ||||||||
Household & Personal Products 0.6% | ||||||||
Herbalife Ltd. | 23,920 | 1,491,651 | ||||||
Insurance 3.7% | ||||||||
American Financial Group, Inc. (a) | 127,835 | 4,580,328 | ||||||
Hartford Financial Services Group, Inc. | 53,820 | 1,036,035 |
62 See financial notes
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Principal Financial Group, Inc. | 39,132 | 1,008,823 | ||||||
Prudential Financial, Inc. (a) | 36,719 | 1,990,170 | ||||||
8,615,356 | ||||||||
Materials 7.6% | ||||||||
Alcoa, Inc. (a) | 168,907 | 1,817,439 | ||||||
CF Industries Holdings, Inc. | 944 | 153,183 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 41,755 | 1,681,056 | ||||||
International Paper Co. (a) | 141,116 | 3,908,913 | ||||||
MeadWestvaco Corp. (a) | 146,247 | 4,081,754 | ||||||
Minerals Technologies, Inc. (a) | 22,346 | 1,225,455 | ||||||
PPG Industries, Inc. (a) | 48,472 | 4,188,466 | ||||||
Rockwood Holdings, Inc. * | 19,828 | 912,881 | ||||||
17,969,147 | ||||||||
Media 1.0% | ||||||||
CBS Corp., Class B - Non Voting Shares | 92,742 | 2,393,671 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 8.0% | ||||||||
Agilent Technologies, Inc. * | 18,884 | 700,030 | ||||||
Bristol-Myers Squibb Co. (a) | 91,964 | 2,905,143 | ||||||
Eli Lilly & Co. (a) | 74,697 | 2,775,740 | ||||||
Mylan, Inc. * | 50,253 | 983,451 | ||||||
PerkinElmer, Inc. (a) | 82,041 | 1,695,787 | ||||||
Pfizer, Inc. (a) | 281,687 | 5,425,292 | ||||||
Watson Pharmaceuticals, Inc. (a)* | 64,861 | 4,356,065 | ||||||
18,841,508 | ||||||||
Real Estate 2.9% | ||||||||
Apartment Investment & Management Co., Class A (a) | 110,996 | 2,738,271 | ||||||
Camden Property Trust | 25,179 | 1,526,855 | ||||||
CBRE Group, Inc. (a)* | 138,378 | 2,460,361 | ||||||
6,725,487 | ||||||||
Retailing 3.8% | ||||||||
Dillard’s, Inc., Class A | 39,657 | 2,043,525 | ||||||
J.C. Penney Co., Inc. (a) | 11,330 | 363,466 | ||||||
Macy’s, Inc. | 69,421 | 2,119,423 | ||||||
PetSmart, Inc. (a) | 80,152 | 3,763,137 | ||||||
Pier 1 Imports, Inc. (a)* | 56,337 | 704,776 | ||||||
8,994,327 | ||||||||
Semiconductors & Semiconductor Equipment 1.7% | ||||||||
Amkor Technology, Inc. * | 154,276 | 746,696 | ||||||
Fairchild Semiconductor International, Inc. * | 30,110 | 450,747 | ||||||
LSI Corp. * | 278,566 | 1,741,037 | ||||||
Micron Technology, Inc. (a)* | 208,354 | 1,164,699 | ||||||
4,103,179 | ||||||||
Software & Services 12.8% | ||||||||
Accenture plc, Class A | 734 | 44,231 | ||||||
ACI Worldwide, Inc. * | 1,679 | 51,495 | ||||||
Activision Blizzard, Inc. | 105,016 | 1,406,164 | ||||||
CA, Inc. (a) | 94,106 | 2,038,336 | ||||||
Computer Sciences Corp. (a) | 51,616 | 1,623,839 | ||||||
Convergys Corp. * | 169,222 | 1,810,675 | ||||||
DST Systems, Inc. | 84,139 | 4,222,937 | ||||||
Fidelity National Information Services, Inc. | 10,491 | 274,654 | ||||||
IAC/InterActiveCorp * | 31,683 | 1,293,617 | ||||||
International Business Machines Corp. | 39,893 | 7,365,445 | ||||||
MasterCard, Inc., Class A | 7,029 | 2,440,750 | ||||||
MAXIMUS, Inc. | 55,603 | 2,243,025 | ||||||
Symantec Corp. (a)* | 124,425 | 2,116,469 | ||||||
Synopsys, Inc. (a)* | 64,346 | 1,725,116 | ||||||
TeleTech Holdings, Inc. (a)* | 90,564 | 1,583,059 | ||||||
30,239,812 | ||||||||
Technology Hardware & Equipment 5.6% | ||||||||
Apple, Inc. * | 4,328 | 1,751,888 | ||||||
AVX Corp. | 63,681 | 853,962 | ||||||
Brocade Communications Systems, Inc. * | 349,224 | 1,529,601 | ||||||
EchoStar Corp., Class A (a)* | 56,967 | 1,501,650 | ||||||
Jabil Circuit, Inc. | 38,188 | 785,145 | ||||||
Lexmark International, Inc., Class A * | 24,654 | 781,532 | ||||||
NCR Corp. (a)* | 114,249 | 2,175,301 | ||||||
Tech Data Corp. (a)* | 41,545 | 2,043,183 | ||||||
The Western Digital Corp. * | 18,779 | 500,273 | ||||||
Xerox Corp. | 163,242 | 1,335,320 | ||||||
13,257,855 | ||||||||
Telecommunication Services 2.4% | ||||||||
AT&T, Inc. (a) | 113,514 | 3,327,096 | ||||||
Telephone & Data Systems, Inc. (a) | 64,416 | 1,493,163 | ||||||
Verizon Communications, Inc. | 19,933 | 737,122 | ||||||
5,557,381 | ||||||||
Transportation 2.6% | ||||||||
Alaska Air Group, Inc. * | 59,261 | 3,942,634 | ||||||
FedEx Corp. | 27,592 | 2,257,854 | ||||||
6,200,488 | ||||||||
Utilities 3.3% | ||||||||
Ameren Corp. | 79,266 | 2,527,000 | ||||||
NiSource, Inc. (a) | 55,708 | 1,230,590 | ||||||
Southwest Gas Corp. (a) | 65,570 | 2,588,704 | ||||||
The AES Corp. (a)* | 120,228 | 1,348,958 | ||||||
7,695,252 | ||||||||
Total Common Stock | ||||||||
(Cost $207,601,910) | 225,584,125 | |||||||
See financial notes 63
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Company 0.8% of net assets | ||||||||
Money Market Fund 0.8% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 1,800,833 | 1,800,833 | ||||||
Total Other Investment Company | ||||||||
(Cost $1,800,833) | 1,800,833 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.3% of net assets | ||||||||
U.S. Treasury Obligations 0.3% | ||||||||
U.S. Treasury Bills | ||||||||
(0.01)%, 12/15/11 (b)(c) | 275,000 | 275,001 | ||||||
0.00%, 12/15/11 (b)(c) | 400,000 | 400,002 | ||||||
Total Short-Term Investments | ||||||||
(Cost $675,003) | 675,003 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $210,115,067 and the unrealized appreciation and depreciation were $30,118,539 and ($12,173,645), respectively, with a net unrealized appreciation of $17,944,894.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for short sales. | |
(b) | All or a portion of this security is held as collateral for open futures contracts. | |
(c) | The rate shown is the purchase yield. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 38 | 2,373,670 | 154,429 |
64 See financial notes
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Short Sales 34.7% of net assets | ||||||||
Automobiles & Components 2.0% | ||||||||
BorgWarner, Inc. * | 15,000 | 1,147,350 | ||||||
Gentex Corp. | 61,900 | 1,864,428 | ||||||
Thor Industries, Inc. | 63,091 | 1,668,126 | ||||||
4,679,904 | ||||||||
Banks 1.2% | ||||||||
Capitol Federal Financial, Inc. | 127,200 | 1,410,648 | ||||||
MGIC Investment Corp. * | 6,400 | 17,024 | ||||||
New York Community Bancorp, Inc. | 100,400 | 1,336,324 | ||||||
2,763,996 | ||||||||
Capital Goods 2.4% | ||||||||
GrafTech International Ltd. * | 42,000 | 659,820 | ||||||
Illinois Tool Works, Inc. | 20,000 | 972,600 | ||||||
Lennox International, Inc. | 37,000 | 1,191,030 | ||||||
Rockwell Collins, Inc. | 18,300 | 1,021,689 | ||||||
Terex Corp. * | 65,800 | 1,094,912 | ||||||
USG Corp. * | 73,400 | 679,684 | ||||||
5,619,735 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Lennar Corp., Class A | 45,100 | 745,954 | ||||||
M.D.C. Holdings, Inc. | 38,900 | 871,360 | ||||||
PulteGroup, Inc. * | 192,800 | 998,704 | ||||||
2,616,018 | ||||||||
Consumer Services 0.4% | ||||||||
Chipotle Mexican Grill, Inc. * | 800 | 268,896 | ||||||
Gaylord Entertainment Co. * | 32,400 | 757,836 | ||||||
1,026,732 | ||||||||
Diversified Financials 1.3% | ||||||||
Greenhill & Co., Inc. | 1,800 | 68,004 | ||||||
T. Rowe Price Group, Inc. | 25,600 | 1,352,704 | ||||||
TD Ameritrade Holding Corp. | 102,300 | 1,716,594 | ||||||
3,137,302 | ||||||||
Energy 2.9% | ||||||||
Carrizo Oil & Gas, Inc. * | 42,800 | 1,164,160 | ||||||
Cobalt International Energy, Inc. * | 153,800 | 1,587,216 | ||||||
Continental Resources, Inc. * | 24,600 | 1,491,990 | ||||||
Dril-Quip, Inc. * | 22,400 | 1,458,240 | ||||||
Gulfport Energy Corp. * | 7,600 | 236,664 | ||||||
Kodiak Oil & Gas Corp * | 95,784 | 661,868 | ||||||
Ultra Petroleum Corp. * | 4,300 | 136,998 | ||||||
6,737,136 | ||||||||
Food & Staples Retailing 0.6% | ||||||||
United Natural Foods, Inc. * | 36,100 | 1,318,011 | ||||||
Food, Beverage & Tobacco 1.3% | ||||||||
General Mills, Inc. | 30,400 | 1,171,312 | ||||||
Green Mountain Coffee Roasters, Inc. * | 12,600 | 819,252 | ||||||
Reynolds American, Inc. | 27,928 | 1,080,255 | ||||||
3,070,819 | ||||||||
Health Care Equipment & Services 1.2% | ||||||||
Dexcom, Inc. * | 90,800 | 888,932 | ||||||
MAKO Surgical Corp. * | 34,678 | 1,333,369 | ||||||
Masimo Corp. | 35,500 | 734,140 | ||||||
2,956,441 | ||||||||
Insurance 1.6% | ||||||||
Assured Guaranty Ltd. | 113,000 | 1,439,620 | ||||||
MBIA, Inc. * | 114,446 | 1,007,125 | ||||||
Old Republic International Corp. | 140,400 | 1,241,136 | ||||||
RLI Corp. | 2,900 | 203,986 | ||||||
3,891,867 | ||||||||
Materials 3.9% | ||||||||
Allied Nevada Gold Corp. * | 45,500 | 1,728,090 | ||||||
Martin Marietta Materials, Inc. | 7,802 | 563,070 | ||||||
Molycorp, Inc. * | 25,400 | 972,058 | ||||||
Southern Copper Corp. | 44,500 | 1,365,260 | ||||||
The Sherwin-Williams Co. | 12,900 | 1,066,959 | ||||||
United States Steel Corp. | 40,500 | 1,027,080 | ||||||
Vulcan Materials Co. | 48,700 | 1,523,823 | ||||||
Walter Energy, Inc. | 12,700 | 960,755 | ||||||
9,207,095 | ||||||||
Media 0.1% | ||||||||
DreamWorks Animation SKG, Inc., Class A * | 8,900 | 165,095 | ||||||
Other Investment Company 2.3% | ||||||||
iShares S&P 100 Index Fund | 96,000 | 5,419,200 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.9% | ||||||||
Human Genome Sciences, Inc. * | 73,100 | 750,006 | ||||||
Regeneron Pharmaceuticals, Inc. * | 25,700 | 1,421,210 | ||||||
Seattle Genetics, Inc. * | 24,800 | 545,600 | ||||||
Theravance, Inc. * | 12,387 | 275,363 | ||||||
Vertex Pharmaceuticals, Inc. * | 39,900 | 1,579,641 | ||||||
4,571,820 | ||||||||
Retailing 0.6% | ||||||||
Urban Outfitters, Inc. * | 51,300 | 1,397,925 | ||||||
Semiconductors & Semiconductor Equipment 0.8% | ||||||||
Cavium, Inc. * | 24,500 | 800,905 | ||||||
Cree, Inc. * | 44,200 | 1,177,488 | ||||||
1,978,393 |
See financial notes 65
Schwab Hedged Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Software & Services 4.3% | ||||||||
Ariba, Inc. * | 11,500 | 364,320 | ||||||
Concur Technologies, Inc. * | 11,800 | 548,936 | ||||||
MicroStrategy, Inc., Class A * | 10,600 | 1,396,762 | ||||||
NetSuite, Inc. * | 40,200 | 1,529,208 | ||||||
OpenTable, Inc. * | 21,100 | 925,446 | ||||||
Pegasystems, Inc. | 33,100 | 1,250,849 | ||||||
QLIK Technologies, Inc. * | 53,000 | 1,514,210 | ||||||
ServiceSource International, Inc. * | 67,900 | 903,749 | ||||||
SuccessFactors, Inc. * | 50,700 | 1,353,690 | ||||||
TiVo, Inc. * | 27,000 | 292,410 | ||||||
10,079,580 | ||||||||
Technology Hardware & Equipment 2.8% | ||||||||
Acme Packet, Inc. * | 23,000 | 832,830 | ||||||
Aruba Networks, Inc. * | 59,000 | 1,397,710 | ||||||
Ciena Corp. * | 101,400 | 1,336,452 | ||||||
Juniper Networks, Inc. * | 41,300 | 1,010,611 | ||||||
Universal Display Corp. * | 42,000 | 1,966,860 | ||||||
6,544,463 | ||||||||
Transportation 2.0% | ||||||||
AMR Corp. * | 19,400 | 51,022 | ||||||
C.H. Robinson Worldwide, Inc. | 27,200 | 1,888,496 | ||||||
Heartland Express, Inc. | 93,600 | 1,255,176 | ||||||
Knight Transportation, Inc. | 94,600 | 1,437,920 | ||||||
4,632,614 | ||||||||
Total Short Sales | ||||||||
(Proceeds $88,843,419) | 81,814,146 | |||||||
End of Short Sale Positions. |
* | Non-income producing security |
66 See financial notes
Schwab Hedged Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $210,077,746) | $228,059,961 | |||||
Deposits with broker for short sales | 87,800,901 | |||||
Receivables: | ||||||
Investments sold | 6,147,891 | |||||
Dividends | 177,347 | |||||
Fund shares sold | 29,190 | |||||
Interest | 930 | |||||
Prepaid expenses | + | 9,276 | ||||
Total assets | 322,225,496 | |||||
Liabilities | ||||||
Securities sold short, at value (proceeds $88,843,419) | 81,814,146 | |||||
Payables: | ||||||
Investments bought | 2,895,446 | |||||
Investment adviser and administrator fees | 20,867 | |||||
Shareholder service fees | 5,892 | |||||
Fund shares redeemed | 1,736,009 | |||||
Due to brokers for futures | 60,040 | |||||
Dividends on short sales | 24,786 | |||||
Accrued expenses | + | 44,102 | ||||
Total liabilities | 86,601,288 | |||||
Net Assets | ||||||
Total assets | 322,225,496 | |||||
Total liabilities | − | 86,601,288 | ||||
Net assets | $235,624,208 | |||||
Net Assets by Source | ||||||
Capital received from investors | 228,783,452 | |||||
Net realized capital losses | (18,325,161 | ) | ||||
Net unrealized capital gains | 25,165,917 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$235,624,208 | 15,381,803 | $15.32 |
See financial notes 67
Schwab Hedged Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $4,646,001 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,037,973 | |||||
Shareholder service fees | 681,099 | |||||
Dividends on short sales | 1,195,282 | |||||
Stock loan fees on short sales | 338,639 | |||||
Professional fees | 45,546 | |||||
Portfolio accounting fees | 40,571 | |||||
Transfer agent fees | 36,640 | |||||
Registration fees | 24,510 | |||||
Shareholder reports | 15,050 | |||||
Custodian fees | 11,703 | |||||
Trustees’ fees | 8,052 | |||||
Interest expense | 1,750 | |||||
Other expenses | + | 7,985 | ||||
Total expenses | 5,444,800 | |||||
Expense reduction by CSIM and its affiliates | − | 62,085 | ||||
Payment for state filing fees (see financial note 11) | − | 9,290 | ||||
Custody credits | − | 25 | ||||
Net expenses | − | 5,373,400 | ||||
Net investment loss | (727,399 | ) | ||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 34,482,666 | |||||
Net realized gains on futures contracts | 909,840 | |||||
Net realized losses on short sales | + | (22,139,047 | ) | |||
Net realized gains | 13,253,459 | |||||
Net unrealized losses on investments | (18,420,579 | ) | ||||
Net unrealized losses on futures contracts | (143,964 | ) | ||||
Net unrealized gains on short sales | + | 16,246,071 | ||||
Net unrealized losses | + | (2,318,472 | ) | |||
Net realized and unrealized gains | 10,934,987 | |||||
Increase in net assets resulting from operations | $10,207,588 |
68 See financial notes
Schwab Hedged Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment loss | ($727,399 | ) | ($1,746,653 | ) | ||||||
Net realized gains | 13,253,459 | 21,406,852 | ||||||||
Net unrealized gains (losses) | + | (2,318,472 | ) | 11,929,922 | ||||||
Increase in net assets from operations | $10,207,588 | $31,590,121 |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,890,847 | $60,873,641 | 8,005,470 | $113,763,890 | ||||||||||||||
Shares redeemed | + | (10,766,228 | ) | (164,542,266 | ) | (8,465,059 | ) | (121,801,322 | ) | |||||||||
Net transactions in fund shares | (6,875,381 | ) | ($103,668,625 | ) | (459,589 | ) | ($8,037,432 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 22,257,184 | $329,085,245 | 22,716,773 | $305,532,556 | ||||||||||||||
Total increase or decrease | + | (6,875,381 | ) | (93,461,037 | ) | (459,589 | ) | 23,552,689 | ||||||||||
End of period | 15,381,803 | $235,624,208 | 22,257,184 | $329,085,245 |
See financial notes 69
Schwab Financial Services Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.74 | 8.77 | 9.05 | 15.88 | 15.75 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.05 | 0.04 | 0.08 | 0.18 | 0.18 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.58 | ) | 0.99 | (0.21 | ) | (6.78 | ) | 0.25 | ||||||||||||||
Total from investment operations | (0.53 | ) | 1.03 | (0.13 | ) | (6.60 | ) | 0.43 | ||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.04 | ) | (0.06 | ) | (0.15 | ) | (0.21 | ) | (0.11 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.02 | ) | (0.19 | ) | |||||||||||||||
Total distributions | (0.04 | ) | (0.06 | ) | (0.15 | ) | (0.23 | ) | (0.30 | ) | ||||||||||||
Net asset value at end of period | 9.17 | 9.74 | 8.77 | 9.05 | 15.88 | |||||||||||||||||
Total return (%) | (5.51 | ) | 11.79 | (1.10 | ) | (42.08 | ) | 2.75 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.93 | 1 | 0.95 | 2 | 0.96 | 3 | 0.94 | 0.90 | ||||||||||||||
Gross operating expenses | 1.06 | 1.04 | 0.99 | 0.94 | 0.90 | |||||||||||||||||
Net investment income (loss) | 0.45 | 0.37 | 0.91 | 1.56 | 1.06 | |||||||||||||||||
Portfolio turnover rate | 77 | 54 | 47 | 59 | 54 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 40 | 52 | 64 | 84 | 94 |
1 The ratio of net operating expenses would have been 0.94%, if payment for state filing fees had not been included. (See financial note 11)
2 The ratio of net operating expenses would have been 0.94%, if certain non-routine expenses had not been incurred.
3 Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
70 See financial notes
Schwab Financial Services Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .8% | Common Stock | 40,331,136 | 39,771,797 | ||||||||
0 | .9% | Short-Term Investment | 358,521 | 358,521 | ||||||||
99 | .7% | Total Investments | 40,689,657 | 40,130,318 | ||||||||
0 | .0% | Collateral Invested for Securities on Loan | 2,255 | 2,255 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 122,942 | |||||||||
100 | .0% | Total Net Assets | 40,255,515 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.8% of net assets | ||||||||
Banks 22.2% | ||||||||
1st Source Corp. | 3,100 | 74,524 | ||||||
Banner Corp. | 4,828 | 84,828 | ||||||
BOK Financial Corp. | 2,800 | 146,216 | ||||||
Commerce Bancshares, Inc. | 14,800 | 574,240 | ||||||
East West Bancorp, Inc. | 21,400 | 416,658 | ||||||
Enterprise Financial Services Corp. | 4,000 | 61,720 | ||||||
Fifth Third Bancorp | 105,600 | 1,268,256 | ||||||
First California Financial Group, Inc. * | 9,700 | 31,719 | ||||||
First Citizens BancShares, Inc., Class A | 400 | 65,220 | ||||||
KeyCorp | 39,000 | 275,340 | ||||||
MainSource Financial Group, Inc. | 15,700 | 147,266 | ||||||
PNC Financial Services Group, Inc. | 7,100 | 381,341 | ||||||
Regions Financial Corp. | 274,600 | 1,079,178 | ||||||
StellarOne Corp. | 5,600 | 67,144 | ||||||
SunTrust Banks, Inc. | 55,900 | 1,102,907 | ||||||
U.S. Bancorp | 12,500 | 319,875 | ||||||
Virginia Commerce Bancorp, Inc. * | 5,000 | 31,800 | ||||||
Wells Fargo & Co. | 98,500 | 2,552,135 | ||||||
WesBanco, Inc. | 9,500 | 188,670 | ||||||
Western Alliance Bancorp * | 8,700 | 56,550 | ||||||
8,925,587 | ||||||||
Diversified Financials 34.2% | ||||||||
American Express Co. | 30,100 | 1,523,662 | ||||||
Bank of America Corp. | 94,200 | 643,386 | ||||||
Capital One Financial Corp. | 32,500 | 1,483,950 | ||||||
Citigroup, Inc. | 22,350 | 706,036 | ||||||
First Cash Financial Services, Inc. * | 8,300 | 344,450 | ||||||
Interactive Brokers Group, Inc., Class A | 53,100 | 816,678 | ||||||
INTL FCStone, Inc. * | 10,600 | 256,944 | ||||||
JPMorgan Chase & Co. | 78,300 | 2,721,708 | ||||||
Lazard Ltd., Class A | 39,200 | 1,071,728 | ||||||
Legg Mason, Inc. | 40,200 | 1,105,500 | ||||||
PHH Corp. * | 16,200 | 298,890 | ||||||
SLM Corp. | 81,100 | 1,108,637 | ||||||
The Bank of New York Mellon Corp. | 22,600 | 480,928 | ||||||
The NASDAQ OMX Group, Inc. * | 48,500 | 1,214,925 | ||||||
13,777,422 | ||||||||
Insurance 27.3% | ||||||||
ACE Ltd. | 8,100 | 584,415 | ||||||
Aflac, Inc. | 14,500 | 653,805 | ||||||
American Equity Investment Life Holding Co. | 64,100 | 694,844 | ||||||
American Financial Group, Inc. | 33,750 | 1,209,263 | ||||||
American National Insurance Co. | 2,300 | 164,358 | ||||||
Assurant, Inc. | 11,100 | 427,794 | ||||||
Berkshire Hathaway, Inc., Class B * | 23,100 | 1,798,566 | ||||||
CNO Financial Group, Inc. * | 53,300 | 333,125 | ||||||
FBL Financial Group, Inc., Class A | 26,600 | 868,490 | ||||||
First American Financial Corp. | 74,200 | 890,400 | ||||||
Hartford Financial Services Group, Inc. | 20,000 | 385,000 | ||||||
Loews Corp. | 8,600 | 341,420 | ||||||
Principal Financial Group, Inc. | 26,300 | 678,014 | ||||||
Prudential Financial, Inc. | 13,500 | 731,700 | ||||||
Reinsurance Group of America, Inc. | 16,400 | 856,572 | ||||||
Symetra Financial Corp. | 9,400 | 87,138 | ||||||
Torchmark Corp. | 7,100 | 290,603 | ||||||
10,995,507 | ||||||||
Real Estate 15.1% | ||||||||
American Campus Communities, Inc. | 6,000 | 233,580 | ||||||
Apartment Investment & Management Co., Class A | 38,700 | 954,729 | ||||||
Ashford Hospitality Trust | 29,700 | 264,330 | ||||||
BRE Properties, Inc. | 5,900 | 295,708 | ||||||
Camden Property Trust | 5,500 | 333,520 | ||||||
CBL & Associates Properties, Inc. | 12,700 | 195,326 | ||||||
First Industrial Realty Trust, Inc. * | 65,000 | 640,250 | ||||||
Pennsylvania REIT | 15,500 | 159,030 | ||||||
RAIT Financial Trust (a) | 432 | 2,246 | ||||||
Rayonier, Inc. REIT | 13,050 | 544,577 | ||||||
Simon Property Group, Inc. | 5,159 | 662,622 | ||||||
Strategic Hotel & Resorts, Inc. * | 43,600 | 248,084 | ||||||
Sunstone Hotel Investors, Inc. * | 21,000 | 145,950 | ||||||
Taubman Centers, Inc. | 4,700 | 287,781 | ||||||
Vornado Realty Trust REIT | 8,400 | 695,604 | ||||||
Weyerhaeuser Co. | 22,800 | 409,944 | ||||||
6,073,281 | ||||||||
Total Common Stock | ||||||||
(Cost $40,331,136) | 39,771,797 | |||||||
See financial notes 71
Schwab Financial Services Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.9% of net assets | ||||||||
Time Deposit 0.9% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 358,521 | 358,521 | ||||||
Total Short-Term Investment | ||||||||
(Cost $358,521) | 358,521 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.0% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 2,255 | 2,255 | ||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $40,689,656 and the unrealized appreciation and depreciation were $2,567,846 and ($3,127,184), respectively, with a net unrealized deppreciation of ($559,338).
* | Non-income producing security. | |
(a) | All or a portion of security is on loan. |
REIT — | Real Estate Investment Trust |
72 See financial notes
Schwab Financial Services Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $40,689,657) including securities on loan of $2,132 | $40,130,318 | |||||
Collateral invested for securities on loan | 2,255 | |||||
Receivables: | ||||||
Fund shares sold | 154,180 | |||||
Dividends | 11,417 | |||||
Receivable from investment adviser | 133 | |||||
Income from securities on loan | 4 | |||||
Prepaid expenses | + | 1,607 | ||||
Total assets | 40,299,914 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 2,255 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 1,729 | |||||
Shareholder service fees | 2,309 | |||||
Fund shares redeemed | 9,076 | |||||
Accrued expenses | + | 29,030 | ||||
Total liabilities | 44,399 | |||||
Net Assets | ||||||
Total assets | 40,299,914 | |||||
Total liabilities | − | 44,399 | ||||
Net assets | $40,255,515 | |||||
Net Assets by Source | ||||||
Capital received from investors | 78,001,856 | |||||
Net investment income not yet distributed | 108,593 | |||||
Net realized capital losses | (37,295,595 | ) | ||||
Net unrealized capital losses | (559,339 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$40,255,515 | 4,391,126 | $9.17 |
See financial notes 73
Schwab Financial Services Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends | $673,254 | |||||
Interest | 76 | |||||
Securities on loan | + | 1,438 | ||||
Total investment income | 674,768 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 264,586 | |||||
Shareholder service fees | 119,136 | |||||
Portfolio accounting fees | 36,745 | |||||
Transfer agent fees | 34,332 | |||||
Professional fees | 28,100 | |||||
Registration fees | 16,803 | |||||
Shareholder reports | 10,846 | |||||
Trustees’ fees | 6,237 | |||||
Custodian fees | 3,137 | |||||
Interest expense | 21 | |||||
Other expenses | + | 1,258 | ||||
Total expenses | 521,201 | |||||
Expense reduction by CSIM and its affiliates | − | 60,605 | ||||
Payment for state filing fees (see financial note 11) | − | 4,394 | ||||
Net expenses | − | 456,202 | ||||
Net investment income | 218,566 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 343,656 | |||||
Net unrealized losses on investments | + | (2,420,332 | ) | |||
Net realized and unrealized losses | (2,076,676 | ) | ||||
Decrease in net assets resulting from operations | ($1,858,110 | ) |
74 See financial notes
Schwab Financial Services Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $218,566 | $218,385 | ||||||||
Net realized gains (losses) | 343,656 | (169,481 | ) | |||||||
Net unrealized gains (losses) | + | (2,420,332 | ) | 6,682,214 | ||||||
Increase (Decrease) in net assets from operations | (1,858,110 | ) | 6,731,118 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($200,494 | ) | ($407,141 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 944,737 | $9,521,425 | 829,077 | $8,100,181 | ||||||||||||||
Shares reinvested | 17,076 | 178,785 | 40,105 | 363,351 | ||||||||||||||
Shares redeemed | + | (1,921,163 | ) | (19,499,334 | ) | (2,842,092 | ) | (26,876,475 | ) | |||||||||
Net transactions in fund shares | (959,350 | ) | ($9,799,124 | ) | (1,972,910 | ) | ($18,412,943 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 5,350,476 | $52,113,243 | 7,323,386 | $64,202,209 | ||||||||||||||
Total decrease | + | (959,350 | ) | (11,857,728 | ) | (1,972,910 | ) | (12,088,966 | ) | |||||||||
End of period | 4,391,126 | $40,255,515 | 5,350,476 | $52,113,243 | ||||||||||||||
Net investment income not yet distributed | $108,593 | $81,681 |
See financial notes 75
Schwab Health Care Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 15.48 | 13.41 | 12.55 | 17.08 | 15.05 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.15 | 0.19 | 0.13 | 0.08 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 1.85 | 2.01 | 0.82 | (4.46 | ) | 2.11 | ||||||||||||||||
Total from investment operations | 2.00 | 2.20 | 0.95 | (4.38 | ) | 2.16 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.13 | ) | (0.09 | ) | (0.05 | ) | — | |||||||||||||
Distributions from net realized gains | — | — | — | (0.10 | ) | (0.13 | ) | |||||||||||||||
Total distributions | (0.19 | ) | (0.13 | ) | (0.09 | ) | (0.15 | ) | (0.13 | ) | ||||||||||||
Net asset value at end of period | 17.29 | 15.48 | 13.41 | 12.55 | 17.08 | |||||||||||||||||
Total return (%) | 13.00 | 16.49 | 7.65 | (25.87 | ) | 14.49 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.81 | 1 | 0.82 | 0.83 | 2 | 0.82 | 0.82 | |||||||||||||||
Gross operating expenses | 0.85 | 0.86 | 0.85 | 0.82 | 0.82 | |||||||||||||||||
Net investment income (loss) | 0.85 | 1.14 | 0.88 | 0.48 | 0.32 | |||||||||||||||||
Portfolio turnover rate | 24 | 37 | 36 | 50 | 34 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 414 | 410 | 430 | 545 | 834 |
1 The ratio of net operating expenses would have been 0.82%, if payment for state filing fees (See financial note 11) and a voluntary reduction of Investment Adviser fees (See financial note 4) had not been included.
2 Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
76 See financial notes
Schwab Health Care Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
77 | .3% | Common Stock | 255,888,092 | 319,939,870 | ||||||||
19 | .4% | Foreign Common Stock | 72,953,344 | 80,299,092 | ||||||||
2 | .9% | Short-Term Investments | 11,915,779 | 11,915,779 | ||||||||
99 | .6% | Total Investments | 340,757,215 | 412,154,741 | ||||||||
0 | .4% | Other Assets and Liabilities, Net | 1,637,026 | |||||||||
100 | .0% | Total Net Assets | 413,791,767 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 77.3% of net assets | ||||||||
Health Care Equipment & Services 26.7% | ||||||||
AmerisourceBergen Corp. | 180,000 | 7,344,000 | ||||||
Baxter International, Inc. | 115,000 | 6,322,700 | ||||||
Becton, Dickinson & Co. | 40,000 | 3,129,200 | ||||||
Boston Scientific Corp. * | 850,000 | 5,006,500 | ||||||
Cardinal Health, Inc. | 90,000 | 3,984,300 | ||||||
CareFusion Corp. * | 30,000 | 768,000 | ||||||
Cerner Corp. * | 90,000 | 5,708,700 | ||||||
CIGNA Corp. | 62,000 | 2,749,080 | ||||||
Coventry Health Care, Inc. * | 25,000 | 795,250 | ||||||
DaVita, Inc. * | 100,000 | 7,000,000 | ||||||
Greatbatch, Inc. * | 56,000 | 1,250,480 | ||||||
Health Management Associates, Inc., Class A * | 100,000 | 876,000 | ||||||
Henry Schein, Inc. * | 30,000 | 2,079,600 | ||||||
Hill-Rom Holdings, Inc. | 20,000 | 673,400 | ||||||
Hologic, Inc. * | 350,000 | 5,642,000 | ||||||
Humana, Inc. | 90,000 | 7,640,100 | ||||||
Integra LifeSciences Holdings * | 70,000 | 2,244,200 | ||||||
Invacare Corp. | 150,000 | 3,367,500 | ||||||
LifePoint Hospitals, Inc. * | 75,000 | 2,899,500 | ||||||
McKesson Corp. | 90,000 | 7,339,500 | ||||||
RTI Biologics, Inc. * | 81,000 | 364,500 | ||||||
Sirona Dental Systems, Inc. * | 115,000 | 5,508,500 | ||||||
Stryker Corp. | 50,000 | 2,395,500 | ||||||
Teleflex, Inc. | 10,000 | 598,600 | ||||||
The Cooper Cos., Inc. | 100,000 | 6,930,000 | ||||||
UnitedHealth Group, Inc. | 265,000 | 12,717,350 | ||||||
WellPoint, Inc. | 25,000 | 1,722,500 | ||||||
Wright Medical Group, Inc. * | 147,000 | 2,526,930 | ||||||
Zimmer Holdings, Inc. * | 15,000 | 789,450 | ||||||
110,373,340 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 50.6% | ||||||||
Abbott Laboratories | 90,000 | 4,848,300 | ||||||
Agilent Technologies, Inc. * | 39,000 | 1,445,730 | ||||||
Alexion Pharmaceuticals, Inc. * | 140,000 | 9,451,400 | ||||||
Allergan, Inc. | 120,000 | 10,094,400 | ||||||
Amgen, Inc. | 295,000 | 16,894,650 | ||||||
Astex Pharmaceuticals * | 300,000 | 579,000 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 30,000 | 2,986,500 | ||||||
Biogen Idec, Inc. * | 110,000 | 12,799,600 | ||||||
Bristol-Myers Squibb Co. | 540,000 | 17,058,600 | ||||||
Celgene Corp. * | 125,000 | 8,103,750 | ||||||
Cepheid, Inc. * | 35,000 | 1,255,800 | ||||||
Cubist Pharmaceuticals, Inc. * | 50,000 | 1,890,500 | ||||||
Eli Lilly & Co. | 360,000 | 13,377,600 | ||||||
Emergent Biosolutions, Inc. * | 30,000 | 565,800 | ||||||
Gilead Sciences, Inc. * | 123,000 | 5,124,180 | ||||||
Johnson & Johnson | 330,000 | 21,248,700 | ||||||
Life Technologies Corp. * | 175,000 | 7,117,250 | ||||||
Merck & Co., Inc. | 417,000 | 14,386,500 | ||||||
Momenta Pharmaceuticals, Inc. * | 50,000 | 740,000 | ||||||
Mylan, Inc. * | 289,000 | 5,655,730 | ||||||
Myriad Genetics, Inc. * | 80,000 | 1,702,400 | ||||||
Nabi Biopharmaceuticals * | 125,000 | 230,000 | ||||||
Par Pharmaceutical Cos., Inc. * | 200,000 | 6,120,000 | ||||||
PerkinElmer, Inc. | 133,000 | 2,749,110 | ||||||
Perrigo Co. | 50,000 | 4,514,000 | ||||||
Pfizer, Inc. | 889,000 | 17,122,140 | ||||||
The Medicines Co. * | 75,000 | 1,404,000 | ||||||
Thermo Fisher Scientific, Inc. * | 175,000 | 8,797,250 | ||||||
United Therapeutics Corp. * | 48,000 | 2,099,040 | ||||||
ViroPharma, Inc. * | 40,000 | 809,600 | ||||||
Watson Pharmaceuticals, Inc. * | 125,000 | 8,395,000 | ||||||
209,566,530 | ||||||||
Total Common Stock | ||||||||
(Cost $255,888,092) | 319,939,870 | |||||||
Foreign Common Stock 19.4% of net assets | ||||||||
Australia 2.0% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.0% | ||||||||
CSL Ltd. | 276,000 | 8,312,833 | ||||||
Denmark 1.8% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.8% | ||||||||
H. Lundbeck A/S | 21,000 | 423,450 | ||||||
Novo Nordisk A/S, Class B | 65,700 | 6,975,132 | ||||||
7,398,582 | ||||||||
France 3.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.5% | ||||||||
Sanofi | 205,000 | 14,665,496 | ||||||
Germany 0.9% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Bayer AG - Reg’d | 26,000 | 1,656,511 |
See financial notes 77
Schwab Health Care Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Merck KGaA | 10,000 | 933,147 | ||||||
Stada Arzneimittel AG | 40,000 | 966,269 | ||||||
3,555,927 | ||||||||
Italy 0.3% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.3% | ||||||||
Recordati S.p.A. | 142,000 | 1,236,199 | ||||||
Japan 2.2% | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Fukuda Denshi Co., Ltd. | 5,000 | 149,927 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.1% | ||||||||
Dainippon Sumitomo Pharma Co., Ltd. | 6,000 | 65,752 | ||||||
Eisai Co., Ltd. | 18,000 | 713,910 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 6,000 | 67,620 | ||||||
Takeda Pharmaceutical Co., Ltd. | 176,000 | 7,934,324 | ||||||
8,781,606 | ||||||||
8,931,533 | ||||||||
Spain 0.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Almirall S.A. | 30,000 | 223,207 | ||||||
Sweden 0.0% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Meda AB, A Shares | 20,000 | 203,536 | ||||||
Switzerland 5.1% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.1% | ||||||||
Novartis AG - Reg’d | 157,000 | 8,844,637 | ||||||
Roche Holding AG | 74,400 | 12,206,758 | ||||||
21,051,395 | ||||||||
United Kingdom 3.5% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.5% | ||||||||
AstraZeneca plc | 186,500 | 8,953,711 | ||||||
GlaxoSmithKline plc | 215,000 | 4,825,106 | ||||||
Shire plc | 30,000 | 941,567 | ||||||
14,720,384 | ||||||||
Total Foreign Common Stock | ||||||||
(Cost $72,953,344) | 80,299,092 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 2.9% of net assets | ||||||||
Time Deposit 2.7% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 11,095,779 | 11,095,779 | ||||||
U.S. Treasury Obligation 0.2% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (a)(b) | 820,000 | 820,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $11,915,779) | 11,915,779 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $340,899,792 and the unrealized appreciation and depreciation were $81,800,776 and ($10,545,827), respectively, with a net unrealized appreciation of $71,254,949.
At 10/31/11, the values of certain foreign securities held by the fund aggregating $80,299,092 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | The rate shown is the purchase yield. |
Reg’d — | Registered |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 165 | 10,306,725 | 800,374 |
78 See financial notes
Schwab Health Care Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $340,757,215) | $412,154,741 | |||||
Receivables: | ||||||
Investments sold | 3,033,925 | |||||
Dividends | 467,181 | |||||
Fund shares sold | 461,609 | |||||
Foreign tax reclaims | 238,658 | |||||
Interest | 9 | |||||
Prepaid expenses | + | 12,609 | ||||
Total assets | 416,368,732 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 2,013,412 | |||||
Investment adviser and administrator fees | 21,430 | |||||
Shareholder service fees | 17,254 | |||||
Due to brokers for futures | 260,700 | |||||
Fund shares redeemed | 198,818 | |||||
Accrued expenses | + | 65,351 | ||||
Total liabilities | 2,576,965 | |||||
Net Assets | ||||||
Total assets | 416,368,732 | |||||
Total liabilities | − | 2,576,965 | ||||
Net assets | $413,791,767 | |||||
Net Assets by Source | ||||||
Capital received from investors | 353,437,685 | |||||
Net investment income not yet distributed | 3,510,614 | |||||
Net realized capital losses | (15,362,094 | ) | ||||
Net unrealized capital gains | 72,205,562 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$413,791,767 | 23,927,757 | $17.29 |
See financial notes 79
Schwab Health Care Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $330,112) | $6,920,961 | |||||
Interest | 4,184 | |||||
Securities on loan | + | 6,411 | ||||
Total investment income | 6,931,556 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 2,266,988 | |||||
Shareholder service fees | 1,030,786 | |||||
Transfer agent fees | 79,314 | |||||
Portfolio accounting fees | 53,019 | |||||
Shareholder reports | 49,026 | |||||
Professional fees | 32,545 | |||||
Custodian fees | 24,743 | |||||
Registration fees | 23,178 | |||||
Trustees’ fees | 8,864 | |||||
Other expenses | + | 13,166 | ||||
Total expenses | 3,581,629 | |||||
Expense reduction by CSIM and its affiliates | − | 173,888 | ||||
Payment for state filing fees (see financial note 11) | − | 25,700 | ||||
Net expenses | − | 3,382,041 | ||||
Net investment income | 3,549,515 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 29,138,221 | |||||
Net realized gains on futures contracts | 217,915 | |||||
Net realized losses on foreign currency transactions | + | (43,932 | ) | |||
Net realized gains | 29,312,204 | |||||
Net unrealized gains on investments | 17,287,861 | |||||
Net unrealized gains on futures contracts | 267,530 | |||||
Net unrealized losses on foreign currency translations | + | (15,376 | ) | |||
Net unrealized gains | + | 17,540,015 | ||||
Net realized and unrealized gains | 46,852,219 | |||||
Increase in net assets resulting from operations | $50,401,734 |
80 See financial notes
Schwab Health Care Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $3,549,515 | $4,802,196 | ||||||||
Net realized gains | 29,312,204 | 3,563,654 | ||||||||
Net unrealized gains | + | 17,540,015 | 56,548,382 | |||||||
Increase in net assets from operations | 50,401,734 | 64,914,232 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,837,988 | ) | ($4,113,182 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,540,237 | $60,660,382 | 2,407,798 | $35,270,249 | ||||||||||||||
Shares reinvested | 268,207 | 4,275,226 | 249,452 | 3,669,445 | ||||||||||||||
Shares redeemed | + | (6,338,786 | ) | (106,395,149 | ) | (8,283,829 | ) | (120,443,252 | ) | |||||||||
Net transactions in fund shares | (2,530,342 | ) | ($41,459,541 | ) | (5,626,579 | ) | ($81,503,558 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 26,458,099 | $409,687,562 | 32,084,678 | $430,390,070 | ||||||||||||||
Total increase or decrease | + | (2,530,342 | ) | 4,104,205 | (5,626,579 | ) | (20,702,508 | ) | ||||||||||
End of period | 23,927,757 | $413,791,767 | 26,458,099 | $409,687,562 | ||||||||||||||
Net investment income not yet distributed | $3,510,614 | $4,836,584 |
See financial notes 81
Schwab® International Core Equity Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 5/30/082– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 7.80 | 7.25 | 5.85 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.17 | 0.16 | 0.03 | 0.06 | ||||||||||||||
Net realized and unrealized gains (losses) | (0.46 | ) | 0.57 | 1.46 | (4.21 | ) | ||||||||||||
Total from investment operations | (0.29 | ) | 0.73 | 1.49 | (4.15 | ) | ||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.18 | ) | (0.09 | ) | — | |||||||||||
Net asset value at end of period | 7.32 | 7.80 | 7.25 | 5.85 | ||||||||||||||
Total return (%) | (3.89 | ) | 10.09 | 25.98 | (41.50 | )3 | ||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses | 0.80 | 4 | 0.87 | 5 | 0.86 | 0.86 | 6 | |||||||||||
Gross operating expenses | 1.22 | 1.27 | 1.60 | 1.39 | 6 | |||||||||||||
Net investment income (loss) | 2.32 | 1.85 | 1.19 | 1.67 | 6 | |||||||||||||
Portfolio turnover rate | 86 | 91 | 7 | 94 | 56 | 3 | ||||||||||||
Net assets, end of period ($ x 1,000,000) | 60 | 53 | 37 | 3 |
1 Effective October 7, 2009, the Investor Shares class, the Select Shares class and the Institutional Shares class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 The ratio of net operating expenses would have been 0.86% if a voluntary reduction of Investment Adviser fees had not been included. (See financial note 4)
5 The ratio of net operating expenses would have been 0.86% if certain non-routine expenses had not been incurred.
6 Annualized.
7 Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund. (See financial note 13).
82 See financial notes
Schwab International Core Equity Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
97 | .3% | Common Stock | 58,137,234 | 58,168,999 | ||||||||
2 | .0% | Other Investment Companies | 1,144,555 | 1,204,144 | ||||||||
99 | .3% | Total Investments | 59,281,789 | 59,373,143 | ||||||||
0 | .7% | Other Assets and Liabilities, Net | 440,329 | |||||||||
100 | .0% | Net Assets | 59,813,472 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 97.3% of net assets | ||||||||
Australia 5.5% | ||||||||
Capital Goods 0.4% | ||||||||
Emeco Holdings Ltd. | 236,390 | 244,897 | ||||||
Diversified Financials 1.6% | ||||||||
Challenger Ltd. | 99,231 | 473,049 | ||||||
IOOF Holdings Ltd. | 71,979 | 476,732 | ||||||
949,781 | ||||||||
Health Care Equipment & Services 1.2% | ||||||||
Ansell Ltd. | 26,685 | 390,301 | ||||||
CSL Ltd. | 8,781 | 264,475 | ||||||
Sigma Pharmaceuticals Ltd. * | 103,409 | 75,354 | ||||||
730,130 | ||||||||
Materials 2.3% | ||||||||
BHP Billiton Ltd. | 23,790 | 931,250 | ||||||
Rio Tinto Ltd. | 6,037 | 433,420 | ||||||
1,364,670 | ||||||||
3,289,478 | ||||||||
Austria 2.6% | ||||||||
Banks 0.4% | ||||||||
Erste Group Bank AG | 12,100 | 257,953 | ||||||
Capital Goods 0.7% | ||||||||
Strabag SE - BR | 13,687 | 420,856 | ||||||
Energy 0.7% | ||||||||
OMV AG | 11,068 | 385,679 | ||||||
Transportation 0.8% | ||||||||
Oesterreichische Post AG | 15,840 | 477,728 | ||||||
1,542,216 | ||||||||
Belgium 1.5% | ||||||||
Banks 0.8% | ||||||||
KBC GROEP N.V. | 21,473 | 476,183 | ||||||
Food & Staples Retailing 0.7% | ||||||||
Delhaize Group | 6,454 | 421,576 | ||||||
897,759 | ||||||||
Brazil 0.5% | ||||||||
Capital Goods 0.1% | ||||||||
Embraer S.A. | 13,800 | 95,250 | ||||||
Consumer Durables & Apparel 0.4% | ||||||||
Ez Tec Empreendimentos e Participacoes SA | 24,900 | 221,901 | ||||||
317,151 | ||||||||
Canada 1.3% | ||||||||
Banks 0.3% | ||||||||
National Bank of Canada | 2,100 | 149,881 | ||||||
Food & Staples Retailing 0.4% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 1,000 | 30,098 | ||||||
The Jean Coutu Group (PJC), Inc., Class A | 18,400 | 235,365 | ||||||
265,463 | ||||||||
Materials 0.6% | ||||||||
AuRico Gold, Inc. * | 13,900 | 134,572 | ||||||
Potash Corp. of Saskatchewan, Inc. | 4,300 | 203,536 | ||||||
338,108 | ||||||||
753,452 | ||||||||
China 1.7% | ||||||||
Capital Goods 0.6% | ||||||||
Harbin Power Equipment Co., Ltd. | 204,000 | 205,579 | ||||||
Shanghai Electric Group Co., Ltd., Class H | 378,000 | 166,323 | ||||||
371,902 | ||||||||
Energy 0.4% | ||||||||
China Petroleum & Chemical Corp., Class H | 228,000 | 215,626 | ||||||
Real Estate 0.7% | ||||||||
Guangzhou R&F Properties Co., Ltd., Class H | 280,400 | 272,468 | ||||||
KWG Property Holding Ltd. | 398,500 | 171,881 | ||||||
444,349 | ||||||||
1,031,877 | ||||||||
Denmark 1.7% | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.7% | ||||||||
H. Lundbeck A/S | 21,033 | 424,116 | ||||||
Novo Nordisk A/S, Class B | 5,812 | 617,039 | ||||||
1,041,155 |
See financial notes 83
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Finland 1.8% | ||||||||
Capital Goods 0.8% | ||||||||
Wartsila Oyj | 15,580 | 473,394 | ||||||
Technology Hardware & Equipment 1.0% | ||||||||
Nokia Oyj | 92,462 | 622,193 | ||||||
1,095,587 | ||||||||
France 8.3% | ||||||||
Capital Goods 0.8% | ||||||||
Bouygues S.A. | 12,784 | 477,466 | ||||||
Commercial & Professional Supplies 0.7% | ||||||||
Societe BIC S.A. | 4,878 | 435,315 | ||||||
Consumer Durables & Apparel 0.8% | ||||||||
Hermes International | 1,368 | 465,204 | ||||||
Energy 1.8% | ||||||||
Total S.A. | 20,907 | 1,090,869 | ||||||
Media 0.6% | ||||||||
Metropole Television S.A. | 20,016 | 342,168 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.3% | ||||||||
Sanofi | 11,041 | 789,862 | ||||||
Retailing 0.9% | ||||||||
PPR | 3,358 | 521,079 | ||||||
Software & Services 0.8% | ||||||||
UbiSoft Entertainment * | 78,382 | 469,534 | ||||||
Telecommunication Services 0.6% | ||||||||
France Telecom S.A. | 13,408 | 241,060 | ||||||
Vivendi | 7,131 | 159,352 | ||||||
400,412 | ||||||||
4,991,909 | ||||||||
Germany 6.2% | ||||||||
Automobiles & Components 0.6% | ||||||||
Bayerische Motoren Werke AG | 4,341 | 352,637 | ||||||
Capital Goods 0.9% | ||||||||
Bilfinger Berger SE | 5,711 | 509,756 | ||||||
Food, Beverage & Tobacco 1.0% | ||||||||
KWS Saat AG | 940 | 191,682 | ||||||
Suedzucker AG | 14,190 | 414,492 | ||||||
606,174 | ||||||||
Insurance 0.7% | ||||||||
Allianz SE - Reg’d | 2,601 | 289,393 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 902 | 120,795 | ||||||
410,188 | ||||||||
Materials 0.8% | ||||||||
BASF SE | 6,876 | 501,919 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.4% | ||||||||
Bayer AG - Reg’d | 10,532 | 671,014 | ||||||
Stada Arzneimittel AG | 6,277 | 151,632 | ||||||
822,646 | ||||||||
Semiconductors & Semiconductor Equipment 0.5% | ||||||||
Infineon Technologies AG | 36,553 | 329,094 | ||||||
Utilities 0.3% | ||||||||
RWE AG | 3,862 | 164,625 | ||||||
3,697,039 | ||||||||
Hong Kong 5.3% | ||||||||
Capital Goods 0.3% | ||||||||
NWS Holdings Ltd. | 125,000 | 189,547 | ||||||
Energy 0.5% | ||||||||
CNOOC Ltd. | 174,000 | 328,922 | ||||||
Real Estate 2.8% | ||||||||
Cheung Kong (Holdings) Ltd. | 40,000 | 495,837 | ||||||
China Overseas Grand Oceans Group Ltd. | 213,000 | 162,471 | ||||||
Great Eagle Holdings Ltd. | 148,000 | 328,698 | ||||||
Hongkong Land Holdings Ltd. | 52,000 | 273,262 | ||||||
Hysan Development Co., Ltd. | 37,000 | 129,115 | ||||||
Soho China Ltd. | 359,500 | 256,312 | ||||||
1,645,695 | ||||||||
Utilities 1.7% | ||||||||
CLP Holdings Ltd. | 53,000 | 472,131 | ||||||
Power Assets Holdings Ltd. | 72,000 | 547,114 | ||||||
1,019,245 | ||||||||
3,183,409 | ||||||||
Israel 0.7% | ||||||||
Materials 0.7% | ||||||||
Israel Chemicals Ltd. | 32,556 | 386,037 | ||||||
Israel Discount Bank Ltd., Class A * | 32,600 | 53,886 | ||||||
439,923 | ||||||||
Italy 1.6% | ||||||||
Banks 0.2% | ||||||||
Banca Monte dei Paschi di Siena S.p.A. | 240,446 | 111,651 | ||||||
Energy 0.9% | ||||||||
Eni S.p.A. | 23,399 | 517,209 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Sorin S.p.A. * | 11,391 | 23,809 | ||||||
Telecommunication Services 0.5% | ||||||||
Telecom Italia S.p.A. | 231,155 | 287,621 | ||||||
940,290 | ||||||||
Japan 18.8% | ||||||||
Automobiles & Components 0.5% | ||||||||
Honda Motor Co., Ltd. | 4,700 | 140,548 | ||||||
The Yokohama Rubber Co., Ltd. | 32,000 | 182,662 | ||||||
323,210 | ||||||||
Banks 1.3% | ||||||||
Aozora Bank Ltd. | 164,000 | 414,596 | ||||||
Suruga Bank Ltd. | 42,000 | 350,114 | ||||||
764,710 | ||||||||
Capital Goods 1.2% | ||||||||
Mitsubishi Heavy Industries Ltd. | 121,000 | 493,018 |
84 See financial notes
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Taisei Corp. | 77,000 | 205,747 | ||||||
698,765 | ||||||||
Commercial & Professional Supplies 0.7% | ||||||||
Duskin Co., Ltd. | 22,300 | 433,344 | ||||||
Consumer Services 0.1% | ||||||||
Round One Corp. | 5,500 | 40,157 | ||||||
Diversified Financials 2.8% | ||||||||
Acom Co., Ltd. * | 3,430 | 60,218 | ||||||
Century Tokyo Leasing Corp. | 7,400 | 147,951 | ||||||
Jaccs Co., Ltd. | 95,000 | 313,835 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 11,150 | 432,072 | ||||||
ORIX Corp. | 1,960 | 171,059 | ||||||
Promise Co., Ltd. * | 54,450 | 526,038 | ||||||
1,651,173 | ||||||||
Food, Beverage & Tobacco 2.2% | ||||||||
Ajinomoto Co., Inc. | 45,000 | 503,748 | ||||||
House Foods Corp. | 24,500 | 444,122 | ||||||
Toyo Suisan Kaisha Ltd. | 14,000 | 357,274 | ||||||
1,305,144 | ||||||||
Household & Personal Products 0.9% | ||||||||
Kao Corp. | 21,800 | 571,909 | ||||||
Media 1.4% | ||||||||
Nippon Television Network Corp. | 2,360 | 334,027 | ||||||
SKY Perfect JSAT Holdings, Inc. | 1,038 | 504,475 | ||||||
838,502 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Takeda Pharmaceutical Co., Ltd. | 9,200 | 414,749 | ||||||
Real Estate 1.6% | ||||||||
Credit Saison Co., Ltd. | 23,100 | 450,770 | ||||||
Daiwa House Industry Co., Ltd. | 42,000 | 526,297 | ||||||
977,067 | ||||||||
Retailing 0.5% | ||||||||
K’s Holdings Corp. | 7,500 | 314,950 | ||||||
Software & Services 1.8% | ||||||||
Capcom Co., Ltd. | 21,300 | 557,214 | ||||||
Nihon Unisys Ltd. | 90,900 | 514,661 | ||||||
1,071,875 | ||||||||
Transportation 3.1% | ||||||||
Central Japan Railway Co. | 69 | 586,984 | ||||||
Sankyu, Inc. | 112,000 | 443,460 | ||||||
Seino Holdings Co., Ltd. | 51,000 | 382,622 | ||||||
Yamato Holdings Co., Ltd. | 26,400 | 437,656 | ||||||
1,850,722 | ||||||||
11,256,277 | ||||||||
Netherlands 2.5% | ||||||||
Capital Goods 0.9% | ||||||||
European Aeronautic Defence & Space Co. | 18,029 | 531,481 | ||||||
Materials 0.4% | ||||||||
Koninklijke DSM N.V. | 4,839 | 247,621 | ||||||
Semiconductors & Semiconductor Equipment 1.2% | ||||||||
ASML Holding N.V. | 13,210 | 554,146 | ||||||
STMicroelectronics N.V. | 22,386 | 155,131 | ||||||
709,277 | ||||||||
1,488,379 | ||||||||
New Zealand 0.5% | ||||||||
Telecommunication Services 0.5% | ||||||||
Telecom Corp. of New Zealand Ltd. | 136,001 | 277,667 | ||||||
Norway 1.3% | ||||||||
Diversified Financials 0.4% | ||||||||
Aker ASA, Class A | 8,152 | 231,415 | ||||||
Energy 0.9% | ||||||||
TGS Nopec Geophysical Co., A.S.A. | 24,009 | 543,869 | ||||||
775,284 | ||||||||
Republic of Korea 1.6% | ||||||||
Automobiles & Components 0.7% | ||||||||
Hyundai Motor Co. | 430 | 86,597 | ||||||
Kia Motors Corp. | 4,704 | 301,582 | ||||||
388,179 | ||||||||
Capital Goods 0.1% | ||||||||
Daelim Industrial Co., Ltd. | 463 | 40,111 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
NongShim Co., Ltd. | 421 | 82,498 | ||||||
Household & Personal Products 0.4% | ||||||||
AMOREPACIFIC Corp. | 1,145 | 250,463 | ||||||
Retailing 0.3% | ||||||||
GS Home Shopping, Inc. | 1,879 | 179,846 | ||||||
941,097 | ||||||||
Singapore 0.9% | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
China Minzhong Food Corp., Ltd. * | 106,000 | 87,380 | ||||||
Real Estate 0.7% | ||||||||
UOL Group Ltd. | 124,000 | 438,369 | ||||||
525,749 | ||||||||
South Africa 1.2% | ||||||||
Materials 0.7% | ||||||||
Kumba Iron Ore Ltd. | 3,666 | 216,560 | ||||||
Mondi Ltd. | 28,198 | 219,178 | ||||||
435,738 | ||||||||
Retailing 0.5% | ||||||||
Woolworths Holdings Ltd. | 52,470 | 266,429 | ||||||
702,167 | ||||||||
Spain 0.9% | ||||||||
Banks 0.3% | ||||||||
Banco Popular Espanol S.A. | 43,224 | 197,847 | ||||||
Utilities 0.6% | ||||||||
Endesa S.A. | 13,489 | 320,268 | ||||||
518,115 |
See financial notes 85
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Sweden 2.6% | ||||||||
Banks 0.8% | ||||||||
Nordea Bank AB | 53,371 | 484,655 | ||||||
Capital Goods 0.2% | ||||||||
Saab AB, Class B | 4,898 | 94,341 | ||||||
Commercial & Professional Supplies 0.8% | ||||||||
Loomis AB, B Shares | 36,367 | 500,274 | ||||||
Materials 0.8% | ||||||||
Boliden AB | 33,419 | 475,098 | ||||||
1,554,368 | ||||||||
Switzerland 5.5% | ||||||||
Capital Goods 0.9% | ||||||||
Meyer Burger Technology AG * | 19,008 | 454,983 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 5,570 | 33,355 | ||||||
Schindler Holding AG | 428 | 50,121 | ||||||
538,459 | ||||||||
Diversified Financials 0.8% | ||||||||
GAM Holding AG * | 38,110 | 455,619 | ||||||
Materials 1.1% | ||||||||
Holcim Ltd. - Reg’d * | 4,263 | 269,959 | ||||||
Syngenta AG - Reg’d * | 1,378 | 419,905 | ||||||
689,864 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.3% | ||||||||
Novartis AG - Reg’d | 8,586 | 483,695 | ||||||
Roche Holding AG | 5,314 | 871,864 | ||||||
1,355,559 | ||||||||
Transportation 0.4% | ||||||||
Flughafen Zuerich AG - Reg’d | 642 | 246,202 | ||||||
Swissair Group (a)(b)* | 30 | — | ||||||
246,202 | ||||||||
3,285,703 | ||||||||
Taiwan 0.4% | ||||||||
Automobiles & Components 0.1% | ||||||||
China Motor Corp. | 40,000 | 38,237 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Asustek Computer, Inc. | 32,000 | 222,470 | ||||||
260,707 | ||||||||
Thailand 0.6% | ||||||||
Diversified Financials 0.4% | ||||||||
Thanachart Capital PCL | 279,900 | 224,830 | ||||||
Energy 0.2% | ||||||||
PTT PCL | 11,400 | 113,444 | ||||||
338,274 | ||||||||
Turkey 1.5% | ||||||||
Automobiles & Components 0.3% | ||||||||
Ford Otomotiv Sanayi A/S | 24,503 | 178,123 | ||||||
Banks 0.8% | ||||||||
Turkiye Halk Bankasi A/S | 37,856 | 232,638 | ||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 133,575 | 226,980 | ||||||
459,618 | ||||||||
Utilities 0.4% | ||||||||
Aygaz A.S. | 48,506 | 263,760 | ||||||
901,501 | ||||||||
United Kingdom 20.3% | ||||||||
Capital Goods 0.8% | ||||||||
Bodycote plc | 107,529 | 486,499 | ||||||
Commercial & Professional Supplies 0.8% | ||||||||
Berendsen plc | 60,597 | 451,472 | ||||||
Consumer Durables & Apparel 0.9% | ||||||||
Persimmon plc | 65,989 | 526,239 | ||||||
Consumer Services 0.8% | ||||||||
Restaurant Group plc | 17,386 | 83,660 | ||||||
William Hill plc | 119,332 | 414,193 | ||||||
497,853 | ||||||||
Energy 3.0% | ||||||||
John Wood Group plc | 45,854 | 453,992 | ||||||
Petrofac Ltd. | 23,441 | 538,459 | ||||||
Royal Dutch Shell plc, B Shares | 22,036 | 790,611 | ||||||
1,783,062 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
WM Morrison Supermarkets plc | 86,981 | 421,808 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
SABMiller plc | 4,904 | 178,605 | ||||||
Insurance 0.9% | ||||||||
Lancashire Holdings Ltd. | 49,025 | 562,844 | ||||||
Materials 2.7% | ||||||||
Mondi plc | 52,872 | 402,127 | ||||||
Rexam plc | 84,613 | 469,009 | ||||||
Rio Tinto plc | 13,270 | 717,893 | ||||||
1,589,029 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.3% | ||||||||
AstraZeneca plc | 17,281 | 829,646 | ||||||
Shire plc | 16,691 | 523,857 | ||||||
1,353,503 | ||||||||
Real Estate 0.6% | ||||||||
Savills plc | 78,446 | 390,783 | ||||||
Retailing 1.7% | ||||||||
Kingfisher plc | 123,174 | 510,321 | ||||||
WH Smith plc | 60,037 | 528,106 | ||||||
1,038,427 | ||||||||
Software & Services 1.2% | ||||||||
Micro Focus International plc | 79,664 | 430,995 | ||||||
The Sage Group plc | 63,152 | 281,654 | ||||||
712,649 | ||||||||
Technology Hardware & Equipment 1.0% | ||||||||
Spectris plc | 19,932 | 407,239 | ||||||
TT Electronics plc | 81,757 | 206,225 | ||||||
613,464 | ||||||||
Telecommunication Services 2.5% | ||||||||
BT Group plc | 180,505 | 544,624 |
86 See financial notes
Schwab International Core Equity Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Vodafone Group plc | 334,794 | 929,618 | ||||||
1,474,242 | ||||||||
Transportation 0.0% | ||||||||
Northgate plc * | 2,526 | 10,457 | ||||||
Utilities 0.1% | ||||||||
Drax Group plc | 3,622 | 31,530 | ||||||
12,122,466 | ||||||||
Total Common Stock | ||||||||
(Cost $58,137,234) | 58,168,999 | |||||||
Other Investment Companies 2.0% of net assets | ||||||||
United States 2.0% | ||||||||
iShares MSCI EAFE Index Fund | 17,500 | 916,475 | ||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 287,669 | 287,669 | ||||||
Total Other Investment Companies | ||||||||
(Cost $1,144,555) | 1,204,144 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $59,750,316 and the unrealized appreciation and depreciation were $3,993,800 and ($4,370,973), respectively, with a net unrealized depreciation of ($377,173).
At 10/31/11, the values of certain foreign securities held by the fund aggregating $56,760,122 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Illiquid security. At the period end, the value of these amounted to $0 or 0.0% of net assets. | |
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
Reg’d — | Registered |
See financial notes 87
Schwab International Core Equity Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $59,281,789) | $59,373,143 | |||||
Foreign currency, at value (cost $249,767) | 249,587 | |||||
Receivables: | ||||||
Investments sold | 326,893 | |||||
Fund shares sold | 188,675 | |||||
Dividends | 103,867 | |||||
Foreign tax reclaims | 38,749 | |||||
Interest | 121 | |||||
Prepaid expenses | + | 320 | ||||
Total assets | 60,281,355 | |||||
Liabilities | ||||||
Payables: | ||||||
Investments bought | 380,458 | |||||
Shareholder service fees | 1,010 | |||||
Fund shares redeemed | 22,658 | |||||
Due to custodian | 1,137 | |||||
Distribution and shareholder services fees | 695 | |||||
Accrued expenses | + | 61,925 | ||||
Total liabilities | 467,883 | |||||
Net Assets | ||||||
Total assets | 60,281,355 | |||||
Total liabilities | − | 467,883 | ||||
Net assets | $59,813,472 | |||||
Net Assets by Source | ||||||
Capital received from investors | 76,046,850 | |||||
Net investment income not yet distributed | 1,302,126 | |||||
Net realized capital losses | (17,625,316 | ) | ||||
Net unrealized capital gains | 89,812 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$59,813,472 | 8,175,389 | $7.32 |
88 See financial notes
Schwab International Core Equity Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $165,560) | $1,887,363 | |||||
Interest | + | 2,204 | ||||
Total investment income | 1,889,567 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 351,271 | |||||
Shareholder service fees | 146,962 | |||||
Professional fees | 69,614 | |||||
Portfolio accounting fees | 63,919 | |||||
Custodian fees | 36,815 | |||||
Transfer agent fees | 19,678 | |||||
Registration fees | 19,320 | |||||
Shareholder reports | 14,065 | |||||
Trustees’ fees | 6,270 | |||||
Interest expense | 10 | |||||
Other expenses | + | 9,785 | ||||
Total expenses | 737,709 | |||||
Expense reduction by CSIM and its affiliates | − | 251,571 | ||||
Custody credits | − | 2 | ||||
Net expenses | − | 486,136 | ||||
Net investment income | 1,403,431 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments (net of foreign capital gain tax of $5,656) | 2,308,137 | |||||
Net realized losses on foreign currency transactions | + | (10,422 | ) | |||
Net realized gains | 2,297,715 | |||||
Net unrealized losses on investments | (6,598,930 | ) | ||||
Net unrealized losses on foreign currency translations | + | (12,040 | ) | |||
Net unrealized losses | + | (6,610,970 | ) | |||
Net realized and unrealized losses | (4,313,255 | ) | ||||
Decrease in net assets resulting from operations | ($2,909,824 | ) |
See financial notes 89
Schwab International Core Equity Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,403,431 | $1,022,157 | ||||||||
Net realized gains | 2,297,715 | 1,862,733 | ||||||||
Net unrealized losses | + | (6,610,970 | ) | (939,147 | ) | |||||
Increase (Decrease) in net assets from operations | (2,909,824 | ) | 1,945,743 | |||||||
Distributions to Shareholders1 | ||||||||||
Distributions from net investment income | ($1,304,611 | ) | ($911,920 | ) |
Transactions in Fund Shares1
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,331,795 | $26,421,070 | 1,771,887 | $12,982,863 | ||||||||||||||
Issued in connection with merger | — | — | 7,281,464 | 54,649,067 | ||||||||||||||
Shares reinvested | 125,830 | 983,995 | 99,931 | 750,485 | ||||||||||||||
Shares redeemed | + | (2,027,829 | ) | (15,977,680 | ) | (7,530,761 | ) | (53,939,839 | ) | |||||||||
Net transactions in fund shares | 1,429,796 | $11,427,385 | 1,622,521 | $14,442,576 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 6,745,593 | $52,600,522 | 5,123,072 | $37,124,123 | ||||||||||||||
Total increase | + | 1,429,796 | 7,212,950 | 1,622,521 | 15,476,399 | |||||||||||||
End of period | 8,175,389 | $59,813,472 | 6,745,593 | $52,600,522 | ||||||||||||||
Net investment income not yet distributed | $1,302,126 | $1,070,626 |
1 | Effective December 3, 2009 all of the assets and liabilities of the Laudus Rosenberg International Equity Fund were transferred to the Schwab International Core Equity Fund. (See financial note 13) |
90 See financial notes
Schwab Active Equity Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (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 Capital Trust (organized May 7, 1993) | Laudus International MarketMasters Fund | |||
Schwab Premier Equity Fund | Schwab Balanced Fund | |||
Schwab Core Equity Fund | Schwab Target 2010 Fund | |||
Schwab Dividend Equity Fund | Schwab Target 2015 Fund | |||
Schwab Large-Cap Growth Fund | Schwab Target 2020 Fund | |||
Schwab Small-Cap Equity Fund | Schwab Target 2025 Fund | |||
Schwab Hedged Equity Fund | Schwab Target 2030 Fund | |||
Schwab Financial Services Fund | Schwab Target 2035 Fund | |||
Schwab Health Care Fund | Schwab Target 2040 Fund | |||
Schwab International Core Equity Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab S&P 500 Index Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Monthly Income Fund – Moderate Payout | |||
Schwab MarketTrack Growth Portfolio | Schwab Monthly Income Fund – Enhanced Payout | |||
Schwab MarketTrack Balanced Portfolio | Schwab Monthly Income Fund – Maximum Payout | |||
Schwab MarketTrack Conservative Portfolio | ||||
Laudus Small-Cap MarketMasters Fund | ||||
Each fund in this report offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”), which is the price for all outstanding shares of the funds. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the valuation date exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board of Trustees has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when a security is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | International fair valuation: The Board of Trustees has adopted procedures to fair value foreign equity securities that trade in markets that close prior to when the funds value their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect |
91
Schwab Active Equity Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the net asset value of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. |
• | Futures and forward contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a value based on that day’s exchange rates (for forwards). | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. | |
• | Underlying funds: valued at their respective net asset values. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and futures contracts. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of October 31, 2011:
Schwab Premier Equity Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $227,229,480 | $— | $— | $227,229,480 | ||||||||||||
Other Investment Company(a) | 6,955,881 | — | — | 6,955,881 | ||||||||||||
Short-Term Investment(a) | — | 700,000 | — | 700,000 | ||||||||||||
Total | $234,185,361 | $700,000 | $— | $234,885,361 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract* | $533,583 | $— | $— | $533,583 |
Schwab Core Equity Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $1,699,970,289 | $— | $— | $1,699,970,289 | ||||||||||||
Other Investment Company(a) | 16,169,233 | — | — | 16,169,233 | ||||||||||||
Short-Term Investment(a) | — | 1,830,000 | — | 1,830,000 | ||||||||||||
Total | $1,716,139,522 | $1,830,000 | $— | $1,717,969,522 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract* | $1,018,658 | $— | $— | $1,018,658 |
Schwab Dividend Equity Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $1,295,240,694 | $— | $— | $1,295,240,694 | ||||||||||||
Short-Term Investments(a) | — | 28,666,439 | — | 28,666,439 | ||||||||||||
Total | $1,295,240,694 | $28,666,439 | $— | $1,323,907,133 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract* | $1,770,524 | $— | $— | $1,770,524 |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab Large-Cap Growth Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $211,308,854 | $— | $— | $211,308,854 | ||||||||||||
Short-Term Investments(a) | — | 1,857,337 | — | 1,857,337 | ||||||||||||
Total | $211,308,854 | $1,857,337 | $— | $213,166,191 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts* | $72,761 | $— | $— | $72,761 |
Schwab Small-Cap Equity Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $218,836,468 | $— | $— | $218,836,468 | ||||||||||||
Short-Term Investments(a) | — | 7,798,517 | — | 7,798,517 | ||||||||||||
Total | $218,836,468 | $7,798,517 | $— | $226,634,985 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $187,388 | $— | $— | $187,388 | ||||||||||||
Futures Contract* | 475,396 | — | — | 475,396 |
Schwab Hedged Equity Fund
Assets Valuation Input | Quoted Prices in | Significant | ||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $225,584,125 | $— | $— | $225,584,125 | ||||||||||||
Other Investment Company(a) | 1,800,833 | — | — | 1,800,833 | ||||||||||||
Short-Term Investments(a) | — | 675,003 | — | 675,003 | ||||||||||||
Total | $227,384,958 | $675,003 | $— | $228,059,961 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contracts* | $154,429 | $— | $— | $154,429 | ||||||||||||
Liabilities Valuation Input | ||||||||||||||||
Other Financial Instruments | ||||||||||||||||
Short Sales(a) | ($81,814,146 | ) | $— | $— | ($81,814,146 | ) |
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab Financial Services Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $39,771,797 | $— | $— | $39,771,797 | ||||||||||||
Short-Term Investment(a) | — | 358,521 | — | 358,521 | ||||||||||||
Total | $39,771,797 | $358,521 | $— | $40,130,318 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $2,255 | $— | $— | $2,255 |
Schwab Health Care Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $319,939,870 | $— | $— | $319,939,870 | ||||||||||||
Foreign Common Stock(a) | — | 80,299,092 | — | 80,299,092 | ||||||||||||
Short-Term Investments(a) | — | 11,915,779 | — | 11,915,779 | ||||||||||||
Total | $319,939,870 | $92,214,871 | $— | $412,154,741 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Futures Contract* | $800,374 | $— | $— | $800,374 |
Schwab International Core Equity Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total** | ||||||||||||
Common Stock(a) | $— | $56,760,122 | $— | $56,760,122 | ||||||||||||
Brazil(a) | 317,151 | — | — | 317,151 | ||||||||||||
Canada(a) | 753,452 | — | — | 753,452 | ||||||||||||
Thailand(a) | 338,274 | — | — | 338,274 | ||||||||||||
Other Investment Companies(a) | 1,204,144 | — | — | 1,204,144 | ||||||||||||
Total | $2,613,021 | $56,760,122 | $— | $59,373,143 | ||||||||||||
(a) | As categorized in Portfolio Holdings. | |
* | Futures Contracts are not included in Investments and are valued at unrealized appreciation or depreciation. | |
** | The fund had no Other Financial Instruments. |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
Certain funds entered into equity index futures contracts (“futures”) from November 1, 2010 through October 31, 2011. The funds invested in futures to gain market exposure while still keeping a small portion of assets in cash for business operations. The fair value and due to brokers for futures held at October 31, 2011 and the realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 2011 are presented on the face of the Portfolio Holdings, Statement of Assets and Liabilities and Statement of Operations, respectively. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
the period, the monthly average contract value of futures contracts held by the funds and the monthly average number of contracts were as follows:
Contract Values | Number of Contracts | |||||||
Schwab Premier Equity Fund | $7,432,542 | 118 | ||||||
Schwab Core Equity Fund | 12,160,079 | 191 | ||||||
Schwab Dividend Equity Fund | 10,571,702 | 171 | ||||||
Schwab Large-Cap Growth Fund | 3,011,419 | 47 | ||||||
Schwab Small-Cap Equity Fund | 5,470,788 | 71 | ||||||
Schwab Hedged Equity Fund | 3,968,123 | 64 | ||||||
Schwab Financial Services Fund | — | — | ||||||
Schwab Health Care Fund | 8,677,256 | 138 | ||||||
Schwab International Core Equity Fund | — | — |
(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 (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value changes daily.
Forward Foreign Currency Contracts: “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. The value of the forward foreign currency contracts are accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the Securities Lending Program, a fund (the “lender”) may make short-term loans of its securities to another party (the “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. The initial collateral received by a fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained thereafter, at a value equal to at least 100% of the current market value of the securities on loan and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios registered under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 2011 and the value of the related collateral are disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities.
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The funds mitigate this risk by ensuring that the funds’ repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. All collateral is held by the funds’ custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counterparty.
Short Sales: When a fund sells securities short (sells securities it does not own), the fund identifies assets worth at least 100% of the value of the short securities as collateral. If the market value of the short securities subsequently falls, the fund can realize a gain by closing the short position. However, if the value rises, the fund typically would have to add to its collateral or close out
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
its short position at a loss. The potential for losses associated with short positions is much greater than the original value of the securities sold short and may exceed amounts recorded in the 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 or losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
If the fund sells securities short, it records the proceeds received as an asset and the obligation to buy back the securities as a liability. At the time a short sale is initiated, the asset and liability are of equal value and effectively cancel each other out. Subsequently, the fund values the liability side of the transaction according to the market price of the securities sold short, and values the asset side according to the value of the proceeds. When the fund closes out a short position (buys the security), it records the outcome as a realized gain or loss. Dividends accrued on securities sold short are recorded as an expense on the fund’s records and presented in the Statement of Operations. The fund may also incur stock loan fees which represent the cost of borrowing securities used for short sale transactions.
Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forwards 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. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The funds make distributions from net investment income, if any, once a year, with the exception of Schwab Dividend Equity Fund which typically pays quarterly dividends. The funds make distributions from net realized capital gains, if any, once a year.
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Financial Notes (continued)
2. Significant Accounting Policies (continued):
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, under which the funds receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges, capital gains on investments on currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2011, if any, are reflected in the funds’ Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(l) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
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Financial Notes (continued)
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in a fund will fluctuate, which means that you could lose money.
The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
The funds’ investment adviser makes investment decisions for the funds using a strategy based largely on historical information. There is no guarantee that a strategy based on historical information will produce the desired results in the future. In addition, the portfolio optimization process used by the fund to assist in constructing the fund’s portfolio does not assure successful investment. Securities selected with the assistance of the process may be negatively impacted by factors or events not foreseen in developing the process. As a result, the fund may have a lower return than if it were managed using another process or strategy.
Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments — large-cap and mid-cap stocks, for instance — a fund’s small-cap holdings could reduce performance.
Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more vulnerable to adverse business or economic events than larger, more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments — small-cap stocks, for instance — a fund’s large- and mid-cap holdings could reduce performance.
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 and could cause the fund to lose more than the principal amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund.
A fund’s investments in REITs will be subject to the risks associated with the direct ownership of real estate, including fluctuations in the value of underlying properties, defaults by borrowers or tenants, changes in interest rates and risks related to general or local economic conditions. REITs are also subject to certain additional risks; for example, REITs are dependent upon specialized management skills and cash flows, and may have their investments in relatively few properties, a small geographic area or a single property type. Failure of a company to qualify as a REIT under federal tax law may have adverse consequences on a fund. In addition, REITs have their own expenses, and a fund will bear a proportionate share of those expenses.
Certain funds engage in short sales transactions. Short sales are transactions in which a fund sells a security it does not own. To complete a short sale, a fund must borrow the security to deliver to the buyer. A fund is then obligated to replace the borrowed security by purchasing the security at the market price at the time of replacement. This price may be more or less than the price at which the security was sold by a fund, and the fund will incur a loss if the price of the security sold short increases between the time of the short sales and the time the fund replaces the borrowed security.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in
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Financial Notes (continued)
3. Risk Factors (continued):
other countries. As a result, there will tend to be an increased risk of price volatility associated with a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar.
To the extent a fund’s investments in a single country or a limited number of countries represent a higher percentage of the fund’s assets, the fund assumes the risk that economic, political and social conditions in those countries will have a significant impact on its investment performance and it may be subject to increased price volatility.
The investments of certain funds are concentrated in issuers doing business in the same sector, and therefore, the companies in which a fund invests will be affected by many of the same factors, such as legislative or regulatory changes, intense competition for market share, and other competitive challenges. In addition, a fund is subject to the risks that stocks of these companies may underperform other segments of the equity market or stock market as a whole and are likely to have above-average volatility.
Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
A particular investment may be difficult to purchase or sell. A fund may be unable to sell illiquid securities at an advantageous time or price.
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. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and the trust.
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab | ||||||||||||||||||||||||||||
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | International | ||||||||||||||||||||||
% of Average | Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | Core | |||||||||||||||||||||
Daily Net Assets | Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | Equity Fund | |||||||||||||||||||||
Flat rate | 0.73% | 0.47% | 0.62% | 0.72% | 0.81% | 1.05% | 0.58% |
Schwab | Schwab | |||||||
% of Average | Financial | Health Care | ||||||
Daily Net Assets | Services Fund | Fund | ||||||
First $500 million | 0.54% | 0.54% | ||||||
$500 million to $1 billion | 0.515% | 0.515% | ||||||
Over $1 billion | 0.49% | 0.49% |
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab) under the Plan. All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.
Pursuant to the Plan, the fund’s shares are subject to an annual shareholder servicing fee up to 0.25%. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab (or, in the case of payments made to Schwab, pursuant to Schwab’s written agreement with the fund), and the fund will pay no more than 0.25% of the average annual daily net asset value of the fund shares owned by shareholders holding shares through such service providers. Payments under the Plan are made as described above regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payment received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.
100
Schwab Active Equity Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Although these agreements specify certain fees for these services, CSIM and Schwab have made an additional agreement (“expense limitation”) with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees, to limit the total annual fund operating expenses, excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||
1.02% | 0.75% | 0.89% | 0.99% | 1.12% | 1.33% | * |
Schwab | ||||||||||
Schwab | Schwab | International | ||||||||
Financial | Health Care | Core | ||||||||
Services Fund | Fund | Equity Fund | ||||||||
0.94% | 0.82% | 0.86% |
* | Excludes dividends and stock loan fees paid on securities sold short. |
Certain Schwab Funds may own shares of other Schwab Funds. The table below reflects the percentages of each fund shares in this report owned by other Schwab Funds as of October 31, 2011.
Schwab | Schwab | Schwab | ||||||||||
Core | Dividend | Small-Cap | ||||||||||
Equity Fund | Equity Fund | Equity Fund | ||||||||||
Schwab Target Funds: | ||||||||||||
Schwab Target 2010 Fund | 0.3% | 0.1% | 0.8% | |||||||||
Schwab Target 2015 Fund | 0.3% | 0.1% | 1.0% | |||||||||
Schwab Target 2020 Fund | 2.1% | 0.6% | 5.8% | |||||||||
Schwab Target 2025 Fund | 0.9% | 0.3% | 2.8% | |||||||||
Schwab Target 2030 Fund | 3.8% | 1.0% | 11.6% | |||||||||
Schwab Target 2035 Fund | 0.9% | 0.2% | 2.6% | |||||||||
Schwab Target 2040 Fund | 4.0% | 1.2% | 12.1% | |||||||||
Schwab Monthly Income Funds: | ||||||||||||
Schwab Monthly Income Fund - Moderate Payout | —% | 0.3% | —% | |||||||||
Schwab Monthly Income Fund - Enhanced Payout | —% | 0.7% | —% | |||||||||
Schwab Monthly Income Fund - Maximum Payout | —% | 0.3% | —% | |||||||||
Schwab Balanced Fund | 2.2% | —% | —% |
The funds may also let a related party own shares of the funds. As of October 31, 2011, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab Dividend Equity Fund was 4.9%.
The funds may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, the funds had no direct security transactions with other Schwab Funds.
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
During the period, the investment adviser voluntarily reduced its Investment Adviser fee for the Schwab Health Care Fund and the Schwab International Core Equity Fund by $34,722 and $34,722 respectively, to reflect a credit in certain stock research fees
101
Schwab Active Equity Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
incurred by the investment adviser and passed on to the Schwab Health Care Fund and the Schwab International Core Equity Fund.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for each fund.
6. Board of Trustees:
Trustees 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 trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Premier Equity Fund | $205,628,746 | $278,195,242 | ||||||
Schwab Core Equity Fund | 628,109,339 | 834,859,429 | ||||||
Schwab Dividend Equity Fund | 413,948,958 | 536,858,568 | ||||||
Schwab Large-Cap Growth Fund | 139,030,173 | 156,062,715 | ||||||
Schwab Small-Cap Equity Fund | 163,946,558 | 184,080,411 | ||||||
Schwab Hedged Equity Fund* | 275,766,073 | 357,614,344 | ||||||
Schwab Financial Services Fund | 37,080,846 | 46,792,698 | ||||||
Schwab Health Care Fund | 97,502,365 | 138,110,732 | ||||||
Schwab International Core Equity Fund | 62,357,422 | 50,954,529 |
* | Including securities sold short. |
102
Schwab Active Equity Funds
Financial Notes (continued)
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Schwab Premier Equity Fund | $5,348 | $1,206 | ||||||
Schwab Core Equity Fund | 22,228 | 18,637 | ||||||
Schwab Dividend Equity Fund | 26,900 | 48,892 | ||||||
Schwab Large-Cap Growth Fund | 24,056 | 4,942 | ||||||
Schwab Small-Cap Equity Fund | 8,490 | 3,469 | ||||||
Schwab Hedged Equity Fund | 7,560 | 4,954 | ||||||
Schwab Financial Services Fund | 3,360 | 9,664 | ||||||
Schwab Health Care Fund | 17,659 | 5,454 | ||||||
Schwab International Core Equity Fund | 4,402 | 4,244 |
10. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Undistributed ordinary income | $919,101 | $12,260,865 | $2,539,120 | $724,130 | $175,364 | $— | ||||||||||||||||||
Undistributed long-term capital gains | — | — | — | — | — | — | ||||||||||||||||||
Unrealized appreciation on investments | 26,506,402 | 260,589,450 | 219,534,743 | 36,076,093 | 27,500,929 | 30,118,539 | ||||||||||||||||||
Unrealized depreciation on investments | (14,490,794 | ) | (80,661,266 | ) | (34,527,878 | ) | (4,899,468 | ) | (13,658,113 | ) | (12,173,645 | ) | ||||||||||||
Other unrealized appreciation/(depreciation) | (1 | ) | — | — | (1 | ) | — | 7,029,274 | ||||||||||||||||
Net unrealized appreciation/(depreciation) | $12,015,607 | $179,928,184 | $185,006,865 | $31,176,624 | $13,842,816 | $24,974,168 | ||||||||||||||||||
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||||||
Undistributed ordinary income | $108,593 | $3,528,758 | $1,643,465 | |||||||||||||||||||||
Undistributed long-term capital gains | — | — | — | |||||||||||||||||||||
Unrealized appreciation on investments | 2,567,846 | 81,800,776 | 3,993,800 | |||||||||||||||||||||
Unrealized depreciation on investments | (3,127,184 | ) | (10,545,827 | ) | (4,370,973 | ) | ||||||||||||||||||
Other unrealized appreciation/(depreciation) | — | 7,510 | 5,843 | |||||||||||||||||||||
Net unrealized appreciation/(depreciation) | ($559,338 | ) | $71,262,459 | ($371,330 | ) | |||||||||||||||||||
The primary differences between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments are Passive Foreign Investment Companies (PFIC), Partnerships and the tax deferral of losses on wash sales.
103
Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Expiration Date | Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | ||||||||||||||||||
October 31, 2015 | $— | $1,357,016 | $— | $— | $— | $— | ||||||||||||||||||
October 31, 2016 | — | 15,197,447 | — | 16,747,673 | — | — | ||||||||||||||||||
October 31, 2017 | 145,509,869 | 190,463,902 | 173,088,288 | 58,253,697 | 48,509,641 | 18,133,409 | ||||||||||||||||||
Total | $145,509,869 | $207,018,365 | * | $173,088,288 | $75,001,370 | $48,509,641 | $18,133,409 | |||||||||||||||||
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Expiration Date | Services Fund | Fund | Equity Fund | |||||||||||||||||||||
October 31, 2016 | $8,451,354 | $— | $17,505,510 | |||||||||||||||||||||
October 31, 2017 | 28,673,848 | 14,437,135 | — | |||||||||||||||||||||
October 31, 2018 | 170,394 | — | — | �� | ||||||||||||||||||||
Total | $37,295,596 | $14,437,135 | $17,505,510 | * | ||||||||||||||||||||
* | The Schwab Core Equity Fund and Schwab International Core Equity Fund have capital loss carryforwards acquired via merger which are subject to certain annual limitations in regard to availability to offset potential future capital gains. |
For the year ended October 31, 2011, the funds had capital losses utilized as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Capital losses utilized | $44,357,505 | $113,293,128 | $44,218,153 | $22,122,709 | $42,631,109 | $13,003,901 | ||||||||||||||||||
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||||||
Capital losses utilized | $334,690 | $29,618,797 | $2,042,197 |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||
Ordinary income | $1,518,547 | $18,535,012 | $23,212,957 | $1,241,602 | $— | $— | ||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | ||||||||||||||||||
Return of capital | — | — | — | — | — | — | ||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||
Ordinary income | $2,109,100 | $18,916,913 | $23,865,611 | $2,274,429 | $— | $— | ||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | ||||||||||||||||||
Return of capital | — | — | — | — | — | — | ||||||||||||||||||
104
Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||||||
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||
Ordinary income | $200,494 | $4,837,988 | $1,304,611 | |||||||||||||||||||||
Long-term capital gains | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | |||||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||
Ordinary income | $407,141 | $4,113,182 | $911,920 | |||||||||||||||||||||
Long-term capital gains | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | |||||||||||||||||||
Premier | Core | Dividend | Large-Cap | Small-Cap | Hedged | |||||||||||||||||||
Equity Fund | Equity Fund | Equity Fund | Growth Fund | Equity Fund | Equity Fund | |||||||||||||||||||
Capital shares | $— | ($328,852 | ) | $— | $— | $54,670 | ($726,605 | ) | ||||||||||||||||
Undistributed net investment income | 10,493 | (2,188,175 | ) | 1,384,856 | — | (54,670 | ) | 727,399 | ||||||||||||||||
Net realized capital gains/(losses) | (10,493 | ) | 2,517,027 | (1,384,856 | ) | — | — | (794 | ) | |||||||||||||||
Schwab | ||||||||||||||||||||||||
Schwab | Schwab | International | ||||||||||||||||||||||
Financial | Health Care | Core | ||||||||||||||||||||||
Services Fund | Fund | Equity Fund | ||||||||||||||||||||||
Capital shares | $— | $— | $5,380 | |||||||||||||||||||||
Undistributed net investment income | 8,840 | (37,497 | ) | 132,680 | ||||||||||||||||||||
Net realized capital gains/(losses) | (8,840 | ) | 37,497 | (138,060 | ) |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
105
Schwab Active Equity Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
11. Other:
During the period, Schwab Premier Equity Fund, Schwab Dividend Equity Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund and Schwab Health Care Fund received a payment related to state filing fees resulting from revised calculation methodologies being applied on sales of the funds’ shares in prior periods in certain states. This payment is presented in the funds’ Statement of Operations as “Payment for state filing fees”.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
13. Reorganization:
Under a plan of reorganization adopted by the Trust, all of the assets and liabilities of the Laudus Rosenberg International Equity Fund were transferred to the Schwab International Core Equity Fund. The reorganization, which qualified as a tax-free exchange for federal income tax purposes, was completed at the close of business on December 3, 2009. The following is a
106
Schwab Active Equity Funds
Financial Notes (continued)
13. Reorganization (continued):
summary of shares outstanding, net assets, net asset value per share issued and unrealized appreciation/ depreciation immediately before and after the reorganization.
Before Reorganization | After Reorganization | |||||||||||
Schwab | Laudus Rosenberg | Schwab | ||||||||||
International | International | International | ||||||||||
Core Equity Fund | Equity Fund | Core Equity Fund | ||||||||||
Shares: | ||||||||||||
Investor Shares | — | 1,107,885 | — | |||||||||
Select Shares | — | 5,807,283 | — | |||||||||
Institutional Shares | 5,312,310 | — | 12,593,773 | |||||||||
Net Assets: | ||||||||||||
Investor Shares | — | $8,781,776 | — | |||||||||
Select Shares | — | $45,867,291 | — | |||||||||
Institutional Shares | $39,870,120 | — | $94,519,187 | |||||||||
Net Assets Value: | ||||||||||||
Investor Shares | — | $7.93 | — | |||||||||
Select Shares | — | $7.90 | — | |||||||||
Institutional Shares | $7.51 | — | $7.51 | |||||||||
Net unrealized appreciation/(depreciation) | $3,421,737 | $6,247,130 | $9,668,867 | |||||||||
Market value of investments | $39,729,753 | $54,556,067 | $94,285,820 | |||||||||
Cost of investments | $36,308,016 | $48,308,937 | $84,616,953 |
Assuming the acquisition had been completed on November 1, 2009, the beginning of the fiscal year of Schwab International Core Equity Fund, Schwab International Core Equity Fund’s pro forma results of operations for the period ended October 31, 2010, are as follows:
Net investment income | $1,076,583 | |||
Net realized/unrealized gain on investments | $3,530,168 | |||
Net increase in net asset resulting from operations | $4,606,751 |
Because the combined investment portfolios have been managed as a single integrated portfolio since the acquisition was completed, it is not practicable to separate the amounts of revenue and earnings of Laudus Rosenberg International Equity Fund that have been included in Schwab International Core Equity Fund’s Statement of Operation since December 3, 2009.
107
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Premier Equity Fund
Schwab Core Equity Fund
Schwab Dividend Equity Fund
Schwab Large-Cap Growth Fund
Schwab Small-Cap Equity Fund
Schwab Hedged Equity Fund
Schwab Financial Services Fund
Schwab Health Care Fund
Schwab International Core Equity Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Premier Equity Fund, Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund, and Schwab International Core Equity Fund (nine of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
108
Other Federal Tax Information (unaudited)
Schwab International Core Equity Fund elects to pass through under section 853 of the Internal Revenue Code foreign tax credit of $164,183 to its shareholders for the year ended October 31, 2011. The respective foreign source income on the fund is $2,019,351.
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Premier Equity Fund | 100.00 | ||||
Schwab Core Equity Fund | 100.00 | ||||
Schwab Dividend Equity Fund | 100.00 | ||||
Schwab Large-Cap Growth Fund | 100.00 | ||||
Schwab Small-Cap Equity Fund | — | ||||
Schwab Hedged Equity Fund | — | ||||
Schwab Financial Services Fund | 100.00 | ||||
Schwab Health Care Fund | 87.79 | ||||
Schwab International Core Equity Fund | — |
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Schwab Premier Equity Fund | $1,518,547 | |||
Schwab Core Equity Fund | 18,535,012 | |||
Schwab Dividend Equity Fund | 23,212,957 | |||
Schwab Large-Cap Growth Fund | 1,241,602 | |||
Schwab Small-Cap Equity Fund | — | |||
Schwab Hedged Equity Fund | — | |||
Schwab Financial Services Fund | 200,494 | |||
Schwab Health Care Fund | 4,837,988 | |||
Schwab International Core Equity Fund | 1,745,220 |
109
Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Premier Equity Fund, Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund, Schwab Financial Services Fund, Schwab Health Care Fund and Schwab International Core Equity Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds, exchange-traded funds and other accounts; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other
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mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Each of Schwab Premier Equity Fund, Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund and Schwab Health Care Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Premier Equity Fund, Schwab Core Equity Fund, Schwab Dividend Equity Fund, Schwab Large-Cap Growth Fund, Schwab Small-Cap Equity Fund, Schwab Hedged Equity Fund and Schwab Health Care Fund. These factors varied from, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to Schwab Financial Services Fund and Schwab Health Care Fund that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
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We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
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Safeguarding Your Information — Security Is a Partnership
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We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2011 Schwab Funds. All rights reserved.
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large* Company Index Fund
Schwab Fundamental US Small-Mid* Company Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab® Premier Income Fund
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Annual report dated October 31, 2011, enclosed.
Schwab Balanced Fundtm
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Schwab Balanced Fundtm
Annual Report
October 31, 2011
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Schwab Balanced Fundtm
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summary | 6 | |
Fund Expenses | 8 | |
Financial Statements and Portfolio Holdings | 9 | |
Financial Notes | 14 | |
Report of Independent Registered Public Accounting Firm | 23 | |
Other Federal Tax Information | 24 | |
Investment Advisory Agreement Approval | 25 | |
Trustees and Officers | 27 | |
Glossary | 30 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab Balanced Fundtm (Ticker Symbol: SWOBX) | 7.28% | |||
Balanced Blended Index | 7.26% | |||
Fund Category: Morningstar Moderate Allocation | 3.97% | |||
Performance Details | pages 6-7 | |||
Minimum Initial Investment1 | $ 100 | |||
All fund and index 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
The Balanced Blended Index is a custom blended index developed by CSIM composed of 60% S&P 500® Index and 40% Barclays Capital U.S. Aggregate Bond Index.
1 | Please see prospectus for further details and eligibility requirements. |
2 Schwab Balanced Fund
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst06.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Balanced Fund 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab Balanced Fund. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Balanced Fund
Fund Management
![]() | Jake M. Gilliam, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the funds. He was appointed portfolio manager in 2011. Since 2007, he has been a portfolio manager with the Schwab Institutional Asset Management team. |
Schwab Balanced Fund 5
Schwab Balanced Fund™
Schwab Balanced Fund (the fund) seeks capital growth and income. To pursue its goal, the fund generally invests in a diversified group of other Schwab and/or Laudus Funds, in accordance with its target portfolio allocation. Normally, the fund invests 55-65% of its assets in equity securities (including stocks and equity funds) and 35-45% in fixed income securities (including bonds and fixed income funds), money market funds, and cash or cash equivalents. (For more information on the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 7.28% for the 12-month period ended October 31, 2011, while the fund’s internally calculated comparative index—the Balanced Blended Index—returned 7.26%. Unlike the return of the fund, the return of the Balanced Blended Index does not include operational and transactional costs.
Taking a broad look at the performance of the financial markets, U.S. stocks comfortably outperformed U.S. fixed income securities. Quantifying that result, the S&P 500 Index returned 8.09% for the 12 months, solidly outperforming the 5.00% return of the Barclays Capital U.S. Aggregate Bond Index.
On a fund-specific level, holdings were broadly in line with those of the Balanced Blended Index, but included a greater weighting in small-cap stocks that dampened the fund’s return compared with that of the index. The Schwab Core Equity Fund represented the largest weighting and added the most to the fund’s total return. However, because Schwab Core Equity Fund’s 7.60% advance was less than that of the S&P 500 Index, this allocation reduced the fund’s performance compared with that of the Balanced Blended Index.
An allocation in the Laudus Growth Investors U.S. Large Cap Growth Fund represented the second-largest contributor to the fund’s total return. Growth stocks outperformed value stocks for the 12 months, helping the Laudus Growth Investors U.S. Large Cap Growth Fund generate a 10.60% gain and comfortably outpace the return of the S&P 500 Index. The corresponding contribution from this investment slice also helped balance out the comparatively negative impact of the fund’s small-cap stock exposure. Although this small-cap stock exposure provided a positive return, the performance of the Laudus Small-Cap MarketMasters Fund (the investment vehicle through which the fund primary held its small-cap stock exposure) was well below that of the S&P 500 Index. As a result, this allocation detracted from the fund’s performance compared with the Balanced Blended Index.
As with the equity slice, the fund’s fixed income exposure was broadly in line with that of the Balanced Blended Index. The gains provided by an allocation in the Schwab Total Bond Market Fund represented the third largest contributor to the fund’s total return. Nevertheless, the positive return of this investment vehicle and that of the fund’s other fixed income fund holding, the Premier Income Fund, were lower than the returns posted by the Barclays Capital U.S. Aggregate Bond Index. As a result, these allocations weighed down the fund’s performance compared with the Balanced Blended Index.
As of 10/31/11:
Statistics
Number of Holdings | 6 | |
Portfolio Turnover Rate | 53% |
Asset Class Weightings % of Investments
Equity Funds - Large-Cap | 49.7% | |
Fixed-Income Funds - Intermediate-Term Bond | 37.2% | |
Equity Funds - Small-Cap | 10.1% | |
Short-Term Investments | 3.0% | |
Total | 100.0% |
Top Holdings % of Net Assets1
Schwab Core Equity Fund | 34.7% | |
Schwab Total Bond Market Fund | 25.1% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 14.8% | |
Schwab Premier Income Fund | 11.9% | |
Laudus Small-Cap MarketMasters Fund, Select Shares | 10.0% | |
Total | 96.5% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small company stocks are subject to greater volatility than other asset classes.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc.
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Balanced Fund
Schwab Balanced Fundtm
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
October 31, 2001 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1
Performance of a Hypothetical
$10,000 Investment1
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctbalanc01.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | 10 Years | ||||||||||||
Fund: Schwab Balanced Fundtm (11/18/96) | 7.28 | % | 2.09 | % | 4.93 | % | |||||||||
Balanced Blended Index* | 7.26 | % | 3.12 | % | 4.76 | % | |||||||||
S&P 500® Index | 8.09 | % | 0.25 | % | 3.69 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.46 | % | |||||||||
Fund Category: Morningstar Moderate Allocation | 3.97 | % | 1.96 | % | 4.44 | % |
Fund Expense Ratios3: Net 0.74%; Gross 0.94%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Because the fund originally used a different asset allocation strategy and a multi-fund strategy, its performance prior to June 3, 2002 does not reflect the current strategy and may have been different if it did. From June 3, 2002 to February 28, 2008, the fund used a manager of managers strategy, and therefore its performance during this time does not reflect the fund’s current multi-fund strategy and may have been different if it did.
* | The Balanced Blended Index is a custom blended index developed by CSIM composed of 60% S&P 500® Index and 40% Barclays Capital U.S. Aggregate Bond Index. | |
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.74%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Balanced Fund 7
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 or share class’ actual expense ratio and an assumed return of 5% per year before expenses. Because the return used is not an actual return, it may not be used to estimate the actual ending account value or expenses you paid for the period.
You may use this information to compare the ongoing costs of investing in the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab Balanced Fundtm | ||||||||||||||||
Actual Return | 0.00 | $ | 1,000 | $ | 961.10 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00 | $ | 1,000 | $ | 1,025.21 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the fund invests are not included in this ratio. | |
2 | Expenses for the fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
8 Schwab Balanced Fund
Schwab Balanced Fund™
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/081 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.00 | 9.99 | 9.82 | 13.86 | 13.39 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.17 | 2 | 0.17 | 2 | 0.22 | 2 | 0.20 | 2 | 0.25 | 2 | ||||||||||||
Net realized and unrealized gains (losses) | 0.63 | 1.03 | 0.64 | (3.26 | ) | 1.06 | ||||||||||||||||
Total from investment operations | 0.80 | 1.20 | 0.86 | (3.06 | ) | 1.31 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.19 | ) | (0.37 | ) | (0.29 | ) | (0.24 | ) | ||||||||||||
Distributions from net realized gains | — | — | (0.32 | ) | (0.69 | ) | (0.60 | ) | ||||||||||||||
Total distributions | (0.19 | ) | (0.19 | ) | (0.69 | ) | (0.98 | ) | (0.84 | ) | ||||||||||||
Net asset value at end of period | 11.61 | 11.00 | 9.99 | 9.82 | 13.86 | |||||||||||||||||
Total return (%) | 7.28 | 12.08 | 9.45 | (23.56 | ) | 10.24 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses3 | 0.00 | 4 | 0.00 | 4 | 0.00 | 0.36 | 1.02 | 5 | ||||||||||||||
Gross operating expenses3 | 0.16 | 0.20 | 0.17 | 0.53 | 1.27 | |||||||||||||||||
Net investment income (loss) | 1.52 | 1.67 | 2.41 | 1.81 | 1.84 | |||||||||||||||||
Portfolio turnover rate | 53 | 8 | 21 | 267 | 244 | |||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 109 | 88 | 86 | 85 | 112 |
1 Effective February 28, 2008, the Investor Share class and the Select Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Investor Shares.
2 Calculated based on the average shares outstanding during the period.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
5 The ratio of net operating expenses would have been 1.10% if custody credits and dividend and interest expenses on short sales had not been incurred.
See financial notes 9
Schwab Balanced Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .5% | Other Investment Companies | 104,140,077 | 108,785,369 | ||||||||
99 | .5% | Total Investments | 104,140,077 | 108,785,369 | ||||||||
0 | .5% | Other Assets and Liabilities, Net | 505,152 | |||||||||
100 | .0% | Net Assets | 109,290,521 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.5% of net assets | ||||||||
Equity Funds 59.5% | ||||||||
Large-Cap 49.5% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 1,231,320 | 16,191,860 | ||||||
Schwab Core Equity Fund (a) | 2,251,895 | 37,854,352 | ||||||
54,046,212 | ||||||||
Small-Cap 10.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 904,643 | 10,982,370 | ||||||
65,028,582 | ||||||||
Fixed-Income Funds 37.0% | ||||||||
Intermediate-Term Bond 37.0% | ||||||||
Schwab Premier Income Fund (a) | 1,239,024 | 13,034,531 | ||||||
Schwab Total Bond Market Fund (a) | 2,878,871 | 27,464,433 | ||||||
40,498,964 | ||||||||
Money Market Fund 3.0% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 3,257,823 | 3,257,823 | ||||||
Total Other Investment Companies | ||||||||
(Cost $104,140,077) | 108,785,369 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $105,736,669 and the unrealized appreciation and depreciation were $3,377,555 and ($328,855), respectively, with a net unrealized appreciation of $ 3,048,700.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
10 See financial notes
Schwab Balanced Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $100,882,254) | $105,527,546 | |||||
Investments in unaffiliated issuers, at value (cost $3,257,823) | + | 3,257,823 | ||||
Total investments, at value (cost $104,140,077) | 108,785,369 | |||||
Receivables: | ||||||
Fund shares sold | 601,340 | |||||
Dividends | 76,598 | |||||
Due from investment adviser | 1,588 | |||||
Interest | 336 | |||||
Prepaid expenses | + | 3,007 | ||||
Total assets | 109,468,238 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 130,820 | |||||
Accrued expenses | + | 46,897 | ||||
Total liabilities | 177,717 | |||||
Net Assets | ||||||
Total assets | 109,468,238 | |||||
Total liabilities | − | 177,717 | ||||
Net assets | $109,290,521 | |||||
Net Assets by Source | ||||||
Capital received from investors | 109,712,772 | |||||
Net investment income not yet distributed | 765,784 | |||||
Net realized capital losses | (5,833,327 | ) | ||||
Net unrealized capital gains | 4,645,292 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$109,290,521 | 9,413,535 | $11.61 |
See financial notes 11
Schwab Balanced Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,487,831 | |||||
Interest | + | 4,600 | ||||
Total investment income | 1,492,431 | |||||
Expenses | ||||||
Shareholder reports | 46,008 | |||||
Professional fees | 42,230 | |||||
Transfer agent fees | 22,535 | |||||
Registration fees | 20,620 | |||||
Portfolio accounting fees | 17,058 | |||||
Trustees’ fees | 6,558 | |||||
Custodian fees | 1,909 | |||||
Interest expense | 180 | |||||
Other expenses | + | 1,559 | ||||
Total expenses | 158,657 | |||||
Expense reduction by CSIM | − | 158,477 | ||||
Custody credits | − | 8 | ||||
Net expenses | − | 172 | ||||
Net investment income | 1,492,259 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized losses on sales of affiliated underlying funds | (269,316 | ) | ||||
Net realized gains on unaffiliated investments | + | 660 | ||||
Net realized losses | (268,656 | ) | ||||
Net unrealized gains on affiliated underlying funds | + | 6,134,481 | ||||
Net realized and unrealized gains | 5,865,825 | |||||
Increase in net assets resulting from operations | $7,358,084 |
12 See financial notes
Schwab Balanced Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,492,259 | $1,462,993 | ||||||||
Net realized gains (losses) | (268,656 | ) | 860,571 | |||||||
Net unrealized gains | + | 6,134,481 | 7,632,908 | |||||||
Increase in net assets from operations | 7,358,084 | 9,956,472 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,483,071 | ) | ($1,576,121 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,803,797 | $43,245,177 | 1,058,742 | $11,123,536 | ||||||||||||||
Shares reinvested | 123,329 | 1,393,617 | 142,826 | 1,479,682 | ||||||||||||||
Shares redeemed | + | (2,534,648 | ) | (29,444,848 | ) | (1,739,721 | ) | (18,264,502 | ) | |||||||||
Net transactions in fund shares | 1,392,478 | $15,193,946 | (538,153 | ) | ($5,661,284 | ) | ||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 8,021,057 | $88,221,562 | 8,559,210 | $85,502,495 | ||||||||||||||
Total increase or decrease | + | 1,392,478 | 21,068,959 | (538,153 | ) | 2,719,067 | ||||||||||||
End of period | 9,413,535 | $109,290,521 | 8,021,057 | $88,221,562 | ||||||||||||||
Net investment income not yet distributed | $765,784 | $756,596 |
See financial notes 13
Schwab Balanced Fund
Financial Notes
1. Business Structure of the Fund:
Schwab Balanced Fund is a series of Schwab Capital Trust (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 fund discussed in this report, which is highlighted:
Schwab Capital Trust (organized May 7, 1993) | Schwab Financial Services Fund | |||
Schwab Balanced Fund | Schwab Health Care Fund | |||
Schwab S&P 500 Index Fund | Schwab International Core Equity Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2010 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2015 Fund | |||
Schwab International Index Fund | Schwab Target 2020 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2025 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2030 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2035 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2040 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Fundamental US Large Company Index Fund | |||
Laudus International MarketMasters Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab Premier Equity Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab Core Equity Fund | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab Dividend Equity Fund | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab Large-Cap Growth Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab Small-Cap Equity Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Hedged Equity Fund | Schwab Monthly Income Fund-Maximum Payout | |||
The Schwab Balanced Fund is a single class “fund of funds” which seeks to achieve its investment objective by investing in a diversified group of other Schwab and/or Laudus Funds, but also may invest in other unaffiliated, third party mutual funds, including exchange traded funds (“ETFs”). In addition, the fund may purchase individual securities to maintain its allocations. The fund bears its share of allocable expenses of the underlying funds in which it invests. The financial statements of the fund should be read in conjunction with the underlying funds’ financial statements.
The fund offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”), which is the price for all outstanding shares of the fund. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees may authorize the issuance of as many shares as necessary.
The fund maintains its own account for purposes of holding assets and accounting, and is considered a separate entity for tax purposes. Within its account, the fund may also keep certain assets in segregated accounts, as required by securities law.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the fund uses in its preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the Securities Exchange Commission (“SEC”).
(a) Security Valuation:
The fund values the securities in its portfolio every business day. The fund uses the following policies to value various types of securities:
• | Underlying funds: valued at their respective net asset values. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the fund discloses the fair value of its investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the fund determines that either the volume and/or level of activity for an asset or
14
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The fund does not adjust the quoted prices for such investments, even in situations where the fund holds a large position and a sale could reasonably impact the quoted price. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the fund’s own assumption in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the fund uses one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the fund in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the fund in the absence of market information. Assumptions used by the fund due to the lack of observable inputs may significantly impact the resulting fair value and therefore the fund’s results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the fund’s investments as of October 31, 2011:
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $108,785,369 | $— | $— | $108,785,369 | ||||||||||||
Total | $108,785,369 | $— | $— | $108,785,369 | ||||||||||||
* | The fund had no Other Financial Instruments. | |
(a) | As categorized in Portfolio Holdings. |
The fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
(b) Accounting Policies for certain Portfolio Investments (if held):
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The fund mitigates this risk by ensuring that the fund’s repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. All collateral is held by the fund’s custodian (or, with tri-party agreements, the
15
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counterparty.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the fund may record certain foreign security dividends on the day it learns of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(f) Distributions to Shareholders:
The fund makes distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
The fund has an arrangement with its custodian bank, State Street Bank and Trust Company, under which the fund receives a credit for its uninvested cash balance to offset its custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the fund’s operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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 fund intends to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the fund distributes substantially all of its net investment income and realized net capital gains, if any, to the participating insurance company’s (shareholders) separate accounts each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Indemnification:
Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss to be remote.
(k) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as
16
Schwab Balanced Fund
Financial Notes (continued)
2. Significant Accounting Policies (continued):
a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the fund may involve certain risks, as discussed in the fund’s prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The fund is subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of the fund’s assets among the various asset classes and market segments will cause the fund to underperform other funds with a similar investment objective.
Market Risk. Stock and bond markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of an investment in the fund will fluctuate, which means that an investor could lose money.
Underlying Fund Investment Risk. The value of your investment in the fund is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. Before investing in the fund, investors should assess the risks associated with the underlying funds in which the fund may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although the fund’s exposure to a particular risk will be proportionate to the fund’s overall asset allocation and underlying fund allocation.
• | Investment Risk: An investment in an underlying fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The fund may experience losses with respect to its investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective. | |
• | Management Risk. The underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-adviser) will make poor security selections. An underlying fund’s adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results. | |
• | Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time. | |
• | Large- and Mid-Cap Risk. Both large- and mid-cap stocks tend to go in and out of favor based on market and economic conditions. However, stocks of mid-cap companies tend to be more vulnerable to adverse business or economic events than larger more established companies. During a period when large- and mid-cap U.S. stocks fall behind other types of investments - small-cap stocks, for instance - an underlying fund’s large- and mid-cap holdings could reduce performance. | |
• | Small-Cap Risk. Historically, small-cap stocks have been riskier than large- and mid-cap stocks, and their prices may move sharply, especially during market upturns and downturns. Small-cap companies may be more vulnerable to adverse business or economic events than larger, more established companies. During a period when small-cap stocks fall behind other types of investments - large-cap and mid-cap stocks, for instance - an underlying fund’s small-cap holdings could reduce performance. |
17
Schwab Balanced Fund
Financial Notes (continued)
3. Risk Factors (continued):
• | Growth Investing Risk. An underlying fund’s investments in growth stocks can be volatile. Growth companies usually invest a high portion of earnings in their businesses and may lack the dividends of value stocks that can cushion stock prices in a falling market. The prices of growth stocks are based largely on projections of the issuer’s future earnings and revenues. If a company’s earnings or revenues fall short of expectations, its stock price may fall dramatically. Growth stocks may also be more expensive relative to their earnings or assets compared to value or other stocks | |
• | Fixed Income Risk. Interest rates rise and fall over time, which will affect an underlying fund’s yield and share price. The credit quality of a portfolio investment could also cause an underlying fund’s share price to fall. A fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed income securities may be paid off earlier or later than expected. Either situation could cause a fund to hold securities paying lower-than-market rates of interest, which could hurt the fund’s yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities. | |
• | ETFs Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio of securities. | |
• | Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. | |
• | Derivatives Risk. An underlying fund’s use of derivatives instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could cause the fund to lose more than the principal amount invested. | |
• | Leverage Risk. Certain underlying fund transactions, such as derivatives, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose a fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund’s portfolio of securities, which means even a small amount of leverage can have a disproportionately large impact on the fund. | |
• | Liquidity Risk. A particular investment may be difficult to purchase or sell. An underlying fund may be unable to sell illiquid securities at an advantageous time or price. | |
• | Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transactions costs will rise, which may lower the underlying fund’s performance and may increase the likelihood of capital gain distributions. |
Direct Investment Risk. The fund may invest a portion of its assets directly in equity and fixed income securities, as well as other mutual funds or ETFs, to maintain its asset allocations. The fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same security.
Please refer to the fund’s prospectus for a more complete description of the principal risks of investing in the fund.
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), a wholly owned subsidiary of The Charles Schwab Corporation, serves as the fund’s investment adviser and administrator pursuant to an Investment Advisory and Administration Agreement (“Advisory Agreement”) between CSIM and the trust.
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the fund. The Plan enables the fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the fund. The fund is not subject to any fee under the Plan.
18
Schwab Balanced Fund
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
CSIM and Schwab have agreed with the fund to limit (“expense limitation”) the total expenses charged, excluding interest, taxes and certain non-routine expenses of the fund to 0.00% for so long as CSIM serves as the investment adviser to the fund, which may only be amended or terminated with the approval of the fund’s Board of Trustees.
The agreement to limit the fund’s total expenses charged is limited to the fund’s direct operating expenses and, therefore, does not apply to aquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
The fund may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, the fund had no direct security transactions with other Schwab Funds.
The fund may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the fund may invest in other related funds. As of October 31, 2011, the percentages of shares of other related funds owned by the Schwab Balanced Fund are:
Equity Funds: | ||||
Large-Cap: | ||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 2.5% | |||
Schwab Core Equity Fund | 2.2% | |||
Small-Cap: | ||||
Laudus Small-Cap MarketMasters Fund | 3.9% | |||
Fixed-Income Funds: | ||||
Intermediate-Term Bond: | ||||
Schwab Premier Income Fund | 3.0% | |||
Schwab Total Bond Market Fund | 3.0% |
Below is a summary of the fund’s transactions with its affiliated underlying funds during the period ended October 31, 2011.
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | — | 1,371,780 | (140,460 | ) | 1,231,320 | $16,191,860 | ($79,285 | ) | $— | |||||||||||||||||||
Schwab Core Equity Fund | 2,871,209 | 715,439 | (1,334,753 | ) | 2,251,895 | 37,854,352 | (328,990 | ) | 465,761 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 838,005 | 234,348 | (167,710 | ) | 904,643 | 10,982,370 | 777,570 | — | ||||||||||||||||||||
Fixed-Income Fund: | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | — | 1,495,170 | (256,146 | ) | 1,239,024 | 13,034,531 | 33,051 | 139,490 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 3,317,269 | 1,708,088 | (2,146,486 | ) | 2,878,871 | 27,464,433 | (671,662 | ) | 882,580 | |||||||||||||||||||
Total | $105,527,546 | ($269,316 | ) | $1,487,831 | ||||||||||||||||||||||||
Pursuant to an exemptive order issued by the SEC, the fund may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject
19
Schwab Balanced Fund
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The fund had no interfund borrowing or lending activity during the period.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for the fund.
6. Board of Trustees:
The trust’s Board of Trustees oversees the general conduct of the trust and the fund. Trustees may include people who are officers and/or directors of the investment adviser or Schwab. Federal securities law limits the percentage of such “interested persons” who may serve on a trust’s board, and the trust was in compliance with these limitations throughout the report period. The trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in the fund’s Statement of Operations.
7. Borrowing from Banks:
The fund has access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company, an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The fund pays interest on the amount it borrows at rates that are negotiated periodically. The fund also pays an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the fund during the period. However, the fund may have utilized its overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||
$64,150,000 | $50,732,000 |
9. Redemption Fee:
The fund charges a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||
$7,174 | $674 |
10. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Undistributed ordinary income | $765,784 | |||
Undistributed long-term capital gains | — | |||
Unrealized appreciation on investments | 3,377,555 | |||
Unrealized depreciation on investments | (328,855 | ) | ||
Other unrealized appreciation/(depreciation) | — | |||
Net unrealized appreciation/(depreciation) | $3,048,700 | |||
20
Schwab Balanced Fund
Financial Notes (continued)
10. Federal Income Taxes (continued):
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. For the year ended October 31, 2011, the fund had capital loss carryforwards $4,236,735 available to offset future net capital gains before October 31, 2017.
For the year ended October 31, 2011, the fund had capital losses utilized as follows:
Capital losses utilized | $54,180 |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Current period distributions | ||||
Ordinary income | $1,483,071 | |||
Long-term capital gains | — | |||
Return of capital | — | |||
Prior period distributions | ||||
Ordinary income | $1,576,121 | |||
Long-term capital gains | — | |||
Return of capital | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The fund may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, no such reclassifications were required.
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the fund, and has determined that no provision for income tax is required in the fund’s financial statements. The fund recognizes interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the fund did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
21
Schwab Balanced Fund
Financial Notes (continued)
10. Federal Income Taxes (continued):
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
22
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Balanced Fund
In our opinion, the accompanying statement of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Balanced Fund (one of the portfolios constituting Schwab Capital Trust, hereafter referred to as the “Fund”) at October 31, 2011, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended and the financial highlights for each of the five years in the period then ended, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Fund’s management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2011 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
23
Other Federal Tax Information (unaudited)
For corporate shareholders, 63.65% of the fund’s dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction.
For the fiscal year ended October 31, 2011, the fund designates $219,610 of the dividend distributions as qualified dividends for the purposes of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
24
Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Balanced Fund (the “Fund”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Fund that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Fund at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreement with respect to the Fund for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreement with respect to the Fund was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Fund under the Agreement, including the resources of CSIM and its affiliates dedicated to the Fund; |
2. | the Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | the Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to the Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Fund grows and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Fund and its shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Fund’s shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Fund and the resources of CSIM and its affiliates dedicated to the Fund supported renewal of the Agreement with respect to the Fund.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Fund. Specifically, the Trustees considered the Fund’s performance relative to a peer category of other mutual funds and appropriate indices/ benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of the Fund, the Trustees considered both risk and shareholder risk expectations for the Fund and the appropriateness of the benchmark used to
25
compare the performance of the Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. The Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to the Fund. These factors varied included the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Fund supported renewal of the Agreement with respect to the Fund.
Fund Expenses. With respect to the Fund’s expenses, the Trustees considered the rate of compensation called for by the Agreement, and the Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep the Fund’s expense cap for so long as CSIM serves as the adviser to the Fund. The Trustees also considered fees charged by CSIM to other mutual funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Fund are reasonable and supported renewal of the Agreement with respect to the Fund.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Fund, such as whether, by virtue of its management of the Fund, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to the Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Fund.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to the Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Fund obtains reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Fund and concluded that the compensation under the Agreement with respect to the Fund is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
26
Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
27
Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
28
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
29
Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
30
PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
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Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
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We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
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Safeguarding Your Information — Security Is a Partnership
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We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
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Notes
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
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Schwab Premier Equity Fund®
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Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
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Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
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Schwab® Monthly Income Fund – Enhanced Payout
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Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Annual Report
October 31, 2011
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
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A suite of seven mutual funds to help keep your retirement
investments properly allocated over your lifetime.
In This Report
Performance at a Glance | 1 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Schwab Target 2010 Fund | 6 | |
Schwab Target 2015 Fund | 8 | |
Schwab Target 2020 Fund | 10 | |
Schwab Target 2025 Fund | 12 | |
Schwab Target 2030 Fund | 14 | |
Schwab Target 2035 Fund | 16 | |
Schwab Target 2040 Fund | 18 | |
Fund Expenses | 20 | |
Financial Statements and Portfolio Holdings | ||
Schwab Target 2010 Fund | 21 | |
Schwab Target 2015 Fund | 26 | |
Schwab Target 2020 Fund | 31 | |
Schwab Target 2025 Fund | 36 | |
Schwab Target 2030 Fund | 41 | |
Schwab Target 2035 Fund | 46 | |
Schwab Target 2040 Fund | 51 | |
Financial Notes | 56 | |
Report of Independent Registered Public Accounting Firm | 75 | |
Other Federal Tax Information | 76 | |
Investment Advisory Agreement Approval | 77 | |
Trustees and Officers | 79 | |
Glossary | 82 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab Target 2010 Fund (Ticker Symbol: SWBRX) | 4.63% | |||
Target 2010 Composite Index | 4.58% | |||
Fund Category: Morningstar Target-Date 2000-2010 | 3.37% | |||
Performance Details | pages 6-7 | |||
Schwab Target 2015 Fund (Ticker Symbol: SWGRX) | 5.10% | |||
Target 2015 Composite Index | 4.86% | |||
Fund Category: Morningstar Target-Date 2011-2015 | 3.15% | |||
Performance Details | pages 8-9 | |||
Schwab Target 2020 Fund (Ticker Symbol: SWCRX) | 5.18% | |||
Target 2020 Composite Index | 5.04% | |||
Fund Category: Morningstar Target-Date 2016-2020 | 3.50% | |||
Performance Details | pages 10-11 | |||
Schwab Target 2025 Fund (Ticker Symbol: SWHRX) | 5.44% | |||
Target 2025 Composite Index | 4.98% | |||
Fund Category: Morningstar Target-Date 2021-2025 | 3.24% | |||
Performance Details | pages 12-13 | |||
All fund and index 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 you cannot invest in them directly. Performance results for less than one year are not annualized.
Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the funds’ returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
The Target 2010 Composite Index is a custom blended index developed by CSIM based on the 2010 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 27.1% Dow Jones U.S. Total Stock Market Index, 8.7% MSCI EAFE Index, 30.0% Barclays Capital U.S. Aggregate Bond Index, 1.9% FTSE EPRA/NAREIT Global Index, 6.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 1.3% MSCI Emerging Markets Index, 3.0% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 12.5% Barclays Capital U.S. Government/Credit: 1-5 Years, and 7.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
The Target 2015 Composite Index is a custom blended index developed by CSIM based on the 2015 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 35.7% Dow Jones U.S. Total Stock Market Index, 11.1% MSCI EAFE Index, 26.0% Barclays Capital U.S. Aggregate Bond Index, 3.3% FTSE EPRA/NAREIT Global Index, 4.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 1.9% MSCI Emerging Markets Index, 3.0% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 7.5% Barclays Capital U.S. Government/Credit: 1-5 Years, and 5.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
The Target 2020 Composite Index is a custom blended index developed by CSIM based on the 2020 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 43.4% Dow Jones U.S. Total Stock Market Index, 13.6% MSCI EAFE Index, 24.0% Barclays Capital U.S. Aggregate Bond Index, 3.6% FTSE EPRA/NAREIT Global Index, 3.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 2.4% MSCI Emerging Markets Index, 2.5% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 3.0% Barclays Capital U.S. Government/Credit: 1-5 Years, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
The Target 2025 Composite Index is a custom blended index developed by CSIM based on the 2025 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 50.0% Dow Jones U.S. Total Stock Market Index, 15.4% MSCI EAFE Index, 19.8% Barclays Capital U.S. Aggregate Bond Index, 4.0% FTSE EPRA/NAREIT Global Index, 2.2% Barclays Capital U.S. Aggregate Intermediate Bond Index, 2.6% MSCI Emerging Markets Index, 2.0% Barclays Capital U.S. TIPS Index, 2.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
Schwab Target Funds 1
Performance at a Glance continued
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for the Report Period | ||||
Schwab Target 2030 Fund (Ticker Symbol: SWDRX) | 5.20% | |||
Target 2030 Composite Index | 4.84% | |||
Fund Category: Morningstar Target-Date 2026-2030 | 3.09% | |||
Performance Details | pages 14-15 | |||
Schwab Target 2035 Fund (Ticker Symbol: SWIRX) | 5.27% | |||
Target 2035 Composite Index | 4.75% | |||
Fund Category: Morningstar Target-Date 2031-2035 | 2.94% | |||
Performance Details | pages 16-17 | |||
Schwab Target 2040 Fund (Ticker Symbol: SWERX) | 5.08% | |||
Target 2040 Composite Index | 4.65% | |||
Fund Category: Morningstar Target-Date 2036-2040 | 2.72% | |||
Performance Details | pages 18-19 | |||
Minimum Initial Investment1 | $ 100 | |||
The Target 2030 Composite Index is a custom blended index developed by CSIM based on the 2030 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 54.7% Dow Jones U.S. Total Stock Market Index, 16.9% MSCI EAFE Index, 14.6% Barclays Capital U.S. Aggregate Bond Index, 4.3% FTSE EPRA/ NAREIT Global Index, 1.6% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.1% MSCI Emerging Markets Index, 1.4% Barclays Capital U.S. TIPS Index, 1.4% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
The Target 2035 Composite Index is a custom blended index developed by CSIM based on the 2035 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 59.4% Dow Jones U.S. Total Stock Market Index, 17.8% MSCI EAFE Index, 9.7% Barclays Capital U.S. Aggregate Bond Index, 4.6% FTSE EPRA/NAREIT Global Index, 1.3% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.2% MSCI Emerging Markets Index, 1.0% Barclays Capital U.S. TIPS Index, 1.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
The Target 2040 Composite Index is a custom blended index developed by CSIM based on the 2040 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 62.0% Dow Jones U.S. Total Stock Market Index, 18.6% MSCI EAFE Index, 6.3% Barclays Capital U.S. Aggregate Bond Index, 5.0% FTSE EPRA/NAREIT Global Index, 1.1% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.4% MSCI Emerging Markets Index, 0.8% Barclays Capital U.S. TIPS Index, 0.8% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months.
1 | Please see prospectus for further details and eligibility requirements. |
2 Schwab Target Funds
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst05.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Target Funds 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab Target Funds. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Target Funds
Fund Management
![]() | Jake M. Gilliam, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the funds. He was appointed portfolio manager in 2011. Since 2007, he has been a portfolio manager with the Schwab Institutional Asset Management team. |
Schwab Target Funds 5
Schwab Target 2010 Fund
The Schwab Target 2010 Fund (the 2010 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2010 fund may also invest in unaffiliated third party mutual funds. The 2010 fund’s asset allocation as of January 3, 2011, was approximately 40% equity securities, 53% fixed income securities, and 7% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2010 fund returned 4.63% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2010 Composite Index (the 2010 index), returned 4.58%. Unlike the return of the 2010 fund, the return of the 2010 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2010 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2010 index, please refer to footnote 3 on the next page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of these returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2010 fund’s biggest drivers of total return, the Schwab Total Bond Market Fund represented the largest position, added the most to performance, and returned 4.47%. However, this fund returned approximately 0.50% less than its comparative index, the Barclays Aggregate. The Schwab Core Equity Fund was another top total return contributor and represented one of the 2010 fund’s larger allocations. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing a slightly smaller allocation within the 2010 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off of the return of the S&P 500 Index. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2010 fund’s performance, in spite of its relatively small size within the portfolio.
Lastly, the 2010 fund’s close performance compared with the 2010 index was driven by the mixed results generated by the managers of the funds selected for the 2010 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2010 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2010 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 22 | |
Portfolio Turnover Rate | 11% |
Asset Class Weightings % of Investments1
Fixed-Income Funds - Intermediate-Term Bond | 36.0% | |
Equity Funds - Large-Cap | 23.2% | |
Fixed-Income Funds - Short-Term Bond | 12.4% | |
Equity Funds - International | 9.9% | |
Money Market Funds | 5.4% | |
Equity Funds - Small-Cap | 4.1% | |
Fixed-Income Funds - Inflation-Protected Bond | 3.0% | |
Fixed-Income Funds - International Bond | 2.4% | |
Equity Funds - Global Real Estate | 2.0% | |
Short-Term Investments | 1.6% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Total Bond Market Fund | 19.8% | |
Schwab Short-Term Bond Market Fund | 12.4% | |
Schwab Core Equity Fund | 8.0% | |
Schwab S&P 500 Index Fund | 7.1% | |
PIMCO Total Return Fund, Institutional Shares | 6.0% | |
Schwab Premier Income Fund | 5.9% | |
Schwab Value Advantage Money Fund, Institutional Prime Shares | 5.4% | |
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 4.3% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 4.1% | |
Laudus International MarketMasters Fund, Select Shares | 3.7% | |
Total | 76.7% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Target Funds
Schwab Target 2010 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
July 1, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt201001.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2010 Fund (7/1/05) | 4.63 | % | 1.41 | % | 3.52 | % | |||||||||
Target 2010 Composite Index3 | 4.58 | % | 3.07 | % | 4.84 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 0.82 | % | 3.45 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.63 | % | |||||||||
Fund Category: Morningstar Target-Date 2000-2010 | 3.37 | % | 2.54 | % | 3.72 | % |
Fund Expense Ratios4: Net 0.64%; Gross 0.80%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2010 Composite Index is a custom blended index developed by CSIM based on the 2010 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 27.1% Dow Jones U.S. Total Stock Market Index, 8.7% MSCI EAFE (Gross) Index, 30.0% Barclays Capital U.S. Aggregate Bond Index, 1.9% FTSE EPRA/NAREIT Global Index, 6.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 1.3% MSCI Emerging Markets (Gross) Index, 3.0% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 12.5% Barclays Capital U.S. Government/Credit: 1-5 Years, and 7.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.64%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 7
Schwab Target 2015 Fund
The Schwab Target 2015 Fund (the 2015 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2015 fund may also invest in unaffiliated third party mutual funds. The 2015 fund’s asset allocation as of January 3, 2011, was approximately 54% equity securities, 41% fixed income securities, and 5% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2015 fund returned 5.10% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2015 Composite Index (the 2015 index), returned 4.86%. Unlike the return of the 2015 fund, the return of the 2015 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2015 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2015 index, please refer to footnote 3 on the next page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2015 fund’s biggest drivers of total return, the Schwab Total Bond Market Fund represented the largest position, added the most to performance, and returned 4.47%. The Schwab Core Equity Fund was another top total return contributor and represented one of the 2015 fund’s larger allocations. This fund returned 7.60% compared with the 8.09% return of its comparative index, the S&P 500 Index. The Schwab Total Bond Market Fund was another sizable position and returned approximately 0.50% less than its comparative index, the Barclays Aggregate. Representing a slightly smaller allocation within the 2015 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off of the 8.09% return of the S&P 500 Index. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2015 fund’s performance, in spite of its relatively small size within the portfolio.
Lastly, the 2015 fund’s outperformance compared with the 2015 index was driven by the mixed results generated by the managers of the funds selected for the 2015 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2015 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2015 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 22 | |
Portfolio Turnover Rate | 16% |
Asset Class Weightings % of Investments1
Fixed-Income Funds - Intermediate-Term Bond | 29.9% | |
Equity Funds - Large-Cap | 29.2% | |
Equity Funds - International | 12.9% | |
Fixed-Income Funds - Short-Term Bond | 7.5% | |
Equity Funds - Small-Cap | 6.8% | |
Equity Funds - Global Real Estate | 3.4% | |
Money Market Funds | 3.4% | |
Fixed-Income Funds - Inflation-Protected Bond | 2.9% | |
Fixed-Income Funds - International Bond | 2.4% | |
Short-Term Investments | 1.6% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Total Bond Market Fund | 18.0% | |
Schwab Core Equity Fund | 10.2% | |
Schwab S&P 500 Index Fund | 9.0% | |
Schwab Short-Term Bond Market Fund | 7.5% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 5.0% | |
Laudus International MarketMasters Fund, Select Shares | 4.5% | |
PIMCO Total Return Fund, Institutional Shares | 4.5% | |
Schwab Small-Cap Equity Fund | 4.4% | |
Schwab Premier Income Fund | 3.9% | |
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 3.5% | |
Total | 70.5% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Target Funds
Schwab Target 2015 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
March 12, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt201501.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2015 Fund (3/12/08) | 5.10 | % | 10.75 | % | 2.83 | % | |||||||||
Target 2015 Composite Index3 | 4.86 | % | 11.43 | % | 2.87 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 12.44 | % | 1.57 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 8.87 | % | 6.59 | % | |||||||||
Fund Category: Morningstar Target-Date 2011-2015 | 3.15 | % | 10.92 | % | 1.43 | % |
Fund Expense Ratios4: Net 0.70%; Gross 1.09%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
The Laudus Mondrian Funds and Laudus Growth Investors U.S. Large Cap Growth Fund are part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2015 Composite Index is a custom blended index developed by CSIM based on the 2015 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 35.7% Dow Jones U.S. Total Stock Market Index, 11.1% MSCI EAFE (Gross) Index, 26.0% Barclays Capital U.S. Aggregate Bond Index, 3.3% FTSE EPRA/NAREIT Global Index, 4.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 1.9% MSCI Emerging Markets (Gross) Index, 3.0% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 7.5% Barclays Capital U.S. Government/Credit: 1-5 Years, and 5.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.70%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 9
Schwab Target 2020 Fund
The Schwab Target 2020 Fund (the 2020 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2020 fund may also invest in unaffiliated third party mutual funds. The 2020 fund’s asset allocation as of January 4, 2011, was approximately 65% equity securities, 33% fixed income securities, and 2% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2020 fund returned 5.18% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2020 Composite Index (the 2020 index), returned 5.04%. Unlike the return of the 2020 fund, the return of the 2020 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2020 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2020 index, please refer to footnote 3 on the next page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2020 fund’s biggest drivers of total return, the Schwab Core Equity Fund was the top total return contributor and represented one of the 2020 fund’s larger allocations. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing a slightly smaller allocation within the 2020 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off the return of the S&P 500 Index. The Schwab Total Bond Market Fund was another large weight within the 2020 fund and returned 4.47%, underperforming the Barclays Aggregate by a bit more than 0.50%. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2020 fund’s performance.
Lastly, the 2020 fund’s outperformance compared with the 2020 index was driven by the mixed results generated by the managers of the funds selected for the 2020 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2020 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2020 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 22 | |
Portfolio Turnover Rate | 15% |
Asset Class Weightings % of Investments6
Equity Funds - Large-Cap | 36.2% | |
Fixed-Income Funds - Intermediate-Term Bond | 27.1% | |
Equity Funds - International | 15.9% | |
Equity Funds - Small-Cap | 7.4% | |
Equity Funds - Global Real Estate | 3.7% | |
Fixed-Income Funds - Short-Term Bond | 2.9% | |
Fixed-Income Funds - Inflation-Protected Bond | 2.4% | |
Fixed-Income Funds - International Bond | 2.4% | |
Money Market Funds | 1.2% | |
Short Term Investments | 0.8% | |
Total | 100.0% |
Top Holdings % of Net Assets7
Schwab Total Bond Market Fund | 18.5% | |
Schwab Core Equity Fund | 13.0% | |
Schwab S&P 500 Index Fund | 11.0% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 6.1% | |
Laudus International MarketMasters Fund, Select Shares | 5.5% | |
Schwab Small-Cap Equity Fund | 4.8% | |
PIMCO Total Return Fund, Institutional Shares | 3.7% | |
Schwab Global Real Estate Fund | 3.7% | |
TCW Relative Value Large Cap Fund | 3.1% | |
Schwab Dividend Equity Fund | 3.0% | |
Total | 72.4% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Target Funds
Schwab Target 2020 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
July 1, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt202001.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2020 Fund (7/1/05) | 5.18 | % | 1.90 | % | 4.12 | % | |||||||||
Target 2020 Composite Index3 | 5.04 | % | 2.68 | % | 4.73 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 0.82 | % | 3.45 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.63 | % | |||||||||
Fund Category: Morningstar Target-Date 2016-2020 | 3.50 | % | 1.35 | % | 3.21 | % |
Fund Expense Ratios4: Net 0.73%; Gross 0.80%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2020 Composite Index is a custom blended index developed by CSIM based on the 2020 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 43.4% Dow Jones U.S. Total Stock Market Index, 13.6% MSCI EAFE (Gross) Index, 24.0% Barclays Capital U.S. Aggregate Bond Index, 3.6% FTSE EPRA/NAREIT Global Index, 3.0% Barclays Capital U.S. Aggregate Intermediate Bond Index, 2.4% MSCI Emerging Markets (Gross) Index, 2.5% Barclays Capital U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 3.0% Barclays Capital U.S. Government/Credit: 1-5 Years, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.73%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 11
Schwab Target 2025 Fund
The Schwab Target 2025 Fund (the 2025 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2025 fund may also invest in unaffiliated third party mutual funds. The 2025 fund’s asset allocation as of January 3, 2011, was approximately 73% equity securities, 25% fixed income securities, and 2% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2025 fund returned 5.44% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2025 Composite Index (the 2025 index), returned 4.98%. Unlike the return of the 2025 fund, the return of the 2025 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2025 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2025 index, please refer to footnote 3 on the next page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2025 fund’s biggest drivers of total return, the Schwab Core Equity Fund was the top total return contributor and represented one of the 2025 fund’s larger allocations. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing a slightly smaller allocation within the 2025 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off of the return of the S&P 500 Index. The Schwab Total Bond Market Fund was another large weight within the 2025 fund and returned 4.47%, underperforming the Barclays Aggregate by a bit more than 0.50%. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2025 fund’s performance.
Lastly, the 2025 fund’s close performance compared with the 2025 index was driven by the mixed results generated by the managers of the funds selected for the 2025 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2025 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2025 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 21 | |
Portfolio Turnover Rate | 9% |
Asset Class Weightings % of Investments1
Equity Funds - Large-Cap | 41.3% | |
Fixed-Income Funds - Intermediate-Term Bond | 22.1% | |
Equity Funds - International | 17.9% | |
Equity Funds - Small-Cap | 9.0% | |
Equity Funds - Global Real Estate | 4.1% | |
Fixed-Income Funds - Inflation-Protected Bond | 2.0% | |
Fixed-Income Funds - International Bond | 1.8% | |
Money Market Funds | 1.3% | |
Short-Term Investments | 0.5% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Total Bond Market Fund | 15.9% | |
Schwab Core Equity Fund | 15.4% | |
Schwab S&P 500 Index Fund | 11.9% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 7.0% | |
Laudus International MarketMasters Fund, Select Shares | 6.4% | |
Schwab Small-Cap Equity Fund | 6.0% | |
Schwab Global Real Estate Fund | 4.1% | |
Schwab Dividend Equity Fund | 3.6% | |
TCW Relative Value Large Cap Fund | 3.3% | |
Laudus Mondrian International Equity Fund, Institutional Shares | 3.2% | |
Total | 76.8% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Target Funds
Schwab Target 2025 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
March 12, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt202501.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2025 Fund (3/12/08) | 5.44 | % | 12.67 | % | 3.73 | % | |||||||||
Target 2025 Composite Index3 | 4.98 | % | 11.93 | % | 2.50 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 12.44 | % | 1.57 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 8.87 | % | 6.59 | % | |||||||||
Fund Category: Morningstar Target-Date 2021-2025 | 3.24 | % | 11.70 | % | 0.84 | % |
Fund Expense Ratios4: Net 0.78%; Gross 1.02%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2025 Composite Index is a custom blended index developed by CSIM based on the 2025 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 50.0% Dow Jones U.S. Total Stock Market Index, 15.4% MSCI EAFE (Gross) Index, 19.8% Barclays Capital U.S. Aggregate Bond Index, 4.0% FTSE EPRA/NAREIT Global Index, 2.2% Barclays Capital U.S. Aggregate Intermediate Bond Index, 2.6% MSCI Emerging Markets (Gross) Index, 2.0% Barclays Capital U.S. TIPS Index, 2.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.78%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 13
Schwab Target 2030 Fund
The Schwab 2030 Fund (the 2030 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2030 fund may also invest in unaffiliated third party mutual funds. The 2030 fund’s asset allocation as of January 3, 2011, was approximately 80% equity securities, 18% fixed income securities, and 2% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2030 fund returned 5.20% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2030 Composite Index (the 2030 index), returned 4.84%. Unlike the return of the 2030 fund, the return of the 2030 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2030 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2030 index, please refer to footnote 3 on the next page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2030 fund’s biggest drivers of total return, the Schwab Core Equity Fund was the top total return contributor and represented the 2030 fund’s largest allocation. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing a smaller allocation within the 2030 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off of the return of the S&P 500 Index. The Schwab Small-Cap Equity Fund was another top contributor, returning 11.82% and solidly outperforming its comparative index, the Russell 2000 Index. The Schwab Total Bond Market Fund was another large weight within the 2030 fund and returned 4.47%, underperforming the Barclays Aggregate by a bit more than 0.50%. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2030 fund’s performance.
Lastly, the 2030 fund’s close performance compared with the 2030 index was driven by the mixed results generated by the managers of the funds selected for the 2030 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2030 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2030 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 20 | |
Portfolio Turnover Rate | 8% |
Asset Class Weightings % of Investments1
Equity Funds - Large-Cap | 44.5% | |
Equity Funds - International | 19.8% | |
Fixed-Income Funds - Intermediate-Term Bond | 16.0% | |
Equity Funds - Small-Cap | 10.8% | |
Equity Funds - Global Real Estate | 4.4% | |
Fixed-Income Funds - Inflation-Protected Bond | 1.3% | |
Fixed-Income Funds - International Bond | 1.3% | |
Money Market Funds | 1.2% | |
Short-Term Investments | 0.7% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Core Equity Fund | 17.6% | |
Schwab Total Bond Market Fund | 12.5% | |
Schwab S&P 500 Index Fund | 12.5% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 7.1% | |
Schwab Small-Cap Equity Fund | 7.0% | |
Laudus International MarketMasters Fund, Select Shares | 6.7% | |
Schwab Global Real Estate Fund | 4.4% | |
Schwab Small-Cap MarketMasters Fund, Select Shares | 3.7% | |
TCW Relative Value Large Cap Fund | 3.6% | |
Schwab Dividend Equity Fund | 3.6% | |
Total | 78.7% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Target Funds
Schwab Target 2030 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
July 1, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt203001.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2030 Fund (7/1/05) | 5.20 | % | 1.93 | % | 4.28 | % | |||||||||
Target 2030 Composite Index3 | 4.84 | % | 2.15 | % | 4.49 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 0.82 | % | 3.45 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.63 | % | |||||||||
Fund Category: Morningstar Target-Date 2026-2030 | 3.09 | % | 0.31 | % | 2.71 | % |
Fund Expense Ratios4: Net 0.79%; Gross 0.87%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2030 Composite Index is a custom blended index developed by CSIM based on the 2030 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 54.7% Dow Jones U.S. Total Stock Market Index, 16.9% MSCI EAFE (Gross) Index, 14.6% Barclays Capital U.S. Aggregate Bond Index, 4.3% FTSE EPRA/ NAREIT Global Index, 1.6% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.1% MSCI Emerging Markets (Gross) Index, 1.4% Barclays Capital U.S. TIPS Index, 1.4% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.79%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 15
Schwab Target 2035 Fund
The Schwab 2035 Fund (the 2035 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2035 fund may also invest in unaffiliated third party mutual funds. The 2035 fund’s asset allocation as of January 3, 2011, was approximately 86% equity securities, 12% fixed income securities, and 2% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2035 fund returned 5.27% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2035 Composite Index (the 2035 index), returned 4.75%. Unlike the return of the 2035 fund, the return of the 2035 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2035 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2035 index, please refer to footnote 3 on the following page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2035 fund’s biggest drivers of total return, the Schwab Core Equity Fund was the top total return contributor and represented the 2035 fund’s largest allocation. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing a slightly smaller allocation within the 2035 fund, the Schwab S&P 500 Index Fund returned 7.97%, not far off of the return of the S&P 500 Index. The Schwab Small-Cap Equity Fund was another top contributor, returning 11.82% and solidly outperforming its comparative index, the Russell 2000 Index. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2035 fund’s performance.
Lastly, the 2035 fund’s close performance compared with the 2035 index was driven by the mixed results generated by the managers of the funds selected for the 2035 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2035 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2035 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 20 | |
Portfolio Turnover Rate | 4% |
Asset Class Weightings % of Investments1
Equity Funds - Large-Cap | 48.3% | |
Equity Funds - International | 20.7% | |
Equity Funds - Small-Cap | 11.7% | |
Fixed-Income Funds - Intermediate-Term Bond | 10.8% | |
Equity Funds - Global Real Estate | 4.7% | |
Money Market Funds | 1.1% | |
Fixed-Income Funds - Inflation-Protected Bond | 1.0% | |
Fixed-Income Funds - International Bond | 0.9% | |
Short-Term Investments | 0.8% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Core Equity Fund | 19.2% | |
Schwab S&P 500 Index Fund | 12.5% | |
Schwab Total Bond Market Fund | 8.6% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 8.2% | |
Schwab Small-Cap Equity Fund | 7.6% | |
Laudus International MarketMasters Fund, Select Shares | 7.1% | |
Schwab Global Real Estate Fund | 4.7% | |
TCW Relative Value Large Cap Fund | 4.2% | |
Schwab Dividend Equity Fund | 4.1% | |
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.1% | |
Total | 80.3% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
16 Schwab Target Funds
Schwab Target 2035 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
March 12, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt203501.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2035 Fund (3/12/08) | 5.27 | % | 13.11 | % | 3.24 | % | |||||||||
Target 2035 Composite Index3 | 4.75 | % | 12.07 | % | 1.94 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 12.44 | % | 1.57 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 8.87 | % | 6.59 | % | |||||||||
Fund Category: Morningstar Target-Date 2031-2035 | 2.94 | % | 11.83 | % | 0.35 | % |
Fund Expense Ratios4: Net 0.83%; Gross 1.13%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2035 Composite Index is a custom blended index developed by CSIM based on the 2035 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 59.4% Dow Jones U.S. Total Stock Market Index, 17.8% MSCI EAFE (Gross) Index, 9.7% Barclays Capital U.S. Aggregate Bond Index, 4.6% FTSE EPRA/NAREIT Global Index, 1.3% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.2% MSCI Emerging Markets (Gross) Index, 1.0% Barclays Capital U.S.TIPS Index, 1.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.83%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 17
Schwab Target 2040 Fund
The Schwab Target 2040 Fund (the 2040 fund) seeks to provide capital appreciation and income consistent with its current asset allocation, and seeks to achieve its investment objective by investing primarily in a combination of other Schwab Funds and Laudus Funds. The 2040 fund may also invest in unaffiliated third party mutual funds. The 2040 fund’s asset allocation as of January 3, 2011, was approximately 90% equity securities, 8% fixed income securities, and 2% money market funds. (For current portfolio allocations, please see the Portfolio Holdings as of October 31, 2011.)
The 2040 fund returned 5.08% for the 12 months ended October 31, 2011, while its internally calculated comparative index, the Target 2040 Composite Index (the 2040 index), returned 4.65%. Unlike the return of the 2040 fund, the return of the 2040 index does not include operational and transactional costs. Although the portfolio’s target allocations were broadly in line with those of the 2040 index, a comparative overweight in small-cap stocks affected both absolute (total) and relative (compared with the index) portfolio performance. (For current allocations of the 2040 index, please refer to footnote 3 on the following page.)
Turning to the market backdrop, U.S. stocks solidly outperformed international equities, U.S. fixed income securities, and global real estate securities. As measured by the Dow Jones U.S. Total Stock Market Index, U.S. stocks returned 8.10%. Within the U.S. stock market, the large-cap Russell 1000 Index returned 8.01%, comfortably outpacing the 6.71% return of the small-cap Russell 2000 Index. Both of those returns readily surpassed the performance of international stocks in developed markets, where equities lost ground and returned -3.64% as measured by the MSCI EAFE Index. Emerging market stocks fared worse still, returning -7.44% as gauged by the MSCI Emerging Markets Index. In the U.S. Bond market, the 5.00% gain of the Barclays Capital U.S. Aggregate Bond Index (the Barclays Aggregate) considerably outpaced the 0.09% return of the Treasury Bill sector of the Barclays Aggregate, while underperforming the 9.02% return of the TIPS sector. In the global real estate market, the FTSE EPRA/NAREIT Global Index returned -1.64%.
Looking at the 2040 fund’s biggest drivers of total return, the Schwab Core Equity Fund was the top total return contributor and represented the 2040 fund’s largest allocation by a wide margin. This fund returned 7.60% compared with the 8.09% return of the S&P 500 Index. Representing the next largest investment slice of the 2040 fund (but a considerably smaller position), the Schwab S&P 500 Index Fund returned 7.97%, not far off of the return of the S&P 500 Index. The Schwab Small-Cap Equity Fund was another top contributor, returning 11.82% and solidly outperforming its comparative index, the Russell 2000 Index. On the other side of the performance spectrum, the Laudus International MarketMasters Fund, Select Shares returned –3.76%, losing slightly more ground than the MSCI EAFE Index and detracting the most from the 2040 fund’s performance.
Lastly, the 2040 fund’s close performance compared with the 2040 index was driven by the mixed results generated by the managers of the funds selected for the 2040 fund’s portfolio. For example, the higher return generated by the Schwab Small-Cap Equity Fund compared with the Russell 2000 Index provided a performance boost compared with the 2040 index. However, the opposite scenario took place on the fixed income side. For example, the PIMCO Total Return Fund lagged the return of the Barclays Aggregate by approximately 3.70%, detracting from the 2040 fund’s relative performance.
As of 10/31/11:
Statistics
Number of Holdings | 20 | |
Portfolio Turnover Rate | 3% |
Asset Class Weightings % of Investments1
Equity Funds - Large-Cap | 50.3% | |
Equity Funds - International | 21.8% | |
Equity Funds - Small-Cap | 12.2% | |
Fixed-Income Funds - Intermediate-Term Bond | 7.2% | |
Equity Funds - Global Real Estate | 5.1% | |
Money Market Funds | 1.4% | |
Fixed-Income Funds - Inflation-Protected Bond | 0.8% | |
Fixed-Income Funds - International Bond | 0.7% | |
Short-Term Investments | 0.5% | |
Total | 100.0% |
Top Holdings % of Net Assets2
Schwab Core Equity Fund | 20.3% | |
Schwab S&P 500 Index Fund | 12.6% | |
Laudus Growth Investors U.S. Large Cap Growth Fund | 8.6% | |
Schwab Small-Cap Equity Fund | 8.0% | |
Laudus International MarketMasters Fund, Select Shares | 7.3% | |
Schwab Total Bond Market Fund | 5.3% | |
Schwab Global Real Estate Fund | 5.1% | |
Schwab Dividend Equity Fund | 4.5% | |
TCW Relative Value Large Cap Fund | 4.3% | |
Laudus Small-Cap MarketMasters Fund, Select Shares | 4.2% | |
Total | 80.2% |
Manager views and portfolio holdings may have changed since the report date.
The Laudus Growth Investors U.S. Large Cap Growth Fund is part of Laudus Trust and distributed by ALPS Distributors, Inc. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.
1 | The fund intends to invest in a combination of the underlying funds; however, the fund may also invest directly in equity and fixed income securities, exchange traded funds, cash equivalents, including money market securities, and futures. | |
2 | This list is not a recommendation of any security by the investment adviser. |
18 Schwab Target Funds
Schwab Target 2040 Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
July 1, 2005 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctt204001.gif)
Average Annual Total Returns1,2
Fund and Inception Date | 1 Year | 5 Years | Since Inception | ||||||||||||
Fund: Schwab Target 2040 Fund (7/1/05) | 5.08 | % | 1.71 | % | 4.33 | % | |||||||||
Target 2040 Composite Index3 | 4.65 | % | 1.69 | % | 4.32 | % | |||||||||
Dow Jones U.S. Total Stock Market Index | 8.05 | % | 0.82 | % | 3.45 | % | |||||||||
Barclays Capital U.S. Aggregate Bond Index | 5.00 | % | 6.41 | % | 5.63 | % | |||||||||
Fund Category: Morningstar Target-Date 2036-2040 | 2.72 | % | -0.14 | % | 2.54 | % |
Fund Expense Ratios4: Net 0.83%; Gross 0.93%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
1 | Fund expenses have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | The Target 2040 Composite Index is a custom blended index developed by CSIM based on the 2040 fund’s asset allocation glide schedule and will become more conservative as time elapses. The current composite is derived using the following portion allocations: 62.0% Dow Jones U.S. Total Stock Market Index, 18.6% MSCI EAFE (Gross) Index, 6.3% Barclays Capital U.S. Aggregate Bond Index, 5.0% FTSE EPRA/NAREIT Global Index, 1.1% Barclays Capital U.S. Aggregate Intermediate Bond Index, 3.4% MSCI Emerging Markets (Gross) Index, 0.8% Barclays Capital U.S. TIPS Index, 0.8% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays Capital U.S. Treasury Bills: 1-3 Months. | |
4 | As stated in the prospectus. Includes expenses of the underlying funds in which the fund invests. The annualized weighted average expense ratio of the underlying funds was 0.83%. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Target Funds 19
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab Target 2010 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 979.60 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2015 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 964.10 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2020 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 948.80 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2025 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 938.50 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2030 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 927.80 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2035 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 919.20 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 | |||||||||
Schwab Target 2040 Fund | ||||||||||||||||
Actual Return | 0.00% | $ | 1,000 | $ | 912.30 | $ | 0.00 | |||||||||
Hypothetical 5% Return | 0.00% | $ | 1,000 | $ | 1,025.21 | $ | 0.00 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. The expenses incurred by the underlying funds in which the funds invest are not included in this ratio. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
20 Schwab Target Funds
Schwab Target 2010 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.34 | 9.46 | 8.76 | 12.65 | 11.42 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.23 | 0.28 | 0.32 | 0.23 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.24 | 0.89 | 0.75 | (3.73 | ) | 1.24 | ||||||||||||||||
Total from investment operations | 0.47 | 1.12 | 1.03 | (3.41 | ) | 1.47 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.25 | ) | (0.24 | ) | (0.33 | ) | (0.38 | ) | (0.21 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.10 | ) | (0.03 | ) | |||||||||||||||
Total distributions | (0.25 | ) | (0.24 | ) | (0.33 | ) | (0.48 | ) | (0.24 | ) | ||||||||||||
Net asset value at end of period | 10.56 | 10.34 | 9.46 | 8.76 | 12.65 | |||||||||||||||||
Total return (%) | 4.63 | 1 | 11.99 | 12.24 | (27.87 | ) | 13.02 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses2 | — | 0.00 | 3 | 0.03 | 4 | 0.06 | 0.06 | |||||||||||||||
Gross operating expenses2 | 0.14 | 0.16 | 0.16 | 0.11 | 0.09 | |||||||||||||||||
Net investment income (loss) | 2.11 | 2.21 | 3.04 | 2.89 | 2.10 | |||||||||||||||||
Portfolio turnover rate | 11 | 24 | 47 | 50 | 5 | 1 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 64 | 73 | 75 | 80 | 138 |
1 Includes proceeds from a litigation settlement related to an affiliated underlying fund. Without the litigation proceeds, performance would have been lower. (See financial note 10)
2 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
3 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
4 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
5 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 21
Schwab Target 2010 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .4% | Other Investment Companies | 55,613,294 | 62,952,085 | ||||||||
1 | .6% | Short-Term Investment | 1,053,225 | 1,053,225 | ||||||||
100 | .0% | Total Investments | 56,666,519 | 64,005,310 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | (5,799 | ) | ||||||||
100 | .0% | Total Net Assets | 63,999,511 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.4% of net assets | ||||||||
Equity Funds 39.2% | ||||||||
Global Real Estate 2.0% | ||||||||
Schwab Global Real Estate Fund (a) | 207,569 | 1,247,487 | ||||||
International 9.9% | ||||||||
American Century International Growth Fund, Institutional Shares | 110,969 | 1,121,895 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 136,896 | 2,390,197 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 94,911 | 844,711 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 152,484 | 1,131,432 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 66,924 | 834,545 | ||||||
6,322,780 | ||||||||
Large-Cap 23.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 198,308 | 2,607,750 | ||||||
Schwab Core Equity Fund (a) | 304,554 | 5,119,549 | ||||||
Schwab Dividend Equity Fund (a) | 95,242 | 1,252,436 | ||||||
Schwab S&P 500 Index Fund (a) | 229,811 | 4,554,858 | ||||||
TCW Relative Value Large Cap Fund | 99,817 | 1,302,612 | ||||||
14,837,205 | ||||||||
Small-Cap 4.1% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 75,447 | 915,924 | ||||||
Schwab Small-Cap Equity Fund (a)* | 110,790 | 1,729,432 | ||||||
2,645,356 | ||||||||
25,052,828 | ||||||||
Fixed-Income Funds 53.8% | ||||||||
Inflation-Protected Bond 3.0% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 162,879 | 1,895,912 | ||||||
Intermediate-Term Bond 36.0% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 220,528 | 2,738,956 | ||||||
PIMCO Total Return Fund, Institutional Shares | 353,312 | 3,854,633 | ||||||
Schwab Premier Income Fund (a) | 359,700 | 3,784,045 | ||||||
Schwab Total Bond Market Fund (a) | 1,326,136 | 12,651,342 | ||||||
23,028,976 | ||||||||
International Bond 2.4% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 126,926 | 1,558,653 | ||||||
Short-Term Bond 12.4% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 859,166 | 7,947,285 | ||||||
34,430,826 | ||||||||
Money Market Fund 5.4% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 3,468,431 | 3,468,431 | ||||||
Total Other Investment Companies | ||||||||
(Cost $55,613,294) | 62,952,085 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.6% of net assets | ||||||||
Time Deposit 1.6% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 1,053,225 | 1,053,225 | ||||||
Total Short-Term Investment | ||||||||
(Cost $1,053,225) | 1,053,225 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $57,595,250 and the unrealized appreciation and depreciation were $6,461,650 and ($51,590), respectively, with a net unrealized appreciation of $6,410,060.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
22 See financial notes
Schwab Target 2010 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $46,708,422) | $53,099,444 | |||||
Investments in unaffiliated issuers, at value (cost $9,958,097) | + | 10,905,866 | ||||
Total investments, at value (cost $56,666,519) | 64,005,310 | |||||
Receivables: | ||||||
Dividends | 52,656 | |||||
Fund shares sold | 6,204 | |||||
Due from investment adviser | 688 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 2,032 | ||||
Total assets | 64,066,891 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 39,223 | |||||
Accrued expenses | + | 28,157 | ||||
Total liabilities | 67,380 | |||||
Net Assets | ||||||
Total assets | 64,066,891 | |||||
Total liabilities | − | 67,380 | ||||
Net assets | $63,999,511 | |||||
Net Assets by Source | ||||||
Capital received from investors | 76,158,844 | |||||
Net investment income not yet distributed | 912,470 | |||||
Net realized capital losses | (20,410,594 | ) | ||||
Net unrealized capital gains | 7,338,791 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$63,999,511 | 6,061,454 | $10.56 |
See financial notes 23
Schwab Target 2010 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,139,481 | |||||
Dividends received from unaffiliated underlying funds | 334,069 | |||||
Interest | + | 382 | ||||
Total investment income | 1,473,932 | |||||
Expenses | ||||||
Professional fees | 36,876 | |||||
Portfolio accounting fees | 16,726 | |||||
Registration fees | 12,919 | |||||
Transfer agent fees | 12,070 | |||||
Shareholder reports | 10,315 | |||||
Trustees’ fees | 6,367 | |||||
Custodian fees | 3,846 | |||||
Other expenses | + | 1,513 | ||||
Total expenses | 100,632 | |||||
Expense reduction by CSIM | − | 100,632 | ||||
Net expenses | − | — | ||||
Net investment income | 1,473,932 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 6,277 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 268,130 | |||||
Net realized gains on sales of affiliated underlying funds* | 1,437,101 | |||||
Net realized gains on sales of unaffiliated underlying funds | + | 152,509 | ||||
Net realized gains | 1,864,017 | |||||
Net unrealized gains on affiliated underlying funds | 346,299 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (434,917 | ) | |||
Net unrealized losses | + | (88,618 | ) | |||
Net realized and unrealized gains | 1,775,399 | |||||
Increase in net assets resulting from operations | $3,249,331 |
* | Includes $66,805 from a litigation settlement related to an affiliated underlying fund. (See financial note 10) |
24 See financial notes
Schwab Target 2010 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,473,932 | $1,639,604 | ||||||||
Net realized gains | 1,864,017 | 114,418 | ||||||||
Net unrealized gains (losses) | + | (88,618 | ) | 6,598,022 | ||||||
Increase in net assets from operations | 3,249,331 | 8,352,044 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,782,231 | ) | ($1,828,001 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 1,007,663 | $10,502,110 | 1,959,676 | $19,167,886 | ||||||||||||||
Shares reinvested | 163,465 | 1,673,878 | 179,646 | 1,724,602 | ||||||||||||||
Shares redeemed | + | (2,213,519 | ) | (23,100,427 | ) | (2,950,024 | ) | (28,824,889 | ) | |||||||||
Net transactions in fund shares | (1,042,391 | ) | ($10,924,439 | ) | (810,702 | ) | ($7,932,401 | ) | ||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 7,103,845 | $73,456,850 | 7,914,547 | $74,865,208 | ||||||||||||||
Total decrease | + | (1,042,391 | ) | (9,457,339 | ) | (810,702 | ) | (1,408,358 | ) | |||||||||
End of period | 6,061,454 | $63,999,511 | 7,103,845 | $73,456,850 | ||||||||||||||
Net investment income not yet distributed | $912,470 | $1,051,515 |
See financial notes 25
Schwab Target 2015 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 10.16 | 9.09 | 8.15 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.19 | 0.16 | 0.19 | 0.06 | ||||||||||||||
Net realized and unrealized gains (losses) | 0.32 | 1.06 | 0.91 | (1.91 | ) | |||||||||||||
Total from investment operations | 0.51 | 1.22 | 1.10 | (1.85 | ) | |||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.15 | ) | (0.16 | ) | — | |||||||||||
Distributions from net realized gains | — | — | (0.00 | )2 | — | |||||||||||||
Total distributions | (0.19 | ) | (0.15 | ) | (0.16 | ) | — | |||||||||||
Net asset value at end of period | 10.48 | 10.16 | 9.09 | 8.15 | ||||||||||||||
Total return (%) | 5.10 | 13.55 | 13.82 | (18.50 | )3 | |||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses4 | — | 0.00 | 5 | 0.02 | 6 | 0.05 | 7 | |||||||||||
Gross operating expenses4 | 0.22 | 0.39 | 0.85 | 1.90 | 7 | |||||||||||||
Net investment income (loss) | 1.94 | 1.91 | 2.57 | 1.87 | 7 | |||||||||||||
Portfolio turnover rate | 16 | 13 | 39 | 35 | 3 | |||||||||||||
Net assets, end of period ($ x 1,000,000) | 53 | 37 | 17 | 6 |
1 Commencement of operations.
2 Amount less than $0.01.
3 Not annualized.
4 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
5 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
6 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
7 Annualized.
26 See financial notes
Schwab Target 2015 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Other Investment Companies | 46,922,653 | 51,870,607 | ||||||||
1 | .6% | Short-Term Investment | 858,721 | 858,721 | ||||||||
99 | .7% | Total Investments | 47,781,374 | 52,729,328 | ||||||||
0 | .3% | Other Assets and Liabilities, Net | 184,594 | |||||||||
100 | .0% | Total Net Assets | 52,913,922 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 98.1% of net assets | ||||||||
Equity Funds 52.1% | ||||||||
Global Real Estate 3.4% | ||||||||
Schwab Global Real Estate Fund (a) | 298,566 | 1,794,383 | ||||||
International 12.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 116,063 | 1,173,395 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 136,706 | 2,386,885 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 114,210 | 1,016,468 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 162,344 | 1,204,589 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 80,220 | 1,000,347 | ||||||
6,781,684 | ||||||||
Large-Cap 29.1% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 199,713 | 2,626,224 | ||||||
Schwab Core Equity Fund (a) | 319,081 | 5,363,750 | ||||||
Schwab Dividend Equity Fund (a) | 98,443 | 1,294,526 | ||||||
Schwab S&P 500 Index Fund (a) | 240,503 | 4,766,777 | ||||||
TCW Relative Value Large Cap Fund | 103,524 | 1,350,989 | ||||||
15,402,266 | ||||||||
Small-Cap 6.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 100,280 | 1,217,399 | ||||||
Schwab Small-Cap Equity Fund (a)* | 150,005 | 2,341,581 | ||||||
3,558,980 | ||||||||
27,537,313 | ||||||||
Fixed-Income Funds 42.6% | ||||||||
Inflation-Protected Bond 2.9% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 132,905 | 1,547,012 | ||||||
Intermediate-Term Bond 29.8% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 148,292 | 1,841,791 | ||||||
PIMCO Total Return Fund, Institutional Shares | 217,092 | 2,368,473 | ||||||
Schwab Premier Income Fund (a) | 196,056 | 2,062,513 | ||||||
Schwab Total Bond Market Fund (a) | 997,635 | 9,517,437 | ||||||
15,790,214 | ||||||||
International Bond 2.4% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 102,177 | 1,254,728 | ||||||
Short-Term Bond 7.5% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 426,993 | 3,949,689 | ||||||
22,541,643 | ||||||||
Money Market Fund 3.4% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 1,791,651 | 1,791,651 | ||||||
Total Other Investment Companies | ||||||||
(Cost $46,922,653) | 51,870,607 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 1.6% of net assets | ||||||||
Time Deposit 1.6% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 858,721 | 858,721 | ||||||
Total Short-Term Investment | ||||||||
(Cost $858,721) | 858,721 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $48,238,550 and the unrealized appreciation and depreciation were $4,490,778 and ($0), respectively, with a net unrealized appreciation of $4,490,778.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 27
Schwab Target 2015 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $39,529,876) | $44,135,612 | |||||
Investments in unaffiliated issuers, at value (cost $8,251,498) | + | 8,593,716 | ||||
Total investments, at value (cost $47,781,374) | 52,729,328 | |||||
Receivables: | ||||||
Fund shares sold | 196,889 | |||||
Dividends | 34,522 | |||||
Due from investment adviser | 828 | |||||
Prepaid expenses | + | 987 | ||||
Total assets | 52,962,554 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 20,347 | |||||
Accrued expenses | + | 28,285 | ||||
Total liabilities | 48,632 | |||||
Net Assets | ||||||
Total assets | 52,962,554 | |||||
Total liabilities | − | 48,632 | ||||
Net assets | $52,913,922 | |||||
Net Assets by Source | ||||||
Capital received from investors | 48,437,020 | |||||
Net investment income not yet distributed | 561,631 | |||||
Net realized capital losses | (1,032,683 | ) | ||||
Net unrealized capital gains | 4,947,954 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$52,913,922 | 5,050,925 | $10.48 |
28 See financial notes
Schwab Target 2015 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $736,955 | |||||
Dividends received from unaffiliated underlying funds | 185,762 | |||||
Interest | + | 359 | ||||
Total investment income | 923,076 | |||||
Expenses | ||||||
Professional fees | 35,881 | |||||
Registration fees | 18,800 | |||||
Portfolio accounting fees | 16,253 | |||||
Transfer agent fees | 11,381 | |||||
Shareholder reports | 9,876 | |||||
Trustees’ fees | 6,162 | |||||
Custodian fees | 4,477 | |||||
Other expenses | + | 718 | ||||
Total expenses | 103,548 | |||||
Expense reduction by CSIM | − | 103,548 | ||||
Net expenses | − | — | ||||
Net investment income | 923,076 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 2,538 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 112,253 | |||||
Net realized losses on sales of affiliated underlying funds | (112,969 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (18,748 | ) | |||
Net realized losses | (16,926 | ) | ||||
Net unrealized gains on affiliated underlying funds | 1,216,844 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (152,273 | ) | |||
Net unrealized gains | + | 1,064,571 | ||||
Net realized and unrealized gains | 1,047,645 | |||||
Increase in net assets resulting from operations | $1,970,721 |
See financial notes 29
Schwab Target 2015 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $923,076 | $522,054 | ||||||||
Net realized gains (losses) | (16,926 | ) | 30,319 | |||||||
Net unrealized gains | + | 1,064,571 | 2,802,230 | |||||||
Increase in net assets from operations | 1,970,721 | 3,354,603 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($789,680 | ) | ($331,163 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 2,925,717 | $30,532,243 | 2,556,420 | $24,483,229 | ||||||||||||||
Shares reinvested | 74,372 | 760,827 | 33,989 | 319,494 | ||||||||||||||
Shares redeemed | + | (1,635,376 | ) | (17,009,209 | ) | (787,229 | ) | (7,498,561 | ) | |||||||||
Net transactions in fund shares | 1,364,713 | $14,283,861 | 1,803,180 | $17,304,162 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 3,686,212 | $37,449,020 | 1,883,032 | $17,121,418 | ||||||||||||||
Total increase | + | 1,364,713 | 15,464,902 | 1,803,180 | 20,327,602 | |||||||||||||
End of period | 5,050,925 | $52,913,922 | 3,686,212 | $37,449,020 | ||||||||||||||
Net investment income not yet distributed | $561,631 | $356,829 |
30��See financial notes
Schwab Target 2020 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.80 | 9.63 | 8.59 | 12.88 | 11.56 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.22 | 0.20 | 0.24 | 0.30 | 0.21 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.34 | 1.18 | 1.08 | (4.11 | ) | 1.33 | ||||||||||||||||
Total from investment operations | 0.56 | 1.38 | 1.32 | (3.81 | ) | 1.54 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.23 | ) | (0.21 | ) | (0.28 | ) | (0.38 | ) | (0.19 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.10 | ) | (0.03 | ) | |||||||||||||||
Total distributions | (0.23 | ) | (0.21 | ) | (0.28 | ) | (0.48 | ) | (0.22 | ) | ||||||||||||
Net asset value at end of period | 11.13 | 10.80 | 9.63 | 8.59 | 12.88 | |||||||||||||||||
Total return (%) | 5.18 | 14.47 | 15.89 | (30.59 | ) | 13.47 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | 0.00 | 2 | 0.00 | 2 | 0.02 | 3 | 0.04 | 0.04 | ||||||||||||||
Gross operating expenses1 | 0.06 | 0.07 | 0.09 | 0.08 | 0.07 | |||||||||||||||||
Net investment income (loss) | 1.92 | 2.01 | 2.75 | 2.67 | 1.84 | |||||||||||||||||
Portfolio turnover rate | 15 | 15 | 48 | 34 | 4 | — | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 273 | 240 | 198 | 163 | 225 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 31
Schwab Target 2020 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .2% | Other Investment Companies | 236,633,939 | 270,840,516 | ||||||||
0 | .8% | Short-Term Investment | 2,055,743 | 2,055,743 | ||||||||
100 | .0% | Total Investments | 238,689,682 | 272,896,259 | ||||||||
0 | .0% | Other Assets and Liabilities, Net | 84,426 | |||||||||
100 | .0% | Total Net Assets | 272,980,685 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.2% of net assets | ||||||||
Equity Funds 63.2% | ||||||||
Global Real Estate 3.7% | ||||||||
Schwab Global Real Estate Fund (a) | 1,660,883 | 9,981,909 | ||||||
International 15.9% | ||||||||
American Century International Growth Fund, Institutional Shares | 746,324 | 7,545,335 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 864,568 | 15,095,351 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 744,546 | 6,626,462 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,022,140 | 7,584,280 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 524,709 | 6,543,115 | ||||||
43,394,543 | ||||||||
Large-Cap 36.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 1,263,479 | 16,614,746 | ||||||
Schwab Core Equity Fund (a) | 2,110,854 | 35,483,448 | ||||||
Schwab Dividend Equity Fund (a) | 632,350 | 8,315,399 | ||||||
Schwab S&P 500 Index Fund (a) | 1,518,287 | 30,092,449 | ||||||
TCW Relative Value Large Cap Fund | 640,097 | 8,353,268 | ||||||
98,859,310 | ||||||||
Small-Cap 7.4% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 586,685 | 7,122,354 | ||||||
Schwab Small-Cap Equity Fund (a)* | 841,120 | 13,129,886 | ||||||
20,252,240 | ||||||||
172,488,002 | ||||||||
Fixed-Income Funds 34.8% | ||||||||
Inflation-Protected Bond 2.4% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 573,400 | 6,674,379 | ||||||
Intermediate-Term Bond 27.1% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 433,202 | 5,380,374 | ||||||
PIMCO Total Return Fund, Institutional Shares | 926,120 | 10,103,968 | ||||||
Schwab Premier Income Fund (a) | 761,332 | 8,009,218 | ||||||
Schwab Total Bond Market Fund (a) | 5,288,857 | 50,455,699 | ||||||
73,949,259 | ||||||||
International Bond 2.4% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 527,811 | 6,481,520 | ||||||
Short-Term Bond 2.9% | ||||||||
Schwab Short-Term Bond Market Fund (a) | 871,286 | 8,059,392 | ||||||
95,164,550 | ||||||||
Money Market Fund 1.2% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 3,187,964 | 3,187,964 | ||||||
Total Other Investment Companies | ||||||||
(Cost $236,633,939) | 270,840,516 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.8% of net assets | ||||||||
Time Deposit 0.8% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 2,055,743 | 2,055,743 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,055,743) | 2,055,743 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $242,287,512 and the unrealized appreciation and depreciation were $32,694,576 and ($2,085,829), respectively, with a net unrealized appreciation of $30,608,747.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
32 See financial notes
Schwab Target 2020 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $202,602,818) | $232,914,456 | |||||
Investments in unaffiliated issuers, at value (cost $36,086,864) | + | 39,981,803 | ||||
Total investments, at value (cost $238,689,682) | 272,896,259 | |||||
Receivables: | ||||||
Fund shares sold | 229,216 | |||||
Dividends | 159,180 | |||||
Due from investment adviser | 1,279 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 6,760 | ||||
Total assets | 273,292,696 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 272,932 | |||||
Accrued expenses | + | 39,079 | ||||
Total liabilities | 312,011 | |||||
Net Assets | ||||||
Total assets | 273,292,696 | |||||
Total liabilities | − | 312,011 | ||||
Net assets | $272,980,685 | |||||
Net Assets by Source | ||||||
Capital received from investors | 277,569,954 | |||||
Net investment income not yet distributed | 2,735,899 | |||||
Net realized capital losses | (41,531,745 | ) | ||||
Net unrealized capital gains | 34,206,577 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$272,980,685 | 24,520,430 | $11.13 |
See financial notes 33
Schwab Target 2020 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,327,096 | |||||
Dividends received from unaffiliated underlying funds | 805,435 | |||||
Interest | + | 800 | ||||
Total investment income | 5,133,331 | |||||
Expenses | ||||||
Professional fees | 43,162 | |||||
Shareholder reports | 27,511 | |||||
Registration fees | 24,658 | |||||
Portfolio accounting fees | 21,001 | |||||
Transfer agent fees | 17,373 | |||||
Custodian fees | 8,090 | |||||
Trustees’ fees | 7,713 | |||||
Interest expense | 14 | |||||
Other expenses | + | 5,455 | ||||
Total expenses | 154,977 | |||||
Expense reduction by CSIM | − | 154,963 | ||||
Net expenses | − | 14 | ||||
Net investment income | 5,133,317 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 10,694 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 460,038 | |||||
Net realized losses on sales of affiliated underlying funds* | (473,921 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (63,637 | ) | |||
Net realized losses | (66,826 | ) | ||||
Net unrealized gains on affiliated underlying funds | 7,690,966 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (634,091 | ) | |||
Net unrealized gains | + | 7,056,875 | ||||
Net realized and unrealized gains | 6,990,049 | |||||
Increase in net assets resulting from operations | $12,123,366 |
* | Includes $54,428 from a litigation settlement related to an affiliated underlying fund. (See financial note 10) |
34 See financial notes
Schwab Target 2020 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $5,133,317 | $4,408,570 | ||||||||
Net realized losses | (66,826 | ) | (1,853,376 | ) | ||||||
Net unrealized gains | + | 7,056,875 | 26,784,257 | |||||||
Increase in net assets from operations | 12,123,366 | 29,339,451 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($5,113,390 | ) | ($4,326,919 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 6,727,716 | $75,400,663 | 5,496,962 | $55,652,382 | ||||||||||||||
Shares reinvested | 452,434 | 4,949,629 | 420,595 | 4,197,532 | ||||||||||||||
Shares redeemed | + | (4,872,189 | ) | (54,205,363 | ) | (4,256,785 | ) | (42,975,456 | ) | |||||||||
Net transactions in fund shares | 2,307,961 | $26,144,929 | 1,660,772 | $16,874,458 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 22,212,469 | $239,825,780 | 20,551,697 | $197,938,790 | ||||||||||||||
Total increase | + | 2,307,961 | 33,154,905 | 1,660,772 | 41,886,990 | |||||||||||||
End of period | 24,520,430 | $272,980,685 | 22,212,469 | $239,825,780 | ||||||||||||||
Net investment income not yet distributed | $2,735,899 | $2,414,159 |
See financial notes 35
Schwab Target 2025 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 10.46 | 9.21 | 7.99 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.19 | 0.16 | 0.17 | 0.05 | ||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 1.24 | 1.21 | (2.06 | ) | |||||||||||||
Total from investment operations | 0.57 | 1.40 | 1.38 | (2.01 | ) | |||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.15 | ) | (0.16 | ) | — | |||||||||||
Net asset value at end of period | 10.84 | 10.46 | 9.21 | 7.99 | ||||||||||||||
Total return (%) | 5.44 | 15.34 | 17.61 | (20.10 | )2 | |||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses3 | — | 0.00 | 4 | 0.01 | 5 | 0.04 | 6 | |||||||||||
Gross operating expenses3 | 0.14 | 0.24 | 0.57 | 1.27 | 6 | |||||||||||||
Net investment income (loss) | 1.66 | 1.62 | 2.15 | 1.60 | 6 | |||||||||||||
Portfolio turnover rate | 9 | 13 | 44 | 3 | 2 | |||||||||||||
Net assets, end of period ($ x 1,000,000) | 104 | 63 | 26 | 8 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
5 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
6 Annualized.
36 See financial notes
Schwab Target 2025 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .3% | Other Investment Companies | 94,086,628 | 103,610,974 | ||||||||
0 | .5% | Short-Term Investment | 486,254 | 486,254 | ||||||||
99 | .8% | Total Investments | 94,572,882 | 104,097,228 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 176,567 | |||||||||
100 | .0% | Total Net Assets | 104,273,795 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.3% of net assets | ||||||||
Equity Funds 72.2% | ||||||||
Global Real Estate 4.1% | ||||||||
Schwab Global Real Estate Fund (a) | 703,826 | 4,229,994 | ||||||
International 17.9% | ||||||||
American Century International Growth Fund, Institutional Shares | 313,059 | 3,165,031 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 381,082 | 6,653,694 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 312,968 | 2,785,411 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 452,359 | 3,356,501 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 213,737 | 2,665,303 | ||||||
18,625,940 | ||||||||
Large-Cap 41.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 553,297 | 7,275,854 | ||||||
Schwab Core Equity Fund (a) | 956,556 | 16,079,711 | ||||||
Schwab Dividend Equity Fund (a) | 289,198 | 3,802,958 | ||||||
Schwab S&P 500 Index Fund (a) | 627,841 | 12,443,817 | ||||||
TCW Relative Value Large Cap Fund | 261,497 | 3,412,540 | ||||||
43,014,880 | ||||||||
Small-Cap 9.0% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 260,766 | 3,165,700 | ||||||
Schwab Small-Cap Equity Fund (a)* | 399,641 | 6,238,399 | ||||||
9,404,099 | ||||||||
75,274,913 | ||||||||
Fixed-Income Funds 25.8% | ||||||||
Inflation-Protected Bond 1.9% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 173,927 | 2,024,507 | ||||||
Intermediate-Term Bond 22.1% | ||||||||
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares | 103,033 | 1,279,665 | ||||||
PIMCO Total Return Fund, Institutional Shares | 263,914 | 2,879,301 | ||||||
Schwab Premier Income Fund (a) | 213,823 | 2,249,419 | ||||||
Schwab Total Bond Market Fund (a) | 1,738,844 | 16,588,575 | ||||||
22,996,960 | ||||||||
International Bond 1.8% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 156,064 | 1,916,466 | ||||||
26,937,933 | ||||||||
Money Market Fund 1.3% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 1,398,128 | 1,398,128 | ||||||
Total Other Investment Companies | ||||||||
(Cost $94,086,628) | 103,610,974 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.5% of net assets | ||||||||
Time Deposit 0.5% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 486,254 | 486,254 | ||||||
Total Short-Term Investment | ||||||||
(Cost $486,254) | 486,254 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $95,588,818 and the unrealized appreciation and depreciation were $8,508,410 and ($0), respectively, with a net unrealized appreciation of $8,508,410.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 37
Schwab Target 2025 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $81,236,914) | $90,209,134 | |||||
Investments in unaffiliated issuers, at value (cost $13,335,968) | + | 13,888,094 | ||||
Total investments, at value (cost $94,572,882) | 104,097,228 | |||||
Receivables: | ||||||
Fund shares sold | 187,222 | |||||
Dividends | 47,509 | |||||
Due from investment adviser | 1,165 | |||||
Prepaid expenses | + | 1,790 | ||||
Total assets | 104,334,914 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 30,483 | |||||
Accrued expenses | + | 30,636 | ||||
Total liabilities | 61,119 | |||||
Net Assets | ||||||
Total assets | 104,334,914 | |||||
Total liabilities | − | 61,119 | ||||
Net assets | $104,273,795 | |||||
Net Assets by Source | ||||||
Capital received from investors | 95,635,354 | |||||
Net investment income not yet distributed | 757,736 | |||||
Net realized capital losses | (1,643,641 | ) | ||||
Net unrealized capital gains | 9,524,346 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$104,273,795 | 9,621,552 | $10.84 |
38 See financial notes
Schwab Target 2025 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $1,222,238 | |||||
Dividends received from unaffiliated underlying funds | 211,607 | |||||
Interest | + | 292 | ||||
Total investment income | 1,434,137 | |||||
Expenses | ||||||
Professional fees | 36,976 | |||||
Registration fees | 25,390 | |||||
Portfolio accounting fees | 17,070 | |||||
Shareholder reports | 13,841 | |||||
Transfer agent fees | 12,477 | |||||
Trustees’ fees | 6,398 | |||||
Custodian fees | 6,229 | |||||
Other expenses | + | 1,400 | ||||
Total expenses | 119,781 | |||||
Expense reduction by CSIM | − | 119,781 | ||||
Net expenses | − | — | ||||
Net investment income | 1,434,137 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 2,291 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 104,438 | |||||
Net realized losses on sales of affiliated underlying funds | (204,171 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (24,562 | ) | |||
Net realized losses | (122,004 | ) | ||||
Net unrealized gains on affiliated underlying funds | 2,009,313 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (318,704 | ) | |||
Net unrealized gains | + | 1,690,609 | ||||
Net realized and unrealized gains | 1,568,605 | |||||
Increase in net assets resulting from operations | $3,002,742 |
See financial notes 39
Schwab Target 2025 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $1,434,137 | $727,221 | ||||||||
Net realized gains (losses) | (122,004 | ) | 29,253 | |||||||
Net unrealized gains | + | 1,690,609 | 5,424,395 | |||||||
Increase in net assets from operations | 3,002,742 | 6,180,869 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($1,192,290 | ) | ($477,680 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,868,311 | $53,244,649 | 3,957,132 | $38,742,638 | ||||||||||||||
Shares reinvested | 109,885 | 1,176,870 | 48,457 | 468,092 | ||||||||||||||
Shares redeemed | + | (1,355,247 | ) | (14,727,440 | ) | (857,464 | ) | (8,387,723 | ) | |||||||||
Net transactions in fund shares | 3,622,949 | $39,694,079 | 3,148,125 | $30,823,007 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 5,998,603 | $62,769,264 | 2,850,478 | $26,243,068 | ||||||||||||||
Total increase | + | 3,622,949 | 41,504,531 | 3,148,125 | 36,526,196 | |||||||||||||
End of period | 9,621,552 | $104,273,795 | 5,998,603 | $62,769,264 | ||||||||||||||
Net investment income not yet distributed | $757,736 | $447,687 |
40 See financial notes
Schwab Target 2030 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.05 | 9.69 | 8.51 | 13.15 | 11.67 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.19 | 0.17 | 0.20 | 0.28 | 0.18 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 1.36 | 1.23 | (4.47 | ) | 1.48 | ||||||||||||||||
Total from investment operations | 0.57 | 1.53 | 1.43 | (4.19 | ) | 1.66 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.19 | ) | (0.17 | ) | (0.25 | ) | (0.35 | ) | (0.16 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.10 | ) | (0.02 | ) | |||||||||||||||
Total distributions | (0.19 | ) | (0.17 | ) | (0.25 | ) | (0.45 | ) | (0.18 | ) | ||||||||||||
Net asset value at end of period | 11.43 | 11.05 | 9.69 | 8.51 | 13.15 | |||||||||||||||||
Total return (%) | 5.20 | 15.97 | 17.31 | (32.83 | ) | 14.45 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | 0.00 | 2 | 0.01 | 3 | 0.03 | 0.03 | |||||||||||||||
Gross operating expenses1 | 0.05 | 0.08 | 0.11 | 0.10 | 0.09 | |||||||||||||||||
Net investment income (loss) | 1.60 | 1.64 | 2.37 | 2.35 | 1.50 | |||||||||||||||||
Portfolio turnover rate | 8 | 14 | 50 | 31 | 4 | — | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 372 | 296 | 200 | 129 | 162 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 41
Schwab Target 2030 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .2% | Other Investment Companies | 320,510,578 | 368,574,086 | ||||||||
0 | .7% | Short-Term Investment | 2,675,573 | 2,675,573 | ||||||||
99 | .9% | Total Investments | 323,186,151 | 371,249,659 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 320,612 | |||||||||
100 | .0% | Total Net Assets | 371,570,271 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.2% of net assets | ||||||||
Equity Funds 79.4% | ||||||||
Global Real Estate 4.4% | ||||||||
Schwab Global Real Estate Fund (a) | 2,726,695 | 16,387,435 | ||||||
International 19.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,245,963 | 12,596,690 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,429,231 | 24,954,373 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 1,301,561 | 11,583,894 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,725,566 | 12,803,701 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 918,048 | 11,448,052 | ||||||
73,386,710 | ||||||||
Large-Cap 44.4% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 2,020,252 | 26,566,317 | ||||||
Schwab Core Equity Fund (a) | 3,881,565 | 65,249,111 | ||||||
Schwab Dividend Equity Fund (a) | 1,011,752 | 13,304,537 | ||||||
Schwab S&P 500 Index Fund (a) | 2,342,665 | 46,431,629 | ||||||
TCW Relative Value Large Cap Fund | 1,028,761 | 13,425,329 | ||||||
164,976,923 | ||||||||
Small-Cap 10.8% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,143,509 | 13,882,197 | ||||||
Schwab Small-Cap Equity Fund (a)* | 1,676,570 | 26,171,256 | ||||||
40,053,453 | ||||||||
294,804,521 | ||||||||
Fixed-Income Funds 18.6% | ||||||||
Inflation-Protected Bond 1.3% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 424,155 | 4,937,169 | ||||||
Intermediate-Term Bond 16.0% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 656,637 | 7,163,905 | ||||||
Schwab Premier Income Fund (a) | 544,479 | 5,727,922 | ||||||
Schwab Total Bond Market Fund (a) | 4,880,271 | 46,557,784 | ||||||
59,449,611 | ||||||||
International Bond 1.3% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 392,824 | 4,823,875 | ||||||
69,210,655 | ||||||||
Money Market Fund 1.2% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 4,558,910 | 4,558,910 | ||||||
Total Other Investment Companies | ||||||||
(Cost $320,510,578) | 368,574,086 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.7% of net assets | ||||||||
Time Deposit 0.7% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 2,675,573 | 2,675,573 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,675,573) | 2,675,573 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $328,172,855 and the unrealized appreciation and depreciation were $45,473,627 and ($2,396,823), respectively, with a net unrealized appreciation of $43,076,804.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
42 See financial notes
Schwab Target 2030 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $280,378,332) | $323,940,110 | |||||
Investments in unaffiliated issuers, at value (cost $42,807,819) | + | 47,309,549 | ||||
Total investments, at value (cost $323,186,151) | 371,249,659 | |||||
Receivables: | ||||||
Fund shares sold | 374,601 | |||||
Dividends | 130,673 | |||||
Due from investment adviser | 1,808 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 8,224 | ||||
Total assets | 371,764,967 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 149,515 | |||||
Accrued expenses | + | 45,181 | ||||
Total liabilities | 194,696 | |||||
Net Assets | ||||||
Total assets | 371,764,967 | |||||
Total liabilities | − | 194,696 | ||||
Net assets | $371,570,271 | |||||
Net Assets by Source | ||||||
Capital received from investors | 354,932,105 | |||||
Net investment income not yet distributed | 2,407,745 | |||||
Net realized capital losses | (33,833,087 | ) | ||||
Net unrealized capital gains | 48,063,508 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$371,570,271 | 32,519,285 | $11.43 |
See financial notes 43
Schwab Target 2030 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $5,048,116 | |||||
Dividends received from unaffiliated underlying funds | 622,549 | |||||
Interest | + | 1,061 | ||||
Total investment income | 5,671,726 | |||||
Expenses | ||||||
Professional fees | 45,598 | |||||
Shareholder reports | 38,796 | |||||
Registration fees | 27,240 | |||||
Transfer agent fees | 23,969 | |||||
Portfolio accounting fees | 22,909 | |||||
Custodian fees | 9,900 | |||||
Trustees’ fees | 8,288 | |||||
Other expenses | + | 7,134 | ||||
Total expenses | 183,834 | |||||
Expense reduction by CSIM | − | 183,834 | ||||
Net expenses | − | — | ||||
Net investment income | 5,671,726 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 6,788 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 286,715 | |||||
Net realized losses on sales of affiliated underlying funds* | (1,236,283 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (49,859 | ) | |||
Net realized losses | (992,639 | ) | ||||
Net unrealized gains on affiliated underlying funds | 10,709,975 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (724,308 | ) | |||
Net unrealized gains | + | 9,985,667 | ||||
Net realized and unrealized gains | 8,993,028 | |||||
Increase in net assets resulting from operations | $14,664,754 |
* | Includes $33,748 from a litigation settlement related to an affiliated underlying fund. (See financial note 10) |
44 See financial notes
Schwab Target 2030 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $5,671,726 | $4,112,116 | ||||||||
Net realized losses | (992,639 | ) | (921,037 | ) | ||||||
Net unrealized gains | + | 9,985,667 | 32,998,391 | |||||||
Increase in net assets from operations | 14,664,754 | 36,189,470 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($5,459,742 | ) | ($3,748,936 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 10,393,929 | $120,477,375 | 9,800,393 | $101,143,105 | ||||||||||||||
Shares reinvested | 465,434 | 5,296,644 | 357,901 | 3,654,170 | ||||||||||||||
Shares redeemed | + | (5,173,535 | ) | (59,799,151 | ) | (3,977,327 | ) | (40,925,461 | ) | |||||||||
Net transactions in fund shares | 5,685,828 | $65,974,868 | 6,180,967 | $63,871,814 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 26,833,457 | $296,390,391 | 20,652,490 | $200,078,043 | ||||||||||||||
Total increase | + | 5,685,828 | 75,179,880 | 6,180,967 | 96,312,348 | |||||||||||||
End of period | 32,519,285 | $371,570,271 | 26,833,457 | $296,390,391 | ||||||||||||||
Net investment income not yet distributed | $2,407,745 | $1,997,443 |
See financial notes 45
Schwab Target 2035 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 3/12/081– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 10.32 | 9.00 | 7.76 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.16 | 0.13 | 0.15 | 0.04 | ||||||||||||||
Net realized and unrealized gains (losses) | 0.38 | 1.33 | 1.23 | (2.28 | ) | |||||||||||||
Total from investment operations | 0.54 | 1.46 | 1.38 | (2.24 | ) | |||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.16 | ) | (0.14 | ) | (0.14 | ) | — | |||||||||||
Net asset value at end of period | 10.70 | 10.32 | 9.00 | 7.76 | ||||||||||||||
Total return (%) | 5.27 | 16.29 | 18.22 | (22.40 | )2 | |||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses3 | — | 0.00 | 4 | 0.01 | 5 | 0.02 | 6 | |||||||||||
Gross operating expenses3 | 0.17 | 0.30 | 0.67 | 1.57 | 6 | |||||||||||||
Net investment income (loss) | 1.41 | 1.38 | 1.92 | 1.32 | 6 | |||||||||||||
Portfolio turnover rate | 4 | 14 | 49 | 7 | 2 | |||||||||||||
Net assets, end of period ($ x 1,000,000) | 77 | 49 | 22 | 6 |
1 Commencement of operations.
2 Not annualized.
3 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
4 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
5 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
6 Annualized.
46 See financial notes
Schwab Target 2035 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Other Investment Companies | 68,495,607 | 76,684,304 | ||||||||
0 | .8% | Short-Term Investment | 596,389 | 596,389 | ||||||||
99 | .8% | Total Investments | 69,091,996 | 77,280,693 | ||||||||
0 | .2% | Other Assets and Liabilities, Net | 149,588 | |||||||||
100 | .0% | Total Net Assets | 77,430,281 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.0% of net assets | ||||||||
Equity Funds 85.3% | ||||||||
Global Real Estate 4.7% | ||||||||
Schwab Global Real Estate Fund (a) | 610,226 | 3,667,458 | ||||||
International 20.7% | ||||||||
American Century International Growth Fund, Institutional Shares | 271,472 | 2,744,585 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 315,685 | 5,511,864 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 278,801 | 2,481,332 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 387,136 | 2,872,548 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 192,080 | 2,395,243 | ||||||
16,005,572 | ||||||||
Large-Cap 48.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 481,457 | 6,331,162 | ||||||
Schwab Core Equity Fund (a) | 884,176 | 14,863,006 | ||||||
Schwab Dividend Equity Fund (a) | 242,036 | 3,182,776 | ||||||
Schwab S&P 500 Index Fund (a) | 488,875 | 9,689,506 | ||||||
TCW Relative Value Large Cap Fund | 251,976 | 3,288,289 | ||||||
37,354,739 | ||||||||
Small-Cap 11.7% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 258,735 | 3,141,047 | ||||||
Schwab Small-Cap Equity Fund (a)* | 378,817 | 5,913,326 | ||||||
9,054,373 | ||||||||
66,082,142 | ||||||||
Fixed-Income Funds 12.6% | ||||||||
Inflation-Protected Bond 1.0% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 63,489 | 739,014 | ||||||
Intermediate-Term Bond 10.7% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 66,644 | 727,084 | ||||||
Schwab Premier Income Fund (a) | 90,073 | 947,567 | ||||||
Schwab Total Bond Market Fund (a) | 695,859 | 6,638,492 | ||||||
8,313,143 | ||||||||
International Bond 0.9% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 57,293 | 703,554 | ||||||
9,755,711 | ||||||||
Money Market Fund 1.1% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 846,451 | 846,451 | ||||||
Total Other Investment Companies | ||||||||
(Cost $68,495,607) | 76,684,304 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.8% of net assets | ||||||||
Time Deposit 0.8% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 596,389 | 596,389 | ||||||
Total Short-Term Investment | ||||||||
(Cost $596,389) | 596,389 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $69,915,150 and the unrealized appreciation and depreciation were $7,365,543 and ($0), respectively, with a net unrealized appreciation of $7,365,543.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
See financial notes 47
Schwab Target 2035 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $59,831,989) | $67,529,103 | |||||
Investments in unaffiliated issuers, at value (cost $9,260,007) | + | 9,751,590 | ||||
Total investments, at value (cost $69,091,996) | 77,280,693 | |||||
Receivables: | ||||||
Fund shares sold | 209,075 | |||||
Dividends | 18,007 | |||||
Due from investment adviser | 955 | |||||
Interest | 1 | |||||
Prepaid expenses | + | 1,366 | ||||
Total assets | 77,510,097 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 49,093 | |||||
Accrued expenses | + | 30,723 | ||||
Total liabilities | 79,816 | |||||
Net Assets | ||||||
Total assets | 77,510,097 | |||||
Total liabilities | − | 79,816 | ||||
Net assets | $77,430,281 | |||||
Net Assets by Source | ||||||
Capital received from investors | 70,168,557 | |||||
Net investment income not yet distributed | 364,231 | |||||
Net realized capital losses | (1,291,204 | ) | ||||
Net unrealized capital gains | 8,188,697 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$77,430,281 | 7,238,659 | $10.70 |
48 See financial notes
Schwab Target 2035 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $835,397 | |||||
Dividends received from unaffiliated underlying funds | 92,005 | |||||
Interest | + | 408 | ||||
Total investment income | 927,810 | |||||
Expenses | ||||||
Professional fees | 36,378 | |||||
Registration fees | 19,624 | |||||
Portfolio accounting fees | 16,618 | |||||
Shareholder reports | 13,679 | |||||
Transfer agent fees | 12,209 | |||||
Trustees’ fees | 6,275 | |||||
Custodian fees | 5,541 | |||||
Other expenses | + | 1,024 | ||||
Total expenses | 111,348 | |||||
Expense reduction by CSIM | − | 111,348 | ||||
Net expenses | − | — | ||||
Net investment income | 927,810 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 869 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 24,362 | |||||
Net realized losses on sales of affiliated underlying funds | (4,532 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (2,308 | ) | |||
Net realized gains | 18,391 | |||||
Net unrealized gains on affiliated underlying funds | 1,388,352 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (216,581 | ) | |||
Net unrealized gains | + | 1,171,771 | ||||
Net realized and unrealized gains | 1,190,162 | |||||
Increase in net assets resulting from operations | $2,117,972 |
See financial notes 49
Schwab Target 2035 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $927,810 | $490,181 | ||||||||
Net realized gains | 18,391 | 75,063 | ||||||||
Net unrealized gains | + | 1,171,771 | 4,642,105 | |||||||
Increase in net assets from operations | 2,117,972 | 5,207,349 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($819,461 | ) | ($384,144 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 3,517,865 | $38,278,820 | 2,857,381 | $27,484,922 | ||||||||||||||
Shares reinvested | 74,569 | 798,641 | 39,144 | 373,828 | ||||||||||||||
Shares redeemed | + | (1,062,462 | ) | (11,556,596 | ) | (643,422 | ) | (6,161,530 | ) | |||||||||
Net transactions in fund shares | 2,529,972 | $27,520,865 | 2,253,103 | $21,697,220 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 4,708,687 | $48,610,905 | 2,455,584 | $22,090,480 | ||||||||||||||
Total increase | + | 2,529,972 | 28,819,376 | 2,253,103 | 26,520,425 | |||||||||||||
End of period | 7,238,659 | $77,430,281 | 4,708,687 | $48,610,905 | ||||||||||||||
Net investment income not yet distributed | $364,231 | $239,022 |
50 See financial notes
Schwab Target 2040 Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 11/1/06– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/09 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 11.16 | 9.71 | 8.48 | 13.45 | 11.83 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.17 | 0.15 | 0.18 | 0.28 | 0.17 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.40 | 1.46 | 1.27 | (4.80 | ) | 1.62 | ||||||||||||||||
Total from investment operations | 0.57 | 1.61 | 1.45 | (4.52 | ) | 1.79 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.18 | ) | (0.16 | ) | (0.22 | ) | (0.36 | ) | (0.15 | ) | ||||||||||||
Distributions from net realized gains | — | — | — | (0.09 | ) | (0.02 | ) | |||||||||||||||
Total distributions | (0.18 | ) | (0.16 | ) | (0.22 | ) | (0.45 | ) | (0.17 | ) | ||||||||||||
Net asset value at end of period | 11.55 | 11.16 | 9.71 | 8.48 | 13.45 | |||||||||||||||||
Total return (%) | 5.08 | 16.71 | 17.66 | (34.60 | ) | 15.32 | ||||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses1 | — | 0.00 | 2 | 0.00 | 2,3 | 0.01 | 0.01 | |||||||||||||||
Gross operating expenses1 | 0.06 | 0.10 | 0.15 | 0.15 | 0.13 | |||||||||||||||||
Net investment income (loss) | 1.42 | 1.44 | 2.15 | 2.22 | 1.19 | |||||||||||||||||
Portfolio turnover rate | 3 | 15 | 51 | 36 | 4 | — | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 342 | 259 | 163 | 94 | 118 |
1 The expenses incurred by underlying funds in which the fund invests are not included in this ratio.
2 Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.
3 Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.
4 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.
See financial notes 51
Schwab Target 2040 Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .3% | Other Investment Companies | 297,347,668 | 340,124,175 | ||||||||
0 | .6% | Short-Term Investment | 1,881,242 | 1,881,242 | ||||||||
99 | .9% | Total Investments | 299,228,910 | 342,005,417 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 355,510 | |||||||||
100 | .0% | Total Net Assets | 342,360,927 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Companies 99.3% of net assets | ||||||||
Equity Funds 89.3% | ||||||||
Global Real Estate 5.1% | ||||||||
Schwab Global Real Estate Fund (a) | 2,878,926 | 17,302,344 | ||||||
International 21.8% | ||||||||
American Century International Growth Fund, Institutional Shares | 1,275,732 | 12,897,652 | ||||||
Laudus International MarketMasters Fund, Select Shares (a) | 1,433,985 | 25,037,386 | ||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a) | 1,317,623 | 11,726,845 | ||||||
Laudus Mondrian International Equity Fund, Institutional Shares (a) | 1,868,526 | 13,864,463 | ||||||
William Blair International Small Cap Growth Fund, Institutional Shares | 897,155 | 11,187,525 | ||||||
74,713,871 | ||||||||
Large-Cap 50.2% | ||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund (a) | 2,242,301 | 29,486,254 | ||||||
Schwab Core Equity Fund (a) | 4,125,083 | 69,342,648 | ||||||
Schwab Dividend Equity Fund (a) | 1,166,029 | 15,333,286 | ||||||
Schwab S&P 500 Index Fund (a) | 2,173,959 | 43,087,863 | ||||||
TCW Relative Value Large Cap Fund | 1,122,153 | 14,644,097 | ||||||
171,894,148 | ||||||||
Small-Cap 12.2% | ||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares (a)* | 1,178,238 | 14,303,815 | ||||||
Schwab Small-Cap Equity Fund (a)* | 1,759,299 | 27,462,661 | ||||||
41,766,476 | ||||||||
305,676,839 | ||||||||
Fixed-Income Funds 8.6% | ||||||||
Inflation-Protected Bond 0.8% | ||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) (a) | 225,421 | 2,623,898 | ||||||
Intermediate-Term Bond 7.1% | ||||||||
PIMCO Total Return Fund, Institutional Shares | 238,895 | 2,606,343 | ||||||
Schwab Premier Income Fund (a) | 340,348 | 3,580,464 | ||||||
Schwab Total Bond Market Fund (a) | 1,919,689 | 18,313,833 | ||||||
24,500,640 | ||||||||
International Bond 0.7% | ||||||||
Laudus Mondrian International Fixed Income Fund (a) | 206,204 | 2,532,179 | ||||||
29,656,717 | ||||||||
Money Market Fund 1.4% | ||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares (a) | 4,790,619 | 4,790,619 | ||||||
Total Other Investment Companies | ||||||||
(Cost $297,347,668) | 340,124,175 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.6% of net assets | ||||||||
Time Deposit 0.6% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 1,881,242 | 1,881,242 | ||||||
�� | ||||||||
Total Short-Term Investment | ||||||||
(Cost $1,881,242) | 1,881,242 | |||||||
End of Investments. |
At 10/31/11, the tax basis cost of the fund’s investments was $303,813,453 and the unrealized appreciation and depreciation were $39,699,105 and ($1,507,141), respectively, with a net unrealized appreciation of $38,191,964.
* | Non-income producing security. | |
(a) | Issuer is affiliated with the fund’s adviser. |
52 See financial notes
Schwab Target 2040 Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated underlying funds, at value (cost $260,020,168) | $298,788,558 | |||||
Investments in unaffiliated issuers, at value (cost $39,208,742) | + | 43,216,859 | ||||
Total investments, at value (cost $299,228,910) | 342,005,417 | |||||
Receivables: | ||||||
Fund shares sold | 464,649 | |||||
Dividends | 54,110 | |||||
Due from investment adviser | 1,984 | |||||
Interest | 2 | |||||
Prepaid expenses | + | 7,242 | ||||
Total assets | 342,533,404 | |||||
Liabilities | ||||||
Payables: | ||||||
Fund shares redeemed | 112,442 | |||||
Accrued expenses | + | 60,035 | ||||
Total liabilities | 172,477 | |||||
Net Assets | ||||||
Total assets | 342,533,404 | |||||
Total liabilities | − | 172,477 | ||||
Net assets | $342,360,927 | |||||
Net Assets by Source | ||||||
Capital received from investors | 324,577,316 | |||||
Net investment income not yet distributed | 1,492,095 | |||||
Net realized capital losses | (26,484,991 | ) | ||||
Net unrealized capital gains | 42,776,507 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$342,360,927 | 29,629,805 | $11.55 |
See financial notes 53
Schwab Target 2040 Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated underlying funds | $4,058,215 | |||||
Dividends received from unaffiliated underlying funds | 474,259 | |||||
Interest | + | 974 | ||||
Total investment income | 4,533,448 | |||||
Expenses | ||||||
Shareholder reports | 60,076 | |||||
Professional fees | 44,299 | |||||
Transfer agent fees | 27,371 | |||||
Registration fees | 25,561 | |||||
Portfolio accounting fees | 22,168 | |||||
Custodian fees | 9,472 | |||||
Trustees’ fees | 8,024 | |||||
Other expenses | + | 5,979 | ||||
Total expenses | 202,950 | |||||
Expense reduction by CSIM | − | 202,950 | ||||
Net expenses | − | — | ||||
Net investment income | 4,533,448 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Realized capital gain distributions received from affiliated underlying funds | 3,975 | |||||
Realized capital gain distributions received from unaffiliated underlying funds | 97,955 | |||||
Net realized losses on sales of affiliated underlying funds* | (461,288 | ) | ||||
Net realized losses on sales of unaffiliated underlying funds | + | (32,048 | ) | |||
Net realized losses | (391,406 | ) | ||||
Net unrealized gains on affiliated underlying funds | 8,305,794 | |||||
Net unrealized losses on unaffiliated underlying funds | + | (716,595 | ) | |||
Net unrealized gains | + | 7,589,199 | ||||
Net realized and unrealized gains | 7,197,793 | |||||
Increase in net assets resulting from operations | $11,731,241 |
* | Includes $22,986 from a litigation settlement related to an affiliated underlying fund. (See financial note 10) |
54 See financial notes
Schwab Target 2040 Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $4,533,448 | $3,044,401 | ||||||||
Net realized losses | (391,406 | ) | (484,034 | ) | ||||||
Net unrealized gains | + | 7,589,199 | 29,324,335 | |||||||
Increase in net assets from operations | 11,731,241 | 31,884,702 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($4,347,408 | ) | ($2,835,524 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 10,468,609 | $123,614,335 | 9,574,793 | $99,582,654 | ||||||||||||||
Shares reinvested | 366,999 | 4,260,852 | 268,561 | 2,774,235 | ||||||||||||||
Shares redeemed | + | (4,450,866 | ) | (52,299,460 | ) | (3,362,169 | ) | (34,829,052 | ) | |||||||||
Net transactions in fund shares | 6,384,742 | $75,575,727 | 6,481,185 | $67,527,837 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 23,245,063 | $259,401,367 | 16,763,878 | $162,824,352 | ||||||||||||||
Total increase | + | 6,384,742 | 82,959,560 | 6,481,185 | 96,577,015 | |||||||||||||
End of period | 29,629,805 | $342,360,927 | 23,245,063 | $259,401,367 | ||||||||||||||
Net investment income not yet distributed | $1,492,095 | $1,238,032 |
See financial notes 55
Schwab Target Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (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 Capital Trust (organized May 7, 1993) | Schwab Premier Equity Fund | |||
Schwab Target 2010 Fund | Schwab Core Equity Fund | |||
Schwab Target 2015 Fund | Schwab Dividend Equity Fund | |||
Schwab Target 2020 Fund | Schwab Large-Cap Growth Fund | |||
Schwab Target 2025 Fund | Schwab Small-Cap Equity Fund | |||
Schwab Target 2030 Fund | Schwab Hedged Equity Fund | |||
Schwab Target 2035 Fund | Schwab Financial Services Fund | |||
Schwab Target 2040 Fund | Schwab Health Care Fund | |||
Schwab S&P 500 Index Fund | Schwab International Core Equity Fund | |||
Schwab Small-Cap Index Fund | Schwab Fundamental US Large Company Index Fund | |||
Schwab Total Stock Market Index Fund | Schwab Fundamental US Small-Mid Company Index Fund | |||
Schwab International Index Fund | Schwab Fundamental International Large Company Index Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Fundamental International Small-Mid Company Index Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Fundamental Emerging Markets Index Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Monthly Income Fund-Moderate Payout | |||
Schwab MarketTrack Conservative Portfolio | Schwab Monthly Income Fund-Enhanced Payout | |||
Laudus Small-Cap MarketMasters Fund | Schwab Monthly Income Fund-Maximum Payout | |||
Laudus International MarketMasters Fund | ||||
Schwab Balanced Fund | ||||
The Schwab Target Funds are “fund of funds.” Each of the funds seeks to achieve its investment objective by investing in a combination of other Schwab and/or Laudus Funds and other unaffiliated, third-party mutual funds, in accordance with its target portfolio allocation. Each fund may also invest directly in equity and fixed income securities, exchange traded funds (“ETFs”), cash equivalents, including money market securities, and futures. Each fund bears its share of the allocable expenses of the underlying funds in which they invest.
Each fund in this report offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”), which is the price for all outstanding share of a fund. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”). For more information about the underlying funds’ operations and policies, please refer to those funds’ semiannual and annual reports, which are filed with the Securities Exchange Commission (“SEC”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Underlying funds: valued at their respective net asset values. | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to
56
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted prices. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the fund’s investments as of October 31, 2011:
Schwab Target 2010 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $62,952,085 | $— | $— | $62,952,085 | ||||||||||||
Short-Term Investment(a) | — | 1,053,225 | — | 1,053,225 | ||||||||||||
Total | $62,952,085 | $1,053,225 | $— | $64,005,310 | ||||||||||||
57
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab Target 2015 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $51,870,607 | $— | $— | $51,870,607 | ||||||||||||
Short-Term Investment(a) | — | 858,721 | — | 858,721 | ||||||||||||
Total | $51,870,607 | $858,721 | $— | $52,729,328 | ||||||||||||
Schwab Target 2020 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $270,840,516 | $— | $— | $270,840,516 | ||||||||||||
Short-Term Investment(a) | — | 2,055,743 | — | 2,055,743 | ||||||||||||
Total | $270,840,516 | $2,055,743 | $— | $272,896,259 | ||||||||||||
Schwab Target 2025 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $103,610,974 | $— | $— | $103,610,974 | ||||||||||||
Short-Term Investment(a) | — | 486,254 | — | 486,254 | ||||||||||||
Total | $103,610,974 | $486,254 | $— | $104,097,228 | ||||||||||||
Schwab Target 2030 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $368,574,086 | $— | $— | $368,574,086 | ||||||||||||
Short-Term Investment(a) | — | 2,675,573 | — | 2,675,573 | ||||||||||||
Total | $368,574,086 | $2,675,573 | $— | $371,249,659 | ||||||||||||
Schwab Target 2035 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $76,684,304 | $— | $— | $76,684,304 | ||||||||||||
Short-Term Investment(a) | — | 596,389 | — | 596,389 | ||||||||||||
Total | $76,684,304 | $596,389 | $— | $77,280,693 | ||||||||||||
58
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
Schwab Target 2040 Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total* | ||||||||||||
Other Investment Companies(a) | $340,124,175 | $— | $— | $340,124,175 | ||||||||||||
Short-Term Investment(a) | — | 1,881,242 | — | 1,881,242 | ||||||||||||
Total | $340,124,175 | $1,881,242 | $— | $342,005,417 | ||||||||||||
* | The fund had no Other Financial Instruments. | |
(a) | As categorized in Portfolio Holdings. |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
(b) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
(c) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date. Any distributions from underlying funds are recorded in accordance with the character of the distributions as designated by the underlying funds.
(d) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
(e) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(f) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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.
(g) Federal Income Taxes:
The funds intend to meet federal income and excise tax requirements for regulated investment companies. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(h) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
59
Schwab Target Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(i) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Asset Allocation Risk. The funds are subject to asset allocation risk, which is the risk that the selection of the underlying funds and the allocation of a fund’s assets among the various asset classes and market segments will cause the funds to underperform other funds with a similar investment objective.
Market Risk. Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of an investment in the funds will fluctuate, which means that an investor could lose money.
Underlying Fund Investment Risk. The value of your investment in the funds is based primarily on the prices of the underlying funds that the fund purchases. In turn, the price of each underlying fund is based on the value of its securities. Before investing in the funds, investors should assess the risks associated with the underlying funds in which the funds may invest and the types of investments made by those underlying funds. These risks include any combination of the risks described below, although a fund’s exposure to a particular risk will be proportionate to the fund’s overall asset allocation and underlying fund allocation.
• | Investment Risk. An investment in an underlying fund is not a bank deposit and is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. The funds may experience losses with respect to their investment in an underlying fund. Further, there is no guarantee that an underlying fund will be able to achieve its objective. | |
• | Management Risk. The underlying funds are actively managed mutual funds. Any actively managed mutual fund is subject to the risk that its investment adviser (or sub-adviser) will make poor security selections. An underlying fund’s adviser applies its own investment techniques and risk analyses in making investment decisions for the fund, but there can be no guarantee that they will produce the desired results. | |
• | Fixed Income Risk. Interest rates rise and fall over time, which will affect an underlying fund’s yield and share price. The credit quality of a portfolio investment could also cause an underlying fund’s share price to fall. A fund could lose money if the issuer or guarantor of a portfolio investment or the counterparty to a derivatives contract fails to make timely principal or interest payments or otherwise honor its obligations. Fixed income securities may be paid off earlier or later than expected. Either situation could cause a fund to hold securities paying lower-than-market rates of interest, which could hurt the fund’s yield or share price. Below investment-grade bonds (junk bonds) involve greater credit risk, are more volatile, involve greater risk of price declines and may be more susceptible to economic downturns than investment-grade securities. |
60
Schwab Target Funds
Financial Notes (continued)
3. Risk Factors (continued):
• | Equity Risk. The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time. | |
• | Large-, Mid- and Small-Cap Risk. Stocks of different market capitalizations tend to go in and out of favor based on market and economic conditions. Historically, small- and mid-cap stocks tend to be more volatile than large-cap stocks, and small-cap stocks have been riskier than large- and mid-cap stocks. During a period when stocks of a particular market capitalization fall behind other types of investments - bonds or stocks of another capitalization range, for instance -and underlying fund’s large-, mid- or small-cap holdings could reduce performance. | |
• | Money Market Risk. Although an underlying money market fund seeks to maintain a stable $1 net asset value, it is possible to lose money by investing in a money market fund. In addition, a money market fund is not designed to offer capital appreciation. | |
• | ETFs Risk. When a fund invests in an ETF, it will bear a proportionate share of the ETF’s expenses. In addition, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio of securities. | |
• | Foreign Investment Risk. An underlying fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets. | |
• | Emerging Market Risk. Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Such countries often have less uniformity in accounting and reporting requirements, unreliable securities valuation and greater risk associated with the custody of securities. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with an underlying fund’s investments in emerging market countries. | |
• | Derivatives Risk. An underlying fund’s use of derivatives instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments and could cause the fund to lose more than the principal amount invested. | |
• | Leverage Risk. Certain underlying fund transactions, such as derivatives, short sales, reverse repurchase agreements, and mortgage dollar rolls, may give rise to a form of leverage and may expose a fund to greater risk. Leverage tends to magnify the effect of any decrease or increase in the value of an underlying fund’s portfolio of securities, which means even a small amount of leverage can have a disproportionately large impact on the fund. | |
• | Liquidity Risk. A particular investment may be difficult to purchase or sell. An underlying fund may be unable to sell illiquid securities at an advantageous time or price. | |
• | Portfolio Turnover Risk. Certain of the underlying funds may buy and sell portfolio securities actively. If they do, their portfolio turnover rate and transactions costs will rise, which may lower the underlying fund’s performance and may increase the likelihood of capital gain distributions. |
Direct Investment Risk. The funds may invest a portion of its assets directly in equity and fixed income securities, ETFs, cash equivalents, including money market securities, and futures. A fund’s direct investment in these securities is subject to the same or similar risks as an underlying fund’s investment in the same security.
Please refer to the funds’ prospectus for a more complete description of the principal risks of investing in the funds.
61
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions:
Charles Schwab Investment Management, Inc. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and the trust.
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. The funds are not subject to any fee under the Plan.
CSIM and Schwab have agreed with the funds to limit (“expense limitation”) the total annual fund operating expense charged, excluding interest, taxes and certain non-routine expenses of the funds to 0.00% for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees.
The agreement to limit the funds’ total expenses charged is limited to each fund’s direct operating expenses and, therefore, does not apply to acquired fund fees and expenses, which are indirect expenses incurred by a fund through its investments in the underlying funds.
62
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
The funds may engage in certain transactions involving related parties. Pursuant to an exemptive order issued by the SEC, the funds may invest in other related funds. As of October 31, 2011, the percentages of shares of other related funds owned by each Schwab Target fund are:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 0.6% | 0.9% | 5.1% | 2.2% | 8.4% | 1.9% | 8.8% | |||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund | 0.1% | 0.1% | 0.9% | 0.4% | 1.5% | 0.3% | 1.5% | |||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund | 0.5% | 0.6% | 3.9% | 1.6% | 6.8% | 1.5% | 6.9% | |||||||||||||||||||||
Laudus Mondrian International Equity Fund | 1.0% | 1.1% | 6.7% | 3.0% | 11.3% | 2.5% | 12.2% | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 0.4% | 0.4% | 2.6% | 1.1% | 4.2% | 1.0% | 4.6% | |||||||||||||||||||||
Schwab Core Equity Fund | 0.3% | 0.3% | 2.1% | 0.9% | 3.8% | 0.9% | 4.0% | |||||||||||||||||||||
Schwab Dividend Equity Fund | 0.1% | 0.1% | 0.6% | 0.3% | 1.0% | 0.2% | 1.2% | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 0.0% | * | 0.0% | * | 0.3% | 0.1% | 0.4% | 0.1% | 0.4% | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund | 0.3% | 0.4% | 2.5% | 1.1% | 4.9% | 1.1% | 5.1% | |||||||||||||||||||||
Schwab Small-Cap Equity Fund | 0.8% | 1.0% | 5.8% | 2.8% | 11.6% | 2.6% | 12.1% | |||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund | 0.7% | 0.6% | 2.6% | 0.8% | 1.9% | 0.3% | 1.0% | |||||||||||||||||||||
(formerly Schwab Inflation Protected Fund) | ||||||||||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 0.9% | 0.5% | 1.9% | 0.5% | 1.3% | 0.2% | 0.8% | |||||||||||||||||||||
Schwab Total Bond Market Fund | 1.4% | 1.0% | 5.5% | 1.8% | 5.1% | 0.7% | 2.0% | |||||||||||||||||||||
International Bond: | �� | |||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 0.2% | 0.1% | 0.7% | 0.2% | 0.6% | 0.1% | 0.3% | |||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 2.4% | 1.2% | 2.5% | —% | —% | —% | —% | |||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund | 0.0% | * | 0.0% | * | 0.0% | * | 0.0% | * | 0.0% | * | 0.0% | * | 0.0% | * |
* | Less than 0.05% |
63
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended October 31, 2011.
Schwab Target 2010 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 218,000 | 17,834 | (28,265 | ) | 207,569 | $1,247,487 | ($31,988 | ) | $96,346 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 154,217 | 29,229 | (46,550 | ) | 136,896 | 2,390,197 | 226,755 | 37,455 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 104,490 | 6,247 | (15,826 | ) | 94,911 | 844,711 | 6,435 | 20,104 | ||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 180,223 | 10,476 | (38,215 | ) | 152,484 | 1,131,432 | 66,080 | 44,155 | ||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 257,141 | 28,599 | (87,432 | ) | 198,308 | 2,607,750 | 280,689 | 2,641 | ||||||||||||||||||||
Schwab Core Equity Fund | 395,651 | 63,628 | (154,725 | ) | 304,554 | �� | 5,119,549 | 199,418 | 64,137 | |||||||||||||||||||
Schwab Dividend Equity Fund | 120,811 | 8,650 | (34,219 | ) | 95,242 | 1,252,436 | 13,155 | 23,153 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 288,821 | 41,615 | (100,625 | ) | 229,811 | 4,554,858 | 440,313 | 103,513 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 92,390 | 7,734 | (24,677 | ) | 75,447 | 915,924 | 99,589 | — | ||||||||||||||||||||
Schwab Small-Cap Equity Fund | 141,510 | 17,503 | (48,223 | ) | 110,790 | 1,729,432 | 42,618 | — | ||||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 202,424 | 6,497 | (46,042 | ) | 162,879 | 1,895,912 | 28,513 | 82,065 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 383,902 | 58,902 | (83,104 | ) | 359,700 | 3,784,045 | 19,696 | 132,414 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 1,518,316 | 202,795 | (394,975 | ) | 1,326,136 | 12,651,342 | (120,403 | ) | 398,450 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 158,494 | — | (31,568 | ) | 126,926 | 1,558,653 | 74,317 | 25,744 | ||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 936,176 | 113,596 | (190,606 | ) | 859,166 | 7,947,285 | 25,109 | 112,973 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,468,431 | — | — | 3,468,431 | 3,468,431 | — | 2,608 | |||||||||||||||||||||
Total | $53,099,444 | $1,370,296 | $1,145,758 | |||||||||||||||||||||||||
64
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2015 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 186,744 | 123,869 | (12,047 | ) | 298,566 | $1,794,383 | ($28,543 | ) | $99,922 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 94,163 | 49,924 | (7,381 | ) | 136,706 | 2,386,885 | (15,864 | ) | 25,009 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 74,160 | 43,365 | (3,315 | ) | 114,210 | 1,016,468 | (2,513 | ) | 15,171 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 111,523 | 61,750 | (10,929 | ) | 162,344 | 1,204,589 | (8,176 | ) | 30,546 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 162,470 | 65,510 | (28,267 | ) | 199,713 | 2,626,224 | 7,106 | 1,828 | ||||||||||||||||||||
Schwab Core Equity Fund | 260,145 | 123,057 | (64,121 | ) | 319,081 | 5,363,750 | (51,941 | ) | 46,354 | |||||||||||||||||||
Schwab Dividend Equity Fund | 86,312 | 18,551 | (6,420 | ) | 98,443 | 1,294,526 | 1,361 | 20,011 | ||||||||||||||||||||
Schwab S&P 500 Index Fund | 190,498 | 91,119 | (41,114 | ) | 240,503 | 4,766,777 | (18,479 | ) | 73,200 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 73,572 | 34,126 | (7,418 | ) | 100,280 | 1,217,399 | (11,126 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 116,778 | 54,303 | (21,076 | ) | 150,005 | 2,341,581 | (21,894 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 99,573 | 54,142 | (20,810 | ) | 132,905 | 1,547,012 | 7,399 | 56,899 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 123,981 | 101,674 | (29,599 | ) | 196,056 | 2,062,513 | 3,645 | 58,334 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 682,054 | 578,211 | (262,630 | ) | 997,635 | 9,517,437 | 18,459 | 246,725 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 76,464 | 39,769 | (14,056 | ) | 102,177 | 1,254,728 | 5,176 | 18,522 | ||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 281,960 | 227,018 | (81,985 | ) | 426,993 | 3,949,689 | 2,421 | 46,287 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 791,651 | 1,000,000 | — | 1,791,651 | 1,791,651 | — | 685 | |||||||||||||||||||||
Total | $44,135,612 | ($112,969 | ) | $739,493 | ||||||||||||||||||||||||
65
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2020 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 1,409,411 | 334,294 | (82,822 | ) | 1,660,883 | $9,981,909 | ($165,667 | ) | $653,478 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 741,436 | 179,382 | (56,250 | ) | 864,568 | 15,095,351 | (74,844 | ) | 183,209 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 608,927 | 172,426 | (36,807 | ) | 744,546 | 6,626,462 | (43,066 | ) | 117,157 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 907,144 | 169,866 | (54,870 | ) | 1,022,140 | 7,584,280 | (26,477 | ) | 222,250 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 1,343,079 | 150,593 | (230,193 | ) | 1,263,479 | 16,614,746 | 381,186 | 13,715 | ||||||||||||||||||||
Schwab Core Equity Fund | 2,097,168 | 438,707 | (425,021 | ) | 2,110,854 | 35,483,448 | (297,475 | ) | 342,240 | |||||||||||||||||||
Schwab Dividend Equity Fund | 614,539 | 70,841 | (53,030 | ) | 632,350 | 8,315,399 | (29,777 | ) | 138,336 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 1,537,795 | 245,644 | (265,152 | ) | 1,518,287 | 30,092,449 | 208,886 | 547,447 | ||||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 507,262 | 117,091 | (37,668 | ) | 586,685 | 7,122,354 | (45,452 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 815,878 | 153,235 | (127,993 | ) | 841,120 | 13,129,886 | (286,125 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 517,329 | 164,939 | (108,868 | ) | 573,400 | 6,674,379 | 60,171 | 262,235 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 444,878 | 413,399 | (96,945 | ) | 761,332 | 8,009,218 | 32,505 | 233,340 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 4,709,620 | 1,921,315 | (1,342,078 | ) | 5,288,857 | 50,455,699 | (304,310 | ) | 1,420,548 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 505,910 | 70,208 | (48,307 | ) | 527,811 | 6,481,520 | 64,461 | 100,800 | ||||||||||||||||||||
Short-Term Bond: | ||||||||||||||||||||||||||||
Schwab Short-Term Bond Market Fund | 623,976 | 368,766 | (121,456 | ) | 871,286 | 8,059,392 | (2,365 | ) | 100,944 | |||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 2,687,964 | 500,000 | — | 3,187,964 | 3,187,964 | — | 2,091 | |||||||||||||||||||||
Total | $232,914,456 | ($528,349 | ) | $4,337,790 | ||||||||||||||||||||||||
66
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2025 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 372,729 | 355,487 | (24,390 | ) | 703,826 | $4,229,994 | ($45,744 | ) | $204,898 | |||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 220,596 | 164,326 | (3,840 | ) | 381,082 | 6,653,694 | (8,816 | ) | 56,127 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 165,977 | 146,991 | — | 312,968 | 2,785,411 | — | 34,725 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 255,504 | 210,037 | (13,182 | ) | 452,359 | 3,356,501 | (6,487 | ) | 68,182 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 376,304 | 207,920 | (30,927 | ) | 553,297 | 7,275,854 | (21,599 | ) | 4,025 | |||||||||||||||||||
Schwab Core Equity Fund | 607,999 | 391,681 | (43,124 | ) | 956,556 | 16,079,711 | (72,811 | ) | 105,034 | |||||||||||||||||||
Schwab Dividend Equity Fund | 194,177 | 95,021 | — | 289,198 | 3,802,958 | — | 53,674 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 418,754 | 228,383 | (19,296 | ) | 627,841 | 12,443,817 | (48,168 | ) | 151,777 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 161,091 | 107,206 | (7,531 | ) | 260,766 | 3,165,700 | (15,189 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 272,929 | 167,615 | (40,903 | ) | 399,641 | 6,238,399 | (54,316 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 110,055 | 91,428 | (27,556 | ) | 173,927 | 2,024,507 | 13,461 | 69,928 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 88,407 | 149,230 | (23,814 | ) | 213,823 | 2,249,419 | 3,242 | 55,735 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 1,014,197 | 1,162,524 | (437,877 | ) | 1,738,844 | 16,588,575 | 40,720 | 392,510 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 100,912 | 73,891 | (18,739 | ) | 156,064 | 1,916,466 | 11,536 | 27,402 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 598,128 | 800,000 | — | 1,398,128 | 1,398,128 | — | 512 | |||||||||||||||||||||
Total | $90,209,134 | ($204,171 | ) | $1,224,529 | ||||||||||||||||||||||||
67
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2030 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 1,949,136 | 777,559 | — | 2,726,695 | $16,387,435 | $— | $990,909 | |||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,112,544 | 349,600 | (32,913 | ) | 1,429,231 | 24,954,373 | (61,989 | ) | 279,623 | |||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 944,933 | 395,302 | (38,674 | ) | 1,301,561 | 11,583,894 | (36,740 | ) | 194,815 | |||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,357,165 | 462,728 | (94,327 | ) | 1,725,566 | 12,803,701 | (55,947 | ) | 351,861 | |||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 1,911,350 | 237,800 | (128,898 | ) | 2,020,252 | 26,566,317 | (15,966 | ) | 20,430 | |||||||||||||||||||
Schwab Core Equity Fund | 3,170,535 | 882,964 | (171,934 | ) | 3,881,565 | 65,249,111 | (311,666 | ) | 543,531 | |||||||||||||||||||
Schwab Dividend Equity Fund | 1,036,860 | 72,414 | (97,522 | ) | 1,011,752 | 13,304,537 | (50,466 | ) | 220,870 | |||||||||||||||||||
Schwab S&P 500 Index Fund | 1,996,131 | 446,424 | (99,890 | ) | 2,342,665 | 46,431,629 | (187,210 | ) | 728,578 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 934,411 | 250,145 | (41,047 | ) | 1,143,509 | 13,882,197 | (55,027 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,467,529 | 353,923 | (144,882 | ) | 1,676,570 | 26,171,256 | (423,325 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 306,490 | 199,848 | (82,183 | ) | 424,155 | 4,937,169 | 44,787 | 189,753 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 271,020 | 340,072 | (66,613 | ) | 544,479 | 5,727,922 | 10,010 | 163,590 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 3,890,485 | 2,119,695 | (1,129,909 | ) | 4,880,271 | 46,557,784 | (179,514 | ) | 1,293,109 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 277,969 | 170,151 | (55,296 | ) | 392,824 | 4,823,875 | 53,022 | 74,689 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 3,558,910 | 1,000,000 | — | 4,558,910 | 4,558,910 | — | 3,146 | |||||||||||||||||||||
Total | $323,940,110 | ($1,270,031 | ) | $5,054,904 | ||||||||||||||||||||||||
68
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2035 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 336,560 | 273,666 | — | 610,226 | $3,667,458 | $— | $183,910 | |||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 200,671 | 115,014 | — | 315,685 | 5,511,864 | — | 52,128 | |||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 170,500 | 108,301 | — | 278,801 | 2,481,332 | — | 35,609 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 237,275 | 149,861 | — | 387,136 | 2,872,548 | — | 64,557 | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 329,447 | 159,738 | (7,728 | ) | 481,457 | 6,331,162 | (6,879 | ) | 3,610 | |||||||||||||||||||
Schwab Core Equity Fund | 585,901 | 304,059 | (5,784 | ) | 884,176 | 14,863,006 | (7,750 | ) | 102,762 | |||||||||||||||||||
Schwab Dividend Equity Fund | 181,555 | 60,481 | — | 242,036 | 3,182,776 | — | 46,969 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 321,333 | 167,542 | — | 488,875 | 9,689,506 | — | 121,118 | |||||||||||||||||||||
Small-Cap:- | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 165,847 | 92,888 | — | 258,735 | 3,141,047 | — | — | |||||||||||||||||||||
Schwab Small-Cap Equity Fund | 255,757 | 135,096 | (12,036 | ) | 378,817 | 5,913,326 | (15,548 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 33,211 | 40,157 | (9,879 | ) | 63,489 | 739,014 | 6,463 | 25,320 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 41,431 | 59,111 | (10,469 | ) | 90,073 | 947,567 | 1,305 | 24,900 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 431,673 | 428,252 | (164,066 | ) | 695,859 | 6,638,492 | 15,791 | 164,659 | ||||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 30,422 | 33,215 | (6,344 | ) | 57,293 | 703,554 | 2,086 | 10,276 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 546,451 | 300,000 | — | 846,451 | 846,451 | — | 448 | |||||||||||||||||||||
Total | $67,529,103 | ($4,532 | ) | $836,266 | ||||||||||||||||||||||||
69
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
Schwab Target 2040 Fund: | ||||||||||||||||||||||||||||
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received* | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Underlying Funds | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Equity Funds: | ||||||||||||||||||||||||||||
Global Real Estate: | ||||||||||||||||||||||||||||
Schwab Global Real Estate Fund | 1,934,150 | 944,776 | — | 2,878,926 | $17,302,344 | $— | $1,025,313 | |||||||||||||||||||||
International: | ||||||||||||||||||||||||||||
Laudus International MarketMasters Fund, Select Shares | 1,097,325 | 349,468 | (12,808 | ) | 1,433,985 | 25,037,386 | 5,721 | 280,501 | ||||||||||||||||||||
Laudus Mondrian Emerging Markets Fund, Institutional Shares | 953,039 | 364,584 | — | 1,317,623 | 11,726,845 | — | 199,380 | |||||||||||||||||||||
Laudus Mondrian International Equity Fund, Institutional Shares | 1,314,689 | 553,837 | — | 1,868,526 | 13,864,463 | — | 354,173 | |||||||||||||||||||||
Large-Cap: | ||||||||||||||||||||||||||||
Laudus Growth Investors U.S. Large Cap Growth Fund | 1,859,075 | 453,320 | (70,094 | ) | 2,242,301 | 29,486,254 | (43,675 | ) | 20,029 | |||||||||||||||||||
Schwab Core Equity Fund | 3,272,657 | 938,833 | (86,407 | ) | 4,125,083 | 69,342,648 | (138,706 | ) | 566,981 | |||||||||||||||||||
Schwab Dividend Equity Fund | 988,816 | 177,213 | — | 1,166,029 | 15,333,286 | — | 241,521 | |||||||||||||||||||||
Schwab S&P 500 Index Fund | 1,746,209 | 477,916 | (50,166 | ) | 2,173,959 | 43,087,863 | (108,458 | ) | 633,335 | |||||||||||||||||||
Small-Cap: | ||||||||||||||||||||||||||||
Laudus Small-Cap MarketMasters Fund, Select Shares | 923,948 | 262,715 | (8,425 | ) | 1,178,238 | 14,303,815 | (19,450 | ) | — | |||||||||||||||||||
Schwab Small-Cap Equity Fund | 1,433,525 | 371,197 | (45,423 | ) | 1,759,299 | 27,462,661 | (138,978 | ) | — | |||||||||||||||||||
Fixed-Income Funds: | ||||||||||||||||||||||||||||
Inflation-Protected Bond: | ||||||||||||||||||||||||||||
Schwab Treasury Inflation Protected Securities Fund (formerly Schwab Inflation Protected Fund) | 104,760 | 152,222 | (31,561 | ) | 225,421 | 2,623,898 | 10,303 | 91,016 | ||||||||||||||||||||
Intermediate-Term Bond: | ||||||||||||||||||||||||||||
Schwab Premier Income Fund | 217,552 | 175,177 | (52,381 | ) | 340,348 | 3,580,464 | 3,460 | 104,914 | ||||||||||||||||||||
Schwab Total Bond Market Fund | 1,439,236 | 807,334 | (326,881 | ) | 1,919,689 | 18,313,833 | (64,014 | ) | 504,218 | |||||||||||||||||||
International Bond: | ||||||||||||||||||||||||||||
Laudus Mondrian International Fixed Income Fund | 100,395 | 131,136 | (25,327 | ) | 206,204 | 2,532,179 | 9,523 | 38,102 | ||||||||||||||||||||
Money Market Fund: | ||||||||||||||||||||||||||||
Schwab Value Advantage Money Fund, Institutional Prime Shares | 2,790,619 | 2,000,000 | — | 4,790,619 | 4,790,619 | — | 2,707 | |||||||||||||||||||||
Total | $298,788,558 | ($484,274 | ) | $4,062,190 | ||||||||||||||||||||||||
* | Distributions received include distributions from net investment income and capital gains from the underlying funds. |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject
70
Schwab Target Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for the fund.
6. Board of Trustees:
Trustees 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 trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Target 2010 Fund | $7,875,000 | $17,905,000 | ||||||
Schwab Target 2015 Fund | 22,186,000 | 7,510,000 | ||||||
Schwab Target 2020 Fund | 66,520,000 | 39,895,000 | ||||||
Schwab Target 2025 Fund | 48,170,000 | 7,935,000 | ||||||
Schwab Target 2030 Fund | 93,545,000 | 26,640,000 | ||||||
Schwab Target 2035 Fund | 29,876,000 | 2,331,000 | ||||||
Schwab Target 2040 Fund | 86,470,000 | 9,095,000 |
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Schwab Target 2010 Fund | $3,912 | $3,791 | ||||||
Schwab Target 2015 Fund | 6,220 | 5,608 | ||||||
Schwab Target 2020 Fund | 7,631 | 12,080 | ||||||
Schwab Target 2025 Fund | 10,063 | 5,393 | ||||||
Schwab Target 2030 Fund | 11,408 | 13,164 | ||||||
Schwab Target 2035 Fund | 3,665 | 8,338 | ||||||
Schwab Target 2040 Fund | 16,855 | 15,078 |
71
Schwab Target Funds
Financial Notes (continued)
10. Other:
For the period ended October 31, 2011, the following funds received proceeds from a litigation settlement related to the Schwab YieldPlus Fund (an affiliated fund):
Schwab Target 2010 Fund $66,805 | ||||||||||||||||||||||||||||
Schwab Target 2020 Fund 54,428 | ||||||||||||||||||||||||||||
Schwab Target 2030 Fund 33,748 | ||||||||||||||||||||||||||||
Schwab Target 2040 Fund 22,986 |
The proceeds received were included in the Statement of Operations as Net realized gains on sales of affiliated underlying funds.
11. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Undistributed ordinary income | $905,455 | $561,058 | $2,719,465 | $757,239 | $2,400,279 | $364,231 | $1,489,309 | |||||||||||||||||||||
Undistributed long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Unrealized appreciation on investments | 6,461,650 | 4,490,778 | 32,694,576 | 8,508,410 | 45,473,627 | 7,365,543 | 39,699,105 | |||||||||||||||||||||
Unrealized depreciation on investments | (51,590 | ) | — | (2,085,829 | ) | — | (2,396,823 | ) | — | (1,507,141 | ) | |||||||||||||||||
Other unrealized appreciation/(depreciation) | — | — | — | — | (2 | ) | — | — | ||||||||||||||||||||
Net unrealized appreciation/(depreciation) | $6,410,060 | $4,490,778 | $30,608,747 | $8,508,410 | $43,076,802 | $7,365,543 | $38,191,964 | |||||||||||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Expiration Date | Fund | Fund | Fund | Fund | Fund | Fund | Fund | |||||||||||||||||||||
October 31, 2016 | $6,215,469 | $— | $9,815,816 | $— | $6,715,916 | $— | $6,366,179 | |||||||||||||||||||||
October 31, 2017 | 13,259,379 | 574,932 | 26,262,598 | 627,208 | 21,027,180 | 468,050 | 15,004,416 | |||||||||||||||||||||
October 31, 2018 | — | — | 1,839,068 | — | 890,126 | — | 475,341 | |||||||||||||||||||||
October 31, 2019 | — | — | — | — | 205,693 | — | 51,729 | |||||||||||||||||||||
Total | $19,474,848 | $574,932 | $37,917,482 | $627,208 | $28,838,915 | $468,050 | $21,897,665 | |||||||||||||||||||||
72
Schwab Target Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
For the year ended October 31, 2011, the funds had capital losses utilized as follows:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Capital losses utilized | $1,742,275 | $151,016 | $866,590 | $104,969 | $— | $36,497 | $— |
The tax-basis components of distributions paid during the current and prior fiscal years were:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Current period distributions | ||||||||||||||||||||||||||||
Ordinary income | $1,782,231 | $789,680 | $5,113,390 | $1,192,290 | $5,459,742 | $819,461 | $4,347,408 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — | |||||||||||||||||||||
Prior period distributions | ||||||||||||||||||||||||||||
Ordinary income | $1,828,001 | $331,163 | $4,326,919 | $477,680 | $3,748,936 | $384,144 | $2,835,524 | |||||||||||||||||||||
Long-term capital gains | — | — | — | — | — | — | — | |||||||||||||||||||||
Return of capital | — | — | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | Schwab | ||||||||||||||||||||||
Target | Target | Target | Target | Target | Target | Target | ||||||||||||||||||||||
2010 | 2015 | 2020 | 2025 | 2030 | 2035 | 2040 | ||||||||||||||||||||||
Fund | Fund | Fund | Fund | Fund | Fund | Fund | ||||||||||||||||||||||
Undistributed net investment income | $169,254 | $71,406 | $301,813 | $68,202 | $198,318 | $16,860 | $68,023 | |||||||||||||||||||||
Net realized capital gains/(losses) | (169,254 | ) | (71,406 | ) | (301,813 | ) | (68,202 | ) | (198,318 | ) | (16,860 | ) | (68,023 | ) |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective
73
Schwab Target Funds
Financial Notes (continued)
11. Federal Income Taxes (continued):
of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
12. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
74
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
In our opinion, the accompanying statements of assets and liabilities, including the portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, and Schwab Target 2040 Fund (seven of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities and investments in the underlying funds at October 31, 2011 by correspondence with the custodian and transfer agent of the underlying funds, respectively, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
75
Other Federal Tax Information (unaudited)
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Target 2010 Fund | 15.33 | ||||
Schwab Target 2015 Fund | 31.60 | ||||
Schwab Target 2020 Fund | 19.69 | ||||
Schwab Target 2025 Fund | 33.51 | ||||
Schwab Target 2030 Fund | 18.24 | ||||
Schwab Target 2035 Fund | 36.26 | ||||
Schwab Target 2040 Fund | 38.97 |
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Schwab Target 2010 Fund | $1,104,669 | |||
Schwab Target 2015 Fund | 309,625 | |||
Schwab Target 2020 Fund | 3,723,543 | |||
Schwab Target 2025 Fund | 485,718 | |||
Schwab Target 2030 Fund | 4,466,319 | |||
Schwab Target 2035 Fund | 419,149 | |||
Schwab Target 2040 Fund | 2,438,059 |
76
Investment Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Target 2010 Fund, Schwab Target 2015 Fund, Schwab Target 2020 Fund, Schwab Target 2025 Fund, Schwab Target 2030 Fund, Schwab Target 2035 Fund, and Schwab Target 2040 Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that the vast majority of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, yield, if applicable, and market trends. As part of this review, the Trustees considered the composition
77
of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Schwab Target 2010 Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect to Schwab Target 2010 Fund. These factors varied from, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
80
Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 ��� present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
81
Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
Barclays Capital U.S. Aggregate Intermediate Bond Index An index that measures the intermediate-term investment grade, U.S. dollar-denominated, fixed-rate taxable bond market.
Barclays Capital U.S. Government/Credit: 1 − 5 Years Index An index that includes investment-grade government and corporate bonds that are denominated in U.S. dollars and have maturities of one to five years. Bonds are represented in the index in proportion to their market value.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
Dow Jones U.S. Total Stock Market Index An index that measures the performance of all U.S. equity securities with readily available prices.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
FTSE EPRA/NAREIT Global Index An index that is designed to provide a diverse representation of publicly traded equity REITs and listed property companies worldwide.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
82
PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
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Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
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Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
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Notes
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large* Company Index Fund
Schwab Fundamental US Small-Mid* Company Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab® Premier Income Fund
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Annual report dated October 31, 2011, enclosed.
Schwab Fundamental Index* Funds
Schwab Fundamental
US Large* Company Index Fund
Schwab Fundamental
US Small-Mid* Company Index Fund
Schwab Fundamental
International* Large Company
Index Fund
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Schwab Fundamental Index* Funds
Annual Report
October 31, 2011
Schwab Fundamental
US Large* Company Index Fund
Schwab Fundamental
US Small-Mid* Company Index Fund
Schwab Fundamental
International* Large Company
Index Fund
Schwab Fundamental
International* Small-Mid Company Index Fund
Schwab Fundamental
Emerging Markets* Index Fund
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* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. |
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Schwab Fundamental Index Funds
In This Report
Performance at a Glance | 2 | |
From the President | 3 | |
Fund Management | 5 | |
Fund Summaries | ||
Schwab Fundamental US Large Company Index Fund | 6 | |
Schwab Fundamental US Small-Mid Company Index Fund | 8 | |
Schwab Fundamental International Large Company Index Fund | 10 | |
Schwab Fundamental International Small-Mid Company Index Fund | 12 | |
Schwab Fundamental Emerging Markets Index Fund | 14 | |
Fund Expenses | 16 | |
Financial Statements and Portfolio Holdings | ||
Schwab Fundamental US Large Company Index Fund | 17 | |
Schwab Fundamental US Small-Mid Company Index Fund | 24 | |
Schwab Fundamental International Large Company Index Fund | 31 | |
Schwab Fundamental International Small-Mid Company Index Fund | 38 | |
Schwab Fundamental Emerging Markets Index Fund | 45 | |
Financial Notes | 52 | |
Report of Independent Registered Public Accounting Firm | 68 | |
Other Federal Tax Information | 69 | |
Investment Advisory and Sub-Advisory Agreement Approval | 70 | |
Trustees and Officers | 72 | |
Glossary | 75 |
Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
Distributor: Charles Schwab & Co., Inc. (Schwab).
Distributor: Charles Schwab & Co., Inc. (Schwab).
The Sector/Industry classifications in this report use the Global Industry Classification Standard (GICS) which was developed by and is the exclusive property of Morgan Stanley Capital International Inc. (MSCI) and Standard & Poor’s (S&P). GICS is a service mark of MSCI and S&P and has been licensed for use by Charles Schwab & Co., Inc. The Industry classifications used in the schedules of Portfolio Holdings are sub-categories of Sector classifications.
Performance at a Glance
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
Total Return for | ||
the Report Period | ||
Schwab Fundamental US Large* Company Index Fund | ||
(Ticker Symbol: SFLNX) | 6.74% | |
FTSE RAFI US 1000 Index® | 6.96% | |
Fund Category: Morningstar Large-Cap Value | 5.07% | |
Performance Details | pages 6-7 | |
Schwab Fundamental US Small-Mid* Company Index Fund | ||
(Ticker Symbol: SFSNX) | 5.55% | |
FTSE RAFI US Mid Small 1500 Index® | 6.21% | |
Fund Category: Morningstar Small-Cap Blend | 6.60% | |
Performance Details | page 8-9 | |
Schwab Fundamental International* Large Company Index Fund | ||
(Ticker Symbol: SFNNX)1 | -7.88% | |
FTSE RAFI Developed ex US 1000 Index® | -5.98% | |
Fund Category: Morningstar Foreign Large-Cap Value | -6.00% | |
Performance Details | pages 10-11 | |
Schwab Fundamental International* Small-Mid Company Index Fund | ||
(Ticker Symbol: SFILX)1 | -1.76% | |
FTSE RAFI Developed ex US Mid Small 1500 Index | 0.41% | |
Fund Category: Morningstar Foreign Small/Mid Growth | -4.05% | |
Performance Details | pages 12-13 | |
Schwab Fundamental Emerging Markets* Index Fund | ||
(Ticker Symbol: SFENX)1 | -10.99% | |
FTSE RAFI Emerging Index® | -8.51% | |
Fund Category: Morningstar Diversified Emerging Markets | -10.78% | |
Performance Details | pages 14-15 | |
Minimum Initial Investment2 | $100 | |
All fund and index 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 you cannot invest in them directly. Performance results less than one year are not annualized.
Index ownership—“FTSE®” is trademark of The Financial Times Limited (“FT”) and the London Exchange Plc (the “Exchange”) and is used by the fund under license. “Research Affiliates” and “Fundamental Index” are trademarks of Research Affiliates LLC (“RA”). The Schwab Fundamental Index Funds are not sponsored, endorsed, sold or promoted by FTSE or RA, and FTSE and RA do not make any representation regarding the advisability of investing in shares of the fund.
Fund expenses may have been partially absorbed by CSIM and is affiliates. Without these reductions, the funds’ returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares.
Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. |
1 | The fund’s performance relative to the index may be affected by fair-value pricing and timing differences in foreign exchange calculations, see financial note 2 for more information. |
2 | Please see prospectus for further details and eligibility requirements. |
2 Schwab Fundamental Index Funds
From the President
![CHANDOHA PHOTO](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctpchandom.jpg)
Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.
Dear Shareholder,
During the 12-month period that ended October 31, 2011, global financial markets saw ongoing challenges with Europe’s sovereign debt crisis, the downgrade of long-term U.S. Treasury debt, and a global economy that lost steam in the middle months of the period but showed pockets of improvement by its end. U.S. stocks provided respectable returns in that environment, while stocks in many developed markets outside of the United States generated losses. Long-term interest rates in the United States continued to decline, boosting prices of Treasury securities.
As slow economic growth continued throughout most of the reporting period, the Federal Reserve kept short-term interest rates at or near zero to spur job growth and the U.S. economy. Concerns intensified throughout the world, however, about the high debt levels of sovereign nations, including the United States. In August, credit rating agency Standard & Poor’s downgraded the credit rating of long-term U.S. debt from AAA to AA+ and continued to warn against the growing level of debt owed by the U.S. government. Throughout the summer of 2011, markets also labored under worries that a default on Greece’s sovereign debt could destabilize some European banks, and that high debt levels in Portugal, Italy, or Spain might further destabilize global financial markets.
Although equity markets rose steadily over the first six months of the reporting period, the concerns about Europe and a possible worldwide recession sparked a global sell-off in August and September. In this environment, investors favored securities viewed as safer or more defensive, which helped
Asset Class Performance Comparison % returns during the report period
This graph compares the performance of various asset classes during the report period. Final performance figures for the period are in the key below.
![]() | 8.09% | S&P 500® Index: measures U.S. large-cap stocks | ||
![]() | 6.71% | Russell 2000® Index: measures U.S. small-cap stocks | ||
![]() | −3.64% | MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East | ||
![]() | 5.00% | Barclays Capital U.S. Aggregate Bond Index: measures the U.S. bond market | ||
![]() | 0.09% | Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations |
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctcaptst03.gif)
These figures assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged and you cannot invest in them directly. Remember that past performance is not an indication of future results.
Data source: Index provider websites and Charles Schwab Investment Management, Inc.
Nothing in this report represents a recommendation of a security by the investment adviser.
Manager views and portfolio holdings may have changed since the report date.
Schwab Fundamental Index Funds 3
From the President continued
Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter.
stock markets in the United States outperform international markets. Stock markets got a further lift in the last month of the period as European leaders appeared closer to a resolution concerning the region’s debt problems, and as the United States managed a faster pace of economic growth in the third quarter. The broad U.S. stock market posted a return of 8.09%, as measured by the S&P 500 Index, while stocks in Europe and much of the rest of the world trailed this result. Stock markets in the developed world outside of the United States returned –3.64%, as measured by the MSCI EAFE Index.
During the market fluctuations of the late summer, investors sought the safety of U.S. Treasury securities. This influx of demand pushed yields on 10-year Treasury notes down from 3.47% at the end of March to 2.17% at the end of October. As investors moved toward safer assets, corporate bonds and other non-Treasury debt securities traded at higher spreads to Treasury bonds over the last months of the period. The Barclays Capital U.S. Aggregate Bond Index ended the 12-month period with an investment return of 5.00%.
Thank you for investing in the Schwab Fundamental Index Funds. We encourage you to review your investment portfolio regularly to make sure it meets your current financial plan. For answers to questions you may have or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-877-824-5615.
Sincerely,
![-s- Marie Chandoha](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctschandom.gif)
Indices are unmanaged, do not incur management fees, costs and expenses, and cannot be invested in directly. Index return figures assume dividends and distributions were reinvested.
4 Schwab Fundamental Index Funds
Fund Management
![]() | Larry Mano, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds. Prior to joining the firm in November 1998, he worked for 20 years in equity management. | |
![]() | Ron Toll, a portfolio manager of the investment adviser, is responsible for the day-to-day co-management of each of the funds. He joined the firm in 1998, became Manager, Portfolio Operations in 2000, Manager, Portfolio Operations and Analytics in 2005 and was named to his current position in 2007. |
Schwab Fundamental Index Funds 5
Schwab Fundamental US Large* Company
Index Fund
Index Fund
The Schwab Fundamental US Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI US 1000 Index (the index). To pursue its goal, the fund primarily invests in stocks that are included in the index. The index is composed of the largest 1000 listed companies incorporated in the United States, ranked by four fundamental financial measures of size: sales, cash flows, book value, and dividends. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 6.74% for the 12 months ended October 31, 2011, while the index returned 6.96%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Energy and Health Care stocks added the most to the fund’s absolute performance (total return), reflecting the solid returns generated by investments in these sectors combined with their average weights within the fund. The fund was more heavily invested in financial stocks than any other sector, and Financials was the only sector that subtracted from the fund’s total return. New legislation expected to trim the financial industry’s profits and Europe’s ongoing and largely unresolved sovereign debt crisis weighed on the performance of this sector.
The fund used a replication investment approach and maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 993 | |
Weighted Average Market Cap ($ x 1,000,000) | $72,780 | |
Price/Earnings Ratio (P/E) | 15.6 | |
Price/Book Ratio (P/B) | 1.7 | |
Portfolio Turnover Rate | 11% |
Sector Weightings % of Investments
Financials | 18.0% | |
Consumer Staples | 11.4% | |
Energy | 11.3% | |
Information Technology | 11.2% | |
Health Care | 11.2% | |
Consumer Discretionary | 10.9% | |
Industrials | 10.7% | |
Utilities | 6.5% | |
Telecommunication Services | 4.7% | |
Materials | 3.6% | |
Other | 0.5% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Exxon Mobil Corp. | 3.0% | |
AT&T, Inc. | 2.4% | |
Chevron Corp. | 2.0% | |
General Electric Co. | 1.9% | |
Wal-Mart Stores, Inc. | 1.8% | |
Pfizer, Inc. | 1.6% | |
Verizon Communications, Inc. | 1.5% | |
JPMorgan Chase & Co. | 1.5% | |
ConocoPhillips | 1.3% | |
Citigroup, Inc. | 1.3% | |
Total | 18.3% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | This list is not a recommendation of any security by the investment adviser. |
6 Schwab Fundamental Index Funds
Schwab Fundamental US Large* Company Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
April 2, 2007 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctfuslco01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Large* Company Index Fund (4/2/07) | 6.74 | % | 16.04 | % | 0.45 | % | |||||||||
FTSE RAFI US 1000 Index® | 6.96 | % | 16.15 | % | 0.50 | % | |||||||||
Fund Category: Morningstar Large-Cap Value | 5.07 | % | 9.49 | % | -2.62 | % |
Fund Expense Ratios4: Net 0.35%; Gross 0.45%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 7
Schwab Fundamental US Small-Mid* Company
Index Fund
Index Fund
The Schwab Fundamental US Small-Mid Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI US Mid Small 1500 Index (the index). To pursue its goal, the fund primarily invests in stocks that are included in the index. The index is composed of approximately 1500 listed small- and medium-sized companies incorporated in the United States, ranked by four fundamental financial measures of size: sales, cash flows, book value, and dividends. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned 5.55% for the 12 months ended October 31, 2011, while the index returned 6.21%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index.
Industrials and Consumer Discretionary stocks added the most to the fund’s absolute performance (total return), reflecting the returns generated by investments in these sectors combined with their large average weights within the fund. The fund was more heavily invested in Financials than in any other sector, but the limited performance by these investments resulted in a relatively small addition to the fund’s total return. New legislation expected to trim the financial industry’s profits and Europe’s ongoing and largely unresolved sovereign debt crisis weighed on the performance of financial stocks.
The fund used a replication investment approach and maintained a tight allocation across all sectors, market capitalizations, and valuation measures compared with the index. Top performing sectors for the fund included Consumer Staples and Health Care, while Financials was the worst performer.
As of 10/31/11:
Statistics
Number of Holdings | 1,427 | |
Weighted Average Market Cap ($ x 1,000,000) | $1,545 | |
Price/Earnings Ratio (P/E) | 71.3 | |
Price/Book Ratio (P/B) | 1.6 | |
Portfolio Turnover Rate | 35% |
Sector Weightings % of Investments
Financials | 19.3% | |
Industrials | 18.7% | |
Consumer Discretionary | 17.5% | |
Information Technology | 16.7% | |
Health Care | 8.0% | |
Energy | 5.9% | |
Materials | 5.5% | |
Consumer Staples | 3.9% | |
Utiltities | 2.2% | |
Telecommunication Services | 1.1% | |
Other | 1.2% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Genesco, Inc. | 0.3% | |
WellCare Health Plans, Inc. | 0.3% | |
Nu Skin Enterprises, Inc, Class A | 0.3% | |
Healthspring, Inc. | 0.3% | |
Dollar General Corp. | 0.3% | |
Hexcel Corp. | 0.2% | |
Chipotle Mexican Grill, Inc. | 0.2% | |
TransDigm Group, Inc. | 0.2% | |
Old Dominion Freight Line, Inc. | 0.2% | |
DSW, Inc., Class A | 0.2% | |
Total | 2.5% |
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
Small-company stocks are subject to greater volatility than other asset classes.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | This list is not a recommendation of any security by the investment adviser. |
8 Schwab Fundamental Index Funds
Schwab Fundamental US Small-Mid* Company Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
April 2, 2007 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctfussmc01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental US Small-Mid* Company Index Fund (4/2/07) | 5.55 | % | 19.95 | % | 2.00 | % | |||||||||
FTSE RAFI US Mid Small 1500 Index® | 6.21 | % | 20.43 | % | 2.71 | % | |||||||||
Fund Category: Morningstar Small-Cap Blend | 6.60 | % | 14.14 | % | -0.49 | % |
Fund Expense Ratios4: Net 0.35%; Gross 0.53%
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 27, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 9
Schwab Fundamental International* Large Company Index Fund
The Schwab Fundamental International Large Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI Developed ex US 1000 Index (the index). To pursue its goal, the fund primarily invests in stocks that are included in the index. The index is composed of the largest 1000 listed companies incorporated outside the United States, ranked by four fundamental financial measures of size: sales, cash flows, book value, and dividends. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -7.88% for the 12 months ended October 31, 2011, while the index returned -5.98%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. The fund maintained a cash position to help meet unexpected liquidations.
Timing differences in foreign exchange calculations represented part of why the fund underperformed the index.** Fair valuation of the fund’s holdings on the last trading day of the current period also reduced the fund’s relative performance (please see financial note 2 for more information).
Energy, Consumer Staples, and Health Care stocks added the most to the fund’s absolute performance (total return), reflecting the returns generated by investments in these sectors combined with their average weights within the fund. Financials represented the fund’s largest sector weight, and when combined with this sector’s double-digit negative return, subtracted the most from the fund’s total return. Europe’s ongoing and largely unresolved sovereign debt crisis was a primary catalyst behind the poor performance of international financial stocks.
U.K. investments helped the fund’s total return the most from a country allocation standpoint. The supportive effect on the fund’s performance reflected the large average weight of this allocation combined with the modestly positive return that these investments generated. Stocks from Italy and France generated double-digit losses, and when combined with their relative weight in the fund, subtracted the most from the fund’s total return.
The fund used a replication investment approach and maintained a tight allocation across all countries, regions, sectors, market capitalizations, and valuation measures compared with the index. Energy and Health Care stocks provided the highest returns for the fund from a sector standpoint, while investments in the Financials and Utilities sectors posted the biggest losses. Stocks from New Zealand and South Korea were the best performers for the fund, while stocks from Greece were the worst.
As of 10/31/11:
Statistics
Number of Holdings | 1,031 | |
Weighted Average Market Cap ($ x 1,000,000) | $46,258 | |
Price/Earnings Ratio (P/E) | 12.0 | |
Price/Book Ratio (P/B) | 1.0 | |
Portfolio Turnover Rate | 35% |
Sector Weightings % of Investments
Financials | 26.8% | |
Industrials | 11.6% | |
Energy | 11.3% | |
Consumer Discretionary | 10.0% | |
Telecommunication Services | 8.4% | |
Consumer Staples | 8.1% | |
Materials | 7.9% | |
Health Care | 5.8% | |
Utilities | 5.7% | |
Information Technology | 4.3% | |
Other | 0.1% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
BP plc | 2.2% | |
Vodafone Group plc | 1.6% | |
Royal Dutch Shell plc, A Shares | 1.6% | |
Total S.A. | 1.5% | |
ING Groep N.V. CVA | 1.5% | |
HSBC Holdings plc | 1.5% | |
Royal Dutch Shell plc, B Shares | 1.2% | |
GlaxoSmithKline plc | 1.0% | |
Nestle S.A. - Reg’d | 1.0% | |
Banco Santander S.A. | 1.0% | |
Total | 14.1% |
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Foreign securities can involve risks such as political and economic instability and currency risk.
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
** | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
10 Schwab Fundamental Index Funds
Schwab Fundamental International* Large Company Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
April 2, 2007 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctfintl01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International* Large Company Index Fund (4/2/07) | -7.88 | % | 10.39 | % | -4.29 | % | |||||||||
FTSE RAFI Developed ex US 1000 Index® | -5.98 | % | 12.32 | % | -2.95 | % | |||||||||
Fund Category: Morningstar Foreign Large-Cap Value | -6.00 | % | 9.05 | % | -5.57 | % |
Fund Expense Ratios4: Net 0.35%; Gross 0.61%
Country Weightings % of Equity Investments
United Kingdom | 20.9% | |||
Japan | 16.6% | |||
France | 10.4% | |||
Germany | 8.4% | |||
Canada | 6.1% | |||
Australia | 5.4% | |||
Switzerland | 4.9% | |||
Republic of Korea | 4.5% | |||
Italy | 4.3% | |||
Spain | 4.3% | |||
Netherlands | 3.7% | |||
Sweden | 2.9% | |||
Other Countries | 7.6% | |||
Total | 100.0% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 11
Schwab Fundamental International* Small-Mid Company Index Fund
The Schwab Fundamental International Small-Mid Company Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE RAFI Developed ex US Mid Small 1500 Index (the index). To pursue its goal, the fund primarily invests in stocks that are included in the index. The index is composed of approximately 1500 small- and medium-sized non US listed companies ranked by four fundamental financial measures of size: sales, cash flows, book value, and dividends. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -1.76% for the 12 months ended October 31, 2011, while the index returned 0.41%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. The fund maintained a cash position to help meet unexpected liquidations.
Timing differences in foreign exchange calculations represented part of why the fund underperformed the index.** Fair valuation of the fund’s holdings on the last trading day of the current period also reduced the fund’s relative performance (please see financial note 2 for more information).
Consumer Staples and Health Care stocks added the most to the fund’s absolute performance (total return), reflecting the solid returns generated by investments in these sectors combined with their average weights within the fund. Financials represented the fund’s second-largest average weight, and when combined with this sector’s modestly negative performance, subtracted the most from the fund’s total return. Europe’s ongoing and largely unresolved sovereign debt crisis was a primary catalyst behind the poor performance of international financial stocks.
Turning to the impact of country allocations on the fund’s total return, investments in Japan helped the most. The positive effect on the fund’s performance reflected the large average weight of this allocation, as well as the respectable return that these investments generated. Stocks from Hong Kong and South Korea generated negative returns, and when combined with their average weights in the fund, subtracted the most from performance.
The fund used a replication investment approach and maintained a tight allocation across all countries, regions, sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 1,472 | |
Weighted Average Market Cap ($ x 1,000,000) | $2,499 | |
Price/Earnings Ratio (P/E) | 96.2 | |
Price/Book Ratio (P/B) | 1.0 | |
Portfolio Turnover Rate | 63% |
Sector Weightings % of Investments
Industrials | 22.8% | |
Financials | 19.1% | |
Consumer Discretionary | 18.0% | |
Materials | 11.3% | |
Consumer Staples | 8.7% | |
Information Technology | 7.4% | |
Health Care | 4.7% | |
Energy | 4.3% | |
Utilities | 1.9% | |
Telecommunication Services | 1.1% | |
Other | 0.7% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
iShares MSCI EAFE Small Cap Index Fund | 0.4% | |
SGL Carbon SE | 0.3% | |
Leopalace21 Corp. | 0.3% | |
Lundin Petroleum AB | 0.3% | |
Konami Corp. | 0.3% | |
First Pacific Co., Ltd. | 0.2% | |
CJ CheilJedang Corp. | 0.2% | |
Hermes International | 0.2% | |
SK Chemicals Co., Ltd. | 0.2% | |
Hyundai Marine & Fire Insurance Co., Ltd. | 0.2% | |
Total | 2.6% |
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Foreign securities can involve risks such as political and economic instability and currency risk.
Small-company stocks are subject to greater volatility than other asset classes.
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
** | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
12 Schwab Fundamental Index Funds
Schwab Fundamental International* Small-Mid Company Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
January 31, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctfinsmc01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental International* Small-Mid Company Index Fund (1/31/08) | -1.76 | % | 19.30 | % | 1.47 | % | |||||||||
FTSE RAFI Developed ex US Mid Small 1500 Index® | 0.41 | % | 22.59 | % | 3.95 | % | |||||||||
Fund Category: Morningstar Foreign Small/Mid Growth | -4.05 | % | 18.54 | % | -1.92 | % |
Fund Expense Ratios4: Net 0.55%; Gross 1.07%
Country Weightings % of Equity Investments
Japan | 33.6% | |||
United Kingdom | 9.4% | |||
Canada | 7.8% | |||
Republic of Korea | 7.7% | |||
Hong Kong | 5.6% | |||
Australia | 5.5% | |||
France | 3.9% | |||
Germany | 3.9% | |||
Switzerland | 3.0% | |||
Italy | 2.6% | |||
Other Countries | 17.0% | |||
Total | 100.0% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 13
Schwab Fundamental Emerging Markets*
Index Fund
Index Fund
The Schwab Fundamental Emerging Markets Index Fund (the fund) seeks investment results that correspond generally (before fees and expenses) to the price and yield of the FTSE/RAFI Emerging Index (the index). To pursue its goal, the fund primarily invests in stocks that are included in the index. The index is composed of the 350 companies from emerging markets with the largest fundamental values ranked by four fundamental financial measures of size: sales, cash flows, book value, and dividends. (For more information concerning the fund’s objective, strategy, and risks, please see the fund’s prospectus.)
The fund returned -10.99% for the 12 months ended October 31, 2011, while the index returned -8.51%. Because the return of the index does not include operational and transactional costs, the return of the fund tends to differ from that of the index. The fund maintained a cash position to help meet unexpected liquidations amid occasionally volatile cash flows.
Timing differences in foreign exchange calculations represented part of the fund’s underperformance.** Fair valuation of the fund’s holdings on the last trading day of the current period also reduced performance compared with that of the index (please see financial note 2 for more information). Another performance detractor was the fund’s exposure to Russia. The fund does not invest in local Russian securities. Instead, the fund invests in Global Depositary Receipts (GDRs). For the period, the price difference between the local securities and Russian GDRs translated into underperformance by the fund.
Consumer Staples and Telecommunication Services stocks added the most to the fund’s absolute performance (total return), reflecting the positive returns generated by investments in these sectors combined with their average weights within the fund. Financials represented the fund’s second-largest average weight, and when combined with this sector’s double-digit losses, subtracted the most from the fund’s total return. Europe’s ongoing and largely unresolved sovereign debt crisis was a primary catalyst behind the poor performance of international financial stocks.
Where country allocations are concerned, investments in Thailand helped the fund’s total return the most. The positive performance effect of this allocation reflected its average weight combined with the double-digit return that these securities generated. Stocks from Brazil represented one of the largest average weights in the fund, and when combined with the double-digit losses posted by these stocks, subtracted the most from the fund’s total return.
The fund used a replication investment approach and maintained a tight allocation across all countries, regions, sectors, market capitalizations, and valuation measures compared with the index.
As of 10/31/11:
Statistics
Number of Holdings | 355 | |
Weighted Average Market Cap ($ x 1,000,000) | $35,023 | |
Price/Earnings Ratio (P/E) | 11.9 | |
Price/Book Ratio (P/B) | 1.5 | |
Portfolio Turnover Rate | 56% |
Sector Weightings % of Investments
Financials | 22.8% | |
Energy | 22.0% | |
Materials | 13.6% | |
Telecommunication Services | 11.9% | |
Information Technology | 9.8% | |
Consumer Staples | 5.3% | |
Industrials | 5.1% | |
Utilities | 4.5% | |
Consumer Discretionary | 3.4% | |
Health Care | 0.2% | |
Other | 1.4% | |
Total | 100.0% |
Top Equity Holdings % Net Assets1
Gazprom ADR | 3.1% | |
LUKOIL ADR | 2.5% | |
Taiwan Semiconductor Manufacturing Co., Ltd. | 2.4% | |
China Mobile Ltd. | 2.3% | |
Petroleo Brasileiro S.A. | 2.1% | |
China Construction Bank Corp., Class H | 1.8% | |
Surgutneftegaz ADR | 1.6% | |
Petroleo Brasileiro S.A. - Petrobras | 1.6% | |
Hon Hai Precision Industry Co., Ltd. | 1.4% | |
Itau Unibanco Holding S.A. | 1.4% | |
Total | 20.2% |
The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.
Foreign securities can involve risks such as political and economic instability and currency risk. These risks may be greater in emerging markets.
Manager views and portfolio holdings may have changed since the report date.
Source of Sector Classification: S&P and MSCI.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
** | Typically, the securities in the index are valued using foreign exchange rates obtained at the close of the London foreign currency exchange (11:00 AM EST), using exchange rates in place at that time. Securities in the fund, however, are valued using foreign exchange rates obtained at the close of the New York foreign currency exchange (4:00 PM EST). This difference in closing times can result in different foreign currency exchange rates between the two exchanges, and thus different foreign currency exchange rates used in the valuation of the index’s and fund’s securities. | |
1 | This list is not a recommendation of any security by the investment adviser. |
14 Schwab Fundamental Index Funds
Schwab Fundamental Emerging Markets* Index Fund
Performance Summary as of 10/31/11
The performance data quoted represents past performance. Past performance does not guarantee future results. Investment returns and principal value 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.schwabfunds.com/prospectus.
January 31, 2008 – October 31, 2011
Performance of a Hypothetical
$10,000 Investment1,3
Performance of a Hypothetical
$10,000 Investment1,3
![(LINE GRAPH)](https://capedge.com/proxy/N-CSR/0000950123-12-000227/f59978ctfemmkt01.gif)
Average Annual Total Returns1,2,3
Fund and Inception Date | 1 Year | 3 Years | Since Inception | ||||||||||||
Fund: Schwab Fundamental Emerging Markets* Index Fund (1/31/08) | -10.99 | % | 20.23 | % | -0.07 | % | |||||||||
FTSE RAFI Emerging Index® | -8.51 | % | 23.86 | % | 2.57 | % | |||||||||
Fund Category: Morningstar Diversified Emerging Markets | -10.78 | % | 20.56 | % | -2.52 | % |
Fund Expense Ratios4: Net 0.61%; Gross 0.98%
Country Weightings % of Equity Investments
Taiwan | 17.5% | |||
Brazil | 17.1% | |||
China | 14.4% | |||
Russia | 11.3% | |||
South Africa | 10.8% | |||
India | 6.5% | |||
Mexico | 5.1% | |||
Malaysia | 4.0% | |||
Other Countries | 13.3% | |||
Total | 100.0% |
All 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 you cannot invest in them directly. Performance results less than one year are not annualized.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL and FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, the fund’s returns would have been lower. These returns do not reflect the deduction of taxes that a shareholder would pay on fund distributions or the redemption of fund shares. | |
2 | Source for category information: Morningstar, Inc. The Morningstar Category return represents all active and index mutual funds within the category as of the report date. | |
3 | On October 19, 2009, the Investor Share class, Select Share class and Institutional Share class were combined into a single class of shares of the fund. The performance and financial history of the fund are that of the fund’s former Institutional Shares. Accordingly, the past performance shown is that of the fund’s former Institutional Shares. | |
4 | As stated in the prospectus. Net Expense: Expenses reduced by a contractual fee waiver in effect for so long as CSIM serves as adviser to the fund. Gross Expense: Does not reflect the effect of contractual fee waivers. For actual ratios during the period, refer to the financial highlights section of the financial statements. |
Schwab Fundamental Index Funds 15
Fund Expenses (Unaudited)
Examples for a $1,000 Investment
As a fund shareholder, you incur two types of costs: transaction costs, such as redemption fees, and ongoing costs, such as 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 May 1, 2011 and held through October 31, 2011.
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 or share class 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 the fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only, and do not reflect any transactional costs, such as redemption fees. If these transactional costs were included, your costs would have been higher.
Ending | ||||||||||||||||
Beginning | Account Value | Expenses Paid | ||||||||||||||
Expense Ratio1 | Account Value | (Net of Expenses) | During Period2 | |||||||||||||
(Annualized) | at 5/1/11 | at 10/31/11 | 5/1/11–10/31/11 | |||||||||||||
Schwab Fundamental US Large Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 904.90 | $ | 1.68 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental US Small-Mid Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 858.20 | $ | 1.64 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.44 | $ | 1.79 | |||||||||
Schwab Fundamental International Large Company Index Fund | ||||||||||||||||
Actual Return | 0.35% | $ | 1,000 | $ | 811.20 | $ | 1.60 | |||||||||
Hypothetical 5% Return | 0.35% | $ | 1,000 | $ | 1,023.40 | $ | 1.79 | |||||||||
Schwab Fundamental International Small-Mid Company Index Fund | ||||||||||||||||
Actual Return | 0.55% | $ | 1,000 | $ | 853.90 | $ | 2.57 | |||||||||
Hypothetical 5% Return | 0.55% | $ | 1,000 | $ | 1,022.43 | $ | 2.80 | |||||||||
Schwab Fundamental Emerging Markets Index Fund | ||||||||||||||||
Actual Return | 0.61% | $ | 1,000 | $ | 813.70 | $ | 2.79 | |||||||||
Hypothetical 5% Return | 0.61% | $ | 1,000 | $ | 1,022.13 | $ | 3.11 |
1 | Based on the most recent six-month expense ratio; may differ from the expense ratio provided in the Financial Highlights. | |
2 | Expenses for each fund are equal to its annualized expense ratio, multiplied by the average account value over the period, multiplied by the 184 days of the period, and divided by the 365 days of the fiscal year. |
16 Schwab Fundamental Index Funds
Schwab Fundamental US Large Company Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 4/2/072– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 9.05 | 7.63 | 6.47 | 10.75 | 10.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.18 | 0.14 | 0.10 | 0.20 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.43 | 1.37 | 1.26 | (4.38 | ) | 0.70 | ||||||||||||||||
Total from investment operations | 0.61 | 1.51 | 1.36 | (4.18 | ) | 0.75 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.15 | ) | (0.09 | ) | (0.20 | ) | (0.09 | ) | — | |||||||||||||
Distributions from net realized gains | — | — | — | (0.01 | ) | — | ||||||||||||||||
Total distributions | (0.15 | ) | (0.09 | ) | (0.20 | ) | (0.10 | ) | — | |||||||||||||
Net asset value at end of period | 9.51 | 9.05 | 7.63 | 6.47 | 10.75 | |||||||||||||||||
Total return (%) | 6.74 | 19.95 | 22.04 | (39.22 | ) | 7.50 | 3 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.35 | 0.35 | 0.35 | 0.35 | 4 | ||||||||||||||||
Gross operating expenses | 0.44 | 0.45 | 0.53 | 0.52 | 0.60 | 4 | ||||||||||||||||
Net investment income (loss) | 2.06 | 1.77 | 1.88 | 2.19 | 1.66 | 4 | ||||||||||||||||
Portfolio turnover rate | 11 | 27 | 28 | 26 | 2 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 1,490 | 1,019 | 663 | 277 | 345 |
1 Effective October 27, 2009, the Investor Share class, the Select Share class and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 Annualized.
See financial notes 17
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .2% | Common Stock | 1,376,436,266 | 1,478,498,401 | ||||||||
0 | .5% | Other Investment Company | 7,158,112 | 7,158,112 | ||||||||
0 | .1% | Short-Term Investment | 985,003 | 985,003 | ||||||||
99 | .8% | Total Investments | 1,384,579,381 | 1,486,641,516 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,904,747 | 4,904,747 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (1,767,911 | ) | ||||||||
100 | .0% | Net Assets | 1,489,778,352 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.2% of net assets | ||||||||||||
Automobiles & Components 1.1% | ||||||||||||
Ford Motor Co. * | 552,974 | 0.4 | 6,458,736 | |||||||||
Other Securities | 0.7 | 10,723,394 | ||||||||||
1.1 | 17,182,130 | |||||||||||
Banks 3.4% | ||||||||||||
U.S. Bancorp | 260,800 | 0.4 | 6,673,872 | |||||||||
Wells Fargo & Co. | 668,125 | 1.2 | 17,311,119 | |||||||||
Other Securities | 1.8 | 26,842,002 | ||||||||||
3.4 | 50,826,993 | |||||||||||
Capital Goods 8.0% | ||||||||||||
General Electric Co. | 1,700,325 | 1.9 | 28,412,431 | |||||||||
The Boeing Co. | 83,440 | 0.4 | 5,489,518 | |||||||||
United Technologies Corp. | 89,515 | 0.5 | 6,980,380 | |||||||||
Other Securities | 5.2 | 78,141,129 | ||||||||||
8.0 | 119,023,458 | |||||||||||
Commercial & Professional Supplies 0.8% | ||||||||||||
Other Securities | 0.8 | 11,627,578 | ||||||||||
Consumer Durables & Apparel 1.1% | ||||||||||||
Other Securities | 1.1 | 15,704,128 | ||||||||||
Consumer Services 1.5% | ||||||||||||
McDonald’s Corp. | 78,580 | 0.5 | 7,296,153 | |||||||||
Other Securities | 1.0 | 14,984,252 | ||||||||||
1.5 | 22,280,405 | |||||||||||
Diversified Financials 7.1% | ||||||||||||
American Express Co. | 130,925 | 0.4 | 6,627,424 | |||||||||
Bank of America Corp. | 2,661,260 | 1.2 | 18,176,406 | |||||||||
Citigroup, Inc. | 610,933 | 1.3 | 19,299,374 | |||||||||
JPMorgan Chase & Co. | 628,742 | 1.5 | 21,855,072 | |||||||||
The Charles Schwab Corp. (b) | 94,515 | 0.1 | 1,160,644 | |||||||||
The Goldman Sachs Group, Inc. | 66,411 | 0.5 | 7,275,325 | |||||||||
Other Securities | 2.1 | 30,887,081 | ||||||||||
7.1 | 105,281,326 | |||||||||||
Energy 11.2% | ||||||||||||
Chevron Corp. | 287,105 | 2.0 | 30,160,380 | |||||||||
ConocoPhillips | 281,910 | 1.3 | 19,635,031 | |||||||||
Exxon Mobil Corp. | 572,684 | 3.0 | 44,720,894 | |||||||||
Occidental Petroleum Corp. | 58,870 | 0.4 | 5,471,378 | |||||||||
Valero Energy Corp. | 225,125 | 0.4 | 5,538,075 | |||||||||
Other Securities | 4.1 | 62,011,121 | ||||||||||
11.2 | 167,536,879 | |||||||||||
Food & Staples Retailing 3.9% | ||||||||||||
CVS Caremark Corp. | 208,935 | 0.5 | 7,584,340 | |||||||||
Wal-Mart Stores, Inc. | 459,325 | 1.7 | 26,052,914 | |||||||||
Other Securities | 1.7 | 24,356,206 | ||||||||||
3.9 | 57,993,460 | |||||||||||
Food, Beverage & Tobacco 5.6% | ||||||||||||
Altria Group, Inc. | 427,680 | 0.8 | 11,782,584 | |||||||||
Kraft Foods, Inc., Class A | 229,092 | 0.5 | 8,059,457 | |||||||||
PepsiCo, Inc. | 132,308 | 0.6 | 8,328,789 | |||||||||
Philip Morris International, Inc. | 108,320 | 0.5 | 7,568,318 | |||||||||
The Coca-Cola Co. | 155,665 | 0.7 | 10,635,033 | |||||||||
Other Securities | 2.5 | 36,388,223 | ||||||||||
5.6 | 82,762,404 | |||||||||||
Health Care Equipment & Services 4.7% | ||||||||||||
UnitedHealth Group, Inc. | 165,775 | 0.5 | 7,955,542 | |||||||||
WellPoint, Inc. | 105,270 | 0.5 | 7,253,103 | |||||||||
Other Securities | 3.7 | 55,136,625 | ||||||||||
4.7 | 70,345,270 | |||||||||||
Household & Personal Products 2.0% | ||||||||||||
The Procter & Gamble Co. | 294,295 | 1.3 | 18,831,937 | |||||||||
Other Securities | 0.7 | 10,588,762 | ||||||||||
2.0 | 29,420,699 | |||||||||||
Insurance 5.3% | ||||||||||||
Berkshire Hathaway, Inc., Class A * | 75 | 0.6 | 8,771,250 | |||||||||
Berkshire Hathaway, Inc., Class B * | 109,011 | 0.6 | 8,487,596 | |||||||||
The Travelers Cos., Inc. | 102,895 | 0.4 | 6,003,923 |
18 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 3.7 | 55,816,496 | ||||||||||
5.3 | 79,079,265 | |||||||||||
Materials 3.6% | ||||||||||||
Other Securities | 3.6 | 53,253,052 | ||||||||||
Media 2.9% | ||||||||||||
Time Warner, Inc. | 203,688 | 0.5 | 7,127,043 | |||||||||
Other Securities | 2.4 | 36,313,202 | ||||||||||
2.9 | 43,440,245 | |||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.5% | ||||||||||||
Abbott Laboratories | 158,690 | 0.6 | 8,548,630 | |||||||||
Bristol-Myers Squibb Co. | 250,350 | 0.5 | 7,908,556 | |||||||||
Eli Lilly & Co. | 168,955 | 0.4 | 6,278,368 | |||||||||
Johnson & Johnson | 281,695 | 1.2 | 18,138,341 | |||||||||
Merck & Co., Inc. | 372,757 | 0.9 | 12,860,116 | |||||||||
Pfizer, Inc. | 1,252,799 | 1.6 | 24,128,909 | |||||||||
Other Securities | 1.3 | 18,425,273 | ||||||||||
6.5 | 96,288,193 | |||||||||||
Real Estate 2.1% | ||||||||||||
Other Securities | 2.1 | 31,911,864 | ||||||||||
Retailing 4.2% | ||||||||||||
Target Corp. | 108,795 | 0.4 | 5,956,526 | |||||||||
The Home Depot, Inc. | 230,796 | 0.6 | 8,262,497 | |||||||||
Other Securities | 3.2 | 48,459,353 | ||||||||||
4.2 | 62,678,376 | |||||||||||
Semiconductors & Semiconductor Equipment 1.8% | ||||||||||||
Intel Corp. | 590,110 | 1.0 | 14,481,299 | |||||||||
Other Securities | 0.8 | 12,795,861 | ||||||||||
1.8 | 27,277,160 | |||||||||||
Software & Services 5.1% | ||||||||||||
Google, Inc., Class A * | 9,337 | 0.4 | 5,533,480 | |||||||||
International Business Machines Corp. | 88,395 | 1.1 | 16,320,369 | |||||||||
Microsoft Corp. | 654,715 | 1.2 | 17,435,061 | |||||||||
Other Securities | 2.4 | 36,029,804 | ||||||||||
5.1 | 75,318,714 | |||||||||||
Technology Hardware & Equipment 4.3% | ||||||||||||
Apple, Inc. * | 26,530 | 0.7 | 10,738,813 | |||||||||
Cisco Systems, Inc. | 489,865 | 0.6 | 9,077,198 | |||||||||
Hewlett-Packard Co. | 268,875 | 0.5 | 7,154,764 | |||||||||
Other Securities | 2.5 | 37,454,158 | ||||||||||
4.3 | 64,424,933 | |||||||||||
Telecommunication Services 4.7% | ||||||||||||
AT&T, Inc. | 1,233,585 | 2.4 | 36,156,376 | |||||||||
Verizon Communications, Inc. | 605,930 | 1.5 | 22,407,291 | |||||||||
Other Securities | 0.8 | 11,319,349 | ||||||||||
4.7 | 69,883,016 | |||||||||||
Transportation 1.9% | ||||||||||||
Other Securities | 1.9 | 28,952,665 | ||||||||||
Utilities 6.4% | ||||||||||||
Duke Energy Corp. | 272,145 | 0.4 | 5,557,201 | |||||||||
Other Securities | 6.0 | 90,448,987 | ||||||||||
6.4 | 96,006,188 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $1,376,436,266) | 1,478,498,401 | |||||||||||
Other Investment Company 0.5% of net assets | ||||||||||||
Money Market Funds 0.5% | ||||||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 7,158,112 | 0.5 | 7,158,112 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $7,158,112) | 7,158,112 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 985,003 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $985,003) | 985,003 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||||||
SSIT U.S. Government Money Market Fund | 4,904,747 | 0.3 | 4,904,747 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $4,904,747) | 4,904,747 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 the tax basis cost of the fund’s investments was $1,407,992,463 and the unrealized appreciation and depreciation were $154,568,175 and ($75,919,122), respectively, with a net unrealized appreciation of $78,649,053.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | All or a portion of this security is on loan. |
See financial notes 19
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
(d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(e) | Illiquid security. At the period end, the value of these amounted to $9,216 or 0.0% of net assets. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 120 | 7,495,800 | 409,840 |
20 See financial notes
Schwab Fundamental US Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments in affiliated issuers, at value (cost $1,611,643) | $1,160,644 | |||||
Investments in unaffiliated issuers, at value (cost $1,382,967,738) including securities on loan of $4,481,254 | + | 1,485,480,872 | ||||
Total investments, at value (cost $1,384,579,381) | 1,486,641,516 | |||||
Collateral invested for securities on loan | 4,904,747 | |||||
Receivables: | ||||||
Fund shares sold | 2,887,428 | |||||
Dividends | 1,966,960 | |||||
Income from securities on loan | 33,769 | |||||
Foreign tax reclaims | 4,568 | |||||
Interest | 1,699 | |||||
Prepaid expenses | + | 27,724 | ||||
Total assets | 1,496,468,411 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 4,904,747 | |||||
Payables: | ||||||
Investment adviser and administrator fees | 23,462 | |||||
Shareholder service fees | 11,858 | |||||
Fund shares redeemed | 1,222,496 | |||||
Due to brokers for futures | 189,600 | |||||
Accrued expenses | + | 337,896 | ||||
Total liabilities | 6,690,059 | |||||
Net Assets | ||||||
Total assets | 1,496,468,411 | |||||
Total liabilities | − | 6,690,059 | ||||
Net assets | $1,489,778,352 | |||||
Net Assets by Source | ||||||
Capital received from investors | 1,493,188,618 | |||||
Net investment income not yet distributed | 21,991,329 | |||||
Net realized capital losses | (127,873,570 | ) | ||||
Net unrealized capital gains | 102,471,975 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$1,489,778,352 | 156,613,787 | $9.51 |
See financial notes 21
Schwab Fundamental US Large Company Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends received from affiliated issuer | $15,742 | |||||
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $3,359) | 29,910,161 | |||||
Interest | 20,677 | |||||
Securities on loan | + | 508,651 | ||||
Total investment income | 30,455,231 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 3,185,245 | |||||
Shareholder service fees | 1,048,953 | |||||
FTSE Index fee | 775,437 | |||||
Transfer agent fees | 184,333 | |||||
Portfolio accounting fees | 74,238 | |||||
Registration fees | 64,997 | |||||
Professional fees | 53,018 | |||||
Shareholder reports | 48,577 | |||||
Custodian fees | 44,594 | |||||
Trustees’ fees | 14,370 | |||||
Interest expense | 37 | |||||
Other expenses | + | 28,366 | ||||
Total expenses | 5,522,165 | |||||
Expense reduction by CSIM and its affiliates | − | 1,091,056 | ||||
Custody credits | − | 66 | ||||
Net expenses | − | 4,431,043 | ||||
Net investment income | 26,024,188 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 1,316,249 | |||||
Net realized gains on futures contracts | + | 1,357,689 | ||||
Net realized gains | 2,673,938 | |||||
Net unrealized losses on affiliated issuer | (306,141 | ) | ||||
Net unrealized gains on unaffiliated investments | 33,326,176 | |||||
Net unrealized gains on futures contracts | + | 90,134 | ||||
Net unrealized gains | + | 33,110,169 | ||||
Net realized and unrealized gains | 35,784,107 | |||||
Increase in net assets resulting from operations | $61,808,295 |
22 See financial notes
Schwab Fundamental US Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $26,024,188 | $14,891,322 | ||||||||
Net realized gains (losses) | 2,673,938 | (2,067,123 | ) | |||||||
Net unrealized gains | + | 33,110,169 | 134,001,189 | |||||||
Increase in net assets from operations | 61,808,295 | 146,825,388 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($16,798,869 | ) | ($8,047,761 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 67,864,083 | $655,800,808 | 46,806,200 | $397,445,530 | ||||||||||||||
Shares reinvested | 795,894 | 7,465,485 | 441,885 | 3,557,176 | ||||||||||||||
Shares redeemed | + | (24,620,341 | ) | (237,836,004 | ) | (21,579,324 | ) | (183,344,157 | ) | |||||||||
Net transactions in fund shares | 44,039,636 | $425,430,289 | 25,668,761 | $217,658,549 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 112,574,151 | $1,019,338,637 | 86,905,390 | $662,902,461 | ||||||||||||||
Total increase | + | 44,039,636 | 470,439,715 | 25,668,761 | 356,436,176 | |||||||||||||
End of period | 156,613,787 | $1,489,778,352 | 112,574,151 | $1,019,338,637 | ||||||||||||||
Net investment income not yet distributed | $21,991,329 | $12,859,600 |
See financial notes 23
Schwab Fundamental US Small-Mid Company Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 4/2/072– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 10.10 | 7.88 | 6.30 | 10.36 | 10.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.11 | 0.09 | 0.06 | 0.05 | 0.05 | |||||||||||||||||
Net realized and unrealized gains (losses) | 0.47 | 2.19 | 1.59 | (4.04 | ) | 0.31 | ||||||||||||||||
Total from investment operations | 0.58 | 2.28 | 1.65 | (3.99 | ) | 0.36 | ||||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.10 | ) | (0.06 | ) | (0.07 | ) | (0.06 | ) | — | |||||||||||||
Distributions from net realized gains | (0.47 | ) | — | — | (0.01 | ) | — | |||||||||||||||
Total distributions | (0.57 | ) | (0.06 | ) | (0.07 | ) | (0.07 | ) | — | |||||||||||||
Net asset value at end of period | 10.11 | 10.10 | 7.88 | 6.30 | 10.36 | |||||||||||||||||
Total return (%) | 5.55 | 29.07 | 26.68 | (38.73 | ) | 3.60 | 3 | |||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.35 | 0.35 | 0.35 | 0.35 | 4 | ||||||||||||||||
Gross operating expenses | 0.50 | 0.53 | 0.60 | 0.71 | 0.89 | 4 | ||||||||||||||||
Net investment income (loss) | 1.18 | 1.03 | 1.00 | 1.44 | 1.36 | 4 | ||||||||||||||||
Portfolio turnover rate | 35 | 41 | 29 | 37 | 4 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 563 | 412 | 298 | 131 | 33 |
1 Effective October 27, 2009, the Investor Share class, the Select Share class and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 Annualized.
24 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .4% | Common Stock | 512,014,961 | 559,875,978 | ||||||||
0 | .0% | Rights | — | 6,053 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .1% | Other Investment Company | 6,000,596 | 6,000,596 | ||||||||
0 | .1% | Short-Term Investment | 775,001 | 775,001 | ||||||||
100 | .6% | Total Investments | 518,790,558 | 566,657,628 | ||||||||
2 | .7% | Collateral Invested for Securities on Loan | 15,327,665 | 15,327,665 | ||||||||
(3 | .3)% | Other Assets and Liabilities, Net | (18,823,923 | ) | ||||||||
100 | .0% | Net Assets | 563,161,370 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.4% of net assets | ||||||||||||
Automobiles & Components 1.0% | ||||||||||||
Other Securities | 1.0 | 5,495,356 | ||||||||||
Banks 8.0% | ||||||||||||
Ocwen Financial Corp. * | 78,845 | 0.2 | 1,143,252 | |||||||||
Other Securities | 7.8 | 43,715,201 | ||||||||||
8.0 | 44,858,453 | |||||||||||
Capital Goods 10.8% | ||||||||||||
A.O. Smith Corp. | 29,000 | 0.2 | 1,077,640 | |||||||||
Aircastle Ltd. | 90,500 | 0.2 | 1,097,765 | |||||||||
Applied Industrial Technologies, Inc. | 35,020 | 0.2 | 1,177,372 | |||||||||
CLARCOR, Inc. | 22,325 | 0.2 | 1,082,316 | |||||||||
Hexcel Corp. * | 55,685 | 0.2 | 1,375,976 | |||||||||
MSC Industrial Direct Co., Class A | 17,400 | 0.2 | 1,183,374 | |||||||||
TransDigm Group, Inc. * | 14,100 | 0.2 | 1,324,272 | |||||||||
Triumph Group, Inc. | 19,060 | 0.2 | 1,107,386 | |||||||||
Wabtec Corp. | 16,460 | 0.2 | 1,105,783 | |||||||||
Woodward, Inc. | 31,700 | 0.2 | 1,073,996 | |||||||||
Other Securities | 8.8 | 49,458,596 | ||||||||||
10.8 | 61,064,476 | |||||||||||
Commercial & Professional Supplies 4.9% | ||||||||||||
Clean Harbors, Inc. * | 18,530 | 0.2 | 1,079,743 | |||||||||
Towers Watson & Co., Class A | 17,715 | 0.2 | 1,163,876 | |||||||||
Other Securities | 4.5 | 25,420,544 | ||||||||||
4.9 | 27,664,163 | |||||||||||
Consumer Durables & Apparel 3.5% | ||||||||||||
Other Securities | 3.5 | 19,758,959 | ||||||||||
Consumer Services 5.5% | ||||||||||||
Bob Evans Farms, Inc. | 34,355 | 0.2 | 1,130,279 | |||||||||
Chipotle Mexican Grill, Inc. * | 4,020 | 0.2 | 1,351,202 | |||||||||
Panera Bread Co., Class A * | 8,175 | 0.2 | 1,092,916 | |||||||||
Other Securities | 4.9 | 27,374,334 | ||||||||||
5.5 | 30,948,731 | |||||||||||
Diversified Financials 2.6% | ||||||||||||
Advance America Cash Advance Centers, Inc. | 135,295 | 0.2 | 1,140,537 | |||||||||
Cash America International, Inc. | 19,805 | 0.2 | 1,084,324 | |||||||||
Other Securities | 2.2 | 12,253,126 | ||||||||||
2.6 | 14,477,987 | |||||||||||
Energy 5.9% | ||||||||||||
Cloud Peak Energy, Inc. * | 49,700 | 0.2 | 1,140,615 | |||||||||
Complete Production Services, Inc. * | 36,400 | 0.2 | 1,193,920 | |||||||||
Crosstex Energy, Inc. | 82,200 | 0.2 | 1,071,066 | |||||||||
Other Securities | 5.3 | 29,846,031 | ||||||||||
5.9 | 33,251,632 | |||||||||||
Food & Staples Retailing 0.7% | ||||||||||||
PriceSmart, Inc. | 15,840 | 0.2 | 1,204,473 | |||||||||
Other Securities | 0.5 | 2,526,420 | ||||||||||
0.7 | 3,730,893 | |||||||||||
Food, Beverage & Tobacco 2.4% | ||||||||||||
Green Mountain Coffee Roasters, Inc. * | 16,480 | 0.2 | 1,071,530 | |||||||||
Hansen Natural Corp. * | 12,155 | 0.2 | 1,082,889 | |||||||||
Sanderson Farms, Inc. | 22,800 | 0.2 | 1,128,600 | |||||||||
TreeHouse Foods, Inc. * | 18,785 | 0.2 | 1,152,272 | |||||||||
Other Securities | 1.6 | 9,085,142 | ||||||||||
2.4 | 13,520,433 | |||||||||||
Health Care Equipment & Services 5.6% | ||||||||||||
Catalyst Health Solutions, Inc. * | 21,200 | 0.2 | 1,165,364 | |||||||||
Healthspring, Inc. * | 26,600 | 0.3 | 1,434,804 | |||||||||
PharMerica Corp. * | 75,340 | 0.2 | 1,175,304 | |||||||||
WellCare Health Plans, Inc. * | 30,000 | 0.3 | 1,470,300 | |||||||||
Other Securities | 4.6 | 26,212,298 | ||||||||||
5.6 | 31,458,070 | |||||||||||
Household & Personal Products 0.8% | ||||||||||||
Nu Skin Enterprises, Inc., Class A | 28,610 | 0.3 | 1,445,663 |
See financial notes 25
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Other Securities | 0.5 | 3,200,345 | ||||||||||
0.8 | 4,646,008 | |||||||||||
Insurance 2.5% | ||||||||||||
Other Securities | 2.5 | 13,874,646 | ||||||||||
Materials 5.5% | ||||||||||||
NewMarket Corp. | 6,295 | 0.2 | 1,222,111 | |||||||||
Other Securities | 5.3 | 29,860,543 | ||||||||||
5.5 | 31,082,654 | |||||||||||
Media 2.5% | ||||||||||||
Other Securities | 2.5 | 14,260,197 | ||||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.5% | ||||||||||||
PDL BioPharma, Inc. | 188,150 | 0.2 | 1,142,071 | |||||||||
Other Securities | 2.3 | 12,674,961 | ||||||||||
2.5 | 13,817,032 | |||||||||||
Real Estate 6.4% | ||||||||||||
Extra Space Storage, Inc. | 47,865 | 0.2 | 1,078,398 | |||||||||
Post Properties, Inc. | 29,420 | 0.2 | 1,208,574 | |||||||||
Other Securities | 6.0 | 33,853,414 | ||||||||||
6.4 | 36,140,386 | |||||||||||
Retailing 5.1% | ||||||||||||
Dollar General Corp. * | 35,800 | 0.3 | 1,419,828 | |||||||||
DSW, Inc., Class A | 24,368 | 0.2 | 1,275,421 | |||||||||
Genesco, Inc. * | 25,600 | 0.3 | 1,508,864 | |||||||||
Pool Corp. | 37,180 | 0.2 | 1,086,400 | |||||||||
Sally Beauty Holdings, Inc. * | 57,965 | 0.2 | 1,112,348 | |||||||||
The Children’s Place Retail Stores, Inc. * | 26,360 | 0.2 | 1,237,602 | |||||||||
Other Securities | 3.7 | 21,250,110 | ||||||||||
5.1 | 28,890,573 | |||||||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||||||
Varian Semiconductor Equipment Associates, Inc. * | 18,612 | 0.2 | 1,168,275 | |||||||||
Other Securities | 3.1 | 17,432,424 | ||||||||||
3.3 | 18,600,699 | |||||||||||
Software & Services 7.7% | ||||||||||||
Equinix, Inc. * | 12,407 | 0.2 | 1,191,196 | |||||||||
Global Payments, Inc. | 24,070 | 0.2 | 1,105,294 | |||||||||
Other Securities | 7.3 | 41,233,470 | ||||||||||
7.7 | 43,529,960 | |||||||||||
Technology Hardware & Equipment 5.7% | ||||||||||||
Other Securities | 5.7 | 32,344,782 | ||||||||||
Telecommunication Services 1.2% | ||||||||||||
Other Securities | 1.2 | 6,488,423 | ||||||||||
Transportation 3.1% | ||||||||||||
Macquarie Infrastructure Co. L.L.C. | 46,200 | 0.2 | 1,218,294 | |||||||||
Old Dominion Freight Line, Inc. * | 35,950 | 0.2 | 1,314,691 | |||||||||
Other Securities | 2.7 | 14,978,544 | ||||||||||
3.1 | 17,511,529 | |||||||||||
Utilities 2.2% | ||||||||||||
El Paso Electric Co. | 37,390 | 0.2 | 1,197,602 | |||||||||
Northwest Natural Gas Co. | 25,305 | 0.2 | 1,182,249 | |||||||||
UIL Holdings Corp. | 35,625 | 0.2 | 1,214,100 | |||||||||
Other Securities | 1.6 | 8,865,985 | ||||||||||
2.2 | 12,459,936 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $512,014,961) | 559,875,978 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Banks 0.0% | ||||||||||||
Other Securities | 0.0 | 6,053 | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | 6,053 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Energy 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | — | |||||||||||
Other Investment Company 1.1% of net assets | ||||||||||||
Money Market Fund 1.1% | ||||||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 6,000,596 | 1.1 | 6,000,596 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $6,000,596) | 6,000,596 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.1% of net assets | ||||||||||||
U.S. Treasury Obligation 0.1% | ||||||||||||
Other Securities | 0.1 | 775,001 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $775,001) | 775,001 | |||||||||||
End of Investments. | ||||||||||||
26 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 2.7% of net assets | ||||||||||||
SSIT U.S. Government Money Market Fund | 15,327,665 | 2.7 | 15,327,665 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $15,327,665) | 15,327,665 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 the tax basis cost of the fund’s investments was $523,109,053 and the unrealized appreciation and depreciation were $102,547,101 and ($58,998,526), respectively, with a net unrealized appreciation of $43,548,575.
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | All or a portion of this security is on loan. | |
(c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(d) | Illiquid security. At the period end, the value of these amounted to $46,192 or 0.0% of net assets. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust. |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 35 | 2,587,550 | 318,689 |
See financial notes 27
Schwab Fundamental US Small-Mid Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $518,790,558) including securities on loan of $14,208,105 | $566,657,628 | |||||
Foreign currency, at value (cost $34) | 32 | |||||
Collateral invested for securities on loan | 15,327,665 | |||||
Receivables: | ||||||
Investments sold | 7,272 | |||||
Fund shares sold | 1,550,498 | |||||
Dividends | 226,503 | |||||
Income from securities on loan | 148,173 | |||||
Interest | 510 | |||||
Prepaid expenses | + | 13,078 | ||||
Total assets | 583,931,359 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 15,327,665 | |||||
Payables: | ||||||
Investments bought | 4,698,442 | |||||
Investment adviser and administrator fees | 9,575 | |||||
Shareholder service fees | 7,391 | |||||
Fund shares redeemed | 476,007 | |||||
Due to brokers for futures | 70,700 | |||||
Accrued expenses | + | 180,209 | ||||
Total liabilities | 20,769,989 | |||||
Net Assets | ||||||
Total assets | 583,931,359 | |||||
Total liabilities | − | 20,769,989 | ||||
Net assets | $563,161,370 | |||||
Net Assets by Source | ||||||
Capital received from investors | 475,258,223 | |||||
Net investment income not yet distributed | 4,811,321 | |||||
Net realized capital gains | 34,906,069 | |||||
Net unrealized capital gains | 48,185,757 | |||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$563,161,370 | 55,683,262 | $10.11 |
28 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $2,743) | $7,276,794 | |||||
Interest | 9,109 | |||||
Securities on loan | + | 1,359,341 | ||||
Total investment income | 8,645,244 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,643,275 | |||||
Shareholder service fees | 501,457 | |||||
FTSE Index fee | 347,206 | |||||
Transfer agent fees | 95,473 | |||||
Portfolio accounting fees | 64,964 | |||||
Professional fees | 46,337 | |||||
Shareholder reports | 41,638 | |||||
Custodian fees | 37,773 | |||||
Registration fees | 34,902 | |||||
Trustees’ fees | 9,802 | |||||
Interest expense | 356 | |||||
Other expenses | + | 12,219 | ||||
Total expenses | 2,835,402 | |||||
Expense reduction by CSIM and its affiliates | − | 851,012 | ||||
Custody credits | − | 118 | ||||
Net expenses | − | 1,984,272 | ||||
Net investment income | 6,660,972 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 35,838,661 | |||||
Net realized gains on futures contracts | 337,574 | |||||
Net realized gains on foreign currency transactions | + | 1,771 | ||||
Net realized gains | 36,178,006 | |||||
Net unrealized losses on investments | (22,574,596 | ) | ||||
Net unrealized gains on futures contracts | 143,995 | |||||
Net unrealized losses on foreign currency translations | + | (1,553 | ) | |||
Net unrealized losses | + | (22,432,154 | ) | |||
Net realized and unrealized gains | 13,745,852 | |||||
Increase in net assets resulting from operations | $20,406,824 |
See financial notes 29
Schwab Fundamental US Small-Mid Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $6,660,972 | $3,788,229 | ||||||||
Net realized gains | 36,178,006 | 45,922,184 | ||||||||
Net unrealized gains (losses) | + | (22,432,154 | ) | 39,040,489 | ||||||
Increase in net assets from operations | 20,406,824 | 88,750,902 | ||||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (4,928,997 | ) | (2,224,324 | ) | ||||||
Distributions from net realized gains | + | (22,135,589 | ) | — | ||||||
Total distributions | ($27,064,586 | ) | ($2,224,324 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 28,330,596 | $298,407,637 | 12,901,533 | $119,705,392 | ||||||||||||||
Shares reinvested | 863,850 | 9,079,063 | 77,351 | 639,688 | ||||||||||||||
Shares redeemed | + | (14,343,010 | ) | (150,006,790 | ) | (9,968,970 | ) | (92,450,771 | ) | |||||||||
Net transactions in fund shares | 14,851,436 | $157,479,910 | 3,009,914 | $27,894,309 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 40,831,826 | $412,339,222 | 37,821,912 | $297,918,335 | ||||||||||||||
Total increase | + | 14,851,436 | 150,822,148 | 3,009,914 | 114,420,887 | |||||||||||||
End of period | 55,683,262 | $563,161,370 | 40,831,826 | $412,339,222 | ||||||||||||||
Net investment income not yet distributed | $4,811,321 | $3,137,049 |
30 See financial notes
Schwab Fundamental International Large Company Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 11/1/07– | 4/2/072– | ||||||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | 10/31/07 | ||||||||||||||||||
Per-Share Data ($) | ||||||||||||||||||||||
Net asset value at beginning of period | 8.09 | 7.69 | 6.01 | 11.40 | 10.00 | |||||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||||||
Net investment income (loss) | 0.23 | 0.21 | 0.16 | 0.28 | 0.08 | |||||||||||||||||
Net realized and unrealized gains (losses) | (0.85 | ) | 0.41 | 1.81 | (5.56 | ) | 1.32 | |||||||||||||||
Total from investment operations | (0.62 | ) | 0.62 | 1.97 | (5.28 | ) | 1.40 | |||||||||||||||
Less distributions: | ||||||||||||||||||||||
Distributions from net investment income | (0.21 | ) | (0.22 | ) | (0.29 | ) | (0.09 | ) | — | |||||||||||||
Distributions from net realized gains | — | — | — | (0.02 | ) | — | ||||||||||||||||
Total distributions | (0.21 | ) | (0.22 | ) | (0.29 | ) | (0.11 | ) | — | |||||||||||||
Net asset value at end of period | 7.26 | 8.09 | 7.69 | 6.01 | 11.40 | |||||||||||||||||
Total return (%) | (7.88 | ) | 8.27 | 34.89 | (46.70 | ) | 14.00 | 3 | ||||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||||||
Net operating expenses | 0.35 | 0.35 | 0.35 | 0.35 | 0.36 | 4,5 | ||||||||||||||||
Gross operating expenses | 0.57 | 0.61 | 0.76 | 0.74 | 1.28 | 4 | ||||||||||||||||
Net investment income (loss) | 3.24 | 2.70 | 2.80 | 3.41 | 2.30 | 4 | ||||||||||||||||
Portfolio turnover rate | 35 | 65 | 82 | 74 | 50 | 3 | ||||||||||||||||
Net assets, end of period ($ x 1,000,000) | 372 | 301 | 253 | 145 | 166 |
1 Effective October 19, 2009, the Investor Share class, the Select Share class and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 Annualized.
5 The ratio of net operating expenses would have been 0.35%, if interest expense had not been incurred.
See financial notes 31
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Common Stock | 382,450,845 | 368,486,637 | ||||||||
0 | .5% | Preferred Stock | 1,491,408 | 1,800,976 | ||||||||
0 | .0% | Rights | 176,179 | 70,643 | ||||||||
0 | .0% | Warrants | — | 417 | ||||||||
0 | .1% | Other Investment Company | 495,250 | 523,700 | ||||||||
99 | .6% | Total Investments | 384,613,682 | 370,882,373 | ||||||||
0 | .5% | Collateral Invested for Securities on Loan | 1,942,763 | 1,942,763 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (563,144 | ) | ||||||||
100 | .0% | Net Assets | 372,261,992 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 99.0% of net assets | ||||||||||||
Australia 5.4% | ||||||||||||
Australia & New Zealand Banking Group Ltd. | 68,182 | 0.4 | 1,540,668 | |||||||||
BHP Billiton Ltd. | 48,498 | 0.5 | 1,898,434 | |||||||||
Commonwealth Bank of Australia | 37,270 | 0.5 | 1,914,561 | |||||||||
National Australia Bank Ltd. | 75,919 | 0.5 | 2,027,752 | |||||||||
Westpac Banking Corp. | 75,529 | 0.5 | 1,752,743 | |||||||||
Other Securities | 3.0 | 10,999,007 | ||||||||||
5.4 | 20,133,165 | |||||||||||
Austria 0.3% | ||||||||||||
Other Securities | 0.3 | 1,301,667 | ||||||||||
Belgium 0.8% | ||||||||||||
Other Securities | 0.8 | 2,993,503 | ||||||||||
Canada 6.1% | ||||||||||||
Royal Bank of Canada | 33,644 | 0.4 | 1,641,105 | |||||||||
The Toronto-Dominion Bank | 19,459 | 0.4 | 1,468,674 | |||||||||
Other Securities | 5.3 | 19,476,860 | ||||||||||
6.1 | 22,586,639 | |||||||||||
Denmark 0.5% | ||||||||||||
Other Securities | 0.5 | 1,896,576 | ||||||||||
Finland 1.1% | ||||||||||||
Nokia Oyj | 235,567 | 0.4 | 1,585,172 | |||||||||
Other Securities | 0.7 | 2,463,692 | ||||||||||
1.1 | 4,048,864 | |||||||||||
France 10.4% | ||||||||||||
AXA S.A. | 160,452 | 0.7 | 2,580,700 | |||||||||
BNP Paribas S.A. | 43,778 | 0.5 | 1,954,901 | |||||||||
France Telecom S.A. | 132,154 | 0.6 | 2,375,973 | |||||||||
GDF Suez | 58,766 | 0.4 | 1,655,598 | |||||||||
Sanofi | 48,345 | 0.9 | 3,458,553 | |||||||||
Total S.A. | 107,672 | 1.5 | 5,618,026 | |||||||||
Other Securities | 5.8 | 21,060,376 | ||||||||||
10.4 | 38,704,127 | |||||||||||
Germany 7.9% | ||||||||||||
Allianz SE - Reg’d | 25,481 | 0.8 | 2,835,069 | |||||||||
BASF SE | 28,988 | 0.6 | 2,116,002 | |||||||||
Daimler AG - Reg’d | 46,122 | 0.6 | 2,342,493 | |||||||||
Deutsche Bank AG - Reg’d | 40,772 | 0.5 | 1,685,863 | |||||||||
Deutsche Telekom AG - Reg’d | 239,299 | 0.8 | 3,040,085 | |||||||||
E.ON AG | 114,550 | 0.7 | 2,762,371 | |||||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 12,100 | 0.4 | 1,620,425 | |||||||||
Siemens AG - Reg’d | 20,273 | 0.6 | 2,125,032 | |||||||||
Other Securities | 2.9 | 10,981,569 | ||||||||||
7.9 | 29,508,909 | |||||||||||
Greece 0.2% | ||||||||||||
Other Securities | 0.2 | 704,403 | ||||||||||
Hong Kong 1.6% | ||||||||||||
Other Securities | 1.6 | 6,148,863 | ||||||||||
Ireland 0.3% | ||||||||||||
Other Securities | 0.3 | 950,525 | ||||||||||
Israel 0.3% | ||||||||||||
Other Securities | 0.3 | 1,108,987 | ||||||||||
Italy 4.3% | ||||||||||||
Assicurazioni Generali S.p.A. | 83,837 | 0.4 | 1,500,017 | |||||||||
Enel S.p.A. | 434,288 | 0.6 | 2,049,012 | |||||||||
Eni S.p.A. | 160,379 | 1.0 | 3,545,001 | |||||||||
Telecom Italia S.p.A. | 1,189,581 | 0.4 | 1,480,167 | |||||||||
UniCredit S.p.A. | 1,301,036 | 0.4 | 1,509,702 | |||||||||
Other Securities | 1.5 | 5,823,254 | ||||||||||
4.3 | 15,907,153 | |||||||||||
Japan 16.5% | ||||||||||||
Canon, Inc. | 34,500 | 0.4 | 1,566,224 |
32 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Mitsubishi UFJ Financial Group, Inc. | 486,834 | 0.6 | 2,115,750 | |||||||||
Toyota Motor Corp. | 90,200 | 0.8 | 2,994,709 | |||||||||
Other Securities | 14.7 | 54,831,930 | ||||||||||
16.5 | 61,508,613 | |||||||||||
Netherlands 3.7% | ||||||||||||
ING Groep N.V. CVA * | 634,454 | 1.5 | 5,469,611 | |||||||||
Other Securities | 2.2 | 8,192,800 | ||||||||||
3.7 | 13,662,411 | |||||||||||
New Zealand 0.1% | ||||||||||||
Other Securities | 0.1 | 459,283 | ||||||||||
Norway 0.9% | ||||||||||||
Other Securities | 0.9 | 3,444,445 | ||||||||||
Portugal 0.3% | ||||||||||||
Other Securities | 0.3 | 997,036 | ||||||||||
Republic of Korea 4.5% | ||||||||||||
Samsung Electronics Co., Ltd. | 3,463 | 0.8 | 2,981,160 | |||||||||
Other Securities | 3.7 | 13,872,842 | ||||||||||
4.5 | 16,854,002 | |||||||||||
Singapore 1.0% | ||||||||||||
Other Securities | 1.0 | 3,596,708 | ||||||||||
Spain 4.3% | ||||||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 214,405 | 0.5 | 1,929,627 | |||||||||
Banco Santander S.A. | 419,008 | 1.0 | 3,546,424 | |||||||||
Iberdrola S.A. | 204,149 | 0.4 | 1,477,012 | |||||||||
Repsol YPF S.A. | 59,707 | 0.5 | 1,797,163 | |||||||||
Telefonica S.A. | 166,256 | 0.9 | 3,533,205 | |||||||||
Other Securities | 1.0 | 3,567,884 | ||||||||||
4.3 | 15,851,315 | |||||||||||
Sweden 2.8% | ||||||||||||
Other Securities | 2.8 | 10,564,483 | ||||||||||
Switzerland 4.9% | ||||||||||||
Nestle S.A. - Reg’d | 62,049 | 1.0 | 3,588,769 | |||||||||
Novartis AG - Reg’d | 52,588 | 0.8 | 2,962,559 | |||||||||
Roche Holding AG | 12,152 | 0.5 | 1,993,770 | |||||||||
Other Securities | 2.6 | 9,697,743 | ||||||||||
4.9 | 18,242,841 | |||||||||||
United Kingdom 20.8% | ||||||||||||
AstraZeneca plc | 46,268 | 0.6 | 2,221,289 | |||||||||
Barclays plc | 607,345 | 0.5 | 1,882,734 | |||||||||
BP plc | 1,092,057 | 2.2 | 8,036,269 | |||||||||
British American Tobacco plc | 39,661 | 0.5 | 1,818,469 | |||||||||
GlaxoSmithKline plc | 169,439 | 1.0 | 3,802,610 | |||||||||
HSBC Holdings plc | 622,512 | 1.5 | 5,431,609 | |||||||||
Royal Dutch Shell plc, A Shares | 164,866 | 1.6 | 5,840,330 | |||||||||
Royal Dutch Shell plc, B Shares | 126,265 | 1.2 | 4,530,155 | |||||||||
Tesco plc | 301,325 | 0.5 | 1,942,767 | |||||||||
Vodafone Group plc | 2,193,290 | 1.6 | 6,090,076 | |||||||||
Other Securities | 9.6 | 35,715,811 | ||||||||||
20.8 | 77,312,119 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $382,450,845) | 368,486,637 | |||||||||||
Preferred Stock 0.5% of net assets | ||||||||||||
Germany 0.5% | ||||||||||||
Other Securities | 0.5 | 1,683,820 | ||||||||||
Italy 0.0% | ||||||||||||
Other Securities | 0.0 | 117,156 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $1,491,408) | 1,800,976 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Hong Kong 0.0% | ||||||||||||
Other Securities | 0.0 | 20,125 | ||||||||||
Italy 0.0% | ||||||||||||
Other Securities | 0.0 | 48,728 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | 1,790 | ||||||||||
Total Rights | ||||||||||||
(Cost $176,179) | 70,643 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Spain 0.0% | ||||||||||||
Other Securities | 0.0 | 417 | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | 417 | |||||||||||
Other Investment Company 0.1% of net assets | ||||||||||||
United States 0.1% | ||||||||||||
Other Securities | 0.1 | 523,700 | ||||||||||
Total Other Investment Company | ||||||||||||
(Cost $495,250) | 523,700 | |||||||||||
End of Investments. | ||||||||||||
See financial notes 33
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.5% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 1,942,763 | 0.5 | 1,942,763 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $1,942,763) | 1,942,763 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $412,378,834 unrealized appreciation and depreciation were $36,765,547 and ($78,262,008), respectively, with a net unrealized depreciation of ($41,496,461).
At 10/31/11, the values of certain foreign securities held by the fund aggregating $346,424,451 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $77,389 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
CVA — | Dutch Certificate | |
FDR — | Fiduciary Depositary Receipt. | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust. | |
RSP — | Risparmio (Convertible Savings Shares). |
34 See financial notes
Schwab Fundamental International Large Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $384,613,682) including securities on loan of $1,587,313 | $370,882,373 | |||||
Foreign currency, at value (cost $210,891) | 209,150 | |||||
Collateral invested for securities on loan | 1,942,763 | |||||
Receivables: | ||||||
Fund shares sold | 1,534,116 | |||||
Dividends | 814,185 | |||||
Foreign tax reclaims | 145,331 | |||||
Income from securities on loan | 8,392 | |||||
Prepaid expenses | + | 8,632 | ||||
Total assets | 375,544,942 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 1,942,763 | |||||
Payables: | ||||||
Investments bought | 266,088 | |||||
Investment adviser and administrator fees | 4,661 | |||||
Shareholder service fees | 2,449 | |||||
Fund shares redeemed | 646,363 | |||||
Due to custodian | 296,100 | |||||
Accrued expenses | + | 124,526 | ||||
Total liabilities | 3,282,950 | |||||
Net Assets | ||||||
Total assets | 375,544,942 | |||||
Total liabilities | − | 3,282,950 | ||||
Net assets | $372,261,992 | |||||
Net Assets by Source | ||||||
Capital received from investors | 489,632,724 | |||||
Net investment income not yet distributed | 9,453,672 | |||||
Net realized capital losses | (113,079,204 | ) | ||||
Net unrealized capital losses | (13,745,200 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$372,261,992 | 51,290,963 | $7.26 |
See financial notes 35
Schwab Fundamental International Large Company Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,229,702) | $12,096,491 | |||||
Interest | 246 | |||||
Securities on loan | + | 411,713 | ||||
Total investment income | 12,508,450 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,045,688 | |||||
Shareholder service fees | 298,119 | |||||
FTSE Index fee | 213,155 | |||||
Custodian fees | 146,026 | |||||
Portfolio accounting fees | 80,795 | |||||
Professional fees | 48,483 | |||||
Transfer agent fees | 48,333 | |||||
Registration fees | 30,096 | |||||
Shareholder reports | 14,319 | |||||
Trustees’ fees | 8,287 | |||||
Interest expense | 796 | |||||
Other expenses | + | 38,467 | ||||
Total expenses | 1,972,564 | |||||
Expense reduction by CSIM and its affiliates | − | 751,799 | ||||
Net expenses | − | 1,220,765 | ||||
Net investment income | 11,287,685 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 3,370,258 | |||||
Net realized losses on foreign currency transactions | + | (56,930 | ) | |||
Net realized gains | 3,313,328 | |||||
Net unrealized losses on investments | (43,651,027 | ) | ||||
Net unrealized losses on foreign currency translations | + | (40,036 | ) | |||
Net unrealized losses | + | (43,691,063 | ) | |||
Net realized and unrealized losses | (40,377,735 | ) | ||||
Decrease in net assets resulting from operations | ($29,090,050 | ) |
36 See financial notes
Schwab Fundamental International Large Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $11,287,685 | $7,399,005 | ||||||||
Net realized gains (losses) | 3,313,328 | (22,238,538 | ) | |||||||
Net unrealized gains (losses) | + | (43,691,063 | ) | 36,716,859 | ||||||
Increase (Decrease) in net assets from operations | (29,090,050 | ) | 21,877,326 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($8,005,998 | ) | ($7,367,808 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 22,477,614 | $174,921,214 | 20,064,502 | $149,645,007 | ||||||||||||||
Shares reinvested | 755,041 | 5,964,829 | 672,848 | 5,140,560 | ||||||||||||||
Shares redeemed | + | (9,127,025 | ) | (72,203,924 | ) | (16,449,786 | ) | (121,700,994 | ) | |||||||||
Net transactions in fund shares | 14,105,630 | $108,682,119 | 4,287,564 | $33,084,573 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 37,185,333 | $300,675,921 | 32,897,769 | $253,081,830 | ||||||||||||||
Total increase | + | 14,105,630 | 71,586,071 | 4,287,564 | 47,594,091 | |||||||||||||
End of period | 51,290,963 | $372,261,992 | 37,185,333 | $300,675,921 | ||||||||||||||
Net investment income not yet distributed | $9,453,672 | $5,891,081 |
See financial notes 37
Schwab Fundamental International Small-Mid Company Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 1/31/082– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 9.96 | 9.00 | 6.22 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.24 | 3 | 0.16 | 3 | 0.12 | 3 | 0.27 | 3 | ||||||||||
Net realized and unrealized gains (losses) | (0.40 | ) | 1.09 | 2.92 | (4.05 | ) | ||||||||||||
Total from investment operations | (0.16 | ) | 1.25 | 3.04 | (3.78 | ) | ||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.27 | ) | (0.29 | ) | (0.26 | ) | — | |||||||||||
Net asset value at end of period | 9.53 | 9.96 | 9.00 | 6.22 | ||||||||||||||
Total return (%) | (1.76 | ) | 14.32 | 51.19 | (37.80 | )4 | ||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses | 0.54 | 0.55 | 0.55 | 0.56 | 5,6 | |||||||||||||
Gross operating expenses | 0.99 | 1.07 | 3.82 | 5.44 | 5 | |||||||||||||
Net investment income (loss) | 2.29 | 1.77 | 1.59 | 3.55 | 5 | |||||||||||||
Portfolio turnover rate | 63 | 63 | 81 | 132 | 4 | |||||||||||||
Net assets, end of period ($ x 1,000,000) | 93 | 74 | 47 | 3 |
1 Effective October 19, 2009, the Investor Share class, the Select Share class and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Calculated based on the average shares outstanding during the period.
4 Not annualized.
5 Annualized.
6 The ratio of net operating expenses would have been 0.55%, if interest expenses had not been incurred.
38 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .4% | Common Stock | 92,481,164 | 91,040,735 | ||||||||
0 | .4% | Preferred Stock | 287,925 | 363,136 | ||||||||
0 | .0% | Rights | — | 12,729 | ||||||||
0 | .0% | Warrants | — | 70 | ||||||||
0 | .4% | Other Investment Company | 316,856 | 337,950 | ||||||||
0 | .3% | Short-Term Investment | 290,064 | 290,064 | ||||||||
99 | .5% | Total Investments | 93,376,009 | 92,044,684 | ||||||||
1 | .3% | Collateral Invested for Securities on Loan | 1,197,571 | 1,197,571 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (734,183 | ) | ||||||||
100 | .0% | Net Assets | 92,508,072 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 98.4% of net assets | ||||||||||||
Australia 5.4% | ||||||||||||
Other Securities | 5.4 | 5,026,282 | ||||||||||
Austria 1.0% | ||||||||||||
Strabag SE - BR | 5,178 | 0.2 | 159,216 | |||||||||
Other Securities | 0.8 | 763,388 | ||||||||||
1.0 | 922,604 | |||||||||||
Belgium 1.1% | ||||||||||||
Other Securities | 1.1 | 1,038,852 | ||||||||||
Canada 7.7% | ||||||||||||
AltaGas Ltd. | 6,100 | 0.2 | 179,986 | |||||||||
Progress Energy Resources Corp. | 10,300 | 0.2 | 145,807 | |||||||||
Tim Hortons, Inc. | 3,300 | 0.2 | 162,426 | |||||||||
Other Securities | 7.1 | 6,685,229 | ||||||||||
7.7 | 7,173,448 | |||||||||||
Denmark 1.2% | ||||||||||||
Topdanmark A/S * | 1,010 | 0.2 | 166,295 | |||||||||
Other Securities | 1.0 | 925,449 | ||||||||||
1.2 | 1,091,744 | |||||||||||
Finland 1.3% | ||||||||||||
Other Securities | 1.3 | 1,196,177 | ||||||||||
France 3.9% | ||||||||||||
Hermes International | 552 | 0.2 | 187,714 | |||||||||
Societe BIC S.A. | 1,892 | 0.2 | 168,843 | |||||||||
Other Securities | 3.5 | 3,212,243 | ||||||||||
3.9 | 3,568,800 | |||||||||||
Germany 3.5% | ||||||||||||
MTU Aero Engines Holding AG | 2,232 | 0.2 | 149,466 | |||||||||
SGL Carbon SE (a)* | 3,945 | 0.3 | 245,194 | |||||||||
Other Securities | 3.0 | 2,820,867 | ||||||||||
3.5 | 3,215,527 | |||||||||||
Greece 0.5% | ||||||||||||
Other Securities | 0.5 | 473,897 | ||||||||||
Hong Kong 5.6% | ||||||||||||
Belle International Holdings Ltd. | 79,000 | 0.2 | 154,937 | |||||||||
First Pacific Co., Ltd. | 183,000 | 0.2 | 190,650 | |||||||||
SJM Holdings Ltd. | 98,000 | 0.2 | 167,977 | |||||||||
Tingyi (Cayman Islands) Holding Corp. | 52,000 | 0.2 | 147,899 | |||||||||
Other Securities | 4.8 | 4,480,035 | ||||||||||
5.6 | 5,141,498 | |||||||||||
Ireland 0.6% | ||||||||||||
Other Securities | 0.6 | 570,758 | ||||||||||
Israel 1.0% | ||||||||||||
Other Securities | 1.0 | 934,611 | ||||||||||
Italy 2.6% | ||||||||||||
Other Securities | 2.6 | 2,395,606 | ||||||||||
Japan 33.4% | ||||||||||||
Chiyoda Corp. | 13,000 | 0.2 | 149,704 | |||||||||
FamilyMart Co., Ltd. | 4,100 | 0.2 | 161,181 | |||||||||
Hino Motors Ltd. | 27,000 | 0.2 | 158,569 | |||||||||
K’s Holdings Corp. | 3,640 | 0.2 | 152,856 | |||||||||
Keihin Electric Express Railway Co., Ltd. | 19,000 | 0.2 | 170,662 | |||||||||
Kewpie Corp. | 11,500 | 0.2 | 156,804 | |||||||||
Konami Corp. | 7,100 | 0.3 | 231,360 | |||||||||
Kyowa Hakko Kirin Co., Ltd. | 16,000 | 0.2 | 180,320 | |||||||||
Leopalace21 Corp. (a)* | 89,800 | 0.3 | 244,933 | |||||||||
Oriental Land Co., Ltd. | 1,600 | 0.2 | 159,010 | |||||||||
Sumitomo Rubber Industries Ltd. | 12,400 | 0.2 | 154,911 | |||||||||
The Iyo Bank Ltd. | 16,000 | 0.2 | 150,108 | |||||||||
Toho Holdings Co., Ltd. | 12,200 | 0.2 | 153,950 | |||||||||
Trend Micro, Inc. | 4,500 | 0.2 | 160,924 |
See financial notes 39
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Yamazaki Baking Co., Ltd. | 12,000 | 0.2 | 159,089 | |||||||||
Yokogawa Electric Corp. * | 17,400 | 0.2 | 162,726 | |||||||||
Other Securities | 30.0 | 28,222,530 | ||||||||||
33.4 | 30,929,637 | |||||||||||
Netherlands 1.3% | ||||||||||||
Other Securities | 1.3 | 1,173,981 | ||||||||||
New Zealand 0.6% | ||||||||||||
Other Securities | 0.6 | 557,067 | ||||||||||
Norway 1.0% | ||||||||||||
Other Securities | 1.0 | 932,897 | ||||||||||
Portugal 0.8% | ||||||||||||
Other Securities | 0.8 | 700,848 | ||||||||||
Republic of Korea 7.7% | ||||||||||||
CJ CheilJedang Corp. | 683 | 0.2 | 188,484 | |||||||||
CJ Corp. | 2,390 | 0.2 | 171,230 | |||||||||
Hyundai Marine & Fire Insurance Co., Ltd. | 6,350 | 0.2 | 183,869 | |||||||||
Hyundai Merchant Marine Co., Ltd. | 5,680 | 0.2 | 146,668 | |||||||||
Korea Zinc Co., Ltd. | 513 | 0.2 | 150,364 | |||||||||
LG Uplus Corp. | 25,120 | 0.2 | 149,600 | |||||||||
NHN Corp. * | 710 | 0.2 | 148,121 | |||||||||
Samsung Engineering Co., Ltd. | 729 | 0.2 | 148,898 | |||||||||
SK Chemicals Co., Ltd. | 2,924 | 0.2 | 187,063 | |||||||||
Taekwang Industrial Co., Ltd. | 118 | 0.2 | 157,004 | |||||||||
Other Securities | 5.7 | 5,480,611 | ||||||||||
7.7 | 7,111,912 | |||||||||||
Singapore 1.9% | ||||||||||||
Other Securities | 1.9 | 1,801,392 | ||||||||||
Spain 1.6% | ||||||||||||
Other Securities | 1.6 | 1,482,856 | ||||||||||
Sweden 2.3% | ||||||||||||
Lundin Petroleum AB * | 9,658 | 0.3 | 235,701 | |||||||||
Meda AB, A Shares | 15,555 | 0.2 | 158,300 | |||||||||
Other Securities | 1.8 | 1,765,965 | ||||||||||
2.3 | 2,159,966 | |||||||||||
Switzerland 3.0% | ||||||||||||
Other Securities | 3.0 | 2,765,334 | ||||||||||
United Kingdom 9.4% | ||||||||||||
Aggreko plc | 5,586 | 0.2 | 153,134 | |||||||||
Babcock International Group plc | 12,968 | 0.2 | 146,559 | |||||||||
Booker Group plc | 124,474 | 0.2 | 149,908 | |||||||||
Charter International plc | 11,801 | 0.2 | 169,975 | |||||||||
Lancashire Holdings Ltd. | 14,249 | 0.2 | 163,589 | |||||||||
The Berkeley Group Holdings plc * | 8,033 | 0.2 | 161,084 | |||||||||
The Weir Group plc | 5,554 | 0.2 | 170,157 | |||||||||
Other Securities | 8.0 | 7,560,635 | ||||||||||
9.4 | 8,675,041 | |||||||||||
Total Common Stock | ||||||||||||
(Cost $92,481,164) | 91,040,735 | |||||||||||
Preferred Stock 0.4% of net assets | ||||||||||||
Germany 0.4% | ||||||||||||
Other Securities | 0.4 | 342,850 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | 18,545 | ||||||||||
United Kingdom 0.0% | ||||||||||||
Other Securities | 0.0 | 1,741 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $287,925) | 363,136 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Australia 0.0% | ||||||||||||
Other Securities | 0.0 | 3,656 | ||||||||||
Republic of Korea 0.0% | ||||||||||||
Other Securities | 0.0 | 9,073 | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | 12,729 | |||||||||||
Warrants 0.0% of net assets | ||||||||||||
Italy 0.0% | ||||||||||||
Other Securities | 0.0 | 70 | ||||||||||
Netherlands 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Warrants | ||||||||||||
(Cost $—) | 70 | |||||||||||
Other Investment Company 0.4% of net assets | ||||||||||||
United States 0.4% | ||||||||||||
iShares MSCI EAFE Small Cap Index Fund | 9,000 | 0.4 | 337,950 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $316,856) | 337,950 | |||||||||||
40 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.3% of net assets | ||||||||||||
Time Deposit 0.3% | ||||||||||||
Bank of America | ||||||||||||
0.03%, 11/01/11 | 290,064 | 0.3 | 290,064 | |||||||||
Total Short-Term Investment | ||||||||||||
(Cost $290,064) | 290,064 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 1.3% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 1,197,571 | 1.3 | 1,197,571 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $1,197,571) | 1,197,571 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $94,807,723 and the unrealized appreciation and depreciation were $10,231,020 and ($12,994,059), respectively, with a net unrealized depreciation of ($2,763,039).
At 10/31/11, the values of certain foreign securities held by the fund aggregating $83,053,215 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(c) | Illiquid security. At the period end, the value of these amounted to $210,798 or 0.2% of net assets. |
CVA — | Dutch Certificate. | |
Reg’d — | Registered. | |
REIT — | Real Estate Investment Trust. | |
RSP — | Risparmio (Convertible Savings Shares). |
See financial notes 41
Schwab Fundamental International Small-Mid Company Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $93,376,009) including securities on loan of $1,084,909 | $92,044,684 | |||||
Foreign currency, at value (cost $154,017) | 154,360 | |||||
Collateral invested for securities on loan | 1,197,571 | |||||
Receivables: | ||||||
Investments sold | 63,268 | |||||
Dividends | 264,444 | |||||
Fund shares sold | 221,698 | |||||
Foreign tax reclaims | 21,380 | |||||
Income from securities on loan | 4,833 | |||||
Prepaid expenses | + | 2,032 | ||||
Total assets | 93,974,270 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 1,197,571 | |||||
Payables: | ||||||
Investments bought | 63,268 | |||||
Investment adviser and administrator fees | 2,507 | |||||
Shareholder service fees | 632 | |||||
Fund shares redeemed | 94,917 | |||||
Accrued expenses | + | 107,303 | ||||
Total liabilities | 1,466,198 | |||||
Net Assets | ||||||
Total assets | 93,974,270 | |||||
Total liabilities | − | 1,466,198 | ||||
Net assets | $92,508,072 | |||||
Net Assets by Source | ||||||
Capital received from investors | 89,157,446 | |||||
Net investment income not yet distributed | 1,370,750 | |||||
Net realized capital gains | 3,314,844 | |||||
Net unrealized capital losses | (1,334,968 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$92,508,072 | 9,705,240 | $9.53 |
42 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $214,007) | $2,536,302 | |||||
Interest | 100 | |||||
Securities on loan | + | 60,527 | ||||
Total investment income | 2,596,929 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 366,327 | |||||
Shareholder service fees | 65,213 | |||||
Custodian fees | 133,508 | |||||
FTSE Index fee | 86,727 | |||||
Portfolio accounting fees | 80,791 | |||||
Professional fees | 46,112 | |||||
Transfer agent fees | 45,892 | |||||
Registration fees | 20,905 | |||||
Shareholder reports | 9,750 | |||||
Trustees’ fees | 6,473 | |||||
Interest expense | 581 | |||||
Other expenses | + | 47,504 | ||||
Total expenses | 909,783 | |||||
Expense reduction by CSIM and its affiliates | − | 413,260 | ||||
Net expenses | − | 496,523 | ||||
Net investment income | 2,100,406 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 4,373,467 | |||||
Net realized gains on foreign currency transactions | + | 6,471 | ||||
Net realized gains | 4,379,938 | |||||
Net unrealized losses on investments | (9,750,639 | ) | ||||
Net unrealized losses on foreign currency translations | + | (10,266 | ) | |||
Net unrealized losses | + | (9,760,905 | ) | |||
Net realized and unrealized losses | (5,380,967 | ) | ||||
Decrease in net assets resulting from operations | ($3,280,561 | ) |
See financial notes 43
Schwab Fundamental International Small-Mid Company Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $2,100,406 | $1,023,950 | ||||||||
Net realized gains | 4,379,938 | 3,763,778 | ||||||||
Net unrealized gains (losses) | + | (9,760,905 | ) | 3,693,389 | ||||||
Increase (Decrease) in net assets from operations | (3,280,561 | ) | 8,481,117 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | ($2,008,011 | ) | ($1,616,483 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 4,357,124 | $45,080,122 | 4,097,167 | $37,090,973 | ||||||||||||||
Shares reinvested | 127,659 | 1,268,928 | 105,785 | 940,433 | ||||||||||||||
Shares redeemed | + | (2,197,870 | ) | (22,426,178 | ) | (1,962,798 | ) | (17,631,284 | ) | |||||||||
Net transactions in fund shares | 2,286,913 | $23,922,872 | 2,240,154 | $20,400,122 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 7,418,327 | $73,873,772 | 5,178,173 | $46,609,016 | ||||||||||||||
Total increase | + | 2,286,913 | 18,634,300 | 2,240,154 | 27,264,756 | |||||||||||||
End of period | 9,705,240 | $92,508,072 | 7,418,327 | $73,873,772 | ||||||||||||||
Net investment income not yet distributed | $1,370,750 | $914,892 |
44 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Financial Statements
Financial Highlights
11/1/10– | 11/1/09– | 11/1/08– | 1/31/082– | |||||||||||||||
10/31/11 | 10/31/10 | 10/31/091 | 10/31/08 | |||||||||||||||
Per-Share Data ($) | ||||||||||||||||||
Net asset value at beginning of period | 10.81 | 8.91 | 5.74 | 10.00 | ||||||||||||||
Income (loss) from investment operations: | ||||||||||||||||||
Net investment income (loss) | 0.24 | 0.17 | 0.05 | 0.16 | ||||||||||||||
Net realized and unrealized gains (losses) | (1.37 | ) | 1.81 | 3.27 | (4.42 | ) | ||||||||||||
Total from investment operations | (1.13 | ) | 1.98 | 3.32 | (4.26 | ) | ||||||||||||
Less distributions: | ||||||||||||||||||
Distributions from net investment income | (0.15 | ) | (0.08 | ) | (0.15 | ) | — | |||||||||||
Distributions from net realized gains | (0.36 | ) | — | — | — | |||||||||||||
Total distributions | (0.51 | ) | (0.08 | ) | (0.15 | ) | — | |||||||||||
Net asset value at end of period | 9.17 | 10.81 | 8.91 | 5.74 | ||||||||||||||
Total return (%) | (10.99 | ) | 22.36 | 59.55 | (42.60 | )3 | ||||||||||||
Ratios/Supplemental Data (%) | ||||||||||||||||||
Ratios to average net assets: | ||||||||||||||||||
Net operating expenses | 0.61 | 4 | 0.61 | 4 | 0.61 | 4 | 0.61 | 4,5 | ||||||||||
Gross operating expenses | 0.91 | 0.98 | 1.70 | 4.06 | 5 | |||||||||||||
Net investment income (loss) | 2.51 | 2.31 | 1.56 | 2.31 | 5 | |||||||||||||
Portfolio turnover rate | 56 | 91 | 103 | 159 | 3 | |||||||||||||
Net assets, end of period ($ x 1,000,000) | 310 | 294 | 119 | 6 |
1 Effective October 19, 2009, the Investor Share class, the Select Share and the Institutional Share class were combined into a single class of shares of the fund. The financial history as shown in the financial highlights is that of the former Institutional Shares.
2 Commencement of operations.
3 Not annualized.
4 The ratio of net operating expenses would have been 0.60%, if interest expenses had not been incurred.
5 Annualized.
See financial notes 45
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings as of October 31, 2011
This section shows the fund’s 50 largest portfolio holdings in unaffiliated issuers and any holdings exceeding 1% of the fund’s total net assets as of the report date and any affiliated issuers. The remaining securities held by the fund are grouped as “Other Securities” in each category. You can request a complete schedule of portfolio holdings as of the report date, free of charge, by calling Schwab Funds® at 1-800-435-4000. This complete schedule, filed on the fund’s Form N-CSR, is also available on the SEC’s website at http://www.sec.gov.
In addition, the fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. A copy of the fund’s most recently filed quarterly schedule of portfolio holdings, included on the fund’s Form N-CSR (with respect to the fund’s second and fourth fiscal quarters) or Form N-Q (with respect to the fund’s first and third fiscal quarters), is available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
88 | .0% | Common Stock | 277,981,460 | 273,181,901 | ||||||||
10 | .2% | Preferred Stock | 33,543,864 | 31,707,219 | ||||||||
0 | .0% | Rights | — | — | ||||||||
1 | .2% | Other Investment Company | 3,566,400 | 3,672,000 | ||||||||
0 | .3% | Short-Term Investment | 769,415 | 769,415 | ||||||||
99 | .7% | Total Investments | 315,861,139 | 309,330,535 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 665,550 | 665,550 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 338,278 | |||||||||
100 | .0% | Net Assets | 310,334,363 |
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Common Stock 88.0% of net assets | ||||||||||||
Brazil 6.9% | ||||||||||||
Banco do Brasil S.A. | 145,100 | 0.7 | 2,188,945 | |||||||||
Petroleo Brasileiro S.A. - Petrobras | 360,800 | 1.6 | 4,850,316 | |||||||||
Vale S.A. | 111,300 | 0.9 | 2,833,633 | |||||||||
Other Securities | 3.7 | 11,575,843 | ||||||||||
6.9 | 21,448,737 | |||||||||||
Chile 1.5% | ||||||||||||
Other Securities | 1.5 | 4,545,766 | ||||||||||
China 14.4% | ||||||||||||
Bank of China Ltd., Class H | 7,902,234 | 0.9 | 2,812,474 | |||||||||
China Construction Bank Corp., Class H | 7,553,000 | 1.8 | 5,549,455 | |||||||||
China Mobile Ltd. | 740,500 | 2.3 | 7,037,961 | |||||||||
China Petroleum & Chemical Corp., Class H | 3,220,000 | 1.0 | 3,045,250 | |||||||||
China Telecom Corp., Ltd., Class H | 3,258,000 | 0.6 | 2,011,512 | |||||||||
China Unicom (Hong Kong) Ltd. | 1,115,056 | 0.7 | 2,241,949 | |||||||||
CNOOC Ltd. | 1,217,000 | 0.7 | 2,300,568 | |||||||||
Industrial & Commercial Bank of China Ltd., Class H | 6,380,172 | 1.3 | 3,984,180 | |||||||||
PetroChina Co., Ltd., Class H | 2,597,000 | 1.1 | 3,371,405 | |||||||||
Other Securities | 4.0 | 12,221,366 | ||||||||||
14.4 | 44,576,120 | |||||||||||
Colombia 1.1% | ||||||||||||
Ecopetrol S.A. | 1,090,010 | 0.8 | 2,336,570 | |||||||||
Other Securities | 0.3 | 973,151 | ||||||||||
1.1 | 3,309,721 | |||||||||||
Czech Republic 0.8% | ||||||||||||
CEZ A/S | 35,826 | 0.5 | 1,514,936 | |||||||||
Other Securities | 0.3 | 1,096,997 | ||||||||||
0.8 | 2,611,933 | |||||||||||
Egypt 0.5% | ||||||||||||
Other Securities | 0.5 | 1,624,164 | ||||||||||
Hungary 0.7% | ||||||||||||
Other Securities | 0.7 | 2,249,821 | ||||||||||
India 6.5% | ||||||||||||
Axis Bank Ltd. | 67,228 | 0.5 | 1,585,200 | |||||||||
Reliance Industries Ltd. | 135,417 | 0.8 | 2,417,349 | |||||||||
Other Securities | 5.2 | 16,250,506 | ||||||||||
6.5 | 20,253,055 | |||||||||||
Indonesia 1.6% | ||||||||||||
PT Astra International Tbk | 212,000 | 0.5 | 1,634,686 | |||||||||
Other Securities | 1.1 | 3,190,034 | ||||||||||
1.6 | 4,824,720 | |||||||||||
Malaysia 4.0% | ||||||||||||
Malayan Banking Berhad | 713,400 | 0.6 | 1,936,826 | |||||||||
Other Securities | 3.4 | 10,539,240 | ||||||||||
4.0 | 12,476,066 | |||||||||||
Mexico 5.0% | ||||||||||||
America Movil S.A.B. de C.V., Series L | 2,317,200 | 0.9 | 2,945,402 | |||||||||
Cemex S.A.B. de C.V., Series CPO * | 4,753,990 | 0.7 | 2,079,670 | |||||||||
Fomento Economico Mexicano S.A.B. de C.V. | 234,200 | 0.5 | 1,571,584 | |||||||||
Grupo Mexico S.A.B. de C.V., Series B | 572,874 | 0.5 | 1,587,902 | |||||||||
Other Securities | 2.4 | 7,460,757 | ||||||||||
5.0 | 15,645,315 | |||||||||||
Poland 2.2% | ||||||||||||
Polski Koncern Naftowy Orlen S.A. * | 160,423 | 0.6 | 1,980,924 | |||||||||
Other Securities | 1.6 | 4,705,297 | ||||||||||
2.2 | 6,686,221 | |||||||||||
Russia 11.2% | ||||||||||||
Gazprom ADR | 818,538 | 3.1 | 9,488,786 | |||||||||
LUKOIL ADR | 135,761 | 2.5 | 7,863,435 |
46 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 76,215 | 0.5 | 1,486,258 | |||||||||
Rosneft Oil Co. GDR - Reg’d | 231,758 | 0.5 | 1,642,146 | |||||||||
Sberbank of Russia ADR * | 174,484 | 0.6 | 1,878,353 | |||||||||
Surgutneftegaz ADR | 584,821 | 1.6 | 5,015,077 | |||||||||
Tatneft ADR | 62,162 | 0.6 | 1,836,135 | |||||||||
Other Securities | 1.8 | 5,608,128 | ||||||||||
11.2 | 34,818,318 | |||||||||||
South Africa 10.8% | ||||||||||||
FirstRand Ltd. | 690,349 | 0.6 | 1,709,358 | |||||||||
Impala Platinum Holdings Ltd. | 73,388 | 0.5 | 1,685,436 | |||||||||
MTN Group Ltd. | 177,740 | 1.0 | 3,089,263 | |||||||||
Sanlam Ltd. | 402,527 | 0.5 | 1,504,447 | |||||||||
Sasol Ltd. | 71,130 | 1.0 | 3,198,906 | |||||||||
Standard Bank Group Ltd. | 257,952 | 1.0 | 3,167,462 | |||||||||
Other Securities | 6.2 | 19,158,810 | ||||||||||
10.8 | 33,513,682 | |||||||||||
Taiwan 17.4% | ||||||||||||
Asustek Computer, Inc. | 261,041 | 0.6 | 1,814,805 | |||||||||
China Steel Corp. | 2,105,733 | 0.7 | 2,095,011 | |||||||||
Chunghwa Telecom Co., Ltd. | 687,906 | 0.7 | 2,301,477 | |||||||||
Formosa Plastics Corp. | 803,820 | 0.8 | 2,364,107 | |||||||||
Hon Hai Precision Industry Co., Ltd. | 1,601,042 | 1.4 | 4,389,060 | |||||||||
Nan Ya Plastics Corp. | 1,137,160 | 0.8 | 2,558,185 | |||||||||
Quanta Computer, Inc. | 869,500 | 0.6 | 1,711,036 | |||||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 3,081,689 | 2.4 | 7,509,695 | |||||||||
Other Securities | 9.4 | 29,254,061 | ||||||||||
17.4 | 53,997,437 | |||||||||||
Thailand 1.6% | ||||||||||||
Other Securities | 1.6 | 5,036,604 | ||||||||||
Turkey 1.8% | ||||||||||||
Other Securities | 1.8 | 5,564,221 | ||||||||||
Total Common Stock | ||||||||||||
(Cost $277,981,460) | 273,181,901 | |||||||||||
Preferred Stock 10.2% of net assets | ||||||||||||
Brazil 10.1% | ||||||||||||
Banco Bradesco S.A. | 197,376 | 1.2 | 3,569,633 | |||||||||
Companhia de Bebidas das Americas | 51,700 | 0.6 | 1,726,997 | |||||||||
Itau Unibanco Holding S.A. | 229,965 | 1.4 | 4,384,049 | |||||||||
Petroleo Brasileiro S.A. | 532,600 | 2.1 | 6,613,876 | |||||||||
Vale S.A., Class A | 143,300 | 1.1 | 3,405,446 | |||||||||
Other Securities | 3.7 | 11,634,251 | ||||||||||
10.1 | 31,334,252 | |||||||||||
Colombia 0.1% | ||||||||||||
Other Securities | 0.1 | 372,967 | ||||||||||
Total Preferred Stock | ||||||||||||
(Cost $33,543,864) | 31,707,219 | |||||||||||
Rights 0.0% of net assets | ||||||||||||
Colombia 0.0% | ||||||||||||
Other Securities | 0.0 | — | ||||||||||
Total Rights | ||||||||||||
(Cost $—) | — | |||||||||||
Other Investment Company 1.2% of net assets | ||||||||||||
United States 1.2% | ||||||||||||
iShares MSCI Emerging Markets Index Fund | 90,000 | 1.2 | 3,672,000 | |||||||||
Total Other Investment Company | ||||||||||||
(Cost $3,566,400) | 3,672,000 | |||||||||||
Face | ||||||||||||
Security | Amount | % of Net | Value | |||||||||
Rate, Maturity Date | ($) | Assets | ($) | |||||||||
Short-Term Investment 0.3% of net assets | ||||||||||||
Time Deposit 0.3% | ||||||||||||
Other Securities | 0.3 | 769,415 | ||||||||||
Total Short-Term Investment | ||||||||||||
(Cost $769,415) | 769,415 | |||||||||||
End of Investments. | ||||||||||||
Number | % of Net | Value | ||||||||||
Security | of Shares | Assets | ($) | |||||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 665,550 | 0.2 | 665,550 | |||||||||
Total Collateral Invested for Securities on Loan | ||||||||||||
(Cost $665,550) | 665,550 | |||||||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $321,105,289 and the unrealized appreciation and depreciation were $19,442,524 and ($31,217,278), respectively, with a net unrealized depreciation of ($11,774,754).
At 10/31/11, the values of certain foreign securities held by the fund aggregating $216,564,064 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
For the following notes, please refer to complete schedule of holdings.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. |
See financial notes 47
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
ADR — | American Depositary Receipt | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
48 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Statement of
Assets and Liabilities
As of October 31, 2011
Assets | ||||||
Investments, at value (cost $315,861,139) including securities on loan of $595,815 | $309,330,535 | |||||
Foreign currency, at value (cost $373,461) | 379,211 | |||||
Collateral invested for securities on loan | 665,550 | |||||
Receivables: | ||||||
Investments sold | 18,085 | |||||
Fund shares sold | 2,727,447 | |||||
Dividends | 241,915 | |||||
Income from securities on loan | 2,376 | |||||
Prepaid expenses | + | 6,552 | ||||
Total assets | 313,371,671 | |||||
Liabilities | ||||||
Collateral held for securities on loan | 665,550 | |||||
Payables: | ||||||
Investments bought | 1,954,852 | |||||
Investment adviser and administrator fees | 7,172 | |||||
Shareholder service fees | 1,265 | |||||
Fund shares redeemed | 205,412 | |||||
Accrued expenses | + | 203,057 | ||||
Total liabilities | 3,037,308 | |||||
Net Assets | ||||||
Total assets | 313,371,671 | |||||
Total liabilities | − | 3,037,308 | ||||
Net assets | $310,334,363 | |||||
Net Assets by Source | ||||||
Capital received from investors | 309,363,160 | |||||
Net investment income not yet distributed | 6,702,195 | |||||
Net realized capital gains | 786,008 | |||||
Net unrealized capital losses | (6,517,000 | ) | ||||
Net Asset Value (NAV) |
Shares | ||||||||||||
Net Assets | ÷ | Outstanding | = | NAV | ||||||||
$310,334,363 | 33,826,795 | $9.17 |
See financial notes 49
Schwab Fundamental Emerging Markets Index Fund
Statement of
Operations
For November 1, 2010 through October 31, 2011
Investment Income | ||||||
Dividends (net of foreign withholding taxes of $1,292,698) | $9,828,169 | |||||
Interest | 218 | |||||
Securities on loan | + | 26,488 | ||||
Total investment income | 9,854,875 | |||||
Expenses | ||||||
Investment adviser and administrator fees | 1,579,096 | |||||
Shareholder service fees | 207,128 | |||||
Custodian fees | 383,909 | |||||
FTSE Index fee | 331,610 | |||||
Transfer agent fees | 105,147 | |||||
Portfolio accounting fees | 72,201 | |||||
Professional fees | 48,734 | |||||
Registration fees | 44,891 | |||||
Interest expense | 27,370 | |||||
Shareholder reports | 24,211 | |||||
Trustees’ fees | 8,089 | |||||
Other expenses | + | 31,139 | ||||
Total expenses | 2,863,525 | |||||
Expense reduction by CSIM and its affiliates | − | 941,239 | ||||
Net expenses | − | 1,922,286 | ||||
Net investment income | 7,932,589 | |||||
Realized and Unrealized Gains (Losses) | ||||||
Net realized gains on investments | 5,381,719 | |||||
Net realized losses on foreign currency transactions | + | (580,126 | ) | |||
Net realized gains | 4,801,593 | |||||
Net unrealized losses on investments (net of foreign capital gain tax of $308,228) | (50,398,837 | ) | ||||
Net unrealized gains on foreign currency translations | + | 5,074 | ||||
Net unrealized losses | + | (50,393,763 | ) | |||
Net realized and unrealized losses | (45,592,170 | ) | ||||
Decrease in net assets resulting from operations | ($37,659,581 | ) |
50 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Statement of
Changes in Net Assets
For the current and prior report periods
Operations | ||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||
Net investment income | $7,932,589 | $4,482,157 | ||||||||
Net realized gains | 4,801,593 | 16,047,573 | ||||||||
Net unrealized gains (losses) | + | (50,393,763 | ) | 20,262,394 | ||||||
Increase (Decrease) in net assets from operations | (37,659,581 | ) | 40,792,124 | |||||||
Distributions to Shareholders | ||||||||||
Distributions from net investment income | (4,207,384 | ) | (1,195,864 | ) | ||||||
Distributions from net realized gains | + | (9,830,980 | ) | — | ||||||
Total distributions | ($14,038,364 | ) | ($1,195,864 | ) |
Transactions in Fund Shares
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | VALUE | SHARES | VALUE | |||||||||||||||
Shares sold | 17,110,504 | $176,362,625 | 19,525,248 | $189,738,742 | ||||||||||||||
Shares reinvested | 806,425 | 8,346,494 | 68,369 | 648,824 | ||||||||||||||
Shares redeemed | + | (11,306,201 | ) | (117,012,298 | ) | (5,759,702 | ) | (54,877,962 | ) | |||||||||
Net transactions in fund shares | 6,610,728 | $67,696,821 | 13,833,915 | $135,509,604 | ||||||||||||||
Shares Outstanding and Net Assets | ||||||||||||||||||
11/1/10-10/31/11 | 11/1/09-10/31/10 | |||||||||||||||||
SHARES | NET ASSETS | SHARES | NET ASSETS | |||||||||||||||
Beginning of period | 27,216,067 | $294,335,487 | 13,382,152 | $119,229,623 | ||||||||||||||
Total increase | + | 6,610,728 | 15,998,876 | 13,833,915 | 175,105,864 | |||||||||||||
End of period | 33,826,795 | $310,334,363 | 27,216,067 | $294,335,487 | ||||||||||||||
Net investment income not yet distributed | $6,702,195 | $3,385,141 |
See financial notes 51
Schwab Fundamental Index Funds
Financial Notes
1. Business Structure of the Funds:
Each of the funds discussed in this report is a series of Schwab Capital Trust (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 Capital Trust (organized May 7, 1993) | Schwab Premier Equity Fund | |||
Schwab Fundamental US Large Company Index Fund | Schwab Core Equity Fund | |||
Schwab Fundamental US Small-Mid Company Index Fund | Schwab Dividend Equity Fund | |||
Schwab Fundamental International Large | Schwab Large-Cap Growth Fund | |||
Company Index Fund | Schwab Small-Cap Equity Fund | |||
Schwab Fundamental International | Schwab Hedged Equity Fund | |||
Small-Mid Company Index Fund | Schwab Financial Services Fund | |||
Schwab Fundamental Emerging Markets Index Fund | Schwab Health Care Fund | |||
Schwab S&P 500 Index Fund | Schwab International Core Equity Fund | |||
Schwab Small-Cap Index Fund | Schwab Target 2010 Fund | |||
Schwab Total Stock Market Index Fund | Schwab Target 2015 Fund | |||
Schwab International Index Fund | Schwab Target 2020 Fund | |||
Schwab MarketTrack All Equity Portfolio | Schwab Target 2025 Fund | |||
Schwab MarketTrack Growth Portfolio | Schwab Target 2030 Fund | |||
Schwab MarketTrack Balanced Portfolio | Schwab Target 2035 Fund | |||
Schwab MarketTrack Conservative Portfolio | Schwab Target 2040 Fund | |||
Laudus Small-Cap MarketMasters Fund | Schwab Monthly Income Fund-Moderate Payout | |||
Laudus International MarketMasters Fund | Schwab Monthly Income Fund-Enhanced Payout | |||
Schwab Balanced Fund | Schwab Monthly Income Fund-Maximum Payout | |||
Each fund in this report offers one share class. Shares are bought and sold (subject to a redemption fee, see financial note 9) at closing net asset value (“NAV”), which is the price for all outstanding shares of the funds. Each share has a par value of 1/1,000 of a cent, and the Board of Trustees 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.
2. Significant Accounting Policies:
The following is a summary of the significant accounting policies the funds use in their preparation of financial statements. The accounting policies are in conformity with accounting principles generally accepted in the United States of America (“GAAP”).
(a) Security Valuation:
The funds value the securities in their portfolios every business day. The funds use the following policies to value various types of securities:
• | Securities traded on an exchange or over-the-counter: valued at the closing value for the day, or, on days when no closing value has been reported, halfway between the most recent bid and ask quotes. Securities that are primarily traded on foreign exchanges are valued at the closing values of such securities on their respective exchanges with these values then translated into U.S. dollars at the valuation date exchange rate, unless these securities are fair valued as discussed below. | |
• | Securities for which no quoted value is available: The Board of Trustees has adopted procedures to fair value each fund’s securities when market prices are not “readily available” or are unreliable. For example, a fund may fair value a security when a security is de-listed or its trading is halted or suspended; when a security’s primary pricing source is unable or unwilling to provide a price; or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. | |
• | International fair valuation: The Board of Trustees has adopted procedures to fair value foreign equity securities that trade in markets that close prior to when the funds value their holdings. By fair valuing securities whose prices may have been affected by events occurring after the close of trading, each fund seeks to establish prices that investors might expect |
52
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
to realize upon the current sales of these securities. This methodology is designed to deter “arbitrage” market timers, who seek to exploit delays between the change in the value of a fund’s portfolio holdings and the net asset value of the fund’s shares, and seeks to help ensure that the prices at which the fund’s shares are purchased and redeemed are fair and do not result in dilution of shareholder interest or other harm to shareholders. When fair value pricing is used at the open or close of a reporting period, it may cause a temporary divergence between the return of a fund and that of its comparative index or benchmark. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. Due to the subjective and variable nature of fair value pricing, there can be no assurance that a fund could obtain the fair value assigned to the security upon the sale of such security. The Board of Trustees regularly reviews fair value determinations made by the funds pursuant to the procedures. |
• | Futures and forward contracts: valued at their settlement prices as of the close of their exchanges (for futures) or at a value based on that day’s exchange rates (for forwards). | |
• | Short-term securities (60 days or less to maturity): valued at amortized cost, which approximates market value. | |
• | Underlying funds: valued at their respective net asset values. |
In accordance with the authoritative guidance on fair value measurements and disclosures under GAAP, the funds disclose the fair value of their investments in a hierarchy that prioritizes the inputs to valuation techniques used to measure the fair value. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs are not associated with orderly transactions, increased analysis and management judgment will be required to estimate fair value.
The three levels of the fair value hierarchy are as follows:
• | Level 1 — quoted prices in active markets for identical securities — Investments whose values are based on quoted market prices in active markets, and whose values are therefore classified as Level 1 prices, include active listed equities and futures contracts. The funds do not adjust the quoted prices for such investments, even in situations where the funds hold a large position and a sale could reasonably impact the quoted price. Investments in underlying funds are valued at their NAV daily and are classified as Level 1 prices. | |
• | Level 2 — other significant observable inputs (including quoted prices for similar securities, interest rates, prepayment speeds, credit risk, etc.) — Investments that trade in markets that are not considered to be active, but whose values are based on quoted market prices, dealer quotations or valuations provided by alternative pricing sources supported by observable inputs are classified as Level 2 prices. These generally include U.S. government and sovereign obligations, most government agency securities, investment-grade corporate bonds, certain mortgage products, less liquid listed equities, and state, municipal and provincial obligations. In addition, international securities whose markets close hours before the funds value their holdings may require fair valuations due to significant movement in the U.S. markets occurring after the daily close of the foreign markets. The Board of Trustees has approved a vendor that calculates fair valuations of international equity securities based on a number of factors that appear to correlate to the movements in the U.S. markets. As investments whose values are classified as Level 2 prices include positions that are not traded in active markets and/or are subject to transfer restrictions, valuations may be adjusted to reflect illiquidity and/or non-transferability, which are generally based on available market information. | |
• | Level 3 — significant unobservable inputs (including the funds’ own assumptions in determining the fair value of investments) — Investments whose values are classified as Level 3 prices have significant unobservable inputs, as they may trade infrequently or not at all. When observable prices are not available for these securities, the funds use one or more valuation techniques for which sufficient and reliable data is available. The inputs used by the funds in estimating the value of Level 3 prices may include the original transaction price, quoted prices for similar securities or assets in active markets, completed or pending third-party transactions in the underlying investment or comparable issuers, and changes in financial ratios or cash flows. Level 3 prices may also be adjusted to reflect illiquidity and/or non-transferability, with the amount of such discount estimated by the funds in the absence of market information. Assumptions used by the funds |
53
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations. |
The inputs or methodology used for valuing securities are not necessarily an indication of the risk associated with investing in those securities. The following is a summary of the inputs used to value the funds’ investments as of October 31, 2011:
Schwab Fundamental US Large Company Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $1,373,217,075 | $— | $— | $1,373,217,075 | ||||||||||||
Diversified Financials | 105,272,110 | — | 9,216 | 105,281,326 | ||||||||||||
Other Investment Company(a) | 7,158,112 | — | — | 7,158,112 | ||||||||||||
Short-Term Investments(a) | — | 985,003 | — | 985,003 | ||||||||||||
Total | $1,485,647,297 | $985,003 | $9,216 | $1,486,641,516 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $4,904,747 | $— | $— | $4,904,747 | ||||||||||||
Futures Contract* | 409,840 | — | — | 409,840 |
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | $— | ($5,334 | ) | ($289,138 | ) | $133,298 | ($93,481 | ) | $263,871 | $— | $9,216 | |||||||||||||||||||||
Total | $— | ($5,334 | ) | ($289,138 | ) | $133,298 | ($93,481 | ) | $263,871 | $— | $9,216 | |||||||||||||||||||||
Schwab Fundamental US Small-Mid Company Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $515,017,525 | $— | $— | $515,017,525 | ||||||||||||
Banks | 44,818,314 | — | 40,139 | 44,858,453 | ||||||||||||
Rights(a) | — | — | 6,053 | 6,053 | ||||||||||||
Warrants | — | — | — | — | ||||||||||||
Other Investment Company(a) | 6,000,596 | — | — | 6,000,596 | ||||||||||||
Short-Term Investments(a) | — | 775,001 | — | 775,001 | ||||||||||||
Total | $565,836,435 | $775,001 | $46,192 | $566,657,628 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $15,327,665 | $— | $— | $15,327,665 | ||||||||||||
Futures Contract* | 318,689 | — | — | 318,689 |
54
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | $— | ($14,610 | ) | ($609,747 | ) | $190,507 | ($109,916 | ) | $583,905 | $— | $40,139 | |||||||||||||||||||||
Rights | 1,287,876 | — | (1,281,823 | ) | — | — | — | 6,053 | ||||||||||||||||||||||||
Total | $1,287,876 | ($14,610 | ) | ($1,891,570 | ) | $190,507 | ($109,916 | ) | $583,905 | $— | $46,192 | |||||||||||||||||||||
Schwab Fundamental International Large Company Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $— | $130,985,065 | $— | $130,985,065 | ||||||||||||
Australia | 204,621 | 19,928,544 | — | 20,133,165 | ||||||||||||
Canada | 22,559,611 | — | 27,028 | 22,586,639 | ||||||||||||
Hong Kong | — | 6,124,605 | 24,258 | 6,148,863 | ||||||||||||
Japan | 105,909 | 61,402,704 | — | 61,508,613 | ||||||||||||
Netherlands | 257,386 | 13,405,025 | — | 13,662,411 | ||||||||||||
Norway | 64,084 | 3,380,361 | — | 3,444,445 | ||||||||||||
Republic of Korea | 332,972 | 16,521,030 | — | 16,854,002 | ||||||||||||
Spain | 176,344 | 15,674,971 | — | 15,851,315 | ||||||||||||
United Kingdom | 106,761 | 77,201,170 | 4,188 | 77,312,119 | ||||||||||||
Preferred Stock(a) | — | 1,800,976 | — | 1,800,976 | ||||||||||||
Rights(a) | 48,728 | — | — | 48,728 | ||||||||||||
Hong Kong | — | — | 20,125 | 20,125 | ||||||||||||
Republic of Korea | — | — | 1,790 | 1,790 | ||||||||||||
Warrants(a) | 417 | — | — | 417 | ||||||||||||
Other Investment Company(a) | 523,700 | — | — | 523,700 | ||||||||||||
Total | $24,380,533 | $346,424,451 | $77,389 | $370,882,373 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $1,942,763 | $— | $— | $1,942,763 |
55
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Canada | $— | $— | ($102,864 | ) | $129,892 | $— | $— | $— | $27,028 | |||||||||||||||||||||||
Hong Kong | — | — | (56,096 | ) | 80,354 | — | — | — | 24,258 | |||||||||||||||||||||||
United Kingdom | 6,965 | 114 | (203 | ) | 4,166 | (6,854 | ) | — | — | 4,188 | ||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Hong Kong | — | — | 20,125 | — | — | — | — | 20,125 | ||||||||||||||||||||||||
Republic of Korea | — | — | 1,790 | — | — | — | — | 1,790 | ||||||||||||||||||||||||
Total | $6,965 | $114 | ($137,248 | ) | $214,412 | ($6,854 | ) | $— | $— | $77,389 | ||||||||||||||||||||||
Schwab Fundamental International Small-Mid Company Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $— | $52,390,939 | $— | $52,390,939 | ||||||||||||
Belgium | 62,243 | 976,609 | — | 1,038,852 | ||||||||||||
Canada | 7,173,448 | — | — | 7,173,448 | ||||||||||||
Finland | 59,471 | 1,136,706 | — | 1,196,177 | ||||||||||||
France | 28,240 | 3,540,560 | — | 3,568,800 | ||||||||||||
Germany | 135,265 | 3,080,262 | — | 3,215,527 | ||||||||||||
Ireland | 140,548 | 430,210 | — | 570,758 | ||||||||||||
Netherlands | — | 1,164,157 | 9,824 | 1,173,981 | ||||||||||||
Republic of Korea | 307,688 | 6,680,087 | 124,137 | 7,111,912 | ||||||||||||
Sweden | 15,233 | 2,080,626 | 64,107 | 2,159,966 | ||||||||||||
Switzerland | 44,502 | 2,720,832 | — | 2,765,334 | ||||||||||||
United Kingdom | 184,209 | 8,490,832 | — | 8,675,041 | ||||||||||||
Preferred Stock(a) | — | 361,395 | — | 361,395 | ||||||||||||
United Kingdom | — | — | 1,741 | 1,741 | ||||||||||||
Rights(a) | — | — | 12,729 | 12,729 | ||||||||||||
Warrants(a) | 70 | — | — | 70 | ||||||||||||
Other Investment Company(a) | 337,950 | — | — | 337,950 | ||||||||||||
Short-Term Investment(a) | — | 290,064 | — | 290,064 | ||||||||||||
Total | $8,488,867 | $83,343,279 | $212,538 | $92,044,684 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $1,197,571 | $— | $— | $1,197,571 |
56
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
The following is a reconciliation of Level 3 Investments for which significant unobservable inputs were used to determine fair value:
Balance | Change in | Balance | ||||||||||||||||||||||||||||||
as of | Realized | Unrealized | Gross | Gross | as of | |||||||||||||||||||||||||||
October 31, | Gains | Gains | Gross | Gross | Transfers | Transfers | October 31, | |||||||||||||||||||||||||
Investments in Securities | 2010 | (Losses) | (Losses) | Purchases | Sales | in** | out** | 2011 | ||||||||||||||||||||||||
Common Stock | ||||||||||||||||||||||||||||||||
Australia | $81,636 | $39,731 | ($39,185 | ) | $— | ($82,182 | ) | $— | $— | $— | ||||||||||||||||||||||
Japan | — | (4,445 | ) | 4,445 | — | — | — | — | — | |||||||||||||||||||||||
Netherlands | — | 39,762 | (33,502 | ) | 25,051 | (175,705 | ) | 154,218 | — | 9,824 | ||||||||||||||||||||||
Republic of Korea | 64,927 | 12,040 | (68,047 | ) | 66,599 | (47,072 | ) | 95,690 | — | 124,137 | ||||||||||||||||||||||
Singapore | 42,317 | 19,683 | (19,953 | ) | — | (42,047 | ) | — | — | — | ||||||||||||||||||||||
Sweden | — | — | 21,634 | 23,504 | — | 18,969 | — | 64,107 | ||||||||||||||||||||||||
United Kingdom | 3,968 | (10,367 | ) | 10,424 | — | (4,025 | ) | — | — | — | ||||||||||||||||||||||
Preferred Stock | ||||||||||||||||||||||||||||||||
United Kingdom | — | — | (5 | ) | 1,746 | — | — | — | 1,741 | |||||||||||||||||||||||
Rights | ||||||||||||||||||||||||||||||||
Australia | — | — | 3,656 | — | — | — | — | 3,656 | ||||||||||||||||||||||||
Republic of Korea | — | — | 9,073 | — | — | — | — | 9,073 | ||||||||||||||||||||||||
Total | $192,848 | $96,404 | ($111,460 | ) | $116,900 | ($351,031 | ) | $268,877 | $— | $212,538 | ||||||||||||||||||||||
Schwab Fundamental Emerging Markets Index Fund
Quoted Prices in | Significant | |||||||||||||||
Active Markets for | Significant Other | Unobservable | ||||||||||||||
Identical Assets | Observable Inputs | Inputs | ||||||||||||||
Description | (Level 1) | (Level 2) | (Level 3) | Total | ||||||||||||
Common Stock(a) | $— | $112,334,319 | $— | $112,334,319 | ||||||||||||
Brazil | 21,448,737 | — | — | 21,448,737 | ||||||||||||
Chile | 4,545,766 | — | — | 4,545,766 | ||||||||||||
Colombia | 3,309,721 | — | — | 3,309,721 | ||||||||||||
Czech Republic | 748,772 | 1,863,161 | — | 2,611,933 | ||||||||||||
Egypt | 693,843 | 930,321 | — | 1,624,164 | ||||||||||||
India | 2,132,955 | 18,120,100 | — | 20,253,055 | ||||||||||||
Malaysia | 210,771 | 12,265,295 | — | 12,476,066 | ||||||||||||
Mexico | 15,645,315 | — | — | 15,645,315 | ||||||||||||
Russia | 3,082,300 | 31,736,018 | — | 34,818,318 | ||||||||||||
South Africa | 380,403 | 33,133,279 | — | 33,513,682 | ||||||||||||
Thailand | 4,094,511 | 942,093 | — | 5,036,604 | ||||||||||||
Turkey | 324,743 | 5,239,478 | — | 5,564,221 | ||||||||||||
Preferred Stock(a) | 31,707,219 | — | — | 31,707,219 | ||||||||||||
Rights(a) | — | — | — | — | ||||||||||||
Other Investment Company(a) | 3,672,000 | — | — | 3,672,000 | ||||||||||||
Short-Term Investment(a) | — | 769,415 | — | 769,415 | ||||||||||||
Total | $91,997,056 | $217,333,479 | $— | $309,330,535 | ||||||||||||
Other Financial Instruments | ||||||||||||||||
Collateral Invested for Securities on Loan | $665,550 | $— | $— | $665,550 |
57
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
* | Futures Contracts are not included in Investments and are valued at unrealized appreciation or depreciation. | |
** | All security transfers in and out of Level 3 from Level 1 or Level 2 were the result of fair valued securities for which no quoted value was available. | |
(a) | As categorized in complete schedule of holdings. |
All net realized and change in unrealized gains (losses) in the tables above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investments held by the funds at October 31, 2011 are as follows:
Schwab Fundamental US Large Company Index Fund | ($291,456 | ) | ||
Schwab Fundamental US Small-Mid Company Index Fund | (816,256 | ) | ||
Schwab Fundamental International Large Company Index Fund | (137,022 | ) | ||
Schwab Fundamental International Small-Mid Company Index Fund | (115,563 | ) | ||
Schwab Fundamental Emerging Markets Index Fund | — |
The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year. There were no significant transfers between Level 1 and Level 2 for the period ended October 31, 2011.
Certain funds entered into equity index futures contracts (“futures”) from November 1, 2010 through October 31, 2011. The funds invested in futures to gain market exposure while still keeping a small portion of assets in cash for business operations. The fair value and due to brokers for futures held at October 31, 2011 and the realized/unrealized gains (losses) on futures contracts held during the period ended October 31, 2011 are presented on the face of the Portfolio Holdings, Statement of Assets and Liabilities and Statement of Operations, respectively. Refer to financial note 2(b) for the funds’ accounting policies with respect to futures contracts and financial note 3 for disclosures concerning the risks of investing in futures contracts. During the period, the monthly average contract value of futures contracts held by the funds and the monthly average number of contracts were as follows:
Contract Values | Number of Contracts | |||||||
Schwab Fundamental US Large Company Index Fund | $9,301,440 | 147 | ||||||
Schwab Fundamental US Small-Mid Company Index Fund | 3,939,713 | 51 | ||||||
Schwab Fundamental International Large Company Index Fund | — | — | ||||||
Schwab Fundamental International Small-Mid Company Index Fund | — | — | ||||||
Schwab Fundamental Emerging Markets Index Fund | — | — |
(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 (the “initial margin”) whenever it enters into the futures contract. The amount of the deposit may vary from one contract to another. Subsequent payments (“variation margin”) are made or received by a fund depending on the daily fluctuations in the value of the futures contract and are accounted for as unrealized gains or losses until the contract is closed, at which time the gains or losses are realized. Futures are traded publicly on exchanges, and their market value changes daily.
Forward Foreign Currency Contracts: “Forwards”, as they are known, are contracts to buy and sell a currency at a set price on a future date. The value of the forward foreign currency contracts are accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.
Securities Lending: Under the Securities Lending Program, a fund (the “lender”) may make short-term loans of its securities to another party (the “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. The initial collateral received by a fund is required to have a value of at least 102% of the current market value of the loaned securities for securities traded on U.S. exchanges and a value of at least 105% for all other securities. The collateral is maintained
58
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
thereafter, at a value equal to at least 100% of the current market value of the securities on loan and is marked to market daily. The cash collateral of securities loaned is invested in money market portfolios registered under Rule 2a-7 of the 1940 Act. Securities lending income, as disclosed in a fund’s Statement of Operations, if applicable, represents the income earned from the investment of the cash collateral plus any fees paid by borrowers, less the fees paid to the lending agent which are subject to adjustments pursuant to the securities lending agreement.
If applicable, the value of the securities on loan as of October 31, 2011 and the value of the related collateral are disclosed in the complete Portfolio Holdings and the Statement of Assets and Liabilities.
Repurchase Agreements: In a repurchase agreement, a fund buys a security from another party (usually a financial institution) with the agreement that it be sold back in the future. Repurchase agreements subject a fund to counterparty risk, meaning that the fund could lose money if the other party fails to perform under the terms of the agreement. The funds mitigate this risk by ensuring that the funds’ repurchase agreements are collateralized by cash, U.S. government securities, fixed income securities, equity securities or other types of securities. All collateral is held by the funds’ custodian (or, with multi-party agreements, the agent’s bank) and is monitored daily to ensure that its market value is at least equal to the repurchase price under the agreement. Investments in repurchase agreements are also based on a review of the credit quality of the repurchase agreement counterparty.
(c) Security Transactions:
Security transactions are recorded as of the date the order to buy or sell the security is executed. Realized gains or losses from security transactions are based on the identified costs of the securities involved.
Assets and liabilities denominated in foreign currencies are reported in U.S. dollars. For assets and liabilities held on a given date, the dollar value is based on market exchange rates in effect on that date. Transactions involving foreign currencies, including purchases, sales, income receipts and expense payments, are calculated using exchange rates in effect on the transaction date. Realized foreign exchange gains or losses arise from sales of foreign currencies, trade and settlement dates on securities transactions and the difference between the recorded amounts of dividends, interest, and foreign withholding taxes and the U.S. dollar equivalent of the amounts actually received or paid. Net unrealized foreign exchange gains or losses arise from changes in foreign exchange rates on foreign denominated assets and liabilities other than investments in securities held at the end of the reporting period. These realized and unrealized foreign exchange gains or losses are reported in foreign currency transactions or translations in the Statement of Operations. The funds do not isolate the portion of the fluctuations on investments resulting from changes in foreign currency exchange rates from the fluctuations in market prices of investments held. Such fluctuations are included with the net realized and unrealized gain or loss from investments.
Gains realized by the funds on the sale of securities in certain foreign countries are subject to non-U.S. taxes. The funds record a liability based on unrealized gains to provide for potential non-U.S. taxes payable upon the sale of these securities.
When a fund closes out a futures or forwards 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. A fund records the daily change in market value of futures, and also the change in the amount of margin deposit required (“due to/from broker”).
(d) Investment Income:
Interest income is recorded as it accrues. Dividends and distributions from portfolio securities and underlying funds are recorded on the date they are effective (the ex-dividend date), although the funds record certain foreign security dividends on the day they learn of the ex-dividend date.
Income received from foreign sources may result in withholding tax. Withholding taxes are accrued at the same time as the related income if the tax rate is fixed and known, unless a tax withheld is reclaimable from the local tax authorities in which case it is recorded as receivable. If the tax rate is not known or estimable, such expense or reclaim receivable is recorded when the net proceeds are received.
(e) Expenses:
Expenses that are specific to a fund are charged directly to the fund. Expenses that are common to all funds within the trust generally are allocated among the funds in proportion to their average daily net assets.
59
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
(f) Distributions to Shareholders:
The funds make distributions from net investment income and net realized capital gains, if any, once a year.
(g) Custody Credit:
Certain funds have an arrangement with their custodian bank, under which the funds receive a credit for their uninvested cash balance to offset their custody fees and accounting fees. The credit amounts, if any, are disclosed in the Statement of Operations as a reduction to the funds’ operating expenses.
(h) Accounting Estimates:
The accounting policies described in this report conform to accounting principles generally accepted in the United States of America. 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. Accordingly, the funds distribute substantially all of their net investment income and realized net capital gains, if any, to their respective shareholders each year. As long as a fund meets the tax requirements, it is not required to pay federal income tax.
(j) Foreign Taxes:
The funds may be subject to foreign taxes (a portion of which may be reclaimable) on income, corporate events, foreign currency exchanges, capital gains on investments on currency repatriation. All foreign taxes are recorded in accordance with the applicable foreign tax regulations and rates that exist in foreign markets in which the funds invest. These foreign taxes, if any, are paid by the funds and are disclosed in the Statement of Operations. Foreign taxes payable as of October 31, 2011, if any, are reflected in the funds’ Statement of Assets and Liabilities.
(k) Indemnification:
Under the funds’ organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the funds. In addition, in the normal course of business the funds enter into contracts with their vendors and others that provide general indemnifications. The funds’ maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the funds. However, based on experience, the funds expect the risk of loss to be remote.
(l) New Accounting Pronouncements:
In April 2011, the Financial Accounting Standards Board (“FASB”) issued an Accounting Standards Updates (“ASU”) related to accounting for repurchase agreements and similar agreements that both entitle and obligate a transferor to repurchase or redeem financial assets before their maturity. The ASU modifies the criteria for determining effective control of transferred assets and as a result certain agreements may now be accounted for as secured borrowings. The ASU is effective prospectively for new and existing transfers that are modified in the first interim or annual period beginning on or after December 15, 2011.
In May 2011, the FASB issued an update to requirements relating to “Fair Value Measurement which represents amendments to achieve common fair value measurement and disclosure requirements in US GAAP and IFRS.” The amendments include (i) those that clarify the FASB’s intent about the application of existing fair value measurement and disclosure requirements and (ii) those that change a particular principle or requirement for measuring fair value or for disclosing information about fair value measurements. The amendments that change a particular principle or requirement for measuring fair value or disclosing information about fair value measurements relate to (i) measuring the fair value of the financial instruments that are managed within a portfolio; (ii) application of premium and discount in a fair value measurement; and (iii) additional disclosures about fair value measurements. The update is effective for annual periods beginning after December 15, 2011 with early adoption prohibited.
60
Schwab Fundamental Index Funds
Financial Notes (continued)
2. Significant Accounting Policies (continued):
At this time, management is evaluating the implications of these changes and their impact on the financial statements.
3. Risk Factors:
Investing in the funds may involve certain risks, as discussed in the funds’ prospectus, including, but not limited to, those described below. Any of these risks could cause an investor to lose money.
Stock markets rise and fall daily. As with any investment whose performance is tied to these markets, the value of your investment in a fund will fluctuate, which means that you could lose money.
The prices of equity securities rise and fall daily. These price movements may result from factors affecting individual companies, industries or the securities market as a whole. In addition, equity markets tend to move in cycles, which may cause stock prices to fall over short or extended periods of time.
As an index fund, each fund seeks to track the performance of its benchmark index, although it may not be successful in doing so. The divergence between the performance of a fund and its benchmark index, positive or negative, is called “tracking error.” Tracking error can be caused by many factors and it may be significant.
In addition, because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. Further, because of a fund’s expenses, the fund’s performance may be below that of its benchmark index.
Certain funds do not fully replicate their benchmark index and may hold securities not included in the index. As a result, such funds are subject to the risk that the investment adviser’s investment strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. A fund utilizing a sampling approach, may not track the return of the index as well as it would if the fund purchases all of the securities in the benchmark index.
A significant percentage of an index may be composed of securities in a single industry or sector of the economy. If a fund is focused in an industry or sector, it may present more risks than if it were broadly diversified over numerous industries and sectors of the economy.
Although certain indices encompass stocks from many different sectors of the economy, their performance may primarily reflect that of large company stocks, which tend to go in and out of favor based on market and economic conditions. As a result, during a period when these stocks fall behind other types of investments — bonds or mid or small company stocks, for instance — a fund’s large-cap holdings could reduce performance.
Historically, mid- and small-cap stocks have been riskier than large-cap stocks. Mid- and small-cap companies themselves may be more vulnerable to adverse business or economic events than larger, more established companies. Stock prices of smaller companies may be based in substantial part on future expectations rather than current achievements and may move sharply, especially during market upturns and downturns. During a period when mid- and small-cap stocks fall behind other types of investments — bonds or large-cap stocks, for instance — a fund’s small- and mid-cap holdings could reduce performance.
A fund’s investments in securities of foreign issuers may involve certain risks that are greater than those associated with investments in securities of U.S. issuers. These include risks of adverse changes in foreign economic, political, regulatory and other conditions; changes in currency exchange rates or exchange control regulations (including limitations on currency movements and exchanges); differing accounting, auditing, financial reporting and legal standards and practices; differing securities market structures; and higher transaction costs. These risks may be heightened in connection with investments in emerging markets.
Emerging markets may be more likely to experience political turmoil or rapid changes in market or economic conditions than more developed countries. Emerging market countries often have less uniformity in accounting and reporting requirements and unreliable securities valuation. It is sometimes difficult to obtain and enforce court judgments in such countries and there is often a greater potential for nationalization and/or expropriation of assets by the government of an emerging market country. In addition, the financial stability of issuers (including governments) in emerging market countries may be more precarious than in other countries. As a result, there will tend to be an increased risk of price volatility associated with the fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar.
61
Schwab Fundamental Index Funds
Financial Notes (continued)
3. Risk Factors (continued):
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 and could cause the fund to lose more than the principal amount invested. In addition, investments in derivatives may involve leverage, which means a small percentage of assets invested in derivatives can have a disproportionately large impact on a fund.
A particular investment may be difficult to purchase or sell. A fund may be unable to sell illiquid securities at an advantageous time or price.
Securities lending involves the risk of loss of rights in the collateral or delay in recovery of the collateral if the borrower fails to return the security loaned or becomes insolvent.
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. (“CSIM” or the “investment adviser”), 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 (“Advisory Agreement”) between CSIM and the trust.
For its advisory and administrative services to the following funds, CSIM is entitled to receive an annual fee, payable monthly, based on a percentage of each fund’s average daily net assets as follows:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
% of Average Daily Net Assets | Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||
First $500 million | 0.30% | 0.30% | 0.30% | 0.40% | 0.50% | |||||||||||||||
$500 million to $5 billion | 0.22% | 0.22% | 0.22% | 0.38% | 0.48% | |||||||||||||||
$5 billion to $10 billion | 0.20% | 0.20% | 0.20% | 0.36% | 0.46% | |||||||||||||||
over $10 billion | 0.18% | 0.18% | 0.18% | 0.34% | 0.44% |
The Board of Trustees has adopted a Shareholder Servicing Plan (the “Plan”) on behalf of the funds. The Plan enables each fund to bear expenses relating to the provision by service providers, including Charles Schwab & Co., Inc. (a broker-dealer affiliate of CSIM, “Schwab”), of certain account maintenance, customer liaison and shareholder services to the current shareholders of the funds. Schwab serves as the funds’ paying agent under the Plan for making payments of the shareholder service fee due to the service providers (other than Schwab) under the Plan. All shareholder service fees paid by the funds to Schwab in its capacity as the funds’ paying agent will be passed through to the service providers, and Schwab will not retain any portion of such fees.
Pursuant to the Plan, each fund’s shares are subject to an annual shareholder servicing fee up to the amount set forth in the table below. The shareholder servicing fee paid to a particular service provider is made pursuant to its written agreement with Schwab (or, in the case of payments made to Schwab, pursuant to Schwab’s written agreement with the funds). Payments under the Plan are made as described in the table below regardless of Schwab’s or the service provider’s actual cost of providing the services. If the cost of providing the services under the Plan is less than the payments received, the unexpended portion of the fees may be retained as profit by Schwab or the service provider.
Although these agreements specify certain fees for these services, CSIM and Schwab have made an additional agreement (“expense limitation”) with the funds, for so long as CSIM serves as the investment adviser to the funds, which may only be amended or terminated with the approval of the funds’ Board of Trustees, to limit the total annual fund operating expenses,
62
Schwab Fundamental Index Funds
Financial Notes (continued)
4. Affiliates and Affiliated Transactions (continued):
excluding interest, taxes and certain non-routine expenses. The expense limitation as a percentage of average daily net assets is as follows:
Schwab | Schwab | |||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||
0.35% | 0.35% | 0.35% | 0.55% | 0.60% |
CSIM has entered into a license agreement with FTSE to use certain FTSE indexes and trademarks in connection with the offering and operation of certain registered investment companies. The funds have entered into a sub-license agreement with CSIM pursuant to which CSIM has agreed to sub-license certain FTSE indexes and trademarks to the funds. Under the sub-license agreement, each fund pays its pro rata share of licensing fees.
The funds may engage in certain transactions involving affiliates. For instance, a fund may own shares of The Charles Schwab Corporation if that company is included in its index. Below is the summary of investment activities involving The Charles Schwab Corporation shares owned by the Schwab Fundamental US Large Company Index Fund during the report period:
Balance | Balance | Realized | Distributions | |||||||||||||||||||||||||
of Shares | of Shares | Market | Gains (Losses) | Received | ||||||||||||||||||||||||
Held at | Gross | Gross | Held at | Value at | 11/01/10 | 11/01/10 | ||||||||||||||||||||||
Fund | 10/31/10 | Additions | Sales | 10/31/11 | 10/31/11 | to 10/31/11 | to 10/31/11 | |||||||||||||||||||||
Schwab Fundamental US Large Company Index Fund | 53,415 | 41,100 | — | 94,515 | $1,160,644 | $— | $15,742 |
The funds may also let a related party own shares of the funds. As of October 31, 2011, the shares owned by Schwab Charitable Giving Trust (an affiliate of Schwab) as a percentage of the total shares of the Schwab Fundamental International Large Company Index Fund was 12.5%.
The funds may engage in direct transactions with certain other Schwab Funds when practical. 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 October 31, 2011, each fund’s total aggregate security transactions with other Schwab Funds were as follows:
Schwab Fundamental US Large Company Index Fund | $24,243,112 | |||
Schwab Fundamental US Small-Mid Company Index Fund | 24,243,112 | |||
Schwab Fundamental International Large Company Index Fund | — | |||
Schwab Fundamental International Small-Mid Company Index Fund | — | |||
Schwab Fundamental Emerging Markets Index Fund | — |
Pursuant to an exemptive order issued by the SEC, the funds may enter into interfund borrowing and lending transactions with other Schwab Funds. All loans are for temporary or emergency purposes only. The interest rate charged on the loan is the average of the overnight repurchase agreement rate and the short-term bank loan rate. The interfund lending facility is subject to the oversight and periodic review of the Board of Trustees of the Schwab Funds. The funds had no interfund borrowing or lending activity during the period.
5. Transfer Agent Services:
Boston Financial Data Services, Inc. (“BFDS”) provides transfer agent services for each fund.
63
Schwab Fundamental Index Funds
Financial Notes (continued)
6. Board of Trustees:
Trustees 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 trust did not pay any of these interested persons for their services as trustees, but it did pay non-interested persons (independent trustees), as noted in each fund’s Statement of Operations.
7. Borrowing from Banks:
The funds have access to custodian overdraft facilities, a committed line of credit of $150 million with State Street Bank and Trust Company (“State Street”), an uncommitted line of credit of $100 million with Bank of America, N.A. and an uncommitted line of credit of $50 million with Brown Brothers Harriman & Co. The funds pay interest on the amounts they borrow at rates that are negotiated periodically. The funds also pay an annual fee to State Street for the committed line of credit.
There were no borrowings from the lines of credit by the funds during the period. However, the funds may have utilized their overdraft facility and incurred interest expense, which is disclosed in the 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 October 31, 2011, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:
Purchases of Securities | Sales/Maturities of Securities | |||||||
Schwab Fundamental US Large Company Index Fund | $576,930,577 | $140,429,303 | ||||||
Schwab Fundamental US Small-Mid Company Index Fund | 358,998,050 | 198,556,220 | ||||||
Schwab Fundamental International Large Company Index Fund | 235,258,255 | 123,676,510 | ||||||
Schwab Fundamental International Small-Mid Company Index Fund | 82,309,406 | 57,607,702 | ||||||
Schwab Fundamental Emerging Markets Index Fund | 238,376,668 | 178,440,969 |
9. Redemption Fee:
The funds charge a 2.00% redemption fee on shares sold or exchanged within 30 days of the original purchase date. Such amounts are netted against redemption proceeds in the Statement of Changes in Net Assets. The redemption fees charged during the current and prior periods are:
Current Period | Prior Period | |||||||
(11/1/10-10/31/11) | (11/1/09-10/31/10) | |||||||
Schwab Fundamental US Large Company Index Fund | $18,099 | $21,126 | ||||||
Schwab Fundamental US Small-Mid Company Index Fund | 10,864 | 14,086 | ||||||
Schwab Fundamental International Large Company Index Fund | 9,544 | 10,801 | ||||||
Schwab Fundamental International Small-Mid Company Index Fund | 3,703 | 4,653 | ||||||
Schwab Fundamental Emerging Markets Index Fund | 15,248 | 11,177 |
64
Schwab Fundamental Index Funds
Financial Notes (continued)
10. Federal Income Taxes:
As of October 31, 2011, the components of distributable earnings on a tax-basis were as follows:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Undistributed ordinary income | $21,895,898 | $13,939,022 | $10,628,905 | $3,817,034 | $10,166,839 | |||||||||||||||
Undistributed long-term capital gains | — | 30,415,553 | — | 2,300,287 | 2,561,237 | |||||||||||||||
Unrealized appreciation on investments | 154,568,175 | 102,547,101 | 36,765,547 | 10,231,020 | 19,442,524 | |||||||||||||||
Unrealized depreciation on investments | (75,919,122 | ) | (58,998,527 | ) | (78,262,008 | ) | (12,994,059 | ) | (31,217,278 | ) | ||||||||||
Other unrealized appreciation/(depreciation) | (1 | ) | (2 | ) | (13,891 | ) | (3,643 | ) | 17,883 | |||||||||||
Net unrealized appreciation/(depreciation) | $78,649,052 | $43,548,572 | ($41,510,352 | ) | ($2,766,682 | ) | ($11,756,871 | ) | ||||||||||||
The primary difference between book-basis and tax-basis unrealized appreciation or unrealized depreciation of investments is the tax deferral of losses on wash sales.
Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. For the year ended October 31, 2011, the following funds had capital loss carryforwards available to offset future net capital gains before the expiration dates:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
Expiration Date | Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | |||||||||||||||
October 31, 2016 | $40,343,237 | $— | $6,762,865 | $— | $— | |||||||||||||||
October 31, 2017 | 63,611,979 | — | 58,777,944 | — | — | |||||||||||||||
October 31, 2018 | — | — | 20,948,477 | — | — | |||||||||||||||
Total | $103,955,216 | $— | $86,489,286 | $— | $— | |||||||||||||||
For the year ended October 31, 2011, the funds had capital losses utilized as follows:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital losses utilized | $8,425,016 | $— | $3,759,418 | $153,428 | $— |
65
Schwab Fundamental Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
The tax-basis components of distributions paid during the current and prior fiscal years were:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Current period distributions | ||||||||||||||||||||
Ordinary income | $16,798,869 | $21,827,248 | $8,005,998 | $2,008,011 | $9,872,229 | |||||||||||||||
Long-term capital gains | — | 5,237,338 | — | — | 4,166,135 | |||||||||||||||
Return of capital | — | — | — | — | — | |||||||||||||||
Prior period distributions | ||||||||||||||||||||
Ordinary income | $8,047,761 | $2,224,324 | $7,367,808 | $1,616,483 | $1,195,864 | |||||||||||||||
Long-term capital gains | — | — | — | — | — | |||||||||||||||
Return of capital | — | — | — | — | — |
Distributions paid to shareholders are based on net investment income and net realized gains determined on a tax basis, which may differ from net investment income and net realized gains for financial reporting purposes. These differences are due primarily to differing treatment for items such as non-U.S. currency gains and losses, short-term capital gains and losses, capital losses related to wash sales, unrealized appreciation of certain investments in non-U.S. securities, and income on certain investments. The fiscal year in which amounts are distributed may differ from the year in which the net investment income and net realized gains are recorded by the funds for financial reporting purposes. The funds may also designate a portion of the amount paid to redeeming shareholders as a distribution for tax purposes.
The permanent book and tax basis differences may result in reclassifications between capital account and other accounts as required. The adjustments will have no impact on net assets or the results of operations. As of October 31, 2011, the funds made the following reclassifications:
Schwab | Schwab | |||||||||||||||||||
Schwab | Schwab | Fundamental | Fundamental | Schwab | ||||||||||||||||
Fundamental | Fundamental | International | International | Fundamental | ||||||||||||||||
US Large | US Small-Mid | Large | Small-Mid | Emerging | ||||||||||||||||
Company | Company | Company | Company | Markets | ||||||||||||||||
Index Fund | Index Fund | Index Fund | Index Fund | Index Fund | ||||||||||||||||
Capital shares | $46,477 | $— | ($51 | ) | $— | $— | ||||||||||||||
Undistributed net investment income | (93,590 | ) | (57,703 | ) | 280,904 | 363,463 | (408,151 | ) | ||||||||||||
Net realized capital gains/(losses) | 47,113 | 57,703 | (280,853 | ) | (363,463 | ) | 408,151 |
As of October 31, 2011, management has reviewed the tax positions for open periods (for federal purposes, three years from the date of filing and for state purposes, four years from the date of filing) as applicable to the funds, and has determined that no provision for income tax is required in the funds’ financial statements. The funds recognize interest and penalties, if any, related to unrecognized tax benefits as income tax expense in the Statement of Operations. During the period ended October 31, 2011, the funds did not incur any interest or penalties.
On December 22, 2010, the Regulated Investment Company Modernization Act of 2010 (“the Act”) was signed by the President. The Act is the first major piece of legislation affecting Regulated Investment Companies (“RICs”) since 1986 and it modernizes several of the federal income and excise tax provisions related to RICs.
Certain of the enacted provisions include:
Post-enactment capital losses may now be carried forward indefinitely, but must retain the character of the original loss. Under pre-enactment law, capital losses could be carried forward for eight years, and carried forward as short-term capital, irrespective of the character of the original loss. The Act contains simplification provisions, which are aimed at preventing disqualification of a RIC for “inadvertent” failures of the asset diversification and/or qualifying income tests. Additionally, the Act exempts RICs
66
Schwab Fundamental Index Funds
Financial Notes (continued)
10. Federal Income Taxes (continued):
from the preferential dividend rule, and repeals the 60-day designation requirement for certain types of pay-through income and gains.
Finally, the Act contains several provisions aimed at preserving the character of distributions made by a fiscal year RIC during the portion of its taxable year ending after October 31 or December 31, reducing the circumstances under which a RIC might be required to file amended Forms 1099 to restate previously reported distributions.
Except for the simplification provisions related to RIC qualification, the Act is effective for taxable years beginning after December 22, 2010. The provisions related to RIC qualification are effective for taxable years for which the extended due date of the tax return is after December 22, 2010.
11. Subsequent Events:
Management has determined there are no subsequent events or transactions through the date the financial statements were issued that would have materially impacted the financial statements as presented.
67
Report of Independent Registered Public Accounting Firm
To the Board of Trustees and Shareholders of:
Schwab Fundamental US Large Company Index Fund
Schwab Fundamental US Small-Mid Company Index Fund
Schwab Fundamental International Large Company Index Fund
Schwab Fundamental International Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets Index Fund
In our opinion, the accompanying statements of assets and liabilities, including the summary portfolio holdings, and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund, and Schwab Fundamental Emerging Markets Index Fund (five of the portfolios constituting Schwab Capital Trust, hereafter collectively referred to as the “Funds”) at October 31, 2011, the results of each of their operations for the year then ended, the changes in each of their net assets for each of the two years in the period then ended and the financial highlights for each of the periods presented, in conformity with accounting principles generally accepted in the United States of America. These financial statements and financial highlights (hereafter referred to as “financial statements”) are the responsibility of the Funds’ management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at October 31, 2011 by correspondence with the custodian and brokers, provide a reasonable basis for our opinion.
PricewaterhouseCoopers LLP
San Francisco, California
December 15, 2011
68
Other Federal Tax Information (unaudited)
The funds elect to pass through under section 853 of the Internal Revenue Code foreign tax credit to its shareholders for the year ended October 31, 2011, and the respective foreign source income on the funds as follows.
Foreign Tax Credit | Foreign Source Income | |||||||
Schwab Fundamental US Large Company Index Fund | $— | $— | ||||||
Schwab Fundamental US Small-Mid Company Index Fund | — | — | ||||||
Schwab Fundamental International Large Company Index Fund | 1,215,632 | 13,205,745 | ||||||
Schwab Fundamental International Small-Mid Company Index Fund | 189,051 | 2,740,236 | ||||||
Schwab Fundamental Emerging Markets Index Fund | 1,248,415 | 11,088,294 |
For corporate shareholders, the following percentage of the funds dividend distributions paid during the fiscal year ended October 31, 2011, qualify for the corporate dividends received deduction:
Percentage | |||||
Schwab Fundamental US Large Company Index Fund | 100.00 | ||||
Schwab Fundamental US Small-Mid Company Index Fund | 13.26 | ||||
Schwab Fundamental International Large Company Index Fund | — | ||||
Schwab Fundamental International Small-Mid Company Index Fund | — | ||||
Schwab Fundamental Emerging Markets Index Fund | — |
For the fiscal year ended October 31, 2011, the funds designate the following amounts of the dividend distributions as qualified dividends for the purpose of the maximum rate under section 1(h)(11) of the Internal Revenue Code. Shareholders will be notified in January 2012 via IRS form 1099 of the amounts for use in preparing their 2011 income tax return.
Schwab Fundamental US Large Company Index Fund | $16,798,869 | |||
Schwab Fundamental US Small-Mid Company Index Fund | 3,018,962 | |||
Schwab Fundamental International Large Company Index Fund | 7,433,024 | |||
Schwab Fundamental International Small-Mid Company Index Fund | 739,785 | |||
Schwab Fundamental Emerging Markets Index Fund | 6,376,646 |
Under Section 852 (b)(3)(C) of the Internal Revenue Code, certain funds hereby designate the following amounts as long-term capital gain dividends for the fiscal year ended October 31, 2011:
Schwab Fundamental US Large Company Index Fund | $— | |||
Schwab Fundamental US Small-Mid Company Index Fund | 5,237,338 | |||
Schwab Fundamental International Large Company Index Fund | — | |||
Schwab Fundamental International Small-Mid Company Index Fund | — | |||
Schwab Fundamental Emerging Markets Index Fund | 4,166,135 |
69
Investment Advisory and Sub-Advisory Agreement Approval
The Investment Company Act of 1940 (the “1940 Act”) requires that initial approval of, as well as the continuation of, a fund’s investment advisory agreement must be specifically approved (1) by the vote of the trustees or by a vote of the shareholders of the fund, and (2) by the vote of a majority of the trustees who are not parties to the investment advisory agreement or “interested persons” of any party (the “Independent Trustees”), cast in person at a meeting called for the purpose of voting on such approval. In connection with such approvals, the fund’s trustees must request and evaluate, and the investment adviser is required to furnish, such information as may be reasonably necessary to evaluate the terms of the investment advisory agreement.
The Board of Trustees (the “Board” or the “Trustees”, as appropriate) calls and holds one or more meetings each year that are dedicated, in whole or in part, to considering whether to renew the investment advisory agreement between Schwab Capital Trust (the “Trust”) and Charles Schwab Investment Management, Inc. (“CSIM”) (the “Agreement”) with respect to the existing funds in the Trust, including Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund (the “Funds”), and to review certain other agreements pursuant to which CSIM provides investment advisory services to certain other registered investment companies. In preparation for the meeting(s), the Board requests and reviews a wide variety of materials provided by CSIM, including information about CSIM’s affiliates, personnel and operations. As part of the renewal process, Independent Trustees’ legal counsel sends an information request letter to CSIM seeking certain relevant information. The responses by CSIM are provided to the Trustees for their review prior to their meeting, and the Trustees are provided with the opportunity to request any additional materials. The Board also receives extensive data provided by third parties. This information is in addition to the detailed information about the Funds that the Board reviews during the course of each year, including information that relates to Fund operations and Fund performance. The Independent Trustees receive advice from independent counsel to the Independent Trustees, including a memorandum regarding the responsibilities of trustees for the approval of investment advisory agreements. In addition, the Independent Trustees meet in executive session outside the presence of Fund management and participate in question and answer sessions with representatives of CSIM.
The Board, including a majority of the Independent Trustees, considered information specifically relating to its consideration of the continuance of the Agreement with respect to the Funds at meetings held on April 28, 2011, and June 15, 2011, and approved the renewal of the Agreement with respect to the Funds for an additional one year term at the meeting held on June 15, 2011. The Board’s approval of the Agreement with respect to the Funds was based on consideration and evaluation of a variety of specific factors discussed at these meetings and at prior meetings, including:
1. | the nature, extent and quality of the services provided to the Funds under the Agreement, including the resources of CSIM and its affiliates dedicated to the Funds; |
2. | each Fund’s investment performance and how it compared to that of certain other comparable mutual funds; |
3. | each Fund’s expenses and how those expenses compared to those of certain other comparable mutual funds; |
4. | the profitability of CSIM and its affiliates, including Charles Schwab & Co., Inc. (“Schwab”), with respect to each Fund, including both direct and indirect benefits accruing to CSIM and its affiliates; and |
5. | the extent to which economies of scale would be realized as the Funds grow and whether fee levels in the Agreement reflect those economies of scale for the benefit of Fund investors. |
Nature, Extent and Quality of Services. The Board considered the nature, extent and quality of the services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds. In this regard, the Trustees evaluated, among other things, CSIM’s personnel, experience, track record and compliance program. The Trustees also considered investments in CSIM’s mutual fund infrastructure, Schwab’s wide range of products, services, and channel alternatives such as free advice, investment and research tools, Internet access, and an array of account features that benefit the Funds and their shareholders. The Trustees also considered Schwab’s excellent reputation as a full service brokerage firm and its overall financial condition. Finally, the Trustees considered that many of the Funds’ shareholders are also brokerage clients of Schwab. Following such evaluation, the Board concluded, within the context of its full deliberations, that the nature, extent and quality of services provided by CSIM to the Funds and the resources of CSIM and its affiliates dedicated to the Funds supported renewal of the Agreement with respect to the Funds.
Fund Performance. The Board considered Fund performance in determining whether to renew the Agreement with respect to the Funds. Specifically, the Trustees considered each Fund’s performance relative to a peer category of other mutual funds and appropriate indices/benchmarks, in light of total return, and market trends. As part of this review, the
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Trustees considered the composition of the peer category, selection criteria and the reputation of the third party who prepared the peer category analysis. In evaluating the performance of each Fund, the Trustees considered both risk and shareholder risk expectations for such Fund and the appropriateness of the benchmark used to compare the performance of each Fund. The Trustees further considered the level of Fund performance in the context of its review of Fund expenses and adviser profitability discussed below. Each of Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund had performance that lagged that of a relevant peer group for certain (although not necessarily all) periods considered. Notwithstanding the forgoing, the Board concluded that other factors relevant to performance supported renewal of the Agreement with respect Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund. These factors varied from, but included one or more of the following: (1) that the underperformance was attributable, to a significant extent, to investment decisions by CSIM that were reasonable and consistent with the Fund’s investment objective and policies; (2) that recent performance showed improvement; and (3) that CSIM had taken steps designed to help improve performance. Following such evaluation the Board concluded, within the context of its full deliberations, that the performance of the Funds supported renewal of the Agreement with respect to the Funds.
Fund Expenses. With respect to the Funds’ expenses, the Trustees considered the rate of compensation called for by the Agreement, and each Fund’s net operating expense ratio, in each case, in comparison to those of a peer group of mutual funds, such peer groups and comparisons having been selected and calculated by an independent third party. The Trustees considered the effects of CSIM’s and Schwab’s historical practice of voluntarily waiving management and other fees to prevent total Fund expenses from exceeding a specified cap. The Trustees also considered CSIM’s contractual commitment to keep each Fund’s expense cap for so long as CSIM serves as the adviser to such Fund. The Trustees also considered fees charged by CSIM to other mutual funds and exchange-traded funds. Following such evaluation, the Board concluded, within the context of its full deliberations, that the expenses of the Funds are reasonable and supported renewal of the Agreement with respect to the Funds.
Profitability. With regard to profitability, the Trustees considered the compensation flowing to CSIM and its affiliates, directly or indirectly. In this connection, the Trustees reviewed management’s profitability analyses, together with certain commentary thereon from an independent accounting firm. The Trustees also considered any other benefits derived by CSIM from its relationship with the Funds, such as whether, by virtue of its management of the Funds, CSIM obtains investment information or other research resources that aid it in providing advisory services to other clients. The Trustees considered whether the varied levels of compensation and profitability under the Agreement and other service agreements were reasonable and justified in light of the quality of all services rendered to each Fund by CSIM and its affiliates. Based on this evaluation, the Board concluded, within the context of its full deliberations, that the profitability of CSIM is reasonable and supported renewal of the Agreement with respect to the Funds.
Economies of Scale. The Trustees considered the existence of any economies of scale and whether those are passed along to a Fund’s shareholders through a graduated investment advisory fee schedule or other means, including any fee waivers by CSIM and its affiliates. In this regard, and consistent with their consideration of Fund expenses, the Trustees considered that CSIM and Schwab have committed resources to minimize the effects on shareholders of diseconomies of scale during periods when fund assets were relatively small through their contractual expense waivers. For example, such diseconomies of scale may particularly affect newer funds or funds with investment strategies that are from time to time out of favor, but shareholders may benefit from the continued availability of such funds at subsidized expense levels. The Trustees also considered the existing contractual investment advisory fee schedules relating to the Funds that, in each case, include lower fees at higher graduated asset levels. Based on this evaluation the Board concluded, within the context of its full deliberations, that the Funds obtain reasonable benefit from economies of scale.
In the course of their deliberations, the Trustees did not identify any particular information or factor that was all important or controlling. Based on the Trustees’ deliberation and their evaluation of the information described above, the Board, including all of the Independent Trustees, approved the continuation of the Agreement with respect to the Funds and concluded that the compensation under the Agreement with respect to the Funds is fair and reasonable in light of such services and expenses and such other matters as the Trustees have considered to be relevant in the exercise of their reasonable judgment.
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Trustees and Officers
The tables below give information about the trustees and officers for Schwab Capital Trust which includes the funds covered in this report. The “Fund Complex” includes The Charles Schwab Family of Funds, Schwab Capital Trust, Schwab Investments, Schwab Annuity Portfolios, Schwab Strategic Trust, Laudus Trust and Laudus Institutional Trust. The Fund Complex includes 87 funds.
The address for all trustees and officers is 211 Main Street, San Francisco, CA 94105. You can find more information about the trustees and officers in the Statement of Additional Information, which is available free by calling 1-800-435-4000.
Independent Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Mariann Byerwalter 1960 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman of JDN Corporate Advisory LLC. | 70 | Director, Redwood Trust, Inc. (1998 – present) Director, PMI Group Inc. (2001 – 2009) | |||
John F. Cogan 1947 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Fellow, The Hoover Institution at Stanford University (Oct. 1979 – present); Senior Fellow, Stanford Institute for Economic Policy Research; Professor of Public Policy, Stanford University (Sept. 1994 – present). | 70 | Director, Gilead Sciences, Inc. (2005 – present) Director, Monaco Coach Corporation (2005 – 2009) | |||
William A. Hasler 1941 Trustee (Trustee of Schwab Capital Trust since 2000.) | Dean Emeritus, Haas School of Business, University of California, Berkeley (July 1998 – present). | 70 | Director, Ditech Networks Corporation (1997 – present) Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Aphton Corp. (1991 – 2007) Director, Solectron Corporation (1998 – 2007) Director, Genitope Corporation (2000 – 2009) | |||
David L. Mahoney 1954 Trustee (Trustee of Schwab Capital Trust since 2011.) | Private Investor. | 70 | Director, Symantec Corporation (2003 – present) Director, Corcept Therapeutics Incorporated (2004 – present) Director, Tercica Inc. (2004 – 2008) | |||
Kiran M. Patel 1948 Trustee (Trustee of Schwab Capital Trust since 2011.) | Executive Vice President and General Manager of Small Business Group, Intuit, Inc. (financial software and services for consumers and small businesses) (Dec. 2008 – present); Senior Vice President and General Manager of Consumer Group, Intuit, Inc. (June 2007 – Dec. 2008); Senior Vice President and Chief Financial Officer, Intuit, Inc. (Sept. 2005 – Jan. 2008). | 70 | Director, KLA-Tencor Corporation (2008 – present) Director, BEA Systems, Inc. (2007 – 2008) Director, Eaton Corp. (2003 – 2006) | |||
Gerald B. Smith 1950 Trustee (Trustee of Schwab Capital Trust since 2000.) | Chairman, Chief Executive Officer and Founder of Smith Graham & Co. (investment advisors) (1990 – present). | 70 | Lead Independent Director, Board of Cooper Industries (2002 – present) Director and Chairman of the Audit Committee, Oneok Partners LP (2003 – present) Director, Oneok, Inc (2009 – present) | |||
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Independent Trustees (continued)
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served1) | During the Past Five Years | the Trustee | Other Directorships | |||
Joseph H. Wender 1944 Trustee (Trustee of Schwab Capital Trust since 2008.) | Senior Consultant, Goldman Sachs & Co., Inc. (Jan. 2008- present); Partner, Colgin Partners, LLC (vineyards) (February 1998 – present); Senior Director, Chairman of the Finance Committee, GSC Group (July 2005 – Dec. 2007); General Partner, Goldman Sachs & Co., Inc. (Oct. 1982 – June 2005). | 70 | Board Member and Chairman of the Audit Committee, Isis Pharmaceuticals (1994 – present) | |||
Interested Trustees
Name, Year of Birth, | Number of | |||||
and Position(s) with | Portfolios in | |||||
the trust; (Terms of | Fund Complex | |||||
office, and length of | Principal Occupations | Overseen by | ||||
Time Served ) | During the Past Five Years | the Trustee | Other Directorships | |||
Charles R. Schwab2 1937 Chairman and Trustee (Chairman and Trustee of Schwab Capital Trust since 1993.) | Chairman and Director, The Charles Schwab Corporation, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc., Charles Schwab Bank, N. A.; Chairman and Chief Executive Officer, Schwab (SIS) Holdings Inc. I, Schwab International Holdings, Inc.; Chief Executive Officer, Schwab Holdings, Inc.; Through June 2007, Director, U.S. Trust Company, N. A., U.S. Trust Corporation, United States Trust Company of New York. Until October 2008, Chief Executive Officer, The Charles Schwab Corporation, Charles Schwab & Co., Inc. | 70 | None | |||
Walter W. Bettinger II2 1960 Trustee (Trustee of Schwab Capital Trust since 2008.) | As of October 2008, President and Chief Executive Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. Since October 2008, Director, The Charles Schwab Corporation. Since May 2008, Director, Charles Schwab & Co., Inc. and Schwab Holdings, Inc. Since 2006, Director, Charles Schwab Bank. From 2004 through 2007, Executive Vice President and President, Schwab Investor Services. From 2004 through 2005, Executive Vice President and Chief Operating Officer, Individual Investor Enterprise, and from 2002 through 2004, Executive Vice President, Corporate Services. Until October 2008, President and Chief Operating Officer, Charles Schwab & Co., Inc. and The Charles Schwab Corporation. | 87 | None | |||
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Officers of the Trust
Name, Year of Birth, and Position(s) | ||
with the trust; (Terms of office, and | ||
length of Time Served3) | Principal Occupations During the Past Five Years | |
Marie Chandoha 1961 President and Chief Executive Officer (Officer of Schwab Capital Trust since 2010.) | Executive Vice President, Charles Schwab & Co., Inc. (Sept. 2010 – present); Director, President and Chief Executive Officer (Dec. 2010 – present), Chief Investment Officer (Sept. 2010 – Oct. 2011), Charles Schwab Investment Management, Inc.; President, Chief Executive Officer and Chief Investment Officer, Schwab Funds, Laudus Funds and Schwab ETFs (Dec. 2010 – present); Global Head of Fixed Income Business Division, BlackRock, Inc. (formerly Barclays Global Investors) (March 2007 – August 2010); Co-Head and Senior Portfolio Manager, Wells Capital Management (June 1999 – March 2007). | |
George Pereira 1964 Treasurer and Principal Financial Officer (Officer of Schwab Capital Trust since 2004.) | Senior Vice President and Chief Financial Officer (Nov. 2004 – present), Chief Operating Officer (Jan. 2011 – present), Charles Schwab Investment Management, Inc. (November 2004 – present); Treasurer and Chief Financial Officer, Laudus Funds (2006 – present); Treasurer and Principal Financial Officer, Schwab Funds (Nov. 2004 – present) and Schwab ETFs (Oct. 2009 – present); Director, Charles Schwab Worldwide Fund, PLC and Charles Schwab Asset Management (Ireland) Limited (April 2005 – present); Treasurer, Chief Financial Officer and Chief Accounting Officer, Excelsior Funds Inc., Excelsior Tax-Exempt Funds, Inc., and Excelsior Funds Trust (June 2006- June 2007). | |
Omar Aguilar 1970 Senior Vice President and Chief Investment Officer – Equities (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Equities, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer — Equities, Schwab Funds and Laudus Funds (June 2011 – present); Head of the Portfolio Management Group and Vice President of Portfolio Management, Financial Engines, Inc. (May 2009 – April 2011); Head of Quantitative Equity, ING Investment Management (July 2004 – Jan. 2009). | |
Brett Wander 1961 Senior Vice President and Chief Investment Officer – Fixed Income (Officer of Schwab Capital Trust since 2011.) | Senior Vice President and Chief Investment Officer – Fixed Income, Charles Schwab Investment Management, Inc. (April 2011 – present); Senior Vice President and Chief Investment Officer – Fixed Income, Schwab Funds and Laudus Funds (June 2011 – present); Senior Managing Director, Global Head of Active Fixed-Income Strategies, State Street Global Advisors (Jan. 2008 – Oct. 2010); Director of Alpha Strategies Loomis, Sayles & Company (April 2006 – Jan. 2008); Managing Director, Head of Market-Based Strategies State Street Research (August 2003 – Jan. 2005). | |
David Lekich 1964 Secretary and Chief Legal Officer (Officer of Schwab Capital Trust since 2011.) | Senior Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (Oct. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Oct. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Oct. 2011); Secretary (April 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab Funds; Vice President and Assistant Clerk, Laudus Funds (April 2011-present); Secretary (May 2011 – present) and Chief Legal Officer (Dec. 2011 – present), Schwab ETFs. | |
Catherine MacGregor 1964 Vice President (Officer of Schwab Capital Trust since 2005.) | Vice President, Charles Schwab & Co., Inc., Charles Schwab Investment Management, Inc. (July 2005 – present); Vice President (Dec. 2005 – present), Chief Legal Officer and Clerk (March 2007 – present), Laudus Funds; Vice President and Assistant Secretary, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
Michael Haydel 1972 Vice President (Officer of Schwab Capital Trust since 2006.) | Senior Vice President (March 2011 – present), Vice President (2004 – March 2011), Asset Management Client Services, Charles Schwab & Co., Inc.; Vice President (Sept. 2005 – present), Anti-Money Laundering Officer (Oct. 2005 – Feb. 2009), Laudus Funds; Vice President, Schwab Funds (June 2007 – present) and Schwab ETFs (Oct. 2009 – present). | |
1 | Trustees remain in office until they resign, retire or are removed by shareholder vote. The Schwab Funds® retirement policy requires that independent trustees elected after January 1, 2000 retire at age 72 or after twenty years as a trustee, whichever comes first. In addition, the Schwab Funds retirement policy also requires any independent trustee of the Schwab Funds who also serves as an independent trustee of the Laudus Funds to retire from the Boards of the Schwab Funds upon their required retirement date from either the Boards of Trustees of the Schwab Funds or the Laudus Funds, whichever comes first. | |
2 | Mr. Schwab and Mr. Bettinger are Interested Trustees because they are employees of Schwab and/or the investment adviser. In addition to their employment with Schwab and/or the investment adviser, Messrs. Schwab and Bettinger also own stock of The Charles Schwab Corporation. | |
3 | The President, Treasurer and Secretary hold office until their respective successors are chosen and qualified or until he or she sooner dies, resigns, is removed or becomes disqualified. Each of the other officers serves at the pleasure of the Board. |
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Glossary
asset allocation The practice of dividing a portfolio among different asset classes, with each asset class assigned a particular percentage.
asset class A group of securities with similar structure and basic characteristics. Stocks, bonds and cash are the three main examples of asset classes.
Barclays Capital U.S. Aggregate Bond Index A broad-based benchmark that measures the investment grade, U.S. dollar-denominated, fixed-rate taxable bond market, including Treasuries, government-related and corporate securities, mortgage-back securities (agency fixed-rate and hybrid ARM passthroughs), asset-backed securities, and commercial mortgage-backed securities.
beta A historical measure of an investment’s volatility relative to a market index (usually the S&P 500®). The index is defined as having a beta of 1.00. Investments with a beta higher than 1.00 have been more volatile than the index; those with a beta of less than 1.00 have been less volatile.
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.
cap, capitalization See “market cap.”
capital gain, capital loss the difference between the amount paid for an investment and its value at a later time. If the investment has been sold, the capital gain or loss is considered a realized gain or loss. If the investment is still held, the gain or loss is still “on paper” and is considered unrealized.
earnings growth rate For a mutual fund, the average yearly rate at which the earnings of the companies in the fund’s portfolio have grown, measured over the past five years.
earnings per share (EPS) A company’s earnings, or net income, for the past 12 months, divided by the number of shares outstanding.
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.
gross domestic product (GDP) The output of goods and services produced by labor and property located in the United States.
market cap, market capitalization The value of a company as determined by the total value of all shares of its stock outstanding.
median market cap The midpoint of the range of market caps of the stocks held by a fund. There are different ways of calculating median market cap. With a simple median, half of the stocks in the fund’s portfolio would be larger than the median, and half would be smaller. With a weighted median (the type that is calculated for these funds), half of the fund’s assets are invested in stocks that are larger than the median market cap, and half in stocks that are smaller.
MSCI EAFE (Europe, Australasia, Far East) Index A free float-adjusted market capitalization index that is designed to measure the equity market performance of developed markets, excluding the U.S. & Canada.
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.
price-to-book ratio (P/B) The market price of a company’s stock compared with its “book value.” A mutual fund’s P/B is the weighted average of the P/B of all stocks in the fund’s portfolio.
price-to-earnings ratio (P/E) The market price of a company’s stock compared with earnings over the past year. A mutual fund’s P/E is the weighted average of the P/E of all stocks in the fund’s portfolio.
return on equity (ROE) The average yearly rate of return for each dollar of investors’ money, measured over the past five years.
S&P 500 Index A market capitalization index that is designed to measure the performance of 500 leading publicly held companies in leading industries of the U.S. economy.
stock A share of ownership, or equity, in the issuing company.
total return The percentage that an investor would have earned or lost on an investment in the fund assuming dividends and distributions were reinvested.
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.
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PRIVACY NOTICE
THIS IS NOT PART OF THE SHAREHOLDER REPORT
THIS IS NOT PART OF THE SHAREHOLDER REPORT
A Commitment to Your Privacy
Your Privacy Is Not for Sale
We do not and will not sell your personal information to anyone, for any reason.
We are committed to protecting the privacy of information we maintain about you. Below are details about our commitment, including the types of information we collect and how we use and share that information. This Privacy Notice applies to you only if you are an individual who invests directly in the funds by placing orders through the funds’ transfer agent. If you place orders through your brokerage account at Charles Schwab & Co., Inc. or an account with another broker-dealer, investment advisor, 401(k) plan, employee benefit plan, administrator, bank or other financial intermediary, you are covered by the privacy policies of that financial institution and should consult those policies.
How We Collect Information About You
We collect personal information about you in a number of ways.
• | APPLICATION AND REGISTRATION INFORMATION. |
We collect personal information from you when you open an account or utilize one of our services. We may also collect information about you from third parties such as consumer reporting agencies to verify your identity. The information we collect may include personal information, including your Social Security number, as well as details about your interests, investments and investment experience.
• | TRANSACTION AND EXPERIENCE INFORMATION. |
Once your account has been opened, we collect and maintain personal information about your account activity, including your transactions, balances, positions and history. This information allows us to administer your account and provide the services you have requested.
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We provide access to information about you to our affiliated companies, outside companies and other third parties in certain limited circumstances, including:
• | to help us process transactions for your account; |
• | when we use other companies to provide services for us, such as printing and mailing your account statements; |
• | when we believe that disclosure is required or permitted under law (for example, to cooperate with regulators or law enforcement, resolve consumer disputes, perform credit/authentication checks, or for risk control). |
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We will comply with state laws that apply to the disclosure or use of information about you.
Safeguarding Your Information — Security Is a Partnership
We take precautions to ensure the information we collect about you is protected and is accessed only by authorized individuals or organizations.
Companies we use to provide support services are not allowed to use information about our shareholders for their own purposes and are contractually obligated to maintain strict confidentiality. We limit their use of information to the performance of the specific services we have requested.
We restrict access to personal information by our employees and agents. Our employees are trained about privacy and are required to safeguard personal information.
We maintain physical, electronic and procedural safeguards that comply with federal standards to guard your nonpublic personal information.
Contact Us
To provide us with updated information, report suspected fraud or identity theft, or for any other questions, please call the number below.
Schwab Funds® direct investors: 1-800-407-0256
© 2011 Schwab Funds. All rights reserved.
Schwab Funds® offers you an extensive family of mutual funds, each one based on a clearly defined investment approach and using disciplined management strategies. The list at right shows all currently available Schwab Funds.
Whether you are an experienced investor or just starting out, Schwab Funds can help you achieve your financial goals. An investor should consider a fund’s investment objectives, risks, charges and expenses carefully before investing or sending money. This and other important information can be found in the fund’s prospectus. Please call 1-800-435-4000 for a prospectus and brochure 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 Schwab’s website at www.schwabfunds.com/prospectus, the SEC’s website at http://www.sec.gov, or by contacting Schwab Funds at 1-800-435-4000.
Information regarding how a fund voted proxies relating to portfolio securities during the most recent twelve-month period ended June 30 is available, without charge, by visiting the fund’s website at www.schwabfunds.com/prospectus or the SEC’s website at http://www.sec.gov.
The Schwab Funds Family®
Stock Funds
Schwab Premier Equity Fund®
Schwab Core Equity Fundtm
Schwab Dividend Equity Fundtm
Schwab Large-Cap Growth Fundtm
Schwab Small-Cap Equity Fundtm
Schwab Hedged Equity Fundtm
Schwab Financial Services Fundtm
Schwab Health Care Fundtm
Schwab® International Core Equity Fund
Schwab Fundamental US Large* Company Index Fund
Schwab Fundamental US Small-Mid* Company Index Fund
Schwab Fundamental International* Large Company Index Fund
Schwab Fundamental International* Small-Mid Company Index Fund
Schwab Fundamental Emerging Markets* Index Fund
Schwab Global Real Estate Fundtm
Schwab S&P 500 Index Fund
Schwab 1000 Index® Fund
Schwab Small-Cap Index Fund®
Schwab Total Stock Market Index Fund®
Schwab International Index Fund®
Asset Allocation Funds
Schwab Balanced Fundtm
Schwab MarketTrack All Equity Portfoliotm
Schwab MarketTrack Growth Portfoliotm
Schwab MarketTrack Balanced Portfoliotm
Schwab MarketTrack Conservative Portfoliotm
Schwab Target 2010 Fund
Schwab Target 2015 Fund
Schwab Target 2020 Fund
Schwab Target 2025 Fund
Schwab Target 2030 Fund
Schwab Target 2035 Fund
Schwab Target 2040 Fund
Schwab® Monthly Income Fund – Moderate Payout
Schwab® Monthly Income Fund – Enhanced Payout
Schwab® Monthly Income Fund – Maximum Payout
Bond Funds
Schwab Short-Term Bond Market Fundtm
Schwab® Premier Income Fund
Schwab Total Bond Market Fundtm
Schwab GNMA Fundtm
Schwab® Treasury Inflation Protected Securities Fundtm
Schwab Tax-Free Bond Fundtm
Schwab California Tax-Free Bond Fundtm
Schwab Money Funds
Schwab offers an array of money market funds1. Choose from taxable or tax-advantaged alternatives. Many can be linked to your eligible Schwab account to “sweep” cash balances automatically, subject to availability, when you’re between investments. Or, for your larger cash reserves, choose one of our Value Advantage Investments®.
* | SCHWAB is a registered trademark of Charles Schwab & Co., Inc. FUNDAMENTAL INDEX, FUNDAMENTAL US LARGE, FUNDAMENTAL US SMALL-MID, FUNDAMENTAL INTERNATIONAL AND FUNDAMENTAL EMERGING MARKETS are trademarks of Research Affiliates LLC. | |
1 | Investments in money market funds are neither insured nor guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other government agency and, although they seek to preserve the value of your investment at $1 per share, it is possible to lose money. |
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Funds
Schwab Funds®
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Item 2: Code of Ethics.
(a) | Registrant has adopted a code of ethics that applies to its principal executive officer, principal financial officer, and any other persons who perform a similar function, regardless of whether these individuals are employed by Registrant or a third party. | |
(c) | During the period covered by the report, no amendments were made to the provisions of this code of ethics. | |
(d) | During the period covered by the report, Registrant did not grant any waivers, including implicit waivers, from the provisions of this code of ethics. | |
(f)(1) | Registrant has filed this code of ethics as an exhibit pursuant to Item 12(a)(1) of Form N-CSR. |
Item 3: Audit Committee Financial Expert.
(a) (1) Disclose that the registrant’s board of directors has determined that the registrant either:
(i) Has at least one audit committee financial expert serving on its audit committee; or
(ii) Does not have an audit committee financial expert serving on its audit committee.
(2) If the registrant provides the disclosure required by paragraph (a)(1)(i) of this Item, it must disclose the name of the audit committee financial expert and whether that person is “independent.” In order to be considered “independent” for purposes of this Item, a member of an audit committee may not, other than in his or her capacity as a member of the audit committee, the board of directors, or any other board committee:
(i) Accept directly or indirectly any consulting, advisory, or other compensatory fee from the issuer; or
(ii) Be an “interested person” of the investment company as defined in Section 2(a)(19) of the Act (15 U.S.C. 80a- 2(a)(19)).
(3) If the registrant provides the disclosure required by paragraph (a)(1)(ii) of this Item, it must explain why it does not have an audit committee financial expert.
3(a)(1) THE REGISTRANT’S BOARD OF DIRECTORS HAS DETERMINED THAT THE REGISTRANT HAS AT LEAST ONE AUDIT COMMITTEE FINANCIAL EXPERT SERVING ON ITS AUDIT COMMITTEE.
3(a)(2) THE AUDIT COMMITTEE FINANCIAL EXPERTS ARE MARIANN BYERWALTER, WILLIAM HASLER AND KIRAN PATEL WHO ARE “INDEPENDENT” FOR PURPOSES OF THIS ITEM 3 OF FORM N-CSR.
Item 4: Principal Accountant Fees and Services.
Registrant is composed of thirty-five series. Thirty-two series have a fiscal year-end of October 31, whose annual financial statements are reported in Item 1, and three series has a fiscal year-end of December 31. Principal accountant fees disclosed in Items 4(a)-(d) and 4(g) include fees billed for services rendered to each of the thirty-five series, based on their respective 2010 and 2009 fiscal years, as applicable.
(a) Below are the aggregate fees billed for each of the last two fiscal years for professional services rendered by the principal accountant for the audit of Registrant’s annual financial statements or services that are normally provided by the accountant in connection with statutory and regulatory filings or engagements.
Audit Fees |
2011: $1,200,554 | 2010: $1,158,777 |
(b) Below are the aggregate fees billed in each of the last two fiscal years for assurance and related services by the principal accountant that are reasonably related to the performance of the audit of Registrant’s financial statements and are not reported under paragraph (a) above.
Audit-Related Fees |
For services rendered to Registrant: |
2011: $82,667 | 2010: $82,667 |
Nature of these services: tax provision review and procedures performed related to Registrant’s service provider conversion. |
In each of the last two fiscal years there were no “Audit-Related Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(c) Below are the aggregate fees billed in each of the last two fiscal years for professional services rendered by the principal accountant for tax compliance, tax advice, and tax planning.
Tax Fees |
For services rendered to Registrant: |
2011: $90,725 | 2010: $90,725 |
Nature of these services: preparation and review of tax returns. |
In each of the last two fiscal years there were no “Tax Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(d) Below are the aggregate fees billed in each of the last two fiscal years for products and services provided by the principal accountant, other than the services reported in paragraphs (a) through (c) above.
All Other Fees |
For services rendered to Registrant:
2011: $11,986 | 2010: $13,258 |
Nature of these services: | review of the methodology of allocation of Charles Schwab & Co., Inc. (“Schwab”) expenses for purposes of Section 15(c) of the Investment Company Act of 1940. |
In each of the last two fiscal years there were no “All Other Fees” required to be approved pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X.
(e)(1) Registrant’s audit committee does not have pre-approval policies and procedures as described in paragraph (c)(7) of Rule 2-01 of Regulation S-X.
(2) There were no services described in each of paragraphs (b) through (d) above (including services required to be approved by Registrant’s audit committee pursuant to paragraph (c)(7)(ii) of Rule 2-01 of Regulation S-X) that were approved by Registrant’s audit committee pursuant to paragraph (c)(7)(i)(C) of Rule 2-01 of Regulation S-X.
(f) Not applicable.
(g) Below are the aggregate non-audit fees billed in each of the last two fiscal years by Registrant’s principal accountant for services rendered to Registrant, to Registrant’s investment adviser, and to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant.
2011: $185,378 | 2010: $186,650 |
Although not required to be included in the amounts disclosed under this paragraph (g) or any other paragraph of this Item 4, below are the aggregate fees billed in each of the last two fiscal years by Registrant’s principal accountant for tax compliance services rendered to U.S. Trust, an entity under common control with Registrant’s investment adviser that does not provide services to Registrant.
(h) | During the past fiscal year, all non-audit services provided by Registrant’s principal accountant to either Registrant’s investment adviser or to any entity controlling, controlled by, or under common control with Registrant’s investment adviser that provides ongoing services to Registrant were pre-approved. Included in the audit committee’s pre-approval was the review and consideration as to whether the provision of these non-audit services is compatible with maintaining the principal accountant’s independence. |
Item 5: Audit Committee of Listed Registrants.
Not applicable.
Item 6: Schedule of Investments.
Except as noted below, the schedules of investments are included as part of the report to shareholders filed under Item 1 of this Form. The schedules of investments for the Schwab S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund, Schwab International Index Fund, Schwab Fundamental US Large Company Index Fund, Schwab Fundamental US Small-Mid Company Index Fund, Schwab Fundamental International Large Company Index Fund, Schwab Fundamental International Small-Mid Company Index Fund and Schwab Fundamental Emerging Markets Index Fund are filed under this Item.
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .2% | Common Stock | 1,376,436,266 | 1,478,498,401 | ||||||||
0 | .5% | Other Investment Company | 7,158,112 | 7,158,112 | ||||||||
0 | .1% | Short-Term Investments | 985,003 | 985,003 | ||||||||
99 | .8% | Total Investments | 1,384,579,381 | 1,486,641,516 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,904,747 | 4,904,747 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (1,767,911 | ) | ||||||||
100 | .0% | Net Assets | 1,489,778,352 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.2% of net assets | ||||||||
Automobiles & Components 1.1% | ||||||||
Autoliv, Inc. | 9,300 | 537,261 | ||||||
BorgWarner, Inc. * | 6,750 | 516,308 | ||||||
Cooper Tire & Rubber Co. | 7,100 | 101,743 | ||||||
Dana Holding Corp. * | 28,300 | 400,162 | ||||||
Exide Technologies * | 22,200 | 99,900 | ||||||
Ford Motor Co. * | 552,974 | 6,458,736 | ||||||
General Motors Co. * | 88,600 | 2,290,310 | ||||||
Gentex Corp. | 12,100 | 364,452 | ||||||
Harley-Davidson, Inc. | 24,560 | 955,384 | ||||||
Johnson Controls, Inc. | 73,410 | 2,417,391 | ||||||
Lear Corp. | 6,800 | 318,988 | ||||||
Tenneco, Inc. * | 11,660 | 381,515 | ||||||
The Goodyear Tire & Rubber Co. * | 103,290 | 1,483,245 | ||||||
TRW Automotive Holdings Corp. * | 20,350 | 856,735 | ||||||
17,182,130 | ||||||||
Banks 3.4% | ||||||||
Associated Banc-Corp. | 39,760 | 443,324 | ||||||
Astoria Financial Corp. | 16,355 | 135,747 | ||||||
BancorpSouth, Inc. | 13,245 | 129,404 | ||||||
Bank of Hawaii Corp. | 6,720 | 283,786 | ||||||
BB&T Corp. | 126,575 | 2,954,260 | ||||||
CapitalSource, Inc. | 76,900 | 489,084 | ||||||
CIT Group, Inc. * | 21,700 | 756,245 | ||||||
City National Corp. | 4,720 | 200,222 | ||||||
Comerica, Inc. | 34,200 | 873,810 | ||||||
Commerce Bancshares, Inc. | 8,523 | 330,692 | ||||||
Cullen/Frost Bankers, Inc. | 6,000 | 294,240 | ||||||
East West Bancorp, Inc. | 10,100 | 196,647 | ||||||
F.N.B. Corp. | 15,200 | 153,368 | ||||||
Fifth Third Bancorp | 144,790 | 1,738,928 | ||||||
First Horizon National Corp. | 49,966 | 349,262 | ||||||
First Niagara Financial Group, Inc. | 32,300 | 296,837 | ||||||
FirstMerit Corp. | 13,225 | 185,282 | ||||||
Fulton Financial Corp. | 30,680 | 289,619 | ||||||
Hancock Holding Co. | 13,752 | 416,686 | ||||||
Hudson City Bancorp, Inc. | 96,890 | 605,562 | ||||||
Huntington Bancshares, Inc. | 125,527 | 650,230 | ||||||
KeyCorp | 193,190 | 1,363,921 | ||||||
M&T Bank Corp. | 16,786 | 1,277,582 | ||||||
MGIC Investment Corp. * | 54,000 | 143,640 | ||||||
New York Community Bancorp, Inc. | 60,465 | 804,789 | ||||||
People’s United Financial, Inc. | 58,352 | 743,988 | ||||||
PNC Financial Services Group, Inc. | 71,445 | 3,837,311 | ||||||
Popular, Inc. * | 281,280 | 523,181 | ||||||
Regions Financial Corp. | 324,625 | 1,275,776 | ||||||
SunTrust Banks, Inc. | 114,560 | 2,260,269 | ||||||
Susquehanna Bancshares, Inc. | 23,000 | 166,980 | ||||||
SVB Financial Group * | 3,800 | 174,572 | ||||||
Synovus Financial Corp. | 320,910 | 481,365 | ||||||
TCF Financial Corp. | 31,565 | 335,852 | ||||||
Trustmark Corp. | 7,700 | 170,478 | ||||||
U.S. Bancorp | 260,800 | 6,673,872 | ||||||
Umpqua Holdings Corp. | 13,900 | 159,155 | ||||||
Valley National Bancorp | 21,644 | 259,728 | ||||||
Washington Federal, Inc. | 16,250 | 221,813 | ||||||
Webster Financial Corp. | 11,125 | 218,495 | ||||||
Wells Fargo & Co. | 668,125 | 17,311,119 | ||||||
Zions Bancorp | 37,435 | 649,872 | ||||||
50,826,993 | ||||||||
Capital Goods 8.0% | ||||||||
3M Co. | 62,375 | 4,928,872 | ||||||
Acuity Brands, Inc. | 3,020 | 139,826 | ||||||
Aecom Technology Corp. * | 19,600 | 410,032 | ||||||
AerCap Holdings N.V. * | 12,600 | 149,436 | ||||||
AGCO Corp. * | 11,940 | 523,330 | ||||||
Alliant Techsystems, Inc. | 6,820 | 396,106 | ||||||
AMETEK, Inc. | 7,265 | 287,113 | ||||||
BE Aerospace, Inc. * | 8,800 | 332,024 | ||||||
Brady Corp., Class A | 4,400 | 135,168 | ||||||
Briggs & Stratton Corp. | 8,935 | 130,451 | ||||||
Carlisle Cos., Inc. | 6,450 | 269,094 | ||||||
Caterpillar, Inc. | 51,845 | 4,897,279 | ||||||
Cooper Industries plc | 13,670 | 717,128 | ||||||
Crane Co. | 8,495 | 374,714 | ||||||
Cummins, Inc. | 11,484 | 1,141,854 | ||||||
Curtiss-Wright Corp. | 10,200 | 334,356 | ||||||
Danaher Corp. | 37,600 | 1,817,960 | ||||||
Deere & Co. | 31,786 | 2,412,557 | ||||||
Donaldson Co., Inc. | 4,500 | 288,225 | ||||||
Dover Corp. | 17,475 | 970,387 | ||||||
Eaton Corp. | 17,920 | 803,174 | ||||||
EMCOR Group, Inc. | 16,140 | 404,630 |
See financial notes 1
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Emerson Electric Co. | 65,950 | 3,173,514 | ||||||
EnerSys * | 4,500 | 101,385 | ||||||
Esterline Technologies Corp. * | 3,400 | 190,060 | ||||||
Fastenal Co. | 15,940 | 607,155 | ||||||
Flowserve Corp. | 4,125 | 382,346 | ||||||
Fluor Corp. | 17,640 | 1,002,834 | ||||||
Fortune Brands Home & Security, Inc. * | 20,500 | 297,865 | ||||||
Foster Wheeler AG * | 11,570 | 246,672 | ||||||
Gardner Denver, Inc. | 2,100 | 162,393 | ||||||
GATX Corp. | 11,035 | 419,109 | ||||||
General Cable Corp. * | 12,700 | 356,108 | ||||||
General Dynamics Corp. | 51,225 | 3,288,133 | ||||||
General Electric Co. | 1,700,325 | 28,412,431 | ||||||
Goodrich Corp. | 10,655 | 1,306,623 | ||||||
Granite Construction, Inc. | 7,800 | 175,500 | ||||||
Harsco Corp. | 13,135 | 302,762 | ||||||
Honeywell International, Inc. | 76,340 | 4,000,216 | ||||||
Hubbell, Inc., Class B | 4,830 | 288,786 | ||||||
Huntington Ingalls Industries, Inc. * | 12,415 | 366,243 | ||||||
Illinois Tool Works, Inc. | 51,470 | 2,502,986 | ||||||
Ingersoll-Rand plc | 34,142 | 1,062,840 | ||||||
ITT Corp. * | 18,855 | 859,788 | ||||||
Jacobs Engineering Group, Inc. * | 20,240 | 785,312 | ||||||
Joy Global, Inc. | 4,300 | 374,960 | ||||||
KBR, Inc. | 20,900 | 583,319 | ||||||
Kennametal, Inc. | 8,740 | 339,899 | ||||||
L-3 Communications Holdings, Inc. | 20,835 | 1,412,196 | ||||||
Lennox International, Inc. | 5,935 | 191,048 | ||||||
Lincoln Electric Holdings, Inc. | 9,200 | 334,880 | ||||||
Lockheed Martin Corp. | 56,335 | 4,275,826 | ||||||
Masco Corp. | 102,150 | 980,640 | ||||||
Meritor, Inc. * | 15,935 | 151,701 | ||||||
Mueller Industries, Inc. | 7,900 | 319,555 | ||||||
Navistar International Corp. * | 16,200 | 681,534 | ||||||
Northrop Grumman Corp. | 54,795 | 3,164,411 | ||||||
Oshkosh Corp. * | 16,320 | 340,435 | ||||||
Owens Corning * | 22,050 | 625,779 | ||||||
PACCAR, Inc. | 41,742 | 1,804,924 | ||||||
Pall Corp. | 5,940 | 303,950 | ||||||
Parker Hannifin Corp. | 13,917 | 1,134,931 | ||||||
Pentair, Inc. | 13,950 | 501,503 | ||||||
Precision Castparts Corp. | 6,916 | 1,128,345 | ||||||
Quanta Services, Inc. * | 22,200 | 463,758 | ||||||
Raytheon Co. | 58,810 | 2,598,814 | ||||||
Regal-Beloit Corp. | 3,000 | 159,390 | ||||||
Rockwell Automation, Inc. | 10,050 | 679,882 | ||||||
Rockwell Collins, Inc. | 10,130 | 565,558 | ||||||
Roper Industries, Inc. | 4,900 | 397,390 | ||||||
Snap-on, Inc. | 7,230 | 388,034 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 10,100 | 172,407 | ||||||
SPX Corp. | 7,035 | 384,181 | ||||||
Stanley Black & Decker, Inc. | 14,403 | 919,632 | ||||||
Teledyne Technologies, Inc. * | 3,300 | 179,751 | ||||||
Terex Corp. * | 19,725 | 328,224 | ||||||
Textron, Inc. | 45,520 | 883,998 | ||||||
The Boeing Co. | 83,440 | 5,489,518 | ||||||
The Manitowoc Co., Inc. | 14,800 | 163,984 | ||||||
The Shaw Group, Inc. * | 13,740 | 319,592 | ||||||
The Timken Co. | 11,165 | 470,270 | ||||||
Thomas & Betts Corp. * | 5,200 | 258,388 | ||||||
Trinity Industries, Inc. | 12,625 | 344,284 | ||||||
Tutor Perini Corp. | 8,800 | 127,864 | ||||||
Tyco International Ltd. | 69,665 | 3,173,241 | ||||||
United Rentals, Inc. * | 17,800 | 416,698 | ||||||
United Technologies Corp. | 89,515 | 6,980,380 | ||||||
URS Corp. * | 17,793 | 635,210 | ||||||
USG Corp. * | 11,625 | 107,648 | ||||||
W.W. Grainger, Inc. | 6,235 | 1,068,118 | ||||||
WABCO Holdings, Inc. * | 2,700 | 135,567 | ||||||
WESCO International, Inc. * | 8,400 | 407,064 | ||||||
119,023,458 | ||||||||
Commercial & Professional Supplies 0.8% | ||||||||
Avery Dennison Corp. | 19,250 | 512,050 | ||||||
Cintas Corp. | 19,250 | 575,382 | ||||||
Corrections Corp. of America * | 12,290 | 273,207 | ||||||
Covanta Holding Corp. | 14,015 | 205,460 | ||||||
Deluxe Corp. | 13,745 | 324,657 | ||||||
Equifax, Inc. | 10,530 | 370,130 | ||||||
FTI Consulting, Inc. * | 7,300 | 287,693 | ||||||
HNI Corp. | 6,520 | 156,806 | ||||||
Iron Mountain, Inc. | 21,955 | 679,068 | ||||||
Kelly Services, Inc., Class A | 9,540 | 155,979 | ||||||
Manpower, Inc. | 18,145 | 782,775 | ||||||
Nielsen Holdings N.V. * | 9,400 | 275,890 | ||||||
Pitney Bowes, Inc. | 43,705 | 890,708 | ||||||
R.R. Donnelley & Sons Co. | 69,740 | 1,136,762 | ||||||
Republic Services, Inc. | 38,424 | 1,093,547 | ||||||
Robert Half International, Inc. | 16,410 | 433,716 | ||||||
Stericycle, Inc. * | 1,900 | 158,802 | ||||||
The Brink’s Co. | 9,220 | 256,224 | ||||||
The Dun & Bradstreet Corp. | 3,000 | 200,580 | ||||||
United Stationers, Inc. | 11,050 | 351,501 | ||||||
Waste Connections, Inc. | 7,800 | 265,590 | ||||||
Waste Management, Inc. | 68,055 | 2,241,051 | ||||||
11,627,578 | ||||||||
Consumer Durables & Apparel 1.1% | ||||||||
Brunswick Corp. | 14,470 | 255,540 | ||||||
Coach, Inc. | 9,375 | 610,031 | ||||||
D.R. Horton, Inc. | 71,990 | 801,249 | ||||||
Eastman Kodak Co. (c)* | 180,840 | 200,732 | ||||||
Garmin Ltd. | 14,770 | 507,940 | ||||||
Hanesbrands, Inc. * | 15,800 | 416,646 | ||||||
Harman International Industries, Inc. | 5,420 | 233,927 | ||||||
Hasbro, Inc. | 10,965 | 417,328 | ||||||
Jarden Corp. | 12,177 | 390,029 | ||||||
KB HOME (c) | 16,760 | 116,817 | ||||||
Leggett & Platt, Inc. | 27,020 | 591,738 | ||||||
Liz Claiborne, Inc. * | 67,545 | 541,036 | ||||||
M.D.C. Holdings, Inc. | 6,835 | 153,104 | ||||||
Mattel, Inc. | 41,335 | 1,167,300 | ||||||
Meritage Homes Corp. * | 6,500 | 115,375 | ||||||
Mohawk Industries, Inc. * | 16,435 | 865,303 | ||||||
Newell Rubbermaid, Inc. | 39,650 | 586,820 | ||||||
NIKE, Inc., Class B | 18,128 | 1,746,633 | ||||||
NVR, Inc. * | 703 | 451,853 |
2 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Polaris Industries, Inc. | 5,800 | 367,372 | ||||||
PulteGroup, Inc. * | 113,652 | 588,717 | ||||||
PVH Corp. | 4,000 | 297,640 | ||||||
Ralph Lauren Corp. | 3,620 | 574,820 | ||||||
The Jones Group, Inc. | 36,775 | 410,777 | ||||||
The Warnaco Group, Inc. * | 3,100 | 152,210 | ||||||
Toll Brothers, Inc. * | 13,095 | 228,377 | ||||||
Tupperware Brands Corp. | 4,800 | 271,392 | ||||||
VF Corp. | 12,745 | 1,761,614 | ||||||
Whirlpool Corp. | 17,355 | 881,808 | ||||||
15,704,128 | ||||||||
Consumer Services 1.5% | ||||||||
Apollo Group, Inc., Class A * | 13,950 | 660,532 | ||||||
Boyd Gaming Corp. * | 16,525 | 107,082 | ||||||
Brinker International, Inc. | 17,455 | 399,720 | ||||||
Career Education Corp. * | 10,135 | 163,478 | ||||||
Carnival Corp. | 51,945 | 1,828,983 | ||||||
Darden Restaurants, Inc. | 15,445 | 739,507 | ||||||
DeVry, Inc. | 2,800 | 105,504 | ||||||
Domino’s Pizza, Inc. * | 17,300 | 554,119 | ||||||
H&R Block, Inc. | 48,465 | 741,030 | ||||||
Hyatt Hotels Corp., Class A * | 3,400 | 126,446 | ||||||
International Game Technology | 36,155 | 635,966 | ||||||
Jack in the Box, Inc. * | 12,340 | 253,957 | ||||||
Las Vegas Sands Corp. * | 9,870 | 463,396 | ||||||
Marriott International, Inc., Class A | 24,489 | 771,403 | ||||||
McDonald’s Corp. | 78,580 | 7,296,153 | ||||||
MGM Resorts International * | 69,215 | 797,357 | ||||||
Penn National Gaming, Inc. * | 14,740 | 530,640 | ||||||
Regis Corp. | 10,675 | 174,643 | ||||||
Royal Caribbean Cruises Ltd. | 20,405 | 606,437 | ||||||
Service Corp. International | 32,200 | 322,000 | ||||||
Starbucks Corp. | 31,990 | 1,354,457 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 13,570 | 679,993 | ||||||
The Wendy’s Co. | 78,900 | 399,234 | ||||||
Wyndham Worldwide Corp. | 19,540 | 657,912 | ||||||
Wynn Resorts Ltd. | 3,200 | 424,960 | ||||||
Yum! Brands, Inc. | 27,730 | 1,485,496 | ||||||
22,280,405 | ||||||||
Diversified Financials 7.1% | ||||||||
Affiliated Managers Group, Inc. * | 2,200 | 203,742 | ||||||
American Express Co. | 130,925 | 6,627,424 | ||||||
Ameriprise Financial, Inc. | 20,600 | 961,608 | ||||||
Bank of America Corp. | 2,661,260 | 18,176,406 | ||||||
BlackRock, Inc. | 6,000 | 946,740 | ||||||
Capital One Financial Corp. | 84,810 | 3,872,425 | ||||||
Citigroup, Inc. | 610,933 | 19,299,374 | ||||||
CME Group, Inc. | 6,520 | 1,796,651 | ||||||
Discover Financial Services | 72,922 | 1,718,042 | ||||||
E*TRADE Financial Corp. * | 39,697 | 430,712 | ||||||
Eaton Vance Corp. | 7,700 | 202,433 | ||||||
Federated Investors, Inc., Class B | 13,530 | 264,376 | ||||||
Franklin Resources, Inc. | 10,440 | 1,113,217 | ||||||
Interactive Brokers Group, Inc., Class A | 18,500 | 284,530 | ||||||
IntercontinentalExchange, Inc. * | 2,600 | 337,688 | ||||||
Invesco Ltd. | 41,200 | 826,884 | ||||||
Jefferies Group, Inc. | 7,300 | 96,798 | ||||||
JPMorgan Chase & Co. | 628,742 | 21,855,072 | ||||||
Knight Capital Group, Inc., Class A * | 22,600 | 282,274 | ||||||
Legg Mason, Inc. | 27,620 | 759,550 | ||||||
Leucadia National Corp. | 8,100 | 217,323 | ||||||
MF Global Holdings Ltd. (c)(d)(e)* | 38,400 | 9,216 | ||||||
Moody’s Corp. | 15,370 | 545,481 | ||||||
Morgan Stanley | 262,735 | 4,634,645 | ||||||
MSCI, Inc., Class A * | 6,300 | 210,357 | ||||||
Northern Trust Corp. | 26,960 | 1,091,071 | ||||||
NYSE Euronext | 29,720 | 789,660 | ||||||
PHH Corp. * | 26,290 | 485,051 | ||||||
Raymond James Financial, Inc. | 10,035 | 304,763 | ||||||
SEI Investments Co. | 9,100 | 147,329 | ||||||
SLM Corp. | 72,135 | 986,085 | ||||||
State Street Corp. | 59,036 | 2,384,464 | ||||||
T. Rowe Price Group, Inc. | 13,545 | 715,718 | ||||||
TD Ameritrade Holding Corp. | 32,070 | 538,135 | ||||||
The Bank of New York Mellon Corp. | 145,352 | 3,093,091 | ||||||
The Charles Schwab Corp. (b) | 94,515 | 1,160,644 | ||||||
The Goldman Sachs Group, Inc. | 66,411 | 7,275,325 | ||||||
The NASDAQ OMX Group, Inc. * | 25,430 | 637,022 | ||||||
105,281,326 | ||||||||
Energy 11.2% | ||||||||
Alpha Natural Resources, Inc. * | 10,972 | 263,767 | ||||||
Anadarko Petroleum Corp. | 38,415 | 3,015,577 | ||||||
Apache Corp. | 23,420 | 2,333,335 | ||||||
Arch Coal, Inc. | 12,000 | 218,640 | ||||||
Atwood Oceanics, Inc. * | 3,800 | 162,412 | ||||||
Baker Hughes, Inc. | 31,349 | 1,817,928 | ||||||
Bristow Group, Inc. | 3,600 | 179,208 | ||||||
Cabot Oil & Gas Corp. | 6,300 | 489,636 | ||||||
Cameron International Corp. * | 14,080 | 691,891 | ||||||
Chesapeake Energy Corp. | 60,120 | 1,690,574 | ||||||
Chevron Corp. | 287,105 | 30,160,380 | ||||||
Cimarex Energy Co. | 2,445 | 156,480 | ||||||
ConocoPhillips | 281,910 | 19,635,031 | ||||||
CONSOL Energy, Inc. | 12,435 | 531,721 | ||||||
Copano Energy L.L.C. | 4,600 | 148,718 | ||||||
CVR Energy, Inc. * | 12,700 | 314,452 | ||||||
Denbury Resources, Inc. * | 11,600 | 182,120 | ||||||
Devon Energy Corp. | 34,240 | 2,223,888 | ||||||
Diamond Offshore Drilling, Inc. (c) | 11,720 | 768,129 | ||||||
Dresser-Rand Group, Inc. * | 5,700 | 275,880 | ||||||
El Paso Corp. | 50,820 | 1,271,008 | ||||||
Energen Corp. | 5,310 | 260,509 | ||||||
EOG Resources, Inc. | 14,150 | 1,265,434 | ||||||
EQT Corp. | 9,080 | 576,580 | ||||||
Exterran Holdings, Inc. * | 16,500 | 156,750 | ||||||
Exxon Mobil Corp. | 572,684 | 44,720,894 | ||||||
FMC Technologies, Inc. * | 11,380 | 510,052 | ||||||
Forest Oil Corp. * | 8,050 | 93,863 | ||||||
General Maritime Corp. (c) | 119,884 | 31,170 | ||||||
Halliburton Co. | 58,865 | 2,199,196 |
See financial notes 3
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Helix Energy Solutions Group, Inc. * | 27,000 | 487,620 | ||||||
Helmerich & Payne, Inc. | 7,095 | 377,312 | ||||||
Hess Corp. | 45,150 | 2,824,584 | ||||||
HollyFrontier Corp. | 19,702 | 604,654 | ||||||
Key Energy Services, Inc. * | 11,800 | 152,574 | ||||||
Linn Energy L.L.C. | 8,400 | 325,248 | ||||||
Marathon Oil Corp. | 132,290 | 3,443,509 | ||||||
Marathon Petroleum Corp. | 66,795 | 2,397,940 | ||||||
McDermott International, Inc. * | 27,110 | 297,668 | ||||||
Murphy Oil Corp. | 26,475 | 1,465,921 | ||||||
Nabors Industries Ltd. * | 39,400 | 722,202 | ||||||
National Oilwell Varco, Inc. | 24,523 | 1,749,226 | ||||||
Newfield Exploration Co. * | 8,700 | 350,262 | ||||||
Noble Corp. * | 24,120 | 866,873 | ||||||
Noble Energy, Inc. | 10,235 | 914,395 | ||||||
Occidental Petroleum Corp. | 58,870 | 5,471,378 | ||||||
Oceaneering International, Inc. | 9,000 | 376,470 | ||||||
Oil States International, Inc. * | 4,800 | 334,128 | ||||||
Overseas Shipholding Group, Inc. (c) | 7,820 | 97,594 | ||||||
Patterson-UTI Energy, Inc. | 18,400 | 373,888 | ||||||
Peabody Energy Corp. | 16,445 | 713,220 | ||||||
Pioneer Natural Resources Co. | 5,650 | 474,035 | ||||||
Plains Exploration & Production Co. * | 14,900 | 469,350 | ||||||
QEP Resources, Inc. | 12,950 | 460,372 | ||||||
Range Resources Corp. | 6,600 | 454,344 | ||||||
Rowan Cos., Inc. * | 12,300 | 424,227 | ||||||
Schlumberger Ltd. | 66,800 | 4,907,796 | ||||||
SEACOR Holdings, Inc. | 5,000 | 425,750 | ||||||
Ship Finance International Ltd. | 12,318 | 176,271 | ||||||
SM Energy Co. | 2,300 | 190,693 | ||||||
Southern Union Co. | 16,580 | 696,857 | ||||||
Southwestern Energy Co. * | 12,240 | 514,570 | ||||||
Spectra Energy Corp. | 80,960 | 2,317,885 | ||||||
Sunoco, Inc. | 54,880 | 2,043,182 | ||||||
Superior Energy Services, Inc. * | 4,600 | 129,352 | ||||||
Targa Resources Corp. | 11,000 | 371,140 | ||||||
Teekay Corp. | 13,140 | 338,486 | ||||||
Tesoro Corp. * | 56,660 | 1,469,760 | ||||||
The Williams Cos., Inc. | 65,675 | 1,977,474 | ||||||
Tidewater, Inc. | 6,120 | 301,288 | ||||||
Ultra Petroleum Corp. * | 3,700 | 117,882 | ||||||
Unit Corp. * | 6,110 | 299,757 | ||||||
USEC, Inc. * | 145,400 | 305,340 | ||||||
Valero Energy Corp. | 225,125 | 5,538,075 | ||||||
Weatherford International Ltd. * | 79,290 | 1,228,995 | ||||||
Western Refining, Inc. * | 21,550 | 344,369 | ||||||
Whiting Petroleum Corp. * | 5,800 | 269,990 | ||||||
World Fuel Services Corp. | 15,000 | 597,750 | ||||||
167,536,879 | ||||||||
Food & Staples Retailing 3.9% | ||||||||
Casey’s General Stores, Inc. | 8,412 | 416,815 | ||||||
Costco Wholesale Corp. | 60,615 | 5,046,199 | ||||||
CVS Caremark Corp. | 208,935 | 7,584,340 | ||||||
Nash Finch Co. | 7,330 | 192,926 | ||||||
Rite Aid Corp. * | 516,000 | 598,560 | ||||||
Ruddick Corp. | 7,435 | 324,984 | ||||||
Safeway, Inc. | 128,640 | 2,491,757 | ||||||
SUPERVALU, Inc. | 277,820 | 2,228,116 | ||||||
Sysco Corp. | 108,840 | 3,017,045 | ||||||
The Kroger Co. | 187,920 | 4,355,985 | ||||||
The Pantry, Inc. * | 22,420 | 317,019 | ||||||
United Natural Foods, Inc. * | 6,400 | 233,664 | ||||||
Wal-Mart Stores, Inc. | 459,325 | 26,052,914 | ||||||
Walgreen Co. | 113,170 | 3,757,244 | ||||||
Whole Foods Market, Inc. | 13,100 | 944,772 | ||||||
Winn-Dixie Stores, Inc. * | 68,000 | 431,120 | ||||||
57,993,460 | ||||||||
Food, Beverage & Tobacco 5.6% | ||||||||
Altria Group, Inc. | 427,680 | 11,782,584 | ||||||
Archer-Daniels-Midland Co. | 119,505 | 3,458,475 | ||||||
Beam, Inc. | 20,500 | 1,013,315 | ||||||
Brown-Forman Corp., Class B | 7,700 | 575,421 | ||||||
Bunge Ltd. | 33,875 | 2,092,459 | ||||||
Campbell Soup Co. | 29,130 | 968,572 | ||||||
Central European Distribution Corp. * | 18,700 | 100,980 | ||||||
Chiquita Brands International, Inc. * | 9,900 | 87,912 | ||||||
Coca-Cola Enterprises, Inc. | 64,395 | 1,727,074 | ||||||
ConAgra Foods, Inc. | 76,305 | 1,932,806 | ||||||
Constellation Brands, Inc., Class A * | 32,805 | 663,317 | ||||||
Corn Products International, Inc. | 7,300 | 354,050 | ||||||
Dean Foods Co. * | 168,690 | 1,639,667 | ||||||
Dole Food Co., Inc. * | 14,800 | 156,584 | ||||||
Dr Pepper Snapple Group, Inc. | 27,500 | 1,029,875 | ||||||
Flowers Foods, Inc. | 15,950 | 322,031 | ||||||
Fresh Del Monte Produce, Inc. | 7,940 | 202,152 | ||||||
General Mills, Inc. | 66,910 | 2,578,042 | ||||||
H.J. Heinz Co. | 33,475 | 1,788,904 | ||||||
Hormel Foods Corp. | 18,720 | 551,678 | ||||||
Kellogg Co. | 27,380 | 1,484,270 | ||||||
Kraft Foods, Inc., Class A | 229,092 | 8,059,457 | ||||||
Lorillard, Inc. | 23,918 | 2,646,766 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 10,140 | 492,398 | ||||||
Mead Johnson Nutrition Co. | 9,200 | 661,020 | ||||||
Molson Coors Brewing Co., Class B | 21,880 | 926,399 | ||||||
PepsiCo, Inc. | 132,308 | 8,328,789 | ||||||
Philip Morris International, Inc. | 108,320 | 7,568,318 | ||||||
Ralcorp Holdings, Inc. * | 7,700 | 622,468 | ||||||
Reynolds American, Inc. | 59,650 | 2,307,262 | ||||||
Sara Lee Corp. | 87,250 | 1,553,050 | ||||||
Smithfield Foods, Inc. * | 44,206 | 1,010,549 | ||||||
The Coca-Cola Co. | 155,665 | 10,635,033 | ||||||
The Hershey Co. | 13,050 | 746,852 | ||||||
The JM Smucker Co. | 11,825 | 910,761 | ||||||
Tyson Foods, Inc., Class A | 77,480 | 1,495,364 | ||||||
Universal Corp. | 6,720 | 287,750 | ||||||
82,762,404 | ||||||||
Health Care Equipment & Services 4.7% | ||||||||
Aetna, Inc. | 62,760 | 2,495,338 | ||||||
Alere, Inc. * | 8,200 | 213,692 | ||||||
AMERIGROUP Corp. * | 6,600 | 367,158 |
4 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AmerisourceBergen Corp. | 87,340 | 3,563,472 | ||||||
Baxter International, Inc. | 46,460 | 2,554,371 | ||||||
Becton, Dickinson & Co. | 18,655 | 1,459,381 | ||||||
Boston Scientific Corp. * | 305,265 | 1,798,011 | ||||||
Brookdale Senior Living, Inc. * | 10,100 | 167,458 | ||||||
C.R. Bard, Inc. | 4,900 | 421,155 | ||||||
Cardinal Health, Inc. | 115,220 | 5,100,789 | ||||||
CareFusion Corp. * | 30,610 | 783,616 | ||||||
Centene Corp. * | 10,000 | 351,500 | ||||||
Cerner Corp. * | 6,410 | 406,586 | ||||||
CIGNA Corp. | 36,409 | 1,614,375 | ||||||
Community Health Systems, Inc. * | 19,650 | 343,482 | ||||||
Coventry Health Care, Inc. * | 38,150 | 1,213,551 | ||||||
Covidien plc | 37,470 | 1,762,589 | ||||||
DaVita, Inc. * | 10,780 | 754,600 | ||||||
DENTSPLY International, Inc. | 9,135 | 337,630 | ||||||
Edwards Lifesciences Corp. * | 2,200 | 165,924 | ||||||
Express Scripts, Inc. * | 32,540 | 1,488,054 | ||||||
Health Management Associates, Inc., Class A * | 48,195 | 422,188 | ||||||
Health Net, Inc. * | 36,770 | 1,021,838 | ||||||
Henry Schein, Inc. * | 9,230 | 639,824 | ||||||
Hill-Rom Holdings, Inc. | 6,000 | 202,020 | ||||||
Hologic, Inc. * | 20,300 | 327,236 | ||||||
Humana, Inc. | 33,940 | 2,881,167 | ||||||
Intuitive Surgical, Inc. * | 1,100 | 477,246 | ||||||
Kindred Healthcare, Inc. * | 11,600 | 135,140 | ||||||
Kinetic Concepts, Inc. * | 6,700 | 458,213 | ||||||
Laboratory Corp. of America Holdings * | 8,730 | 732,010 | ||||||
LifePoint Hospitals, Inc. * | 12,230 | 472,812 | ||||||
Lincare Holdings, Inc. | 12,102 | 285,002 | ||||||
Magellan Health Services, Inc. * | 7,100 | 365,437 | ||||||
McKesson Corp. | 64,500 | 5,259,975 | ||||||
Medco Health Solutions, Inc. * | 60,910 | 3,341,523 | ||||||
MEDNAX, Inc. * | 3,200 | 210,560 | ||||||
Medtronic, Inc. | 93,365 | 3,243,500 | ||||||
Omnicare, Inc. | 23,810 | 710,014 | ||||||
Owens & Minor, Inc. | 14,002 | 418,940 | ||||||
Patterson Cos., Inc. | 7,875 | 247,826 | ||||||
Quest Diagnostics, Inc. | 17,255 | 962,829 | ||||||
St. Jude Medical, Inc. | 20,660 | 805,740 | ||||||
STERIS Corp. | 4,900 | 151,802 | ||||||
Stryker Corp. | 15,945 | 763,925 | ||||||
Teleflex, Inc. | 6,820 | 408,245 | ||||||
Tenet Healthcare Corp. * | 99,275 | 469,571 | ||||||
The Cooper Cos., Inc. | 4,200 | 291,060 | ||||||
UnitedHealth Group, Inc. | 165,775 | 7,955,542 | ||||||
Universal American Corp. * | 19,100 | 219,650 | ||||||
Universal Health Services, Inc., Class B | 10,550 | 421,684 | ||||||
Varian Medical Systems, Inc. * | 5,220 | 306,518 | ||||||
VCA Antech, Inc. * | 6,600 | 134,112 | ||||||
WellPoint, Inc. | 105,270 | 7,253,103 | ||||||
Zimmer Holdings, Inc. * | 18,740 | 986,286 | ||||||
70,345,270 | ||||||||
Household & Personal Products 2.0% | ||||||||
Avon Products, Inc. | 49,225 | 899,833 | ||||||
Church & Dwight Co., Inc. | 9,000 | 397,620 | ||||||
Colgate-Palmolive Co. | 36,630 | 3,310,253 | ||||||
Energizer Holdings, Inc. * | 9,020 | 665,586 | ||||||
Herbalife Ltd. | 5,600 | 349,216 | ||||||
Kimberly-Clark Corp. | 51,320 | 3,577,517 | ||||||
The Clorox Co. | 13,010 | 870,890 | ||||||
The Estee Lauder Cos., Inc., Class A | 5,260 | 517,847 | ||||||
The Procter & Gamble Co. | 294,295 | 18,831,937 | ||||||
29,420,699 | ||||||||
Insurance 5.3% | ||||||||
ACE Ltd. | 47,200 | 3,405,480 | ||||||
Aflac, Inc. | 39,440 | 1,778,350 | ||||||
Alleghany Corp. * | 518 | 164,372 | ||||||
Allied World Assurance Co. Holdings AG | 8,240 | 478,744 | ||||||
Alterra Capital Holdings Ltd. | 7,200 | 156,096 | ||||||
American Financial Group, Inc. | 11,740 | 420,644 | ||||||
American International Group, Inc. * | 25,780 | 636,508 | ||||||
Aon Corp. | 23,036 | 1,073,938 | ||||||
Arch Capital Group Ltd. * | 24,175 | 869,575 | ||||||
Arthur J. Gallagher & Co. | 10,740 | 331,866 | ||||||
Aspen Insurance Holdings Ltd. | 16,525 | 437,747 | ||||||
Assurant, Inc. | 25,155 | 969,474 | ||||||
Assured Guaranty Ltd. | 23,800 | 303,212 | ||||||
Axis Capital Holdings Ltd. | 21,750 | 681,862 | ||||||
Berkshire Hathaway, Inc., Class A * | 75 | 8,771,250 | ||||||
Berkshire Hathaway, Inc., Class B * | 109,011 | 8,487,596 | ||||||
Brown & Brown, Inc. | 10,100 | 223,008 | ||||||
Cincinnati Financial Corp. | 34,680 | 1,003,639 | ||||||
CNO Financial Group, Inc. * | 106,100 | 663,125 | ||||||
Delphi Financial Group, Inc., Class A | 7,300 | 193,304 | ||||||
Endurance Specialty Holdings Ltd. | 8,530 | 317,316 | ||||||
Erie Indemnity Co., Class A | 2,225 | 175,664 | ||||||
Everest Re Group Ltd. | 9,525 | 856,488 | ||||||
Fidelity National Financial, Inc., Class A | 113,125 | 1,746,650 | ||||||
Genworth Financial, Inc., Class A * | 135,300 | 863,214 | ||||||
Hartford Financial Services Group, Inc. | 131,710 | 2,535,417 | ||||||
HCC Insurance Holdings, Inc. | 13,835 | 368,149 | ||||||
Kemper Corp. | 13,850 | 372,427 | ||||||
Lincoln National Corp. | 57,780 | 1,100,709 | ||||||
Loews Corp. | 64,482 | 2,559,935 | ||||||
Markel Corp. * | 1,213 | 468,825 | ||||||
Marsh & McLennan Cos., Inc. | 57,850 | 1,771,367 | ||||||
MBIA, Inc. (c)* | 18,910 | 166,408 | ||||||
Mercury General Corp. | 7,230 | 313,059 | ||||||
MetLife, Inc. | 91,305 | 3,210,284 | ||||||
Montpelier Re Holdings Ltd. | 17,180 | 300,650 | ||||||
Old Republic International Corp. | 54,660 | 483,194 | ||||||
PartnerRe Ltd. | 12,430 | 773,395 | ||||||
Platinum Underwriters Holdings Ltd. | 5,200 | 180,076 | ||||||
Primerica, Inc. | 15,000 | 339,450 |
See financial notes 5
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Principal Financial Group, Inc. | 43,785 | 1,128,777 | ||||||
ProAssurance Corp. | 5,100 | 390,405 | ||||||
Protective Life Corp. | 16,665 | 309,969 | ||||||
Prudential Financial, Inc. | 69,940 | 3,790,748 | ||||||
Reinsurance Group of America, Inc. | 10,300 | 537,969 | ||||||
RenaissanceRe Holdings Ltd. | 6,825 | 464,919 | ||||||
RLI Corp. | 4,100 | 288,394 | ||||||
Selective Insurance Group, Inc. | 10,800 | 173,124 | ||||||
StanCorp Financial Group, Inc. | 10,125 | 343,643 | ||||||
The Allstate Corp. | 139,855 | 3,683,781 | ||||||
The Chubb Corp. | 50,375 | 3,377,644 | ||||||
The Hanover Insurance Group, Inc. | 8,930 | 340,769 | ||||||
The Phoenix Cos., Inc. * | 66,680 | 99,353 | ||||||
The Progressive Corp. | 91,145 | 1,732,666 | ||||||
The Travelers Cos., Inc. | 102,895 | 6,003,923 | ||||||
Torchmark Corp. | 15,810 | 647,103 | ||||||
Transatlantic Holdings, Inc. | 11,425 | 594,557 | ||||||
Unum Group | 52,625 | 1,254,580 | ||||||
Validus Holdings Ltd. | 15,900 | 435,024 | ||||||
W. R. Berkley Corp. | 24,060 | 837,529 | ||||||
White Mountains Insurance Group Ltd. | 1,629 | 684,180 | ||||||
Willis Group Holdings plc | 16,745 | 608,011 | ||||||
XL Group plc | 64,385 | 1,399,730 | ||||||
79,079,265 | ||||||||
Materials 3.6% | ||||||||
Air Products & Chemicals, Inc. | 19,775 | 1,703,419 | ||||||
Airgas, Inc. | 6,100 | 420,595 | ||||||
AK Steel Holding Corp. (c) | 29,445 | 245,277 | ||||||
Albemarle Corp. | 3,700 | 197,173 | ||||||
Alcoa, Inc. | 199,605 | 2,147,750 | ||||||
Allegheny Technologies, Inc. | 7,711 | 357,790 | ||||||
AptarGroup, Inc. | 5,900 | 283,023 | ||||||
Ashland, Inc. | 17,435 | 923,358 | ||||||
Ball Corp. | 21,580 | 746,021 | ||||||
Bemis Co., Inc. | 13,955 | 392,275 | ||||||
Cabot Corp. | 7,830 | 236,309 | ||||||
Carpenter Technology Corp. | 6,300 | 357,336 | ||||||
Celanese Corp., Series A | 15,400 | 670,670 | ||||||
CF Industries Holdings, Inc. | 2,871 | 465,877 | ||||||
Cliffs Natural Resources, Inc. | 4,000 | 272,880 | ||||||
Commercial Metals Co. | 29,645 | 368,487 | ||||||
Crown Holdings, Inc. * | 17,520 | 592,001 | ||||||
Cytec Industries, Inc. | 6,120 | 273,380 | ||||||
Domtar Corp. | 8,791 | 720,071 | ||||||
E.I. du Pont de Nemours & Co. | 88,845 | 4,270,779 | ||||||
Eastman Chemical Co. | 17,520 | 688,361 | ||||||
Ecolab, Inc. | 16,160 | 870,054 | ||||||
FMC Corp. | 4,840 | 381,828 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 56,670 | 2,281,534 | ||||||
Greif, Inc., Class A | 3,112 | 139,355 | ||||||
Huntsman Corp. | 33,115 | 388,770 | ||||||
International Flavors & Fragrances, Inc. | 7,335 | 444,208 | ||||||
International Paper Co. | 96,495 | 2,672,911 | ||||||
Louisiana-Pacific Corp. * | 21,185 | 140,880 | ||||||
LyondellBasell Industries N.V., Class A | 45,100 | 1,481,986 | ||||||
Martin Marietta Materials, Inc. | 5,110 | 368,789 | ||||||
MeadWestvaco Corp. | 33,040 | 922,146 | ||||||
Monsanto Co. | 33,495 | 2,436,761 | ||||||
Nalco Holding Co. | 14,470 | 545,664 | ||||||
Newmont Mining Corp. | 36,310 | 2,426,597 | ||||||
Nucor Corp. | 55,780 | 2,107,368 | ||||||
Olin Corp. | 14,055 | 265,077 | ||||||
Owens-Illinois, Inc. * | 31,845 | 639,448 | ||||||
Packaging Corp. of America | 13,145 | 342,822 | ||||||
PPG Industries, Inc. | 18,700 | 1,615,867 | ||||||
Praxair, Inc. | 21,370 | 2,172,688 | ||||||
Reliance Steel & Aluminum Co. | 13,020 | 575,354 | ||||||
Rock-Tenn Co., Class A | 5,472 | 323,888 | ||||||
Rockwood Holdings, Inc. * | 7,400 | 340,696 | ||||||
RPM International, Inc. | 19,765 | 444,120 | ||||||
Sealed Air Corp. | 19,375 | 344,875 | ||||||
Sensient Technologies Corp. | 4,600 | 170,016 | ||||||
Sigma-Aldrich Corp. | 6,330 | 414,488 | ||||||
Silgan Holdings, Inc. | 6,340 | 238,004 | ||||||
Solutia, Inc. * | 8,900 | 144,625 | ||||||
Sonoco Products Co. | 15,755 | 494,549 | ||||||
Southern Copper Corp. | 24,065 | 738,314 | ||||||
Steel Dynamics, Inc. | 40,850 | 510,217 | ||||||
Temple-Inland, Inc. | 33,645 | 1,070,247 | ||||||
The Dow Chemical Co. | 176,500 | 4,920,820 | ||||||
The Mosaic Co. | 7,710 | 451,498 | ||||||
The Scotts Miracle-Gro Co., Class A | 5,820 | 282,328 | ||||||
The Sherwin-Williams Co. | 10,045 | 830,822 | ||||||
The Valspar Corp. | 12,550 | 437,619 | ||||||
United States Steel Corp. (c) | 22,495 | 570,473 | ||||||
Vulcan Materials Co. | 16,823 | 526,392 | ||||||
W.R. Grace & Co. * | 6,100 | 254,919 | ||||||
Worthington Industries, Inc. | 11,065 | 191,203 | ||||||
53,253,052 | ||||||||
Media 2.9% | ||||||||
AMC Networks, Inc., Class A * | 4,416 | 144,050 | ||||||
Cablevision Systems Corp., Class A | 17,665 | 255,613 | ||||||
CBS Corp., Class B - Non Voting Shares | 103,190 | 2,663,334 | ||||||
Cinemark Holdings, Inc. | 13,800 | 285,246 | ||||||
Comcast Corp., Class A | 210,040 | 4,925,438 | ||||||
Comcast Corp., Special Class A | 72,820 | 1,674,860 | ||||||
Dex One Corp. (c)* | 47,000 | 29,239 | ||||||
DIRECTV, Class A * | 52,840 | 2,402,106 | ||||||
Discovery Communications, Inc., Class A * | 9,067 | 394,052 | ||||||
Discovery Communications, Inc., Class C * | 7,407 | 293,095 | ||||||
DISH Network Corp., Class A * | 29,670 | 717,124 | ||||||
Gannett Co., Inc. | 73,830 | 863,073 | ||||||
Lamar Advertising Co., Class A * | 7,820 | 175,872 | ||||||
Liberty Global, Inc., Series A * | 20,610 | 828,110 | ||||||
Liberty Global, Inc., Series C * | 20,770 | 796,945 | ||||||
Liberty Media Corp - Liberty Starz - Class A * | 4,500 | 307,350 | ||||||
Live Nation Entertainment, Inc. * | 31,814 | 298,733 |
6 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
News Corp., Class A | 182,020 | 3,188,990 | ||||||
News Corp., Class B | 59,990 | 1,070,822 | ||||||
Omnicom Group, Inc. | 29,004 | 1,290,098 | ||||||
Regal Entertainment Group, Class A (c) | 32,985 | 476,303 | ||||||
SuperMedia, Inc. (c)* | 28,800 | 49,824 | ||||||
The Interpublic Group of Cos., Inc. | 47,705 | 452,243 | ||||||
The McGraw-Hill Cos., Inc. | 32,980 | 1,401,650 | ||||||
The New York Times Co., Class A * | 35,900 | 273,558 | ||||||
The Walt Disney Co. | 155,650 | 5,429,072 | ||||||
Time Warner Cable, Inc. | 40,009 | 2,548,173 | ||||||
Time Warner, Inc. | 203,688 | 7,127,043 | ||||||
Viacom Inc., Class B | 49,900 | 2,188,115 | ||||||
Virgin Media, Inc. | 36,510 | 890,114 | ||||||
43,440,245 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 6.5% | ||||||||
Abbott Laboratories | 158,690 | 8,548,630 | ||||||
Agilent Technologies, Inc. * | 17,505 | 648,910 | ||||||
Allergan, Inc. | 10,430 | 877,372 | ||||||
Amgen, Inc. | 94,955 | 5,438,073 | ||||||
Biogen Idec, Inc. * | 18,350 | 2,135,206 | ||||||
Bristol-Myers Squibb Co. | 250,350 | 7,908,556 | ||||||
Celgene Corp. * | 12,000 | 777,960 | ||||||
Charles River Laboratories International, Inc. * | 5,820 | 187,870 | ||||||
Covance, Inc. * | 4,420 | 224,227 | ||||||
Eli Lilly & Co. | 168,955 | 6,278,368 | ||||||
Endo Pharmaceuticals Holdings, Inc. * | 10,000 | 323,100 | ||||||
Forest Laboratories, Inc. * | 30,555 | 956,371 | ||||||
Gilead Sciences, Inc. * | 44,160 | 1,839,706 | ||||||
Hospira, Inc. * | 10,550 | 331,797 | ||||||
Johnson & Johnson | 281,695 | 18,138,341 | ||||||
Life Technologies Corp. * | 10,319 | 419,674 | ||||||
Merck & Co., Inc. | 372,757 | 12,860,116 | ||||||
Mettler-Toledo International, Inc. * | 1,500 | 230,400 | ||||||
Mylan, Inc. * | 18,075 | 353,728 | ||||||
PerkinElmer, Inc. | 11,000 | 227,370 | ||||||
Perrigo Co. | 4,400 | 397,232 | ||||||
Pfizer, Inc. | 1,252,799 | 24,128,909 | ||||||
Pharmaceutical Product Development, Inc. | 10,500 | 346,395 | ||||||
Thermo Fisher Scientific, Inc. * | 38,545 | 1,937,657 | ||||||
Waters Corp. * | 3,800 | 304,456 | ||||||
Watson Pharmaceuticals, Inc. * | 6,965 | 467,769 | ||||||
96,288,193 | ||||||||
Real Estate 2.1% | ||||||||
Alexandria Real Estate Equities, Inc. | 4,364 | 288,417 | ||||||
Annaly Capital Management, Inc. | 97,585 | 1,644,307 | ||||||
Apartment Investment & Management Co., Class A | 26,954 | 664,955 | ||||||
AvalonBay Communities, Inc. | 6,099 | 815,375 | ||||||
BioMed Realty Trust, Inc. | 10,700 | 193,777 | ||||||
Boston Properties, Inc. | 12,690 | 1,256,183 | ||||||
Brandywine Realty Trust | 29,925 | 272,617 | ||||||
BRE Properties, Inc. | 5,920 | 296,710 | ||||||
Camden Property Trust | 7,320 | 443,885 | ||||||
CBL & Associates Properties, Inc. | 19,736 | 303,540 | ||||||
CBRE Group, Inc. * | 19,630 | 349,021 | ||||||
Chimera Investment Corp. | 44,300 | 133,343 | ||||||
Colonial Properties Trust | 17,425 | 353,379 | ||||||
CommonWealth REIT | 14,262 | 275,970 | ||||||
Corporate Office Properties Trust | 4,400 | 106,700 | ||||||
DCT Industrial Trust, Inc. | 29,000 | 143,840 | ||||||
DDR Corp. | 40,152 | 514,347 | ||||||
Digital Realty Trust, Inc. | 2,800 | 174,524 | ||||||
Douglas Emmett, Inc. | 8,400 | 163,800 | ||||||
Duke Realty Corp. | 38,775 | 476,157 | ||||||
Entertainment Properties Trust | 3,500 | 156,800 | ||||||
Equity Residential | 24,245 | 1,422,697 | ||||||
Essex Property Trust, Inc. | 1,900 | 271,244 | ||||||
Federal Realty Investment Trust | 4,370 | 387,881 | ||||||
General Growth Properties, Inc. | 25,800 | 379,260 | ||||||
Hatteras Financial Corp. | 5,500 | 141,350 | ||||||
HCP, Inc. | 24,265 | 966,960 | ||||||
Health Care REIT, Inc. | 9,830 | 517,943 | ||||||
Highwoods Properties, Inc. | 7,435 | 230,336 | ||||||
Home Properties, Inc. | 4,800 | 282,720 | ||||||
Hospitality Properties Trust | 31,755 | 763,073 | ||||||
Host Hotels & Resorts, Inc. | 70,478 | 1,005,721 | ||||||
iStar Financial, Inc. * | 56,870 | 386,147 | ||||||
Jones Lang LaSalle, Inc. | 2,500 | 161,550 | ||||||
Kilroy Realty Corp. | 4,600 | 168,774 | ||||||
Kimco Realty Corp. | 39,260 | 685,872 | ||||||
Lexington Realty Trust | 16,900 | 132,834 | ||||||
Liberty Property Trust | 18,950 | 606,400 | ||||||
Mack-Cali Realty Corp. | 14,650 | 411,079 | ||||||
MFA Financial, Inc. | 38,500 | 259,875 | ||||||
National Retail Properties, Inc. | 7,800 | 212,550 | ||||||
Pennsylvania REIT | 12,100 | 124,146 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 8,100 | 137,538 | ||||||
Plum Creek Timber Co., Inc. | 19,495 | 734,182 | ||||||
Potlatch Corp. | 8,600 | 279,328 | ||||||
ProLogis, Inc. | 55,305 | 1,645,877 | ||||||
Public Storage | 7,730 | 997,556 | ||||||
Rayonier, Inc. REIT | 11,302 | 471,632 | ||||||
Realty Income Corp. | 7,340 | 245,229 | ||||||
Redwood Trust, Inc. | 20,225 | 235,015 | ||||||
Regency Centers Corp. | 9,620 | 394,035 | ||||||
Senior Housing Properties Trust | 10,640 | 238,762 | ||||||
Simon Property Group, Inc. | 16,076 | 2,064,801 | ||||||
SL Green Realty Corp. | 8,607 | 593,797 | ||||||
Sunstone Hotel Investors, Inc. * | 38,400 | 266,880 | ||||||
The Macerich Co. | 10,502 | 522,580 | ||||||
UDR, Inc. | 16,187 | 403,542 | ||||||
Ventas, Inc. | 17,778 | 988,635 | ||||||
Vornado Realty Trust REIT | 15,028 | 1,244,469 | ||||||
Washington REIT | 4,900 | 141,904 | ||||||
Weingarten Realty Investors | 16,835 | 390,740 | ||||||
Weyerhaeuser Co. | 76,157 | 1,369,303 | ||||||
31,911,864 | ||||||||
Retailing 4.2% | ||||||||
Aaron’s, Inc. | 11,350 | 303,726 |
See financial notes 7
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Abercrombie & Fitch Co., Class A | 10,110 | 752,184 | ||||||
Advance Auto Parts, Inc. | 7,145 | 464,925 | ||||||
Aeropostale, Inc. * | 17,800 | 243,148 | ||||||
Amazon.com, Inc. * | 9,050 | 1,932,265 | ||||||
American Eagle Outfitters, Inc. | 28,935 | 379,917 | ||||||
Ann, Inc. * | 9,830 | 261,871 | ||||||
Asbury Automotive Group, Inc. * | 15,945 | 297,374 | ||||||
Ascena Retail Group, Inc. * | 5,800 | 167,620 | ||||||
AutoNation, Inc. * | 28,415 | 1,106,480 | ||||||
AutoZone, Inc. * | 2,523 | 816,418 | ||||||
Barnes & Noble, Inc. * | 23,940 | 293,744 | ||||||
Bed Bath & Beyond, Inc. * | 20,565 | 1,271,740 | ||||||
Best Buy Co., Inc. | 93,100 | 2,442,013 | ||||||
Big Lots, Inc. * | 9,965 | 375,581 | ||||||
Cabela’s, Inc. * | 5,700 | 142,044 | ||||||
CarMax, Inc. * | 18,940 | 569,336 | ||||||
Charming Shoppes, Inc. * | 53,690 | 186,304 | ||||||
Chico’s FAS, Inc. | 13,900 | 171,804 | ||||||
Collective Brands, Inc. * | 10,340 | 151,067 | ||||||
Core-Mark Holding Co., Inc. * | 6,600 | 221,034 | ||||||
Dick’s Sporting Goods, Inc. * | 4,700 | 183,723 | ||||||
Dillard’s, Inc., Class A | 10,175 | 524,318 | ||||||
Dollar Tree, Inc. * | 11,017 | 880,919 | ||||||
Expedia, Inc. | 26,230 | 688,800 | ||||||
Family Dollar Stores, Inc. | 13,275 | 778,313 | ||||||
Foot Locker, Inc. | 28,095 | 614,157 | ||||||
GameStop Corp., Class A * | 39,390 | 1,007,202 | ||||||
Genuine Parts Co. | 22,400 | 1,286,432 | ||||||
Group 1 Automotive, Inc. | 7,335 | 334,183 | ||||||
HSN, Inc. * | 10,000 | 356,700 | ||||||
J.C. Penney Co., Inc. | 52,200 | 1,674,576 | ||||||
Kohl’s Corp. | 40,495 | 2,146,640 | ||||||
Liberty Interactive Corp., Class A * | 89,020 | 1,462,599 | ||||||
Limited Brands, Inc. | 38,420 | 1,640,918 | ||||||
LKQ Corp. * | 12,200 | 355,996 | ||||||
Lowe’s Cos., Inc. | 195,255 | 4,104,260 | ||||||
Macy’s, Inc. | 99,720 | 3,044,452 | ||||||
Netflix, Inc. * | 900 | 73,872 | ||||||
Nordstrom, Inc. | 22,055 | 1,117,968 | ||||||
O’Reilly Automotive, Inc. * | 9,730 | 739,966 | ||||||
Office Depot, Inc. * | 176,950 | 405,216 | ||||||
OfficeMax, Inc. * | 27,655 | 141,594 | ||||||
Penske Automotive Group, Inc. | 14,995 | 305,748 | ||||||
PetSmart, Inc. | 9,340 | 438,513 | ||||||
Priceline.com, Inc. * | 706 | 358,450 | ||||||
RadioShack Corp. | 30,080 | 358,253 | ||||||
Rent-A-Center, Inc. | 15,370 | 524,885 | ||||||
Ross Stores, Inc. | 6,945 | 609,285 | ||||||
Saks, Inc. * | 47,235 | 499,274 | ||||||
Sears Holdings Corp. (c)* | 26,221 | 2,049,958 | ||||||
Signet Jewelers Ltd. * | 10,600 | 456,966 | ||||||
Sonic Automotive, Inc., Class A | 22,160 | 325,087 | ||||||
Staples, Inc. | 96,550 | 1,444,388 | ||||||
Target Corp. | 108,795 | 5,956,526 | ||||||
The Gap, Inc. | 59,075 | 1,116,517 | ||||||
The Home Depot, Inc. | 230,796 | 8,262,497 | ||||||
The Men’s Wearhouse, Inc. | 6,300 | 194,544 | ||||||
The TJX Cos., Inc. | 32,630 | 1,922,886 | ||||||
Tiffany & Co. | 7,435 | 592,793 | ||||||
Tractor Supply Co. | 5,700 | 404,358 | ||||||
Urban Outfitters, Inc. * | 11,400 | 310,650 | ||||||
Williams-Sonoma, Inc. | 11,545 | 433,399 | ||||||
62,678,376 | ||||||||
Semiconductors & Semiconductor Equipment 1.8% | ||||||||
Advanced Micro Devices, Inc. * | 60,230 | 351,141 | ||||||
Altera Corp. | 9,150 | 346,968 | ||||||
Amkor Technology, Inc. * | 30,580 | 148,007 | ||||||
Analog Devices, Inc. | 20,765 | 759,376 | ||||||
Applied Materials, Inc. | 103,625 | 1,276,660 | ||||||
Atmel Corp. * | 10,700 | 112,992 | ||||||
Avago Technologies Ltd. | 5,700 | 192,489 | ||||||
Broadcom Corp., Class A * | 15,245 | 550,192 | ||||||
Cree, Inc. * | 9,500 | 253,080 | ||||||
First Solar, Inc. (c)* | 4,400 | 218,988 | ||||||
Intel Corp. | 590,110 | 14,481,299 | ||||||
Intersil Corp., Class A | 12,100 | 144,837 | ||||||
KLA-Tencor Corp. | 9,580 | 451,122 | ||||||
Lam Research Corp. * | 6,400 | 275,136 | ||||||
Linear Technology Corp. | 13,455 | 434,731 | ||||||
LSI Corp. * | 57,640 | 360,250 | ||||||
Marvell Technology Group Ltd. * | 35,130 | 491,469 | ||||||
Maxim Integrated Products, Inc. | 26,300 | 688,008 | ||||||
MEMC Electronic Materials, Inc. * | 37,400 | 224,026 | ||||||
Microchip Technology, Inc. | 16,880 | 610,381 | ||||||
Micron Technology, Inc. * | 138,475 | 774,075 | ||||||
Novellus Systems, Inc. * | 4,900 | 169,295 | ||||||
NVIDIA Corp. * | 25,737 | 380,908 | ||||||
ON Semiconductor Corp. * | 22,200 | 168,054 | ||||||
Skyworks Solutions, Inc. * | 7,200 | 142,632 | ||||||
Teradyne, Inc. * | 9,300 | 133,176 | ||||||
Texas Instruments, Inc. | 83,470 | 2,565,033 | ||||||
Xilinx, Inc. | 17,120 | 572,835 | ||||||
27,277,160 | ||||||||
Software & Services 5.1% | ||||||||
Accenture plc, Class A | 42,495 | 2,560,749 | ||||||
Activision Blizzard, Inc. | 51,800 | 693,602 | ||||||
Adobe Systems, Inc. * | 28,340 | 833,479 | ||||||
Akamai Technologies, Inc. * | 6,100 | 164,334 | ||||||
Alliance Data Systems Corp. * | 3,580 | 366,735 | ||||||
Amdocs Ltd. * | 20,800 | 624,416 | ||||||
AOL, Inc. * | 52,680 | 743,842 | ||||||
Autodesk, Inc. * | 7,800 | 269,880 | ||||||
Automatic Data Processing, Inc. | 41,080 | 2,149,716 | ||||||
BMC Software, Inc. * | 6,740 | 234,282 | ||||||
Broadridge Financial Solutions, Inc. | 14,287 | 317,886 | ||||||
CA, Inc. | 27,505 | 595,758 | ||||||
CACI International, Inc., Class A * | 6,400 | 351,296 | ||||||
Check Point Software Technologies Ltd. * | 7,000 | 403,410 | ||||||
Citrix Systems, Inc. * | 5,870 | 427,512 | ||||||
Cognizant Technology Solutions Corp., Class A * | 6,100 | 443,775 | ||||||
Computer Sciences Corp. | 46,045 | 1,448,576 | ||||||
Compuware Corp. * | 14,200 | 119,990 | ||||||
Convergys Corp. * | 25,465 | 272,476 | ||||||
DST Systems, Inc. | 6,700 | 336,273 |
8 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
eBay, Inc. * | 75,975 | 2,418,284 | ||||||
Electronic Arts, Inc. * | 21,450 | 500,858 | ||||||
Fidelity National Information Services, Inc. | 35,523 | 929,992 | ||||||
Fiserv, Inc. * | 12,950 | 762,367 | ||||||
Google, Inc., Class A * | 9,337 | 5,533,480 | ||||||
IAC/InterActiveCorp * | 19,062 | 778,302 | ||||||
International Business Machines Corp. | 88,395 | 16,320,369 | ||||||
Intuit, Inc. | 12,455 | 668,460 | ||||||
Lender Processing Services, Inc. | 6,300 | 110,565 | ||||||
MasterCard, Inc., Class A | 3,268 | 1,134,780 | ||||||
Microsoft Corp. | 654,715 | 17,435,061 | ||||||
Monster Worldwide, Inc. * | 27,900 | 257,517 | ||||||
Nuance Communications, Inc. * | 10,600 | 280,688 | ||||||
Oracle Corp. | 165,260 | 5,415,570 | ||||||
Paychex, Inc. | 26,960 | 785,614 | ||||||
SAIC, Inc. * | 60,100 | 747,043 | ||||||
Symantec Corp. * | 66,845 | 1,137,033 | ||||||
Synopsys, Inc. * | 14,300 | 383,383 | ||||||
Teradata Corp. * | 6,500 | 387,790 | ||||||
The Western Union Co. | 28,610 | 499,817 | ||||||
Total System Services, Inc. | 32,070 | 637,872 | ||||||
Unisys Corp. * | 8,600 | 223,514 | ||||||
VeriSign, Inc. | 9,360 | 300,362 | ||||||
Visa, Inc., Class A | 27,000 | 2,518,020 | ||||||
Yahoo!, Inc. * | 114,705 | 1,793,986 | ||||||
75,318,714 | ||||||||
Technology Hardware & Equipment 4.3% | ||||||||
Amphenol Corp., Class A | 8,600 | 408,414 | ||||||
Anixter International, Inc. * | 5,420 | 318,100 | ||||||
Apple, Inc. * | 26,530 | 10,738,813 | ||||||
Arrow Electronics, Inc. * | 31,495 | 1,135,395 | ||||||
Avnet, Inc. * | 40,280 | 1,220,887 | ||||||
Benchmark Electronics, Inc. * | 11,040 | 151,690 | ||||||
Brightpoint, Inc. * | 13,800 | 140,070 | ||||||
Brocade Communications Systems, Inc. * | 74,900 | 328,062 | ||||||
Cisco Systems, Inc. | 489,865 | 9,077,198 | ||||||
Corning, Inc. | 101,360 | 1,448,434 | ||||||
Dell, Inc. * | 307,310 | 4,858,571 | ||||||
Diebold, Inc. | 9,030 | 291,488 | ||||||
EMC Corp. * | 104,010 | 2,549,285 | ||||||
Flextronics International Ltd. * | 219,300 | 1,439,704 | ||||||
FLIR Systems, Inc. | 6,400 | 168,320 | ||||||
Harris Corp. | 13,325 | 503,019 | ||||||
Hewlett-Packard Co. | 268,875 | 7,154,764 | ||||||
Ingram Micro, Inc., Class A * | 78,055 | 1,395,623 | ||||||
Insight Enterprises, Inc. * | 17,100 | 288,990 | ||||||
Itron, Inc. * | 3,300 | 121,407 | ||||||
Jabil Circuit, Inc. | 37,995 | 781,177 | ||||||
Juniper Networks, Inc. * | 24,770 | 606,122 | ||||||
Lexmark International, Inc., Class A * | 15,745 | 499,117 | ||||||
Molex, Inc. | 7,630 | 188,385 | ||||||
Molex, Inc., Class A | 14,730 | 300,492 | ||||||
Motorola Mobility Holdings, Inc. * | 28,515 | 1,108,663 | ||||||
Motorola Solutions, Inc. | 73,345 | 3,440,614 | ||||||
NCR Corp. * | 22,245 | 423,545 | ||||||
NetApp, Inc. * | 10,430 | 427,213 | ||||||
QUALCOMM, Inc. | 69,485 | 3,585,426 | ||||||
SanDisk Corp. * | 17,665 | 895,086 | ||||||
Sanmina-SCI Corp. * | 30,382 | 267,665 | ||||||
Seagate Technology plc | 101,035 | 1,631,715 | ||||||
TE Connectivity Ltd. | 49,615 | 1,763,813 | ||||||
Tech Data Corp. * | 31,040 | 1,526,547 | ||||||
Tellabs, Inc. | 36,060 | 156,140 | ||||||
The Western Digital Corp. * | 39,200 | 1,044,288 | ||||||
Trimble Navigation Ltd. * | 4,300 | 173,763 | ||||||
Vishay Intertechnology, Inc. * | 19,940 | 214,355 | ||||||
Xerox Corp. | 202,026 | 1,652,573 | ||||||
64,424,933 | ||||||||
Telecommunication Services 4.7% | ||||||||
American Tower Corp., Class A * | 11,965 | 659,272 | ||||||
AT&T, Inc. | 1,233,585 | 36,156,376 | ||||||
CenturyLink, Inc. | 80,355 | 2,833,317 | ||||||
Cincinnati Bell, Inc. * | 75,800 | 244,076 | ||||||
Crown Castle International Corp. * | 12,580 | 520,309 | ||||||
Frontier Communications Corp. | 108,398 | 678,572 | ||||||
Leap Wireless International, Inc. * | 20,300 | 141,085 | ||||||
Level 3 Communications, Inc. * | 23,200 | 619,208 | ||||||
MetroPCS Communications, Inc. * | 24,400 | 207,400 | ||||||
NII Holdings, Inc. * | 16,770 | 394,598 | ||||||
Sprint Nextel Corp. * | 1,161,200 | 2,984,284 | ||||||
Telephone & Data Systems, Inc. | 25,600 | 593,408 | ||||||
tw telecom, Inc. * | 9,900 | 183,150 | ||||||
United States Cellular Corp. * | 5,735 | 228,654 | ||||||
Verizon Communications, Inc. | 605,930 | 22,407,291 | ||||||
Windstream Corp. | 84,800 | 1,032,016 | ||||||
69,883,016 | ||||||||
Transportation 1.9% | ||||||||
Alaska Air Group, Inc. * | 6,925 | 460,720 | ||||||
Alexander & Baldwin, Inc. | 6,620 | 274,796 | ||||||
AMERCO * | 2,120 | 160,505 | ||||||
AMR Corp. * | 259,320 | 682,012 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 5,000 | 192,600 | ||||||
Avis Budget Group, Inc. * | 62,490 | 881,109 | ||||||
C.H. Robinson Worldwide, Inc. | 8,980 | 623,481 | ||||||
Con-way, Inc. | 9,530 | 280,849 | ||||||
CSX Corp. | 90,010 | 1,999,122 | ||||||
Delta Air Lines, Inc. * | 169,700 | 1,445,844 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 5,600 | 341,824 | ||||||
DryShips, Inc. * | 38,300 | 101,495 | ||||||
Expeditors International of Washington, Inc. | 9,825 | 448,020 | ||||||
FedEx Corp. | 39,962 | 3,270,091 | ||||||
Hertz Global Holdings, Inc. * | 106,500 | 1,235,400 | ||||||
J.B. Hunt Transport Services, Inc. | 8,645 | 365,770 | ||||||
JetBlue Airways Corp. * | 43,490 | 194,835 | ||||||
Kansas City Southern * | 7,290 | 460,509 | ||||||
Kirby Corp. * | 5,800 | 356,932 | ||||||
Norfolk Southern Corp. | 39,150 | 2,896,709 | ||||||
Republic Airways Holdings, Inc. * | 33,700 | 87,620 | ||||||
Ryder System, Inc. | 15,020 | 765,119 |
See financial notes 9
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
SkyWest, Inc. | 18,600 | 249,426 | ||||||
Southwest Airlines Co. | 98,575 | 842,816 | ||||||
Union Pacific Corp. | 36,156 | 3,600,053 | ||||||
United Continental Holdings, Inc. * | 92,043 | 1,778,271 | ||||||
United Parcel Service, Inc., Class B | 65,860 | 4,626,007 | ||||||
UTI Worldwide, Inc. | 9,800 | 143,178 | ||||||
Werner Enterprises, Inc. | 7,540 | 178,698 | ||||||
YRC Worldwide, Inc. * | 165,500 | 8,854 | ||||||
28,952,665 | ||||||||
Utilities 6.4% | ||||||||
AGL Resources, Inc. | 14,640 | 614,002 | ||||||
ALLETE, Inc. | 6,600 | 260,766 | ||||||
Alliant Energy Corp. | 18,475 | 753,411 | ||||||
Ameren Corp. | 73,990 | 2,358,801 | ||||||
American Electric Power Co., Inc. | 92,945 | 3,650,880 | ||||||
American Water Works Co., Inc. | 22,100 | 674,713 | ||||||
Aqua America, Inc. | 11,600 | 257,404 | ||||||
Atmos Energy Corp. | 20,160 | 691,891 | ||||||
Avista Corp. | 11,500 | 292,675 | ||||||
Black Hills Corp. | 9,625 | 324,459 | ||||||
Calpine Corp. * | 63,550 | 964,054 | ||||||
CenterPoint Energy, Inc. | 84,170 | 1,754,103 | ||||||
Cleco Corp. | 6,700 | 247,029 | ||||||
CMS Energy Corp. | 43,110 | 897,550 | ||||||
Consolidated Edison, Inc. | 54,325 | 3,143,788 | ||||||
Constellation Energy Group, Inc. | 69,680 | 2,766,296 | ||||||
Dominion Resources, Inc. | 86,210 | 4,447,574 | ||||||
DPL, Inc. | 11,920 | 361,772 | ||||||
DTE Energy Co. | 39,665 | 2,066,943 | ||||||
Duke Energy Corp. | 272,145 | 5,557,201 | ||||||
Dynegy, Inc. * | 82,180 | 301,601 | ||||||
Edison International | 71,890 | 2,918,734 | ||||||
Entergy Corp. | 37,617 | 2,601,968 | ||||||
Exelon Corp. | 120,055 | 5,329,241 | ||||||
FirstEnergy Corp. | 80,634 | 3,625,305 | ||||||
GenOn Energy, Inc. * | 223,602 | 681,986 | ||||||
Great Plains Energy, Inc. | 31,970 | 663,058 | ||||||
Hawaiian Electric Industries, Inc. | 17,770 | 450,114 | ||||||
IDACORP, Inc. | 7,640 | 308,503 | ||||||
Integrys Energy Group, Inc. | 19,035 | 1,007,142 | ||||||
ITC Holdings Corp. | 4,200 | 305,256 | ||||||
MDU Resources Group, Inc. | 36,780 | 758,036 | ||||||
National Fuel Gas Co. | 7,345 | 450,175 | ||||||
New Jersey Resources Corp. | 7,880 | 370,518 | ||||||
NextEra Energy, Inc. | 67,780 | 3,822,792 | ||||||
Nicor, Inc. | 7,340 | 412,875 | ||||||
NiSource, Inc. | 72,135 | 1,593,462 | ||||||
Northeast Utilities | 27,415 | 947,737 | ||||||
NorthWestern Corp. | 6,700 | 230,815 | ||||||
NRG Energy, Inc. * | 81,360 | 1,742,731 | ||||||
NSTAR | 16,980 | 765,628 | ||||||
NV Energy, Inc. | 45,300 | 726,612 | ||||||
OGE Energy Corp. | 13,065 | 675,983 | ||||||
ONEOK, Inc. | 17,810 | 1,354,450 | ||||||
Pepco Holdings, Inc. | 68,565 | 1,357,587 | ||||||
PG&E Corp. | 64,315 | 2,759,113 | ||||||
Piedmont Natural Gas Co., Inc. | 11,150 | 364,494 | ||||||
Pinnacle West Capital Corp. | 21,785 | 992,960 | ||||||
PNM Resources, Inc. | 24,795 | 445,814 | ||||||
Portland General Electric Co. | 13,245 | 325,032 | ||||||
PPL Corp. | 75,055 | 2,204,365 | ||||||
Progress Energy, Inc. | 57,365 | 2,988,716 | ||||||
Public Service Enterprise Group, Inc. | 87,880 | 2,961,556 | ||||||
Questar Corp. | 44,450 | 856,552 | ||||||
SCANA Corp. | 25,785 | 1,090,190 | ||||||
Sempra Energy | 38,715 | 2,080,157 | ||||||
Southern Co. | 124,335 | 5,371,272 | ||||||
Southwest Gas Corp. | 7,825 | 308,931 | ||||||
TECO Energy, Inc. | 36,725 | 681,983 | ||||||
The AES Corp. * | 197,540 | 2,216,399 | ||||||
UGI Corp. | 22,120 | 634,180 | ||||||
Unisource Energy Corp. | 5,900 | 219,952 | ||||||
Vectren Corp. | 15,765 | 447,411 | ||||||
Westar Energy, Inc. | 18,370 | 500,766 | ||||||
WGL Holdings, Inc. | 10,545 | 451,431 | ||||||
Wisconsin Energy Corp. | 13,040 | 422,887 | ||||||
Xcel Energy, Inc. | 84,890 | 2,194,406 | ||||||
96,006,188 | ||||||||
Total Common Stock | ||||||||
(Cost $1,376,436,266) | 1,478,498,401 | |||||||
Other Investment Company 0.5% of net assets | ||||||||
Money Market Fund 0.5% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 7,158,112 | 7,158,112 | ||||||
Total Other Investment Company | ||||||||
(Cost $7,158,112) | 7,158,112 | |||||||
Security | Face Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
(0.01)%, 12/15/11 (a)(f) | 200,000 | 200,001 | ||||||
0.00%, 12/15/11 (a)(f) | 785,000 | 785,002 | ||||||
Total Short-Term Investments | ||||||||
(Cost $985,003) | 985,003 | |||||||
End of Investments. | ||||||||
10 See financial notes
Schwab Fundamental US Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||
SSIT U.S. Government Money Market Fund | 4,904,747 | 4,904,747 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,904,747) | 4,904,747 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 tax basis cost of the fund’s investments was $1,407,992,463 and the unrealized appreciation and depreciation were $154,568,175 and ($75,919,122), respectively, with a net unrealized appreciation of $78,649,053.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | All or a portion of this security is on loan. | |
(d) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(e) | Illiquid security. At the period end, the value of these amounted to $9,216 or 0.0% of net assets. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 120 | 7,495,800 | 409,840 |
See financial notes 11
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .4% | Common Stock | 512,014,961 | 559,875,978 | ||||||||
0 | .0% | Rights | — | 6,053 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
1 | .1% | Other Investment Company | 6,000,596 | 6,000,596 | ||||||||
0 | .1% | Short-Term Investments | 775,001 | 775,001 | ||||||||
100 | .6% | Total Investments | 518,790,558 | 566,657,628 | ||||||||
2 | .7% | Collateral Invested for Securities on Loan | 15,327,665 | 15,327,665 | ||||||||
(3 | .3)% | Other Assets and Liabilities, Net | (18,823,923 | ) | ||||||||
100 | .0% | Net Assets | 563,161,370 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.4% of net assets | ||||||||
Automobiles & Components 1.0% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 62,300 | 603,687 | ||||||
Dorman Products, Inc. * | 6,000 | 228,660 | ||||||
Drew Industries, Inc. | 14,095 | 338,703 | ||||||
Federal-Mogul Corp. * | 47,900 | 807,594 | ||||||
Fuel Systems Solutions, Inc. * | 9,700 | 226,398 | ||||||
Modine Manufacturing Co. * | 51,655 | 545,993 | ||||||
Motorcar Parts of America, Inc. * | 7,700 | 76,384 | ||||||
Spartan Motors, Inc. | 42,200 | 206,780 | ||||||
Standard Motor Products, Inc. | 32,000 | 497,600 | ||||||
Stoneridge, Inc. * | 21,200 | 166,844 | ||||||
Superior Industries International, Inc. | 26,760 | 489,441 | ||||||
Thor Industries, Inc. | 34,400 | 909,536 | ||||||
Tower International, Inc. * | 20,100 | 247,431 | ||||||
Winnebago Industries, Inc. * | 18,465 | 150,305 | ||||||
5,495,356 | ||||||||
Banks 8.0% | ||||||||
1st Source Corp. | 7,740 | 186,070 | ||||||
Ameris Bancorp * | 16,034 | 161,142 | ||||||
Arrow Financial Corp. | 6,275 | 146,459 | ||||||
BancFirst Corp. | 4,075 | 157,703 | ||||||
Banco Latinoamericano de Comercio Exterior, S.A., Class E | 37,700 | 612,625 | ||||||
Bank Mutual Corp. | 44,660 | 148,718 | ||||||
Bank of Marin Bancorp | 3,100 | 109,864 | ||||||
Bank of the Ozarks, Inc. | 12,300 | 305,901 | ||||||
BankAtlantic Bancorp, Inc. Class A (b)* | 24,060 | 57,022 | ||||||
BankFinancial Corp. | 10,700 | 85,600 | ||||||
Banner Corp. | 20,037 | 352,050 | ||||||
Beneficial Mutual Bancorp, Inc. * | 12,850 | 105,499 | ||||||
Berkshire Hills Bancorp, Inc. | 14,050 | 281,281 | ||||||
BOK Financial Corp. | 14,700 | 767,634 | ||||||
Boston Private Financial Holdings, Inc. | 70,640 | 535,451 | ||||||
Brookline Bancorp, Inc. | 64,610 | 540,140 | ||||||
Bryn Mawr Bank Corp. | 5,700 | 104,652 | ||||||
Camden National Corp. | 3,200 | 94,976 | ||||||
Capitol Federal Financial, Inc. | 82,786 | 918,097 | ||||||
Cardinal Financial Corp. | 12,700 | 136,398 | ||||||
Cathay General Bancorp | 54,500 | 762,455 | ||||||
Center Financial Corp. * | 20,200 | 132,714 | ||||||
Centerstate Banks, Inc. | 18,200 | 103,376 | ||||||
Chemical Financial Corp. | 20,130 | 405,217 | ||||||
Citizens & Northern Corp. | 8,000 | 132,560 | ||||||
Citizens Republic Bancorp, Inc. * | 86,050 | 775,310 | ||||||
City Holding Co. | 13,690 | 449,853 | ||||||
CoBiz Financial, Inc. | 30,100 | 159,530 | ||||||
Columbia Banking System, Inc. | 18,435 | 351,555 | ||||||
Community Bank System, Inc. | 26,570 | 679,129 | ||||||
Community Trust Bancorp, Inc. | 9,195 | 260,494 | ||||||
CVB Financial Corp. | 94,180 | 914,488 | ||||||
Dime Community Bancshares | 29,150 | 347,468 | ||||||
Doral Financial Corp. * | 159,700 | 191,640 | ||||||
Eagle Bancorp, Inc. * | 8,000 | 110,960 | ||||||
Enterprise Financial Services Corp. | 10,400 | 160,472 | ||||||
ESSA Bancorp, Inc. | 7,500 | 82,800 | ||||||
Financial Institutions, Inc. | 8,705 | 142,588 | ||||||
First Bancorp | 9,900 | 125,532 | ||||||
First BanCorp Puerto Rico (b)* | 100,872 | 359,104 | ||||||
First Busey Corp. | 37,115 | 189,287 | ||||||
First Citizens BancShares, Inc., Class A | 3,000 | 489,150 | ||||||
First Commonwealth Financial Corp. | 126,890 | 584,963 | ||||||
First Community Bancshares, Inc. | 15,475 | 185,855 | ||||||
First Financial Bancorp | 36,990 | 606,636 | ||||||
First Financial Bankshares, Inc. (b) | 18,200 | 578,032 | ||||||
First Financial Corp. | 6,000 | 197,160 | ||||||
First Financial Holdings, Inc. | 15,145 | 112,830 | ||||||
First Interstate BancSystem, Inc. | 14,700 | 185,808 | ||||||
First Merchants Corp. | 24,965 | 201,218 | ||||||
First Midwest Bancorp, Inc. | 78,695 | 709,042 | ||||||
Flagstar Bancorp, Inc. * | 187,800 | 146,484 | ||||||
Flushing Financial Corp. | 29,355 | 359,892 | ||||||
Glacier Bancorp, Inc. | 54,780 | 621,753 | ||||||
Great Southern Bancorp, Inc. | 6,300 | 125,307 | ||||||
Hanmi Financial Corp. * | 72,170 | 72,170 | ||||||
Heartland Financial USA, Inc. | 6,050 | 94,562 | ||||||
Home Bancshares, Inc. | 8,840 | 207,298 | ||||||
Hudson Valley Holding Corp. | 13,300 | 288,876 | ||||||
IBERIABANK Corp. | 16,150 | 835,278 | ||||||
Independent Bank Corp. | 14,595 | 378,302 | ||||||
International Bancshares Corp. | 56,100 | 1,016,532 | ||||||
Investors Bancorp, Inc. * | 25,965 | 360,394 | ||||||
Lakeland Bancorp, Inc. | 15,378 | 142,862 | ||||||
Lakeland Financial Corp. | 10,500 | 250,845 | ||||||
MainSource Financial Group, Inc. | 15,100 | 141,638 | ||||||
MB Financial, Inc. | 45,645 | 756,338 |
12 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Metro Bancorp, Inc. * | 12,400 | 102,548 | ||||||
Nara Bancorp, Inc. * | 21,113 | 179,038 | ||||||
National Penn Bancshares, Inc. | 116,923 | 911,999 | ||||||
NBT Bancorp, Inc. | 27,155 | 584,376 | ||||||
Northfield Bancorp, Inc. (b) | 8,100 | 111,861 | ||||||
Northwest Bancshares, Inc. | 78,692 | 981,289 | ||||||
OceanFirst Financial Corp. | 12,200 | 159,088 | ||||||
Ocwen Financial Corp. * | 78,845 | 1,143,252 | ||||||
Old National Bancorp | 87,925 | 1,017,292 | ||||||
Oriental Financial Group, Inc. | 32,635 | 345,605 | ||||||
Oritani Financial Corp. | 8,600 | 111,456 | ||||||
Orrstown Financial Services, Inc. | 4,100 | 37,556 | ||||||
Pacific Continental Corp. | 12,500 | 108,375 | ||||||
PacWest Bancorp | 26,080 | 460,051 | ||||||
Park National Corp. (b) | 12,210 | 729,059 | ||||||
Peoples Bancorp, Inc. | 9,575 | 126,677 | ||||||
Pinnacle Financial Partners, Inc. * | 28,000 | 420,280 | ||||||
PrivateBancorp, Inc. | 46,415 | 505,923 | ||||||
Prosperity Bancshares, Inc. | 20,400 | 785,196 | ||||||
Provident Financial Services, Inc. | 52,290 | 677,155 | ||||||
Provident New York Bancorp | 19,685 | 136,811 | ||||||
Radian Group, Inc. | 163,200 | 383,520 | ||||||
Renasant Corp. | 20,000 | 288,400 | ||||||
Republic Bancorp, Inc., Class A | 11,100 | 225,774 | ||||||
S&T Bancorp, Inc. | 27,590 | 515,105 | ||||||
S.Y. Bancorp, Inc. | 7,515 | 154,659 | ||||||
Sandy Spring Bancorp, Inc. | 16,795 | 285,683 | ||||||
SCBT Financial Corp. | 8,100 | 239,193 | ||||||
Seacoast Banking Corp. of Florida * | 99,790 | 148,687 | ||||||
Signature Bank * | 16,380 | 913,185 | ||||||
Simmons First National Corp., Class A | 12,100 | 314,116 | ||||||
Southside Bancshares, Inc. | 11,807 | 242,870 | ||||||
Southwest Bancorp, Inc. * | 17,100 | 80,370 | ||||||
State Bancorp, Inc. | 9,500 | 112,385 | ||||||
StellarOne Corp. | 12,542 | 150,379 | ||||||
Sterling Bancorp | 25,795 | 212,809 | ||||||
Sterling Financial Corp. * | 12,525 | 188,000 | ||||||
Suffolk Bancorp | 7,415 | 63,102 | ||||||
Territorial Bancorp, Inc. | 5,600 | 110,040 | ||||||
Texas Capital Bancshares, Inc. * | 19,620 | 549,360 | ||||||
TFS Financial Corp. * | 39,680 | 365,453 | ||||||
The Bancorp, Inc. * | 19,400 | 155,976 | ||||||
The First of Long Island Corp. | 3,900 | 99,645 | ||||||
The PMI Group, Inc. (c)(d)* | 257,300 | 40,139 | ||||||
Tompkins Financial Corp. | 4,031 | 158,942 | ||||||
Tower Bancorp, Inc. | 5,300 | 136,316 | ||||||
TowneBank (b) | 16,900 | 210,574 | ||||||
TriCo Bancshares | 10,700 | 158,681 | ||||||
TrustCo Bank Corp. NY | 81,410 | 403,794 | ||||||
UMB Financial Corp. | 19,201 | 707,941 | ||||||
Union First Market Bankshares Corp. | 13,300 | 170,506 | ||||||
United Bankshares, Inc. | 36,995 | 878,261 | ||||||
United Community Banks, Inc. (b)* | 66,179 | 489,063 | ||||||
United Financial Bancorp, Inc. | 8,900 | 143,646 | ||||||
Univest Corp. of Pennsylvania | 9,600 | 146,016 | ||||||
ViewPoint Financial Group | 10,100 | 129,987 | ||||||
Virginia Commerce Bancorp, Inc. * | 29,000 | 184,440 | ||||||
Washington Banking Co. | 7,400 | 87,468 | ||||||
Washington Trust Bancorp, Inc. | 7,385 | 173,400 | ||||||
WesBanco, Inc. | 16,690 | 331,463 | ||||||
West Coast Bancorp * | 12,665 | 189,088 | ||||||
Westamerica Bancorp | 17,470 | 783,005 | ||||||
Western Alliance Bancorp * | 53,065 | 344,923 | ||||||
Westfield Financial, Inc. | 20,727 | 147,369 | ||||||
Wilshire Bancorp, Inc. * | 23,000 | 78,660 | ||||||
Wintrust Financial Corp. | 27,640 | 798,243 | ||||||
WSFS Financial Corp. | 6,035 | 239,891 | ||||||
44,858,453 | ||||||||
Capital Goods 10.8% | ||||||||
A.O. Smith Corp. | 29,000 | 1,077,640 | ||||||
A123 Systems, Inc. (b)* | 27,800 | 95,354 | ||||||
AAON, Inc. | 7,020 | 148,613 | ||||||
AAR CORP. | 37,980 | 756,941 | ||||||
Aceto Corp. | 22,900 | 145,186 | ||||||
Actuant Corp., Class A | 34,700 | 780,750 | ||||||
Aegion Corp. * | 23,615 | 349,266 | ||||||
Aerovironment, Inc. * | 5,900 | 194,877 | ||||||
Aircastle Ltd. | 90,500 | 1,097,765 | ||||||
Alamo Group, Inc. | 6,300 | 150,255 | ||||||
Albany International Corp., Class A | 26,600 | 600,894 | ||||||
Altra Holdings, Inc. * | 15,600 | 229,320 | ||||||
American Railcar Industries, Inc. * | 10,550 | 232,733 | ||||||
American Science & Engineering, Inc. | 2,300 | 156,446 | ||||||
American Superconductor Corp. * | 17,300 | 75,428 | ||||||
American Woodmark Corp. | 4,895 | 83,264 | ||||||
Ampco-Pittsburgh Corp. | 7,160 | 150,288 | ||||||
Apogee Enterprises, Inc. | 36,195 | 395,249 | ||||||
Applied Industrial Technologies, Inc. | 35,020 | 1,177,372 | ||||||
Armstrong World Industries, Inc. | 24,400 | 1,039,196 | ||||||
Astec Industries, Inc. * | 18,250 | 606,812 | ||||||
AZZ, Inc. | 5,400 | 241,164 | ||||||
Barnes Group, Inc. | 38,265 | 890,427 | ||||||
Beacon Roofing Supply, Inc. * | 46,680 | 860,312 | ||||||
Belden, Inc. | 25,240 | 814,747 | ||||||
Blount International, Inc. * | 25,705 | 399,199 | ||||||
Builders FirstSource, Inc. * | 44,155 | 71,973 | ||||||
CAI International, Inc. * | 5,000 | 78,050 | ||||||
Cascade Corp. | 7,655 | 329,931 | ||||||
Ceradyne, Inc. * | 21,630 | 723,740 | ||||||
Chart Industries, Inc. * | 13,910 | 786,054 | ||||||
China BAK Battery, Inc. (b)* | 61,500 | 56,586 | ||||||
China Yuchai International Ltd. | 28,100 | 427,120 | ||||||
CIRCOR International, Inc. | 7,290 | 253,838 | ||||||
CLARCOR, Inc. | 22,325 | 1,082,316 | ||||||
Coleman Cable, Inc. * | 15,200 | 154,584 | ||||||
Colfax Corp. (b)* | 14,400 | 363,744 | ||||||
Columbus McKinnon Corp. * | 21,860 | 327,681 | ||||||
Comfort Systems USA, Inc. | 38,000 | 418,000 | ||||||
Commercial Vehicle Group, Inc. * | 19,560 | 215,747 | ||||||
Cubic Corp. | 8,590 | 404,761 | ||||||
DigitalGlobe, Inc. * | 13,100 | 267,240 | ||||||
Douglas Dynamics, Inc. | 8,100 | 121,662 | ||||||
Ducommun, Inc. | 9,900 | 141,273 | ||||||
DXP Enterprises, Inc. * | 8,000 | 199,840 | ||||||
Dycom Industries, Inc. * | 46,570 | 904,855 | ||||||
Dynamic Materials Corp. | 5,400 | 117,180 | ||||||
Encore Wire Corp. | 23,240 | 617,719 | ||||||
EnPro Industries, Inc. * | 15,470 | 532,787 | ||||||
ESCO Technologies, Inc. | 13,200 | 403,524 |
See financial notes 13
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Federal Signal Corp. | 89,000 | 420,080 | ||||||
Flow International Corp. * | 28,000 | 72,520 | ||||||
Force Protection, Inc. * | 79,800 | 293,664 | ||||||
Franklin Electric Co., Inc. | 9,580 | 439,914 | ||||||
FreightCar America, Inc. * | 13,935 | 264,068 | ||||||
Furmanite Corp. * | 18,900 | 126,063 | ||||||
Fushi Copperweld, Inc. (b)* | 16,600 | 105,576 | ||||||
GenCorp, Inc. * | 51,200 | 248,832 | ||||||
Generac Holdings, Inc. * | 19,700 | 450,342 | ||||||
GeoEye, Inc. * | 8,200 | 275,274 | ||||||
Gibraltar Industries, Inc. * | 45,155 | 503,930 | ||||||
Graco, Inc. | 24,240 | 1,040,866 | ||||||
GrafTech International Ltd. * | 44,830 | 704,279 | ||||||
Great Lakes Dredge & Dock Co. | 37,400 | 192,610 | ||||||
Griffon Corp. * | 58,808 | 556,912 | ||||||
H&E Equipment Services, Inc. * | 17,720 | 194,388 | ||||||
HEICO Corp. | 3,768 | 214,851 | ||||||
HEICO Corp., Class A | 8,766 | 344,591 | ||||||
Hexcel Corp. * | 55,685 | 1,375,976 | ||||||
Houston Wire & Cable Co. | 13,000 | 166,010 | ||||||
Hurco Cos., Inc. * | 4,100 | 107,092 | ||||||
IDEX Corp. | 27,200 | 964,240 | ||||||
II-VI, Inc. * | 15,530 | 295,225 | ||||||
Insteel Industries, Inc. | 16,300 | 168,053 | ||||||
Interline Brands, Inc. * | 25,460 | 379,354 | ||||||
John Bean Technologies Corp. | 22,940 | 370,252 | ||||||
Kadant, Inc. * | 9,000 | 194,850 | ||||||
Kaman Corp. | 19,180 | 637,735 | ||||||
Kaydon Corp. | 17,935 | 564,235 | ||||||
Kratos Defense & Security Solutions, Inc. * | 16,056 | 101,634 | ||||||
L.B. Foster Co., Class A | 7,880 | 200,940 | ||||||
Lawson Products, Inc. | 5,530 | 92,185 | ||||||
Layne Christensen Co. * | 21,200 | 534,028 | ||||||
Lindsay Corp. | 3,400 | 197,540 | ||||||
LMI Aerospace, Inc. * | 6,500 | 130,715 | ||||||
LSI Industries, Inc. | 25,602 | 172,301 | ||||||
Lydall, Inc. * | 19,900 | 218,104 | ||||||
MasTec, Inc. * | 32,410 | 700,704 | ||||||
MFC Industrial Ltd. | 45,100 | 317,053 | ||||||
Michael Baker Corp. * | 7,300 | 150,234 | ||||||
Miller Industries, Inc. | 14,100 | 288,204 | ||||||
MSC Industrial Direct Co., Class A | 17,400 | 1,183,374 | ||||||
Mueller Water Products, Inc., Class A | 227,400 | 625,350 | ||||||
MYR Group, Inc. * | 16,700 | 322,143 | ||||||
NACCO Industries, Inc., Class A | 6,940 | 569,774 | ||||||
National Presto Industries, Inc. | 2,945 | 281,248 | ||||||
NCI Building Systems, Inc. * | 47,451 | 432,279 | ||||||
NN, Inc. * | 11,500 | 101,660 | ||||||
Nordson Corp. | 12,750 | 591,217 | ||||||
Northwest Pipe Co. * | 13,000 | 346,710 | ||||||
Orbital Sciences Corp. * | 40,555 | 626,980 | ||||||
Orion Marine Group, Inc. * | 19,240 | 130,640 | ||||||
Pike Electric Corp. * | 21,220 | 161,484 | ||||||
Polypore International, Inc. * | 8,000 | 419,600 | ||||||
Powell Industries, Inc. * | 7,770 | 261,150 | ||||||
Quanex Building Products Corp. | 31,450 | 463,887 | ||||||
Raven Industries, Inc. | 5,065 | 303,951 | ||||||
RBC Bearings, Inc. * | 10,000 | 405,000 | ||||||
Robbins & Myers, Inc. | 11,817 | 528,102 | ||||||
RSC Holdings, Inc. * | 42,300 | 412,848 | ||||||
Rush Enterprises, Inc., Class A * | 41,560 | 802,108 | ||||||
Sauer-Danfoss, Inc. * | 9,640 | 373,261 | ||||||
Seaboard Corp. | 200 | 439,600 | ||||||
SeaCube Container Leasing Ltd. | 17,000 | 236,300 | ||||||
Sensata Technologies Holding N.V. * | 19,600 | 586,824 | ||||||
Simpson Manufacturing Co., Inc. | 22,085 | 677,126 | ||||||
Standex International Corp. | 11,550 | 445,946 | ||||||
Sterling Construction Co., Inc. * | 17,300 | 215,385 | ||||||
Sun Hydraulics Corp. | 5,250 | 150,990 | ||||||
TAL International Group, Inc. | 8,790 | 244,626 | ||||||
Taser International, Inc. * | 25,900 | 128,723 | ||||||
Tecumseh Products Co., Class A * | 25,530 | 162,371 | ||||||
Tennant Co. | 10,080 | 389,995 | ||||||
Textainer Group Holdings Ltd. | 5,350 | 146,858 | ||||||
The Gorman-Rupp Co. | 8,000 | 214,960 | ||||||
The Greenbrier Cos., Inc. * | 21,620 | 402,348 | ||||||
The Middleby Corp. * | 5,808 | 489,498 | ||||||
The Toro Co. | 17,110 | 924,624 | ||||||
Titan International, Inc. | 14,275 | 321,188 | ||||||
Titan Machinery, Inc. * | 8,200 | 191,306 | ||||||
TransDigm Group, Inc. * | 14,100 | 1,324,272 | ||||||
Tredegar Corp. | 21,475 | 415,971 | ||||||
TriMas Corp. * | 13,450 | 262,141 | ||||||
Triumph Group, Inc. | 19,060 | 1,107,386 | ||||||
Twin Disc, Inc. | 5,100 | 198,390 | ||||||
Universal Forest Products, Inc. | 21,470 | 602,663 | ||||||
Valmont Industries, Inc. | 8,250 | 707,437 | ||||||
Vicor Corp. | 7,261 | 66,438 | ||||||
Wabash National Corp. * | 29,045 | 200,411 | ||||||
Wabtec Corp. | 16,460 | 1,105,783 | ||||||
Watsco, Inc. | 16,245 | 1,001,667 | ||||||
Watts Water Technologies, Inc., Class A | 20,855 | 656,724 | ||||||
Woodward, Inc. | 31,700 | 1,073,996 | ||||||
Xerium Technologies, Inc. * | 10,100 | 104,636 | ||||||
61,064,476 | ||||||||
Commercial & Professional Supplies 4.9% | ||||||||
ABM Industries, Inc. | 42,100 | 851,262 | ||||||
Acco Brands Corp. * | 96,045 | 659,829 | ||||||
American Reprographics Co. * | 47,350 | 188,927 | ||||||
Casella Waste Systems, Inc., Class A * | 38,200 | 239,896 | ||||||
CBIZ, Inc. * | 64,095 | 405,721 | ||||||
CDI Corp. | 23,460 | 308,030 | ||||||
Cenveo, Inc. * | 107,808 | 404,280 | ||||||
Clean Harbors, Inc. * | 18,530 | 1,079,743 | ||||||
Consolidated Graphics, Inc. * | 13,720 | 625,083 | ||||||
Copart, Inc. * | 22,880 | 996,424 | ||||||
CoStar Group, Inc. * | 5,440 | 334,723 | ||||||
Courier Corp. | 10,455 | 90,854 | ||||||
CRA International, Inc. * | 8,845 | 170,885 | ||||||
Dolan Co. * | 19,000 | 166,250 | ||||||
EnergySolutions, Inc. * | 125,500 | 473,135 | ||||||
Ennis, Inc. | 34,040 | 498,005 | ||||||
Exponent, Inc. * | 5,800 | 279,444 | ||||||
G & K Services, Inc., Class A | 19,290 | 585,644 | ||||||
GP Strategies Corp. * | 11,900 | 140,658 | ||||||
Healthcare Services Group, Inc. | 26,555 | 460,729 | ||||||
Heidrick & Struggles International, Inc. | 12,170 | 240,723 |
14 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Herman Miller, Inc. | 35,310 | 729,152 | ||||||
Hill International, Inc. * | 24,800 | 138,880 | ||||||
Hudson Highland Group, Inc. * | 18,385 | 85,123 | ||||||
Huron Consulting Group, Inc. * | 18,000 | 648,180 | ||||||
ICF International, Inc. * | 12,900 | 301,602 | ||||||
IHS, Inc., Class A * | 11,010 | 924,730 | ||||||
Innerworkings, Inc. * | 15,300 | 138,465 | ||||||
Insperity, Inc. | 20,860 | 537,771 | ||||||
Interface, Inc., Class A | 29,185 | 380,572 | ||||||
KAR Auction Services, Inc. * | 35,300 | 485,375 | ||||||
Kforce, Inc. * | 28,800 | 367,488 | ||||||
Kimball International, Inc., Class B | 20,725 | 116,682 | ||||||
Knoll, Inc. | 29,900 | 455,975 | ||||||
Korn/Ferry International * | 27,230 | 434,863 | ||||||
M&F Worldwide Corp. * | 23,033 | 570,297 | ||||||
McGrath Rentcorp | 19,025 | 508,348 | ||||||
Metalico, Inc. * | 35,800 | 161,816 | ||||||
Mine Safety Appliances Co. | 17,825 | 598,029 | ||||||
Mistras Group, Inc. * | 9,000 | 196,200 | ||||||
Mobile Mini, Inc. * | 28,125 | 510,188 | ||||||
Multi-Color Corp. | 8,600 | 227,986 | ||||||
Navigant Consulting, Inc. * | 70,225 | 795,649 | ||||||
On Assignment, Inc. * | 27,900 | 301,041 | ||||||
Resources Connection, Inc. | 24,860 | 275,697 | ||||||
Rollins, Inc. | 20,522 | 446,969 | ||||||
Schawk, Inc. | 8,460 | 114,125 | ||||||
Standard Parking Corp. * | 14,000 | 246,260 | ||||||
Steelcase, Inc., Class A | 106,200 | 786,942 | ||||||
Sykes Enterprises, Inc. * | 25,955 | 413,463 | ||||||
Team, Inc. * | 10,700 | 267,607 | ||||||
Tetra Tech, Inc. * | 42,295 | 923,300 | ||||||
The Advisory Board Co. * | 3,530 | 216,213 | ||||||
The Corporate Executive Board Co. | 16,170 | 591,660 | ||||||
The Geo Group, Inc. * | 35,480 | 646,800 | ||||||
The Standard Register Co. | 34,950 | 90,521 | ||||||
Towers Watson & Co., Class A | 17,715 | 1,163,876 | ||||||
TrueBlue, Inc. * | 45,030 | 595,297 | ||||||
UniFirst Corp. | 10,105 | 528,997 | ||||||
US Ecology, Inc. | 9,000 | 162,540 | ||||||
Verisk Analytics, Inc., Class A * | 22,800 | 801,420 | ||||||
Viad Corp. | 21,565 | 451,355 | ||||||
VSE Corp. | 5,200 | 126,464 | ||||||
27,664,163 | ||||||||
Consumer Durables & Apparel 3.5% | ||||||||
American Apparel, Inc. (b)* | 111,600 | 97,092 | ||||||
American Greetings Corp., Class A | 47,200 | 755,672 | ||||||
Arctic Cat, Inc. * | 14,800 | 300,588 | ||||||
Beazer Homes USA, Inc. (b)* | 219,200 | 471,280 | ||||||
Blyth, Inc. | 11,672 | 651,648 | ||||||
Callaway Golf Co. | 103,455 | 601,074 | ||||||
Carter’s, Inc. * | 19,065 | 726,186 | ||||||
Cavco Industries, Inc. * | 3,500 | 157,605 | ||||||
Cherokee, Inc. | 10,000 | 131,400 | ||||||
Columbia Sportswear Co. | 8,380 | 450,341 | ||||||
Crocs, Inc. * | 25,360 | 448,111 | ||||||
CSS Industries, Inc. | 7,175 | 151,249 | ||||||
Deckers Outdoor Corp. * | 7,450 | 858,538 | ||||||
Ethan Allen Interiors, Inc. | 28,465 | 563,607 | ||||||
Fossil, Inc. * | 8,565 | 887,848 | ||||||
Furniture Brands International, Inc. * | 128,000 | 244,480 | ||||||
G-III Apparel Group Ltd. * | 10,600 | 298,814 | ||||||
Helen of Troy Ltd. * | 18,630 | 538,966 | ||||||
Hooker Furniture Corp. | 11,400 | 110,580 | ||||||
Hovnanian Enterprises, Inc., Class A (b)* | 156,800 | 225,792 | ||||||
Iconix Brand Group, Inc. * | 30,530 | 548,013 | ||||||
JAKKS Pacific, Inc. | 33,925 | 643,557 | ||||||
K-Swiss, Inc., Class A * | 35,630 | 160,335 | ||||||
Kenneth Cole Productions, Inc., Class A * | 12,140 | 130,626 | ||||||
Kid Brands, Inc. * | 12,400 | 36,332 | ||||||
La-Z-Boy, Inc. * | 68,920 | 700,227 | ||||||
Leapfrog Enterprises, Inc. * | 31,335 | 116,880 | ||||||
Libbey, Inc. * | 16,400 | 207,624 | ||||||
Lifetime Brands, Inc. | 10,700 | 130,861 | ||||||
Lululemon Athletica, Inc. * | 2,600 | 146,848 | ||||||
M/I Homes, Inc. * | 28,400 | 212,148 | ||||||
Maidenform Brands, Inc. * | 11,300 | 277,754 | ||||||
Movado Group, Inc. | 19,620 | 328,243 | ||||||
Nautilus, Inc. * | 52,657 | 106,367 | ||||||
Oxford Industries, Inc. | 19,830 | 783,285 | ||||||
Perry Ellis International, Inc. * | 12,800 | 321,280 | ||||||
Quiksilver, Inc. * | 238,200 | 797,970 | ||||||
Sealy Corp. * | 94,570 | 146,583 | ||||||
Skechers U.S.A., Inc., Class A * | 36,945 | 526,836 | ||||||
Skyline Corp. | 8,985 | 60,739 | ||||||
Smith & Wesson Holding Corp. * | 56,400 | 166,944 | ||||||
Standard Pacific Corp. * | 62,100 | 188,784 | ||||||
Steven Madden Ltd. * | 13,248 | 488,851 | ||||||
Sturm, Ruger & Co., Inc. | 6,900 | 209,208 | ||||||
Tempur-Pedic International, Inc. * | 15,415 | 1,049,145 | ||||||
The Ryland Group, Inc. | 51,400 | 693,900 | ||||||
True Religion Apparel, Inc. * | 8,000 | 271,360 | ||||||
Under Armour, Inc., Class A * | 5,815 | 490,844 | ||||||
Unifi, Inc. * | 20,600 | 159,650 | ||||||
Universal Electronics, Inc. * | 7,200 | 133,848 | ||||||
Wolverine World Wide, Inc. | 22,490 | 853,046 | ||||||
19,758,959 | ||||||||
Consumer Services 5.5% | ||||||||
AFC Enterprises, Inc. * | 27,700 | 379,767 | ||||||
Ambassadors Group, Inc. | 15,300 | 75,888 | ||||||
American Public Education, Inc. * | 2,300 | 82,363 | ||||||
Ameristar Casinos, Inc. | 23,775 | 439,837 | ||||||
Ascent Capital Group, Inc., Class A * | 11,800 | 536,782 | ||||||
Bally Technologies, Inc. * | 22,575 | 818,795 | ||||||
Biglari Holdings, Inc. * | 748 | 258,150 | ||||||
BJ’s Restaurants, Inc. * | 7,400 | 391,682 | ||||||
Bob Evans Farms, Inc. | 34,355 | 1,130,279 | ||||||
Bravo Brio Restaurant Group, Inc. * | 6,300 | 122,409 | ||||||
Buffalo Wild Wings, Inc. * | 4,200 | 278,124 | ||||||
Capella Education Co. * | 3,040 | 105,822 | ||||||
Carrols Restaurant Group, Inc. * | 19,800 | 184,932 | ||||||
CEC Entertainment, Inc. | 18,880 | 596,986 | ||||||
ChinaCast Education Corp. (b)* | 21,000 | 84,420 | ||||||
Chipotle Mexican Grill, Inc. * | 4,020 | 1,351,202 | ||||||
Choice Hotels International, Inc. | 20,040 | 717,232 | ||||||
Churchill Downs, Inc. | 7,895 | 379,513 | ||||||
Coinstar, Inc. (b)* | 17,125 | 817,547 | ||||||
Corinthian Colleges, Inc. * | 182,385 | 348,355 | ||||||
CPI Corp. (b) | 9,800 | 58,506 |
See financial notes 15
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cracker Barrel Old Country Store, Inc. | 23,020 | 975,818 | ||||||
Denny’s Corp. * | 119,400 | 429,840 | ||||||
DineEquity, Inc. * | 11,230 | 527,361 | ||||||
Education Management Corp. (b)* | 39,400 | 782,484 | ||||||
Gaylord Entertainment Co. * | 31,780 | 743,334 | ||||||
Grand Canyon Education, Inc. * | 8,200 | 133,742 | ||||||
Hillenbrand, Inc. | 43,200 | 911,952 | ||||||
International Speedway Corp., Class A | 23,550 | 561,903 | ||||||
Interval Leisure Group, Inc. * | 19,532 | 269,737 | ||||||
Isle of Capri Casinos, Inc. * | 35,415 | 192,658 | ||||||
ITT Educational Services, Inc. (b)* | 12,635 | 782,865 | ||||||
K12, Inc. * | 6,900 | 241,845 | ||||||
Krispy Kreme Doughnuts, Inc. * | 30,235 | 213,459 | ||||||
LIFE TIME FITNESS, Inc. * | 11,685 | 503,974 | ||||||
Lincoln Educational Services Corp. | 20,760 | 194,106 | ||||||
Mac-Gray Corp. | 7,200 | 99,936 | ||||||
Matthews International Corp., Class A | 17,715 | 622,505 | ||||||
McCormick & Schmick’s Seafood Restaurants, Inc. * | 20,500 | 137,350 | ||||||
Morgans Hotel Group * | 21,900 | 142,569 | ||||||
Morton’s Restaurant Group, Inc. * | 20,800 | 101,504 | ||||||
Multimedia Games Holding Co., Inc. * | 35,380 | 233,862 | ||||||
O’Charley’s, Inc. * | 45,375 | 281,779 | ||||||
Orient-Express Hotels Ltd., Class A * | 41,990 | 358,175 | ||||||
P.F. Chang’s China Bistro, Inc. | 17,155 | 533,520 | ||||||
Panera Bread Co., Class A * | 8,175 | 1,092,916 | ||||||
Papa John’s International, Inc. * | 17,610 | 594,514 | ||||||
Peet’s Coffee & Tea, Inc. * | 4,800 | 305,856 | ||||||
Pinnacle Entertainment, Inc. * | 58,575 | 663,069 | ||||||
Red Lion Hotels Corp. * | 19,800 | 137,610 | ||||||
Red Robin Gourmet Burgers, Inc. * | 17,680 | 443,238 | ||||||
Ruby Tuesday, Inc. * | 64,750 | 543,252 | ||||||
Ruth’s Hospitality Group, Inc. * | 36,400 | 171,808 | ||||||
School Specialty, Inc. * | 23,500 | 179,775 | ||||||
Scientific Games Corp., Class A * | 87,470 | 760,114 | ||||||
Shuffle Master, Inc. * | 24,800 | 263,128 | ||||||
Sonic Corp. * | 69,080 | 511,883 | ||||||
Sotheby’s | 17,120 | 602,966 | ||||||
Speedway Motorsports, Inc. | 17,215 | 223,795 | ||||||
Steiner Leisure Ltd. * | 7,860 | 378,695 | ||||||
Stewart Enterprises, Inc., Class A | 68,340 | 440,110 | ||||||
Strayer Education, Inc. (b) | 4,000 | 340,840 | ||||||
Texas Roadhouse, Inc. | 24,110 | 345,496 | ||||||
The Cheesecake Factory, Inc. * | 36,735 | 1,028,213 | ||||||
The Marcus Corp. | 19,030 | 226,838 | ||||||
Universal Technical Institute, Inc. * | 10,080 | 143,942 | ||||||
Vail Resorts, Inc. | 23,460 | 1,045,377 | ||||||
Weight Watchers International, Inc. | 10,992 | 820,223 | ||||||
WMS Industries, Inc. * | 25,112 | 550,204 | ||||||
30,948,731 | ||||||||
Diversified Financials 2.6% | ||||||||
Advance America Cash Advance Centers, Inc. | 135,295 | 1,140,537 | ||||||
BGC Partners, Inc., Class A | 14,480 | 99,188 | ||||||
Calamos Asset Management, Inc., Class A | 31,015 | 387,377 | ||||||
Cash America International, Inc. | 19,805 | 1,084,324 | ||||||
Cohen & Steers, Inc. | 4,240 | 115,201 | ||||||
Compass Diversified Holdings | 47,960 | 626,358 | ||||||
CompuCredit Holdings Corp. * | 18,128 | 56,559 | ||||||
Cowen Group, Inc., Class A * | 102,339 | 278,362 | ||||||
Credit Acceptance Corp. * | 2,675 | 184,361 | ||||||
DFC Global Corp. * | 24,737 | 542,235 | ||||||
Duff & Phelps Corp., Class A | 8,000 | 101,520 | ||||||
Encore Capital Group, Inc. * | 7,555 | 204,665 | ||||||
Evercore Partners, Inc., Class A | 3,600 | 98,784 | ||||||
EZCORP, Inc., Class A * | 20,500 | 569,490 | ||||||
FBR & Co. * | 35,700 | 74,256 | ||||||
First Cash Financial Services, Inc. * | 10,290 | 427,035 | ||||||
GAMCO Investors, Inc., Class A | 2,535 | 119,398 | ||||||
GFI Group, Inc. | 60,020 | 259,286 | ||||||
Gleacher & Co., Inc. * | 59,600 | 76,288 | ||||||
Greenhill & Co., Inc. | 6,435 | 243,114 | ||||||
ICG Group, Inc. * | 11,000 | 118,690 | ||||||
INTL FCStone, Inc. * | 7,274 | 176,322 | ||||||
Investment Technology Group, Inc. * | 55,455 | 632,742 | ||||||
Janus Capital Group, Inc. | 83,200 | 545,792 | ||||||
KBW, Inc. | 12,600 | 178,416 | ||||||
LPL Investment Holdings, Inc. * | 13,000 | 377,130 | ||||||
MarketAxess Holdings, Inc. | 5,700 | 166,611 | ||||||
Medallion Financial Corp. | 20,100 | 239,190 | ||||||
Nelnet, Inc., Class A | 20,040 | 430,459 | ||||||
NewStar Financial, Inc. * | 26,100 | 279,792 | ||||||
Oppenheimer Holdings, Inc., Class A | 7,400 | 130,018 | ||||||
Penson Worldwide, Inc. (b)* | 35,000 | 43,050 | ||||||
PICO Holdings, Inc. * | 8,595 | 196,310 | ||||||
Piper Jaffray Cos., Inc. * | 15,905 | 330,188 | ||||||
Portfolio Recovery Associates, Inc. * | 3,645 | 255,660 | ||||||
Resource America, Inc., Class A | 15,200 | 74,024 | ||||||
Safeguard Scientifics, Inc. * | 5,500 | 93,005 | ||||||
Stifel Financial Corp. * | 17,760 | 566,011 | ||||||
SWS Group, Inc. | 91,020 | 501,520 | ||||||
The First Marblehead Corp. * | 48,000 | 46,080 | ||||||
Waddell & Reed Financial, Inc., Class A | 29,120 | 807,498 | ||||||
Walter Investment Management Corp. | 34,700 | 879,992 | ||||||
World Acceptance Corp. * | 10,660 | 721,149 | ||||||
14,477,987 | ||||||||
Energy 5.9% | ||||||||
Alon USA Energy, Inc. | 20,600 | 156,560 | ||||||
Approach Resources, Inc. (b)* | 3,800 | 92,758 | ||||||
ATP Oil & Gas Corp. (b)* | 26,785 | 282,582 | ||||||
Basic Energy Services, Inc. * | 40,185 | 736,993 | ||||||
Berry Petroleum Co., Class A | 17,620 | 608,771 | ||||||
Bill Barrett Corp. * | 14,840 | 617,344 | ||||||
BPZ Resources, Inc. (b)* | 20,600 | 61,594 | ||||||
Brigham Exploration Co. * | 6,835 | 248,897 | ||||||
Cal Dive International, Inc. * | 124,343 | 278,528 | ||||||
Callon Petroleum Co. * | 22,500 | 105,975 | ||||||
CARBO Ceramics, Inc. | 3,080 | 418,418 | ||||||
Carrizo Oil & Gas, Inc. * | 7,605 | 206,856 | ||||||
Clayton Williams Energy, Inc. * | 2,085 | 136,234 | ||||||
Clean Energy Fuels Corp. (b)* | 8,600 | 101,652 |
16 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cloud Peak Energy, Inc. * | 49,700 | 1,140,615 | ||||||
Cobalt International Energy, Inc. * | 20,700 | 213,624 | ||||||
Complete Production Services, Inc. * | 36,400 | 1,193,920 | ||||||
Comstock Resources, Inc. * | 41,855 | 763,435 | ||||||
Concho Resources, Inc. * | 10,440 | 988,877 | ||||||
Contango Oil & Gas Co. * | 5,560 | 357,730 | ||||||
Continental Resources, Inc. * | 5,000 | 303,250 | ||||||
Core Laboratories N.V. | 5,990 | �� | 648,477 | |||||
Crimson Exploration, Inc. * | 34,900 | 104,002 | ||||||
Crosstex Energy, Inc. | 82,200 | 1,071,066 | ||||||
Dawson Geophysical Co. * | 4,900 | 141,610 | ||||||
Delek US Holdings, Inc. | 11,100 | 160,728 | ||||||
Delta Petroleum Corp. * | 23,663 | 53,005 | ||||||
DHT Holdings, Inc. | 87,100 | 139,360 | ||||||
Dril-Quip, Inc. * | 8,185 | 532,844 | ||||||
Endeavour International Corp. * | 11,100 | 103,008 | ||||||
Energy Partners Ltd. * | 30,600 | 438,804 | ||||||
Energy XXI (Bermuda) Ltd. * | 17,000 | 499,290 | ||||||
ENGlobal Corp. * | 28,000 | 73,080 | ||||||
EXCO Resources, Inc. | 49,900 | 629,239 | ||||||
Gastar Exploration Ltd. * | 23,000 | 85,100 | ||||||
Geokinetics, Inc. * | 19,800 | 64,746 | ||||||
GeoResources, Inc. * | 3,200 | 84,928 | ||||||
Global Geophysical Services, Inc. * | 9,600 | 91,584 | ||||||
Global Industries Ltd. * | 85,465 | 679,447 | ||||||
GMX Resources, Inc. * | 45,500 | 113,750 | ||||||
Goodrich Petroleum Corp. (b)* | 13,700 | 217,145 | ||||||
Gran Tierra Energy, Inc. * | 51,900 | 315,552 | ||||||
Green Plains Renewable Energy, Inc. * | 8,500 | 88,910 | ||||||
Gulf Island Fabrication, Inc. | 9,400 | 261,790 | ||||||
GulfMark Offshore, Inc., Class A * | 20,105 | 836,167 | ||||||
Gulfport Energy Corp. * | 4,100 | 127,674 | ||||||
Harvest Natural Resources, Inc. (b)* | 11,750 | 125,373 | ||||||
Hercules Offshore, Inc. * | 236,700 | 897,093 | ||||||
Hornbeck Offshore Services, Inc. * | 28,780 | 945,135 | ||||||
InterOil Corp. (b)* | 5,400 | 256,554 | ||||||
ION Geophysical Corp. * | 34,605 | 263,690 | ||||||
James River Coal Co. * | 15,700 | 162,495 | ||||||
Knightsbridge Tankers Ltd. (b) | 16,290 | 274,975 | ||||||
Lufkin Industries, Inc. | 7,510 | 443,766 | ||||||
Magnum Hunter Resources Corp. (b)* | 15,354 | 69,093 | ||||||
Matrix Service Co. * | 24,000 | 254,880 | ||||||
McMoRan Exploration Co. * | 63,660 | 775,379 | ||||||
Miller Energy Resources, Inc. (b)* | 22,000 | 63,140 | ||||||
Mitcham Industries, Inc. * | 8,900 | 129,762 | ||||||
Natural Gas Services Group * | 6,800 | 93,568 | ||||||
Newpark Resources, Inc. * | 78,840 | 704,041 | ||||||
Nordic American Tanker Shipping Ltd. (b) | 39,885 | 575,142 | ||||||
Oilsands Quest, Inc. * | 329,900 | 85,774 | ||||||
OYO Geospace Corp. * | 1,000 | 78,580 | ||||||
Pacific Ethanol, Inc. (b)* | 109,642 | 50,435 | ||||||
Parker Drilling Co. * | 178,310 | 986,054 | ||||||
Patriot Coal Corp. * | 41,300 | 518,728 | ||||||
Penn Virginia Corp. | 66,700 | 406,203 | ||||||
Petroleum Development Corp. * | 11,855 | 309,534 | ||||||
PetroQuest Energy, Inc. * | 40,185 | 292,949 | ||||||
PHI, Inc. - Non Voting Shares * | 11,885 | 262,302 | ||||||
Pioneer Drilling Co. * | 51,700 | 511,313 | ||||||
Quicksilver Resources, Inc. * | 19,300 | 148,610 | ||||||
Resolute Energy Corp. * | 7,800 | 101,400 | ||||||
REX American Resources Corp. * | 8,300 | 151,392 | ||||||
Rex Energy Corp. * | 12,500 | 193,500 | ||||||
Rosetta Resources, Inc. * | 15,110 | 669,978 | ||||||
RPC, Inc. | 20,097 | 373,201 | ||||||
SandRidge Energy, Inc. * | 83,665 | 640,874 | ||||||
Stone Energy Corp. * | 36,500 | 886,585 | ||||||
Swift Energy Co. * | 26,005 | 796,273 | ||||||
Teekay Tankers Ltd., Class A (b) | 29,300 | 144,742 | ||||||
Tesco Corp. * | 25,400 | 392,938 | ||||||
TETRA Technologies, Inc. * | 70,760 | 672,220 | ||||||
Tsakos Energy Navigation Ltd. | 79,130 | 473,197 | ||||||
Union Drilling, Inc. * | 17,000 | 127,330 | ||||||
VAALCO Energy, Inc. * | 31,340 | 213,425 | ||||||
Vanguard Natural Resources LLC | 4,200 | 122,094 | ||||||
Vantage Drilling Co. * | 121,100 | 164,696 | ||||||
Venoco, Inc. * | 10,600 | 103,244 | ||||||
W&T Offshore, Inc. | 20,300 | 399,707 | ||||||
Warren Resources, Inc. * | 24,200 | 75,746 | ||||||
Willbros Group, Inc. * | 56,700 | 288,603 | ||||||
33,251,632 | ||||||||
Food & Staples Retailing 0.7% | ||||||||
Ingles Markets, Inc., Class A | 11,100 | 167,610 | ||||||
PriceSmart, Inc. | 15,840 | 1,204,473 | ||||||
Spartan Stores, Inc. | 33,400 | 571,808 | ||||||
Susser Holdings Corp. * | 18,300 | 401,868 | ||||||
The Andersons, Inc. | 18,625 | 687,635 | ||||||
The Fresh Market, Inc. * | 3,500 | 140,000 | ||||||
Village Super Market, Inc., Class A | 3,202 | 90,809 | ||||||
Weis Markets, Inc. | 11,800 | 466,690 | ||||||
3,730,893 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
Adecoagro SA * | 12,900 | 125,388 | ||||||
Alliance One International, Inc. * | 218,530 | 583,475 | ||||||
B&G Foods, Inc. | 37,700 | 799,994 | ||||||
Cal-Maine Foods, Inc. (b) | 16,000 | 533,120 | ||||||
Calavo Growers, Inc. | 7,700 | 173,789 | ||||||
Coca-Cola Bottling Co. Consolidated | 6,600 | 370,392 | ||||||
Darling International, Inc. * | 28,620 | 401,252 | ||||||
Diamond Foods, Inc. (b) | 6,700 | 440,525 | ||||||
Green Mountain Coffee Roasters, Inc. * | 16,480 | 1,071,530 | ||||||
Hansen Natural Corp. * | 12,155 | 1,082,889 | ||||||
Heckmann Corp. * | 27,200 | 162,928 | ||||||
Imperial Sugar Co. | 33,100 | 224,087 | ||||||
J & J Snack Foods Corp. | 7,935 | 409,208 | ||||||
Lancaster Colony Corp. | 13,865 | 922,300 | ||||||
National Beverage Corp. | 11,400 | 192,888 | ||||||
Omega Protein Corp. * | 12,700 | 137,541 | ||||||
Pilgrim’s Pride Corp. * | 85,900 | 432,936 | ||||||
Reddy Ice Holdings, Inc. * | 41,610 | 46,187 | ||||||
Sanderson Farms, Inc. | 22,800 | 1,128,600 | ||||||
Smart Balance, Inc. * | 64,200 | 420,510 | ||||||
Snyders-Lance, Inc. | 24,460 | 519,041 | ||||||
The Boston Beer Co., Inc., Class A * | 1,900 | 168,112 | ||||||
The Hain Celestial Group, Inc. * | 28,770 | 965,521 | ||||||
Tootsie Roll Industries, Inc. | 11,395 | 282,254 |
See financial notes 17
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
TreeHouse Foods, Inc. * | 18,785 | 1,152,272 | ||||||
Vector Group Ltd. (b) | 37,731 | 662,934 | ||||||
Zhongpin, Inc. (b)* | 12,000 | 110,760 | ||||||
13,520,433 | ||||||||
Health Care Equipment & Services 5.6% | ||||||||
Abaxis, Inc. * | 5,000 | 140,300 | ||||||
Accuray, Inc. * | 18,762 | 75,048 | ||||||
Air Methods Corp. * | 5,600 | 452,592 | ||||||
Align Technology, Inc. * | 16,500 | 379,995 | ||||||
Alliance HealthCare Services, Inc. * | 50,175 | 55,694 | ||||||
Almost Family, Inc. * | 4,000 | 74,560 | ||||||
Amedisys, Inc. * | 28,570 | 375,124 | ||||||
American Dental Partners, Inc. * | 10,400 | 109,824 | ||||||
AMN Healthcare Services, Inc. * | 69,245 | 328,221 | ||||||
AmSurg Corp. * | 34,225 | 866,919 | ||||||
Analogic Corp. | 5,265 | 284,731 | ||||||
AngioDynamics, Inc. * | 17,500 | 269,675 | ||||||
ArthroCare Corp. * | 8,100 | 244,215 | ||||||
Assisted Living Concepts, Inc., Class A | 14,640 | 208,034 | ||||||
athenahealth, Inc. * | 2,400 | 126,984 | ||||||
Atrion Corp. | 600 | 135,000 | ||||||
Bio-Reference Laboratories, Inc. * | 11,300 | 226,452 | ||||||
BioScrip, Inc. * | 90,200 | 586,300 | ||||||
Cantel Medical Corp. | 6,500 | 179,400 | ||||||
CardioNet, Inc. * | 22,900 | 64,807 | ||||||
Catalyst Health Solutions, Inc. * | 21,200 | 1,165,364 | ||||||
Chemed Corp. | 10,695 | 634,855 | ||||||
Chindex International, Inc. * | 7,100 | 78,881 | ||||||
Computer Programs & Systems, Inc. | 2,000 | 102,140 | ||||||
CONMED Corp. * | 26,295 | 690,770 | ||||||
CorVel Corp. * | 3,301 | 170,233 | ||||||
Cross Country Healthcare, Inc. * | 20,465 | 102,325 | ||||||
Emdeon, Inc., Class A * | 13,600 | 257,992 | ||||||
Emeritus Corp. * | 16,000 | 283,360 | ||||||
Ensign Group, Inc. | 4,020 | 91,495 | ||||||
Exactech, Inc. * | 5,600 | 89,600 | ||||||
Five Star Quality Care, Inc. * | 57,400 | 148,666 | ||||||
Gen-Probe, Inc. * | 12,715 | 764,171 | ||||||
Gentiva Health Services, Inc. * | 27,025 | 111,884 | ||||||
Greatbatch, Inc. * | 19,120 | 426,950 | ||||||
Haemonetics Corp. * | 11,100 | 676,545 | ||||||
Hanger Orthopedic Group, Inc. * | 15,200 | 264,024 | ||||||
HEALTHSOUTH Corp. * | 45,200 | 798,232 | ||||||
Healthspring, Inc. * | 26,600 | 1,434,804 | ||||||
Healthways, Inc. * | 40,960 | 293,274 | ||||||
HMS Holdings Corp. * | 10,200 | 249,288 | ||||||
ICU Medical, Inc. * | 5,050 | 198,516 | ||||||
IDEXX Laboratories, Inc. * | 12,800 | 921,472 | ||||||
Integra LifeSciences Holdings * | 7,920 | 253,915 | ||||||
Invacare Corp. | 29,365 | 659,244 | ||||||
IPC The Hospitalist Co. * | 4,600 | 192,878 | ||||||
Kensey Nash Corp. * | 4,400 | 118,272 | ||||||
Landauer, Inc. | 4,250 | 217,813 | ||||||
LCA-Vision, Inc. * | 22,830 | 73,741 | ||||||
LHC Group, Inc. * | 7,360 | 115,478 | ||||||
Masimo Corp. | 10,600 | 219,208 | ||||||
MedAssets, Inc. * | 19,700 | 210,002 | ||||||
Medical Action Industries, Inc. * | 22,800 | 119,472 | ||||||
MedQuist Holdings, Inc. * | 10,900 | 93,195 | ||||||
Meridian Bioscience, Inc. | 11,525 | 209,986 | ||||||
Merit Medical Systems, Inc. * | 16,775 | 225,121 | ||||||
Metropolitan Health Networks, Inc. * | 24,433 | 159,303 | ||||||
Molina Healthcare, Inc. * | 41,257 | 873,823 | ||||||
MWI Veterinary Supply, Inc. * | 6,900 | 520,950 | ||||||
National Healthcare Corp. | 6,750 | 258,592 | ||||||
Natus Medical, Inc. * | 14,600 | 125,560 | ||||||
Neogen Corp. * | 3,800 | 146,870 | ||||||
NuVasive, Inc. * | 5,400 | 80,028 | ||||||
Omnicell, Inc. * | 16,200 | 242,190 | ||||||
Orthofix International N.V. * | 13,860 | 486,625 | ||||||
PharMerica Corp. * | 75,340 | 1,175,304 | ||||||
PSS World Medical, Inc. * | 41,170 | 916,032 | ||||||
Quality Systems, Inc. | 8,660 | 336,961 | ||||||
Quidel Corp. * | 11,900 | 212,534 | ||||||
RadNet, Inc. * | 36,000 | 92,520 | ||||||
ResMed, Inc. * | 32,540 | 920,882 | ||||||
RTI Biologics, Inc. * | 56,800 | 255,600 | ||||||
Select Medical Holdings Corp. * | 60,200 | 523,740 | ||||||
Sirona Dental Systems, Inc. * | 14,290 | 684,491 | ||||||
Skilled Healthcare Group, Inc., Class A * | 20,360 | 76,961 | ||||||
SonoSite, Inc. * | 5,680 | 176,023 | ||||||
Sunrise Senior Living, Inc. * | 83,500 | 459,250 | ||||||
SurModics, Inc. * | 12,660 | 133,436 | ||||||
Symmetry Medical, Inc. * | 26,870 | 244,248 | ||||||
Syneron Medical Ltd. * | 11,300 | 127,916 | ||||||
Team Health Holdings, Inc. * | 10,500 | 213,360 | ||||||
The Providence Service Corp. * | 13,000 | 162,500 | ||||||
Thoratec Corp. * | 15,000 | 547,650 | ||||||
Triple-S Management Corp., Class B * | 23,800 | 452,200 | ||||||
U.S. Physical Therapy, Inc. | 7,000 | 136,640 | ||||||
Volcano Corp. * | 4,000 | 99,720 | ||||||
WellCare Health Plans, Inc. * | 30,000 | 1,470,300 | ||||||
West Pharmaceutical Services, Inc. | 20,540 | 798,390 | ||||||
Wright Medical Group, Inc. * | 13,440 | 231,034 | ||||||
Zoll Medical Corp. * | 7,125 | 269,396 | ||||||
31,458,070 | ||||||||
Household & Personal Products 0.8% | ||||||||
American Oriental Bioengineering, Inc. (b)* | 149,000 | 114,760 | ||||||
Central Garden & Pet Co. * | 26,600 | 230,090 | ||||||
Central Garden & Pet Co., Class A * | 83,730 | 735,987 | ||||||
Elizabeth Arden, Inc. * | 23,470 | 804,551 | ||||||
Inter Parfums, Inc. | 6,550 | 120,782 | ||||||
Nu Skin Enterprises, Inc., Class A | 28,610 | 1,445,663 | ||||||
Nutraceutical International Corp. * | 6,400 | 88,320 | ||||||
Prestige Brands Holdings, Inc. * | 20,510 | 216,996 | ||||||
Revlon, Inc., Class A * | 14,100 | 207,693 | ||||||
Schiff Nutrition International, Inc. * | 12,500 | 152,750 | ||||||
USANA Health Sciences, Inc. * | 3,930 | 135,978 | ||||||
WD-40 Co. | 8,915 | 392,438 | ||||||
4,646,008 | ||||||||
Insurance 2.5% | ||||||||
American Equity Investment Life Holding Co. | 64,915 | 703,679 | ||||||
American National Insurance Co. | 5,500 | 393,030 |
18 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
American Safety Insurance Holdings Ltd. * | 10,400 | 212,264 | ||||||
AMERISAFE, Inc. * | 17,200 | 370,660 | ||||||
AmTrust Financial Services, Inc. | 15,180 | 385,268 | ||||||
Argo Group International Holdings Ltd. | 24,859 | 750,493 | ||||||
Citizens, Inc. * | 23,980 | 188,003 | ||||||
CNA Financial Corp. | 24,000 | 638,400 | ||||||
eHealth, Inc. * | 10,000 | 148,500 | ||||||
Employers Holdings, Inc. | 30,900 | 501,198 | ||||||
Enstar Group Ltd. * | 3,710 | 341,209 | ||||||
FBL Financial Group, Inc., Class A | 16,000 | 522,400 | ||||||
Flagstone Reinsurance Holdings S.A. | 56,400 | 478,836 | ||||||
Global Indemnity plc * | 10,670 | 215,427 | ||||||
Greenlight Capital Re Ltd., Class A * | 14,100 | 317,673 | ||||||
Hallmark Financial Services, Inc. * | 15,000 | 116,400 | ||||||
Harleysville Group, Inc. | 12,635 | �� | 742,433 | |||||
Hilltop Holdings, Inc. * | 27,670 | 218,040 | ||||||
Horace Mann Educators Corp. | 47,290 | 636,051 | ||||||
Infinity Property & Casualty Corp. | 12,065 | 699,287 | ||||||
Kansas City Life Insurance Co. | 2,977 | 99,789 | ||||||
Maiden Holdings Ltd. | 66,500 | 541,975 | ||||||
Meadowbrook Insurance Group, Inc. | 36,700 | 380,212 | ||||||
National Financial Partners Corp. * | 52,885 | 722,938 | ||||||
National Western Life Insurance Co., Class A | 900 | 129,393 | ||||||
OneBeacon Insurance Group Ltd., Class A | 23,600 | 359,192 | ||||||
Presidential Life Corp. | 20,745 | 205,790 | ||||||
Safety Insurance Group, Inc. | 13,805 | 588,369 | ||||||
Seabright Holdings, Inc. | 31,500 | 226,170 | ||||||
State Auto Financial Corp. | 10,230 | 135,957 | ||||||
Stewart Information Services Corp. | 33,500 | 336,340 | ||||||
The Navigators Group, Inc. * | 10,165 | 463,727 | ||||||
Tower Group, Inc. | 26,200 | 621,726 | ||||||
United Fire & Casualty Co. | 19,260 | 362,281 | ||||||
Universal Insurance Holdings, Inc. | 28,800 | 121,536 | ||||||
13,874,646 | ||||||||
Materials 5.5% | ||||||||
A. M. Castle & Co. * | 23,478 | 321,414 | ||||||
A. Schulman, Inc. | 38,933 | 821,876 | ||||||
AEP Industries, Inc. * | 4,740 | 128,122 | ||||||
Allied Nevada Gold Corp. * | 3,600 | 136,728 | ||||||
AMCOL International Corp. | 15,320 | 462,511 | ||||||
American Vanguard Corp. | 18,300 | 226,371 | ||||||
Balchem Corp. | 4,100 | 151,167 | ||||||
Boise, Inc. | 98,600 | 596,530 | ||||||
Buckeye Technologies, Inc. | 19,580 | 592,099 | ||||||
Calgon Carbon Corp. * | 17,900 | 285,505 | ||||||
Century Aluminum Co. * | 68,900 | 768,924 | ||||||
Clearwater Paper Corp. * | 20,760 | 687,779 | ||||||
Coeur d’Alene Mines Corp. * | 37,100 | 948,647 | ||||||
Compass Minerals International, Inc. | 8,330 | 633,663 | ||||||
Deltic Timber Corp. | 3,500 | 236,915 | ||||||
Eagle Materials, Inc. | 26,970 | 555,043 | ||||||
Ferro Corp. * | 67,030 | 433,684 | ||||||
General Steel Holdings, Inc. (b)* | 104,500 | 128,535 | ||||||
Georgia Gulf Corp. * | 35,324 | 639,364 | ||||||
Globe Specialty Metals, Inc. | 13,600 | 226,712 | ||||||
Graphic Packaging Holding Co. * | 106,400 | 470,288 | ||||||
H.B. Fuller Co. | 42,580 | 915,044 | ||||||
Handy & Harman Ltd. * | 12,600 | 151,200 | ||||||
Hawkins, Inc. | 4,500 | 172,260 | ||||||
Haynes International, Inc. | 6,876 | 402,177 | ||||||
Headwaters, Inc. * | 134,980 | 237,565 | ||||||
Hecla Mining Co. * | 60,345 | 378,363 | ||||||
Horsehead Holding Corp. * | 26,300 | 228,284 | ||||||
Innophos Holdings, Inc. | 10,450 | 459,696 | ||||||
Innospec, Inc. * | 13,880 | 419,176 | ||||||
Intrepid Potash, Inc. * | 11,300 | 314,479 | ||||||
Kaiser Aluminum Corp. | 13,380 | 621,635 | ||||||
KapStone Paper & Packaging Corp. * | 23,100 | 378,840 | ||||||
Koppers Holdings, Inc. | 14,960 | 495,026 | ||||||
Kraton Performance Polymers, Inc. * | 21,700 | 427,056 | ||||||
Landec Corp. * | 25,400 | 157,734 | ||||||
LSB Industries, Inc. * | 8,220 | 291,235 | ||||||
Materion Corp. * | 13,360 | 353,238 | ||||||
Mercer International, Inc. * | 29,100 | 200,208 | ||||||
Metals USA Holdings Corp. * | 19,500 | 212,355 | ||||||
Minerals Technologies, Inc. | 12,910 | 707,984 | ||||||
Myers Industries, Inc. | 34,205 | 417,985 | ||||||
Neenah Paper, Inc. | 17,665 | 291,473 | ||||||
NewMarket Corp. | 6,295 | 1,222,111 | ||||||
Noranda Aluminum Holding Corp. * | 10,300 | 95,378 | ||||||
Olympic Steel, Inc. | 15,000 | 306,750 | ||||||
OM Group, Inc. * | 33,635 | 972,388 | ||||||
Omnova Solutions, Inc. * | 53,280 | 236,030 | ||||||
P.H. Glatfelter Co. | 63,045 | 945,675 | ||||||
PolyOne Corp. | 85,700 | 958,983 | ||||||
Qiao Xing Universal Resources, Inc. (b)* | 82,700 | 72,776 | ||||||
Quaker Chemical Corp. | 7,500 | 260,925 | ||||||
Royal Gold, Inc. | 13,850 | 991,383 | ||||||
RTI International Metals, Inc. * | 25,780 | 680,334 | ||||||
Schnitzer Steel Industries, Inc., Class A | 17,010 | 796,068 | ||||||
Schweitzer-Mauduit International, Inc. | 10,986 | 772,536 | ||||||
Spartech Corp. * | 62,665 | 254,420 | ||||||
Stepan Co. | 8,565 | 661,989 | ||||||
Stillwater Mining Co. * | 22,070 | 250,715 | ||||||
Texas Industries, Inc. (b) | 19,185 | 575,550 | ||||||
Titanium Metals Corp. | 32,050 | 536,837 | ||||||
TPC Group, Inc. * | 24,600 | 488,802 | ||||||
Universal Stainless & Alloy Products, Inc. * | 5,900 | 222,135 | ||||||
Verso Paper Corp. * | 30,600 | 55,998 | ||||||
Walter Energy, Inc. | 7,675 | 580,614 | ||||||
Wausau Paper Corp. | 77,610 | 582,075 | ||||||
Westlake Chemical Corp. | 10,600 | 436,826 | ||||||
Yongye International, Inc. * | 16,100 | 81,144 | ||||||
Zep, Inc. | 15,300 | 233,172 | ||||||
Zoltek Cos., Inc. * | 17,400 | 126,150 | ||||||
31,082,654 | ||||||||
Media 2.5% | ||||||||
AH Belo Corp., Class A | 21,900 | 109,500 | ||||||
Arbitron, Inc. | 8,960 | 355,981 | ||||||
Belo Corp., Class A | 116,500 | 738,610 |
See financial notes 19
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Carmike Cinemas, Inc. * | 32,275 | 209,142 | ||||||
Central European Media Enterprises Ltd., Class A * | 50,200 | 554,208 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 26,700 | 293,700 | ||||||
CTC Media, Inc. | 12,100 | 139,271 | ||||||
DG Fastchannel, Inc. * | 8,100 | 150,984 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 35,600 | 660,380 | ||||||
Entercom Communications Corp., Class A * | 33,300 | 218,448 | ||||||
Fisher Communications, Inc. * | 5,100 | 148,104 | ||||||
Gray Television, Inc. * | 51,200 | 97,280 | ||||||
Harte-Hanks, Inc. | 54,335 | 477,061 | ||||||
Journal Communications, Inc., Class A * | 44,715 | 172,600 | ||||||
Knology, Inc. * | 19,700 | 282,301 | ||||||
Lee Enterprises, Inc. * | 94,750 | 67,273 | ||||||
Liberty Media Corp. - Liberty Capital, Class A * | 11,300 | 868,066 | ||||||
LIN TV Corp., Class A * | 29,633 | 92,455 | ||||||
Lions Gate Entertainment Corp. * | 88,900 | 730,758 | ||||||
LodgeNet Interactive Corp. (b)* | 92,550 | 185,100 | ||||||
Media General, Inc., Class A (b)* | 50,570 | 152,721 | ||||||
Meredith Corp. | 24,000 | 643,920 | ||||||
Morningstar, Inc. | 5,735 | 338,193 | ||||||
National CineMedia, Inc. | 20,500 | 248,050 | ||||||
Radio One, Inc., Class D * | 58,130 | 76,150 | ||||||
Scholastic Corp. | 37,300 | 1,001,505 | ||||||
Scripps Networks Interactive, Class A | 22,700 | 964,296 | ||||||
Sinclair Broadcast Group, Inc., Class A | 19,119 | 183,160 | ||||||
Sirius XM Radio, Inc. * | 221,000 | 395,590 | ||||||
The E.W. Scripps Co., Class A * | 92,000 | 767,280 | ||||||
The Madison Square Garden, Inc., Class A * | 32,700 | 864,261 | ||||||
The McClatchy Co., Class A * | 219,400 | 344,458 | ||||||
The Washington Post Co., Class B | 2,231 | 758,897 | ||||||
Valassis Communications, Inc. * | 36,185 | 706,693 | ||||||
World Wrestling Entertainment, Inc., Class A (b) | 25,100 | 263,801 | ||||||
14,260,197 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.5% | ||||||||
Affymetrix, Inc. * | 77,990 | 435,964 | ||||||
Albany Molecular Research, Inc. * | 30,700 | 98,547 | ||||||
Alexion Pharmaceuticals, Inc. * | 8,400 | 567,084 | ||||||
Alkermes PLC * | 25,100 | 438,999 | ||||||
Alnylam Pharmaceuticals, Inc. * | 9,100 | 73,892 | ||||||
Amylin Pharmaceuticals, Inc. * | 25,400 | 292,608 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 8,800 | 876,040 | ||||||
BioMarin Pharmaceuticals, Inc. * | 8,200 | 279,702 | ||||||
Bruker Corp. * | 13,385 | 193,146 | ||||||
Cambrex Corp. * | 20,629 | 113,666 | ||||||
Cepheid, Inc. * | 4,400 | 157,872 | ||||||
Cubist Pharmaceuticals, Inc. * | 16,640 | 629,158 | ||||||
Dendreon Corp. * | 7,000 | 76,580 | ||||||
Emergent Biosolutions, Inc. * | 10,100 | 190,486 | ||||||
Enzon Pharmaceuticals, Inc. * | 12,300 | 90,405 | ||||||
eResearch Technology, Inc. * | 26,600 | 135,926 | ||||||
Human Genome Sciences, Inc. * | 15,000 | 153,900 | ||||||
Illumina, Inc. * | 10,060 | 308,037 | ||||||
Impax Laboratories, Inc. * | 12,900 | 243,939 | ||||||
Isis Pharmaceuticals, Inc. * | 17,200 | 142,588 | ||||||
K-V Pharmaceutical Co., Class A (b)* | 38,164 | 42,362 | ||||||
Luminex Corp. * | 7,700 | 169,092 | ||||||
Medicis Pharmaceutical Corp., Class A | 17,625 | 674,861 | ||||||
Myriad Genetics, Inc. * | 25,740 | 547,747 | ||||||
Obagi Medical Products, Inc. * | 9,000 | 84,960 | ||||||
Onyx Pharmaceuticals, Inc. * | 11,500 | 470,695 | ||||||
Par Pharmaceutical Cos., Inc. * | 19,370 | 592,722 | ||||||
PAREXEL International Corp. * | 35,220 | 775,897 | ||||||
PDL BioPharma, Inc. | 188,150 | 1,142,071 | ||||||
Regeneron Pharmaceuticals, Inc. * | 7,300 | 403,690 | ||||||
Salix Pharmaceuticals Ltd. * | 7,195 | 246,465 | ||||||
Seattle Genetics, Inc. * | 7,000 | 154,000 | ||||||
Techne Corp. | 8,065 | 554,872 | ||||||
The Medicines Co. * | 8,320 | 155,750 | ||||||
United Therapeutics Corp. * | 5,820 | 254,509 | ||||||
Vertex Pharmaceuticals, Inc. * | 13,700 | 542,383 | ||||||
ViroPharma, Inc. * | 36,360 | 735,926 | ||||||
VIVUS, Inc. * | 13,300 | 125,419 | ||||||
Warner Chilcott plc, Class A * | 35,600 | 645,072 | ||||||
13,817,032 | ||||||||
Real Estate 6.4% | ||||||||
Acadia Realty Trust | 27,074 | 560,973 | ||||||
Agree Realty Corp. | 6,300 | 150,633 | ||||||
Alexander’s, Inc. | 320 | 138,784 | ||||||
Altisource Portfolio Solutions S.A. * | 6,000 | 241,500 | ||||||
American Assets Trust, Inc. | 4,900 | 99,323 | ||||||
American Campus Communities, Inc. | 23,860 | 928,870 | ||||||
American Capital Agency Corp. | 15,300 | 420,903 | ||||||
Anworth Mortgage Asset Corp. | 131,355 | 847,240 | ||||||
Arbor Realty Trust, Inc. * | 15,300 | 55,233 | ||||||
Ashford Hospitality Trust | 105,785 | 941,486 | ||||||
Associated Estates Reality Corp. | 10,900 | 185,082 | ||||||
Avatar Holdings, Inc. * | 11,645 | 110,628 | ||||||
CapLease, Inc. | 51,200 | 200,192 | ||||||
Capstead Mortgage Corp. | 77,650 | 941,118 | ||||||
Cedar Shopping Centers, Inc. | 79,945 | 293,398 | ||||||
Cogdell Spencer, Inc. | 39,200 | 158,368 | ||||||
Colony Financial, Inc. | 4,600 | 67,482 | ||||||
Cousins Properties, Inc. | 102,083 | 669,664 | ||||||
CreXus Investment Corp. | 7,500 | 71,700 | ||||||
CubeSmart | 76,975 | 755,125 | ||||||
CYS Investments, Inc. (b) | 35,400 | 448,872 | ||||||
DiamondRock Hospitality Co. | 100,587 | 910,312 | ||||||
DuPont Fabros Technology, Inc. | 13,400 | 278,586 | ||||||
Dynex Capital, Inc. | 9,600 | 84,096 | ||||||
EastGroup Properties, Inc. | 16,450 | 717,385 | ||||||
Education Realty Trust, Inc. | 48,500 | 448,625 | ||||||
Equity Lifestyle Properties, Inc. | 9,970 | 659,316 | ||||||
Equity One, Inc. | 32,800 | 562,520 | ||||||
Extra Space Storage, Inc. | 47,865 | 1,078,398 | ||||||
FelCor Lodging Trust, Inc. * | 100,850 | 303,559 | ||||||
First Industrial Realty Trust, Inc. * | 102,900 | 1,013,565 | ||||||
First Potomac Realty Trust | 31,500 | 447,615 | ||||||
Forestar Group, Inc. * | 19,860 | 258,180 |
20 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Franklin Street Properties Corp. | 51,120 | 649,224 | ||||||
Getty Realty Corp. | 9,060 | 144,416 | ||||||
Gladstone Commercial Corp. | 7,600 | 127,908 | ||||||
Glimcher Realty Trust | 81,525 | 746,769 | ||||||
Government Properties Income Trust | 6,800 | 160,004 | ||||||
Gramercy Capital Corp. * | 127,100 | 378,758 | ||||||
Grubb & Ellis Co. * | 96,000 | 43,200 | ||||||
Healthcare Realty Trust, Inc. | 49,200 | 929,388 | ||||||
Hersha Hospitality Trust | 59,940 | 264,335 | ||||||
HomeBanc Corp. (b)(c)(d)* | 6,875 | — | ||||||
Inland Real Estate Corp. | 87,530 | 656,475 | ||||||
Invesco Mortgage Capital, Inc. | 6,500 | 102,570 | ||||||
Investors Real Estate Trust | 70,025 | 518,885 | ||||||
Kite Realty Group Trust | 73,580 | 303,885 | ||||||
LaSalle Hotel Properties | 40,840 | 976,484 | ||||||
LTC Properties, Inc. | 11,230 | 318,483 | ||||||
Medical Properties Trust, Inc. | 63,300 | 639,330 | ||||||
Mid-America Apartment Communities, Inc. | 14,845 | 926,328 | ||||||
Mission West Properties, Inc. | 23,800 | 185,164 | ||||||
Monmouth Real Estate Investment Corp., Class A | 22,600 | 189,840 | ||||||
MPG Office Trust, Inc. * | 119,420 | 285,414 | ||||||
National Health Investors, Inc. | 10,435 | 466,340 | ||||||
New York Mortgage Trust, Inc. | 14,100 | 98,700 | ||||||
Newcastle Investment Corp. | 132,800 | 609,552 | ||||||
NorthStar Realty Finance Corp. | 180,532 | 713,101 | ||||||
OMEGA Healthcare Investors, Inc. | 38,290 | 680,030 | ||||||
One Liberty Properties, Inc. | 12,003 | 195,169 | ||||||
Parkway Properties, Inc. | 34,720 | 446,152 | ||||||
Post Properties, Inc. | 29,420 | 1,208,574 | ||||||
PS Business Parks, Inc. | 9,750 | 518,993 | ||||||
RAIT Financial Trust (b) | 114,120 | 593,424 | ||||||
Ramco-Gershenson Properties Trust | 37,070 | 357,726 | ||||||
Resource Capital Corp. | 56,900 | 305,553 | ||||||
Sabra Health Care REIT, Inc. | 48,033 | 493,299 | ||||||
Saul Centers, Inc. | 6,605 | 236,723 | ||||||
Sovran Self Storage, Inc. | 20,870 | 922,454 | ||||||
Strategic Hotel & Resorts, Inc. * | 119,355 | 679,130 | ||||||
Sun Communities, Inc. | 14,955 | 569,486 | ||||||
Tanger Factory Outlet Centers, Inc. | 28,480 | 801,997 | ||||||
Taubman Centers, Inc. | 16,095 | 985,497 | ||||||
The Howard Hughes Corp. * | 14,800 | 710,104 | ||||||
The St. Joe Co. (b)* | 29,170 | 418,590 | ||||||
Universal Health Realty Income Trust | 3,900 | 148,083 | ||||||
Urstadt Biddle Properties, Inc., Class A | 14,795 | 263,943 | ||||||
Winthrop Realty Trust | 13,500 | 122,175 | ||||||
36,140,386 | ||||||||
Retailing 5.1% | ||||||||
1-800-FLOWERS.COM, Inc., Class A * | 54,947 | 156,599 | ||||||
99 Cents Only Stores * | 36,240 | 790,032 | ||||||
America’s Car-Mart, Inc. * | 7,100 | 236,998 | ||||||
Audiovox Corp., Class A * | 31,420 | 223,396 | ||||||
bebe stores, Inc. | 44,590 | 320,156 | ||||||
Big 5 Sporting Goods Corp. | 19,240 | 148,725 | ||||||
Blue Nile, Inc. (b)* | 1,700 | 76,721 | ||||||
Brown Shoe Co., Inc. | 69,542 | 619,619 | ||||||
Build-A-Bear Workshop, Inc. * | 37,050 | 242,678 | ||||||
Casual Male Retail Group, Inc. * | 53,800 | 223,270 | ||||||
Christopher & Banks Corp. | 51,840 | 172,627 | ||||||
Citi Trends, Inc. * | 9,500 | 117,705 | ||||||
Coldwater Creek, Inc. * | 131,060 | 137,613 | ||||||
Conn’s, Inc. (b)* | 77,489 | 713,674 | ||||||
Cost Plus, Inc. * | 34,800 | 274,572 | ||||||
Destination Maternity Corp. | 4,700 | 77,879 | ||||||
Dollar General Corp. * | 35,800 | 1,419,828 | ||||||
DSW, Inc., Class A | 24,368 | 1,275,421 | ||||||
Express, Inc. | 9,000 | 203,310 | ||||||
Fred’s, Inc., Class A | 51,770 | 631,076 | ||||||
Genesco, Inc. * | 25,600 | 1,508,864 | ||||||
Guess?, Inc. | 13,755 | 453,777 | ||||||
hhgregg, Inc. (b)* | 16,600 | 211,650 | ||||||
Hibbett Sports, Inc. * | 11,785 | 485,424 | ||||||
Hot Topic, Inc. | 97,600 | 737,856 | ||||||
Jos. A. Bank Clothiers, Inc. * | 13,385 | 715,294 | ||||||
Kirkland’s, Inc. * | 9,622 | 108,151 | ||||||
Lithia Motors, Inc., Class A | 51,935 | 1,068,303 | ||||||
Lumber Liquidators Holdings, Inc. * | 7,900 | 118,263 | ||||||
MarineMax, Inc. * | 35,500 | 288,970 | ||||||
Midas, Inc. * | 13,600 | 124,032 | ||||||
Monro Muffler Brake, Inc. | 9,440 | 350,130 | ||||||
New York & Co, Inc. * | 32,100 | 85,707 | ||||||
Nutrisystem, Inc. | 32,530 | 402,071 | ||||||
Orbitz Worldwide, Inc. * | 66,300 | 125,307 | ||||||
Overstock.com, Inc. * | 9,760 | 81,008 | ||||||
Pacific Sunwear of California, Inc. * | 161,330 | 201,663 | ||||||
PetMed Express, Inc. | 6,500 | 64,805 | ||||||
Pier 1 Imports, Inc. * | 57,685 | 721,639 | ||||||
Pool Corp. | 37,180 | 1,086,400 | ||||||
Rue21, Inc. * | 4,700 | 125,208 | ||||||
Sally Beauty Holdings, Inc. * | 57,965 | 1,112,348 | ||||||
Select Comfort Corp. * | 33,270 | 691,018 | ||||||
Shoe Carnival, Inc. * | 10,700 | 292,003 | ||||||
Shutterfly, Inc. * | 4,700 | 195,849 | ||||||
Stage Stores, Inc. | 43,955 | 687,017 | ||||||
Stein Mart, Inc. | 59,815 | 433,659 | ||||||
Systemax, Inc. * | 22,045 | 333,541 | ||||||
The Bon-Ton Stores, Inc. (b) | 39,511 | 208,618 | ||||||
The Buckle, Inc. | 16,522 | 736,220 | ||||||
The Cato Corp., Class A | 23,995 | 614,992 | ||||||
The Children’s Place Retail Stores, Inc. * | 26,360 | 1,237,602 | ||||||
The Finish Line, Inc., Class A | 37,152 | 746,755 | ||||||
The Pep Boys - Manny, Moe & Jack | 76,115 | 875,323 | ||||||
The Talbots, Inc. (b)* | 120,680 | 317,388 | ||||||
The Wet Seal, Inc., Class A * | 92,160 | 386,150 | ||||||
TravelCenters of America L.L.C. * | 33,100 | 164,838 | ||||||
Tuesday Morning Corp. * | 65,730 | 237,943 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 11,100 | 746,919 | ||||||
ValueVision Media, Inc., Class A * | 26,920 | 88,298 | ||||||
Vitamin Shoppe, Inc. * | 12,100 | 456,291 | ||||||
West Marine, Inc. * | 26,080 | 237,067 | ||||||
Zale Corp. * | 207,200 | 764,568 | ||||||
Zumiez, Inc. * | 8,780 | 199,745 | ||||||
28,890,573 |
See financial notes 21
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Semiconductors & Semiconductor Equipment 3.3% | ||||||||
Advanced Energy Industries, Inc. * | 19,720 | 184,185 | ||||||
Alpha & Omega Semiconductor Ltd. * | 11,100 | 93,795 | ||||||
ANADIGICS, Inc. * | 25,000 | 65,750 | ||||||
Applied Micro Circuits Corp. * | 19,440 | 131,026 | ||||||
ATMI, Inc. * | 22,415 | 457,266 | ||||||
Axcelis Technologies, Inc. * | 71,760 | 100,464 | ||||||
Brooks Automation, Inc. | 31,790 | 332,206 | ||||||
Cabot Microelectronics Corp. * | 10,330 | 397,912 | ||||||
Canadian Solar, Inc. (b)* | 17,700 | 61,065 | ||||||
CEVA, Inc. * | 4,200 | 130,494 | ||||||
Cirrus Logic, Inc. * | 8,235 | 137,030 | ||||||
Cohu, Inc. | 14,610 | 162,025 | ||||||
Cymer, Inc. * | 12,420 | 539,649 | ||||||
Cypress Semiconductor Corp. * | 34,405 | 657,480 | ||||||
Diodes, Inc. * | 13,297 | 297,454 | ||||||
DSP Group, Inc. * | 28,440 | 175,759 | ||||||
Energy Conversion Devices, Inc. (b)* | 79,330 | 38,872 | ||||||
Entegris, Inc. * | 55,745 | 499,475 | ||||||
Exar Corp. * | 24,115 | 147,343 | ||||||
Fairchild Semiconductor International, Inc. * | 68,500 | 1,025,445 | ||||||
FormFactor, Inc. * | 38,565 | 230,619 | ||||||
GT Advanced Technologies, Inc. * | 32,100 | 263,220 | ||||||
Hittite Microwave Corp. * | 4,255 | 223,813 | ||||||
Integrated Device Technology, Inc. * | 92,980 | 565,318 | ||||||
Integrated Silicon Solutions, Inc. * | 16,200 | 149,202 | ||||||
International Rectifier Corp. * | 34,800 | 845,292 | ||||||
IXYS Corp. * | 9,700 | 132,599 | ||||||
Kopin Corp. * | 25,900 | 104,895 | ||||||
Kulicke & Soffa Industries, Inc. * | 44,580 | 430,197 | ||||||
Lattice Semiconductor Corp. * | 38,000 | 240,540 | ||||||
LTX-Credence Corp. * | 16,400 | 103,812 | ||||||
Mattson Technology, Inc. * | 38,600 | 52,110 | ||||||
Micrel, Inc. | 15,950 | 175,769 | ||||||
Microsemi Corp. * | 31,545 | 582,321 | ||||||
MKS Instruments, Inc. | 24,050 | 640,692 | ||||||
Monolithic Power Systems * | 12,900 | 160,734 | ||||||
Netlogic Microsystems, Inc. * | 6,290 | 309,468 | ||||||
NXP Semiconductor N.V. * | 7,900 | 141,963 | ||||||
OmniVision Technologies, Inc. * | 16,880 | 275,313 | ||||||
Pericom Semiconductor Corp. * | 16,800 | 142,632 | ||||||
Photronics, Inc. * | 69,125 | 433,414 | ||||||
PMC-Sierra, Inc. * | 110,225 | 698,826 | ||||||
Power Integrations, Inc. | 4,860 | 173,162 | ||||||
Rambus, Inc. * | 12,900 | 228,717 | ||||||
RF Micro Devices, Inc. * | 99,945 | 733,596 | ||||||
Rudolph Technologies, Inc. * | 10,300 | 75,911 | ||||||
Semtech Corp. * | 16,205 | 395,726 | ||||||
Sigma Designs, Inc. * | 18,950 | 158,043 | ||||||
Silicon Image, Inc. * | 25,360 | 163,318 | ||||||
Silicon Laboratories, Inc. * | 10,090 | 431,348 | ||||||
Standard Microsystems Corp. * | 13,890 | 343,916 | ||||||
STR Holdings, Inc. * | 13,500 | 115,425 | ||||||
SunPower Corp., Class A (b)* | 40,400 | 404,808 | ||||||
SunPower Corp., Class B * | 27,069 | 255,802 | ||||||
Supertex, Inc. * | 6,300 | 116,298 | ||||||
Tessera Technologies, Inc. * | 38,290 | 527,253 | ||||||
TriQuint Semiconductor, Inc. * | 35,360 | 188,115 | ||||||
Ultra Clean Holdings, Inc. * | 16,800 | 92,064 | ||||||
Ultratech, Inc. * | 7,200 | 156,960 | ||||||
Varian Semiconductor Equipment Associates, Inc. * | 18,612 | 1,168,275 | ||||||
Veeco Instruments, Inc. * | 8,360 | 223,128 | ||||||
Volterra Semiconductor Corp. * | 4,700 | 111,390 | ||||||
18,600,699 | ||||||||
Software & Services 7.7% | ||||||||
ACI Worldwide, Inc. * | 10,900 | 334,303 | ||||||
Actuate Corp. * | 22,200 | 144,300 | ||||||
Acxiom Corp. * | 63,415 | 836,444 | ||||||
Advent Software, Inc. * | 9,720 | 266,328 | ||||||
American Software, Inc., Class A | 17,400 | 136,068 | ||||||
Ancestry.com, Inc. * | 6,700 | 152,559 | ||||||
ANSYS, Inc. * | 19,500 | 1,060,020 | ||||||
Ariba, Inc. * | 12,445 | 394,258 | ||||||
AsiaInfo-Linkage, Inc. (b)* | 20,200 | 202,404 | ||||||
Blackbaud, Inc. | 12,000 | 336,360 | ||||||
Bottomline Technologies, Inc. * | 6,900 | 167,601 | ||||||
Cadence Design Systems, Inc. * | 90,900 | 1,006,263 | ||||||
Cardtronics, Inc. * | 14,700 | 366,471 | ||||||
Cass Information Systems, Inc. | 3,100 | 121,489 | ||||||
CIBER, Inc. * | 148,170 | 515,632 | ||||||
CommVault Systems, Inc. * | 4,800 | 204,384 | ||||||
Computer Task Group, Inc. * | 9,400 | 120,038 | ||||||
Concur Technologies, Inc. * | 9,100 | 423,332 | ||||||
CSG Systems International, Inc. * | 25,245 | 359,489 | ||||||
DealerTrack Holdings, Inc. * | 12,895 | 279,693 | ||||||
Digital River, Inc. * | 18,450 | 338,189 | ||||||
EarthLink, Inc. | 114,375 | 801,769 | ||||||
Ebix, Inc. (b)* | 3,800 | 65,018 | ||||||
EPIQ Systems, Inc. | 22,170 | 316,144 | ||||||
ePlus, Inc. * | 3,600 | 97,776 | ||||||
Equinix, Inc. * | 12,407 | 1,191,196 | ||||||
Euronet Worldwide, Inc. * | 42,295 | 819,254 | ||||||
FactSet Research Systems, Inc. | 6,165 | 612,924 | ||||||
Fair Isaac Corp. | 24,005 | 656,537 | ||||||
FleetCor Technologies, Inc. * | 3,000 | 83,880 | ||||||
Forrester Research, Inc. | 5,525 | 197,850 | ||||||
Fortinet, Inc. * | 8,000 | 184,480 | ||||||
Gartner, Inc. * | 15,300 | 589,356 | ||||||
Genpact Ltd. * | 65,650 | 1,060,247 | ||||||
GigaMedia Ltd. * | 115,000 | 105,892 | ||||||
Global Cash Access Holdings, Inc. * | 90,335 | 269,198 | ||||||
Global Payments, Inc. | 24,070 | 1,105,294 | ||||||
Heartland Payment Systems, Inc. | 29,465 | 641,158 | ||||||
iGATE Corp. | 5,900 | 79,532 | ||||||
Informatica Corp. * | 13,855 | 630,402 | ||||||
InfoSpace, Inc. * | 25,900 | 226,884 | ||||||
Internap Network Services Corp. * | 27,200 | 154,496 | ||||||
j2 Global Communications, Inc. | 15,485 | 476,628 | ||||||
Jack Henry & Associates, Inc. | 32,080 | 1,039,713 | ||||||
JDA Software Group, Inc. * | 15,785 | 503,068 | ||||||
Kenexa Corp. * | 6,500 | 148,655 | ||||||
Lionbridge Technologies, Inc. * | 47,600 | 128,996 | ||||||
Liquidity Services, Inc. * | 7,700 | 250,712 | ||||||
Manhattan Associates, Inc. * | 8,095 | 342,823 | ||||||
ManTech International Corp., Class A | 17,100 | 600,723 | ||||||
MAXIMUS, Inc. | 13,590 | 548,221 | ||||||
Mentor Graphics Corp. * | 46,420 | 527,331 |
22 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
MercadoLibre, Inc. | 1,500 | 97,800 | ||||||
MICROS Systems, Inc. * | 20,240 | 996,213 | ||||||
MicroStrategy, Inc., Class A * | 2,528 | 333,115 | ||||||
ModusLink Global Solutions, Inc. | 57,475 | 240,246 | ||||||
MoneyGram International, Inc. * | 94,400 | 241,664 | ||||||
Monotype Imaging Holdings, Inc. * | 8,900 | 120,773 | ||||||
Move, Inc. * | 60,300 | 110,952 | ||||||
NCI, Inc., Class A * | 5,400 | 73,710 | ||||||
Net 1 UEPS Technologies, Inc. * | 40,260 | 311,210 | ||||||
NetScout Systems, Inc. * | 10,500 | 172,095 | ||||||
NeuStar, Inc., Class A * | 21,775 | 692,227 | ||||||
NIC, Inc. | 9,800 | 135,338 | ||||||
Online Resources Corp * | 22,100 | 59,228 | ||||||
Openwave Systems, Inc. * | 114,435 | 177,374 | ||||||
Parametric Technology Corp. * | 41,640 | 867,361 | ||||||
Perficient, Inc. * | 13,700 | 130,561 | ||||||
PRGX Global, Inc. * | 23,400 | 124,956 | ||||||
Progress Software Corp. * | 23,725 | 499,648 | ||||||
Quest Software, Inc. * | 24,080 | 423,567 | ||||||
QuinStreet, Inc. * | 9,900 | 113,751 | ||||||
Rackspace Hosting, Inc. * | 12,920 | 534,759 | ||||||
RealNetworks, Inc. | 15,636 | 152,607 | ||||||
Red Hat, Inc. * | 17,700 | 878,805 | ||||||
Rosetta Stone, Inc. * | 8,200 | 81,426 | ||||||
Rovi Corp. * | 18,669 | 924,862 | ||||||
S1 Corp. * | 32,500 | 316,225 | ||||||
Salesforce.com, Inc. * | 5,535 | 737,096 | ||||||
Sapient Corp. | 25,780 | 318,641 | ||||||
SeaChange International, Inc. * | 14,900 | 125,756 | ||||||
SINA Corp. * | 10,480 | 851,919 | ||||||
Smith Micro Software, Inc. * | 33,800 | 39,546 | ||||||
Sohu.com, Inc. * | 7,100 | 428,840 | ||||||
Solera Holdings, Inc. | 11,360 | 620,597 | ||||||
SS&C Technologies Holdings, Inc. * | 5,700 | 90,402 | ||||||
Synchronoss Technologies, Inc. * | 4,600 | 138,276 | ||||||
Syntel, Inc. | 4,855 | 237,410 | ||||||
Take-Two Interactive Software, Inc. * | 57,455 | 906,640 | ||||||
Taleo Corp., Class A * | 6,600 | 213,840 | ||||||
TeleCommunication Systems, Inc., Class A * | 37,000 | 122,100 | ||||||
TeleTech Holdings, Inc. * | 28,910 | 505,347 | ||||||
THQ, Inc. * | 134,810 | 287,145 | ||||||
TIBCO Software, Inc. * | 35,930 | 1,038,018 | ||||||
TiVo, Inc. * | 15,900 | 172,197 | ||||||
TNS, Inc. * | 26,395 | 515,494 | ||||||
Tyler Technologies, Inc. * | 8,980 | �� | 283,499 | |||||
United Online, Inc. | 121,727 | 719,407 | ||||||
ValueClick, Inc. * | 40,380 | 710,688 | ||||||
VeriFone Systems, Inc. * | 13,935 | 588,196 | ||||||
Verint Systems, Inc. * | 4,600 | 137,080 | ||||||
Virtusa Corp. * | 6,900 | 112,401 | ||||||
VistaPrint N.V. * | 6,220 | 217,202 | ||||||
VMware, Inc., Class A * | 8,500 | 830,875 | ||||||
WebMD Health Corp. * | 6,484 | 233,100 | ||||||
Websense, Inc. * | 9,990 | 178,222 | ||||||
Wright Express Corp. * | 21,100 | 989,168 | ||||||
XO Group, Inc. * | 16,100 | 148,603 | ||||||
43,529,960 | ||||||||
Technology Hardware & Equipment 5.7% | ||||||||
Acme Packet, Inc. * | 1,600 | 57,936 | ||||||
ADTRAN, Inc. | 16,945 | 569,352 | ||||||
Aeroflex Holding Corp. * | 6,900 | 75,141 | ||||||
Agilysys, Inc. * | 50,822 | 431,479 | ||||||
Anaren, Inc. * | 7,800 | 149,214 | ||||||
Arris Group, Inc. * | 80,505 | 866,234 | ||||||
Aviat Networks, Inc. * | 54,860 | 112,463 | ||||||
Avid Technology, Inc. * | 24,025 | 148,955 | ||||||
AVX Corp. | 40,600 | 544,446 | ||||||
Badger Meter, Inc. | 5,200 | 170,248 | ||||||
Bel Fuse, Inc., Class B | 8,200 | 146,616 | ||||||
Black Box Corp. | 17,240 | 482,548 | ||||||
Blue Coat Systems, Inc. * | 11,600 | 186,760 | ||||||
Checkpoint Systems, Inc. * | 30,380 | 402,535 | ||||||
Ciena Corp. * | 12,460 | 164,223 | ||||||
Cognex Corp. | 14,265 | 483,441 | ||||||
Cogo Group, Inc. * | 18,900 | 45,360 | ||||||
Coherent, Inc. * | 9,440 | 481,157 | ||||||
Comtech Telecommunications Corp. | 28,470 | 942,642 | ||||||
Cray, Inc. * | 18,200 | 115,206 | ||||||
CTS Corp. | 30,995 | 287,634 | ||||||
Daktronics, Inc. | 23,265 | 234,976 | ||||||
Digi International, Inc. * | 18,600 | 237,894 | ||||||
Dolby Laboratories, Inc., Class A * | 13,900 | 406,436 | ||||||
Dot Hill Systems Corp. * | 34,800 | 59,856 | ||||||
DTS, Inc. * | 2,600 | 73,034 | ||||||
EchoStar Corp., Class A * | 27,800 | 732,808 | ||||||
Electro Rent Corp. | 11,005 | 176,850 | ||||||
Electro Scientific Industries, Inc. * | 15,735 | 193,383 | ||||||
Electronics for Imaging, Inc. * | 34,202 | 513,030 | ||||||
EMCORE Corp. * | 52,100 | 51,579 | ||||||
Emulex Corp. * | 59,665 | 499,993 | ||||||
Extreme Networks, Inc. * | 48,765 | 143,857 | ||||||
F5 Networks, Inc. * | 9,040 | 939,708 | ||||||
FARO Technologies, Inc. * | 4,600 | 192,188 | ||||||
FEI Co. * | 16,620 | 660,811 | ||||||
Finisar Corp. * | 8,330 | 170,682 | ||||||
Gerber Scientific, Inc. (c)(d)* | 19,700 | — | ||||||
Globecomm Systems, Inc. * | 13,800 | 187,542 | ||||||
Harmonic, Inc. * | 33,000 | 181,500 | ||||||
Hutchinson Technology, Inc. * | 91,300 | 162,514 | ||||||
Imation Corp. * | 53,685 | 360,763 | ||||||
Infinera Corp. * | 42,100 | 307,751 | ||||||
InterDigital, Inc. | 9,700 | 421,465 | ||||||
Intermec, Inc. * | 40,135 | 323,889 | ||||||
Intevac, Inc. * | 12,100 | 97,405 | ||||||
JDS Uniphase Corp. * | 41,400 | 496,800 | ||||||
KEMET Corp. * | 38,200 | 352,204 | ||||||
Key Tronic Corp. * | 20,900 | 87,362 | ||||||
Littelfuse, Inc. | 8,845 | 433,051 | ||||||
LoJack Corp. * | 21,100 | 70,052 | ||||||
Loral Space & Communications, Inc. * | 3,450 | 208,725 | ||||||
Measurement Specialties, Inc. * | 6,000 | 187,260 | ||||||
Mercury Computer Systems, Inc. * | 7,900 | 115,340 | ||||||
Methode Electronics, Inc. | 28,430 | 264,115 | ||||||
Mitel Networks Corp. * | 17,000 | 48,450 | ||||||
MTS Systems Corp. | 6,580 | 241,289 | ||||||
Multi-Fineline Electronix, Inc. * | 7,120 | 163,333 | ||||||
Nam Tai Electronics, Inc. | 27,540 | 132,192 | ||||||
National Instruments Corp. | 24,742 | 660,859 | ||||||
NETGEAR, Inc. * | 12,150 | 430,839 | ||||||
Newport Corp. * | 19,130 | 264,950 |
See financial notes 23
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Novatel Wireless, Inc. * | 37,700 | 149,669 | ||||||
Oclaro, Inc. * | 26,900 | 110,559 | ||||||
Oplink Communications, Inc. * | 5,800 | 94,076 | ||||||
Opnext, Inc. * | 43,200 | 42,872 | ||||||
Orbotech Ltd. * | 22,800 | 242,820 | ||||||
OSI Systems, Inc. * | 10,590 | 469,137 | ||||||
Park Electrochemical Corp. | 13,610 | 385,163 | ||||||
PC Connection, Inc. * | 12,000 | 100,200 | ||||||
PC Mall, Inc. * | 19,300 | 101,711 | ||||||
Plantronics, Inc. | 18,310 | 611,737 | ||||||
Plexus Corp. * | 34,180 | 878,426 | ||||||
Polycom, Inc. * | 44,940 | 742,858 | ||||||
Power-One, Inc. * | 22,900 | 113,355 | ||||||
Powerwave Technologies, Inc. * | 14,624 | 52,793 | ||||||
Pulse Electronics Corp. | 78,110 | 275,728 | ||||||
Qiao Xing Mobile Communication Co., Ltd. * | 31,400 | 32,656 | ||||||
QLogic Corp. * | 49,080 | 685,647 | ||||||
Quantum Corp. * | 169,600 | 442,656 | ||||||
RadiSys Corp. * | 21,200 | 124,232 | ||||||
RADWARE Ltd. * | 2,600 | 68,744 | ||||||
Richardson Electronics Ltd. | 12,500 | 162,375 | ||||||
Rimage Corp. | 7,700 | 85,470 | ||||||
Riverbed Technology, Inc. * | 9,400 | 259,252 | ||||||
Rofin-Sinar Technologies, Inc. * | 14,010 | 364,260 | ||||||
Rogers Corp. * | 5,120 | 221,030 | ||||||
ScanSource, Inc. * | 27,840 | 967,718 | ||||||
Silicon Graphics International Corp. * | 10,060 | 145,468 | ||||||
Sonus Networks, Inc. * | 90,270 | 239,215 | ||||||
STEC, Inc. * | 12,000 | 135,840 | ||||||
Stratasys, Inc. * | 2,800 | 78,512 | ||||||
Super Micro Computer, Inc. * | 15,800 | 252,800 | ||||||
Sycamore Networks, Inc. | 11,600 | 222,952 | ||||||
Symmetricom, Inc. * | 32,900 | 169,435 | ||||||
Synaptics, Inc. * | 13,105 | 442,818 | ||||||
SYNNEX Corp. * | 27,200 | 785,264 | ||||||
Tekelec * | 75,035 | 736,844 | ||||||
TTM Technologies, Inc. * | 18,800 | 209,996 | ||||||
UTStarcom Holdings Corp. * | 200,900 | 287,287 | ||||||
ViaSat, Inc. * | 17,915 | 763,000 | ||||||
Westell Technologies, Inc., Class A * | 30,033 | 60,366 | ||||||
Xyratex Ltd. | 50,225 | 685,069 | ||||||
Zebra Technologies Corp., Class A * | 24,820 | 887,067 | ||||||
Zygo Corp. * | 7,000 | 107,380 | ||||||
32,344,782 | ||||||||
Telecommunication Services 1.2% | ||||||||
AboveNet, Inc. | 8,000 | 474,800 | ||||||
Alaska Communication Systems Group, Inc. (b) | 61,040 | 431,553 | ||||||
Atlantic Tele-Network, Inc. | 6,700 | 254,265 | ||||||
Cbeyond, Inc. * | 13,960 | 115,030 | ||||||
Cogent Communications Group, Inc. * | 9,200 | 147,660 | ||||||
Consolidated Communications Holdings, Inc. | 27,700 | 522,976 | ||||||
FiberTower Corp. (b)* | 56,500 | 54,240 | ||||||
General Communication, Inc., Class A * | 35,060 | 331,317 | ||||||
IDT Corp., Class B | 19,700 | 226,550 | ||||||
Iridium Communications, Inc. * | 24,700 | 157,092 | ||||||
Neutral Tandem, Inc. * | 11,800 | 124,372 | ||||||
NTELOS Holdings Corp. | 23,040 | 438,221 | ||||||
PAETEC Holding Corp. * | 143,500 | 786,380 | ||||||
Premiere Global Services, Inc. * | 68,700 | 622,422 | ||||||
SBA Communications Corp., Class A * | 20,705 | 788,654 | ||||||
Shenandoah Telecommunications Co. | 10,700 | 145,092 | ||||||
SureWest Communications | 12,470 | 143,031 | ||||||
USA Mobility, Inc. | 46,405 | 606,513 | ||||||
Vonage Holdings Corp. * | 35,300 | 118,255 | ||||||
6,488,423 | ||||||||
Transportation 3.1% | ||||||||
Aegean Marine Petroleum Network, Inc. | 53,000 | 275,600 | ||||||
Air Transport Services Group, Inc. * | 93,030 | 515,386 | ||||||
Allegiant Travel Co. * | 6,680 | 347,093 | ||||||
Arkansas Best Corp. | 38,840 | 800,104 | ||||||
Celadon Group, Inc. | 21,480 | 236,495 | ||||||
Copa Holdings S.A., Class A | 13,300 | 918,631 | ||||||
Costamare, Inc. | 9,300 | 116,436 | ||||||
Covenant Transport Group, Inc., Class A * | 14,600 | 46,866 | ||||||
Diana Shipping, Inc. * | 68,735 | 565,689 | ||||||
Eagle Bulk Shipping, Inc. (b)* | 166,960 | 258,788 | ||||||
Excel Maritime Carriers Ltd. (b)* | 146,124 | 414,992 | ||||||
Forward Air Corp. | 12,525 | 410,194 | ||||||
Genco Shipping & Trading Ltd. (b)* | 91,245 | 821,205 | ||||||
Genesee & Wyoming, Inc., Class A * | 13,865 | 820,947 | ||||||
Hawaiian Holdings, Inc. * | 81,440 | 435,704 | ||||||
Heartland Express, Inc. | 48,565 | 651,257 | ||||||
Hub Group, Inc., Class A * | 25,610 | 800,568 | ||||||
International Shipholding Corp. | 8,400 | 170,856 | ||||||
Knight Transportation, Inc. | 30,825 | 468,540 | ||||||
Landstar System, Inc. | 22,870 | 1,020,688 | ||||||
Macquarie Infrastructure Co. L.L.C. | 46,200 | 1,218,294 | ||||||
Marten Transport Ltd. | 11,800 | 208,978 | ||||||
Navios Maritime Holdings, Inc. | 125,700 | 472,632 | ||||||
OceanFreight, Inc., Class A * | 7,296 | 138,405 | ||||||
Old Dominion Freight Line, Inc. * | 35,950 | 1,314,691 | ||||||
Pacer International, Inc. * | 100,860 | 475,051 | ||||||
Paragon Shipping, Inc., Class A | 105,300 | 114,777 | ||||||
Park-Ohio Holdings Corp. * | 14,200 | 229,756 | ||||||
Pinnacle Airlines Corp. * | 24,000 | 61,680 | ||||||
Quality Distribution, Inc. * | 15,400 | 173,558 | ||||||
RailAmerica, Inc. * | 16,900 | 231,023 | ||||||
Safe Bulkers, Inc. | 19,300 | 132,012 | ||||||
Saia, Inc. * | 24,700 | 329,745 | ||||||
Seaspan Corp. | 65,100 | 922,467 | ||||||
Star Bulk Carriers Corp. | 65,400 | 90,906 | ||||||
Swift Transporation Co. * | 51,000 | 453,900 | ||||||
TBS International plc, Class A * | 28,000 | 19,880 | ||||||
Ultrapetrol Bahamas Ltd. (b)* | 20,700 | 61,479 | ||||||
US Airways Group, Inc. * | 132,800 | 766,256 | ||||||
17,511,529 | ||||||||
Utilities 2.2% | ||||||||
American States Water Co. | 15,615 | 545,588 | ||||||
California Water Service Group | 33,880 | 629,151 |
24 See financial notes
Schwab Fundamental US Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Central Vermont Public Service Corp. | 14,845 | 525,068 | ||||||
CH Energy Group, Inc. | 14,505 | 800,821 | ||||||
Chesapeake Utilities Corp. | 6,150 | 260,698 | ||||||
Connecticut Water Service, Inc. | 5,600 | 149,744 | ||||||
Consolidated Water Co., Ltd. | 9,700 | 90,016 | ||||||
El Paso Electric Co. | 37,390 | 1,197,602 | ||||||
Genie Energy Ltd., Class B * | 19,700 | 163,510 | ||||||
MGE Energy, Inc. | 19,600 | 855,344 | ||||||
Middlesex Water Co. | 10,000 | 189,500 | ||||||
Northwest Natural Gas Co. | 25,305 | 1,182,249 | ||||||
Ormat Technologies, Inc. | 9,600 | 182,304 | ||||||
Otter Tail Corp. | 46,580 | 904,118 | ||||||
SJW Corp. | 9,720 | 226,282 | ||||||
South Jersey Industries, Inc. | 17,440 | 982,046 | ||||||
The Empire District Electric Co. | 42,910 | 856,913 | ||||||
The Laclede Group, Inc. | 26,440 | 1,060,773 | ||||||
The York Water Co. | 6,200 | 105,400 | ||||||
UIL Holdings Corp. | 35,625 | 1,214,100 | ||||||
Unitil Corp. | 12,700 | 338,709 | ||||||
12,459,936 | ||||||||
Total Common Stock | ||||||||
(Cost $512,014,961) | 559,875,978 | |||||||
Rights 0.0% of net assets | ||||||||
Banks 0.0% | ||||||||
First Bancorp (b)(c)(d)* | 100,872 | 6,053 | ||||||
Total Rights | ||||||||
(Cost $—) | 6,053 | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (c)(d)* | 1,535 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Other Investment Company 1.1% of net assets | ||||||||
Money Market Fund 1.1% | ||||||||
State Street Institutional Liquid Reserves Fund - Institutional Class | 6,000,596 | 6,000,596 | ||||||
Total Other Investment Company | ||||||||
(Cost $6,000,596) | 6,000,596 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.1% of net assets | ||||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
(0.01)%, 12/15/11 (a)(e) | 150,000 | 150,000 | ||||||
0.00%, 12/15/11 (a)(e) | 625,000 | 625,001 | ||||||
Total Short-Term Investments | ||||||||
(Cost $775,001) | 775,001 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 2.7% of net assets | ||||||||
SSIT U.S. Government Money Market Fund | 15,327,665 | 15,327,665 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $15,327,665) | 15,327,665 | |||||||
End of Collateral Invested for Securities on Loan |
At 10/31/11 tax basis cost of the fund’s investments was $523,109,053 and the unrealized appreciation and depreciation were $102,547,101 and ($58,998,526), respectively, with a net unrealized appreciation of $43,548,575.
* | Non-income producing security. | |
(a) | All or a portion of this security is held as collateral for open futures contracts. | |
(b) | All or a portion of this security is on loan. | |
(c) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(d) | Illiquid security. At the period end, the value of these amounted to $46,192 or 0.0% of net assets. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 35 | 2,587,550 | 318,689 |
See financial notes 25
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Common Stock | 382,450,845 | 368,486,637 | ||||||||
0 | .5% | Preferred Stock | 1,491,408 | 1,800,976 | ||||||||
0 | .0% | Rights | 176,179 | 70,643 | ||||||||
0 | .0% | Warrants | — | 417 | ||||||||
0 | .1% | Other Investment Company | 495,250 | 523,700 | ||||||||
99 | .6% | Total Investments | 384,613,682 | 370,882,373 | ||||||||
0 | .5% | Collateral Invested for Securities on Loan | 1,942,763 | 1,942,763 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (563,144 | ) | ||||||||
100 | .0% | Total Net Assets | 372,261,992 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.0% of net assets | ||||||||
Australia 5.4% | ||||||||
Banks 2.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | 68,182 | 1,540,668 | ||||||
Bank of Queensland Ltd. | 8,442 | 74,231 | ||||||
Bendigo & Adelaide Bank Ltd. | 12,376 | 122,205 | ||||||
Commonwealth Bank of Australia | 37,270 | 1,914,561 | ||||||
National Australia Bank Ltd. | 75,919 | 2,027,752 | ||||||
Westpac Banking Corp. | 75,529 | 1,752,743 | ||||||
7,432,160 | ||||||||
Capital Goods 0.0% | ||||||||
CSR Ltd. | 22,388 | 57,025 | ||||||
Leighton Holdings Ltd. | 3,627 | 82,396 | ||||||
139,421 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Brambles Ltd. | 32,166 | 222,361 | ||||||
Consumer Services 0.1% | ||||||||
Echo Entertainment Group Ltd. * | 32,896 | 127,687 | ||||||
TABCORP Holdings Ltd. | 32,065 | 98,593 | ||||||
Tatts Group Ltd. | 59,120 | 143,834 | ||||||
370,114 | ||||||||
Diversified Financials 0.1% | ||||||||
ASX Ltd. | 2,821 | 90,578 | ||||||
BGP Holdings plc (a)(b)* | 453,854 | — | ||||||
Macquarie Group Ltd. | 12,240 | 315,134 | ||||||
405,712 | ||||||||
Energy 0.3% | ||||||||
Caltex Australia Ltd. | 8,411 | 116,812 | ||||||
Oil Search Ltd. | 13,646 | 93,096 | ||||||
Origin Energy Ltd. | 14,846 | 223,720 | ||||||
Santos Ltd. | 14,096 | 190,375 | ||||||
Woodside Petroleum Ltd. | 7,592 | 289,081 | ||||||
WorleyParsons Ltd. | 4,052 | 117,608 | ||||||
1,030,692 | ||||||||
Food & Staples Retailing 0.5% | ||||||||
Metcash Ltd. | 34,575 | 151,304 | ||||||
Wesfarmers Ltd. | 24,638 | 835,931 | ||||||
Wesfarmers Ltd., Price Protected Shares | 3,832 | 131,293 | ||||||
Woolworths Ltd. | 31,350 | 783,682 | ||||||
1,902,210 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Coca-Cola Amatil Ltd. | 10,331 | 133,361 | ||||||
Foster’s Group Ltd. | 36,427 | 204,621 | ||||||
Goodman Fielder Ltd. | 58,475 | 34,007 | ||||||
Treasury Wine Estates | 19,414 | 75,802 | ||||||
447,791 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Sonic Healthcare Ltd. | 9,239 | 106,760 | ||||||
Insurance 0.4% | ||||||||
AMP Ltd. | 63,381 | 282,556 | ||||||
Insurance Australia Group Ltd. | 71,670 | 236,285 | ||||||
QBE Insurance Group Ltd. | 30,518 | 469,761 | ||||||
Suncorp Group Ltd. | 56,523 | 507,289 | ||||||
1,495,891 | ||||||||
Materials 0.9% | ||||||||
Amcor Ltd. | 36,152 | 264,496 | ||||||
BHP Billiton Ltd. | 48,498 | 1,898,434 | ||||||
BlueScope Steel Ltd. | 119,634 | 104,659 | ||||||
Boral Ltd. | 27,050 | 110,421 | ||||||
Incitec Pivot Ltd. | 31,763 | 115,050 | ||||||
Newcrest Mining Ltd. | 3,428 | 121,152 | ||||||
OneSteel Ltd. | 46,726 | 59,425 | ||||||
Orica Ltd. | 8,026 | 217,389 | ||||||
Rio Tinto Ltd. | 4,685 | 336,355 | ||||||
Sims Metal Management Ltd. | 7,533 | 108,648 | ||||||
3,336,029 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
CSL Ltd. | 5,351 | 161,167 | ||||||
Real Estate 0.4% | ||||||||
CFS Retail Property Trust | 35,549 | 67,767 | ||||||
Dexus Property Group | 136,913 | 121,792 | ||||||
Goodman Group | 154,991 | 100,720 | ||||||
GPT Group | 50,859 | 167,850 | ||||||
Lend Lease Corp., Ltd. | 19,143 | 155,753 | ||||||
Mirvac Group | 119,599 | 156,613 | ||||||
Stockland | 80,386 | 265,451 | ||||||
Westfield Group | 72,741 | 585,593 | ||||||
1,621,539 | ||||||||
Software & Services 0.0% | ||||||||
Computershare Ltd. | 9,935 | 78,516 | ||||||
Telecommunication Services 0.2% | ||||||||
Telstra Corp., Ltd. | 219,730 | 713,449 |
26 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 0.2% | ||||||||
Asciano Ltd. | 42,876 | 68,542 | ||||||
MAP Group | 34,349 | 122,567 | ||||||
Qantas Airways Ltd. * | 77,430 | 129,495 | ||||||
Toll Holdings Ltd. | 19,133 | 96,643 | ||||||
Transurban Group | 20,200 | 110,807 | ||||||
528,054 | ||||||||
Utilities 0.0% | ||||||||
AGL Energy Ltd. | 9,378 | 141,299 | ||||||
20,133,165 | ||||||||
Austria 0.3% | ||||||||
Banks 0.1% | ||||||||
Erste Group Bank AG | 9,785 | 208,601 | ||||||
Raiffeisen Bank International | 1,412 | 39,186 | ||||||
247,787 | ||||||||
Capital Goods 0.0% | ||||||||
Wienerberger AG | 5,067 | 61,221 | ||||||
Energy 0.1% | ||||||||
OMV AG | 8,869 | 309,052 | ||||||
Insurance 0.0% | ||||||||
Vienna Insurance Group AG | 1,700 | 71,286 | ||||||
Materials 0.1% | ||||||||
Voestalpine AG | 7,917 | 272,020 | ||||||
Real Estate 0.0% | ||||||||
Immofinanz AG * | 35,824 | 117,623 | ||||||
Telecommunication Services 0.0% | ||||||||
Telekom Austria AG | 19,631 | 222,678 | ||||||
1,301,667 | ||||||||
Belgium 0.8% | ||||||||
Banks 0.1% | ||||||||
Dexia S.A. * | 105,105 | 81,532 | ||||||
KBC GROEP N.V. | 12,040 | 266,998 | ||||||
348,530 | ||||||||
Capital Goods 0.0% | ||||||||
Bekaert N.V. | 968 | 42,964 | ||||||
Diversified Financials 0.1% | ||||||||
Groupe Bruxelles Lambert S.A. | 2,644 | 203,235 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Colruyt S.A. | 1,426 | 58,586 | ||||||
Delhaize Group | 6,041 | 394,599 | ||||||
453,185 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Anheuser-Busch InBev N.V. | 11,742 | 651,166 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Agfa Gevaert N.V. * | 15,446 | 38,584 | ||||||
Insurance 0.1% | ||||||||
Ageas | 213,568 | 428,133 | ||||||
Materials 0.1% | ||||||||
Solvay S.A. | 1,694 | 172,567 | ||||||
Umicore | 3,446 | 147,417 | ||||||
319,984 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
UCB S.A. | 4,936 | 216,861 | ||||||
Retailing 0.0% | ||||||||
S.A. D’Ieteren N.V. | 925 | 52,640 | ||||||
Telecommunication Services 0.1% | ||||||||
Belgacom S.A. | 7,878 | 238,221 | ||||||
2,993,503 | ||||||||
Canada 6.1% | ||||||||
Automobiles & Components 0.1% | ||||||||
Magna International, Inc. | 8,618 | 328,811 | ||||||
Banks 1.8% | ||||||||
Bank of Montreal (c) | 20,513 | 1,211,949 | ||||||
Bank of Nova Scotia | 22,648 | 1,193,579 | ||||||
Canadian Imperial Bank of Commerce | 9,677 | 729,112 | ||||||
National Bank of Canada | 4,130 | 294,766 | ||||||
Royal Bank of Canada | 33,644 | 1,641,105 | ||||||
The Toronto-Dominion Bank | 19,459 | 1,468,674 | ||||||
6,539,185 | ||||||||
Capital Goods 0.1% | ||||||||
Bombardier, Inc., Class A | 8,500 | 35,816 | ||||||
Bombardier, Inc., Class B | 34,068 | 140,818 | ||||||
Finning International, Inc. | 4,080 | 95,374 | ||||||
SNC-Lavalin Group, Inc. | 2,000 | 100,507 | ||||||
Superior Plus Corp. | 6,000 | 41,535 | ||||||
414,050 | ||||||||
Diversified Financials 0.1% | ||||||||
CI Financial Corp. | 5,400 | 108,352 | ||||||
IGM Financial, Inc. | 2,620 | 113,133 | ||||||
Onex Corp. | 6,561 | 217,548 | ||||||
439,033 | ||||||||
Energy 1.2% | ||||||||
Cameco Corp. | 2,700 | 57,941 | ||||||
Canadian Natural Resources Ltd. | 12,500 | 440,933 | ||||||
Cenovus Energy, Inc. | 10,909 | 373,648 | ||||||
Crescent Point Energy Corp. | 2,600 | 111,043 | ||||||
Enbridge, Inc. | 13,938 | 482,848 | ||||||
Encana Corp. | 32,409 | 702,967 | ||||||
Husky Energy, Inc. | 8,567 | 219,944 | ||||||
Imperial Oil Ltd. | 4,623 | 191,460 | ||||||
Nexen, Inc. | 11,826 | 200,867 | ||||||
Pembina Pipeline Corp. | 3,800 | 103,430 | ||||||
Precision Drilling Corp. * | 11,000 | 127,575 | ||||||
Suncor Energy, Inc. | 18,145 | 577,982 | ||||||
Talisman Energy, Inc. | 18,281 | 259,336 | ||||||
TransCanada Corp. | 16,735 | 711,374 | ||||||
Vermilion Energy, Inc. | 1,200 | 56,536 | ||||||
4,617,884 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Alimentation Couche-Tard, Inc., Class B | 4,737 | 142,573 | ||||||
Empire Co., Ltd, Class A | 1,933 | 118,162 | ||||||
George Weston Ltd. | 2,705 | 187,498 | ||||||
Loblaw Cos., Ltd. | 4,664 | 178,512 | ||||||
Metro, Inc., Class A | 3,640 | 178,357 |
See financial notes 27
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Shoppers Drug Mart Corp. | 4,959 | 208,460 | ||||||
1,013,562 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Saputo, Inc. | 2,300 | 95,023 | ||||||
Viterra, Inc. | 12,200 | 125,580 | ||||||
220,603 | ||||||||
Insurance 0.8% | ||||||||
Fairfax Financial Holdings Ltd. | 662 | 276,735 | ||||||
Great-West Lifeco, Inc. | 7,920 | 176,318 | ||||||
Industrial Alliance Insurance & Financial Services, Inc. | 2,000 | 65,072 | ||||||
Intact Financial Corp. | 2,723 | 151,947 | ||||||
Manulife Financial Corp. | 64,948 | 857,503 | ||||||
Power Corp. of Canada | 20,115 | 506,533 | ||||||
Power Financial Corp. | 10,214 | 275,652 | ||||||
Sun Life Financial, Inc. | 20,990 | 529,830 | ||||||
2,839,590 | ||||||||
Materials 0.5% | ||||||||
Agrium, Inc. | 1,912 | 157,641 | ||||||
Barrick Gold Corp. | 9,116 | 450,061 | ||||||
First Quantum Minerals Ltd. | 2,500 | 52,445 | ||||||
Goldcorp, Inc. | 6,810 | 331,362 | ||||||
Kinross Gold Corp. | 7,953 | 113,381 | ||||||
Methanex Corp. | 2,200 | 56,724 | ||||||
Potash Corp. of Saskatchewan, Inc. | 4,942 | 233,924 | ||||||
Sherritt International Corp. | 8,000 | 45,989 | ||||||
Sino-Forest Corp. (a)(b)* | 20,000 | 27,028 | ||||||
Teck Resources Ltd., Class B | 8,157 | 327,017 | ||||||
Yamana Gold, Inc. | 9,276 | 138,477 | ||||||
1,934,049 | ||||||||
Media 0.1% | ||||||||
Groupe Aeroplan, Inc. | 4,600 | 52,980 | ||||||
Quebecor, Inc., Class B | 2,392 | 82,793 | ||||||
Shaw Communications, Inc., Class B | 8,777 | 177,786 | ||||||
Thomson Reuters Corp. | 8,907 | 263,524 | ||||||
577,083 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Valeant Pharmaceuticals International, Inc. | 2,800 | 110,567 | ||||||
Real Estate 0.2% | ||||||||
Brookfield Asset Management, Inc., Class A | 13,255 | 383,520 | ||||||
Brookfield Properties Corp. | 7,991 | 131,159 | ||||||
H&R REIT | 4,200 | 91,732 | ||||||
RioCan REIT | 4,472 | 113,466 | ||||||
719,877 | ||||||||
Retailing 0.1% | ||||||||
Canadian Tire Corp., Ltd., Class A | 2,619 | 156,549 | ||||||
RONA, Inc. | 5,500 | 52,972 | ||||||
209,521 | ||||||||
Software & Services 0.0% | ||||||||
CGI Group, Inc., Class A * | 5,517 | 112,914 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Celestica, Inc. * | 11,412 | 94,685 | ||||||
Research In Motion Ltd. * | 5,606 | 113,385 | ||||||
208,070 | ||||||||
Telecommunication Services 0.2% | ||||||||
BCE, Inc. | 8,453 | 335,067 | ||||||
Rogers Communications, Inc., Class B | 9,404 | 342,950 | ||||||
Telus Corp. | 2,378 | 127,948 | ||||||
Telus Corp. - Non Voting Shares | 1,431 | 73,118 | ||||||
879,083 | ||||||||
Transportation 0.2% | ||||||||
Canadian National Railway Co. | 7,323 | 573,644 | ||||||
Canadian Pacific Railway Ltd. | 3,432 | 212,135 | ||||||
785,779 | ||||||||
Utilities 0.2% | ||||||||
ATCO Ltd., Class I | 1,833 | 111,957 | ||||||
Canadian Utilities Ltd., Class A | 2,080 | 125,729 | ||||||
Emera, Inc. | 2,800 | 91,943 | ||||||
Fortis, Inc. | 4,100 | 138,620 | ||||||
TransAlta Corp. | 7,669 | 168,729 | ||||||
636,978 | ||||||||
22,586,639 | ||||||||
Denmark 0.5% | ||||||||
Banks 0.2% | ||||||||
Danske Bank A/S * | 38,167 | 521,838 | ||||||
Jyske Bank A/S - Reg’d * | 2,464 | 71,619 | ||||||
593,457 | ||||||||
Capital Goods 0.0% | ||||||||
FLSmidth & Co. A/S | 1,312 | 83,093 | ||||||
Vestas Wind Systems A/S * | 6,536 | 101,322 | ||||||
184,415 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Carlsberg A/S, Class B | 2,560 | 173,313 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Novo Nordisk A/S, Class B | 3,039 | 322,640 | ||||||
Transportation 0.2% | ||||||||
AP Moller - Maersk A/S, Series A | 24 | 154,517 | ||||||
AP Moller - Maersk A/S, Series B | 60 | 405,767 | ||||||
DSV A/S | 3,118 | 62,467 | ||||||
622,751 | ||||||||
1,896,576 | ||||||||
Finland 1.1% | ||||||||
Automobiles & Components 0.0% | ||||||||
Nokian Renkaat Oyj | 2,270 | 83,142 | ||||||
Capital Goods 0.2% | ||||||||
Kone Oyj, Class B | 2,516 | 138,523 | ||||||
Metso Corp. Oyj | 4,674 | 180,799 | ||||||
Outotec Oyj | 1,888 | 87,643 | ||||||
Wartsila Oyj | 2,957 | 89,848 | ||||||
YIT Oyj | 3,140 | 49,551 | ||||||
546,364 | ||||||||
Diversified Financials 0.0% | ||||||||
Pohjola Bank plc, Class A | 5,001 | 57,504 | ||||||
Energy 0.0% | ||||||||
Neste Oil Oyj | 9,172 | 110,973 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Kesko Oyj, Class B | 3,436 | 121,958 |
28 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Insurance 0.1% | ||||||||
Sampo Oyj, Class A | 17,111 | 470,329 | ||||||
Materials 0.2% | ||||||||
Huhtamaki Oyj | 6,718 | 76,750 | ||||||
Outokumpu Oyj | 6,812 | 57,575 | ||||||
Rautaruukki Oyj | 5,166 | 55,065 | ||||||
Stora Enso Oyj, Class R | 26,539 | 167,982 | ||||||
UPM-Kymmene Oyj | 24,071 | 281,466 | ||||||
638,838 | ||||||||
Technology Hardware & Equipment 0.4% | ||||||||
Nokia Oyj | 235,567 | 1,585,172 | ||||||
Telecommunication Services 0.1% | ||||||||
Elisa Oyj | 5,988 | 126,244 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 12,669 | 308,340 | ||||||
4,048,864 | ||||||||
France 10.4% | ||||||||
Automobiles & Components 0.5% | ||||||||
Cie Generale des Etablissements Michelin, Class B | 4,880 | 353,362 | ||||||
Faurecia | 3,260 | 86,195 | ||||||
PSA Peugeot Citroen S.A. | 23,820 | 518,282 | ||||||
Renault S.A. | 15,281 | 638,473 | ||||||
Valeo S.A. | 3,153 | 158,266 | ||||||
1,754,578 | ||||||||
Banks 0.9% | ||||||||
BNP Paribas S.A. | 43,778 | 1,954,901 | ||||||
Credit Agricole S.A. | 58,539 | 453,112 | ||||||
Natixis | 39,873 | 126,367 | ||||||
Societe Generale | 34,663 | 992,462 | ||||||
3,526,842 | ||||||||
Capital Goods 1.3% | ||||||||
Alstom S.A. | 8,273 | 308,070 | ||||||
Bouygues S.A. | 15,706 | 586,599 | ||||||
Compagnie de Saint-Gobain | 23,118 | 1,068,456 | ||||||
Eiffage S.A. | 3,902 | 132,343 | ||||||
European Aeronautic Defence & Space Co. | 13,206 | 389,303 | ||||||
Legrand S.A. | 3,697 | 130,683 | ||||||
Nexans S.A. | 1,746 | 109,828 | ||||||
Rexel S.A. | 2,604 | 46,683 | ||||||
Safran S.A. | 4,528 | 147,866 | ||||||
Schneider Electric S.A. | 11,167 | 655,723 | ||||||
Thales S.A. | 3,783 | 133,416 | ||||||
Vallourec S.A. | 3,675 | 222,838 | ||||||
Vinci S.A. | 16,885 | 828,012 | ||||||
Wendel | 660 | 48,885 | ||||||
Zodiac Aerospace | 1,286 | 100,833 | ||||||
4,909,538 | ||||||||
Consumer Durables & Apparel 0.3% | ||||||||
Christian Dior S.A. | 2,002 | 282,450 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 5,107 | 846,454 | ||||||
1,128,904 | ||||||||
Consumer Services 0.1% | ||||||||
Accor S.A. | 7,865 | 257,059 | ||||||
Sodexo | 3,937 | 284,269 | ||||||
541,328 | ||||||||
Diversified Financials 0.0% | ||||||||
Eurazeo | 1,419 | 67,669 | ||||||
Energy 1.6% | ||||||||
Bourbon S.A. | 2,472 | 68,613 | ||||||
Compagnie Generale de Geophysique-Veritas * | 4,873 | 106,472 | ||||||
Technip S.A. | 2,374 | 224,478 | ||||||
Total S.A. | 107,672 | 5,618,026 | ||||||
6,017,589 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Carrefour S.A. | 37,466 | 991,276 | ||||||
Casino Guichard-Perrachon S.A. | 2,814 | 263,496 | ||||||
Rallye S.A. | 2,190 | 70,020 | ||||||
1,324,792 | ||||||||
Food, Beverage & Tobacco 0.4% | ||||||||
DANONE S.A. | 13,980 | 969,134 | ||||||
Pernod Ricard S.A. | 5,311 | 494,213 | ||||||
1,463,347 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Essilor International S.A. | 2,562 | 185,167 | ||||||
Household & Personal Products 0.1% | ||||||||
L’Oreal S.A. | 4,635 | 510,338 | ||||||
Insurance 0.8% | ||||||||
AXA S.A. | 160,452 | 2,580,700 | ||||||
CNP Assurances | 14,184 | 216,611 | ||||||
SCOR SE | 7,303 | 170,135 | ||||||
2,967,446 | ||||||||
Materials 0.4% | ||||||||
Air Liquide S.A. | 5,583 | 720,861 | ||||||
Arkema | 1,891 | 128,511 | ||||||
Eramet | 298 | 46,661 | ||||||
Imerys S.A. | 1,259 | 71,632 | ||||||
Lafarge S.A. | 12,500 | 506,129 | ||||||
1,473,794 | ||||||||
Media 0.2% | ||||||||
Lagardere S.C.A. | 7,556 | 202,412 | ||||||
Metropole Television S.A. | 4,156 | 71,045 | ||||||
PagesJaunes Groupe (c) | 12,336 | 52,636 | ||||||
Publicis Groupe | 2,837 | 136,860 | ||||||
SES FDR | 6,625 | 169,213 | ||||||
Societe Television Francaise 1 | 6,078 | 81,609 | ||||||
713,775 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Sanofi | 48,345 | 3,458,553 | ||||||
Real Estate 0.2% | ||||||||
Fonciere des Regions | 603 | 44,438 | ||||||
Klepierre | 2,537 | 79,077 | ||||||
Unibail-Rodamco SE | 2,533 | 503,584 | ||||||
627,099 | ||||||||
Retailing 0.2% | ||||||||
PPR | 3,737 | 579,890 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
STMicroelectronics N.V. | 20,188 | 139,900 |
See financial notes 29
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Software & Services 0.1% | ||||||||
Atos Origin S.A. | 2,345 | 113,368 | ||||||
Cap Gemini | 5,084 | 194,541 | ||||||
307,909 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Alcatel-Lucent * | 73,524 | 203,272 | ||||||
Gemalto N.V. | 1,700 | 77,323 | ||||||
Neopost S.A. | 994 | 75,601 | ||||||
356,196 | ||||||||
Telecommunication Services 1.0% | ||||||||
France Telecom S.A. | 132,154 | 2,375,973 | ||||||
Vivendi | 64,510 | 1,441,567 | ||||||
3,817,540 | ||||||||
Transportation 0.1% | ||||||||
Air France-KLM * | 16,123 | 122,442 | ||||||
Groupe Eurotunnel S.A. - Reg’d | 8,906 | 80,225 | ||||||
202,667 | ||||||||
Utilities 0.7% | ||||||||
EDF S.A. | 10,465 | 313,192 | ||||||
GDF Suez | 58,766 | 1,655,598 | ||||||
Suez Environnement Co. | 14,991 | 235,178 | ||||||
Veolia Environnement | 30,036 | 425,298 | ||||||
2,629,266 | ||||||||
38,704,127 | ||||||||
Germany 7.9% | ||||||||
Automobiles & Components 1.0% | ||||||||
Bayerische Motoren Werke AG | 11,459 | 930,862 | ||||||
Continental AG * | 2,600 | 193,877 | ||||||
Daimler AG - Reg’d | 46,122 | 2,342,493 | ||||||
Volkswagen AG | 1,165 | 182,188 | ||||||
3,649,420 | ||||||||
Banks 0.1% | ||||||||
Commerzbank AG * | 70,151 | 171,290 | ||||||
Capital Goods 0.8% | ||||||||
Bilfinger Berger SE | 1,657 | 147,902 | ||||||
GEA Group AG | 4,514 | 123,778 | ||||||
Hochtief AG | 2,188 | 159,075 | ||||||
MAN SE | 3,786 | 333,585 | ||||||
Siemens AG - Reg’d | 20,273 | 2,125,032 | ||||||
2,889,372 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Adidas AG | 4,607 | 324,456 | ||||||
Consumer Services 0.0% | ||||||||
TUI AG * | 23,701 | 154,598 | ||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 40,772 | 1,685,863 | ||||||
Deutsche Boerse AG * | 4,200 | 231,478 | ||||||
1,917,341 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Metro AG | 8,511 | 394,346 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Celesio AG | 7,599 | 119,850 | ||||||
Fresenius Medical Care AG & Co. KGaA | 3,759 | 273,827 | ||||||
Fresenius SE & Co. KGaA | 2,437 | 239,286 | ||||||
632,963 | ||||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 1,512 | 87,167 | ||||||
Henkel AG & Co. KGaA | 2,800 | 136,723 | ||||||
223,890 | ||||||||
Insurance 1.2% | ||||||||
Allianz SE - Reg’d | 25,481 | 2,835,069 | ||||||
Hannover Rueckversicherung AG - Reg’d | 2,577 | 126,877 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 12,100 | 1,620,425 | ||||||
4,582,371 | ||||||||
Materials 1.1% | ||||||||
Aurubis AG | 2,743 | 154,764 | ||||||
BASF SE | 28,988 | 2,116,002 | ||||||
HeidelbergCement AG | 7,642 | 345,969 | ||||||
K+S AG - Reg’d | 2,431 | 154,042 | ||||||
Lanxess AG | 2,411 | 140,817 | ||||||
Linde AG | 2,707 | 428,836 | ||||||
Salzgitter AG | 2,659 | 150,288 | ||||||
Symrise AG | 2,938 | 76,050 | ||||||
ThyssenKrupp AG | 20,996 | 601,505 | ||||||
4,168,273 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.4% | ||||||||
Bayer AG - Reg’d | 20,742 | 1,321,514 | ||||||
Merck KGaA | 1,511 | 140,998 | ||||||
1,462,512 | ||||||||
Retailing 0.0% | ||||||||
Douglas Holding AG | 1,347 | 54,413 | ||||||
Praktiker Bau- und Heimwerkermaerkte Holding AG (c) | 16,984 | 67,238 | ||||||
121,651 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Infineon Technologies AG | 18,113 | 163,075 | ||||||
Software & Services 0.2% | ||||||||
SAP AG | 10,100 | 610,726 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Wincor Nixdorf AG | 1,223 | 68,486 | ||||||
Telecommunication Services 0.8% | ||||||||
Deutsche Telekom AG - Reg’d | 239,299 | 3,040,085 | ||||||
Freenet AG | 6,685 | 86,182 | ||||||
3,126,267 | ||||||||
Transportation 0.3% | ||||||||
Deutsche Lufthansa AG - Reg’d | 16,292 | 221,352 | ||||||
Deutsche Post AG - Reg’d | 58,865 | 892,894 | ||||||
1,114,246 | ||||||||
Utilities 1.0% | ||||||||
E.ON AG | 114,550 | 2,762,371 | ||||||
RWE AG | 22,785 | 971,255 | ||||||
3,733,626 | ||||||||
29,508,909 |
30 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Greece 0.2% | ||||||||
Banks 0.1% | ||||||||
Alpha Bank A.E. * | 40,004 | 53,577 | ||||||
EFG Eurobank Ergasias * | 33,912 | 31,144 | ||||||
National Bank of Greece S.A. * | 52,555 | 122,639 | ||||||
Piraeus Bank S.A. * | 71,024 | 20,739 | ||||||
228,099 | ||||||||
Consumer Services 0.1% | ||||||||
OPAP S.A. | 14,772 | 171,420 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Coca Cola Hellenic Bottling Co., S.A. * | 3,562 | 69,359 | ||||||
Telecommunication Services 0.0% | ||||||||
Hellenic Telecommunications Organization S.A. (OTE) | 27,404 | 150,784 | ||||||
Utilities 0.0% | ||||||||
Public Power Corp. S.A. | 9,794 | 84,741 | ||||||
704,403 | ||||||||
Hong Kong 1.6% | ||||||||
Banks 0.2% | ||||||||
BOC Hong Kong (Holdings) Ltd. | 89,500 | 212,828 | ||||||
Hang Seng Bank Ltd. | 18,400 | 237,258 | ||||||
The Bank of East Asia Ltd. (c) | 43,670 | 159,773 | ||||||
609,859 | ||||||||
Capital Goods 0.3% | ||||||||
Hutchison Whampoa Ltd. | 84,000 | 768,301 | ||||||
Jardine Matheson Holdings Ltd. | 4,400 | 221,754 | ||||||
Jardine Strategic Holdings Ltd. | 3,000 | 87,963 | ||||||
1,078,018 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Yue Yuen Industrial (Holdings) Ltd. | 29,500 | 84,015 | ||||||
Diversified Financials 0.0% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 5,200 | 88,150 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Chaoda Modern Agriculture (Holdings) Ltd. (a)(b) | 171,320 | 24,258 | ||||||
Insurance 0.1% | ||||||||
AIA Group Ltd. | 125,400 | 383,440 | ||||||
Real Estate 0.6% | ||||||||
Cheung Kong (Holdings) Ltd. | 32,000 | 396,670 | ||||||
Hang Lung Group Ltd. | 20,000 | 121,550 | ||||||
Hang Lung Properties Ltd. | 35,000 | 127,463 | ||||||
Henderson Land Development Co., Ltd. | 25,569 | 139,761 | ||||||
Hongkong Land Holdings Ltd. | 30,000 | 157,651 | ||||||
Kerry Properties Ltd. | 19,000 | 69,729 | ||||||
New World Development Co., Ltd. | 118,000 | 124,307 | ||||||
Sino Land Co., Ltd. | 60,000 | 94,844 | ||||||
Sun Hung Kai Properties Ltd. | 38,600 | 531,475 | ||||||
Swire Pacific Ltd., Class A | 22,500 | 260,000 | ||||||
The Link REIT | 43,500 | 149,389 | ||||||
The Wharf Holdings Ltd. | 27,000 | 143,620 | ||||||
2,316,459 | ||||||||
Retailing 0.1% | ||||||||
Esprit Holdings Ltd. | 43,684 | 63,182 | ||||||
Li & Fung Ltd. | 56,000 | 107,923 | ||||||
171,105 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Kingboard Chemical Holdings Ltd. | 23,000 | 78,559 | ||||||
Telecommunication Services 0.0% | ||||||||
PCCW Ltd. | 353,000 | 141,065 | ||||||
Transportation 0.1% | ||||||||
Cathay Pacific Airways Ltd. | 39,800 | 72,244 | ||||||
MTR Corp., Ltd. | 31,500 | 101,681 | ||||||
Orient Overseas International Ltd. | 15,500 | 69,955 | ||||||
Pacific Basin Shipping Ltd. | 122,000 | 55,628 | ||||||
299,508 | ||||||||
Utilities 0.2% | ||||||||
CLP Holdings Ltd. | 50,000 | 445,406 | ||||||
Hong Kong & China Gas Co., Ltd. | 70,640 | 159,263 | ||||||
Power Assets Holdings Ltd. | 35,500 | 269,758 | ||||||
874,427 | ||||||||
6,148,863 | ||||||||
Ireland 0.3% | ||||||||
Banks 0.0% | ||||||||
Anglo Irish Bank Corp., Ltd. (a)(b)* | 9,106 | — | ||||||
The Governor & Company of the Bank of Ireland * | 430,689 | 60,640 | ||||||
60,640 | ||||||||
Capital Goods 0.1% | ||||||||
DCC | 3,744 | 103,585 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Kerry Group plc, Class A | 2,681 | 99,425 | ||||||
Materials 0.2% | ||||||||
CRH plc | 30,534 | 551,170 | ||||||
Smurfit Kappa Group plc * | 9,769 | 66,990 | ||||||
618,160 | ||||||||
Transportation 0.0% | ||||||||
Ryanair Holdings plc * | 14,633 | 68,715 | ||||||
950,525 | ||||||||
Israel 0.3% | ||||||||
Banks 0.1% | ||||||||
Bank Hapoalim B.M. | 75,415 | 292,313 | ||||||
Bank Leumi Le-Israel | 15,399 | 53,362 | ||||||
345,675 | ||||||||
Materials 0.0% | ||||||||
Israel Chemicals Ltd. | 7,435 | 88,162 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Teva Pharmaceutical Industries Ltd. | 11,318 | 461,416 | ||||||
Telecommunication Services 0.1% | ||||||||
Bezeq Israeli Telecommunication Corp., Ltd. | 68,532 | 144,823 | ||||||
Cellcom Israel Ltd. | 3,128 | 68,911 | ||||||
213,734 | ||||||||
1,108,987 |
See financial notes 31
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Italy 4.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
Fiat S.p.A. | 87,956 | 538,595 | ||||||
Pirelli & C. S.p.A. | 16,164 | 142,654 | ||||||
681,249 | ||||||||
Banks 1.0% | ||||||||
Banca Carige S.p.A. (Cassa di Risparmio di Genova e Imperia) | 25,944 | 50,709 | ||||||
Banca Monte dei Paschi di Siena S.p.A. | 280,465 | 130,233 | ||||||
Banca Piccolo Credito Valtellinese Scarl | 14,448 | 41,899 | ||||||
Banca Popolare dell’Emilia Romagna Scrl | 14,886 | 120,024 | ||||||
Banca Popolare di Milano Scarl (c) | 51,712 | 31,824 | ||||||
Banca Popolare di Sondrio Scarl | 12,186 | 92,964 | ||||||
Banco Popolare Societa Cooperativa | 134,722 | 199,942 | ||||||
Intesa Sanpaolo | 667,238 | 1,177,676 | ||||||
UniCredit S.p.A. | 1,301,036 | 1,509,702 | ||||||
Unione di Banche Italiane S.C.P.A. | 54,084 | 204,923 | ||||||
3,559,896 | ||||||||
Capital Goods 0.1% | ||||||||
Fiat Industrial S.p.A. * | 21,461 | 186,850 | ||||||
Finmeccanica S.p.A. | 30,810 | 211,177 | ||||||
Prysmian S.p.A. | 6,598 | 99,743 | ||||||
497,770 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Luxottica Group S.p.A. | 2,449 | 72,170 | ||||||
Diversified Financials 0.1% | ||||||||
EXOR S.p.A. | 2,591 | 56,564 | ||||||
Mediobanca S.p.A. | 24,664 | 195,347 | ||||||
251,911 | ||||||||
Energy 1.1% | ||||||||
Eni S.p.A. | 160,379 | 3,545,001 | ||||||
ERG S.p.A. | 6,645 | 81,757 | ||||||
Saipem S.p.A. | 4,644 | 207,505 | ||||||
Saras S.p.A. * | 42,193 | 69,379 | ||||||
Tenaris S.A. | 7,812 | 124,650 | ||||||
4,028,292 | ||||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Parmalat S.p.A. | 60,703 | 134,831 | ||||||
Insurance 0.4% | ||||||||
Assicurazioni Generali S.p.A. | 83,837 | 1,500,017 | ||||||
Fondiaria-Sai S.p.A. * | 36,906 | 81,083 | ||||||
Unipol Gruppo Finanziario S.p.A. * | 142,474 | 58,420 | ||||||
1,639,520 | ||||||||
Materials 0.0% | ||||||||
Buzzi Unicem S.p.A. * | 7,306 | 66,799 | ||||||
Italcementi S.p.A. | 7,983 | 53,088 | ||||||
Italcementi S.p.A. - RSP | 16,025 | 50,197 | ||||||
170,084 | ||||||||
Media 0.1% | ||||||||
Mediaset S.p.A. | 50,390 | 185,658 | ||||||
Telecommunication Services 0.6% | ||||||||
Telecom Italia S.p.A. | 1,189,581 | 1,480,167 | ||||||
Telecom Italia S.p.A. - RSP | 536,206 | 562,725 | ||||||
2,042,892 | ||||||||
Transportation 0.0% | ||||||||
Atlantia S.p.A. | 11,672 | 177,780 | ||||||
Utilities 0.7% | ||||||||
A2A S.p.A. | 80,145 | 109,576 | ||||||
Enel S.p.A. | 434,288 | 2,049,012 | ||||||
Snam Rete Gas S.p.A. | 32,854 | 160,596 | ||||||
Terna - Rete Elettrica Nationale S.p.A. | 37,969 | 145,916 | ||||||
2,465,100 | ||||||||
15,907,153 | ||||||||
Japan 16.5% | ||||||||
Automobiles & Components 2.1% | ||||||||
Aisin Seiki Co., Ltd. | 6,000 | 189,762 | ||||||
Bridgestone Corp. | 23,000 | 539,283 | ||||||
Daihatsu Motor Co., Ltd. | 7,000 | 123,182 | ||||||
Denso Corp. | 11,600 | 356,738 | ||||||
Fuji Heavy Industries Ltd. | 22,000 | 139,441 | ||||||
Honda Motor Co., Ltd. | 41,400 | 1,238,015 | ||||||
Isuzu Motors Ltd. | 38,000 | 161,075 | ||||||
Mazda Motor Corp. * | 118,000 | 248,030 | ||||||
Mitsubishi Motors Corp. * | 151,000 | 199,467 | ||||||
Nissan Motor Co., Ltd. | 101,600 | 934,187 | ||||||
Nok Corp. | 4,800 | 81,234 | ||||||
Stanley Electric Co., Ltd. | 5,200 | 76,089 | ||||||
Suzuki Motor Corp. | 16,900 | 358,434 | ||||||
The Yokohama Rubber Co., Ltd. | 16,000 | 91,331 | ||||||
Toyota Industries Corp. | 4,700 | 132,145 | ||||||
Toyota Motor Corp. | 90,200 | 2,994,709 | ||||||
Yamaha Motor Co., Ltd. * | 9,500 | 136,078 | ||||||
7,999,200 | ||||||||
Banks 1.6% | ||||||||
Fukuoka Financial Group, Inc. | 35,000 | 135,521 | ||||||
Hokuhoku Financial Group, Inc. | 34,000 | 63,543 | ||||||
Mitsubishi UFJ Financial Group, Inc. | 486,834 | 2,115,750 | ||||||
Mizuho Financial Group, Inc. | 676,716 | 947,192 | ||||||
Resona Holdings, Inc. | 22,358 | 100,219 | ||||||
Shinsei Bank Ltd. | 108,000 | 118,701 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 46,310 | 1,294,434 | ||||||
Sumitomo Mitsui Trust Holdings, Inc. | 97,150 | 332,459 | ||||||
The Bank of Kyoto Ltd. | 8,000 | 67,955 | ||||||
The Bank of Yokohama Ltd. | 31,000 | 141,931 | ||||||
The Chiba Bank Ltd. | 20,000 | 122,367 | ||||||
The Chugoku Bank Ltd. | 6,000 | 78,592 | ||||||
The Gunma Bank, Ltd. | 16,000 | 81,886 | ||||||
The Hachijuni Bank Ltd. | 16,000 | 88,957 | ||||||
The Joyo Bank Ltd. | 20,000 | 83,796 | ||||||
The Shizuoka Bank Ltd. | 16,000 | 155,235 | ||||||
Yamaguchi Financial Group, Inc. | 10,000 | 89,104 | ||||||
6,017,642 | ||||||||
Capital Goods 2.3% | ||||||||
Amada Co., Ltd. | 8,000 | 53,073 | ||||||
Asahi Glass Co., Ltd. | 24,000 | 210,166 | ||||||
Daikin Industries Ltd. | 5,200 | 153,887 | ||||||
Fanuc Corp. | 1,500 | 242,535 | ||||||
Fuji Electric Holdings Co., Ltd. | 23,000 | 67,116 | ||||||
Fujikura Ltd. | 18,000 | 57,452 | ||||||
Furukawa Electric Co., Ltd. | 25,000 | 69,833 |
32 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Hankyu Hanshin Holdings, Inc. | 41,000 | 173,128 | ||||||
Hanwa Co., Ltd. | 30,000 | 125,535 | ||||||
IHI Corp. | 52,000 | 118,457 | ||||||
ITOCHU Corp. | 46,000 | 454,960 | ||||||
JGC Corp. | 4,000 | 112,688 | ||||||
JS Group Corp. | 7,100 | 148,881 | ||||||
JTEKT Corp. | 12,100 | 132,316 | ||||||
Kajima Corp. | 62,000 | 199,035 | ||||||
Kanematsu Corp. * | 64,000 | 53,963 | ||||||
Kawasaki Heavy Industries Ltd. | 41,000 | 104,538 | ||||||
Kinden Corp. | 8,000 | 65,695 | ||||||
Komatsu Ltd. | 16,100 | 398,069 | ||||||
Kubota Corp. | 15,000 | 123,543 | ||||||
Makita Corp. | 2,400 | 89,601 | ||||||
Marubeni Corp. | 57,000 | 331,772 | ||||||
Minebea Co., Ltd. | 16,000 | 57,017 | ||||||
Mitsubishi Corp. | 37,400 | 769,204 | ||||||
Mitsubishi Electric Corp. | 42,000 | 388,634 | ||||||
Mitsubishi Heavy Industries Ltd. | 145,000 | 590,806 | ||||||
Mitsui & Co., Ltd. | 45,800 | 668,429 | ||||||
Mitsui Engineering & Shipbuilding Co., Ltd. | 40,000 | 63,533 | ||||||
NGK Insulators Ltd. | 6,000 | 69,168 | ||||||
Nidec Corp. | 1,400 | 115,049 | ||||||
Nippon Sheet Glass Co., Ltd. | 44,000 | 94,879 | ||||||
NSK Ltd. | 12,000 | 90,680 | ||||||
NTN Corp. | 18,000 | 79,505 | ||||||
Obayashi Corp. | 34,000 | 156,097 | ||||||
Shimizu Corp. | 37,000 | 159,213 | ||||||
SMC Corp. | 800 | 124,433 | ||||||
Sojitz Corp. | 231,500 | 392,870 | ||||||
Sumitomo Corp. | 40,200 | 497,722 | ||||||
Sumitomo Electric Industries Ltd. | 22,700 | 251,685 | ||||||
Sumitomo Heavy Industries Ltd. | 14,000 | 79,502 | ||||||
Taisei Corp. | 68,000 | 181,699 | ||||||
Toto Ltd. | 8,000 | 66,520 | ||||||
Toyota Tsusho Corp. | 13,900 | 219,346 | ||||||
8,602,234 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Dai Nippon Printing Co., Ltd. | 23,000 | 240,912 | ||||||
Secom Co., Ltd. | 3,700 | 174,985 | ||||||
Toppan Printing Co., Ltd. | 29,000 | 225,483 | ||||||
641,380 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Casio Computer Co., Ltd. | 12,500 | 76,576 | ||||||
Haseko Corp. * | 121,000 | 76,071 | ||||||
NAMCO BANDAI Holdings, Inc. | 7,700 | 111,647 | ||||||
Nikon Corp. | 6,000 | 134,347 | ||||||
Panasonic Corp. | 130,450 | 1,318,730 | ||||||
Sankyo Co., Ltd. | 1,400 | 73,160 | ||||||
Sega Sammy Holdings, Inc. | 4,200 | 91,316 | ||||||
Sekisui Chemical Co., Ltd. | 17,000 | 133,403 | ||||||
Sekisui House Ltd. | 22,000 | 196,936 | ||||||
Sharp Corp. | 45,000 | 414,812 | ||||||
Sony Corp. | 39,000 | 813,673 | ||||||
Sumitomo Forestry Co., Ltd. | 9,500 | 82,204 | ||||||
Yamaha Corp. | 6,200 | 62,752 | ||||||
3,585,627 | ||||||||
Consumer Services 0.0% | ||||||||
Benesse Holdings, Inc. | 2,000 | 86,894 | ||||||
Diversified Financials 0.4% | ||||||||
Aiful Corp. * | 58,400 | 81,913 | ||||||
Credit Saison Co., Ltd. | 8,500 | 165,868 | ||||||
Daiwa Securities Group, Inc. | 63,000 | 220,435 | ||||||
Nomura Holdings, Inc. | 102,800 | 391,686 | ||||||
ORIX Corp. | 3,860 | 336,882 | ||||||
Promise Co., Ltd. * | 13,500 | 130,423 | ||||||
SBI Holdings, Inc. | 907 | 75,524 | ||||||
1,402,731 | ||||||||
Energy 0.3% | ||||||||
Cosmo Oil Co., Ltd. | 70,000 | 175,118 | ||||||
Idemitsu Kosan Co., Ltd. | 1,900 | 177,723 | ||||||
Inpex Corp. | 64 | 422,533 | ||||||
Showa Shell Sekiyu K.K. | 12,100 | 87,579 | ||||||
TonenGeneral Sekiyu K.K. | 15,000 | 169,264 | ||||||
1,032,217 | ||||||||
Food & Staples Retailing 0.4% | ||||||||
Aeon Co., Ltd. | 40,800 | 533,612 | ||||||
Lawson, Inc. | 2,200 | 123,793 | ||||||
Seven & i Holdings Co., Ltd. | 26,000 | 693,829 | ||||||
Uny Co., Ltd. | 13,000 | 117,270 | ||||||
1,468,504 | ||||||||
Food, Beverage & Tobacco 0.5% | ||||||||
Ajinomoto Co., Inc. | 19,000 | 212,694 | ||||||
Asahi Breweries Ltd. | 12,200 | 249,747 | ||||||
Japan Tobacco, Inc. | 100 | 499,816 | ||||||
Kirin Holdings Co., Ltd. | 25,000 | 305,863 | ||||||
Meiji Holdings Co., Ltd. | 3,400 | 149,064 | ||||||
Nippon Meat Packers, Inc. | 9,000 | 112,180 | ||||||
Nisshin Seifun Group, Inc. | 7,000 | 86,034 | ||||||
Nissin Foods Holdings Co., Ltd. | 2,500 | 96,295 | ||||||
Yakult Honsha Co., Ltd. | 3,400 | 95,547 | ||||||
1,807,240 | ||||||||
Health Care Equipment & Services 0.2% | ||||||||
Alfresa Holdings Corp. | 3,800 | 142,373 | ||||||
Medipal Holdings Corp. | 21,200 | 197,760 | ||||||
Olympus Corp. (c) | 5,500 | 83,814 | ||||||
Suzuken Co., Ltd. | 3,100 | 74,167 | ||||||
Terumo Corp. | 1,900 | 96,539 | ||||||
594,653 | ||||||||
Household & Personal Products 0.1% | ||||||||
Kao Corp. | 14,000 | 367,281 | ||||||
Shiseido Co., Ltd. | 7,000 | 128,124 | ||||||
495,405 | ||||||||
Insurance 0.3% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 17,790 | 348,441 | ||||||
T&D Holdings, Inc. | 16,600 | 164,563 | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 330 | 375,805 | ||||||
Tokio Marine Holdings, Inc. | 17,300 | 412,509 | ||||||
1,301,318 | ||||||||
Materials 1.4% | ||||||||
Asahi Kasei Corp. | 38,000 | 225,353 | ||||||
Daicel Chemical Industries Ltd. | 12,000 | 68,119 | ||||||
Denki Kagaku Kogyo Kabushiki Kaisha | 12,000 | 45,646 | ||||||
DIC Corp. | 34,000 | 64,201 | ||||||
Dowa Holdings Co., Ltd. | 10,000 | 60,010 |
See financial notes 33
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
JFE Holdings, Inc. | 22,400 | 426,329 | ||||||
JSR Corp. | 4,700 | 89,723 | ||||||
Kobe Steel Ltd. | 105,000 | 175,608 | ||||||
Kuraray Co., Ltd. | 9,500 | 132,989 | ||||||
Mitsubhishi Gas Chemical Co., Inc. | 10,000 | 65,267 | ||||||
Mitsubishi Chemical Holdings Corp. | 47,000 | 284,908 | ||||||
Mitsubishi Materials Corp. | 47,000 | 124,932 | ||||||
Mitsui Chemicals, Inc. | 49,000 | 160,705 | ||||||
Mitsui Mining & Smelting Co., Ltd. | 20,000 | 54,508 | ||||||
Nippon Paper Group, Inc. | 6,543 | 149,956 | ||||||
Nippon Steel Corp. | 225,000 | 586,624 | ||||||
Nisshin Steel Co., Ltd. | 34,000 | 53,816 | ||||||
Nitto Denko Corp. | 2,700 | 113,422 | ||||||
Oji Paper Co., Ltd. | 42,000 | 207,743 | ||||||
Shin-Etsu Chemical Co., Ltd. | 7,700 | 395,432 | ||||||
Showa Denko K.K. | 61,000 | 110,671 | ||||||
Sumitomo Chemical Co., Ltd. | 54,000 | 199,313 | ||||||
Sumitomo Metal Industries Ltd. | 150,000 | 282,090 | ||||||
Sumitomo Metal Mining Co., Ltd. | 13,000 | 178,952 | ||||||
Taiheiyo Cement Corp. | 73,000 | 141,814 | ||||||
Taiyo Nippon Sanso Corp. | 8,000 | 56,849 | ||||||
Teijin Ltd. | 31,000 | 108,214 | ||||||
Toray Industries, Inc. | 30,000 | 213,522 | ||||||
Tosoh Corp. | 28,000 | 91,005 | ||||||
Toyo Seikan Kaisha Ltd. | 7,700 | 117,164 | ||||||
Ube Industries Ltd. | 31,000 | 90,882 | ||||||
5,075,767 | ||||||||
Media 0.1% | ||||||||
Dentsu, Inc. | 4,501 | 135,526 | ||||||
Hakuhodo Dy Holdings, Inc. | 1,810 | 98,344 | ||||||
233,870 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.6% | ||||||||
Astellas Pharma, Inc. | 9,900 | 362,077 | ||||||
Chugai Pharmaceutical Co., Ltd. | 3,700 | 57,956 | ||||||
Daiichi Sankyo Co., Ltd. | 14,700 | 285,542 | ||||||
Eisai Co., Ltd. | 6,200 | 245,902 | ||||||
Ono Pharmaceutical Co., Ltd. | 2,200 | 115,136 | ||||||
Otsuka Holdings K.K. | 9,900 | 254,037 | ||||||
Shionogi & Co., Ltd. | 4,000 | 54,450 | ||||||
Taisho Pharmaceutical Holdings Co., Ltd. * | 1,500 | 105,909 | ||||||
Takeda Pharmaceutical Co., Ltd. | 16,300 | 734,827 | ||||||
2,215,836 | ||||||||
Real Estate 0.3% | ||||||||
Daito Trust Construction Co., Ltd. | 1,800 | 159,481 | ||||||
Daiwa House Industry Co., Ltd. | 19,000 | 238,087 | ||||||
Mitsubishi Estate Co., Ltd. | 15,000 | 254,055 | ||||||
Mitsui Fudosan Co., Ltd. | 20,000 | 332,606 | ||||||
Sumitomo Realty & Development Co., Ltd. | 8,500 | 176,181 | ||||||
Tokyu Land Corp. | 13,000 | 54,725 | ||||||
1,215,135 | ||||||||
Retailing 0.2% | ||||||||
Edion Corp. | 9,800 | 78,412 | ||||||
Fast Retailing Co., Ltd. | 700 | 125,745 | ||||||
Isetan Mitsukoshi Holdings Ltd. | 14,000 | 142,603 | ||||||
J. Front Retailing Co., Ltd. | 26,000 | 113,852 | ||||||
Marui Group Co., Ltd. | 11,300 | 87,849 | ||||||
Takashimaya Co., Ltd. | 15,000 | 106,490 | ||||||
Yamada Denki Co., Ltd. | 3,270 | 235,161 | ||||||
890,112 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Elpida Memory, Inc. * | 9,800 | 60,917 | ||||||
Rohm Co., Ltd. | 3,300 | 168,140 | ||||||
Tokyo Electron Ltd. | 2,500 | 132,958 | ||||||
362,015 | ||||||||
Software & Services 0.1% | ||||||||
Nintendo Co., Ltd. | 2,230 | 336,441 | ||||||
Nomura Research Institute Ltd. | 4,400 | 98,956 | ||||||
NTT Data Corp. | 39 | 130,744 | ||||||
566,141 | ||||||||
Technology Hardware & Equipment 1.7% | ||||||||
Alps Electric Co., Ltd. | 7,600 | 57,229 | ||||||
Brother Industries Ltd. | 7,700 | 100,492 | ||||||
Canon, Inc. | 34,500 | 1,566,224 | ||||||
FUJIFILM Holdings Corp. | 14,100 | 345,086 | ||||||
Fujitsu Ltd. | 85,000 | 454,550 | ||||||
Hitachi Ltd. | 183,000 | 980,567 | ||||||
Hoya Corp. | 10,100 | 220,652 | ||||||
Ibiden Co., Ltd. | 2,900 | 64,040 | ||||||
Keyence Corp. | 430 | 109,311 | ||||||
Konica Minolta Holdings, Inc. | 19,900 | 144,754 | ||||||
Kyocera Corp. | 4,400 | 386,787 | ||||||
Murata Manufacturing Co., Ltd. | 3,900 | 217,846 | ||||||
NEC Corp. * | 231,000 | 514,011 | ||||||
Nippon Electric Glass Co., Ltd. | 7,000 | 62,798 | ||||||
OMRON Corp. | 5,700 | 122,843 | ||||||
Ricoh Co., Ltd. | 29,000 | 237,684 | ||||||
Seiko Epson Corp. | 10,200 | 134,065 | ||||||
TDK Corp. | 2,700 | 110,101 | ||||||
Toshiba Corp. | 108,000 | 471,030 | ||||||
6,300,070 | ||||||||
Telecommunication Services 1.0% | ||||||||
KDDI Corp. | 130 | 952,296 | ||||||
Nippon Telegraph & Telephone Corp. | 27,704 | 1,421,099 | ||||||
NTT DOCOMO, Inc. | 550 | 976,824 | ||||||
SOFTBANK Corp. | 10,200 | 331,047 | ||||||
3,681,266 | ||||||||
Transportation 0.8% | ||||||||
All Nippon Airways Co., Ltd. | 20,000 | 60,220 | ||||||
Central Japan Railway Co. | 54 | 459,379 | ||||||
East Japan Railway Co. | 10,618 | 643,751 | ||||||
Kawasaki Kisen Kaisha Ltd. | 29,000 | 59,149 | ||||||
Keio Corp. | 14,100 | 96,671 | ||||||
Kintetsu Corp. (c) | 39,000 | 136,817 | ||||||
Mitsui O.S.K. Lines Ltd. | 50,000 | 192,650 | ||||||
Nagoya Railroad Co., Ltd. | 38,000 | 99,346 | ||||||
Nippon Express Co., Ltd. | 54,000 | 208,761 | ||||||
Nippon Yusen Kabushiki Kaisha | 75,000 | 189,154 | ||||||
Odakyu Electric Railway Co., Ltd. | 12,000 | 112,432 | ||||||
Seino Holdings Co., Ltd. | 10,000 | 75,024 | ||||||
Tobu Railway Co., Ltd. | 22,000 | 104,996 | ||||||
Tokyu Corp. | 40,000 | 193,063 | ||||||
West Japan Railway Co. | 6,565 | 278,183 | ||||||
Yamato Holdings Co., Ltd. | 12,000 | 198,935 | ||||||
3,108,531 | ||||||||
Utilities 0.8% | ||||||||
Chubu Electric Power Co., Inc. | 25,000 | 457,393 |
34 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Electric Power Development Co., Ltd. | 7,800 | 194,170 | ||||||
Hokkaido Electric Power Co., Inc. | 7,400 | 92,819 | ||||||
Hokuriku Electric Power Co. | 6,500 | 103,557 | ||||||
Kyushu Electric Power Co., Inc. | 17,500 | 231,673 | ||||||
Osaka Gas Co., Ltd. | 66,000 | 249,745 | ||||||
Shikoku Electric Power Co., Inc. | 5,200 | 132,924 | ||||||
The Chugoku Electric Power Co., Inc. | 12,600 | 187,482 | ||||||
The Kansai Electric Power Co., Inc. | 28,200 | 415,990 | ||||||
The Tokyo Electric Power Co., Inc. | 44,000 | 161,399 | ||||||
Toho Gas Co., Ltd. | 17,000 | 96,239 | ||||||
Tohoku Electric Power Co., Inc. | 18,100 | 199,992 | ||||||
Tokyo Gas Co., Ltd. | 70,000 | 301,442 | ||||||
2,824,825 | ||||||||
61,508,613 | ||||||||
Netherlands 3.7% | ||||||||
Capital Goods 0.2% | ||||||||
Imtech N.V. | 1,829 | 54,032 | ||||||
Koninklijke BAM Groep N.V. | 15,485 | 64,322 | ||||||
Koninklijke Boskalis Westminster N.V. | 2,178 | 76,127 | ||||||
Koninklijke Philips Electronics N.V. | 33,110 | 689,241 | ||||||
883,722 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Randstad Holding N.V. | 3,524 | 125,111 | ||||||
USG People N.V. | 5,400 | 47,828 | ||||||
172,939 | ||||||||
Diversified Financials 1.5% | ||||||||
ING Groep N.V. CVA * | 634,454 | 5,469,611 | ||||||
SNS Reaal N.V. * | 27,491 | 76,630 | ||||||
5,546,241 | ||||||||
Energy 0.1% | ||||||||
Fugro N.V. CVA | 1,310 | 76,937 | ||||||
SBM Offshore N.V. | 4,836 | 106,258 | ||||||
183,195 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Koninklijke Ahold N.V. | 50,296 | 642,600 | ||||||
Food, Beverage & Tobacco 0.5% | ||||||||
CSM N.V. | 3,357 | 49,199 | ||||||
Heineken Holding N.V. | 3,645 | 155,930 | ||||||
Heineken N.V. | 5,298 | 257,386 | ||||||
Nutreco N.V. | 1,466 | 97,400 | ||||||
Unilever N.V. CVA | 36,150 | 1,248,030 | ||||||
1,807,945 | ||||||||
Insurance 0.3% | ||||||||
Aegon N.V. * | 159,969 | 762,883 | ||||||
Delta Lloyd N.V. | 11,600 | 203,690 | ||||||
966,573 | ||||||||
Materials 0.5% | ||||||||
Akzo Nobel N.V. | 8,263 | 434,485 | ||||||
APERAM | 3,287 | 56,485 | ||||||
ArcelorMittal | 51,477 | 1,067,273 | ||||||
Koninklijke DSM N.V. | 6,429 | 328,984 | ||||||
1,887,227 | ||||||||
Media 0.0% | ||||||||
Wolters Kluwer N.V. | 8,459 | 149,259 | ||||||
Real Estate 0.0% | ||||||||
Corio N.V. | 1,951 | 99,147 | ||||||
Wereldhave N.V. | 930 | 72,795 | ||||||
171,942 | ||||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
ASML Holding N.V. | 3,829 | 160,623 | ||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. | 68,032 | 890,737 | ||||||
Transportation 0.1% | ||||||||
TNT Express N.V. | 15,998 | 135,736 | ||||||
TNT N.V. | 12,575 | 63,672 | ||||||
199,408 | ||||||||
13,662,411 | ||||||||
New Zealand 0.1% | ||||||||
Materials 0.0% | ||||||||
Fletcher Building Ltd. | 23,530 | 125,473 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Corp. of New Zealand Ltd. | 163,500 | 333,810 | ||||||
459,283 | ||||||||
Norway 0.9% | ||||||||
Banks 0.1% | ||||||||
DnB NOR A.S.A. | 31,427 | 363,516 | ||||||
Capital Goods 0.1% | ||||||||
Orkla A.S.A. | 39,214 | 339,958 | ||||||
Energy 0.4% | ||||||||
Aker Solutions A.S.A. | 5,150 | 59,208 | ||||||
Frontline Ltd. | 6,834 | 34,776 | ||||||
Kvaerner A.S.A. * | 33,261 | 64,084 | ||||||
Petroleum Geo-Services A.S.A. * | 4,622 | 50,217 | ||||||
Seadrill Ltd. | 2,000 | 65,678 | ||||||
Statoil A.S.A. | 53,623 | 1,360,633 | ||||||
1,634,596 | ||||||||
Insurance 0.0% | ||||||||
Storebrand A.S.A. | 18,777 | 114,717 | ||||||
Materials 0.2% | ||||||||
Norsk Hydro A.S.A. | 70,910 | 367,314 | ||||||
Norske Skogindustrier A.S.A. * | 64,675 | 36,403 | ||||||
Yara International A.S.A. | 3,700 | 174,971 | ||||||
578,688 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telenor A.S.A. | 23,184 | 412,970 | ||||||
3,444,445 | ||||||||
Portugal 0.3% | ||||||||
Banks 0.0% | ||||||||
Banco Comercial Portugues S.A. - Reg’d (c)* | 237,916 | 50,336 | ||||||
Capital Goods 0.0% | ||||||||
Sonae | 52,887 | 38,079 | ||||||
Energy 0.1% | ||||||||
Galp Energia, SGPS, S.A., B Shares | 5,265 | 108,279 |
See financial notes 35
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 45,179 | 323,083 | ||||||
Transportation 0.0% | ||||||||
Brisa Auto-Estradas de Portugal S.A. | 19,159 | 65,208 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 131,163 | 412,051 | ||||||
997,036 | ||||||||
Republic of Korea 4.5% | ||||||||
Automobiles & Components 0.5% | ||||||||
Hankook Tire Co., Ltd. | 3,036 | 121,179 | ||||||
Hyundai Mobis | 938 | 268,447 | ||||||
Hyundai Motor Co. | 5,894 | 1,186,984 | ||||||
Kia Motors Corp. | 4,850 | 310,943 | ||||||
1,887,553 | ||||||||
Banks 0.5% | ||||||||
BS Financial Group, Inc. * | 5,470 | 60,203 | ||||||
DGB Financial Group, Inc. * | 4,501 | 56,659 | ||||||
Hana Financial Group, Inc. | 5,420 | 193,621 | ||||||
Industrial Bank of Korea | 6,220 | 81,658 | ||||||
KB Financial Group, Inc. | 9,136 | 353,946 | ||||||
Korea Exchange Bank | 17,670 | 130,797 | ||||||
Shinhan Financial Group Co., Ltd. | 16,410 | 653,727 | ||||||
Woori Finance Holdings Co., Ltd. | 22,600 | 216,201 | ||||||
1,746,812 | ||||||||
Capital Goods 1.0% | ||||||||
Daelim Industrial Co., Ltd. | 1,567 | 135,755 | ||||||
Doosan Corp. | 2,062 | 260,738 | ||||||
Doosan Heavy Industries & Construction Co., Ltd. | 1,577 | 83,823 | ||||||
GS Engineering & Construction Corp. | 1,253 | 108,967 | ||||||
Hyundai Development Co. | 4,446 | 91,817 | ||||||
Hyundai Engineering & Construction Co., Ltd. | 1,481 | 94,236 | ||||||
Hyundai Heavy Industries Co., Ltd. | 957 | 255,676 | ||||||
Hyundai Mipo Dockyard Co., Ltd. | 694 | 75,420 | ||||||
LG Corp. | 9,386 | 549,300 | ||||||
LG International Corp. | 3,220 | 142,168 | ||||||
LS Corp. | 1,719 | 122,349 | ||||||
Samsung C&T Corp. | 5,020 | 310,384 | ||||||
Samsung Heavy Industries Co., Ltd. | 4,860 | 148,271 | ||||||
SK Holdings Co., Ltd. | 9,303 | 1,238,477 | ||||||
STX Corp. | 3,860 | 48,869 | ||||||
STX Offshore & Shipbuilding Co., Ltd. | 4,730 | 65,908 | ||||||
3,732,158 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
LG Electronics, Inc. | 7,212 | 477,449 | ||||||
Consumer Services 0.0% | ||||||||
Kangwon Land, Inc. | 3,781 | 100,795 | ||||||
Diversified Financials 0.0% | ||||||||
Samsung Securities Co., Ltd. | 1,434 | 74,098 | ||||||
Energy 0.2% | ||||||||
GS Holdings | 3,090 | 177,989 | ||||||
S-Oil Corp. | 3,455 | 358,537 | ||||||
SK Innovation Co., Ltd. | 2,597 | 390,800 | ||||||
927,326 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
E-Mart Co., Ltd. * | 507 | 132,446 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
KT&G Corp. | 2,294 | 143,867 | ||||||
Insurance 0.1% | ||||||||
Dongbu Insurance Co., Ltd. | 2,469 | 103,943 | ||||||
Samsung Fire & Marine Insurance Co., Ltd. | 1,110 | 236,025 | ||||||
Samsung Life Insurance Co., Ltd. | 1,606 | 124,555 | ||||||
464,523 | ||||||||
Materials 0.6% | ||||||||
Cheil Industries, Inc. | 612 | 54,061 | ||||||
Dongkuk Steel Mill Co., Ltd. | 2,560 | 59,288 | ||||||
Hanwha Corp. | 7,060 | 247,781 | ||||||
Honam Petrochemical Corp. | 267 | 72,838 | ||||||
Hyosung Corp. | 1,973 | 113,791 | ||||||
Hyundai Steel Co. | 1,007 | 91,380 | ||||||
Korea Kumho Petrochemical Co., Ltd. | 760 | 128,800 | ||||||
LG Chem Ltd. | 705 | 227,494 | ||||||
POSCO | 3,053 | 1,057,829 | ||||||
2,053,262 | ||||||||
Retailing 0.1% | ||||||||
Hyundai Department Store Co., Ltd. | 712 | 102,083 | ||||||
Lotte Shopping Co., Ltd. | 288 | 103,364 | ||||||
Shinsegae Co., Ltd. | 234 | 58,851 | ||||||
264,298 | ||||||||
Semiconductors & Semiconductor Equipment 0.9% | ||||||||
Hynix Semiconductor, Inc. | 10,650 | 215,527 | ||||||
Samsung Electronics Co., Ltd. | 3,463 | 2,981,160 | ||||||
3,196,687 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
LG Display Co., Ltd. | 10,650 | 216,246 | ||||||
Samsung Electro-Mechanics Co., Ltd. | 908 | 68,776 | ||||||
Samsung SDI Co., Ltd. | 750 | 90,345 | ||||||
375,367 | ||||||||
Telecommunication Services 0.2% | ||||||||
KT Corp. | 10,140 | 339,861 | ||||||
SK Telecom Co., Ltd. | 2,261 | 301,064 | ||||||
640,925 | ||||||||
Transportation 0.0% | ||||||||
Korean Air Lines Co., Ltd. | 1,750 | 77,706 | ||||||
Utilities 0.2% | ||||||||
Korea Electric Power Corp. * | 20,790 | 465,539 | ||||||
Korea Gas Corp. | 2,760 | 93,191 | ||||||
558,730 | ||||||||
16,854,002 | ||||||||
Singapore 1.0% | ||||||||
Banks 0.3% | ||||||||
DBS Group Holdings Ltd. | 43,056 | 420,561 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 46,897 | 313,973 | ||||||
United Overseas Bank Ltd. | 28,952 | 392,663 | ||||||
1,127,197 | ||||||||
Capital Goods 0.2% | ||||||||
Fraser & Neave Ltd. | 39,000 | 189,947 | ||||||
Keppel Corp., Ltd. | 31,300 | 234,315 |
36 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Noble Group Ltd. | 140,879 | 172,013 | ||||||
SembCorp Industries Ltd. | 27,000 | 89,017 | ||||||
Singapore Technologies Engineering Ltd. | 28,100 | 62,950 | ||||||
748,242 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Golden Agri-Resources Ltd. | 155,000 | 79,348 | ||||||
Wilmar International Ltd. | 39,166 | 169,112 | ||||||
248,460 | ||||||||
Media 0.0% | ||||||||
Singapore Press Holdings Ltd. | 44,000 | 136,164 | ||||||
Real Estate 0.1% | ||||||||
Capitaland Ltd. | 74,000 | 159,429 | ||||||
CapitaMall Trust | 42,000 | 62,403 | ||||||
City Developments Ltd. | 13,000 | 112,107 | ||||||
333,939 | ||||||||
Retailing 0.0% | ||||||||
Jardine Cycle & Carriage Ltd. | 4,000 | 143,793 | ||||||
Technology Hardware & Equipment 0.0% | ||||||||
Venture Corp. Ltd. | 10,000 | 53,334 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 207,486 | 524,589 | ||||||
Transportation 0.1% | ||||||||
ComfortDelGro Corp. Ltd. | 59,000 | 65,376 | ||||||
Singapore Airlines Ltd. | 23,270 | 215,614 | ||||||
280,990 | ||||||||
3,596,708 | ||||||||
Spain 4.3% | ||||||||
Banks 1.7% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 214,405 | 1,929,627 | ||||||
Banco de Sabadell S.A. | 82,101 | 294,478 | ||||||
Banco Popular Espanol S.A. | 76,701 | 351,080 | ||||||
Banco Santander S.A. | 419,008 | 3,546,424 | ||||||
Bankinter S.A. | 19,894 | 121,454 | ||||||
CaixaBank | 32,771 | 159,771 | ||||||
6,402,834 | ||||||||
Capital Goods 0.2% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 9,653 | 365,677 | ||||||
Ferrovial S.A. | 15,010 | 190,778 | ||||||
Fomento de Construcciones y Contratas S.A. | 4,980 | 128,924 | ||||||
Gamesa Corp. Tecnologica S.A. | 10,682 | 51,586 | ||||||
Obrascon Huarte Lain S.A. | 2,064 | 57,550 | ||||||
Sacyr Vallehermoso S.A. | 9,447 | 65,971 | ||||||
860,486 | ||||||||
Energy 0.5% | ||||||||
Repsol YPF S.A. | 59,707 | 1,797,163 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Distribuidora Internacional de Alimentacion S.A. * | 38,561 | 176,344 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Ebro Foods S.A. | 4,400 | 89,164 | ||||||
Insurance 0.0% | ||||||||
Mapfre S.A. | 41,269 | 150,795 | ||||||
Materials 0.0% | ||||||||
Acerinox S.A. | 7,606 | 100,659 | ||||||
Retailing 0.1% | ||||||||
Industria de Diseno Textil S.A. | 3,424 | 310,829 | ||||||
Software & Services 0.0% | ||||||||
Indra Sistemas S.A. | 6,089 | 102,029 | ||||||
Telecommunication Services 1.0% | ||||||||
Telefonica S.A. | 166,256 | 3,533,205 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 10,642 | 175,120 | ||||||
Utilities 0.6% | ||||||||
Acciona S.A. | 1,464 | 138,435 | ||||||
Enagas | 4,712 | 92,655 | ||||||
Endesa S.A. | 5,553 | 131,844 | ||||||
Gas Natural SDG S.A. | 16,825 | 312,741 | ||||||
Iberdrola S.A. | 204,149 | 1,477,012 | ||||||
2,152,687 | ||||||||
15,851,315 | ||||||||
Sweden 2.8% | ||||||||
Banks 0.6% | ||||||||
Nordea Bank AB | 120,349 | 1,092,874 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 60,505 | 379,300 | ||||||
Svenska Handelsbanken AB, A Shares | 17,583 | 504,992 | ||||||
Swedbank AB, A Shares | 27,730 | 388,233 | ||||||
2,365,399 | ||||||||
Capital Goods 0.7% | ||||||||
Alfa Laval AB | 6,485 | 120,781 | ||||||
Assa Abloy AB, B Shares | 6,018 | 146,147 | ||||||
Atlas Copco AB, A Shares | 9,070 | 197,177 | ||||||
Atlas Copco AB, B Shares | 6,361 | 123,610 | ||||||
NCC AB, B Shares | 6,710 | 122,978 | ||||||
Peab AB | 7,502 | 40,828 | ||||||
Saab AB, Class B | 3,308 | 63,715 | ||||||
Sandvik AB | 21,337 | 293,311 | ||||||
Scania AB, A Shares | 3,000 | 48,591 | ||||||
Scania AB, B Shares | 16,719 | 280,544 | ||||||
Skanska AB, B Shares | 17,814 | 290,883 | ||||||
SKF AB, B Shares | 8,369 | 185,474 | ||||||
Trelleborg AB, B Shares | 6,872 | 58,172 | ||||||
Volvo AB, A Shares | 18,498 | 229,805 | ||||||
Volvo AB, B Shares | 40,627 | 505,672 | ||||||
2,707,688 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Securitas AB, B Shares | 15,528 | 141,496 | ||||||
Consumer Durables & Apparel 0.1% | ||||||||
Electrolux AB, B Shares | 10,571 | 196,836 | ||||||
Husqvarna AB, A Shares | 10,926 | 55,706 | ||||||
Husqvarna AB, B Shares | 8,986 | 45,639 | ||||||
298,181 | ||||||||
Diversified Financials 0.3% | ||||||||
Industrivarden AB, A Shares | 7,273 | 95,373 | ||||||
Industrivarden AB, C Shares | 4,458 | 55,519 | ||||||
Investor AB, B Shares | 25,656 | 501,775 | ||||||
Kinnevik Investment AB, B Shares | 5,524 | 115,434 |
See financial notes 37
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
L E Lundbergforetagen AB, B Shares | 1,770 | 54,569 | ||||||
Ratos AB, B Shares | 6,830 | 90,845 | ||||||
913,515 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Axfood AB | 1,636 | 62,039 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Swedish Match AB | 2,614 | 90,261 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Getinge AB, B Shares | 4,464 | 115,801 | ||||||
Materials 0.2% | ||||||||
Boliden AB | 7,065 | 100,439 | ||||||
Holmen AB, B Shares | 3,748 | 106,048 | ||||||
SSAB AB, A Shares | 8,329 | 80,517 | ||||||
SSAB AB, B Shares | 8,622 | 73,053 | ||||||
Svenska Cellulosa AB, B Shares | 31,235 | 455,986 | ||||||
816,043 | ||||||||
Retailing 0.2% | ||||||||
Hennes & Mauritz AB, B Shares | 26,626 | 880,371 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Hexagon AB, Class B | 4,550 | 69,738 | ||||||
Telefonaktiebolaget LM Ericsson, B Shares | 84,997 | 885,968 | ||||||
955,706 | ||||||||
Telecommunication Services 0.3% | ||||||||
Tele2 AB, B Shares | 12,161 | 256,090 | ||||||
TeliaSonera AB | 131,051 | 910,925 | ||||||
1,167,015 | ||||||||
Transportation 0.0% | ||||||||
SAS AB (c)* | 30,790 | 50,968 | ||||||
10,564,483 | ||||||||
Switzerland 4.9% | ||||||||
Capital Goods 0.2% | ||||||||
ABB Ltd. - Reg’d * | 28,618 | 538,745 | ||||||
Geberit AG - Reg’d * | 581 | 118,987 | ||||||
Schindler Holding AG | 493 | 57,733 | ||||||
Schindler Holding AG - Reg’d | 398 | 46,709 | ||||||
Sulzer AG - Reg’d | 490 | 57,109 | ||||||
819,283 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Adecco S.A. - Reg’d * | 4,623 | 222,030 | ||||||
SGS S.A. - Reg’d | 91 | 156,104 | ||||||
378,134 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 5,784 | 329,483 | ||||||
Swatch Group AG - Bearer Shares | 387 | 162,922 | ||||||
Swatch Group AG - Reg’d | 836 | 61,647 | ||||||
554,052 | ||||||||
Diversified Financials 0.7% | ||||||||
Credit Suisse Group AG - Reg’d * | 40,982 | 1,181,963 | ||||||
GAM Holding AG * | 5,520 | 65,994 | ||||||
Julius Baer Group Ltd. * | 3,073 | 115,467 | ||||||
Pargesa Holding S.A. | 1,454 | 113,547 | ||||||
UBS AG - Reg’d * | 86,346 | 1,091,259 | ||||||
2,568,230 | ||||||||
Energy 0.1% | ||||||||
Petroplus Holdings AG * | 8,411 | 50,171 | ||||||
Transocean Ltd. | 8,908 | 503,414 | ||||||
553,585 | ||||||||
Food, Beverage & Tobacco 1.0% | ||||||||
Aryzta AG | 1,440 | 69,434 | ||||||
Lindt & Spruengli AG | 18 | 55,548 | ||||||
Lindt & Spruengli AG - Reg’d | 2 | 73,648 | ||||||
Nestle S.A. - Reg’d | 62,049 | 3,588,769 | ||||||
3,787,399 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Synthes, Inc. - Reg’d | 620 | 103,682 | ||||||
Insurance 0.8% | ||||||||
Baloise Holding AG - Reg’d | 2,000 | 162,912 | ||||||
Helvetia Holding AG - Reg’d | 263 | 96,095 | ||||||
Swiss Life Holding AG - Reg’d * | 3,047 | 374,224 | ||||||
Swiss Re Ltd. * | 16,284 | 889,081 | ||||||
Zurich Financial Services AG * | 6,270 | 1,444,881 | ||||||
2,967,193 | ||||||||
Materials 0.3% | ||||||||
Clariant AG - Reg’d * | 9,477 | 102,627 | ||||||
Givaudan S.A. - Reg’d * | 129 | 117,328 | ||||||
Holcim Ltd. - Reg’d * | 8,589 | 543,908 | ||||||
Syngenta AG - Reg’d * | 1,153 | 351,343 | ||||||
1,115,206 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.4% | ||||||||
Lonza Group AG - Reg’d * | 1,288 | 85,676 | ||||||
Novartis AG - Reg’d | 52,588 | 2,962,559 | ||||||
Roche Holding AG | 12,152 | 1,993,770 | ||||||
5,042,005 | ||||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 584 | 235,260 | ||||||
Transportation 0.0% | ||||||||
Kuehne & Nagel International AG - Reg’d | 959 | 118,812 | ||||||
18,242,841 | ||||||||
United Kingdom 20.8% | ||||||||
Automobiles & Components 0.0% | ||||||||
GKN plc | 47,244 | 143,622 | ||||||
Banks 2.6% | ||||||||
Barclays plc | 607,345 | 1,882,734 | ||||||
Bradford & Bingley plc (a)(b)* | 87,225 | — | ||||||
HSBC Holdings plc | 622,512 | 5,431,609 | ||||||
Lloyds Banking Group plc * | 1,644,699 | 850,510 | ||||||
Royal Bank of Scotland Group plc * | 1,075,299 | 414,980 | ||||||
Standard Chartered plc | 44,918 | 1,048,131 | ||||||
9,627,964 | ||||||||
Capital Goods 0.7% | ||||||||
BAE Systems plc | 143,300 | 635,484 | ||||||
Balfour Beatty plc | 31,126 | 125,568 | ||||||
Bunzl plc | 11,216 | 145,086 | ||||||
Carillion plc | 18,838 | 104,631 | ||||||
Cobham plc | 21,604 | 62,344 |
38 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Cookson Group plc | 10,222 | 78,572 | ||||||
IMI plc | 7,666 | 101,033 | ||||||
Invensys plc | 17,216 | 62,284 | ||||||
Meggitt plc | 18,968 | 117,063 | ||||||
Rolls-Royce Holdings plc * | 37,752 | 424,954 | ||||||
Rolls-Royce Holdings plc, C Shares (a)(b)* | 2,604,888 | 4,188 | ||||||
SIG plc | 33,272 | 51,265 | ||||||
Smiths Group plc | 8,822 | 135,398 | ||||||
Travis Perkins plc | 8,595 | 118,541 | ||||||
Wolseley plc | 12,988 | 374,523 | ||||||
2,540,934 | ||||||||
Commercial & Professional Supplies 0.2% | ||||||||
Capita Group plc | 10,412 | 121,481 | ||||||
De La Rue plc | 8,842 | 119,783 | ||||||
Experian plc | 13,282 | 172,543 | ||||||
G4S plc | 44,043 | 172,195 | ||||||
Hays plc | 41,715 | 52,963 | ||||||
Rentokil Initial plc * | 71,739 | 82,734 | ||||||
Serco Group plc | 11,842 | 98,614 | ||||||
820,313 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Barratt Developments plc * | 91,005 | 129,665 | ||||||
Bellway plc | 7,042 | 80,130 | ||||||
Burberry Group plc | 4,542 | 97,506 | ||||||
Persimmon plc | 21,573 | 172,037 | ||||||
Taylor Wimpey plc * | 258,269 | 152,862 | ||||||
632,200 | ||||||||
Consumer Services 0.5% | ||||||||
Carnival plc | 5,045 | 184,594 | ||||||
Compass Group plc | 51,578 | 468,371 | ||||||
Enterprise Inns plc * | 61,825 | 27,510 | ||||||
Greene King plc | 8,896 | 64,146 | ||||||
InterContinental Hotels Group plc | 3,169 | 58,487 | ||||||
Ladbrokes plc | 50,996 | 112,944 | ||||||
Mitchells & Butlers plc * | 32,350 | 124,603 | ||||||
Punch Taverns plc * | 192,981 | 32,511 | ||||||
Spirit Pub Co. plc * | 139,053 | 106,761 | ||||||
Thomas Cook Group plc | 101,587 | 84,294 | ||||||
Tui Travel plc | 53,817 | 147,265 | ||||||
Whitbread plc | 5,779 | 153,556 | ||||||
William Hill plc | 32,996 | 114,527 | ||||||
1,679,569 | ||||||||
Diversified Financials 0.2% | ||||||||
3i Group plc | 20,645 | 68,043 | ||||||
Close Brothers Group plc | 4,858 | 55,210 | ||||||
ICAP plc | 16,312 | 105,209 | ||||||
Intermediate Capital Group plc | 18,280 | 71,578 | ||||||
Investec plc | 19,765 | 119,747 | ||||||
Man Group plc | 70,018 | 167,380 | ||||||
Provident Financial plc | 5,338 | 94,876 | ||||||
Schroders plc | 3,413 | 78,117 | ||||||
Schroders plc - Non Voting Shares | 2,867 | 57,325 | ||||||
817,485 | ||||||||
Energy 5.3% | ||||||||
AMEC plc | 6,332 | 93,837 | ||||||
BG Group plc | 44,270 | 959,951 | ||||||
BP plc | 1,092,057 | 8,036,269 | ||||||
Royal Dutch Shell plc, A Shares | 164,866 | 5,840,330 | ||||||
Royal Dutch Shell plc, B Shares | 126,265 | 4,530,155 | ||||||
Tullow Oil plc | 4,576 | 102,813 | ||||||
19,563,355 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
J Sainsbury plc | 97,772 | 468,520 | ||||||
Tesco plc | 301,325 | 1,942,767 | ||||||
WM Morrison Supermarkets plc | 103,681 | 502,793 | ||||||
2,914,080 | ||||||||
Food, Beverage & Tobacco 1.6% | ||||||||
Associated British Foods plc | 13,739 | 243,852 | ||||||
British American Tobacco plc | 39,661 | 1,818,469 | ||||||
Diageo plc | 51,312 | 1,061,941 | ||||||
Imperial Tobacco Group plc | 27,085 | 986,623 | ||||||
Premier Foods plc * | 497,870 | 31,346 | ||||||
SABMiller plc | 20,249 | 737,473 | ||||||
Tate & Lyle plc | 16,840 | 176,187 | ||||||
Unilever plc | 30,548 | 1,023,973 | ||||||
6,079,864 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Smith & Nephew plc | 12,858 | 117,691 | ||||||
Household & Personal Products 0.2% | ||||||||
Reckitt Benckiser Group plc | 11,511 | 590,856 | ||||||
Insurance 1.2% | ||||||||
Amlin plc | 22,449 | 103,543 | ||||||
Aviva plc | 242,941 | 1,325,380 | ||||||
Catlin Group Ltd. | 14,774 | 93,979 | ||||||
Hiscox Ltd. | 16,184 | 98,910 | ||||||
Legal & General Group plc | 278,083 | 489,874 | ||||||
Old Mutual plc | 239,140 | 420,440 | ||||||
Prudential plc | 86,030 | 888,613 | ||||||
Resolution Ltd. | 54,748 | 240,940 | ||||||
RSA Insurance Group plc | 175,442 | 313,313 | ||||||
Standard Life plc | 100,122 | 345,358 | ||||||
4,320,350 | ||||||||
Materials 1.3% | ||||||||
Anglo American plc | 24,735 | 906,797 | ||||||
Antofagasta plc | 5,775 | 107,485 | ||||||
BHP Billiton plc | 31,563 | 993,902 | ||||||
Eurasian Natural Resources Corp. | 7,300 | 76,892 | ||||||
Johnson Matthey plc | 7,361 | 221,411 | ||||||
Kazakhmys plc | 5,684 | 84,030 | ||||||
Lonmin plc | 4,664 | 81,113 | ||||||
Mondi plc | 16,615 | 126,368 | ||||||
Rexam plc | 37,353 | 207,048 | ||||||
Rio Tinto plc | 21,856 | 1,182,386 | ||||||
Vedanta Resources plc | 4,115 | 83,991 | ||||||
Xstrata plc | 36,436 | 606,898 | ||||||
4,678,321 | ||||||||
Media 0.4% | ||||||||
British Sky Broadcasting Group plc | 21,400 | 241,295 | ||||||
Informa plc | 12,226 | 70,997 | ||||||
ITV plc * | 72,461 | 74,245 | ||||||
Pearson plc | 23,506 | 431,825 | ||||||
United Business Media Ltd. | 14,770 | 120,227 | ||||||
WPP plc | 37,147 | 384,511 | ||||||
Yell Group plc (c)* | 903,131 | 52,428 | ||||||
1,375,528 |
See financial notes 39
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.6% | ||||||||
AstraZeneca plc | 46,268 | 2,221,289 | ||||||
GlaxoSmithKline plc | 169,439 | 3,802,610 | ||||||
Shire plc | 3,388 | 106,334 | ||||||
6,130,233 | ||||||||
Real Estate 0.2% | ||||||||
British Land Co. plc | 23,408 | 191,504 | ||||||
Capital Shopping Centres Group plc | 19,406 | 102,428 | ||||||
Hammerson plc | 17,173 | 112,193 | ||||||
Land Securities Group plc | 29,258 | 320,211 | ||||||
SEGRO plc | 26,119 | 102,135 | ||||||
828,471 | ||||||||
Retailing 0.4% | ||||||||
Debenhams plc | 64,322 | 67,046 | ||||||
Dixons Retail plc * | 713,103 | 135,391 | ||||||
Home Retail Group plc | 65,352 | 105,453 | ||||||
Inchcape plc | 26,172 | 136,657 | ||||||
Kesa Electricals plc | 51,625 | 85,346 | ||||||
Kingfisher plc | 106,706 | 442,093 | ||||||
Marks & Spencer Group plc | 84,366 | 434,958 | ||||||
Next plc | 5,492 | 225,096 | ||||||
1,632,040 | ||||||||
Software & Services 0.1% | ||||||||
Logica plc | 69,244 | 103,904 | ||||||
The Sage Group plc | 30,393 | 135,551 | ||||||
239,455 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Electrocomponents plc | 22,208 | 78,123 | ||||||
Telecommunication Services 2.1% | ||||||||
BT Group plc | 483,115 | 1,457,667 | ||||||
Cable & Wireless Communications plc | 258,109 | 150,000 | ||||||
Cable & Wireless Worldwide plc | 75,470 | 33,770 | ||||||
Inmarsat plc | 9,906 | 74,729 | ||||||
Vodafone Group plc | 2,193,290 | 6,090,076 | ||||||
7,806,242 | ||||||||
Transportation 0.1% | ||||||||
easyJet plc * | 11,737 | 67,264 | ||||||
FirstGroup plc | 31,635 | 169,427 | ||||||
International Consolidated Airlines Group S.A. * | 40,617 | 108,455 | ||||||
National Express Group plc | 28,760 | 106,233 | ||||||
Stagecoach Group plc | 20,418 | 81,160 | ||||||
532,539 | ||||||||
Utilities 1.1% | ||||||||
Centrica plc | 166,102 | 790,745 | ||||||
Drax Group plc | 31,403 | 273,365 | ||||||
International Power plc | 59,529 | 322,926 | ||||||
National Grid plc | 123,143 | 1,224,293 | ||||||
Pennon Group plc | 10,854 | 121,247 | ||||||
Severn Trent plc | 8,381 | 203,998 | ||||||
SSE plc | 39,651 | 856,706 | ||||||
United Utilities Group plc | 37,915 | 369,604 | ||||||
4,162,884 | ||||||||
77,312,119 | ||||||||
Total Common Stock | ||||||||
(Cost $382,450,845) | 368,486,637 | |||||||
Preferred Stock 0.5% of net assets | ||||||||
Germany 0.5% | ||||||||
Automobiles & Components 0.4% | ||||||||
Porsche Automobil Holding SE | 3,820 | 222,535 | ||||||
Volkswagen AG | 7,114 | 1,238,901 | ||||||
1,461,436 | ||||||||
Household & Personal Products 0.1% | ||||||||
Henkel AG & Co. KGaA | 3,741 | 222,384 | ||||||
1,683,820 | ||||||||
Italy 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
EXOR S.p.A. | 3,094 | 64,119 | ||||||
Insurance 0.0% | ||||||||
Unipol Gruppo Finanziario S.p.A. * | 175,514 | 53,037 | ||||||
117,156 | ||||||||
Total Preferred Stock | ||||||||
(Cost $1,491,408) | 1,800,976 | |||||||
Rights 0.0% of net assets | ||||||||
Hong Kong 0.0% | ||||||||
New World Development Co., Ltd. (a)(b)* | 59,000 | 20,125 | ||||||
Italy 0.0% | ||||||||
Banca Popolare di Milano Scarl * | 51,712 | 48,728 | ||||||
Republic of Korea 0.0% | ||||||||
Samsung Securities Co., Ltd. (a)(b)* | 171 | 1,790 | ||||||
Total Rights | ||||||||
(Cost $176,179) | 70,643 | |||||||
Warrants 0.0% of net assets | ||||||||
Spain 0.0% | ||||||||
Promotora de Informaciones S.A. * | 3,766 | 417 | ||||||
Total Warrants | ||||||||
(Cost $—) | 417 | |||||||
40 See financial notes
Schwab Fundamental International Large Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Other Investment Company 0.1% of net assets | ||||||||
United States 0.1% | ||||||||
iShares MSCI EAFE Index Fund | 10,000 | 523,700 | ||||||
Total Other Investment Company | ||||||||
(Cost $495,250) | 523,700 | |||||||
End of Investments. | ||||||||
Collateral Invested for Securities on Loan 0.5% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 1,942,763 | 1,942,763 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $1,942,763) | 1,942,763 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $412,378,834 unrealized appreciation and depreciation were $36,765,547 and ($78,262,008), respectively, with a net unrealized depreciation of ($41,496,461).
At 10/31/11, the values of certain foreign securities held bythe fund aggregating $346,424,451 were adjusted from theirclosing market values in accordance with international fairvaluation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these amounted to $77,389 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
CVA — | Dutch Certificate | |
FDR — | Fiduciary Depositary Receipt | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) |
See financial notes 41
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .4% | Common Stock | 92,481,164 | 91,040,735 | ||||||||
0 | .4% | Preferred Stock | 287,925 | 363,136 | ||||||||
0 | .0% | Rights | — | 12,729 | ||||||||
0 | .0% | Warrants | — | 70 | ||||||||
0 | .4% | Other Investment Company | 316,856 | 337,950 | ||||||||
0 | .3% | Short-Term Investment | 290,064 | 290,064 | ||||||||
99 | .5% | Total Investments | 93,376,009 | 92,044,684 | ||||||||
1 | .3% | Collateral Invested for Securities on Loan | 1,197,571 | 1,197,571 | ||||||||
(0 | .8)% | Other Assets and Liabilities, Net | (734,183 | ) | ||||||||
100 | .0% | Total Net Assets | 92,508,072 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.4% of net assets | ||||||||
Australia 5.4% | ||||||||
Automobiles & Components 0.0% | ||||||||
Fleetwood Corp. Ltd. | 2,918 | 37,280 | ||||||
Capital Goods 0.6% | ||||||||
Alesco Corp. Ltd. | 15,412 | 22,734 | ||||||
Boart Longyear Group | 18,778 | 62,658 | ||||||
Bradken Ltd. | 7,474 | 60,281 | ||||||
Cardno Ltd. | 4,455 | 24,490 | ||||||
Emeco Holdings Ltd. | 43,807 | 45,383 | ||||||
GWA International Ltd. | 16,601 | 39,772 | ||||||
Hastie Group Ltd. * | 127,234 | 13,994 | ||||||
Hills Holdings Ltd. | 26,326 | 29,990 | ||||||
Macmahon Holdings Ltd. * | 56,842 | 36,016 | ||||||
Monadelphous Group Ltd. | 3,312 | 62,992 | ||||||
Seven Network Ltd. | 5,631 | 45,238 | ||||||
UGL Ltd. | 8,199 | 113,439 | ||||||
556,987 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Campbell Brothers Ltd. | 1,703 | 81,983 | ||||||
Downer EDI Ltd. * | 37,657 | 119,586 | ||||||
Programmed Maintenance Services Ltd. | 17,486 | 36,132 | ||||||
Seek Ltd. | 7,406 | 48,014 | ||||||
Spotless Group Ltd. | 39,823 | 82,925 | ||||||
Transfield Services Ltd. | 25,473 | 60,793 | ||||||
429,433 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Billabong International Ltd. | 11,648 | 52,036 | ||||||
G.U.D. Holdings Ltd. | 5,090 | 41,722 | ||||||
93,758 | ||||||||
Consumer Services 0.3% | ||||||||
Ardent Leisure Group | 22,494 | 25,757 | ||||||
Aristocrat Leisure Ltd. | 35,911 | 85,017 | ||||||
Crown Ltd. | 16,038 | 135,144 | ||||||
Flight Centre Ltd. | 2,900 | 60,215 | ||||||
306,133 | ||||||||
Diversified Financials 0.3% | ||||||||
Challenger Ltd. | 18,260 | 87,048 | ||||||
IOOF Holdings Ltd. | 5,456 | 36,136 | ||||||
Perpetual Ltd. | 3,189 | 75,382 | ||||||
Platinum Asset Management Ltd. | 7,896 | 33,151 | ||||||
231,717 | ||||||||
Energy 0.2% | ||||||||
AWE Ltd. * | 27,955 | 40,315 | ||||||
Beach Energy Ltd. | 63,396 | 77,914 | ||||||
Energy Resources of Australia Ltd. * | 8,476 | 17,352 | ||||||
New Hope Corp., Ltd. | 10,349 | 64,063 | ||||||
Paladin Energy Ltd. * | 16,756 | 25,589 | ||||||
225,233 | ||||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Elders Ltd. * | 161,410 | 46,930 | ||||||
GrainCorp Ltd. | 10,544 | 86,855 | ||||||
133,785 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Ansell Ltd. | 5,510 | 80,591 | ||||||
Cochlear Ltd. | 1,140 | 69,997 | ||||||
Primary Health Care Ltd. | 31,736 | 110,458 | ||||||
Ramsay Health Care Ltd. | 5,759 | 113,207 | ||||||
Sigma Pharmaceuticals Ltd. * | 175,544 | 127,918 | ||||||
502,171 | ||||||||
Materials 0.9% | ||||||||
Adelaide Brighton Ltd. | 23,427 | 70,101 | ||||||
Alumina Ltd. | 48,118 | 73,299 | ||||||
Fortescue Metals Group Ltd. | 7,248 | 36,405 | ||||||
Gunns Ltd. * | 124,356 | 34,354 | ||||||
Iluka Resources Ltd. | 7,162 | 119,066 | ||||||
James Hardie Industries N.V. CDI * | 14,953 | 96,849 | ||||||
Kagara Ltd. * | 35,378 | 14,795 | ||||||
Macarthur Coal Ltd. | 5,280 | 89,528 | ||||||
Mount Gibson Iron Ltd. | 29,964 | 47,926 | ||||||
Nufarm Ltd. * | 17,529 | 86,259 | ||||||
OZ Minerals Ltd. | 9,802 | 117,710 | ||||||
PaperlinX Ltd. * | 164,715 | 16,356 | ||||||
802,648 | ||||||||
Media 0.2% | ||||||||
APN News & Media Ltd. | 20,063 | 18,401 | ||||||
Consolidated Media Holdings Ltd. | 8,653 | 23,767 | ||||||
Fairfax Media Ltd. | 76,208 | 73,895 | ||||||
STW Communications Group Ltd. | 19,814 | 19,080 | ||||||
Ten Network Holdings Ltd. * | 48,692 | 47,083 | ||||||
182,226 | ||||||||
Real Estate 0.7% | ||||||||
Abacus Property Group | 15,827 | 31,498 |
42 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Australand Property Group | 26,342 | 71,895 | ||||||
Bunnings Warehouse Property Trust | 18,086 | 31,590 | ||||||
Centro Retail Group * | 95,828 | 27,474 | ||||||
Charter Hall Group | 12,731 | 26,158 | ||||||
Charter Hall Office REIT | 34,467 | 122,305 | ||||||
Charter Hall Retail REIT | 17,091 | 58,620 | ||||||
Commonwealth Property Office Fund | 128,041 | 124,901 | ||||||
FKP Property Group | 41,444 | 21,359 | ||||||
ING Office Fund | 157,431 | 102,920 | ||||||
Westfield Retail Trust | 10,783 | 28,737 | ||||||
647,457 | ||||||||
Retailing 0.4% | ||||||||
David Jones Ltd. | 30,451 | 107,497 | ||||||
Harvey Norman Holdings Ltd. | 36,661 | 83,030 | ||||||
JB Hi-Fi Ltd. | 3,730 | 61,560 | ||||||
Pacific Brands Ltd. | 121,711 | 76,043 | ||||||
Premier Investments Ltd. | 7,763 | 41,450 | ||||||
369,580 | ||||||||
Software & Services 0.0% | ||||||||
Iress Market Technology Ltd. | 3,060 | 24,386 | ||||||
Transportation 0.1% | ||||||||
Virgin Blue Holdings Ltd. * | 292,310 | 113,969 | ||||||
Utilities 0.4% | ||||||||
APA Group | 31,878 | 145,379 | ||||||
Envestra Ltd. | 78,387 | 52,820 | ||||||
Infigen Energy | 187,167 | 56,527 | ||||||
SP Ausnet | 110,093 | 114,793 | ||||||
369,519 | ||||||||
5,026,282 | ||||||||
Austria 1.0% | ||||||||
Capital Goods 0.4% | ||||||||
Andritz AG | 1,602 | 141,605 | ||||||
Semperit AG Holding | 849 | 36,711 | ||||||
Strabag SE - BR | 5,178 | 159,216 | ||||||
337,532 | ||||||||
Energy 0.0% | ||||||||
Schoeller-Bleckmann Oilfield Equipment AG | 318 | 25,126 | ||||||
Materials 0.1% | ||||||||
Mayr-Melnhof Karton AG | 561 | 51,934 | ||||||
RHI AG | 2,072 | 45,085 | ||||||
97,019 | ||||||||
Real Estate 0.2% | ||||||||
Atrium European Real Estate Ltd. | 11,066 | 55,779 | ||||||
CA Immobilien Anlagen AG * | 6,011 | 76,908 | ||||||
Conwert Immobilien Invest SE | 5,391 | 73,478 | ||||||
Sparkassen Immobilien AG * | 4,076 | 23,907 | ||||||
230,072 | ||||||||
Transportation 0.2% | ||||||||
Flughafen Wien AG | 986 | 44,317 | ||||||
Oesterreichische Post AG | 3,671 | 110,716 | ||||||
155,033 | ||||||||
Utilities 0.1% | ||||||||
Verbund AG | 2,680 | 77,822 | ||||||
922,604 | ||||||||
Belgium 1.1% | ||||||||
Capital Goods 0.1% | ||||||||
Compagnie d’Enterprises CFE | 954 | 53,561 | ||||||
Diversified Financials 0.2% | ||||||||
Ackermans & van Haaren N.V. | 1,226 | 98,768 | ||||||
Gimv N.V. | 688 | 35,030 | ||||||
RHJ International * | 9,688 | 46,710 | ||||||
Sofina S.A. | 956 | 81,491 | ||||||
261,999 | ||||||||
Energy 0.0% | ||||||||
Euronav S.A. * | 2,931 | 12,967 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Omega Pharma S.A. | 1,313 | 62,243 | ||||||
Materials 0.2% | ||||||||
Nyrstar * | 8,827 | 77,199 | ||||||
Tessenderlo Chemie N.V. | 3,540 | 109,839 | ||||||
187,038 | ||||||||
Real Estate 0.2% | ||||||||
Befimmo S.C.A. | 984 | 75,344 | ||||||
Cofinimmo | 920 | 112,153 | ||||||
187,497 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Barco N.V. | 518 | 28,011 | ||||||
EVS Broadcast Equipment S.A. | 408 | 20,881 | ||||||
48,892 | ||||||||
Telecommunication Services 0.2% | ||||||||
Mobistar S.A. | 1,648 | 93,780 | ||||||
Telenet Group Holding N.V. * | 2,494 | 96,194 | ||||||
189,974 | ||||||||
Transportation 0.0% | ||||||||
Compagnie Maritime Belge S.A. | 1,479 | 34,681 | ||||||
1,038,852 | ||||||||
Canada 7.7% | ||||||||
Automobiles & Components 0.1% | ||||||||
Linamar Corp. | 4,333 | 68,772 | ||||||
Martinrea International, Inc. * | 5,978 | 42,222 | ||||||
110,994 | ||||||||
Banks 0.3% | ||||||||
Canadian Western Bank | 2,221 | 63,505 | ||||||
Genworth MI Canada, Inc. | 2,700 | 59,594 | ||||||
Home Capital Group, Inc. | 800 | 36,181 | ||||||
Laurentian Bank of Canada | 1,663 | 76,714 | ||||||
235,994 | ||||||||
Capital Goods 0.4% | ||||||||
Aecon Group, Inc. | 5,400 | 48,759 | ||||||
ATS Automation Tooling Systems, Inc. * | 5,000 | 31,151 | ||||||
CAE, Inc. | 7,999 | 85,307 | ||||||
Russel Metals, Inc. | 5,503 | 126,650 | ||||||
Toromont Industries Ltd. | 3,216 | 60,335 | ||||||
352,202 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
Progressive Waste Solutions Ltd. | 4,800 | 101,129 | ||||||
Ritchie Bros. Auctioneers, Inc. | 2,400 | 47,771 |
See financial notes 43
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Stantec, Inc. * | 2,100 | 51,639 | ||||||
Transcontinental, Inc., Class A | 6,337 | 80,742 | ||||||
281,281 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Dorel Industries, Inc., Class B | 2,910 | 70,768 | ||||||
Gildan Activewear, Inc. | 3,402 | 87,785 | ||||||
158,553 | ||||||||
Consumer Services 0.3% | ||||||||
Great Canadian Gaming Corp. * | 4,600 | 37,843 | ||||||
Tim Hortons, Inc. | 3,300 | 162,426 | ||||||
Transat A.T., Inc., Class A * | 5,000 | 36,619 | ||||||
236,888 | ||||||||
Diversified Financials 0.4% | ||||||||
AGF Management Ltd., Class B | 6,872 | 110,172 | ||||||
Canaccord Financial, Inc. | 2,800 | 26,490 | ||||||
Dundee Corp., Class A * | 4,187 | 100,606 | ||||||
GMP Capital, Inc. | 5,000 | 35,716 | ||||||
TMX Group, Inc. | 2,926 | 128,577 | ||||||
401,561 | ||||||||
Energy 1.8% | ||||||||
Advantage Oil & Gas Ltd. * | 18,600 | 98,715 | ||||||
AltaGas Ltd. | 6,100 | 179,986 | ||||||
Birchcliff Energy Ltd. * | 3,000 | 45,508 | ||||||
Connacher Oil & Gas Ltd. * | 32,900 | 15,183 | ||||||
Crew Energy, Inc. * | 1,600 | 17,593 | ||||||
Daylight Energy Ltd. | 9,600 | 94,868 | ||||||
Denison Mines Corp. * | 12,400 | 19,532 | ||||||
Enerflex Ltd. | 3,216 | 33,104 | ||||||
Ensign Energy Services, Inc. | 8,592 | 129,214 | ||||||
Fairborne Energy Ltd. * | 9,462 | 33,795 | ||||||
Flint Energy Services Ltd. * | 3,028 | 36,303 | ||||||
Galleon Energy, Inc., Class A * | 9,800 | 27,529 | ||||||
MEG Energy Corp. * | 2,300 | 103,745 | ||||||
Mullen Group Ltd. | 6,700 | 134,639 | ||||||
Niko Resources Ltd. | 600 | 33,005 | ||||||
Nuvista Energy Ltd. | 5,400 | 33,318 | ||||||
Pacific Rubiales Energy Corp. | 2,500 | 58,289 | ||||||
PetroBakken Energy Ltd., Class A | 2,600 | 23,685 | ||||||
Petrobank Energy & Resources Ltd. * | 4,600 | 41,397 | ||||||
Petrominerales Ltd. | 1,000 | 26,386 | ||||||
Progress Energy Resources Corp. | 10,300 | 145,807 | ||||||
Savanna Energy Services Corp. * | 4,000 | 33,750 | ||||||
ShawCor Ltd., Class A | 1,522 | 36,418 | ||||||
Trican Well Service Ltd. | 2,441 | 43,175 | ||||||
Trilogy Energy Corp. | 2,600 | 88,584 | ||||||
Trinidad Drilling Ltd. | 12,251 | 95,869 | ||||||
Uranium One, Inc. | 9,000 | 27,088 | ||||||
1,656,485 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
The Jean Coutu Group (PJC), Inc., Class A | 9,000 | 115,124 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Cott Corp. * | 9,200 | 64,610 | ||||||
Maple Leaf Foods, Inc. | 9,114 | 103,324 | ||||||
167,934 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
CML Healthcare, Inc. | 7,362 | 71,570 | ||||||
SXC Health Solutions Corp. * | 800 | 37,145 | ||||||
108,715 | ||||||||
Materials 1.7% | ||||||||
Agnico-Eagle Mines Ltd. | 1,773 | 76,914 | ||||||
AuRico Gold, Inc. * | 10,678 | 103,379 | ||||||
Canfor Corp. * | 7,898 | 79,871 | ||||||
Cascades, Inc. | 15,345 | 70,047 | ||||||
CCL Industries, Inc., Class B | 1,927 | 56,065 | ||||||
Centerra Gold, Inc. | 2,880 | 57,094 | ||||||
Eldorado Gold Corp. | 7,000 | 131,537 | ||||||
Franco-Nevada Corp. | 2,397 | 94,966 | ||||||
Golden Star Resources Ltd. * | 8,600 | 16,997 | ||||||
Harry Winston Diamond Corp. * | 4,745 | 57,507 | ||||||
HudBay Minerals, Inc. | 7,196 | 78,837 | ||||||
IAMGOLD Corp. | 5,765 | 123,947 | ||||||
Inmet Mining Corp. | 1,696 | 101,241 | ||||||
Lake Shore Gold Corp. * | 6,800 | 10,097 | ||||||
Lundin Mining Corp. * | 16,609 | 65,153 | ||||||
Major Drilling Group International, Inc. | 2,100 | 28,084 | ||||||
New Gold, Inc. * | 7,400 | 91,688 | ||||||
Norbord, Inc. * | 2,195 | 19,291 | ||||||
Osisko Mining Corp. * | 2,600 | 31,354 | ||||||
PAN American Silver Corp. | 2,000 | 55,882 | ||||||
Quadra FNX Mining Ltd. * | 4,965 | 57,284 | ||||||
Silver Wheaton Corp. | 1,974 | 68,167 | ||||||
Thompson Creek Metals Co., Inc. * | 6,517 | 46,814 | ||||||
West Fraser Timber Co., Ltd. | 2,023 | 87,273 | ||||||
1,609,489 | ||||||||
Media 0.2% | ||||||||
Astral Media, Inc., Class A | 2,252 | 77,315 | ||||||
Cogeco Cable, Inc. | 1,453 | 69,141 | ||||||
Corus Entertainment, Inc., Class B | 1,283 | 24,572 | ||||||
Torstar Corp., Class B | 4,606 | 48,243 | ||||||
219,271 | ||||||||
Real Estate 1.0% | ||||||||
Allied Properties Real Estate Investment Trust | 1,600 | 38,814 | ||||||
Artis Real Estate Investment Trust | 2,100 | 27,810 | ||||||
Boardwalk Real Estate Investment Trust | 1,470 | 71,793 | ||||||
Calloway Real Estate Investment Trust | 4,470 | 117,944 | ||||||
Canadian Apartment Properties Real Estate Investment Trust | 3,575 | 72,522 | ||||||
Canadian Real Estate Investment Trust | 2,932 | 104,367 | ||||||
Chartwell Seniors Housing Real Estate Investment Trust | 8,908 | 69,441 | ||||||
Cominar Real Estate Investment Trust | 2,692 | 60,957 | ||||||
Dundee Real Estate Investment Trust | 1,518 | 50,257 | ||||||
Extendicare Real Estate Investment Trust | 8,477 | 63,445 | ||||||
First Capital Realty, Inc. | 2,779 | 45,362 | ||||||
FirstService Corp. * | 1,600 | 44,705 | ||||||
InnVest Real Estate Investment Trust | 9,923 | 41,016 | ||||||
Morguard REIT | 2,800 | 42,586 | ||||||
Primaris Retail Real Estate Investment Trust | 3,192 | 66,034 | ||||||
917,053 | ||||||||
Retailing 0.2% | ||||||||
Dollarama, Inc. | 2,500 | 94,106 |
44 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Reitmans (Canada) Ltd., Class A | 3,325 | 52,139 | ||||||
146,245 | ||||||||
Software & Services 0.1% | ||||||||
MacDonald, Dettwiler & Associates Ltd. | 1,232 | 55,386 | ||||||
Open Text Corp. * | 1,423 | 87,100 | ||||||
142,486 | ||||||||
Telecommunication Services 0.1% | ||||||||
Manitoba Telecom Services, Inc. | 4,200 | 134,543 | ||||||
Transportation 0.1% | ||||||||
TransForce, Inc. | 10,000 | 120,692 | ||||||
Utilities 0.1% | ||||||||
Atlantic Power Corp. | 4,300 | 57,938 | ||||||
7,173,448 | ||||||||
Denmark 1.2% | ||||||||
Banks 0.1% | ||||||||
Sydbank A/S | 5,332 | 98,742 | ||||||
Capital Goods 0.1% | ||||||||
NKT Holding A/S (a) | 1,326 | 50,324 | ||||||
Rockwool International A/S, B Shares | 245 | 23,908 | ||||||
74,232 | ||||||||
Consumer Durables & Apparel 0.0% | ||||||||
Bang & Olufsen A/S * | 2,024 | 23,588 | ||||||
Energy 0.0% | ||||||||
Torm A/S * | 10,136 | 11,103 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
East Asiatic Co., Ltd. A/S | 2,803 | 65,672 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Coloplast A/S, Class B | 672 | 97,723 | ||||||
GN Store Nord A/S | 5,353 | 39,452 | ||||||
William Demant Holdings A/S * | 445 | 35,234 | ||||||
172,409 | ||||||||
Insurance 0.3% | ||||||||
Topdanmark A/S * | 1,010 | 166,295 | ||||||
Tryg A/S | 2,552 | 141,880 | ||||||
308,175 | ||||||||
Materials 0.2% | ||||||||
Novozymes A/S, Class B | 966 | 143,453 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Alk-Abello A/S | 670 | 39,701 | ||||||
H. Lundbeck A/S | 2,949 | 59,465 | ||||||
99,166 | ||||||||
Software & Services 0.1% | ||||||||
SimCorp A/S | 376 | 64,435 | ||||||
Transportation 0.0% | ||||||||
D/S Norden A/S | 1,055 | 30,769 | ||||||
1,091,744 | ||||||||
Finland 1.3% | ||||||||
Capital Goods 0.3% | ||||||||
Cargotec Corp., B Shares | 2,777 | 92,929 | ||||||
Cramo Oyj | 2,383 | 28,297 | ||||||
Konecranes Oyj | 2,847 | 64,802 | ||||||
Ramirent Oyj | 3,294 | 28,194 | ||||||
Uponor Oyj | 7,722 | 79,891 | ||||||
294,113 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Lassila & Tikanoja Oyj | 2,642 | 41,200 | ||||||
Poyry Oyj | 4,100 | 37,009 | ||||||
78,209 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Amer Sports Oyj, A Shares | 8,978 | 123,633 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
HKScan Oyj, A Shares | 5,834 | 46,555 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Oriola-KD Oyj, Class B | 8,602 | 23,923 | ||||||
Materials 0.2% | ||||||||
Kemira Oyj | 6,715 | 91,969 | ||||||
M-real Oyj, Class B * | 30,723 | 66,536 | ||||||
158,505 | ||||||||
Media 0.1% | ||||||||
Sanoma Oyj (a) | 4,808 | 64,505 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Orion Oyj, Class B | 6,229 | 129,625 | ||||||
Real Estate 0.1% | ||||||||
Citycon Oyj | 7,500 | 27,621 | ||||||
Sponda Oyj | 16,770 | 72,855 | ||||||
100,476 | ||||||||
Retailing 0.1% | ||||||||
Stockmann Oyj Abp, B Shares | 2,156 | 38,320 | ||||||
Software & Services 0.1% | ||||||||
Tieto Oyj | 7,582 | 120,042 | ||||||
Transportation 0.0% | ||||||||
Finnair Oyj * | 4,666 | 18,271 | ||||||
1,196,177 | ||||||||
France 3.9% | ||||||||
Automobiles & Components 0.1% | ||||||||
Plastic Omnium S.A. | 2,573 | 71,532 | ||||||
Societe Fonciere Financiere et de Participations (FFP) | 692 | 32,340 | ||||||
103,872 | ||||||||
Capital Goods 0.1% | ||||||||
Manitou BF * | 852 | 17,110 | ||||||
Mersen S.A. | 1,246 | 48,641 | ||||||
Saft Groupe S.A. | 1,422 | 43,206 | ||||||
108,957 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Bureau Veritas S.A. | 1,384 | 107,388 | ||||||
Derichebourg S.A. * | 9,597 | 38,226 | ||||||
Edenred | 4,696 | 132,460 | ||||||
Seche Environnement S.A. | 494 | 22,409 | ||||||
Societe BIC S.A. | 1,892 | 168,843 | ||||||
Teleperformance | 3,656 | 77,195 | ||||||
546,521 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Beneteau | 1,671 | 23,845 | ||||||
Hermes International | 552 | 187,714 |
See financial notes 45
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Nexity | 2,626 | 75,657 | ||||||
SEB S.A. | 1,098 | 92,050 | ||||||
379,266 | ||||||||
Consumer Services 0.1% | ||||||||
Club Mediterranee S.A. * | 3,105 | 58,693 | ||||||
Pierre & Vacances | 477 | 18,586 | ||||||
77,279 | ||||||||
Energy 0.1% | ||||||||
Maurel et Prom | 6,383 | 128,325 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
Bonduelle S.C.A. | 488 | 44,064 | ||||||
Remy Cointreau S.A. | 954 | 78,154 | ||||||
Vilmorin & Cie | 262 | 28,779 | ||||||
150,997 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
bioMerieux | 552 | 47,897 | ||||||
Medica S.A. | 1,804 | 35,930 | ||||||
83,827 | ||||||||
Insurance 0.1% | ||||||||
Euler Hermes S.A. | 1,032 | 74,506 | ||||||
Materials 0.2% | ||||||||
Ciments Francais S.A. | 996 | 87,966 | ||||||
SA des Ciments Vicat | 948 | 61,955 | ||||||
Sequana | 3,482 | 21,310 | ||||||
171,231 | ||||||||
Media 0.4% | ||||||||
Canal Plus | 4,272 | 25,982 | ||||||
Eutelsat Communications | 2,398 | 98,755 | ||||||
Havas S.A. | 24,129 | 103,874 | ||||||
Ipsos | 1,409 | 46,106 | ||||||
JC Decaux S.A. * | 2,436 | 64,873 | ||||||
Technicolor - Reg’d * | 14,942 | 40,456 | ||||||
380,046 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Ipsen S.A. | 1,100 | 36,303 | ||||||
Virbac S.A. | 210 | 36,280 | ||||||
72,583 | ||||||||
Real Estate 0.4% | ||||||||
Gecina S.A. | 1,262 | 124,802 | ||||||
ICADE | 1,214 | 108,650 | ||||||
Mercialys | 1,442 | 53,693 | ||||||
Societe de la Tour Eiffel | 466 | 28,071 | ||||||
Societe Immobilliere de Location pour l’Industrie et le Commerce | 609 | 63,926 | ||||||
379,142 | ||||||||
Retailing 0.2% | ||||||||
CFAO | 3,568 | 137,825 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Silicon-On-Insulator Technologies * | 3,880 | 19,362 | ||||||
Software & Services 0.4% | ||||||||
Alten | 1,225 | 34,884 | ||||||
Altran Technologies S.A. * | 12,638 | 64,028 | ||||||
Axway Software S.A. * | 1,379 | 28,240 | ||||||
Dassault Systemes S.A. | 1,315 | 110,565 | ||||||
Groupe Steria S.C.A. | 2,144 | 40,893 | ||||||
Sopra Group | 297 | 18,834 | ||||||
UbiSoft Entertainment * | 10,768 | 64,504 | ||||||
361,948 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Bull * | 7,391 | 34,945 | ||||||
Ingenico S.A. | 733 | 28,977 | ||||||
63,922 | ||||||||
Telecommunication Services 0.0% | ||||||||
Iliad S.A. | 276 | 32,231 | ||||||
Transportation 0.2% | ||||||||
Aeroports de Paris (ADP) | 1,506 | 118,239 | ||||||
Bollore | 260 | 59,783 | ||||||
178,022 | ||||||||
Utilities 0.1% | ||||||||
Rubis | 1,400 | 79,560 | ||||||
Sechilienne S.A. | 2,111 | 39,378 | ||||||
118,938 | ||||||||
3,568,800 | ||||||||
Germany 3.5% | ||||||||
Automobiles & Components 0.1% | ||||||||
ElringKlinger AG | 916 | 25,276 | ||||||
Leoni AG | 2,669 | 111,424 | ||||||
136,700 | ||||||||
Banks 0.1% | ||||||||
Aareal Bank AG * | 3,642 | 72,980 | ||||||
Capital Goods 1.3% | ||||||||
Bauer AG | 1,231 | 28,386 | ||||||
BayWa AG | 2,724 | 119,943 | ||||||
Brenntag AG | 1,022 | 102,820 | ||||||
Demag Cranes AG | 1,083 | 88,264 | ||||||
Deutz AG * | 9,206 | 57,570 | ||||||
Gildemeister AG * | 4,002 | 58,116 | ||||||
Heidelberger Druckmaschinen AG (a)* | 27,395 | 53,813 | ||||||
Kloeckner & Co., SE | 3,400 | 50,676 | ||||||
Krones AG | 882 | 44,962 | ||||||
KUKA AG * | 2,007 | 38,187 | ||||||
MTU Aero Engines Holding AG | 2,232 | 149,466 | ||||||
Pfeiffer Vacuum Technology AG | 288 | 29,107 | ||||||
Rheinmetall AG | 840 | 44,548 | ||||||
SGL Carbon SE (a)* | 3,945 | 245,194 | ||||||
Vossloh AG | 504 | 52,690 | ||||||
1,163,742 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Gerry Weber International AG | 1,270 | 39,427 | ||||||
Puma AG Rudolf Dassler Sport | 292 | 93,785 | ||||||
133,212 | ||||||||
Diversified Financials 0.0% | ||||||||
Deutsche Beteiligings AG | 1,288 | 27,520 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Suedzucker AG | 4,764 | 139,157 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Rhoen-klinikum AG | 4,432 | 88,434 | ||||||
Materials 0.2% | ||||||||
Fuchs Petrolub AG | 1,194 | 56,367 | ||||||
H&R WASAG AG | 1,658 | 36,162 |
46 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Wacker Chemie AG | 662 | 66,630 | ||||||
159,159 | ||||||||
Media 0.3% | ||||||||
Axel Springer AG | 2,538 | 102,576 | ||||||
Kabel Deutschland Holding AG * | 2,084 | 118,203 | ||||||
Sky Deutschland AG * | 11,138 | 32,820 | ||||||
253,599 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
QIAGEN N.V. * | 6,819 | 94,844 | ||||||
Stada Arzneimittel AG | 3,742 | 90,394 | ||||||
185,238 | ||||||||
Real Estate 0.3% | ||||||||
Deutsche Euroshop AG | 2,249 | 82,343 | ||||||
Deutsche Wohnen AG | 3,912 | 57,598 | ||||||
DIC Asset AG | 2,410 | 21,983 | ||||||
Gagfah S.A. | 6,095 | 39,037 | ||||||
IVG Immobilien AG * | 8,034 | 35,805 | ||||||
236,766 | ||||||||
Retailing 0.1% | ||||||||
Fielmann AG | 448 | 47,072 | ||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
Aixtron SE | 1,430 | 20,247 | ||||||
Kontron AG | 3,346 | 23,683 | ||||||
Q-Cells SE (a)* | 24,418 | 24,246 | ||||||
Solarworld AG (a) | 6,260 | 30,548 | ||||||
98,724 | ||||||||
Software & Services 0.2% | ||||||||
Bechtle AG | 1,333 | 49,728 | ||||||
Software AG | 1,629 | 67,464 | ||||||
United Internet AG - Reg’d | 3,356 | 66,134 | ||||||
183,326 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Jenoptik AG * | 4,031 | 26,635 | ||||||
Transportation 0.3% | ||||||||
Air Berlin plc (a)* | 12,818 | 47,001 | ||||||
Fraport AG | 2,044 | 128,694 | ||||||
Hamburger Hafen und Logistik AG | 1,225 | 37,663 | ||||||
Sixt AG | 2,376 | 49,905 | ||||||
263,263 | ||||||||
3,215,527 | ||||||||
Greece 0.5% | ||||||||
Banks 0.0% | ||||||||
TT Hellenic Postbank S.A. * | 26,788 | 13,200 | ||||||
Capital Goods 0.0% | ||||||||
Ellaktor S.A. | 11,458 | 21,961 | ||||||
Consumer Services 0.0% | ||||||||
Intralot S.A. Integrated Lottery | 16,713 | 24,013 | ||||||
Diversified Financials 0.1% | ||||||||
Hellenic Exchanges S.A. | 4,342 | 21,209 | ||||||
Marfin Investment Group S.A. * | 75,562 | 41,673 | ||||||
62,882 | ||||||||
Energy 0.2% | ||||||||
Hellenic Petroleum S.A. | 8,368 | 73,671 | ||||||
Motor Oil (Hellas) Corinth Refineries S.A. | 9,108 | 81,945 | ||||||
155,616 | ||||||||
Materials 0.2% | ||||||||
Mytilineos Holdings S.A. * | 9,551 | 44,012 | ||||||
Titan Cement Co. | 4,311 | 83,254 | ||||||
Viohalco, Hellenic Copper & Aluminum Industry S.A. * | 7,091 | 31,891 | ||||||
159,157 | ||||||||
Retailing 0.0% | ||||||||
Jumbo S.A. | 6,839 | 37,068 | ||||||
473,897 | ||||||||
Hong Kong 5.6% | ||||||||
Automobiles & Components 0.1% | ||||||||
Geely Automobile Holdings Ltd. | 60,000 | 15,341 | ||||||
Minth Group Ltd. | 20,000 | 20,751 | ||||||
Xinyi Glass Holdings Co., Ltd. | 52,000 | 32,763 | ||||||
68,855 | ||||||||
Banks 0.1% | ||||||||
Dah Sing Banking Group Ltd. | 16,600 | 16,150 | ||||||
Dah Sing Financial Group | 12,550 | 38,959 | ||||||
Wing Hang Bank Ltd. | 9,500 | 85,793 | ||||||
140,902 | ||||||||
Capital Goods 0.3% | ||||||||
China High Speed Transmission Equipment Group Co., Ltd. | 34,000 | 21,403 | ||||||
Johnson Electric Holdings Ltd. | 91,500 | 53,630 | ||||||
NWS Holdings Ltd. | 60,000 | 90,983 | ||||||
Shun Tak Holdings Ltd. | 121,000 | 56,211 | ||||||
Singamas Container Holdings Ltd. | 82,000 | 18,515 | ||||||
240,742 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Anta Sports Products Ltd. | 18,000 | 16,461 | ||||||
Bosideng International Holdings Ltd. | 124,000 | 34,184 | ||||||
China Dongxiang Group Co. | 135,000 | 24,149 | ||||||
Li Ning Co., Ltd. | 23,500 | 22,404 | ||||||
Ports Design Ltd. | 13,000 | 23,181 | ||||||
Skyworth Digital Holdings Ltd. | 92,000 | 48,614 | ||||||
Stella International Holdings Ltd. | 17,000 | 38,414 | ||||||
Techtronic Industries Co., Ltd. | 80,000 | 69,219 | ||||||
Texwinca Holdings Ltd. | 54,000 | 68,413 | ||||||
345,039 | ||||||||
Consumer Services 0.5% | ||||||||
Cafe De Coral Holdings Ltd. | 22,000 | 49,646 | ||||||
China Travel International Investment Hong Kong Ltd. | 190,000 | 28,691 | ||||||
Sands China Ltd. * | 38,000 | 114,197 | ||||||
Shangri-La Asia Ltd. | 52,000 | 104,444 | ||||||
SJM Holdings Ltd. | 98,000 | 167,977 | ||||||
The Hongkong & Shanghai Hotels Ltd. | 33,500 | 44,624 | ||||||
509,579 | ||||||||
Diversified Financials 0.3% | ||||||||
First Pacific Co., Ltd. | 183,000 | 190,650 | ||||||
Guoco Group Ltd. | 6,000 | 57,010 | ||||||
247,660 |
See financial notes 47
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Energy 0.0% | ||||||||
Mongolia Energy Co., Ltd. * | 215,000 | 20,637 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
China Mengniu Dairy Co., Ltd. | 37,000 | 117,900 | ||||||
China Yurun Food Group Ltd. (a) | 24,000 | 41,657 | ||||||
Global Bio-chem Technology Group Co., Ltd. | 338,000 | 78,203 | ||||||
Tingyi (Cayman Islands) Holding Corp. | 52,000 | 147,899 | ||||||
Vitasoy International Holdings Ltd. | 32,000 | 22,507 | ||||||
Want Want China Holdings Ltd. | 123,000 | 114,040 | ||||||
522,206 | ||||||||
Household & Personal Products 0.1% | ||||||||
Hengan International Group Co., Ltd. | 15,000 | 130,025 | ||||||
Materials 0.3% | ||||||||
China Grand Forestry Green Resources Group Ltd. * | 1,832,000 | 11,440 | ||||||
China Shanshui Cement Group | 68,000 | 52,086 | ||||||
China Zhongwang Holdings Ltd. | 177,600 | 58,737 | ||||||
Fosun International | 132,000 | 74,766 | ||||||
Fushan International Energy Group Ltd. | 58,000 | 23,853 | ||||||
Lee & Man Paper Manufacturing Ltd. | 61,000 | 25,094 | ||||||
Nine Dragons Paper Holdings Ltd. | 47,000 | 31,995 | ||||||
Samling Global Ltd. | 360,000 | 20,694 | ||||||
298,665 | ||||||||
Media 0.1% | ||||||||
Television Broadcasts Ltd. | 19,000 | 109,486 | ||||||
Real Estate 1.1% | ||||||||
Agile Property Holdings Ltd. | 62,000 | 55,885 | ||||||
Champion Real Estate Investment Trust | 113,000 | 46,620 | ||||||
Chinese Estates Holdings Ltd. | 29,000 | 47,173 | ||||||
Country Garden Holdings Co. | 164,000 | 64,934 | ||||||
Great Eagle Holdings Ltd. | 36,000 | 79,954 | ||||||
Greentown China Holdings Ltd. | 43,500 | 27,899 | ||||||
HKR International Ltd. | 59,200 | 24,477 | ||||||
Hopewell Holdings Ltd. | 31,000 | 80,507 | ||||||
Hopson Development Holdings Ltd. | 69,000 | 43,018 | ||||||
Hysan Development Co., Ltd. | 33,000 | 115,156 | ||||||
K Wah International Holdings Ltd. | 57,000 | 15,405 | ||||||
Kowloon Development Co., Ltd. | 26,000 | 25,018 | ||||||
KWG Property Holding Ltd. | 47,000 | 20,272 | ||||||
Midland Holdings Ltd. | 36,000 | 17,654 | ||||||
New World China Land Ltd. | 129,600 | 29,569 | ||||||
Renhe Commercial Holdings (a) | 288,000 | 40,357 | ||||||
Shimao Property Holdings Ltd. (a) | 65,500 | 63,949 | ||||||
Shui On Land Ltd. | 172,900 | 53,647 | ||||||
Soho China Ltd. | 88,000 | 62,741 | ||||||
SRE Group Ltd. | 412,000 | 21,236 | ||||||
Wheelock & Co., Ltd. | 44,000 | 129,276 | ||||||
1,064,747 | ||||||||
Retailing 0.5% | ||||||||
Belle International Holdings Ltd. | 79,000 | 154,937 | ||||||
Giordano International Ltd. | 103,000 | 77,691 | ||||||
GOME Electrical Appliances Holdings Ltd. | 420,000 | 128,772 | ||||||
Lifestyle International Holdings Ltd. | 17,000 | 45,510 | ||||||
Parkson Retail Group Ltd. | 22,000 | 27,994 | ||||||
434,904 | ||||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASM Pacific Technology Ltd. | 5,500 | 60,395 | ||||||
GCL-Poly Energy Holdings Ltd. (a) | 58,000 | 18,722 | ||||||
Semiconductor Manufacturing International Corp. * | 1,822,000 | 99,947 | ||||||
179,064 | ||||||||
Software & Services 0.1% | ||||||||
Tencent Holdings Ltd. | 3,000 | 69,383 | ||||||
Technology Hardware & Equipment 0.5% | ||||||||
AAC Technologies Holdings, Inc. | 16,000 | 36,624 | ||||||
BYD Electronic International Co., Ltd. * | 71,500 | 25,508 | ||||||
Digital China Holdings Ltd. | 44,700 | 69,852 | ||||||
Foxconn International Holdings Ltd. * | 192,000 | 128,602 | ||||||
Ju Teng International Holdings Ltd. | 74,000 | 14,205 | ||||||
Kingboard Laminates Holding Ltd. | 54,000 | 29,070 | ||||||
TPV Technology Ltd. | 160,000 | 45,289 | ||||||
VTech Holdings Ltd. | 13,000 | 121,385 | ||||||
470,535 | ||||||||
Telecommunication Services 0.1% | ||||||||
Hutchison Telecommunications Hong Kong Holdings Ltd. | 84,000 | 29,865 | ||||||
SmarTone Telecommunications Holdings Ltd. | 22,000 | 40,633 | ||||||
70,498 | ||||||||
Transportation 0.1% | ||||||||
Hong Kong Aircraft Engineering Co., Ltd. | 3,200 | 39,913 | ||||||
Hopewell Highway Infrastructure Ltd. | 49,900 | 27,524 | ||||||
67,437 | ||||||||
Utilities 0.2% | ||||||||
Cheung Kong Infrastructure Holdings Ltd. | 12,000 | 64,281 | ||||||
China Gas Holdings Ltd. | 76,000 | 21,810 | ||||||
ENN Energy Holdings Ltd. | 18,000 | 65,043 | ||||||
151,134 | ||||||||
5,141,498 | ||||||||
Ireland 0.6% | ||||||||
Capital Goods 0.2% | ||||||||
Grafton Group plc | 17,271 | 66,641 | ||||||
Kingspan Group plc | 8,707 | 77,354 | ||||||
143,995 | ||||||||
Consumer Services 0.1% | ||||||||
Paddy Power plc | 1,293 | 71,123 | ||||||
Food, Beverage & Tobacco 0.2% | ||||||||
C&C Group plc | 21,918 | 88,273 | ||||||
Glanbia plc | 7,962 | 52,000 | ||||||
Greencore Group plc | 45,087 | 45,542 | ||||||
185,815 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
United Drug plc | 14,210 | 43,852 | ||||||
Media 0.0% | ||||||||
Independent News & Media plc * | 45,416 | 17,470 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Elan Corp. plc * | 6,996 | 82,967 |
48 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 0.0% | ||||||||
Aer Lingus Group plc * | 25,632 | 25,536 | ||||||
570,758 | ||||||||
Israel 1.0% | ||||||||
Banks 0.2% | ||||||||
Israel Discount Bank Ltd., Class A * | 66,130 | 109,309 | ||||||
Mizrahi Tefahot Bank Ltd. | 6,718 | 57,807 | ||||||
167,116 | ||||||||
Capital Goods 0.2% | ||||||||
Clal Industries Ltd. | 4,437 | 20,920 | ||||||
Delek Group Ltd. | 298 | 58,520 | ||||||
Discount Investment Corp. - Reg’d | 7,234 | 76,074 | ||||||
Elbit Systems Ltd. | 1,195 | 52,898 | ||||||
IDB Holding Corp., Ltd. * | 1,148 | 17,490 | ||||||
225,902 | ||||||||
Energy 0.1% | ||||||||
Oil Refineries Ltd. * | 160,560 | 92,103 | ||||||
Paz Oil Co., Ltd. | 286 | 40,545 | ||||||
132,648 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Shufersal Ltd. | 6,581 | 28,390 | ||||||
Food, Beverage & Tobacco 0.0% | ||||||||
Strauss Group Ltd. | 2,315 | 30,403 | ||||||
Insurance 0.1% | ||||||||
Clal Insurance Enterprise Holdings Ltd. | 1,169 | 20,330 | ||||||
Harel Insurance Investments & Finances Service Ltd. | 469 | 20,282 | ||||||
Migdal Insurance & Financial Holdings Ltd. | 18,191 | 26,243 | ||||||
66,855 | ||||||||
Materials 0.1% | ||||||||
The Israel Corp., Ltd. | 114 | 82,769 | ||||||
Real Estate 0.1% | ||||||||
Gazit-Globe Ltd. | 4,494 | 49,165 | ||||||
Software & Services 0.1% | ||||||||
NICE Systems Ltd. * | 1,927 | 68,628 | ||||||
Telecommunication Services 0.1% | ||||||||
Partner Communications Co., Ltd. | 6,968 | 82,735 | ||||||
934,611 | ||||||||
Italy 2.6% | ||||||||
Automobiles & Components 0.1% | ||||||||
Brembo S.p.A. | 2,675 | 28,478 | ||||||
Immsi S.p.A. | 25,302 | 21,901 | ||||||
Piaggio & C. S.p.A. | 11,743 | 39,028 | ||||||
89,407 | ||||||||
Banks 0.1% | ||||||||
Credito Emiliano S.p.A. | 11,810 | 50,234 | ||||||
Capital Goods 0.5% | ||||||||
Astaldi S.p.A. | 4,661 | 27,436 | ||||||
C.I.R. S.p.A. - Compagnie Industriali Riunite | 53,010 | 105,983 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. | 1,418 | 35,933 | ||||||
Danieli S.p.A. - Officine Meccaniche Danieli & C. - RSP | 2,943 | 40,674 | ||||||
Impregilo S.p.A. | 45,661 | 134,302 | ||||||
Interpump Group S.p.A. | 5,283 | 33,878 | ||||||
Maire Tecnimont S.p.A. | 18,370 | 30,284 | ||||||
Trevi Finanziaria S.p.A. | 2,104 | 23,460 | ||||||
431,950 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Benetton Group S.p.A. | 13,190 | 75,887 | ||||||
De’Longhi S.p.A. | 10,796 | 117,979 | ||||||
Geox S.p.A. | 5,595 | 22,318 | ||||||
Indesit Co., S.p.A. | 6,840 | 46,701 | ||||||
Safilo Group S.p.A. * | 4,319 | 35,789 | ||||||
Tod’s S.p.A. | 477 | 47,614 | ||||||
346,288 | ||||||||
Consumer Services 0.3% | ||||||||
Autogrill S.p.A. | 9,984 | 115,470 | ||||||
Lottomatica S.p.A. * | 6,960 | 132,866 | ||||||
248,336 | ||||||||
Diversified Financials 0.0% | ||||||||
Azimut Holding S.p.A. | 4,659 | 36,316 | ||||||
Food & Staples Retailing 0.0% | ||||||||
Marr S.p.A. | 2,592 | 27,798 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Davide Campari - Milano S.p.A. | 10,592 | 81,828 | ||||||
Health Care Equipment & Services 0.0% | ||||||||
Sorin S.p.A. * | 16,554 | 34,601 | ||||||
Insurance 0.2% | ||||||||
Mediolanum S.p.A | 21,694 | 83,144 | ||||||
Milano Assicurazioni S.p.A. * | 105,852 | 45,140 | ||||||
Societa Cattolica di Assicurazioni S.c.r.l. | 4,236 | 94,294 | ||||||
222,578 | ||||||||
Materials 0.1% | ||||||||
Cementir Holding S.p.A. | 8,284 | 19,413 | ||||||
Italmobiliare S.p.A. | 1,168 | 32,707 | ||||||
Italmobiliare S.p.A. - RSP | 2,662 | 45,813 | ||||||
97,933 | ||||||||
Media 0.1% | ||||||||
Gruppo Editoriale L’Espresso S.p.A. | 15,653 | 27,648 | ||||||
Mondadori (Arnoldo) Editore S.p.A. | 19,093 | 39,214 | ||||||
66,862 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Recordati S.p.A. | 5,841 | 50,850 | ||||||
Real Estate 0.1% | ||||||||
Beni Stabili S.p.A. | 76,086 | 45,725 | ||||||
Prelios S.p.A * | 91,666 | 26,902 | ||||||
72,627 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Esprinet S.p.A. | 4,294 | 17,586 | ||||||
Transportation 0.2% | ||||||||
Alitalia S.p.A. (b)(c)* | 14,782 | — | ||||||
Ansaldo STS S.p.A. | 4,553 | 48,169 | ||||||
Autostrada Torino-Milano S.p.A. | 5,028 | 52,587 | ||||||
Gemina S.p.A. * | 52,402 | 44,605 |
See financial notes 49
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Societa Iniziative Autostradali e Servizi S.p.A. | 5,356 | 44,265 | ||||||
189,626 | ||||||||
Utilities 0.3% | ||||||||
ACEA S.p.A. | 9,340 | 70,814 | ||||||
Edison S.p.A. * | 79,168 | 93,083 | ||||||
Hera S.p.A. | 62,400 | 102,029 | ||||||
Iren S.p.A. | 53,622 | 64,860 | ||||||
330,786 | ||||||||
2,395,606 | ||||||||
Japan 33.4% | ||||||||
Automobiles & Components 2.2% | ||||||||
Akebono Brake Industry Co., Ltd. | 7,200 | 34,249 | ||||||
Calsonic Kansei Corp. | 12,000 | 70,415 | ||||||
EXEDY Corp. | 1,600 | 46,353 | ||||||
F.C.C. Co., Ltd. | 1,300 | 27,467 | ||||||
Futaba Industrial Co., Ltd. | 14,100 | 89,865 | ||||||
Kanto Auto Works, Ltd. | 9,400 | 77,878 | ||||||
Kayaba Industry Co., Ltd. | 9,000 | 51,718 | ||||||
Keihin Corp. | 3,300 | 50,900 | ||||||
Koito Manufacturing Co., Ltd. | 6,000 | 90,439 | ||||||
Mitsuba Corp. | 5,000 | 39,921 | ||||||
Musashi Seimitsu Industry Co., Ltd. | 2,200 | 52,007 | ||||||
NGK Spark Plug Co., Ltd. | 7,000 | 86,769 | ||||||
NHK Spring Co., Ltd. | 12,000 | 109,827 | ||||||
Nifco, Inc. | 2,400 | 62,595 | ||||||
Nippon Seiki Co., Ltd. | 3,000 | 30,141 | ||||||
Nissan Shatai Co., Ltd. | 7,000 | 62,757 | ||||||
Nissin Kogyo Co., Ltd. | 3,800 | 53,548 | ||||||
Press Kogyo Co., Ltd. | 8,000 | 37,405 | ||||||
Riken Corp. | 7,000 | 28,678 | ||||||
Sanden Corp. | 12,000 | 41,159 | ||||||
Showa Corp. * | 8,000 | 46,336 | ||||||
Sumitomo Rubber Industries Ltd. | 12,400 | 154,911 | ||||||
Tachi-S Co., Ltd. | 2,500 | 42,700 | ||||||
Takata Corp. | 3,000 | 72,963 | ||||||
Tokai Rika Co., Ltd. | 3,800 | 61,211 | ||||||
Tokai Rubber Industries Ltd. | 3,500 | 43,960 | ||||||
Toyo Tire & Rubber Co., Ltd. | 32,000 | 77,663 | ||||||
Toyoda Gosei Co., Ltd. | 4,600 | 81,145 | ||||||
Toyota Auto Body Co., Ltd. | 4,400 | 65,980 | ||||||
Toyota Boshoku Corp. | 8,200 | 99,349 | ||||||
TS Tech Co., Ltd. | 3,500 | 52,538 | ||||||
Unipres Corp. | 1,500 | 40,915 | ||||||
Yorozu Corp. | 1,400 | 33,014 | ||||||
2,016,776 | ||||||||
Banks 3.0% | ||||||||
Aichi Bank Ltd. | 600 | 33,301 | ||||||
Aozora Bank Ltd. | 33,000 | 83,425 | ||||||
Bank of The Ryukyus Ltd. | 3,400 | 41,579 | ||||||
Kansai Urban Banking Corp. | 24,000 | 43,185 | ||||||
Kiyo Holdings, Inc. | 51,000 | 71,995 | ||||||
Sapporo Hokuyo Holdings, Inc. | 17,600 | 58,285 | ||||||
Senshu Ikeda Holdings, Inc. | 52,100 | 76,067 | ||||||
Suruga Bank Ltd. | 11,000 | 91,696 | ||||||
The 77 Bank Ltd. | 22,000 | 86,656 | ||||||
The Akita Bank Ltd. | 10,000 | 28,651 | ||||||
The Aomori Bank Ltd. | 12,000 | 34,606 | ||||||
The Awa Bank Ltd. | 12,000 | 79,758 | ||||||
The Bank of Iwate Ltd. | 1,200 | 54,457 | ||||||
The Bank of Nagoya Ltd. | 16,000 | 50,637 | ||||||
The Bank of Okinawa Ltd. | 1,400 | 55,891 | ||||||
The Daishi Bank Ltd. | 26,000 | 82,734 | ||||||
The Ehime Bank Ltd. | 9,000 | 26,010 | ||||||
The Eighteenth Bank Ltd. | 8,000 | 20,481 | ||||||
The Fukui Bank Ltd. | 11,000 | 31,838 | ||||||
The Higashi-Nippon Bank Ltd. | 11,000 | 22,188 | ||||||
The Higo Bank Ltd. | 14,000 | 76,439 | ||||||
The Hiroshima Bank Ltd. | 30,000 | 133,445 | ||||||
The Hokkoku Bank Ltd. | 21,000 | 70,729 | ||||||
The Hyakugo Bank Ltd. | 20,000 | 77,778 | ||||||
The Hyakujushi Bank Ltd. | 16,000 | 61,270 | ||||||
The Iyo Bank Ltd. | 16,000 | 150,108 | ||||||
The Juroku Bank Ltd. | 28,000 | 83,739 | ||||||
The Kagoshima Bank Ltd. | 14,000 | 91,673 | ||||||
The Keiyo Bank Ltd. | 10,000 | 48,580 | ||||||
The Minato Bank Ltd. | 15,000 | 25,766 | ||||||
The Miyazaki Bank Ltd. | 10,000 | 21,091 | ||||||
The Musashino Bank Ltd. | 2,400 | 76,320 | ||||||
The Nanto Bank Ltd. | 18,000 | 95,954 | ||||||
The Nishi-Nippon City Bank Ltd. | 43,000 | 117,265 | ||||||
The Ogaki Kyoritsu Bank Ltd. | 25,000 | 77,502 | ||||||
The Oita Bank Ltd. | 9,000 | 25,543 | ||||||
The San-in Godo Bank Ltd. | 14,000 | 101,772 | ||||||
The Shiga Bank Ltd. | 17,000 | 109,463 | ||||||
The Shikoku Bank Ltd. | 10,000 | 35,217 | ||||||
The Tochigi Bank Ltd. | 6,000 | 21,043 | ||||||
The Toho Bank Ltd. | 15,000 | 38,950 | ||||||
The Tokyo Tomin Bank Ltd. | 3,600 | 41,829 | ||||||
The Yachiyo Bank Ltd. | 1,200 | 29,414 | ||||||
The Yamagata Bank Ltd. | 8,000 | 38,274 | ||||||
The Yamanashi Chuo Bank Ltd. | 11,000 | 44,201 | ||||||
Tsukuba Bank Ltd. | 9,800 | 32,384 | ||||||
2,799,189 | ||||||||
Capital Goods 5.9% | ||||||||
Aica Kogyo Co., Ltd. | 3,400 | 45,995 | ||||||
Amano Corp. | 5,500 | 46,294 | ||||||
Bando Chemical Industries Ltd. | 6,000 | 23,307 | ||||||
Central Glass Co., Ltd. | 19,000 | 84,934 | ||||||
Chiyoda Corp. | 13,000 | 149,704 | ||||||
Chudenko Corp. | 3,300 | 35,722 | ||||||
CKD Corp. | 3,200 | 21,484 | ||||||
Comsys Holdings Corp. | 11,200 | 109,628 | ||||||
Daifuku Co., Ltd. | 8,500 | 44,097 | ||||||
Daihen Corp. | 8,000 | 27,399 | ||||||
Ebara Corp. | 22,000 | 80,347 | ||||||
Fujitec Co., Ltd. | 7,000 | 35,408 | ||||||
Furukawa Co., Ltd. * | 40,000 | 38,752 | ||||||
Futaba Corp. | 3,000 | 56,584 | ||||||
Glory Ltd. | 3,500 | 74,914 | ||||||
GS Yuasa Corp. | 12,000 | 62,865 | ||||||
Hino Motors Ltd. | 27,000 | 158,569 | ||||||
Hitachi Cable Ltd. | 23,000 | 54,353 | ||||||
Hitachi Construction Machinery Co., Ltd. | 5,800 | 111,564 | ||||||
Hitachi Zosen Corp. | 64,000 | 86,530 | ||||||
Hoshizaki Electric Co., Ltd. | 3,900 | 87,153 | ||||||
Inaba Denki Sangyo Co., Ltd. | 2,600 | 74,365 | ||||||
Inabata & Co., Ltd. | 10,600 | 57,495 | ||||||
Iseki & Co., Ltd. * | 13,000 | 28,558 |
50 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Iwatani Corp. | 18,000 | 62,107 | ||||||
JFE Shoji Holdings, Inc. | 30,000 | 121,694 | ||||||
Kandenko Co., Ltd. | 10,000 | 43,934 | ||||||
Keihan Electric Railway Co., Ltd. | 27,000 | 123,463 | ||||||
Kitz Corp. | 10,000 | 45,934 | ||||||
Komori Corp. | 6,900 | 43,084 | ||||||
Kumagai Gumi Co., Ltd. * | 37,000 | 33,052 | ||||||
Kurita Water Industries Ltd. | 4,300 | 118,410 | ||||||
Kuroda Electric Co., Ltd. | 2,700 | 29,400 | ||||||
Kyowa Exeo Corp. | 9,100 | 80,046 | ||||||
Kyudenko Corp. | 5,000 | 30,242 | ||||||
Mabuchi Motor Co., Ltd. | 1,800 | 78,892 | ||||||
Maeda Corp. | 31,000 | 113,016 | ||||||
Maeda Road Construction Co., Ltd. | 9,000 | 89,504 | ||||||
Makino Milling Machine Co., Ltd. | 5,000 | 33,189 | ||||||
Max Co., Ltd. | 3,000 | 35,840 | ||||||
Meidensha Corp. | 11,000 | 41,415 | ||||||
Misumi Group, Inc. | 1,300 | 27,050 | ||||||
Mitsuboshi Belting Ltd. | 6,000 | 31,480 | ||||||
Miura Co., Ltd. | 1,800 | 48,293 | ||||||
Mori Seiki Co., Ltd. | 5,500 | 49,938 | ||||||
Nabtesco Corp. | 2,000 | 43,803 | ||||||
Nachi-Fujikoshi Corp. | 12,000 | 66,507 | ||||||
Nagase & Co., Ltd. | 9,000 | 101,324 | ||||||
Namura Shipbuilding Co., Ltd. | 5,400 | 17,425 | ||||||
NEC Networks & System Integration Corp. | 2,900 | 43,605 | ||||||
Nichias Corp. | 8,000 | 43,455 | ||||||
Nippo Corp. | 11,000 | 96,875 | ||||||
Nippon Densetsu Kogyo Co., Ltd. | 5,000 | 49,611 | ||||||
Nippon Steel Trading Co., Ltd. | 8,000 | 20,815 | ||||||
Nippon Thompson Co., Ltd. | 4,000 | 25,764 | ||||||
Nishimatsu Construction Co., Ltd. | 65,000 | 106,774 | ||||||
Nisshinbo Holdings, Inc. | 11,000 | 99,865 | ||||||
Nitto Boseki Co., Ltd. | 14,000 | 41,893 | ||||||
Noritake Co., Ltd. | 7,000 | 22,292 | ||||||
Noritz Corp. | 3,700 | 75,205 | ||||||
Oiles Corp. | 1,400 | 25,135 | ||||||
Okuma Corp. | 7,000 | 51,523 | ||||||
Okumura Corp. | 17,000 | 67,097 | ||||||
OSG Corp. | 3,200 | 41,005 | ||||||
Penta-Ocean Construction Co., Ltd. (a) | 37,000 | 117,571 | ||||||
Ryobi Ltd. | 14,000 | 56,508 | ||||||
Sanki Engineering Co., Ltd. | 8,000 | 43,072 | ||||||
Sankyo-Tateyama Holdings, Inc. * | 48,000 | 60,382 | ||||||
Sanwa Holdings Corp. | 25,000 | 74,883 | ||||||
Sekisui Jushi Corp. | 4,000 | 37,730 | ||||||
Shima Seiki Mfg., Ltd. | 1,700 | 31,639 | ||||||
ShinMaywa Industries Ltd. | 10,000 | 33,808 | ||||||
Sintokogio Ltd. | 3,500 | 31,675 | ||||||
Sumikin Bussan Corp. | 14,000 | 30,991 | ||||||
Swcc Showa Holdings Co., Ltd. * | 33,000 | 31,295 | ||||||
Tadano Ltd. | 10,000 | 66,733 | ||||||
Taihei Dengyo Kaisha Ltd. | 4,000 | 26,332 | ||||||
Taikisha Ltd. | 2,800 | 60,631 | ||||||
Takara Standard Co., Ltd. | 7,000 | 51,236 | ||||||
Takasago Thermal Engineering Co., Ltd. | 7,000 | 55,722 | ||||||
Tekken Corp. | 26,000 | 29,818 | ||||||
The Japan Steel Works Ltd. | 10,000 | 68,530 | ||||||
The Nippon Signal Co., Ltd. | 3,800 | 27,845 | ||||||
THK Co., Ltd. | 5,100 | 99,394 | ||||||
Tobishima Corp. * | 26,100 | 25,485 | ||||||
Toda Corp. | 25,000 | 88,707 | ||||||
Toshiba Machine Co., Ltd. | 5,000 | 24,770 | ||||||
Toshiba Plant Systems & Services Corp. | 2,000 | 21,380 | ||||||
Toyo Construction Co., Ltd. | 48,000 | 48,825 | ||||||
Toyo Engineering Corp. | 10,000 | 33,060 | ||||||
Trusco Nakayama Corp. | 1,800 | 33,348 | ||||||
Tsubakimoto Chain Co. | 11,000 | 56,454 | ||||||
Ushio, Inc. | 4,100 | 60,618 | ||||||
Yamazen Corp. | 7,100 | 50,268 | ||||||
Yuasa Trading Co., Ltd. | 31,000 | 43,315 | ||||||
5,438,002 | ||||||||
Commercial & Professional Supplies 0.5% | ||||||||
Duskin Co., Ltd. | 5,500 | 106,878 | ||||||
Kokuyo Co., Ltd. | 12,200 | 90,858 | ||||||
Meitec Corp. | 2,400 | 44,692 | ||||||
Nissha Printing Co., Ltd. | 2,200 | 25,925 | ||||||
Okamura Corp. | 7,000 | 42,465 | ||||||
Park24 Co., Ltd. | 5,100 | 58,639 | ||||||
Sohgo Security Services Co., Ltd. | 5,700 | 59,750 | ||||||
Toppan Forms Co., Ltd. | 3,500 | 27,394 | ||||||
456,601 | ||||||||
Consumer Durables & Apparel 1.5% | ||||||||
Alpine Electronics, Inc. | 3,300 | 38,751 | ||||||
Asics Corp. | 6,000 | 79,543 | ||||||
Chofu Seisakusho Co., Ltd. | 1,500 | 38,254 | ||||||
Foster Electric Co., Ltd. | 1,200 | 17,572 | ||||||
Funai Electric Co., Ltd. | 1,400 | 27,517 | ||||||
Gunze Ltd. | 15,000 | 45,492 | ||||||
Heiwa Corp. | 2,200 | 36,456 | ||||||
Hitachi Koki Co., Ltd. | 3,600 | 26,998 | ||||||
JVC KENWOOD Holdings, Inc. * | 11,260 | 45,748 | ||||||
Kurabo Industries Ltd. | 26,000 | 49,306 | ||||||
Mizuno Corp. | 8,000 | 38,768 | ||||||
Onward Holdings Co., Ltd. | 13,000 | 95,706 | ||||||
PanaHome Corp. | 7,000 | 48,248 | ||||||
Pioneer Corp. * | 24,400 | 97,838 | ||||||
Rinnai Corp. | 1,500 | 112,060 | ||||||
Sangetsu Co., Ltd. | 2,700 | 70,620 | ||||||
Sanyo Shokai Ltd. | 8,000 | 18,867 | ||||||
Seiko Holdings Corp. | 13,000 | 32,174 | ||||||
Seiren Co., Ltd. | 5,000 | 29,691 | ||||||
Shimano, Inc. | 2,400 | 118,632 | ||||||
Tamron Co., Ltd. | 1,400 | 37,692 | ||||||
The Japan Wool Textile Co., Ltd. | 5,000 | 40,237 | ||||||
Tomy Co., Ltd. | 5,300 | 36,371 | ||||||
Toyobo Co., Ltd. | 74,000 | 105,090 | ||||||
TSI Holdings Co., Ltd. * | 7,000 | 36,111 | ||||||
Unitika Ltd. * | 47,000 | 27,116 | ||||||
Wacoal Holdings Corp. | 7,000 | 82,695 | ||||||
1,433,553 | ||||||||
Consumer Services 0.6% | ||||||||
Accordia Golf Co., Ltd. | 56 | 41,229 | ||||||
Doutor Nichires Holdings Co., Ltd. | 4,200 | 50,212 | ||||||
H.I.S. Co., Ltd. | 1,800 | 46,521 | ||||||
MOS Food Services, Inc. | 1,800 | 34,330 | ||||||
Oriental Land Co., Ltd. | 1,600 | 159,010 | ||||||
Resorttrust, Inc. | 3,100 | 46,372 | ||||||
Round One Corp. | 6,200 | 45,267 |
See financial notes 51
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Saizeriya Co., Ltd. | 2,000 | 32,413 | ||||||
Tokyo Dome Corp. * | 16,000 | 36,370 | ||||||
Yoshinoya Holdings Co., Ltd. | 25 | 31,840 | ||||||
Zensho Co., Ltd. | 4,100 | 51,166 | ||||||
574,730 | ||||||||
Diversified Financials 1.0% | ||||||||
Acom Co., Ltd. * | 8,000 | 140,449 | ||||||
Aeon Credit Service Co., Ltd. | 6,900 | 102,899 | ||||||
Century Tokyo Leasing Corp. | 2,000 | 39,987 | ||||||
Fuyo General Lease Co., Ltd. | 1,600 | 54,977 | ||||||
Hitachi Capital Corp. | 3,800 | 46,435 | ||||||
IBJ Leasing Co., Ltd. | 1,600 | 35,808 | ||||||
Jaccs Co., Ltd. | 24,000 | 79,285 | ||||||
JAFCO Co., Ltd. | 1,100 | 22,554 | ||||||
Japan Securities Finance Co., Ltd. | 5,700 | 27,240 | ||||||
Marusan Securities Co., Ltd. | 6,400 | 22,992 | ||||||
Matsui Securities Co., Ltd. | 6,000 | 28,236 | ||||||
Mitsubishi UFJ Lease & Finance Co., Ltd. | 2,500 | 96,877 | ||||||
Monex Group, Inc. | 129 | 19,712 | ||||||
Okasan Securities Group, Inc. | 8,000 | 24,557 | ||||||
Orient Corp. * | 60,500 | 57,517 | ||||||
Ricoh Leasing | 1,300 | 28,432 | ||||||
Tokai Tokyo Financial Holdings, Inc. | 19,000 | 52,770 | ||||||
880,727 | ||||||||
Energy 0.2% | ||||||||
AOC Holdings, Inc. | 8,800 | 50,493 | ||||||
Itohchu Enex Co., Ltd. | 5,900 | 30,618 | ||||||
Japan Petroleum Exploration Co., Ltd. | 2,300 | 90,842 | ||||||
San-Ai Oil Co., Ltd. | 6,000 | 26,049 | ||||||
Shinko Plantech Co., Ltd. | 2,600 | 23,095 | ||||||
221,097 | ||||||||
Food & Staples Retailing 0.9% | ||||||||
Arcs Co., Ltd. | 2,300 | 40,950 | ||||||
Cawachi Ltd. | 1,600 | 30,409 | ||||||
Circle K Sunkus Co., Ltd. | 4,300 | 70,107 | ||||||
cocokara fine, Inc. | 3,000 | 74,574 | ||||||
FamilyMart Co., Ltd. | 4,100 | 161,181 | ||||||
Heiwado Co., Ltd. | 3,800 | 46,010 | ||||||
Izumiya Co., Ltd. | 6,000 | 27,132 | ||||||
Kato Sangyo Co., Ltd. | 2,400 | 46,880 | ||||||
Matsumotokiyoshi Holdings Co., Ltd. | 4,800 | 90,935 | ||||||
Ministop Co., Ltd. | 1,700 | 30,580 | ||||||
Okuwa Co., Ltd. | 3,000 | 41,855 | ||||||
Sugi Holdings Co., Ltd. | 1,700 | 44,366 | ||||||
Tsuruha Holdings, Inc. | 700 | 35,763 | ||||||
Valor Co., Ltd. | 3,500 | 52,054 | ||||||
792,796 | ||||||||
Food, Beverage & Tobacco 2.6% | ||||||||
Coca-Cola Central Japan Co., Ltd. | 2,700 | 35,834 | ||||||
Coca-Cola West Co., Ltd. | 5,600 | 100,010 | ||||||
Ezaki Glico Co., Ltd. | 8,000 | 95,019 | ||||||
Fuji Oil Co., Ltd. | 5,600 | 79,487 | ||||||
Hokuto Corp. | 1,600 | 33,047 | ||||||
House Foods Corp. | 4,000 | 72,510 | ||||||
Ito En Ltd. | 5,700 | 96,622 | ||||||
Itoham Foods, Inc. | 18,000 | 61,978 | ||||||
J-Oil Mills, Inc. | 9,000 | 25,904 | ||||||
Kagome Co., Ltd. | 4,900 | 93,054 | ||||||
Kewpie Corp. | 11,500 | 156,804 | ||||||
Kikkoman Corp. | 13,000 | 143,757 | ||||||
Kyokuyo Co., Ltd. | 12,000 | 26,961 | ||||||
Marudai Food Co., Ltd. | 12,000 | 39,988 | ||||||
Maruha Nichiro Holdings, Inc. | 77,000 | 139,076 | ||||||
Megmilk Snow Brand Co., Ltd. | 6,600 | 126,880 | ||||||
Mikuni Coca-Cola Bottling Co., Ltd. | 5,300 | 45,806 | ||||||
Mitsui Sugar Co., Ltd. | 8,000 | 33,329 | ||||||
Morinaga & Co., Ltd. | 16,000 | 37,833 | ||||||
Morinaga Milk Industry Co., Ltd. | 28,000 | 110,832 | ||||||
Nichirei Corp. | 27,000 | 119,843 | ||||||
Nippon Flour Mills Co., Ltd. | 15,000 | 67,097 | ||||||
Nippon Suisan Kaisha Ltd. | 33,800 | 114,174 | ||||||
Sakata Seed Corp. | 2,400 | 33,962 | ||||||
Sapporo Holdings Ltd. | 27,000 | 100,656 | ||||||
Takara Holdings, Inc. | 11,000 | 65,000 | ||||||
The Nisshin Oillio Group Ltd. | 16,000 | 71,537 | ||||||
Toyo Suisan Kaisha Ltd. | 5,000 | 127,598 | ||||||
Yamazaki Baking Co., Ltd. | 12,000 | 159,089 | ||||||
2,413,687 | ||||||||
Health Care Equipment & Services 0.5% | ||||||||
Hogy Medical Co., Ltd. | 800 | 33,895 | ||||||
Miraca Holdings, Inc. | 2,000 | 76,275 | ||||||
Nihon Kohden Corp. | 2,100 | 49,027 | ||||||
Nikkiso Co., Ltd. | 4,000 | 33,262 | ||||||
Nipro Corp. | 6,000 | 50,870 | ||||||
Toho Holdings Co., Ltd. | 12,200 | 153,950 | ||||||
Vital KSK Holdings, Inc. | 7,400 | 61,303 | ||||||
458,582 | ||||||||
Household & Personal Products 0.5% | ||||||||
Fancl Corp. | 3,600 | 50,242 | ||||||
Kobayashi Pharmaceutical Co., Ltd. | 1,100 | 54,526 | ||||||
Kose Corp. | 1,400 | 33,358 | ||||||
Lion Corp. | 18,000 | 100,320 | ||||||
Mandom Corp. | 1,200 | 30,641 | ||||||
Unicharm Corp. | 2,500 | 111,960 | ||||||
Unihair Co., Ltd. * | 4,000 | 41,083 | ||||||
422,130 | ||||||||
Insurance 0.1% | ||||||||
Sony Financial Holdings, Inc. | 5,166 | 85,936 | ||||||
Materials 3.9% | ||||||||
Adeka Corp. | 6,900 | 69,005 | ||||||
Aichi Steel Corp. | 6,000 | 31,546 | ||||||
Air Water, Inc. | 11,000 | 139,636 | ||||||
Chugoku Marine Paints Ltd. | 4,000 | 28,154 | ||||||
Daido Steel Co., Ltd. | 22,000 | 133,314 | ||||||
Daio Paper Corp. | 10,000 | 75,163 | ||||||
Earth Chemical Co., Ltd. | 1,000 | 36,402 | ||||||
FP Corp. | 900 | 57,297 | ||||||
Furukawa-Sky Aluminum Corp. | 11,000 | 32,531 | ||||||
Godo Steel Ltd. | 26,000 | 61,513 | ||||||
Hitachi Chemical Co., Ltd. | 6,800 | 120,815 | ||||||
Hitachi Metals Ltd. | 8,000 | 90,729 | ||||||
Hokuetsu Kishu Paper Co., Ltd. | 10,000 | 65,819 | ||||||
Ishihara Sangyo Kaisha Ltd. * | 37,000 | 44,720 | ||||||
Kaneka Corp. | 18,000 | 96,547 | ||||||
Kansai Paint Co., Ltd. | 11,000 | 103,257 | ||||||
Kureha Corp. | 12,000 | 53,593 | ||||||
Kyoei Steel Ltd. | 3,200 | 56,589 | ||||||
Lintec Corp. | 2,100 | 44,362 | ||||||
Maruichi Steel Tube Ltd. | 4,500 | 100,798 |
52 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Mitsubishi Paper Mills Ltd. * | 53,000 | 50,046 | ||||||
Mitsubishi Steel Mfg. Co., Ltd. | 10,000 | 26,770 | ||||||
Nihon Parkerizing Co., Ltd. | 2,000 | 26,924 | ||||||
Nihon Yamamura Glass Co., Ltd. | 12,000 | 27,736 | ||||||
Nippon Coke & Engineering Co., Ltd. | 13,500 | 18,379 | ||||||
Nippon Denko Co., Ltd. | 5,000 | 26,667 | ||||||
Nippon Kayaku Co., Ltd. | 8,000 | 78,272 | ||||||
Nippon Light Metal Co., Ltd. | 60,000 | 87,065 | ||||||
Nippon Metal Industry Co., Ltd. * | 22,000 | 21,517 | ||||||
Nippon Paint Co., Ltd. | 11,000 | 83,754 | ||||||
Nippon Shokubai Co., Ltd. | 10,000 | 101,992 | ||||||
Nippon Soda Co., Ltd. | 10,000 | 46,033 | ||||||
Nippon Yakin Kogyo Co., Ltd. * | 16,500 | 28,901 | ||||||
Nissan Chemical Industries Ltd. | 11,000 | 108,062 | ||||||
Nittetsu Mining Co., Ltd. | 5,000 | 20,296 | ||||||
Nof Corp. | 12,000 | 56,253 | ||||||
Pacific Metals Co., Ltd. | 9,000 | 51,991 | ||||||
Rengo Co., Ltd. | 22,000 | 145,196 | ||||||
Sakai Chemical Industry Co., Ltd. | 6,000 | 23,554 | ||||||
Sanyo Chemical Industries Ltd. | 4,000 | 25,867 | ||||||
Sanyo Special Steel Co., Ltd. | 9,000 | 48,967 | ||||||
Shin-Etsu Polymer Co., Ltd. | 4,500 | 21,535 | ||||||
Sumitomo Bakelite Co., Ltd. | 16,000 | 93,683 | ||||||
Sumitomo Light Metal Industries Ltd. * | 47,000 | 40,080 | ||||||
Sumitomo Osaka Cement Co., Ltd. | 45,000 | 136,323 | ||||||
Takasago International Corp. | 6,000 | 28,017 | ||||||
Toagosei Co., Ltd. | 14,000 | 62,534 | ||||||
Toho Zinc Co., Ltd. | 7,000 | 28,543 | ||||||
Tokai Carbon Co., Ltd. | 11,000 | 54,566 | ||||||
Tokuyama Corp. | 27,000 | 97,311 | ||||||
Tokyo Ohka Kogyo Co., Ltd. | 2,900 | 60,262 | ||||||
Tokyo Steel Manufacturing Co., Ltd. | 12,100 | 101,432 | ||||||
Topy Industries Ltd. | 25,000 | 60,403 | ||||||
Toyo Ink Mfg. Co., Ltd. | 12,000 | 47,548 | ||||||
Yamato Kogyo Co., Ltd. | 3,000 | 75,884 | ||||||
Yodogawa Steel Works Ltd. | 18,000 | 71,517 | ||||||
Zeon Corp. | 10,000 | 92,104 | ||||||
3,617,774 | ||||||||
Media 0.6% | ||||||||
Asatsu-DK, Inc. | 3,200 | 75,102 | ||||||
Fuji Media Holdings, Inc. | 46 | 65,812 | ||||||
Kadokawa Group Holdings, Inc. (a) | 1,900 | 59,201 | ||||||
Nippon Television Network Corp. | 300 | 42,461 | ||||||
Shochiku Co., Ltd. | 6,000 | 54,435 | ||||||
SKY Perfect JSAT Holdings, Inc. | 87 | 42,283 | ||||||
Toei Co., Ltd. | 9,000 | 42,221 | ||||||
Toho Co., Ltd. | 7,800 | 134,166 | ||||||
Tokyo Broadcasting System Holdings, Inc. | 3,000 | 37,011 | ||||||
TV Asahi Corp. | 17 | 26,782 | ||||||
579,474 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 1.0% | ||||||||
Dainippon Sumitomo Pharma Co., Ltd. | 11,000 | 120,544 | ||||||
Hisamitsu Pharmaceutical Co., Inc. | 1,800 | 72,429 | ||||||
Kaken Pharmaceutical Co., Ltd. | 4,000 | 50,207 | ||||||
Kissei Pharmaceutical Co., Ltd. | 3,000 | 56,349 | ||||||
Kyorin Co., Ltd. | 4,000 | 73,602 | ||||||
Kyowa Hakko Kirin Co., Ltd. | 16,000 | 180,320 | ||||||
Mitsubishi Tanabe Pharma Corp. | 8,000 | 138,378 | ||||||
Mochida Pharmaceutical Co., Ltd. | 5,000 | 51,108 | ||||||
Rohto Pharmaceutical Co., Ltd. | 5,000 | 57,600 | ||||||
Santen Pharmaceutical Co., Ltd. | 2,700 | 100,747 | ||||||
Tsumura & Co. | 1,900 | 53,438 | ||||||
954,722 | ||||||||
Real Estate 0.8% | ||||||||
Aeon Mall Co., Ltd. | 2,800 | 64,915 | ||||||
Daibiru Corp. | 3,500 | 23,643 | ||||||
Daikyo, Inc. * | 23,000 | 39,210 | ||||||
Goldcrest Co., Ltd. | 1,060 | 19,447 | ||||||
Heiwa Real Estate Co., Ltd. | 15,000 | 32,504 | ||||||
Hulic Co., Ltd. | 4,400 | 47,105 | ||||||
Kenedix, Inc. * | 152 | 22,534 | ||||||
Leopalace21 Corp. (a)* | 89,800 | 244,933 | ||||||
Nomura Real Estate Holdings, Inc. | 4,900 | 78,991 | ||||||
NTT Urban Development Corp. | 62 | 42,684 | ||||||
Shoei Co., Ltd. | 2,800 | 20,629 | ||||||
TOC Co., Ltd. | 6,400 | 28,166 | ||||||
Tokyo Tatemono Co., Ltd. | 30,000 | 94,153 | ||||||
758,914 | ||||||||
Retailing 2.4% | ||||||||
Alpen Co., Ltd. | 1,800 | 30,881 | ||||||
AOKI Holdings, Inc. | 2,400 | 31,980 | ||||||
Aoyama Trading Co., Ltd. | 7,200 | 113,735 | ||||||
Autobacs Seven Co., Ltd. | 2,500 | 114,478 | ||||||
Best Denki Co., Ltd. * | 11,500 | 31,451 | ||||||
Bic Camera, Inc. | 113 | 59,817 | ||||||
Canon Marketing Japan, Inc. | 11,000 | 130,400 | ||||||
Chiyoda Co., Ltd. | 2,900 | 51,246 | ||||||
DCM Holdings Co., Ltd. | 9,200 | 73,583 | ||||||
Don Quijote Co., Ltd. | 3,000 | 109,893 | ||||||
Fuji Co., Ltd. | 1,600 | 35,305 | ||||||
Geo Corp. | 45 | 45,313 | ||||||
H2O Retailing Corp. | 11,000 | 79,359 | ||||||
Hikari Tsushin, Inc. | 1,600 | 37,250 | ||||||
Izumi Co., Ltd. | 5,600 | 85,185 | ||||||
Joshin Denki Co., Ltd. | 4,000 | 42,594 | ||||||
K’s Holdings Corp. | 3,640 | 152,856 | ||||||
Kohnan Shoji Co., Ltd. | 3,300 | 57,210 | ||||||
Kojima Co., Ltd. | 7,400 | 50,726 | ||||||
Komeri Co., Ltd. | 3,600 | 113,421 | ||||||
Nissen Holdings Co., Ltd. | 4,800 | 29,053 | ||||||
Nitori Holdings Co., Ltd. | 800 | 76,509 | ||||||
Paltac Corp. | 2,800 | 49,927 | ||||||
Parco Co., Ltd. | 4,400 | 32,981 | ||||||
Ryohin Keikaku Co., Ltd. | 2,100 | 99,660 | ||||||
Shimachu Co., Ltd. | 3,700 | 79,802 | ||||||
Shimamura Co., Ltd. | 1,100 | 110,012 | ||||||
T-Gaia Corp. | 15 | 27,615 | ||||||
The Daiei, Inc. * | 32,200 | 122,135 | ||||||
USS Co., Ltd. | 1,100 | 90,936 | ||||||
Xebio Co., Ltd. | 1,900 | 46,006 | ||||||
Yokohama Reito Co., Ltd. | 6,000 | 44,787 | ||||||
2,256,106 | ||||||||
Semiconductors & Semiconductor Equipment 0.4% | ||||||||
Advantest Corp. | 4,900 | 57,030 | ||||||
Dainippon Screen Mfg. Co., Ltd. | 7,000 | 53,749 | ||||||
Disco Corp. | 600 | 31,693 | ||||||
Sanken Electric Co., Ltd. | 9,000 | 33,766 | ||||||
Shinko Electric Industries Co., Ltd. | 6,000 | 43,354 | ||||||
Sumco Corp. * | 6,600 | 66,740 | ||||||
Tokyo Seimitsu Co., Ltd. | 1,500 | 27,188 |
See financial notes 53
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
UKC Holdings Corp. | 2,400 | 23,152 | ||||||
ULVAC, Inc. * | 3,100 | 43,579 | ||||||
380,251 | ||||||||
Software & Services 1.4% | ||||||||
Capcom Co., Ltd. | 2,300 | 60,169 | ||||||
eAccess Ltd. | 60 | 16,204 | ||||||
Fuji Soft, Inc. | 4,500 | 71,375 | ||||||
IT Holdings Corp. | 11,500 | 118,137 | ||||||
Itochu Techno-Solutions Corp. | 1,900 | 82,268 | ||||||
Konami Corp. | 7,100 | 231,360 | ||||||
Net One Systems Co., Ltd. | 27 | 70,227 | ||||||
Nihon Unisys Ltd. | 6,500 | 36,802 | ||||||
NSD Co., Ltd. | 2,800 | 22,305 | ||||||
OBIC Co., Ltd. | 220 | 41,593 | ||||||
Oracle Corp. Japan | 1,000 | 34,503 | ||||||
Otsuka Corp. | 1,000 | 69,464 | ||||||
Square Enix Holdings Co., Ltd. | 3,000 | 57,020 | ||||||
Sumisho Computer Systems Corp. | 4,976 | 77,912 | ||||||
Transcosmos, Inc. | 3,800 | 43,063 | ||||||
Trend Micro, Inc. | 4,500 | 160,924 | ||||||
Yahoo Japan Corp. | 284 | 91,209 | ||||||
1,284,535 | ||||||||
Technology Hardware & Equipment 2.1% | ||||||||
Anritsu Corp. | 4,000 | 45,226 | ||||||
Canon Electronics, Inc. | 1,200 | 29,181 | ||||||
Citizen Watch Co., Ltd. | 21,000 | 111,385 | ||||||
Cmk Corp. * | 6,300 | 23,064 | ||||||
Daiwabo Holdings Co., Ltd. | 22,000 | 51,635 | ||||||
Denki Kogyo Co., Ltd. | 6,000 | 22,727 | ||||||
Hamamatsu Photonics K.K. | 2,200 | 83,703 | ||||||
Hirose Electric Co., Ltd. | 1,100 | 105,413 | ||||||
Hitachi High-Technologies Corp. | 3,800 | 79,410 | ||||||
Hitachi Kokusai Electric, Inc. | 6,000 | 44,683 | ||||||
Horiba Ltd. | 1,900 | 60,271 | ||||||
Hosiden Corp. | 10,700 | 73,753 | ||||||
Japan Aviation Electronics Industry Ltd. | 4,000 | 27,853 | ||||||
Japan Radio Co., Ltd. | 12,000 | 29,064 | ||||||
Kaga Electronics Co., Ltd. | 2,600 | 24,973 | ||||||
Mitsumi Electric Co., Ltd. | 9,100 | 72,215 | ||||||
Nichicon Corp. | 3,500 | 41,326 | ||||||
Nippon Chemi-Con Corp. | 6,000 | 22,855 | ||||||
Oki Electric Industry Co., Ltd. * | 143,000 | 121,705 | ||||||
Riso Kagaku Corp. | 2,200 | 37,769 | ||||||
Ryoden Trading Co., Ltd. | 4,000 | 23,099 | ||||||
Ryosan Co., Ltd. | 4,200 | 86,360 | ||||||
Ryoyo Electro Corp. | 4,300 | 39,061 | ||||||
Sanshin Electronics Co., Ltd. | 3,600 | 30,181 | ||||||
Shimadzu Corp. | 12,000 | 102,159 | ||||||
SMK Corp. | 6,000 | 19,759 | ||||||
Star Micronics Co., Ltd. | 3,300 | 32,321 | ||||||
Taiyo Yuden Co., Ltd. | 7,000 | 54,238 | ||||||
Toshiba Tec Corp. | 15,000 | 55,276 | ||||||
Uniden Corp. | 8,000 | 31,128 | ||||||
Yamatake Corp. | 4,100 | 90,707 | ||||||
YASKAWA Electric Corp. | 8,000 | 68,735 | ||||||
Yokogawa Electric Corp. * | 17,400 | 162,726 | ||||||
1,903,961 | ||||||||
Transportation 1.2% | ||||||||
Fukuyama Transporting Co., Ltd. | 10,000 | 51,341 | ||||||
Hitachi Transport System Ltd. | 2,800 | 48,721 | ||||||
Iino Kaiun Kaisha Ltd. | 5,300 | 24,947 | ||||||
Japan Airport Terminal Co., Ltd. | 4,300 | 56,883 | ||||||
Kamigumi Co., Ltd. | 14,000 | 122,247 | ||||||
Keihin Electric Express Railway Co., Ltd. | 19,000 | 170,662 | ||||||
Keisei Electric Railway Co., Ltd. | 16,000 | 107,727 | ||||||
Mitsubishi Logistics Corp. | 8,000 | 87,978 | ||||||
Mitsui-Soko Co., Ltd. | 9,000 | 31,530 | ||||||
Nippon Konpo Unyu Soko Co., Ltd. | 4,000 | 41,186 | ||||||
Nishi-Nippon Railroad Co., Ltd. | 19,000 | 87,554 | ||||||
Sankyu, Inc. | 24,000 | 95,027 | ||||||
Senko Co., Ltd. | 10,000 | 37,917 | ||||||
Sotetsu Holdings, Inc. | 26,000 | 80,005 | ||||||
The Sumitomo Warehouse Co., Ltd. | 11,000 | 49,300 | ||||||
1,093,025 | ||||||||
Utilities 0.1% | ||||||||
Saibu Gas Co., Ltd. | 12,000 | 29,594 | ||||||
The Okinawa Electric Power Co., Inc. | 1,900 | 77,475 | ||||||
107,069 | ||||||||
30,929,637 | ||||||||
Netherlands 1.3% | ||||||||
Capital Goods 0.3% | ||||||||
Aalberts Industries N.V. | 5,749 | 101,110 | ||||||
Arcadis N.V. | 3,108 | 60,957 | ||||||
Grontmij N.V. CVA | 1,804 | 28,178 | ||||||
Heijmans N.V., CVA | 4,043 | 62,006 | ||||||
Wavin N.V. * | 7,121 | 52,724 | ||||||
304,975 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Koninklijke Ten Cate N.V. | 1,978 | 67,903 | ||||||
TomTom N.V. * | 5,312 | 26,501 | ||||||
94,404 | ||||||||
Diversified Financials 0.0% | ||||||||
BinckBank N.V. | 2,930 | 33,989 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Sligro Food Group N.V. | 1,693 | 55,416 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Koninklijike Wessanen N.V. | 20,592 | 102,792 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Mediq N.V. | 6,195 | 98,316 | ||||||
Insurance 0.0% | ||||||||
Brit Insurance Holdings N.V. (b)(c)* | 571 | 9,824 | ||||||
Materials 0.0% | ||||||||
AMG Advanced Metallurgical Group N.V. * | 1,811 | 22,380 | ||||||
Real Estate 0.3% | ||||||||
Eurocommercial Properties N.V. | 2,188 | 93,321 | ||||||
Nieuwe Steen Investments N.V. | 5,118 | 75,777 | ||||||
VastNed Retail N.V. | 1,660 | 83,865 | ||||||
252,963 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ASM International N.V. | 1,723 | 48,509 | ||||||
Software & Services 0.1% | ||||||||
Ordina N.V. * | 6,672 | 12,001 |
54 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Unit 4 N.V. | 838 | 23,729 | ||||||
35,730 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
TKH Group N.V. CVA | 1,361 | 33,556 | ||||||
Transportation 0.1% | ||||||||
Koninklijke Vopak N.V. | 1,574 | 81,127 | ||||||
1,173,981 | ||||||||
New Zealand 0.6% | ||||||||
Consumer Services 0.1% | ||||||||
Sky City Entertainment Group Ltd. | 39,257 | 111,691 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Fisher & Paykel Healthcare Corp., Ltd. | 22,004 | 40,927 | ||||||
Materials 0.0% | ||||||||
Nuplex Industries Ltd. | 11,449 | 24,025 | ||||||
Media 0.1% | ||||||||
Sky Network Television Ltd. | 10,175 | 45,045 | ||||||
Real Estate 0.1% | ||||||||
AMP NZ Office Ltd. | 47,986 | 32,152 | ||||||
Goodman Property Trust | 42,514 | 33,584 | ||||||
Kiwi Income Property Trust | 56,677 | 48,130 | ||||||
113,866 | ||||||||
Transportation 0.1% | ||||||||
Air New Zealand Ltd. | 24,211 | 20,462 | ||||||
Auckland International Airport Ltd. | 46,244 | 87,314 | ||||||
107,776 | ||||||||
Utilities 0.1% | ||||||||
Contact Energy Ltd. * | 16,452 | 74,134 | ||||||
Infratil Ltd. | 26,600 | 39,603 | ||||||
113,737 | ||||||||
557,067 | ||||||||
Norway 1.0% | ||||||||
Banks 0.0% | ||||||||
Sparebanken 1 SMN | 4,491 | 35,679 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
Tomra Systems A.S.A. | 6,342 | 46,503 | ||||||
Energy 0.5% | ||||||||
BW Offshore Ltd. | 14,860 | 27,737 | ||||||
DNO International A.S.A. * | 15,220 | 17,795 | ||||||
Dockwise Ltd. * | 1,038 | 16,909 | ||||||
Fred. Olsen Energy A.S.A. | 1,630 | 54,678 | ||||||
Norwegian Energy Co., A.S.A. * | 14,516 | 15,568 | ||||||
Prosafe SE | 13,302 | 100,546 | ||||||
Songa Offshore SE * | 8,500 | 34,016 | ||||||
Subsea 7 S.A. * | 5,011 | 108,053 | ||||||
TGS Nopec Geophysical Co., A.S.A. | 3,116 | 70,586 | ||||||
445,888 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Austevoll Seafood A.S.A. | 5,126 | 20,194 | ||||||
Cermaq A.S.A. * | 4,229 | 46,908 | ||||||
Marine Harvest | 121,140 | 53,991 | ||||||
121,093 | ||||||||
Media 0.1% | ||||||||
Schibsted A.S.A. | 3,350 | 87,133 | ||||||
Real Estate 0.0% | ||||||||
Norwegian Property A.S.A. | 22,454 | 35,161 | ||||||
Semiconductors & Semiconductor Equipment 0.0% | ||||||||
Renewable Energy Corp. A.S.A. (a)* | 28,800 | 27,770 | ||||||
Software & Services 0.1% | ||||||||
Atea A.S.A. | 5,815 | 51,332 | ||||||
Transportation 0.1% | ||||||||
Golden Ocean Group Ltd. | 48,950 | 37,723 | ||||||
Stolt-Nielsen Ltd. | 2,256 | 44,615 | ||||||
82,338 | ||||||||
932,897 | ||||||||
Portugal 0.8% | ||||||||
Banks 0.2% | ||||||||
Banco BPI S.A. - Reg’d * | 55,350 | 37,795 | ||||||
Banco Espirito Santo S.A. | 35,500 | 76,175 | ||||||
Banif, SGPS, S.A. - Reg’d * | 20,346 | 8,907 | ||||||
122,877 | ||||||||
Capital Goods 0.0% | ||||||||
Mota-Engil, SGPS, S.A. | 18,535 | 26,390 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Jeronimo Martins, SGPS, S.A. | 7,754 | 132,964 | ||||||
Materials 0.2% | ||||||||
CIMPOR-Cimentos de Portugal, SGPS, S.A. | 15,570 | 115,122 | ||||||
Portucel-Empresa Produtora de Pasta e Papel, S.A. | 16,559 | 41,552 | ||||||
Semapa-Sociedade de Investimento e Gestao, SGPS, S.A. | 5,699 | 42,904 | ||||||
Sonae Industria-SGPS, S.A. * | 12,033 | 12,711 | ||||||
212,289 | ||||||||
Media 0.1% | ||||||||
Zon Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS, S.A. | 20,882 | 65,018 | ||||||
Telecommunication Services 0.0% | ||||||||
Sonaecom, SGPS, S.A. | 16,207 | 28,944 | ||||||
Utilities 0.1% | ||||||||
EDP Renovaveis S.A. * | 18,810 | 112,366 | ||||||
700,848 | ||||||||
Republic of Korea 7.7% | ||||||||
Automobiles & Components 0.2% | ||||||||
Halla Climate Control Corp. | 2,810 | 59,439 | ||||||
S&T Daewoo Co., Ltd. | 1,220 | 36,677 | ||||||
Ssangyong Motor Co. * | 10,330 | 53,627 | ||||||
149,743 | ||||||||
Banks 0.0% | ||||||||
Jeonbuk Bank | 5,560 | 25,143 | ||||||
Capital Goods 1.7% | ||||||||
CJ Corp. | 2,390 | 171,230 | ||||||
Daewoo Engineering & Construction Co., Ltd. * | 8,190 | 75,110 |
See financial notes 55
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Daewoo International Corp. | 3,010 | 87,846 | ||||||
Daewoo Shipbuilding & Marine Engineering Co., Ltd. | 4,660 | 114,592 | ||||||
Dongbu Corp. | 4,680 | 20,077 | ||||||
Doosan Engineering & Construction Co., Ltd. | 7,960 | 27,873 | ||||||
Doosan Infracore Co., Ltd. * | 4,320 | 73,878 | ||||||
Hanjin Heavy Industries & Construction Co., Ltd. * | 3,881 | 68,680 | ||||||
Hanjin Heavy Industries & Construction Holdings Co., Ltd. | 12,710 | 88,596 | ||||||
KCC Corp. | 532 | 128,954 | ||||||
Keangnam Enterprises Ltd. * | 4,100 | 31,144 | ||||||
Kolon Engineering & Construction Co., Ltd. * | 7,110 | 30,943 | ||||||
Kyeryong Construction Industrial Co., Ltd. | 2,600 | 34,293 | ||||||
LG Hausys Ltd. | 664 | 47,496 | ||||||
Samsung Engineering Co., Ltd. | 729 | 148,898 | ||||||
Samsung Techwin Co., Ltd. | 1,820 | 97,280 | ||||||
SK Networks Co., Ltd. | 14,020 | 140,491 | ||||||
STX Engine Co., Ltd. | 2,180 | 37,677 | ||||||
Taeyoung Engineering & Construction | 9,010 | 47,795 | ||||||
Taihan Electric Wire Co., Ltd. * | 19,447 | 71,169 | ||||||
1,544,022 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
S1 Corp. | 1,230 | 64,013 | ||||||
Consumer Durables & Apparel 0.3% | ||||||||
Handsome Co., Ltd. | 1,830 | 44,603 | ||||||
LG Fashion Corp. | 1,520 | 61,192 | ||||||
Woongjin Coway Co., Ltd. | 4,040 | 139,174 | ||||||
244,969 | ||||||||
Consumer Services 0.1% | ||||||||
Hite Jinro Co., Ltd. | 1,690 | 38,551 | ||||||
Hotel Shilla Co., Ltd. | 1,620 | 54,506 | ||||||
93,057 | ||||||||
Diversified Financials 0.7% | ||||||||
Daewoo Securities Co., Ltd. | 7,800 | 75,114 | ||||||
Daishin Securities Co., Ltd. | 5,520 | 50,537 | ||||||
Hanwha Securities Co., Ltd. | 4,260 | 19,315 | ||||||
Hyundai Securities Co., Ltd. | 12,580 | 108,260 | ||||||
Korea Investment Holdings Co., Ltd. | 3,470 | 115,264 | ||||||
Meritz Finance Holdings Co., Ltd. * | 7,195 | 14,947 | ||||||
Mirae Asset Securities Co., Ltd. | 987 | 31,414 | ||||||
Samsung Card Co., Ltd. | 2,150 | 80,567 | ||||||
Tong Yang Securities, Inc. | 20,180 | 84,631 | ||||||
Woori Investment & Securities Co., Ltd. | 7,670 | 83,993 | ||||||
664,042 | ||||||||
Energy 0.1% | ||||||||
SK Gas Co., Ltd. | 953 | 62,763 | ||||||
Food, Beverage & Tobacco 0.8% | ||||||||
CJ CheilJedang Corp. | 683 | 188,484 | ||||||
Daesang Corp. | 5,720 | 71,665 | ||||||
Lotte Chilsung Beverage Co., Ltd. | 81 | 90,936 | ||||||
Lotte Confectionery Co., Ltd. | 64 | 100,075 | ||||||
Namyang Dairy Products Co., Ltd. | 52 | 36,694 | ||||||
NongShim Co., Ltd. | 406 | 79,558 | ||||||
Orion Corp. | 183 | 98,419 | ||||||
Ottogi Corp. | 318 | 37,291 | ||||||
Samyang Corp. (b)(c) | 1,160 | 84,682 | ||||||
787,804 | ||||||||
Household & Personal Products 0.3% | ||||||||
Amorepacific Corp. | 91 | 103,137 | ||||||
Amorepacific Group | 614 | 134,309 | ||||||
LG Household & Health Care Ltd. | 190 | �� | 85,811 | |||||
323,257 | ||||||||
Insurance 0.6% | ||||||||
Hanwha General Insurance Co., Ltd. * | 3,940 | 28,642 | ||||||
Hyundai Marine & Fire Insurance Co., Ltd. | 6,350 | 183,869 | ||||||
Korean Reinsurance Co. | 8,655 | 116,405 | ||||||
LIG Insurance Co., Ltd. | 5,660 | 120,486 | ||||||
Meritz Fire & Marine Insurance Co., Ltd. | 7,404 | 70,062 | ||||||
519,464 | ||||||||
Materials 1.4% | ||||||||
Dongbu HiTek Co., Ltd. * | 2,710 | 19,740 | ||||||
Dongbu Steel Co., Ltd. | 9,620 | 49,408 | ||||||
Hanil Cement Co., Ltd. | 594 | 22,700 | ||||||
Hansol Paper Co., Ltd. | 11,040 | 82,483 | ||||||
Hanwha Chemical Corp. | 4,110 | 107,001 | ||||||
Hyundai Hysco | 1,700 | 65,806 | ||||||
Kisco Corp. | 1,130 | 24,383 | ||||||
Kolon Corp. | 1,270 | 28,455 | ||||||
Korea Zinc Co., Ltd. | 513 | 150,364 | ||||||
OCI Co., Ltd. | 497 | 102,002 | ||||||
Poongsan Corp. | 1,770 | 53,843 | ||||||
Samsung Fine Chemicals Co., Ltd. | 680 | 32,625 | ||||||
Seah Besteel Corp. | 2,160 | 109,485 | ||||||
SK Chemicals Co., Ltd. | 2,924 | 187,063 | ||||||
SKC Co., Ltd. | 860 | 33,015 | ||||||
Ssangyong Cement Industrial Co., Ltd. * | 6,080 | 24,393 | ||||||
Taekwang Industrial Co., Ltd. | 118 | 157,004 | ||||||
Tong Yang Major Corp. * | 15,280 | 12,282 | ||||||
Young Poong Corp. | 45 | 46,738 | ||||||
1,308,790 | ||||||||
Media 0.1% | ||||||||
Cheil Worldwide, Inc. | 3,693 | 60,469 | ||||||
Woongjin Thinkbig Co., Ltd. | 1,860 | 26,713 | ||||||
87,182 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Dong-A Pharmaceutical Co., Ltd. | 528 | 43,197 | ||||||
Yuhan Corp. | 378 | 41,515 | ||||||
84,712 | ||||||||
Retailing 0.1% | ||||||||
CJ O Shopping Co., Ltd. | 149 | 39,815 | ||||||
Daewoo Motor Sales Corp. * | 50,660 | 73,862 | ||||||
113,677 | ||||||||
Software & Services 0.2% | ||||||||
NCSoft Corp. | 150 | 47,156 | ||||||
NHN Corp. * | 710 | 148,121 | ||||||
195,277 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Daeduck Electronics Co., Ltd. | 3,020 | 29,240 |
56 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
LG Innotek | 344 | 22,694 | ||||||
51,934 | ||||||||
Telecommunication Services 0.2% | ||||||||
LG Uplus Corp. | 25,120 | 149,600 | ||||||
SK Broadband Co., Ltd. * | 18,417 | 64,836 | ||||||
214,436 | ||||||||
Transportation 0.5% | ||||||||
Asiana Airlines * | 6,810 | 48,827 | ||||||
Hanjin Shipping Co., Ltd. | 2,280 | 22,427 | ||||||
Hanjin Shipping Holdings Co., Ltd. | 10,070 | 77,952 | ||||||
Hanjin Transportation Co., Ltd. | 1,570 | 34,735 | ||||||
Hyundai Merchant Marine Co., Ltd. | 5,680 | 146,668 | ||||||
Korea Express Co., Ltd. * | 666 | 45,416 | ||||||
Korea Line Corp. (b)(c)* | 5,830 | 39,456 | ||||||
STX Pan Ocean Co., Ltd. | 15,790 | 103,754 | ||||||
519,235 | ||||||||
Utilities 0.1% | ||||||||
Samchully Co., Ltd. | 677 | 58,392 | ||||||
7,111,912 | ||||||||
Singapore 1.9% | ||||||||
Capital Goods 0.1% | ||||||||
Cosco Corp.(Singapore) Ltd. | 32,431 | 25,950 | ||||||
SembCorp Marine Ltd. | 24,096 | 79,920 | ||||||
Yangzijiang Shipbuilding Holdings Ltd. | 31,000 | 22,961 | ||||||
128,831 | ||||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc * | 42,000 | 57,388 | ||||||
Raffles Education Corp., Ltd. | 66,666 | 23,334 | ||||||
80,722 | ||||||||
Diversified Financials 0.1% | ||||||||
Singapore Exchange Ltd. | 24,000 | 128,081 | ||||||
Energy 0.1% | ||||||||
Ezra Holdings Ltd. | 22,000 | 16,917 | ||||||
Straits Asia Resources Ltd. | 22,000 | 41,096 | ||||||
58,013 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Olam International Ltd. | 66,704 | 133,615 | ||||||
Real Estate 0.9% | ||||||||
Ascendas REIT | 86,000 | 139,917 | ||||||
Ascott Residence Trust | 52,000 | 43,280 | ||||||
CapitaCommercial Trust | 109,302 | 97,642 | ||||||
CDL Hospitality Trusts | 18,000 | 23,262 | ||||||
Fortune REIT | 52,000 | 24,143 | ||||||
Frasers Commercial Trust | 62,000 | 38,857 | ||||||
Keppel Land Ltd. | 33,000 | 72,803 | ||||||
Lippo-Mapletree Indonesia Retail Trust | 62,000 | 25,515 | ||||||
Mapletree Logistics Trust | 63,000 | 42,786 | ||||||
Suntec Real Estate Investment Trust | 119,000 | 116,929 | ||||||
UOL Group Ltd. | 35,000 | 123,733 | ||||||
Wing Tai Holdings Ltd. | 51,000 | 51,735 | ||||||
Yanlord Land Group Ltd. | 30,000 | 24,345 | ||||||
824,947 | ||||||||
Telecommunication Services 0.2% | ||||||||
M1 Ltd. | 25,000 | 48,825 | ||||||
StarHub Ltd. | 42,000 | 94,005 | ||||||
142,830 | ||||||||
Transportation 0.3% | ||||||||
Neptune Orient Lines Ltd. | 84,000 | 75,335 | ||||||
SATS Ltd. | 43,749 | 85,241 | ||||||
SIA Engineering Co., Ltd. | 11,205 | 32,753 | ||||||
Singapore Post Ltd. | 77,000 | 62,701 | ||||||
SMRT Corp., Ltd. | 33,000 | 48,323 | ||||||
304,353 | ||||||||
1,801,392 | ||||||||
Spain 1.6% | ||||||||
Banks 0.1% | ||||||||
Banco de Valencia S.A. * | 14,861 | 18,138 | ||||||
Banco Espanol de Credito S.A. | 12,026 | 71,207 | ||||||
Caja de Ahorros del Mediterraneo | 5,382 | 10,410 | ||||||
99,755 | ||||||||
Capital Goods 0.3% | ||||||||
Abengoa S.A. | 3,589 | 83,378 | ||||||
Construcciones y Auxiliar de Ferrocarriles S.A. | 158 | 83,812 | ||||||
Zardoya Otis S.A. | 7,696 | 103,679 | ||||||
270,869 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Prosegur, Compania de Seguridad S.A. - Reg’d | 1,341 | 66,671 | ||||||
Consumer Services 0.1% | ||||||||
Melia Hotels International S.A. | 4,537 | 33,262 | ||||||
NH Hoteles S.A. * | 20,328 | 99,475 | ||||||
132,737 | ||||||||
Diversified Financials 0.2% | ||||||||
Bolsas y Mercados Espanoles | 4,740 | 135,752 | ||||||
Corporacion Financiera Alba S.A. | 1,240 | 60,379 | ||||||
196,131 | ||||||||
Energy 0.1% | ||||||||
Tecnicas Reunidas S.A. | 1,041 | 41,887 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Pescanova S.A. | 839 | 28,900 | ||||||
Viscofan S.A. | 1,418 | 54,446 | ||||||
83,346 | ||||||||
Insurance 0.1% | ||||||||
Grupo Catalana Occidente S.A. | 4,296 | 79,171 | ||||||
Materials 0.1% | ||||||||
Grupo Empresarial Ence S.A. | 12,595 | 37,334 | ||||||
Tubacex S.A. * | 9,984 | 26,281 | ||||||
63,615 | ||||||||
Media 0.1% | ||||||||
Antena 3 de Television S.A. | 6,253 | 37,441 | ||||||
Mediaset Espana Comunicacion S.A. | 8,038 | 53,194 | ||||||
Promotora de Informaciones S.A., Class A (a)* | 34,982 | 36,115 | ||||||
126,750 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Almirall S.A. | 3,232 | 24,047 |
See financial notes 57
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Grifols S.A. * | 5,303 | 98,596 | ||||||
122,643 | ||||||||
Utilities 0.2% | ||||||||
Iberdrola S.A. | 11,564 | 83,665 | ||||||
Red Electrica Corp. S.A. | 2,400 | 115,616 | ||||||
199,281 | ||||||||
1,482,856 | ||||||||
Sweden 2.3% | ||||||||
Capital Goods 0.1% | ||||||||
BE Group AB * | 5,054 | 19,406 | ||||||
Concentric AB * | 2,482 | 15,233 | ||||||
Haldex AB | 2,482 | 10,595 | ||||||
Lindab International AB | 6,400 | 39,511 | ||||||
NIBE Industrier AB, B Shares | 2,076 | 31,022 | ||||||
115,767 | ||||||||
Commercial & Professional Supplies 0.3% | ||||||||
AF AB, B Shares | 1,392 | 23,450 | ||||||
Gunnebo AB | 4,276 | 17,247 | ||||||
Intrum Justitia AB | 4,130 | 67,763 | ||||||
Loomis AB, B Shares | 5,266 | 72,441 | ||||||
Niscayah Group AB (a)(b)(c)* | 23,212 | 64,107 | ||||||
245,008 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
JM AB | 4,052 | 73,521 | ||||||
Nobia AB * | 11,604 | 50,189 | ||||||
123,710 | ||||||||
Consumer Services 0.0% | ||||||||
Rezidor Hotel Group AB * | 5,980 | 21,599 | ||||||
SkiStar AB | 1,486 | 21,457 | ||||||
43,056 | ||||||||
Diversified Financials 0.1% | ||||||||
Avanza Bank Holding AB | 710 | 18,929 | ||||||
Bure Equity AB * | 4,932 | 14,548 | ||||||
D. Carnegie & Co. AB (b)(c)* | 851 | — | ||||||
Investment AB Oresund | 3,618 | 51,518 | ||||||
84,995 | ||||||||
Energy 0.3% | ||||||||
Lundin Petroleum AB * | 9,658 | 235,701 | ||||||
PA Resources AB * | 66,638 | 17,708 | ||||||
253,409 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Hakon Invest AB | 2,602 | 36,377 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
AarhusKarlshamn AB | 2,674 | 72,064 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Elekta AB, B Shares | 1,630 | 65,093 | ||||||
Materials 0.1% | ||||||||
Billerud AB | 5,403 | 41,960 | ||||||
Hoganas AB, B Shares | 1,668 | 53,166 | ||||||
95,126 | ||||||||
Media 0.2% | ||||||||
Eniro AB * | 31,087 | 48,032 | ||||||
Modern Times Group, B Shares | 2,219 | 117,328 | ||||||
165,360 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
Meda AB, A Shares | 15,555 | 158,300 | ||||||
Real Estate 0.6% | ||||||||
Castellum AB | 9,598 | 129,936 | ||||||
Fabege AB | 11,376 | 97,643 | ||||||
Hufvudstaden AB, A Shares | 7,308 | 79,284 | ||||||
Klovern AB | 7,600 | 31,716 | ||||||
Kungsleden AB | 15,572 | 119,069 | ||||||
Wallenstam AB, Class B | 6,648 | 65,616 | ||||||
Wihlborgs Fastigheter AB | 3,536 | 48,311 | ||||||
571,575 | ||||||||
Retailing 0.1% | ||||||||
Clas Ohlson AB, B Shares | 3,744 | 45,922 | ||||||
KappAhl AB | 9,122 | 19,805 | ||||||
Mekonomen AB | 948 | 34,588 | ||||||
100,315 | ||||||||
Technology Hardware & Equipment 0.0% | ||||||||
Axis Communications AB | 1,342 | 29,811 | ||||||
2,159,966 | ||||||||
Switzerland 3.0% | ||||||||
Automobiles & Components 0.0% | ||||||||
Autoneum Holding AG * | 287 | 19,403 | ||||||
Banks 0.3% | ||||||||
Banque Cantonale Vaudoise - Reg’d | 156 | 80,760 | ||||||
Liechtensteinische Landesbank AG | 384 | 21,326 | ||||||
St. Galler Kantonalbank AG - Reg’d | 107 | 46,488 | ||||||
Valiant Holding AG - Reg’d | 663 | 91,785 | ||||||
240,359 | ||||||||
Capital Goods 0.6% | ||||||||
AFG Arbonia-Forster Holding AG - Reg’d * | 1,936 | 44,456 | ||||||
Bucher Industries AG - Reg’d | 492 | 84,936 | ||||||
Burckhardt Compression Holding AG | 94 | 20,777 | ||||||
Daetwyler Holding AG - BR | 305 | 20,064 | ||||||
Georg Fischer AG - Reg’d * | 269 | 111,463 | ||||||
Huber & Suhner AG - Reg’d | 650 | 34,924 | ||||||
Kaba Holding AG - Reg’d, Series B | 155 | 59,940 | ||||||
OC Oerlikon Corp. AG - Reg’d * | 12,723 | 76,190 | ||||||
Rieter Holding AG - Reg’d * | 287 | 59,713 | ||||||
Zehnder Group AG - BR | 400 | 23,761 | ||||||
536,224 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Forbo Holding AG - Reg’d * | 102 | 48,203 | ||||||
Consumer Services 0.1% | ||||||||
Kuoni Reisen Holding AG - Reg’d, Series B * | 184 | 62,756 | ||||||
Diversified Financials 0.2% | ||||||||
Bank Sarasin & Cie AG - Reg’d, Series B | 1,644 | 62,497 | ||||||
EFG International AG * | 2,203 | 18,392 | ||||||
Partners Group Holding AG | 182 | 34,046 | ||||||
Verwaltungs-und Privat-Bank AG | 230 | 23,176 | ||||||
Vontobel Holding AG - Reg’d | 1,960 | 58,481 | ||||||
196,592 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Barry Callebaut AG - Reg’d * | 89 | 84,382 |
58 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Emmi AG - Reg’d | 149 | 29,839 | ||||||
114,221 | ||||||||
Health Care Equipment & Services 0.3% | ||||||||
Galenica AG - Reg’d | 151 | 87,471 | ||||||
Nobel Biocare Holding AG - Reg’d * | 6,535 | 80,028 | ||||||
Sonova Holding AG - Reg’d * | 1,089 | 115,148 | ||||||
Straumann Holding AG - Reg’d | 205 | 36,086 | ||||||
318,733 | ||||||||
Materials 0.4% | ||||||||
Ems-Chemie Holding AG - Reg’d | 674 | 118,844 | ||||||
Schmolz & Bickenbach AG - Reg’d * | 12,422 | 100,971 | ||||||
Sika AG - BR | 47 | 92,111 | ||||||
Vetropack Holding AG - BR | 14 | 26,225 | ||||||
338,151 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Actelion Ltd. - Reg’d * | 1,684 | 62,381 | ||||||
BB Biotech AG - Reg’d | 893 | 57,530 | ||||||
119,911 | ||||||||
Real Estate 0.4% | ||||||||
Allreal Holding AG - Reg’d * | 260 | 41,833 | ||||||
Mobimo Holding AG * | 192 | 48,169 | ||||||
PSP Swiss Property AG - Reg’d * | 1,577 | 143,476 | ||||||
Swiss Prime Site AG - Reg’d * | 1,450 | 118,588 | ||||||
352,066 | ||||||||
Retailing 0.1% | ||||||||
Charles Voegele Holding AG - BR * | 600 | 18,473 | ||||||
Dufry Group - Reg’d * | 483 | 51,704 | ||||||
Valora Holding AG - Reg’d | 226 | 46,937 | ||||||
117,114 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
Kudelski S.A. - BR | 2,220 | 22,983 | ||||||
Logitech International S.A. - Reg’d * | 6,690 | 64,569 | ||||||
87,552 | ||||||||
Transportation 0.2% | ||||||||
Flughafen Zuerich AG - Reg’d | 137 | 52,538 | ||||||
Panalpina Welttransport Holding AG - Reg’d * | 1,176 | 116,303 | ||||||
168,841 | ||||||||
Utilities 0.0% | ||||||||
BKW FMB Energie AG | 1,000 | 45,208 | ||||||
2,765,334 | ||||||||
United Kingdom 9.4% | ||||||||
Banks 0.1% | ||||||||
Paragon Group Cos. plc | 27,404 | 71,330 | ||||||
Capital Goods 1.6% | ||||||||
Ashtead Group plc | 47,457 | 118,092 | ||||||
Bodycote plc | 22,963 | 103,893 | ||||||
Charter International plc | 11,801 | 169,975 | ||||||
Chemring Group plc | 6,408 | 52,432 | ||||||
Fenner plc | 9,940 | 54,228 | ||||||
Galliford Try plc | 4,509 | 33,689 | ||||||
Interserve plc | 26,056 | 138,089 | ||||||
Keller Group plc | 3,234 | 19,061 | ||||||
Kier Group plc | 3,535 | 79,736 | ||||||
Melrose plc | 15,381 | 81,235 | ||||||
Morgan Crucible Co. plc | 16,104 | 73,084 | ||||||
Qinetiq Group plc | 64,213 | 120,350 | ||||||
Rotork plc | 2,274 | 61,335 | ||||||
Senior plc | 20,006 | 53,343 | ||||||
Spirax-Sarco Engineering plc | 2,768 | 85,030 | ||||||
The Weir Group plc | 5,554 | 170,157 | ||||||
Ultra Electronics Holdings plc | 2,253 | 57,483 | ||||||
1,471,212 | ||||||||
Commercial & Professional Supplies 1.1% | ||||||||
Aggreko plc | 5,586 | 153,134 | ||||||
Babcock International Group plc | 12,968 | 146,559 | ||||||
Berendsen plc | 8,646 | 64,416 | ||||||
Homeserve plc | 10,503 | 58,987 | ||||||
Intertek Group plc | 4,067 | 134,092 | ||||||
ITE Group plc | 6,982 | 21,049 | ||||||
Michael Page International plc | 10,877 | 70,020 | ||||||
Mitie Group plc | 33,986 | 137,164 | ||||||
Regus plc | 40,799 | 49,519 | ||||||
RPS Group plc | 13,146 | 38,071 | ||||||
Shanks Group plc | 37,149 | 65,901 | ||||||
Sthree plc | 4,362 | 19,924 | ||||||
WS Atkins plc | 8,798 | 80,929 | ||||||
1,039,765 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Bovis Homes Group plc | 13,807 | 104,195 | ||||||
Pace plc | 21,180 | 26,888 | ||||||
Redrow plc * | 19,779 | 36,993 | ||||||
The Berkeley Group Holdings plc * | 8,033 | 161,084 | ||||||
329,160 | ||||||||
Consumer Services 0.4% | ||||||||
J.D. Wetherspoon plc | 12,818 | 88,714 | ||||||
Marston’s plc | 60,877 | 94,656 | ||||||
Millennium & Copthorne Hotels plc | 9,479 | 67,772 | ||||||
PartyGaming plc | 12,903 | 22,619 | ||||||
Rank Group plc | 21,578 | 48,224 | ||||||
Restaurant Group plc | 12,605 | 60,655 | ||||||
382,640 | ||||||||
Diversified Financials 0.9% | ||||||||
Aberdeen Asset Management plc | 43,195 | 133,002 | ||||||
Ashmore Group plc | 9,074 | 50,262 | ||||||
Brewin Dolphin Holdings plc | 12,128 | 24,518 | ||||||
F&C Asset Management plc | 55,423 | 65,184 | ||||||
Henderson Group plc | 52,138 | 100,396 | ||||||
IG Group Holdings plc | 14,624 | 109,051 | ||||||
International Personal Finance | 14,992 | 65,819 | ||||||
London Stock Exchange Group plc | 9,420 | 135,995 | ||||||
Rathbone Brothers plc | 2,614 | 48,100 | ||||||
Tullett Prebon plc | 17,763 | 100,162 | ||||||
832,489 | ||||||||
Energy 0.6% | ||||||||
Afren plc * | 17,381 | 27,490 | ||||||
Cairn Energy plc * | 13,880 | 65,553 | ||||||
Hunting plc | 7,221 | 76,923 | ||||||
John Wood Group plc | 10,054 | 99,543 | ||||||
Petrofac Ltd. | 5,348 | 122,848 | ||||||
Premier Oil plc * | 10,446 | 61,495 | ||||||
Salamander Energy plc * | 5,512 | 17,562 | ||||||
Soco International plc * | 7,704 | 40,670 | ||||||
512,084 |
See financial notes 59
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food & Staples Retailing 0.2% | ||||||||
Booker Group plc | 124,474 | 149,908 | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Britvic plc | 20,879 | 110,565 | ||||||
Dairy Crest Group plc | 16,734 | 92,795 | ||||||
Devro plc | 7,697 | 30,400 | ||||||
Greggs plc | 8,324 | 68,289 | ||||||
Robert Wiseman Dairies plc | 5,278 | 24,475 | ||||||
326,524 | ||||||||
Health Care Equipment & Services 0.0% | ||||||||
Synergy Health plc | 2,850 | 38,104 | ||||||
Household & Personal Products 0.1% | ||||||||
McBride plc * | 22,551 | 49,434 | ||||||
PZ Cussons plc | 7,369 | 43,517 | ||||||
92,951 | ||||||||
Insurance 0.5% | ||||||||
Admiral Group plc | 5,435 | 102,510 | ||||||
Beazley plc | 30,668 | 61,865 | ||||||
Jardine Lloyd Thompson Group plc | 8,003 | 92,270 | ||||||
Lancashire Holdings Ltd. | 14,249 | 163,589 | ||||||
St. James’s Place plc | 8,473 | 47,919 | ||||||
468,153 | ||||||||
Materials 0.7% | ||||||||
Aquarius Platinum Ltd. | 13,165 | 39,229 | ||||||
Croda International plc | 3,287 | 92,409 | ||||||
DS Smith plc | 39,551 | 135,124 | ||||||
Elementis plc | 22,308 | 51,498 | ||||||
Filtrona plc | 12,206 | 77,739 | ||||||
Fresnillo plc | 1,544 | 41,859 | ||||||
Gem Diamonds Ltd. * | 7,282 | 25,906 | ||||||
Hochschild Mining plc | 2,812 | 20,145 | ||||||
Petropavlovsk plc | 3,720 | 43,786 | ||||||
Randgold Resources Ltd. | 891 | 97,446 | ||||||
Victrex plc | 2,306 | 46,906 | ||||||
Yule Catto & Co. plc | 9,118 | 24,886 | ||||||
696,933 | ||||||||
Media 0.2% | ||||||||
Aegis Group plc | 50,279 | 110,363 | ||||||
Daily Mail & General Trust | 16,151 | 108,036 | ||||||
218,399 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Genus plc | 2,304 | 37,933 | ||||||
Hikma Pharmaceuticals plc | 3,590 | 38,883 | ||||||
76,816 | ||||||||
Real Estate 0.5% | ||||||||
Big Yellow Group plc | 7,762 | 32,594 | ||||||
Capital & Counties Properties plc | 20,922 | 60,379 | ||||||
Derwent London plc | 3,466 | 94,342 | ||||||
Grainger plc | 16,112 | 21,713 | ||||||
Great Portland Estates plc | 12,216 | 73,028 | ||||||
Mapeley Ltd. (b)(c)* | 2,199 | — | ||||||
Savills plc | 5,670 | 28,245 | ||||||
Shaftesbury plc | 8,726 | 70,513 | ||||||
Unite Group plc | 7,910 | 22,409 | ||||||
Workspace Group plc | 8,269 | 31,910 | ||||||
435,133 | ||||||||
Retailing 0.5% | ||||||||
Carpetright plc | 3,573 | 26,461 | ||||||
Game Group plc | 89,069 | 27,569 | ||||||
Halfords Group plc | 16,932 | 88,794 | ||||||
Howden Joinery Group plc * | 30,079 | 56,805 | ||||||
Mothercare plc | 7,454 | 20,111 | ||||||
N Brown Group plc | 14,833 | 62,856 | ||||||
Sports Direct International plc * | 16,410 | 60,447 | ||||||
WH Smith plc | 14,849 | 130,617 | ||||||
473,660 | ||||||||
Semiconductors & Semiconductor Equipment 0.1% | ||||||||
ARM Holdings plc | 9,392 | 88,124 | ||||||
CSR plc | 9,401 | 27,265 | ||||||
115,389 | ||||||||
Software & Services 0.3% | ||||||||
Computacenter plc | 7,112 | 43,580 | ||||||
Micro Focus International plc | 9,562 | 51,732 | ||||||
Misys plc * | 17,483 | 81,873 | ||||||
Telecity Group plc * | 3,590 | 34,394 | ||||||
Xchanging plc * | 50,018 | 54,689 | ||||||
266,268 | ||||||||
Technology Hardware & Equipment 0.4% | ||||||||
Domino Printing Sciences plc | 4,263 | 39,275 | ||||||
Halma plc | 16,551 | 88,939 | ||||||
Laird plc | 24,153 | 57,784 | ||||||
Premier Farnell plc | 17,885 | 50,177 | ||||||
Spectris plc | 4,859 | 99,276 | ||||||
Spirent Communications plc | 12,162 | 24,387 | ||||||
359,838 | ||||||||
Telecommunication Services 0.1% | ||||||||
Colt Group S.A. * | 19,460 | 31,558 | ||||||
TalkTalk Telecom Group plc | 22,268 | 46,359 | ||||||
77,917 | ||||||||
Transportation 0.3% | ||||||||
BBA Aviation plc | 31,725 | 90,320 | ||||||
Go-Ahead Group plc | 4,810 | 107,188 | ||||||
Stobart Group Ltd. | 15,046 | 28,688 | ||||||
Wincanton plc | 12,200 | 14,172 | ||||||
240,368 | ||||||||
8,675,041 | ||||||||
Total Common Stock | ||||||||
(Cost $92,481,164) | 91,040,735 | |||||||
Preferred Stock 0.4% of net assets | ||||||||
Germany 0.4% | ||||||||
Capital Goods 0.1% | ||||||||
Jungheinrich AG | 1,391 | 43,806 | ||||||
KSB AG | 53 | 31,302 | ||||||
75,108 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Hugo Boss AG | 566 | 53,746 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Draegerwerk AG & Co. KGAA | 472 | 49,448 |
60 See financial notes
Schwab Fundamental International Small-Mid Company Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Materials 0.0% | ||||||||
Fuchs Petrolub AG | 903 | 44,263 | ||||||
Media 0.1% | ||||||||
ProSiebenSat.1 Media AG | 3,544 | 75,545 | ||||||
Transportation 0.0% | ||||||||
Sixt AG | 2,572 | 44,740 | ||||||
342,850 | ||||||||
Republic of Korea 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
Daishin Securities Co., Ltd. | 3,040 | 18,545 | ||||||
United Kingdom 0.0% | ||||||||
Household & Personal Products 0.0% | ||||||||
McBride plc (b) | 1,082,448 | 1,741 | ||||||
Total Preferred Stock | ||||||||
(Cost $287,925) | 363,136 | |||||||
Rights 0.0% of net assets | ||||||||
Australia 0.0% | ||||||||
Energy 0.0% | ||||||||
Energy Resources of Australia Ltd. (b)(c)* | 7,625 | 3,656 | ||||||
Republic of Korea 0.0% | ||||||||
Banks 0.0% | ||||||||
Jeonbuk Bank (b)(c)* | 717 | 39 | ||||||
Diversified Financials 0.0% | ||||||||
Woori Investment & Securities Co., Ltd. (b)(c)* | 2,727 | 5,906 | ||||||
Transportation 0.0% | ||||||||
Hanjin Shipping Co., Ltd. (b)(c)* | 963 | 3,128 | ||||||
9,073 | ||||||||
Total Rights | ||||||||
(Cost $—) | 12,729 | |||||||
Warrants 0.0% of net assets | ||||||||
Italy 0.0% | ||||||||
Software & Services 0.0% | ||||||||
Tiscali S.p.A. * | 33,436 | 70 | ||||||
Netherlands 0.0% | ||||||||
Real Estate 0.0% | ||||||||
Nieuwe Steen Investments N.V. (b)(c)* | 2,410 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | 70 | |||||||
Other Investment Company 0.4% of net assets | ||||||||
United States 0.4% | ||||||||
iShares MSCI EAFE Small Cap Index Fund | 9,000 | 337,950 | ||||||
Total Other Investment Company | ||||||||
(Cost $316,856) | 337,950 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.3% of net assets | ||||||||
Time Deposit 0.3% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 290,064 | 290,064 | ||||||
Total Short-Term Investment | ||||||||
(Cost $290,064) | 290,064 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 1.3% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 1,197,571 | 1,197,571 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $1,197,571) | 1,197,571 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $94,807,723 and the unrealized appreciation and depreciation were $10,231,020 and ($12,994,059), respectively, with a net unrealized depreciation of ($2,763,039).
At 10/31/11, the values of certain foreign securities held bythe fund aggregating $82,053,215 were adjusted from theirclosing market values in accordance with international fairvaluation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(c) | Illiquid security. At the period end, the value of these amounted to $210,798 or 0.2% of net assets. |
CVA — | Dutch Certificate | |
Reg’d — | Registered | |
REIT — | Real Estate Investment Trust | |
RSP — | Risparmio (Convertible Savings Shares) |
See financial notes 61
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
88 | .0% | Common Stock | 277,981,460 | 273,181,901 | ||||||||
10 | .2% | Preferred Stock | 33,543,864 | 31,707,219 | ||||||||
0 | .0% | Rights | — | — | ||||||||
1 | .2% | Other Investment Company | 3,566,400 | 3,672,000 | ||||||||
0 | .3% | Short-Term Investment | 769,415 | 769,415 | ||||||||
99 | .7% | Total Investments | 315,861,139 | 309,330,535 | ||||||||
0 | .2% | Collateral Invested for Securities on Loan | 665,550 | 665,550 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 338,278 | |||||||||
100 | .0% | Total Net Assets | 310,334,363 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 88.0% of net assets | ||||||||
Brazil 6.9% | ||||||||
Banks 0.9% | ||||||||
Banco do Brasil S.A. | 145,100 | 2,188,945 | ||||||
Banco Santander Brasil S.A. | 72,500 | 652,430 | ||||||
2,841,375 | ||||||||
Capital Goods 0.3% | ||||||||
Embraer S.A. | 89,200 | 615,674 | ||||||
Weg S.A. | 17,800 | 197,507 | ||||||
813,181 | ||||||||
Consumer Durables & Apparel 0.1% | ||||||||
Cyrela Brazil Realty S.A. | 30,000 | 262,283 | ||||||
Diversified Financials 0.3% | ||||||||
BM&F BOVESPA S.A. | 169,700 | 1,013,149 | ||||||
Energy 1.7% | ||||||||
Petroleo Brasileiro S.A. - Petrobras | 360,800 | 4,850,316 | ||||||
Ultrapar Participacoes S.A. | 26,100 | 465,189 | ||||||
5,315,505 | ||||||||
Food, Beverage & Tobacco 0.6% | ||||||||
BRF-Brasil Foods S.A. | 45,200 | 941,200 | ||||||
Companhia de Bebidas das Americas | 8,800 | 237,626 | ||||||
JBS S.A. * | 59,500 | 178,828 | ||||||
Souza Cruz S.A. | 33,700 | 413,386 | ||||||
1,771,040 | ||||||||
Household & Personal Products 0.1% | ||||||||
Natura Cosmeticos S.A. | 22,300 | 433,829 | ||||||
Materials 1.6% | ||||||||
Companhia Siderurgica Nacional S.A. | 98,900 | 916,504 | ||||||
Fibria Celulose S.A. | 17,842 | 158,898 | ||||||
Gerdau S.A. | 21,300 | 162,524 | ||||||
Suzano Papel e Celulose S.A. | 28,600 | 139,931 | ||||||
Usinas Siderurgicas de Minas Gerais S.A. | 42,500 | 610,202 | ||||||
Vale S.A. | 111,300 | 2,833,633 | ||||||
4,821,692 | ||||||||
Software & Services 0.2% | ||||||||
Redecard S.A. | 37,400 | 628,471 | ||||||
Telecommunication Services 0.2% | ||||||||
Tele Norte Leste Participacoes S.A. | 23,300 | 284,998 | ||||||
Tim Participacoes S.A. | 74,356 | 384,589 | ||||||
669,587 | ||||||||
Transportation 0.2% | ||||||||
All America Latina Logistica S.A. | 38,800 | 193,226 | ||||||
CCR S.A. | 14,400 | 396,307 | ||||||
589,533 | ||||||||
Utilities 0.7% | ||||||||
AES Tiete S.A. | 4,800 | 59,691 | ||||||
Centrais Eletricas Brasileiras S.A. | 75,300 | 753,943 | ||||||
Cia de Saneamento Basico do Estado de Sao Paulo | 11,600 | 318,234 | ||||||
Companhia Energetica de Minas Gerais | 9,625 | 131,465 | ||||||
EDP - Energias do Brasil S.A. | 9,800 | 211,201 | ||||||
Light S.A. | 23,700 | 369,266 | ||||||
Tractebel Energia S.A. | 27,800 | 445,292 | ||||||
2,289,092 | ||||||||
21,448,737 | ||||||||
Chile 1.5% | ||||||||
Banks 0.2% | ||||||||
Banco de Chile | 2,181,472 | 304,547 | ||||||
Banco Santander Chile | 3,275,466 | 253,373 | ||||||
557,920 | ||||||||
Capital Goods 0.2% | ||||||||
Empresas Copec S.A. | 40,088 | 614,473 | ||||||
Food & Staples Retailing 0.1% | ||||||||
Cencosud S.A. | 61,854 | 395,149 | ||||||
Materials 0.2% | ||||||||
Empresas CMPC S.A. | 109,950 | 457,798 | ||||||
Retailing 0.1% | ||||||||
S.A.C.I. Falabella | 34,726 | 326,032 | ||||||
Telecommunication Services 0.1% | ||||||||
Empresa Nacional de Telecomunicaciones S.A. | 15,676 | 310,352 | ||||||
Utilities 0.6% | ||||||||
Empresa Nacional de Electricidad S.A. | 364,066 | 583,308 | ||||||
Enersis S.A. | 3,204,095 | 1,300,734 | ||||||
1,884,042 | ||||||||
4,545,766 |
62 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
China 14.4% | ||||||||
Automobiles & Components 0.1% | ||||||||
Dongfeng Motor Group Co., Ltd., Class H | 164,000 | 267,523 | ||||||
Guangzhou Automobile Group Co., Ltd., Class H | 218,000 | 217,491 | ||||||
485,014 | ||||||||
Banks 4.8% | ||||||||
Agricultural Bank of China Ltd., Class H | 1,482,600 | 665,414 | ||||||
Bank of China Ltd., Class H | 7,902,234 | 2,812,474 | ||||||
Bank of Communications Co., Ltd., Class H | 843,700 | 579,853 | ||||||
China CITIC Bank Corp. Ltd., Class H | 818,000 | 439,457 | ||||||
China Construction Bank Corp., Class H | 7,553,000 | 5,549,455 | ||||||
China Merchants Bank Co., Ltd., Class H | 228,350 | 461,076 | ||||||
China Minsheng Banking Corp., Ltd., Class H (a) | 340,700 | 277,540 | ||||||
Industrial & Commercial Bank of China Ltd., Class H | 6,380,172 | 3,984,180 | ||||||
14,769,449 | ||||||||
Capital Goods 0.6% | ||||||||
Beijing Enterprises Holdings Ltd. | 45,500 | 251,791 | ||||||
China Communications Construction Co., Ltd., Class H | 811,000 | 611,701 | ||||||
China International Marine Containers (Group) Co., Ltd., Class B | 106,005 | 127,612 | ||||||
China Railway Construction Corp., Ltd., Class H | 304,000 | 181,168 | ||||||
China Railway Group Ltd., Class H | 595,000 | 197,549 | ||||||
Citic Pacific Ltd. | 163,000 | 294,585 | ||||||
Shanghai Industrial Holdings Ltd. | 62,000 | 202,991 | ||||||
1,867,397 | ||||||||
Energy 3.5% | ||||||||
China Coal Energy Co., Ltd., Class H | 334,000 | 416,006 | ||||||
China Petroleum & Chemical Corp., Class H | 3,220,000 | 3,045,250 | ||||||
China Shenhua Energy Co., Ltd., Class H | 309,000 | 1,413,610 | ||||||
CNOOC Ltd. | 1,217,000 | 2,300,568 | ||||||
PetroChina Co., Ltd., Class H | 2,597,000 | 3,371,405 | ||||||
Yanzhou Coal Mining Co., Ltd., Class H | 96,000 | 237,628 | ||||||
10,784,467 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
China Resources Enterprise Ltd. | 154,000 | 562,415 | ||||||
Insurance 0.9% | ||||||||
China Life Insurance Co., Ltd., Class H | 563,000 | 1,455,577 | ||||||
China Pacific Insurance Group Co., Ltd., Class H | 111,400 | 341,852 | ||||||
PICC Property & Casualty Co., Ltd., Class H | 190,000 | 263,494 | ||||||
Ping An Insurance (Group) Co. of China Ltd., Class H | 80,500 | 597,020 | ||||||
2,657,943 | ||||||||
Materials 0.1% | ||||||||
Aluminum Corp. of China Ltd., Class H (a) | 329,000 | 176,703 | ||||||
Angang Steel Co., Ltd., Class H | 208,000 | 126,905 | ||||||
303,608 | ||||||||
Real Estate 0.3% | ||||||||
China Overseas Land & Investment Ltd. | 264,000 | 488,503 | ||||||
Sino-Ocean Land Holdings Ltd. (a) | 768,000 | 340,741 | ||||||
829,244 | ||||||||
Telecommunication Services 3.6% | ||||||||
China Mobile Ltd. | 740,500 | 7,037,961 | ||||||
China Telecom Corp., Ltd., Class H | 3,258,000 | 2,011,512 | ||||||
China Unicom (Hong Kong) Ltd. | 1,115,056 | 2,241,949 | ||||||
11,291,422 | ||||||||
Transportation 0.1% | ||||||||
China COSCO Holdings Co., Ltd., Class H | 283,500 | 147,855 | ||||||
China Merchants Holdings International Co., Ltd. | 66,000 | 203,658 | ||||||
351,513 | ||||||||
Utilities 0.2% | ||||||||
China Resources Power Holdings Co., Ltd. | 185,000 | 328,570 | ||||||
Huaneng Power International, Inc., Class H | 763,000 | 345,078 | ||||||
673,648 | ||||||||
44,576,120 | ||||||||
Colombia 1.1% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 16,305 | 253,401 | ||||||
Diversified Financials 0.1% | ||||||||
Grupo de Inversiones Suramericana | 24,616 | 432,429 | ||||||
Energy 0.8% | ||||||||
Ecopetrol S.A. | 1,090,010 | 2,336,570 | ||||||
Materials 0.1% | ||||||||
Inversiones Argos S.A. | 29,952 | 287,321 | ||||||
3,309,721 | ||||||||
Czech Republic 0.8% | ||||||||
Banks 0.1% | ||||||||
Komercni Banka A/S | 1,820 | 348,225 | ||||||
Telecommunication Services 0.2% | ||||||||
Telefonica 02 Czech Republic A/S | 35,594 | 748,772 | ||||||
Utilities 0.5% | ||||||||
CEZ A/S | 35,826 | 1,514,936 | ||||||
2,611,933 | ||||||||
Egypt 0.5% | ||||||||
Banks 0.1% | ||||||||
Commercial International Bank Egypt S.A.E. GDR | 90,765 | 398,497 |
See financial notes 63
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.2% | ||||||||
Orascom Construction Industries GDR | 16,923 | 693,843 | ||||||
Telecommunication Services 0.2% | ||||||||
Orascom Telecom Holding S.A.E. GDR - Reg’d * | 193,755 | 531,824 | ||||||
1,624,164 | ||||||||
Hungary 0.7% | ||||||||
Banks 0.3% | ||||||||
OTP Bank Nyrt. plc | 55,071 | 863,524 | ||||||
Energy 0.3% | ||||||||
MOL Hungarian Oil & Gas plc * | 11,933 | 923,716 | ||||||
Telecommunication Services 0.1% | ||||||||
Magyar Telekom Telecommunications plc | 200,243 | 462,581 | ||||||
2,249,821 | ||||||||
India 6.5% | ||||||||
Automobiles & Components 0.2% | ||||||||
Bajaj Auto Ltd. | 9,940 | 353,517 | ||||||
Tata Motors Ltd. | 65,475 | 264,228 | ||||||
617,745 | ||||||||
Banks 1.3% | ||||||||
Axis Bank Ltd. | 67,228 | 1,585,200 | ||||||
HDFC Bank Ltd. | 40,405 | 402,833 | ||||||
Housing Development Finance Corp., Ltd. | 41,445 | 582,687 | ||||||
ICICI Bank Ltd. | 47,081 | 887,481 | ||||||
Punjab National Bank Ltd. | 4,782 | 95,554 | ||||||
State Bank of India | 12,603 | 490,230 | ||||||
4,043,985 | ||||||||
Capital Goods 0.4% | ||||||||
Bharat Heavy Electricals Ltd. | 39,235 | 254,731 | ||||||
Jaiprakash Associates Ltd. | 147,326 | 231,979 | ||||||
Larsen & Toubro Ltd. | 21,622 | 622,135 | ||||||
1,108,845 | ||||||||
Energy 1.7% | ||||||||
Bharat Petroleum Corp., Ltd. | 39,154 | 500,853 | ||||||
Hindustan Petroleum Corp., Ltd. | 143,724 | 983,445 | ||||||
Indian Oil Corp., Ltd. | 57,221 | 341,657 | ||||||
Oil & Natural Gas Corp., Ltd. | 149,372 | 850,741 | ||||||
Reliance Industries Ltd. | 135,417 | 2,417,349 | ||||||
5,094,045 | ||||||||
Food, Beverage & Tobacco 0.7% | ||||||||
Balrampur Chini Mills Ltd. | 801,529 | 872,575 | ||||||
ITC Ltd. | 296,649 | 1,295,606 | ||||||
2,168,181 | ||||||||
Household & Personal Products 0.1% | ||||||||
Hindustan Unilever Ltd. | 50,963 | 390,988 | ||||||
Materials 0.9% | ||||||||
Grasim Industries Ltd. | 4,334 | 220,319 | ||||||
Hindalco Industries Ltd. | 188,401 | 521,627 | ||||||
JSW Steel Ltd. | 16,690 | 221,825 | ||||||
Steel Authority of India Ltd. | 86,968 | 198,773 | ||||||
Sterlite Industries (India) Ltd. | 117,296 | 307,000 | ||||||
Tata Chemicals Ltd. | 34,307 | 232,249 | ||||||
Tata Steel Ltd. | 111,522 | 1,091,498 | ||||||
2,793,291 | ||||||||
Real Estate 0.1% | ||||||||
DLF Ltd. | 72,316 | 354,036 | ||||||
Software & Services 0.4% | ||||||||
Infosys Ltd. | 22,692 | 1,324,931 | ||||||
Telecommunication Services 0.3% | ||||||||
Bharti Airtel Ltd. | 84,206 | 673,744 | ||||||
Reliance Communications Ltd. | 229,137 | 371,702 | ||||||
1,045,446 | ||||||||
Utilities 0.4% | ||||||||
GAIL India Ltd. | 34,926 | 301,153 | ||||||
NTPC Ltd. | 216,399 | 795,207 | ||||||
Reliance Infrastructure Ltd. | 22,708 | 215,202 | ||||||
1,311,562 | ||||||||
20,253,055 | ||||||||
Indonesia 1.6% | ||||||||
Automobiles & Components 0.5% | ||||||||
PT Astra International Tbk | 212,000 | 1,634,686 | ||||||
Banks 0.4% | ||||||||
PT Bank Central Asia Tbk | 574,000 | 520,534 | ||||||
PT Bank Rakyat Indonesia (Persero) Tbk | 1,003,500 | 754,481 | ||||||
1,275,015 | ||||||||
Capital Goods 0.1% | ||||||||
PT United Tractors Tbk | 115,500 | 317,689 | ||||||
Energy 0.2% | ||||||||
PT Bumi Resources Tbk | 1,739,500 | 454,352 | ||||||
Telecommunication Services 0.4% | ||||||||
PT Telekomunikasi Indonesia Tbk | 1,370,500 | 1,142,978 | ||||||
4,824,720 | ||||||||
Malaysia 4.0% | ||||||||
Automobiles & Components 0.1% | ||||||||
UMW Holdings Berhad | 102,500 | 220,859 | ||||||
Banks 1.3% | ||||||||
CIMB Group Holdings Berhad | 350,300 | 859,852 | ||||||
Malayan Banking Berhad | 713,400 | 1,936,826 | ||||||
Public Bank Berhad | 318,600 | 1,316,204 | ||||||
4,112,882 | ||||||||
Capital Goods 0.5% | ||||||||
IJM Corp. Berhad | 105,100 | 194,139 | ||||||
Sime Darby Berhad | 447,900 | 1,292,046 | ||||||
1,486,185 | ||||||||
Consumer Services 0.3% | ||||||||
Genting Berhad | 180,300 | 627,986 | ||||||
Genting Malaysia Berhad | 218,600 | 271,931 | ||||||
899,917 | ||||||||
Diversified Financials 0.1% | ||||||||
AMMB Holdings Berhad | 156,300 | 303,003 |
64 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
British American Tobacco Malaysia Berhad | 14,300 | 215,287 | ||||||
IOI Corp. Berhad | 343,500 | 583,572 | ||||||
Kuala Lumpur Kepong Berhad | 37,100 | 253,144 | ||||||
PPB Group Berhad | 45,200 | 250,326 | ||||||
1,302,329 | ||||||||
Materials 0.1% | ||||||||
Petronas Chemicals Group Berhad | 152,400 | 317,926 | ||||||
Telecommunication Services 0.6% | ||||||||
Axiata Group Berhad | 546,800 | 864,247 | ||||||
DIGI.com Berhad | 59,700 | 614,738 | ||||||
Telekom Malaysia Berhad | 264,000 | 363,533 | ||||||
1,842,518 | ||||||||
Transportation 0.2% | ||||||||
MISC Berhad | 271,100 | 614,662 | ||||||
PLUS Expressways Berhad | 146,300 | 210,771 | ||||||
825,433 | ||||||||
Utilities 0.4% | ||||||||
Petronas Gas Berhad | 89,000 | 378,678 | ||||||
Tenaga Nasional Berhad | 252,900 | 490,538 | ||||||
YTL Power International Berhad | 477,907 | 295,798 | ||||||
1,165,014 | ||||||||
12,476,066 | ||||||||
Mexico 5.0% | ||||||||
Banks 0.2% | ||||||||
Grupo Financiero Banorte S.A.B. de C.V., Class O | 169,000 | 576,353 | ||||||
Capital Goods 0.3% | ||||||||
Alfa S.A.B., Class A | 43,100 | 497,589 | ||||||
Empresas ICA S.A.B. de C.V. * | 156,200 | 209,095 | ||||||
Grupo Carso S.A.B. de C.V., Series A1 | 90,800 | 234,103 | ||||||
940,787 | ||||||||
Food & Staples Retailing 0.3% | ||||||||
Wal-Mart de Mexico S.A.B. de C.V., Series V | 356,000 | 918,916 | ||||||
Food, Beverage & Tobacco 0.8% | ||||||||
Coca-Cola Femsa S.A.B. de C.V., Series L | 38,700 | 348,030 | ||||||
Fomento Economico Mexicano S.A.B. de C.V. | 234,200 | 1,571,584 | ||||||
Grupo Bimbo S.A.B. de C.V., Series A | 118,800 | 244,696 | ||||||
Grupo Modelo S.A. de C.V., Series C | 50,800 | 323,165 | ||||||
2,487,475 | ||||||||
Household & Personal Products 0.1% | ||||||||
Kimberly-Clark de Mexico S.A.B. de C.V., Class A | 43,600 | 248,147 | ||||||
Materials 1.5% | ||||||||
Cemex S.A.B. de C.V., Series CPO * | 4,753,990 | 2,079,670 | ||||||
Grupo Mexico S.A.B. de C.V., Series B | 572,874 | 1,587,902 | ||||||
Industrias Penoles S.A. de C.V. | 14,400 | 587,799 | ||||||
Minera Frisco S.A.B. de C.V., Series A1 * | 168,088 | 662,287 | ||||||
4,917,658 | ||||||||
Media 0.4% | ||||||||
Grupo Televisa S.A., Series CPO | 291,700 | 1,247,610 | ||||||
Telecommunication Services 1.3% | ||||||||
America Movil S.A.B. de C.V., Series L | 2,317,200 | 2,945,402 | ||||||
Telefonos de Mexico S.A.B. de C.V., Series L | 1,352,100 | 1,062,241 | ||||||
4,007,643 | ||||||||
Transportation 0.1% | ||||||||
Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B | 86,300 | 300,726 | ||||||
15,645,315 | ||||||||
Poland 2.2% | ||||||||
Banks 0.4% | ||||||||
Bank Pekao S.A. | 10,879 | 503,702 | ||||||
Powszechna Kasa Oszczednosci Bank Polski S.A. | 56,019 | 637,135 | ||||||
1,140,837 | ||||||||
Energy 0.8% | ||||||||
Grupa Lotos S.A. * | 31,270 | 280,719 | ||||||
Polski Koncern Naftowy Orlen S.A. * | 160,423 | 1,980,924 | ||||||
Polskie Gornictwo Naftowe i Gazownictwo S.A. | 193,339 | 240,165 | ||||||
2,501,808 | ||||||||
Insurance 0.2% | ||||||||
Powszechny Zaklad Ubezpieczen S.A. | 4,979 | 527,315 | ||||||
Materials 0.3% | ||||||||
KGHM Polska Miedz S.A. | 17,403 | 840,205 | ||||||
Telecommunication Services 0.2% | ||||||||
Telekomunikacja Polska S.A. | 149,422 | 792,344 | ||||||
Utilities 0.3% | ||||||||
PGE S.A. | 143,655 | 883,712 | ||||||
6,686,221 | ||||||||
Russia 11.2% | ||||||||
Banks 0.8% | ||||||||
Sberbank of Russia ADR * | 174,484 | 1,878,353 | ||||||
VTB Bank OJSC GDR - Reg’d | 133,882 | 639,919 | ||||||
2,518,272 | ||||||||
Energy 8.6% | ||||||||
Gazprom ADR | 818,538 | 9,488,786 | ||||||
LUKOIL ADR | 135,761 | 7,863,435 | ||||||
NovaTek OAO GDR - Reg’d. | 6,621 | 923,814 | ||||||
Rosneft Oil Co. GDR - Reg’d | 231,758 | 1,642,146 | ||||||
Surgutneftegaz ADR | 584,821 | 5,015,077 | ||||||
Tatneft ADR | 62,162 | 1,836,135 | ||||||
26,769,393 | ||||||||
Materials 1.2% | ||||||||
Magnitogorsk Iron & Steel Works GDR - Reg’d | 79,944 | 491,558 | ||||||
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR | 76,215 | 1,486,258 | ||||||
Novolipetsk Steel GDR - Reg’d | 29,880 | 808,893 | ||||||
Severstal GDR - Reg’d | 58,783 | 858,542 | ||||||
3,645,251 |
See financial notes 65
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Telecommunication Services 0.4% | ||||||||
Mobile TeleSystems ADR | 84,251 | 1,203,947 | ||||||
Utilities 0.2% | ||||||||
Federal Hydrogenerating Co. ADR | 181,561 | 681,455 | ||||||
34,818,318 | ||||||||
South Africa 10.8% | ||||||||
Banks 1.5% | ||||||||
ABSA Group Ltd. | 50,307 | 901,919 | ||||||
Nedbank Group Ltd. | 38,121 | 674,445 | ||||||
Standard Bank Group Ltd. | 257,952 | 3,167,462 | ||||||
4,743,826 | ||||||||
Capital Goods 1.0% | ||||||||
Aveng Ltd. | 89,499 | 416,554 | ||||||
Barloworld Ltd. | 103,538 | 865,579 | ||||||
Bidvest Group Ltd. | 50,037 | 989,455 | ||||||
Murray & Roberts Holdings Ltd. * | 141,762 | 430,233 | ||||||
Reunert Ltd. | 33,684 | 266,114 | ||||||
2,967,935 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Steinhoff International Holdings Ltd. * | 240,245 | 716,724 | ||||||
Diversified Financials 1.1% | ||||||||
African Bank Investments Ltd. | 107,122 | 462,499 | ||||||
FirstRand Ltd. | 690,349 | 1,709,358 | ||||||
Investec Ltd. | 45,762 | 280,037 | ||||||
Remgro Ltd. | 47,319 | 715,197 | ||||||
RMB Holdings Ltd. | 75,603 | 236,739 | ||||||
3,403,830 | ||||||||
Energy 1.0% | ||||||||
Sasol Ltd. | 71,130 | 3,198,906 | ||||||
Food & Staples Retailing 0.5% | ||||||||
Massmart Holdings Ltd. | 19,747 | 393,168 | ||||||
Pick n Pay Stores Ltd. | 35,167 | 175,875 | ||||||
Shoprite Holdings Ltd. | 43,432 | 635,835 | ||||||
The Spar Group Ltd. | 20,189 | 245,723 | ||||||
1,450,601 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Tiger Brands Ltd. | 14,108 | 404,831 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Netcare Ltd. | 136,434 | 238,020 | ||||||
Insurance 0.7% | ||||||||
Liberty Holdings Ltd. | 26,997 | 275,843 | ||||||
MMI Holdings Ltd. | 131,244 | 281,617 | ||||||
Sanlam Ltd. | 402,527 | 1,504,447 | ||||||
2,061,907 | ||||||||
Materials 1.9% | ||||||||
Anglo Platinum Ltd. | 8,015 | 577,136 | ||||||
AngloGold Ashanti Ltd. | 11,191 | 505,818 | ||||||
ArcelorMittal South Africa Ltd. | 39,701 | 335,343 | ||||||
Gold Fields Ltd. | 55,928 | 969,477 | ||||||
Harmony Gold Mining Co., Ltd. | 33,421 | 436,980 | ||||||
Impala Platinum Holdings Ltd. | 73,388 | 1,685,436 | ||||||
Kumba Iron Ore Ltd. | 4,621 | 272,974 | ||||||
Mondi Ltd. | 24,355 | 189,307 | ||||||
Mpact Ltd. * | 91,552 | 158,634 | ||||||
Nampak Ltd. | 80,727 | 221,769 | ||||||
Pretoria Portland Cement Co., Ltd. | 81,076 | 245,531 | ||||||
Sappi Ltd. * | 109,251 | 318,580 | ||||||
5,916,985 | ||||||||
Media 0.2% | ||||||||
Naspers Ltd., Class N | 12,910 | 612,449 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.1% | ||||||||
Aspen Pharmacare Holdings Ltd. * | 38,429 | 460,527 | ||||||
Real Estate 0.2% | ||||||||
Growthpoint Properties Ltd. | 201,201 | 466,556 | ||||||
Retailing 0.6% | ||||||||
Imperial Holdings Ltd. | 52,601 | 773,205 | ||||||
JD Group Ltd. | 33,387 | 185,762 | ||||||
The Foschini Group Ltd. | 21,127 | 265,154 | ||||||
Truworths International Ltd. | 25,357 | 255,171 | ||||||
Woolworths Holdings Ltd. | 94,834 | 481,543 | ||||||
1,960,835 | ||||||||
Technology Hardware & Equipment 0.1% | ||||||||
DataTec Ltd. | 64,563 | 325,275 | ||||||
Telecommunication Services 1.5% | ||||||||
MTN Group Ltd. | 177,740 | 3,089,263 | ||||||
Telkom South Africa Ltd. | 258,671 | 994,478 | ||||||
Vodacom Group Ltd. | 44,387 | 500,734 | ||||||
4,584,475 | ||||||||
33,513,682 | ||||||||
Taiwan 17.4% | ||||||||
Banks 1.5% | ||||||||
Chang Hwa Commercial Bank | 414,200 | 266,590 | ||||||
China Development Financial Holding Corp. | 1,540,978 | 487,644 | ||||||
Chinatrust Financial Holding Co., Ltd. | 1,202,487 | 788,106 | ||||||
First Financial Holding Co., Ltd. | 771,777 | 512,300 | ||||||
Hua Nan Financial Holdings Co., Ltd. | 797,475 | 519,523 | ||||||
Mega Financial Holding Co., Ltd. | 1,477,300 | 1,135,596 | ||||||
SinoPac Financial Holdings Co., Ltd. | 1,135,827 | 367,717 | ||||||
Taishin Financial Holding Co., Ltd. | 734,758 | 311,110 | ||||||
Taiwan Cooperative Bank | 533,816 | 350,345 | ||||||
4,738,931 | ||||||||
Capital Goods 0.3% | ||||||||
Far Eastern New Century Corp. | 466,935 | 548,982 | ||||||
Teco Electric & Machinery Co., Ltd. | 361,000 | 210,609 | ||||||
Walsin Lihwa Corp. | 683,000 | 229,110 | ||||||
988,701 | ||||||||
Consumer Durables & Apparel 0.4% | ||||||||
Formosa Taffeta Co., Ltd. | 255,000 | 235,600 | ||||||
Pou Chen Corp. | 773,267 | 594,417 | ||||||
Tatung Co., Ltd. * | 1,479,887 | 521,051 | ||||||
1,351,068 | ||||||||
Diversified Financials 0.5% | ||||||||
Fubon Financial Holding Co., Ltd. | 969,509 | 1,136,687 | ||||||
Yuanta Financial Holding Co., Ltd. * | 663,770 | 378,380 | ||||||
1,515,067 | ||||||||
Energy 0.3% | ||||||||
Formosa Petrochemical Corp. | 270,030 | 849,236 | ||||||
Food & Staples Retailing 0.2% | ||||||||
President Chain Store Corp. | 90,000 | 500,466 |
66 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food, Beverage & Tobacco 0.3% | ||||||||
Uni-President Enterprises Corp. | 713,724 | 981,485 | ||||||
Insurance 0.5% | ||||||||
Cathay Financial Holding Co., Ltd. | 1,015,388 | 1,210,891 | ||||||
Shin Kong Financial Holding Co., Ltd. * | 1,008,000 | 313,960 | ||||||
1,524,851 | ||||||||
Materials 3.2% | ||||||||
Asia Cement Corp. | 389,976 | 469,747 | ||||||
China Steel Corp. | 2,105,733 | 2,095,011 | ||||||
Formosa Chemicals & Fibre Corp. | 494,420 | 1,430,884 | ||||||
Formosa Plastics Corp. | 803,820 | 2,364,107 | ||||||
Nan Ya Plastics Corp. | 1,137,160 | 2,558,185 | ||||||
Taiwan Cement Corp. | 688,299 | 859,603 | ||||||
9,777,537 | ||||||||
Retailing 0.1% | ||||||||
Far Eastern Department Stores Co., Ltd. | 162,060 | 247,776 | ||||||
Semiconductors & Semiconductor Equipment 3.9% | ||||||||
Advanced Semiconductor Engineering, Inc. | 536,090 | 473,726 | ||||||
King Yuan Electronics Co., Ltd. | 510,000 | 196,336 | ||||||
Macronix International Co., Ltd. | 321,000 | 121,297 | ||||||
MediaTek, Inc. | 134,138 | 1,407,680 | ||||||
Novatek Microelectronics Corp. | 73,000 | 178,949 | ||||||
Powerchip Technology Corp. * | 2,496,940 | 102,402 | ||||||
Powertech Technology, Inc. | 96,800 | 235,665 | ||||||
Siliconware Precision Industries Co. | 589,270 | 604,927 | ||||||
Taiwan Semiconductor Manufacturing Co., Ltd. | 3,081,689 | 7,509,695 | ||||||
United Microelectronics Corp. | 2,699,965 | 1,185,479 | ||||||
12,016,156 | ||||||||
Technology Hardware & Equipment 5.1% | ||||||||
Acer, Inc. | 506,496 | 578,333 | ||||||
Asustek Computer, Inc. | 261,041 | 1,814,805 | ||||||
AU Optronics Corp. | 2,169,800 | 935,219 | ||||||
Chimei Innolux Corp. * | 461,357 | 185,321 | ||||||
Chunghwa Picture Tubes Ltd. * | 1,825,486 | 111,146 | ||||||
CMC Magnetics Corp. * | 902,000 | 179,350 | ||||||
Compal Electronics, Inc. | 1,169,305 | 1,073,164 | ||||||
Coretronic Corp. | 155,000 | 116,606 | ||||||
Delta Electronics, Inc. | 153,025 | 359,799 | ||||||
Foxconn Technology Co., Ltd. | 124,950 | 435,496 | ||||||
HannStar Display Corp. * | 1,482,000 | 85,311 | ||||||
Hon Hai Precision Industry Co., Ltd. | 1,601,042 | 4,389,060 | ||||||
HTC Corp. | 53,473 | 1,201,728 | ||||||
Inventec Corp. | 846,207 | 304,109 | ||||||
Lite-On Technology Corp. | 660,099 | 622,894 | ||||||
Pegatron Corp. | 416,264 | 449,591 | ||||||
Quanta Computer, Inc. | 869,500 | 1,711,036 | ||||||
Synnex Technology International Corp. | 169,000 | 414,266 | ||||||
Unimicron Technology Corp. | 147,000 | 190,871 | ||||||
Wistron Corp. | 445,808 | 515,933 | ||||||
WPG Holdings Ltd. | 168,950 | 204,008 | ||||||
15,878,046 | ||||||||
Telecommunication Services 1.1% | ||||||||
Chunghwa Telecom Co., Ltd. | 687,906 | 2,301,477 | ||||||
Far EasTone Telecommunications Co., Ltd. | 351,622 | 576,614 | ||||||
Taiwan Mobile Co., Ltd. | 210,600 | 603,475 | ||||||
3,481,566 | ||||||||
Transportation 0.0% | ||||||||
Evergreen Marine Corp. | 267,298 | 146,551 | ||||||
53,997,437 | ||||||||
Thailand 1.6% | ||||||||
Banks 0.3% | ||||||||
Bangkok Bank Public Co., Ltd. - Reg’d | 42,200 | 213,855 | ||||||
Kasikornbank Public Co., Ltd. | 86,600 | 349,737 | ||||||
Siam Commercial Bank Public Co., Ltd. | 125,400 | 479,171 | ||||||
1,042,763 | ||||||||
Energy 0.8% | ||||||||
IRPC PCL | 1,547,800 | 193,286 | ||||||
PTT Exploration & Production Public Co., Ltd. - Reg’d | 95,500 | 500,016 | ||||||
PTT PCL | 132,087 | 1,314,427 | ||||||
Thai Oil Public Co., Ltd. | 166,300 | 315,024 | ||||||
2,322,753 | ||||||||
Materials 0.1% | ||||||||
The Siam Cement Public Co., Ltd. | 31,600 | 378,501 | ||||||
Telecommunication Services 0.4% | ||||||||
Advanced Info Service Public Co., Ltd. | 304,575 | 1,292,587 | ||||||
5,036,604 | ||||||||
Turkey 1.8% | ||||||||
Banks 0.6% | ||||||||
Akbank T.A.S. | 138,380 | 503,973 | ||||||
Turkiye Garanti Bankasi A/S | 108,430 | 380,434 | ||||||
Turkiye Halk Bankasi A/S | 34,264 | 210,564 | ||||||
Turkiye Is Bankasi, Class C | 205,446 | 477,507 | ||||||
Turkiye Vakiflar Bankasi T.A.O., Class D | 110,179 | 187,224 | ||||||
Yapi ve Kredi Bankasi A/S * | 82,157 | 153,574 | ||||||
1,913,276 | ||||||||
Capital Goods 0.4% | ||||||||
Dogan Sirketler Grubu Holdings A/S * | 673,539 | 246,785 | ||||||
Koc Holding A/S | 289,840 | 1,030,258 | ||||||
1,277,043 | ||||||||
Diversified Financials 0.1% | ||||||||
Haci Omer Sabanci Holding A/S | 71,887 | 245,137 | ||||||
Energy 0.3% | ||||||||
Tupras-Turkiye Petrol Rafinerileri A/S | 38,852 | 875,390 | ||||||
Materials 0.1% | ||||||||
Eregli Demir ve Celik Fabrikalari T.A.S. | 148,901 | 307,073 | ||||||
Telecommunication Services 0.2% | ||||||||
Turk Telekomunikasyon A/S | 76,570 | 324,743 | ||||||
Turkcell Iletisim Hizmetleri A/S * | 46,839 | 230,632 | ||||||
555,375 |
See financial notes 67
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Transportation 0.1% | ||||||||
Turk Hava Yollari Anonim Ortakligi * | 270,911 | 390,927 | ||||||
5,564,221 | ||||||||
Total Common Stock | ||||||||
(Cost $277,981,460) | 273,181,901 | |||||||
Preferred Stock 10.2% of net assets | ||||||||
Brazil 10.1% | ||||||||
Banks 2.8% | ||||||||
Banco Bradesco S.A. | 197,376 | 3,569,633 | ||||||
Itau Unibanco Holding S.A. | 229,965 | 4,384,049 | ||||||
Itausa - Investimentos Itau S.A. | 130,300 | 815,869 | ||||||
8,769,551 | ||||||||
Energy 2.1% | ||||||||
Petroleo Brasileiro S.A. | 532,600 | 6,613,876 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Compania Brasileira de Distribuicao Grupo Pao de Acucar | 18,800 | 717,244 | ||||||
Food, Beverage & Tobacco 0.6% | ||||||||
Companhia de Bebidas das Americas | 51,700 | 1,726,997 | ||||||
Materials 2.4% | ||||||||
Bradespar S.A. | 14,500 | 295,600 | ||||||
Braskem S.A., Class A | 28,900 | 257,547 | ||||||
Gerdau S.A. | 122,700 | 1,104,182 | ||||||
Klabin S.A. | 58,400 | 214,980 | ||||||
Metalurgica Gerdau S.A. | 113,100 | 1,281,956 | ||||||
Usinas Siderurgicas de Minas Gerais S.A., Class A | 124,200 | 853,633 | ||||||
Vale S.A., Class A | 143,300 | 3,405,446 | ||||||
7,413,344 | ||||||||
Telecommunication Services 0.9% | ||||||||
Brasil Telecom S.A. | 83,311 | 573,571 | ||||||
Tele Norte Leste Participacoes S.A. | 116,000 | 1,251,315 | ||||||
Telefonica Brasil S.A. | 22,232 | 646,817 | ||||||
Telemar Norte Leste S.A., Class A | 10,100 | 276,201 | ||||||
2,747,904 | ||||||||
Utilities 1.1% | ||||||||
AES Tiete S.A. | 11,100 | 158,207 | ||||||
Centrais Eletricas Brasileiras S.A., Class B | 85,700 | 1,181,535 | ||||||
Companhia Energetica de Minas Gerais | 84,408 | 1,411,020 | ||||||
Companhia Paranaense de Energia-Copel, Class B | 17,200 | 344,130 | ||||||
Compania Energetica de Sao Paulo, Class B | 14,700 | 250,444 | ||||||
3,345,336 | ||||||||
31,334,252 | ||||||||
Colombia 0.1% | ||||||||
Banks 0.1% | ||||||||
Bancolombia S.A. | 23,672 | 372,967 | ||||||
Total Preferred Stock | ||||||||
(Cost $33,543,864) | 31,707,219 | |||||||
Rights 0.0% of net assets | ||||||||
Colombia 0.0% | ||||||||
Diversified Financials 0.0% | ||||||||
Grupo de Inversiones Suramericana (b) | 6,297 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
Other Investment Company 1.2% of net assets | ||||||||
United States 1.2% | ||||||||
iShares MSCI Emerging Markets Index Fund | 90,000 | 3,672,000 | ||||||
Total Other Investment Company | ||||||||
(Cost $3,566,400) | 3,672,000 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.3% of net assets | ||||||||
Time Deposit 0.3% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 769,415 | 769,415 | ||||||
Total Short-Term Investment | ||||||||
(Cost $769,415) | 769,415 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.2% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 665,550 | 665,550 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $665,550) | 665,550 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $321,105,289 and the unrealized appreciation and depreciation
68 See financial notes
Schwab Fundamental Emerging Markets Index Fund
Portfolio Holdings continued
were $19,442,524 and ($31,217,278), respectively, with a net unrealized depreciation of ($11,774,754).
At 10/31/11, the values of certain foreign securities held bythe fund aggregating $216,564,064 were adjusted from theirclosing market values in accordance with international fairvaluation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
ADR — | American Depositary Receipt | |
GDR — | Global Depositary Receipt | |
Reg’d — | Registered |
See financial notes 69
Schwab S&P 500 Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
98 | .1% | Common Stock | 8,824,947,361 | 10,701,120,014 | ||||||||
1 | .7% | Short-Term Investments | 182,670,166 | 182,670,166 | ||||||||
99 | .8% | Total Investments | 9,007,617,527 | 10,883,790,180 | ||||||||
0 | .1% | Collateral Invested for Securities on Loan | 10,781,362 | 10,781,362 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 14,018,050 | |||||||||
100 | .0% | Net Assets | 10,908,589,592 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 98.1% of net assets | ||||||||
Automobiles & Components 0.7% | ||||||||
Ford Motor Co. * | 3,538,797 | 41,333,149 | ||||||
Harley-Davidson, Inc. | 231,470 | 9,004,183 | ||||||
Johnson Controls, Inc. | 627,159 | 20,652,346 | ||||||
The Goodyear Tire & Rubber Co. * | 197,636 | 2,838,053 | ||||||
73,827,731 | ||||||||
Banks 2.5% | ||||||||
BB&T Corp. | 650,513 | 15,182,973 | ||||||
Comerica, Inc. | 188,270 | 4,810,299 | ||||||
Fifth Third Bancorp | 866,629 | 10,408,214 | ||||||
First Horizon National Corp. | 238,860 | 1,669,631 | ||||||
Hudson City Bancorp, Inc. | 481,992 | 3,012,450 | ||||||
Huntington Bancshares, Inc. | 768,693 | 3,981,830 | ||||||
KeyCorp | 874,798 | 6,176,074 | ||||||
M&T Bank Corp. | 117,498 | 8,942,773 | ||||||
People’s United Financial, Inc. | 343,300 | 4,377,075 | ||||||
PNC Financial Services Group, Inc. | 491,178 | 26,381,170 | ||||||
Regions Financial Corp. | 1,177,945 | 4,629,324 | ||||||
SunTrust Banks, Inc. | 501,716 | 9,898,857 | ||||||
U.S. Bancorp | 1,800,028 | 46,062,717 | ||||||
Wells Fargo & Co. | 4,954,909 | 128,381,692 | ||||||
Zions Bancorp | 154,698 | 2,685,557 | ||||||
276,600,636 | ||||||||
Capital Goods 7.9% | ||||||||
3M Co. | 667,919 | 52,778,959 | ||||||
Caterpillar, Inc. | 605,362 | 57,182,494 | ||||||
Cummins, Inc. | 182,562 | 18,152,140 | ||||||
Danaher Corp. | 533,174 | 25,778,963 | ||||||
Deere & Co. | 387,886 | 29,440,547 | ||||||
Dover Corp. | 174,270 | 9,677,213 | ||||||
Eaton Corp. | 313,078 | 14,032,156 | ||||||
Emerson Electric Co. | 713,815 | 34,348,778 | ||||||
Fastenal Co. | 271,898 | 10,356,595 | ||||||
Flowserve Corp. | 50,100 | 4,643,769 | ||||||
Fluor Corp. | 160,582 | 9,129,087 | ||||||
General Dynamics Corp. | 338,960 | 21,757,842 | ||||||
General Electric Co. | 9,963,752 | 166,494,296 | ||||||
Goodrich Corp. | 114,696 | 14,065,170 | ||||||
Honeywell International, Inc. | 733,229 | 38,421,199 | ||||||
Illinois Tool Works, Inc. | 466,036 | 22,663,331 | ||||||
Ingersoll-Rand plc | 300,000 | 9,339,000 | ||||||
Jacobs Engineering Group, Inc. * | 119,534 | 4,637,919 | ||||||
Joy Global, Inc. | 100,000 | 8,720,000 | ||||||
L-3 Communications Holdings, Inc. | 105,783 | 7,169,972 | ||||||
Lockheed Martin Corp. | 257,891 | 19,573,927 | ||||||
Masco Corp. | 347,388 | 3,334,925 | ||||||
Northrop Grumman Corp. | 260,567 | 15,047,744 | ||||||
PACCAR, Inc. | 343,250 | 14,842,130 | ||||||
Pall Corp. | 107,030 | 5,476,725 | ||||||
Parker Hannifin Corp. | 155,336 | 12,667,651 | ||||||
Precision Castparts Corp. | 134,927 | 22,013,340 | ||||||
Quanta Services, Inc. * | 181,000 | 3,781,090 | ||||||
Raytheon Co. | 331,388 | 14,644,036 | ||||||
Rockwell Automation, Inc. | 132,521 | 8,965,046 | ||||||
Rockwell Collins, Inc. | 147,405 | 8,229,621 | ||||||
Roper Industries, Inc. | 85,000 | 6,893,500 | ||||||
Snap-on, Inc. | 58,282 | 3,127,995 | ||||||
Stanley Black & Decker, Inc. | 157,781 | 10,074,317 | ||||||
Textron, Inc. | 259,904 | 5,047,336 | ||||||
The Boeing Co. | 689,254 | 45,346,021 | ||||||
Tyco International Ltd. | 433,600 | 19,750,480 | ||||||
United Technologies Corp. | 851,535 | 66,402,699 | ||||||
W.W. Grainger, Inc. | 57,927 | 9,923,474 | ||||||
Xylem Inc. * | 173,800 | 4,647,412 | ||||||
858,578,899 | ||||||||
Commercial & Professional Supplies 0.6% | ||||||||
Avery Dennison Corp. | 103,076 | 2,741,821 | ||||||
Cintas Corp. | 111,376 | 3,329,029 | ||||||
Equifax, Inc. | 119,661 | 4,206,084 | ||||||
Iron Mountain, Inc. | 190,400 | 5,889,072 | ||||||
Pitney Bowes, Inc. | 196,591 | 4,006,524 | ||||||
R.R. Donnelley & Sons Co. | 194,869 | 3,176,365 | ||||||
Republic Services, Inc. | 299,934 | 8,536,122 | ||||||
Robert Half International, Inc. | 123,342 | 3,259,929 | ||||||
Stericycle, Inc. * | 80,700 | 6,744,906 | ||||||
The Dun & Bradstreet Corp. | 40,100 | 2,681,086 | ||||||
Waste Management, Inc. | 454,916 | 14,980,384 | ||||||
59,551,322 | ||||||||
Consumer Durables & Apparel 1.0% | ||||||||
Coach, Inc. | 267,728 | 17,421,061 | ||||||
D.R. Horton, Inc. | 260,616 | 2,900,656 |
See financial notes 1
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Harman International Industries, Inc. | 64,756 | 2,794,869 | ||||||
Hasbro, Inc. | 107,917 | 4,107,321 | ||||||
Leggett & Platt, Inc. | 157,894 | 3,457,879 | ||||||
Lennar Corp., Class A | 151,118 | 2,499,492 | ||||||
Mattel, Inc. | 321,294 | 9,073,342 | ||||||
Newell Rubbermaid, Inc. | 250,050 | 3,700,740 | ||||||
NIKE, Inc., Class B | 361,462 | 34,826,864 | ||||||
PulteGroup, Inc. * | 293,286 | 1,519,221 | ||||||
Ralph Lauren Corp. | 60,526 | 9,610,923 | ||||||
VF Corp. | 80,391 | 11,111,644 | ||||||
Whirlpool Corp. | 76,122 | 3,867,759 | ||||||
106,891,771 | ||||||||
Consumer Services 2.1% | ||||||||
Apollo Group, Inc., Class A * | 109,790 | 5,198,557 | ||||||
Carnival Corp. | 433,221 | 15,253,711 | ||||||
Chipotle Mexican Grill, Inc. * | 29,000 | 9,747,480 | ||||||
Darden Restaurants, Inc. | 128,248 | 6,140,514 | ||||||
DeVry, Inc. | 57,700 | 2,174,136 | ||||||
H&R Block, Inc. | 262,105 | 4,007,585 | ||||||
International Game Technology | 280,660 | 4,936,809 | ||||||
Marriott International, Inc., Class A | 267,172 | 8,415,918 | ||||||
McDonald’s Corp. | 966,738 | 89,761,623 | ||||||
Starbucks Corp. | 714,662 | 30,258,789 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 180,068 | 9,023,208 | ||||||
Wyndham Worldwide Corp. | 148,464 | 4,998,783 | ||||||
Wynn Resorts Ltd. | 74,700 | 9,920,160 | ||||||
Yum! Brands, Inc. | 444,985 | 23,837,847 | ||||||
223,675,120 | ||||||||
Diversified Financials 5.7% | ||||||||
American Express Co. | 975,741 | 49,392,009 | ||||||
Ameriprise Financial, Inc. | 215,714 | 10,069,530 | ||||||
Bank of America Corp. | 9,478,911 | 64,740,962 | ||||||
BlackRock, Inc. | 94,000 | 14,832,260 | ||||||
Capital One Financial Corp. | 428,374 | 19,559,557 | ||||||
Citigroup, Inc. | 2,734,147 | 86,371,704 | ||||||
CME Group, Inc. | 63,537 | 17,508,256 | ||||||
Discover Financial Services | 500,773 | 11,798,212 | ||||||
E*TRADE Financial Corp. * | 195,319 | 2,119,211 | ||||||
Federated Investors, Inc., Class B | 76,906 | 1,502,743 | ||||||
Franklin Resources, Inc. | 139,335 | 14,857,291 | ||||||
IntercontinentalExchange, Inc. * | 67,958 | 8,826,385 | ||||||
Invesco Ltd. | 436,147 | 8,753,470 | ||||||
Janus Capital Group, Inc. | 171,695 | 1,126,319 | ||||||
JPMorgan Chase & Co. | 3,653,531 | 126,996,738 | ||||||
Legg Mason, Inc. | 143,998 | 3,959,945 | ||||||
Leucadia National Corp. | 177,151 | 4,752,961 | ||||||
Moody’s Corp. | 188,529 | 6,690,894 | ||||||
Morgan Stanley | 1,415,454 | 24,968,609 | ||||||
Northern Trust Corp. | 225,818 | 9,138,855 | ||||||
NYSE Euronext | 245,500 | 6,522,935 | ||||||
SLM Corp. | 494,418 | 6,758,694 | ||||||
State Street Corp. | 466,026 | 18,822,790 | ||||||
T. Rowe Price Group, Inc. | 243,179 | 12,849,578 | ||||||
The Bank of New York Mellon Corp. | 1,163,073 | 24,750,193 | ||||||
The Charles Schwab Corp. (b) | 1,009,981 | 12,402,567 | ||||||
The Goldman Sachs Group, Inc. | 473,969 | 51,923,304 | ||||||
The NASDAQ OMX Group, Inc. * | 159,000 | 3,982,950 | ||||||
625,978,922 | ||||||||
Energy 12.0% | ||||||||
Alpha Natural Resources, Inc. * | 196,430 | 4,722,177 | ||||||
Anadarko Petroleum Corp. | 460,909 | 36,181,356 | ||||||
Apache Corp. | 357,906 | 35,658,175 | ||||||
Baker Hughes, Inc. | 400,863 | 23,246,045 | ||||||
Cabot Oil & Gas Corp. | 92,200 | 7,165,784 | ||||||
Cameron International Corp. * | 228,900 | 11,248,146 | ||||||
Chesapeake Energy Corp. | 609,566 | 17,140,996 | ||||||
Chevron Corp. | 1,881,534 | 197,655,147 | ||||||
ConocoPhillips | 1,286,590 | 89,610,993 | ||||||
CONSOL Energy, Inc. | 212,018 | 9,065,890 | ||||||
Denbury Resources, Inc. * | 377,200 | 5,922,040 | ||||||
Devon Energy Corp. | 404,258 | 26,256,557 | ||||||
Diamond Offshore Drilling, Inc. | 65,300 | 4,279,762 | ||||||
El Paso Corp. | 717,471 | 17,943,950 | ||||||
EOG Resources, Inc. | 247,406 | 22,125,519 | ||||||
EQT Corp. | 140,100 | 8,896,350 | ||||||
Exxon Mobil Corp. | 4,555,941 | 355,773,433 | ||||||
FMC Technologies, Inc. * | 230,000 | 10,308,600 | ||||||
Halliburton Co. | 857,068 | 32,020,060 | ||||||
Helmerich & Payne, Inc. | 95,000 | 5,052,100 | ||||||
Hess Corp. | 293,240 | 18,345,094 | ||||||
Marathon Oil Corp. | 670,652 | 17,457,071 | ||||||
Marathon Petroleum Corp. | 335,326 | 12,038,203 | ||||||
Murphy Oil Corp. | 174,292 | 9,650,548 | ||||||
Nabors Industries Ltd. * | 287,890 | 5,277,024 | ||||||
National Oilwell Varco, Inc. | 401,424 | 28,633,574 | ||||||
Newfield Exploration Co. * | 120,000 | 4,831,200 | ||||||
Noble Corp. * | 230,000 | 8,266,200 | ||||||
Noble Energy, Inc. | 160,284 | 14,319,772 | ||||||
Occidental Petroleum Corp. | 759,350 | 70,573,989 | ||||||
Peabody Energy Corp. | 261,564 | 11,344,031 | ||||||
Pioneer Natural Resources Co. | 119,800 | 10,051,220 | ||||||
QEP Resources, Inc. | 162,691 | 5,783,665 | ||||||
Range Resources Corp. | 150,900 | 10,387,956 | ||||||
Rowan Cos., Inc. * | 126,263 | 4,354,811 | ||||||
Schlumberger Ltd. | 1,263,215 | 92,808,406 | ||||||
Southwestern Energy Co. * | 326,100 | 13,709,244 | ||||||
Spectra Energy Corp. | 595,509 | 17,049,423 | ||||||
Sunoco, Inc. | 109,001 | 4,058,107 | ||||||
Tesoro Corp. * | 164,807 | 4,275,094 | ||||||
The Williams Cos., Inc. | 546,298 | 16,449,033 | ||||||
Valero Energy Corp. | 549,440 | 13,516,224 | ||||||
1,313,452,969 | ||||||||
Food & Staples Retailing 2.3% | ||||||||
Costco Wholesale Corp. | 405,892 | 33,790,509 | ||||||
CVS Caremark Corp. | 1,258,851 | 45,696,291 | ||||||
Safeway, Inc. | 355,696 | 6,889,832 | ||||||
SUPERVALU, Inc. | 229,681 | 1,842,042 | ||||||
Sysco Corp. | 544,957 | 15,106,208 | ||||||
The Kroger Co. | 562,047 | 13,028,250 |
2 See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Wal-Mart Stores, Inc. | 1,647,102 | 93,423,625 | ||||||
Walgreen Co. | 838,911 | 27,851,845 | ||||||
Whole Foods Market, Inc. | 147,716 | 10,653,278 | ||||||
248,281,880 | ||||||||
Food, Beverage & Tobacco 6.2% | ||||||||
Altria Group, Inc. | 1,955,891 | 53,884,797 | ||||||
Archer-Daniels-Midland Co. | 633,199 | 18,324,779 | ||||||
Beam, Inc. | 138,179 | 6,830,188 | ||||||
Brown-Forman Corp., Class B | 88,728 | 6,630,643 | ||||||
Campbell Soup Co. | 168,411 | 5,599,666 | ||||||
Coca-Cola Enterprises, Inc. | 283,362 | 7,599,769 | ||||||
ConAgra Foods, Inc. | 401,749 | 10,176,302 | ||||||
Constellation Brands, Inc., Class A * | 175,065 | 3,539,814 | ||||||
Dean Foods Co. * | 144,970 | 1,409,108 | ||||||
Dr Pepper Snapple Group, Inc. | 192,800 | 7,220,360 | ||||||
General Mills, Inc. | 606,680 | 23,375,380 | ||||||
H.J. Heinz Co. | 303,643 | 16,226,682 | ||||||
Hormel Foods Corp. | 116,700 | 3,439,149 | ||||||
Kellogg Co. | 234,434 | 12,708,667 | ||||||
Kraft Foods, Inc., Class A | 1,654,854 | 58,217,764 | ||||||
Lorillard, Inc. | 129,697 | 14,352,270 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 132,602 | 6,439,153 | ||||||
Mead Johnson Nutrition Co. | 191,100 | 13,730,535 | ||||||
Molson Coors Brewing Co., Class B | 147,030 | 6,225,250 | ||||||
PepsiCo, Inc. | 1,480,863 | 93,220,326 | ||||||
Philip Morris International, Inc. | 1,645,846 | 114,995,260 | ||||||
Reynolds American, Inc. | 327,596 | 12,671,413 | ||||||
Sara Lee Corp. | 573,042 | 10,200,148 | ||||||
The Coca-Cola Co. | 2,148,728 | 146,801,097 | ||||||
The Hershey Co. | 138,628 | 7,933,681 | ||||||
The JM Smucker Co. | 106,275 | 8,185,301 | ||||||
Tyson Foods, Inc., Class A | 277,090 | 5,347,837 | ||||||
675,285,339 | ||||||||
Health Care Equipment & Services 3.9% | ||||||||
Aetna, Inc. | 347,780 | 13,827,733 | ||||||
AmerisourceBergen Corp. | 247,246 | 10,087,637 | ||||||
Baxter International, Inc. | 527,289 | 28,990,349 | ||||||
Becton, Dickinson & Co. | 202,390 | 15,832,970 | ||||||
Boston Scientific Corp. * | 1,434,274 | 8,447,874 | ||||||
C.R. Bard, Inc. | 84,773 | 7,286,239 | ||||||
Cardinal Health, Inc. | 330,733 | 14,641,550 | ||||||
CareFusion Corp. * | 207,066 | 5,300,890 | ||||||
Cerner Corp. * | 137,400 | 8,715,282 | ||||||
CIGNA Corp. | 252,508 | 11,196,205 | ||||||
Coventry Health Care, Inc. * | 138,985 | 4,421,113 | ||||||
Covidien plc | 462,400 | 21,751,296 | ||||||
DaVita, Inc. * | 90,400 | 6,328,000 | ||||||
DENTSPLY International, Inc. | 132,400 | 4,893,504 | ||||||
Edwards Lifesciences Corp. * | 105,000 | 7,919,100 | ||||||
Express Scripts, Inc. * | 457,472 | 20,920,195 | ||||||
Humana, Inc. | 159,403 | 13,531,721 | ||||||
Intuitive Surgical, Inc. * | 36,600 | 15,879,276 | ||||||
Laboratory Corp. of America Holdings * | 89,691 | 7,520,590 | ||||||
McKesson Corp. | 226,275 | 18,452,726 | ||||||
Medco Health Solutions, Inc. * | 361,282 | 19,819,931 | ||||||
Medtronic, Inc. | 983,939 | 34,182,041 | ||||||
Patterson Cos., Inc. | 103,047 | 3,242,889 | ||||||
Quest Diagnostics, Inc. | 148,280 | 8,274,024 | ||||||
St. Jude Medical, Inc. | 319,387 | 12,456,093 | ||||||
Stryker Corp. | 317,640 | 15,218,132 | ||||||
Tenet Healthcare Corp. * | 451,617 | 2,136,148 | ||||||
UnitedHealth Group, Inc. | 1,005,610 | 48,259,224 | ||||||
Varian Medical Systems, Inc. * | 110,706 | 6,500,656 | ||||||
WellPoint, Inc. | 337,929 | 23,283,308 | ||||||
Zimmer Holdings, Inc. * | 177,223 | 9,327,246 | ||||||
428,643,942 | ||||||||
Household & Personal Products 2.4% | ||||||||
Avon Products, Inc. | 391,020 | 7,147,846 | ||||||
Colgate-Palmolive Co. | 459,397 | 41,515,707 | ||||||
Kimberly-Clark Corp. | 367,095 | 25,590,192 | ||||||
The Clorox Co. | 127,857 | 8,558,747 | ||||||
The Estee Lauder Cos., Inc., Class A | 104,026 | 10,241,360 | ||||||
The Procter & Gamble Co. | 2,574,690 | 164,754,413 | ||||||
257,808,265 | ||||||||
Insurance 3.6% | ||||||||
ACE Ltd. | 312,000 | 22,510,800 | ||||||
Aflac, Inc. | 429,773 | 19,378,465 | ||||||
American International Group, Inc. * | 409,577 | 10,112,456 | ||||||
Aon Corp. | 311,450 | 14,519,799 | ||||||
Assurant, Inc. | 89,346 | 3,443,395 | ||||||
Berkshire Hathaway, Inc., Class B * | 1,647,830 | 128,300,044 | ||||||
Cincinnati Financial Corp. | 155,203 | 4,491,575 | ||||||
Genworth Financial, Inc., Class A * | 496,064 | 3,164,888 | ||||||
Hartford Financial Services Group, Inc. | 413,495 | 7,959,779 | ||||||
Lincoln National Corp. | 294,671 | 5,613,483 | ||||||
Loews Corp. | 286,616 | 11,378,655 | ||||||
Marsh & McLennan Cos., Inc. | 507,579 | 15,542,069 | ||||||
MetLife, Inc. | 990,877 | 34,839,235 | ||||||
Principal Financial Group, Inc. | 307,867 | 7,936,811 | ||||||
Prudential Financial, Inc. | 451,431 | 24,467,560 | ||||||
The Allstate Corp. | 502,110 | 13,225,577 | ||||||
The Chubb Corp. | 267,893 | 17,962,226 | ||||||
The Progressive Corp. | 590,520 | 11,225,785 | ||||||
The Travelers Cos., Inc. | 400,660 | 23,378,511 | ||||||
Torchmark Corp. | 95,511 | 3,909,265 | ||||||
Unum Group | 276,440 | 6,590,330 | ||||||
XL Group plc | 312,199 | 6,787,206 | ||||||
396,737,914 | ||||||||
Materials 3.5% | ||||||||
Air Products & Chemicals, Inc. | 203,601 | 17,538,190 | ||||||
Airgas, Inc. | 62,700 | 4,323,165 | ||||||
AK Steel Holding Corp. (a) | 140,900 | 1,173,697 | ||||||
Alcoa, Inc. | 996,064 | 10,717,649 | ||||||
Allegheny Technologies, Inc. | 92,070 | 4,272,048 | ||||||
Ball Corp. | 152,738 | 5,280,153 |
See financial notes 3
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Bemis Co., Inc. | 88,735 | 2,494,341 | ||||||
CF Industries Holdings, Inc. | 66,225 | 10,746,331 | ||||||
Cliffs Natural Resources, Inc. | 136,800 | 9,332,496 | ||||||
E.I. du Pont de Nemours & Co. | 873,804 | 42,003,758 | ||||||
Eastman Chemical Co. | 122,516 | 4,813,654 | ||||||
Ecolab, Inc. | 218,528 | 11,765,547 | ||||||
FMC Corp. | 67,100 | 5,293,519 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 880,840 | 35,462,618 | ||||||
International Flavors & Fragrances, Inc. | 71,843 | 4,350,812 | ||||||
International Paper Co. | 419,089 | 11,608,765 | ||||||
MeadWestvaco Corp. | 155,750 | 4,346,982 | ||||||
Monsanto Co. | 504,200 | 36,680,550 | ||||||
Newmont Mining Corp. | 457,546 | 30,577,799 | ||||||
Nucor Corp. | 296,100 | 11,186,658 | ||||||
Owens-Illinois, Inc. * | 157,500 | 3,162,600 | ||||||
PPG Industries, Inc. | 153,048 | 13,224,878 | ||||||
Praxair, Inc. | 287,779 | 29,258,491 | ||||||
Sealed Air Corp. | 145,968 | 2,598,230 | ||||||
Sigma-Aldrich Corp. | 116,454 | 7,625,408 | ||||||
The Dow Chemical Co. | 1,106,835 | 30,858,560 | ||||||
The Mosaic Co. | 259,500 | 15,196,320 | ||||||
The Sherwin-Williams Co. | 88,636 | 7,331,084 | ||||||
Titanium Metals Corp. | 82,800 | 1,386,900 | ||||||
United States Steel Corp. (a) | 134,613 | 3,413,786 | ||||||
Vulcan Materials Co. | 106,571 | 3,334,607 | ||||||
381,359,596 | ||||||||
Media 3.1% | ||||||||
Cablevision Systems Corp., Class A | 220,000 | 3,183,400 | ||||||
CBS Corp., Class B - Non Voting Shares | 633,936 | 16,361,888 | ||||||
Comcast Corp., Class A | 2,583,964 | 60,593,956 | ||||||
DIRECTV, Class A * | 685,302 | 31,153,829 | ||||||
Discovery Communications, Inc., Class A * | 255,000 | 11,082,300 | ||||||
Gannett Co., Inc. | 207,114 | 2,421,163 | ||||||
News Corp., Class A | 2,142,001 | 37,527,857 | ||||||
Omnicom Group, Inc. | 257,747 | 11,464,587 | ||||||
Scripps Networks Interactive, Class A | 91,193 | 3,873,879 | ||||||
The Interpublic Group of Cos., Inc. | 454,565 | 4,309,276 | ||||||
The McGraw-Hill Cos., Inc. | 294,267 | 12,506,347 | ||||||
The Walt Disney Co. | 1,735,183 | 60,523,183 | ||||||
The Washington Post Co., Class B | 5,369 | 1,826,319 | ||||||
Time Warner Cable, Inc. | 311,201 | 19,820,392 | ||||||
Time Warner, Inc. | 966,874 | 33,830,921 | ||||||
Viacom Inc., Class B | 534,353 | 23,431,379 | ||||||
333,910,676 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.4% | ||||||||
Abbott Laboratories | 1,453,886 | 78,320,839 | ||||||
Agilent Technologies, Inc. * | 322,966 | 11,972,350 | ||||||
Allergan, Inc. | 283,958 | 23,886,547 | ||||||
Amgen, Inc. | 865,859 | 49,587,745 | ||||||
Biogen Idec, Inc. * | 227,291 | 26,447,581 | ||||||
Bristol-Myers Squibb Co. | 1,592,364 | 50,302,779 | ||||||
Celgene Corp. * | 434,613 | 28,175,961 | ||||||
Eli Lilly & Co. | 954,623 | 35,473,791 | ||||||
Forest Laboratories, Inc. * | 277,864 | 8,697,143 | ||||||
Gilead Sciences, Inc. * | 722,875 | 30,114,972 | ||||||
Hospira, Inc. * | 141,382 | 4,446,464 | ||||||
Johnson & Johnson | 2,567,825 | 165,342,252 | ||||||
Life Technologies Corp. * | 173,435 | 7,053,602 | ||||||
Merck & Co., Inc. | 2,900,114 | 100,053,933 | ||||||
Mylan, Inc. * | 404,751 | 7,920,977 | ||||||
PerkinElmer, Inc. | 105,660 | 2,183,992 | ||||||
Pfizer, Inc. | 7,310,833 | 140,806,643 | ||||||
Thermo Fisher Scientific, Inc. * | 353,637 | 17,777,332 | ||||||
Waters Corp. * | 81,252 | 6,509,910 | ||||||
Watson Pharmaceuticals, Inc. * | 125,746 | 8,445,101 | ||||||
803,519,914 | ||||||||
Real Estate 1.8% | ||||||||
Apartment Investment & Management Co., Class A | 127,314 | 3,140,837 | ||||||
AvalonBay Communities, Inc. | 88,099 | 11,777,955 | ||||||
Boston Properties, Inc. | 133,576 | 13,222,688 | ||||||
CBRE Group, Inc. * | 280,140 | 4,980,889 | ||||||
Equity Residential | 275,322 | 16,155,895 | ||||||
HCP, Inc. | 381,500 | 15,202,775 | ||||||
Health Care REIT, Inc. | 165,500 | 8,720,195 | ||||||
Host Hotels & Resorts, Inc. | 637,211 | 9,093,001 | ||||||
Kimco Realty Corp. | 378,159 | 6,606,438 | ||||||
Plum Creek Timber Co., Inc. | 158,777 | 5,979,542 | ||||||
ProLogis, Inc. | 430,089 | 12,799,449 | ||||||
Public Storage | 130,878 | 16,889,806 | ||||||
Simon Property Group, Inc. | 278,153 | 35,725,971 | ||||||
Ventas, Inc. | 270,300 | 15,031,383 | ||||||
Vornado Realty Trust REIT | 174,156 | 14,421,858 | ||||||
Weyerhaeuser Co. | 494,240 | 8,886,435 | ||||||
198,635,117 | ||||||||
Retailing 3.7% | ||||||||
Abercrombie & Fitch Co., Class A | 78,745 | 5,858,628 | ||||||
Amazon.com, Inc. * | 340,290 | 72,655,318 | ||||||
AutoNation, Inc. * | 40,833 | 1,590,037 | ||||||
AutoZone, Inc. * | 27,098 | 8,768,642 | ||||||
Bed Bath & Beyond, Inc. * | 226,869 | 14,029,579 | ||||||
Best Buy Co., Inc. | 296,557 | 7,778,690 | ||||||
Big Lots, Inc. * | 72,567 | 2,735,050 | ||||||
CarMax, Inc. * | 200,000 | 6,012,000 | ||||||
Expedia, Inc. | 190,226 | 4,995,335 | ||||||
Family Dollar Stores, Inc. | 108,430 | 6,357,251 | ||||||
GameStop Corp., Class A * | 146,800 | 3,753,676 | ||||||
Genuine Parts Co. | 142,838 | 8,203,186 | ||||||
J.C. Penney Co., Inc. | 153,021 | 4,908,914 | ||||||
Kohl’s Corp. | 275,510 | 14,604,785 | ||||||
Limited Brands, Inc. | 227,535 | 9,718,020 | ||||||
Lowe’s Cos., Inc. | 1,181,188 | 24,828,572 | ||||||
Macy’s, Inc. | 399,926 | 12,209,741 | ||||||
Netflix, Inc. * | 49,200 | 4,038,336 | ||||||
Nordstrom, Inc. | 151,296 | 7,669,194 | ||||||
O’Reilly Automotive, Inc. * | 121,200 | 9,217,260 | ||||||
Priceline.com, Inc. * | 45,900 | 23,304,348 |
4 See financial notes
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ross Stores, Inc. | 115,000 | 10,088,950 | ||||||
Sears Holdings Corp. (a)* | 44,826 | 3,504,497 | ||||||
Staples, Inc. | 653,469 | 9,775,896 | ||||||
Target Corp. | 642,708 | 35,188,263 | ||||||
The Gap, Inc. | 325,062 | 6,143,672 | ||||||
The Home Depot, Inc. | 1,465,750 | 52,473,850 | ||||||
The TJX Cos., Inc. | 356,953 | 21,035,240 | ||||||
Tiffany & Co. | 116,328 | 9,274,831 | ||||||
Urban Outfitters, Inc. * | 111,100 | 3,027,475 | ||||||
403,749,236 | ||||||||
Semiconductors & Semiconductor Equipment 2.4% | ||||||||
Advanced Micro Devices, Inc. * | 484,339 | 2,823,696 | ||||||
Altera Corp. | 301,746 | 11,442,208 | ||||||
Analog Devices, Inc. | 296,254 | 10,834,009 | ||||||
Applied Materials, Inc. | 1,215,472 | 14,974,615 | ||||||
Broadcom Corp., Class A * | 451,218 | 16,284,458 | ||||||
First Solar, Inc. (a)* | 47,800 | 2,379,006 | ||||||
Intel Corp. | 4,920,305 | 120,744,285 | ||||||
KLA-Tencor Corp. | 160,681 | 7,566,468 | ||||||
Linear Technology Corp. | 214,968 | 6,945,616 | ||||||
LSI Corp. * | 573,376 | 3,583,600 | ||||||
MEMC Electronic Materials, Inc. * | 164,927 | 987,913 | ||||||
Microchip Technology, Inc. | 178,623 | 6,459,008 | ||||||
Micron Technology, Inc. * | 940,775 | 5,258,932 | ||||||
Novellus Systems, Inc. * | 66,111 | 2,284,135 | ||||||
NVIDIA Corp. * | 565,682 | 8,372,094 | ||||||
Teradyne, Inc. * | 168,449 | 2,412,190 | ||||||
Texas Instruments, Inc. | 1,082,554 | 33,266,884 | ||||||
Xilinx, Inc. | 269,163 | 9,006,194 | ||||||
265,625,311 | ||||||||
Software & Services 9.5% | ||||||||
Accenture plc, Class A | 610,000 | 36,758,600 | ||||||
Adobe Systems, Inc. * | 462,776 | 13,610,242 | ||||||
Akamai Technologies, Inc. * | 169,341 | 4,562,047 | ||||||
Autodesk, Inc. * | 214,381 | 7,417,583 | ||||||
Automatic Data Processing, Inc. | 458,073 | 23,970,960 | ||||||
BMC Software, Inc. * | 162,339 | 5,642,904 | ||||||
CA, Inc. | 370,925 | 8,034,235 | ||||||
Citrix Systems, Inc. * | 176,408 | 12,847,795 | ||||||
Cognizant Technology Solutions Corp., Class A * | 281,348 | 20,468,067 | ||||||
Computer Sciences Corp. | 144,040 | 4,531,498 | ||||||
Compuware Corp. * | 278,185 | 2,350,663 | ||||||
eBay, Inc. * | 1,065,169 | 33,904,329 | ||||||
Electronic Arts, Inc. * | 305,892 | 7,142,578 | ||||||
Fidelity National Information Services, Inc. | 232,234 | 6,079,886 | ||||||
Fiserv, Inc. * | 132,652 | 7,809,223 | ||||||
Google, Inc., Class A * | 235,862 | 139,781,256 | ||||||
International Business Machines Corp. | 1,119,090 | 206,617,587 | ||||||
Intuit, Inc. | 284,809 | 15,285,699 | ||||||
MasterCard, Inc., Class A | 100,000 | 34,724,000 | ||||||
Microsoft Corp. | 6,995,831 | 186,298,980 | ||||||
Monster Worldwide, Inc. * | 89,138 | 822,744 | ||||||
Oracle Corp. | 3,692,686 | 121,009,320 | ||||||
Paychex, Inc. | 305,065 | 8,889,594 | ||||||
Red Hat, Inc. * | 180,900 | 8,981,685 | ||||||
SAIC, Inc. * | 252,000 | 3,132,360 | ||||||
Salesforce.com, Inc. * | 126,967 | 16,908,195 | ||||||
Symantec Corp. * | 692,550 | 11,780,276 | ||||||
Teradata Corp. * | 161,371 | 9,627,394 | ||||||
The Western Union Co. | 630,625 | 11,017,019 | ||||||
Total System Services, Inc. | 177,100 | 3,522,519 | ||||||
VeriSign, Inc. | 149,825 | 4,807,884 | ||||||
Visa, Inc., Class A | 474,700 | 44,270,522 | ||||||
Yahoo!, Inc. * | 1,162,255 | 18,177,668 | ||||||
1,040,785,312 | ||||||||
Technology Hardware & Equipment 7.3% | ||||||||
Amphenol Corp., Class A | 161,800 | 7,683,882 | ||||||
Apple, Inc. * | 868,740 | 351,648,577 | ||||||
Cisco Systems, Inc. | 5,153,828 | 95,500,433 | ||||||
Corning, Inc. | 1,450,987 | 20,734,604 | ||||||
Dell, Inc. * | 1,453,085 | 22,973,274 | ||||||
EMC Corp. * | 1,949,545 | 47,783,348 | ||||||
F5 Networks, Inc. * | 74,000 | 7,692,300 | ||||||
FLIR Systems, Inc. | 149,700 | 3,937,110 | ||||||
Harris Corp. | 129,300 | 4,881,075 | ||||||
Hewlett-Packard Co. | 1,959,508 | 52,142,508 | ||||||
Jabil Circuit, Inc. | 170,686 | 3,509,304 | ||||||
JDS Uniphase Corp. * | 191,981 | 2,303,772 | ||||||
Juniper Networks, Inc. * | 491,565 | 12,028,596 | ||||||
Lexmark International, Inc., Class A * | 83,508 | 2,647,204 | ||||||
Molex, Inc. | 126,666 | 3,127,383 | ||||||
Motorola Mobility Holdings, Inc. * | 241,981 | 9,408,221 | ||||||
Motorola Solutions, Inc. | 282,922 | 13,271,871 | ||||||
NetApp, Inc. * | 345,174 | 14,138,327 | ||||||
QUALCOMM, Inc. | 1,569,565 | 80,989,554 | ||||||
SanDisk Corp. * | 218,124 | 11,052,343 | ||||||
TE Connectivity Ltd. | 400,000 | 14,220,000 | ||||||
Tellabs, Inc. | 436,856 | 1,891,586 | ||||||
The Western Digital Corp. * | 206,000 | 5,487,840 | ||||||
Xerox Corp. | 1,284,866 | 10,510,204 | ||||||
799,563,316 | ||||||||
Telecommunication Services 3.0% | ||||||||
American Tower Corp., Class A * | 368,100 | 20,282,310 | ||||||
AT&T, Inc. | 5,552,836 | 162,753,623 | ||||||
CenturyLink, Inc. | 577,643 | 20,367,692 | ||||||
Frontier Communications Corp. | 937,945 | 5,871,536 | ||||||
MetroPCS Communications, Inc. * | 243,900 | 2,073,150 | ||||||
Sprint Nextel Corp. * | 2,882,208 | 7,407,275 | ||||||
Verizon Communications, Inc. | 2,648,178 | 97,929,622 | ||||||
Windstream Corp. | 473,774 | 5,765,830 | ||||||
322,451,038 | ||||||||
Transportation 1.9% | ||||||||
C.H. Robinson Worldwide, Inc. | 155,995 | 10,830,733 | ||||||
CSX Corp. | 1,013,291 | 22,505,193 | ||||||
Expeditors International of Washington, Inc. | 199,300 | 9,088,080 |
See financial notes 5
Schwab S&P 500 Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
FedEx Corp. | 291,868 | 23,883,558 | ||||||
Norfolk Southern Corp. | 325,292 | 24,068,355 | ||||||
Ryder System, Inc. | 60,702 | 3,092,160 | ||||||
Southwest Airlines Co. | 753,336 | 6,441,023 | ||||||
Union Pacific Corp. | 458,375 | 45,640,399 | ||||||
United Parcel Service, Inc., Class B | 923,318 | 64,853,856 | ||||||
210,403,357 | ||||||||
Utilities 3.6% | ||||||||
Ameren Corp. | 217,420 | 6,931,350 | ||||||
American Electric Power Co., Inc. | 445,802 | 17,511,103 | ||||||
CenterPoint Energy, Inc. | 399,066 | 8,316,535 | ||||||
CMS Energy Corp. | 237,984 | 4,954,827 | ||||||
Consolidated Edison, Inc. | 271,565 | 15,715,467 | ||||||
Constellation Energy Group, Inc. | 182,265 | 7,235,920 | ||||||
Dominion Resources, Inc. | 551,564 | 28,455,187 | ||||||
DTE Energy Co. | 153,312 | 7,989,088 | ||||||
Duke Energy Corp. | 1,234,298 | 25,204,365 | ||||||
Edison International | 306,093 | 12,427,376 | ||||||
Entergy Corp. | 173,453 | 11,997,744 | ||||||
Exelon Corp. | 615,890 | 27,339,357 | ||||||
FirstEnergy Corp. | 390,694 | 17,565,602 | ||||||
Integrys Energy Group, Inc. | 71,494 | 3,782,748 | ||||||
NextEra Energy, Inc. | 394,238 | 22,235,023 | ||||||
Nicor, Inc. | 34,408 | 1,935,450 | ||||||
NiSource, Inc. | 256,762 | 5,671,873 | ||||||
Northeast Utilities | 163,700 | 5,659,109 | ||||||
NRG Energy, Inc. * | 240,000 | 5,140,800 | ||||||
ONEOK, Inc. | 100,200 | 7,620,210 | ||||||
Pepco Holdings, Inc. | 205,700 | 4,072,860 | ||||||
PG&E Corp. | 371,106 | 15,920,447 | ||||||
Pinnacle West Capital Corp. | 94,461 | 4,305,532 | ||||||
PPL Corp. | 528,970 | 15,535,849 | ||||||
Progress Energy, Inc. | 280,959 | 14,637,964 | ||||||
Public Service Enterprise Group, Inc. | 472,170 | 15,912,129 | ||||||
SCANA Corp. | 113,900 | 4,815,692 | ||||||
Sempra Energy | 240,269 | 12,909,653 | ||||||
Southern Co. | 803,625 | 34,716,600 | ||||||
TECO Energy, Inc. | 194,819 | 3,617,789 | ||||||
The AES Corp. * | 623,349 | 6,993,976 | ||||||
Wisconsin Energy Corp. | 218,600 | 7,089,198 | ||||||
Xcel Energy, Inc. | 448,186 | 11,585,608 | ||||||
395,802,431 | ||||||||
Total Common Stock | ||||||||
(Cost $8,824,947,361) | 10,701,120,014 | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 1.7% of net assets | ||||||||
Time Deposit 1.6% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 170,540,163 | 170,540,163 | ||||||
U.S. Treasury Obligations 0.1% | ||||||||
U.S. Treasury Bills | ||||||||
(0.01)%, 12/15/11 (c)(d) | 800,000 | 800,000 | ||||||
0.00%, 12/15/11 (c)(d) | 10,230,000 | 10,230,003 | ||||||
0.01%, 12/15/11 (c)(d) | 1,100,000 | 1,100,000 | ||||||
12,130,003 | ||||||||
Total Short-Term Investments | ||||||||
(Cost $182,670,166) | 182,670,166 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.1% of net assets | ||||||||
Invesco Short Term Investment Trust Government & Agency Portfolio | 10,781,362 | 10,781,362 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $10,781,362) | 10,781,362 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11, tax basis cost of the fund’s investments was $9,051,852,174 and the unrealized appreciation and depreciation were $3,227,324,321 and ($1,395,386,315), respectively, with a net unrealized appreciation of $1,831,938,006.
* | Non-income producing security. | |
(a) | All or a portion of this security is on loan. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | All or a portion of this security is held as collateral for open futures contracts. | |
(d) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 2,900 | 181,148,500 | 8,117,863 |
6 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .4% | Common Stock | 1,332,736,154 | 1,492,931,898 | ||||||||
0 | .0% | Rights | — | — | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .2% | Short-Term Investment | 2,705,000 | 2,705,000 | ||||||||
99 | .6% | Total Investments | 1,335,441,154 | 1,495,636,898 | ||||||||
2 | .7% | Collateral Invested for Securities on Loan | 40,423,756 | 40,423,756 | ||||||||
(2 | .3)% | Other Assets and Liabilities, Net | (34,384,644 | ) | ||||||||
100 | .0% | Net Assets | 1,501,676,010 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.4% of net assets | ||||||||
Automobiles & Components 0.6% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 111,900 | 1,084,311 | ||||||
Cooper Tire & Rubber Co. | 107,723 | 1,543,671 | ||||||
Dorman Products, Inc. * | 23,300 | 887,963 | ||||||
Drew Industries, Inc. | 33,200 | 797,796 | ||||||
Exide Technologies * | 134,600 | 605,700 | ||||||
Fuel Systems Solutions, Inc. * | 27,600 | 644,184 | ||||||
Modine Manufacturing Co. * | 81,000 | 856,170 | ||||||
Superior Industries International, Inc. | 42,700 | 780,983 | ||||||
Thor Industries, Inc. | 77,500 | 2,049,100 | ||||||
9,249,878 | ||||||||
Banks 6.3% | ||||||||
1st Source Corp. | 21,121 | 507,749 | ||||||
Astoria Financial Corp. | 155,200 | 1,288,160 | ||||||
BancFirst Corp. | 9,216 | 356,659 | ||||||
BancorpSouth, Inc. | 127,700 | 1,247,629 | ||||||
Bank of the Ozarks, Inc. | 44,600 | 1,109,202 | ||||||
Beneficial Mutual Bancorp, Inc. * | 60,203 | 494,267 | ||||||
Boston Private Financial Holdings, Inc. | 133,200 | 1,009,656 | ||||||
Brookline Bancorp, Inc. | 102,992 | 861,013 | ||||||
Capitol Federal Financial, Inc. | 243,900 | 2,704,851 | ||||||
Cathay General Bancorp | 129,522 | 1,812,013 | ||||||
Chemical Financial Corp. | 46,903 | 944,157 | ||||||
City Holding Co. | 26,300 | 864,218 | ||||||
Columbia Banking System, Inc. | 71,800 | 1,369,226 | ||||||
Community Bank System, Inc. | 65,200 | 1,666,512 | ||||||
Community Trust Bancorp, Inc. | 26,500 | 750,745 | ||||||
CVB Financial Corp. | 156,319 | 1,517,858 | ||||||
Dime Community Bancshares | 47,900 | 570,968 | ||||||
F.N.B. Corp. | 222,137 | 2,241,362 | ||||||
First Commonwealth Financial Corp. | 176,656 | 814,384 | ||||||
First Financial Bancorp | 100,989 | 1,656,220 | ||||||
First Financial Bankshares, Inc. (c) | 54,331 | 1,725,553 | ||||||
First Interstate BancSystem, Inc. | 33,500 | 423,440 | ||||||
First Midwest Bancorp, Inc. | 115,763 | 1,043,025 | ||||||
Flagstar Bancorp, Inc. * | 336,700 | 262,626 | ||||||
Glacier Bancorp, Inc. | 130,811 | 1,484,705 | ||||||
Hancock Holding Co. | 147,149 | 4,458,615 | ||||||
Home Bancshares, Inc. | 39,490 | 926,041 | ||||||
IBERIABANK Corp. | 45,800 | 2,368,776 | ||||||
Independent Bank Corp. | 38,500 | 997,920 | ||||||
International Bancshares Corp. | 95,400 | 1,728,648 | ||||||
Investors Bancorp, Inc. * | 86,400 | 1,199,232 | ||||||
Kearny Financial Corp. | 29,200 | 284,116 | ||||||
MB Financial, Inc. | 99,224 | 1,644,142 | ||||||
MGIC Investment Corp. * | 302,400 | 804,384 | ||||||
National Penn Bancshares, Inc. | 215,078 | 1,677,608 | ||||||
NBT Bancorp, Inc. | 59,985 | 1,290,877 | ||||||
Northfield Bancorp, Inc. (c) | 33,300 | 459,873 | ||||||
Northwest Bancshares, Inc. | 186,709 | 2,328,261 | ||||||
Ocwen Financial Corp. * | 152,000 | 2,204,000 | ||||||
Old National Bancorp | 177,883 | 2,058,106 | ||||||
Oriental Financial Group, Inc. | 80,500 | 852,495 | ||||||
Oritani Financial Corp. | 97,750 | 1,266,840 | ||||||
PacWest Bancorp | 58,516 | 1,032,222 | ||||||
Park National Corp. (c) | 20,953 | 1,251,104 | ||||||
Pinnacle Financial Partners, Inc. * | 60,632 | 910,086 | ||||||
PrivateBancorp, Inc. | 94,476 | 1,029,788 | ||||||
Prosperity Bancshares, Inc. | 86,400 | 3,325,536 | ||||||
Provident Financial Services, Inc. | 94,551 | 1,224,435 | ||||||
Radian Group, Inc. | 182,300 | 428,405 | ||||||
S&T Bancorp, Inc. | 43,681 | 815,524 | ||||||
Signature Bank * | 80,509 | 4,488,377 | ||||||
Simmons First National Corp., Class A | 28,700 | 745,052 | ||||||
Susquehanna Bancshares, Inc. | 243,608 | 1,768,594 | ||||||
Texas Capital Bancshares, Inc. * | 63,900 | 1,789,200 | ||||||
The PMI Group, Inc. (a)(b)* | 380,200 | 59,311 | ||||||
TrustCo Bank Corp. NY | 153,302 | 760,378 | ||||||
Trustmark Corp. | 102,477 | 2,268,841 | ||||||
UMB Financial Corp. | 52,000 | 1,917,240 | ||||||
Umpqua Holdings Corp. | 213,195 | 2,441,083 | ||||||
United Bankshares, Inc. (c) | 78,222 | 1,856,990 | ||||||
Washington Federal, Inc. | 195,700 | 2,671,305 | ||||||
Webster Financial Corp. | 138,200 | 2,714,248 | ||||||
WesBanco, Inc. | 46,698 | 927,422 | ||||||
Westamerica Bancorp | 50,600 | 2,267,892 | ||||||
Western Alliance Bancorp * | 121,900 | 792,350 | ||||||
Wintrust Financial Corp. | 60,955 | 1,760,380 | ||||||
94,521,895 | ||||||||
Capital Goods 9.8% | ||||||||
3D Systems Corp. * | 71,300 | 1,160,051 | ||||||
A.O. Smith Corp. | 63,195 | 2,348,326 | ||||||
A123 Systems, Inc. (c)* | 136,200 | 467,166 |
See financial notes 17
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AAON, Inc. | 34,650 | 733,540 | ||||||
AAR CORP. | 71,597 | 1,426,928 | ||||||
Actuant Corp., Class A | 127,848 | 2,876,580 | ||||||
Aegion Corp. * | 71,500 | 1,057,485 | ||||||
Aerovironment, Inc. * | 24,400 | 805,932 | ||||||
Aircastle Ltd. | 80,100 | 971,613 | ||||||
Albany International Corp., Class A | 48,200 | 1,088,838 | ||||||
Altra Holdings, Inc. * | 46,500 | 683,550 | ||||||
American Science & Engineering, Inc. | 15,700 | 1,067,914 | ||||||
American Superconductor Corp. (c)* | 42,500 | 185,300 | ||||||
Applied Industrial Technologies, Inc. | 68,466 | 2,301,827 | ||||||
Astec Industries, Inc. * | 35,595 | 1,183,534 | ||||||
AZZ, Inc. | 22,600 | 1,009,316 | ||||||
Barnes Group, Inc. | 86,440 | 2,011,459 | ||||||
Beacon Roofing Supply, Inc. * | 79,382 | 1,463,010 | ||||||
Belden, Inc. | 83,200 | 2,685,696 | ||||||
Blount International, Inc. * | 83,662 | 1,299,271 | ||||||
Brady Corp., Class A | 92,429 | 2,839,419 | ||||||
Briggs & Stratton Corp. | 79,293 | 1,157,678 | ||||||
Cascade Corp. | 16,000 | 689,600 | ||||||
Ceradyne, Inc. * | 43,612 | 1,459,257 | ||||||
Chart Industries, Inc. * | 51,200 | 2,893,312 | ||||||
CIRCOR International, Inc. | 30,600 | 1,065,492 | ||||||
Colfax Corp. (c)* | 60,400 | 1,525,704 | ||||||
Comfort Systems USA, Inc. | 70,700 | 777,700 | ||||||
Commercial Vehicle Group, Inc. * | 40,200 | 443,406 | ||||||
Cubic Corp. | 28,515 | 1,343,627 | ||||||
Curtiss-Wright Corp. | 83,400 | 2,733,852 | ||||||
DigitalGlobe, Inc. * | 80,000 | 1,632,000 | ||||||
Dycom Industries, Inc. * | 61,100 | 1,187,173 | ||||||
EMCOR Group, Inc. | 124,200 | 3,113,694 | ||||||
Encore Wire Corp. | 31,541 | 838,360 | ||||||
EnerSys * | 87,678 | 1,975,385 | ||||||
EnPro Industries, Inc. * | 36,200 | 1,246,728 | ||||||
ESCO Technologies, Inc. | 48,669 | 1,487,811 | ||||||
Franklin Electric Co., Inc. | 32,718 | 1,502,411 | ||||||
GATX Corp. | 86,100 | 3,270,078 | ||||||
Generac Holdings, Inc. * | 44,600 | 1,019,556 | ||||||
General Cable Corp. * | 95,500 | 2,677,820 | ||||||
GeoEye, Inc. * | 38,400 | 1,289,088 | ||||||
Granite Construction, Inc. | 61,900 | 1,392,750 | ||||||
Great Lakes Dredge & Dock Co. | 102,100 | 525,815 | ||||||
Griffon Corp. * | 77,421 | 733,177 | ||||||
HEICO Corp. | 64,356 | 3,669,579 | ||||||
Hexcel Corp. * | 180,083 | 4,449,851 | ||||||
II-VI, Inc. * | 88,400 | 1,680,484 | ||||||
Interline Brands, Inc. * | 57,534 | 857,257 | ||||||
John Bean Technologies Corp. | 49,900 | 805,386 | ||||||
Kaman Corp. | 46,549 | 1,547,754 | ||||||
Kaydon Corp. | 59,535 | 1,872,971 | ||||||
Layne Christensen Co. * | 33,911 | 854,218 | ||||||
Lindsay Corp. | 19,800 | 1,150,380 | ||||||
MasTec, Inc. * | 97,573 | 2,109,528 | ||||||
Meritor, Inc. * | 163,700 | 1,558,424 | ||||||
Moog, Inc., Class A * | 81,500 | 3,156,495 | ||||||
Mueller Industries, Inc. | 70,324 | 2,844,606 | ||||||
Mueller Water Products, Inc., Class A | 243,100 | 668,525 | ||||||
NACCO Industries, Inc., Class A | 10,777 | 884,792 | ||||||
National Presto Industries, Inc. | 8,600 | 821,300 | ||||||
Orbital Sciences Corp. * | 100,836 | 1,558,925 | ||||||
Polypore International, Inc. * | 59,400 | 3,115,530 | ||||||
Powell Industries, Inc. * | 16,000 | 537,760 | ||||||
Quanex Building Products Corp. | 67,404 | 994,209 | ||||||
Raven Industries, Inc. | 31,500 | 1,890,315 | ||||||
RBC Bearings, Inc. * | 37,300 | 1,510,650 | ||||||
Robbins & Myers, Inc. | 83,000 | 3,709,270 | ||||||
RSC Holdings, Inc. * | 104,400 | 1,018,944 | ||||||
Rush Enterprises, Inc., Class A * | 58,987 | 1,138,449 | ||||||
Satcon Technology Corp. (c)* | 70,900 | 75,154 | ||||||
Sauer-Danfoss, Inc. * | 20,200 | 782,144 | ||||||
Simpson Manufacturing Co., Inc. | 70,694 | 2,167,478 | ||||||
Sun Hydraulics Corp. | 44,250 | 1,272,630 | ||||||
TAL International Group, Inc. | 39,100 | 1,088,153 | ||||||
Teledyne Technologies, Inc. * | 67,200 | 3,660,384 | ||||||
Tennant Co. | 35,700 | 1,381,233 | ||||||
The Gorman-Rupp Co. | 26,625 | 715,414 | ||||||
The Greenbrier Cos., Inc. * | 43,300 | 805,813 | ||||||
The Manitowoc Co., Inc. | 233,200 | 2,583,856 | ||||||
The Middleby Corp. * | 33,052 | 2,785,623 | ||||||
The Toro Co. | 55,135 | 2,979,495 | ||||||
Titan International, Inc. | 73,600 | 1,656,000 | ||||||
Tredegar Corp. | 39,900 | 772,863 | ||||||
TriMas Corp. * | 48,600 | 947,214 | ||||||
Tutor Perini Corp. | 44,230 | 642,662 | ||||||
United Rentals, Inc. * | 115,200 | 2,696,832 | ||||||
Universal Forest Products, Inc. | 35,562 | 998,225 | ||||||
USG Corp. (c)* | 149,400 | 1,383,444 | ||||||
Vicor Corp. | 34,100 | 312,015 | ||||||
Wabash National Corp. * | 118,800 | 819,720 | ||||||
Watsco, Inc. | 50,400 | 3,107,664 | ||||||
Watts Water Technologies, Inc., Class A | 50,907 | 1,603,061 | ||||||
147,290,908 | ||||||||
Commercial & Professional Supplies 4.1% | ||||||||
ABM Industries, Inc. | 85,809 | 1,735,058 | ||||||
Acacia Research * | 66,200 | 2,637,408 | ||||||
Acco Brands Corp. * | 100,400 | 689,748 | ||||||
Consolidated Graphics, Inc. * | 17,100 | 779,076 | ||||||
CoStar Group, Inc. * | 45,083 | 2,773,957 | ||||||
Deluxe Corp. | 92,646 | 2,188,298 | ||||||
EnergySolutions, Inc. * | 136,500 | 514,605 | ||||||
EnerNOC, Inc. (c)* | 22,700 | 201,349 | ||||||
Exponent, Inc. * | 25,300 | 1,218,954 | ||||||
FTI Consulting, Inc. * | 80,800 | 3,184,328 | ||||||
G & K Services, Inc., Class A | 32,530 | 987,611 | ||||||
Healthcare Services Group, Inc. | 119,925 | 2,080,699 | ||||||
Heidrick & Struggles International, Inc. | 24,100 | 476,698 | ||||||
Herman Miller, Inc. | 106,100 | 2,190,965 | ||||||
Higher One Holdings, Inc. (c)* | 29,400 | 518,616 | ||||||
HNI Corp. | 78,700 | 1,892,735 | ||||||
Huron Consulting Group, Inc. * | 37,500 | 1,350,375 | ||||||
ICF International, Inc. * | 33,700 | 787,906 | ||||||
Insperity, Inc. | 42,810 | 1,103,642 | ||||||
Interface, Inc., Class A | 111,800 | 1,457,872 | ||||||
KAR Auction Services, Inc. * | 58,800 | 808,500 | ||||||
Kelly Services, Inc., Class A | 51,223 | 837,496 | ||||||
Kforce, Inc. * | 59,400 | 757,944 |
18 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Knoll, Inc. | 86,303 | 1,316,121 | ||||||
Korn/Ferry International * | 84,161 | 1,344,051 | ||||||
M&F Worldwide Corp. * | 19,070 | 472,173 | ||||||
McGrath Rentcorp | 41,098 | 1,098,139 | ||||||
Mine Safety Appliances Co. | 55,589 | 1,865,011 | ||||||
Mobile Mini, Inc. * | 79,668 | 1,445,178 | ||||||
Navigant Consulting, Inc. * | 91,948 | 1,041,771 | ||||||
Quad Graphics, Inc. | 40,000 | 788,800 | ||||||
Resources Connection, Inc. | 79,350 | 879,991 | ||||||
Schawk, Inc. | 17,700 | 238,773 | ||||||
Steelcase, Inc., Class A | 137,642 | 1,019,927 | ||||||
Sykes Enterprises, Inc. * | 70,893 | 1,129,325 | ||||||
Team, Inc. * | 33,000 | 825,330 | ||||||
Tetra Tech, Inc. * | 108,700 | 2,372,921 | ||||||
The Advisory Board Co. * | 27,176 | 1,664,530 | ||||||
The Brink’s Co. | 80,700 | 2,242,653 | ||||||
The Corporate Executive Board Co. | 59,600 | 2,180,764 | ||||||
The Geo Group, Inc. * | 120,700 | 2,200,361 | ||||||
TrueBlue, Inc. * | 80,576 | 1,065,215 | ||||||
UniFirst Corp. | 26,335 | 1,378,637 | ||||||
United Stationers, Inc. | 81,134 | 2,580,873 | ||||||
Viad Corp. | 33,896 | 709,443 | ||||||
61,033,827 | ||||||||
Consumer Durables & Apparel 2.4% | ||||||||
American Greetings Corp., Class A | 76,311 | 1,221,739 | ||||||
Brunswick Corp. | 166,000 | 2,931,560 | ||||||
Callaway Golf Co. | 108,369 | 629,624 | ||||||
Carter’s, Inc. * | 94,414 | 3,596,229 | ||||||
Crocs, Inc. * | 162,000 | 2,862,540 | ||||||
Eastman Kodak Co. (c)* | 367,500 | 407,925 | ||||||
Ethan Allen Interiors, Inc. | 49,979 | 989,584 | ||||||
G-III Apparel Group Ltd. * | 26,600 | 749,854 | ||||||
Helen of Troy Ltd. * | 54,100 | 1,565,113 | ||||||
Iconix Brand Group, Inc. * | 127,900 | 2,295,805 | ||||||
iRobot Corp. * | 39,800 | 1,347,628 | ||||||
JAKKS Pacific, Inc. | 48,000 | 910,560 | ||||||
KB HOME | 110,500 | 770,185 | ||||||
M.D.C. Holdings, Inc. | 65,600 | 1,469,440 | ||||||
Maidenform Brands, Inc. * | 40,700 | 1,000,406 | ||||||
Meritage Homes Corp. * | 42,785 | 759,434 | ||||||
Quiksilver, Inc. * | 225,200 | 754,420 | ||||||
Skechers U.S.A., Inc., Class A * | 61,478 | 876,676 | ||||||
Standard Pacific Corp. * | 179,000 | 544,160 | ||||||
Steven Madden Ltd. * | 61,200 | 2,258,280 | ||||||
The Jones Group, Inc. | 157,100 | 1,754,807 | ||||||
The Ryland Group, Inc. | 66,800 | 901,800 | ||||||
True Religion Apparel, Inc. * | 46,600 | 1,580,672 | ||||||
Wolverine World Wide, Inc. | 86,736 | 3,289,897 | ||||||
35,468,338 | ||||||||
Consumer Services 5.1% | ||||||||
American Public Education, Inc. * | 33,500 | 1,199,635 | ||||||
Ameristar Casinos, Inc. | 53,975 | 998,537 | ||||||
Ascent Capital Group, Inc., Class A * | 25,200 | 1,146,348 | ||||||
Biglari Holdings, Inc. * | 2,600 | 897,312 | ||||||
BJ’s Restaurants, Inc. * | 38,900 | 2,058,977 | ||||||
Bob Evans Farms, Inc. | 51,646 | 1,699,153 | ||||||
Boyd Gaming Corp. (c)* | 93,600 | 606,528 | ||||||
Bridgepoint Education, Inc. (c)* | 33,300 | 721,611 | ||||||
Brinker International, Inc. | 147,200 | 3,370,880 | ||||||
Buffalo Wild Wings, Inc. * | 31,900 | 2,112,418 | ||||||
Capella Education Co. * | 28,800 | 1,002,528 | ||||||
Career Education Corp. * | 114,400 | 1,845,272 | ||||||
CEC Entertainment, Inc. | 35,738 | 1,130,035 | ||||||
Churchill Downs, Inc. | 20,261 | 973,946 | ||||||
Coinstar, Inc. (c)* | 58,100 | 2,773,694 | ||||||
Corinthian Colleges, Inc. (c)* | 81,100 | 154,901 | ||||||
Cracker Barrel Old Country Store, Inc. | 42,053 | 1,782,627 | ||||||
DineEquity, Inc. * | 27,800 | 1,305,488 | ||||||
Domino’s Pizza, Inc. * | 94,579 | 3,029,365 | ||||||
Gaylord Entertainment Co. * | 86,235 | 2,017,037 | ||||||
Grand Canyon Education, Inc. * | 50,900 | 830,179 | ||||||
Hillenbrand, Inc. | 111,800 | 2,360,098 | ||||||
International Speedway Corp., Class A | 50,400 | 1,202,544 | ||||||
Interval Leisure Group, Inc. * | 72,800 | 1,005,368 | ||||||
Jack in the Box, Inc. * | 91,988 | 1,893,113 | ||||||
K12, Inc. * | 60,800 | 2,131,040 | ||||||
Krispy Kreme Doughnuts, Inc. * | 117,300 | 828,138 | ||||||
LIFE TIME FITNESS, Inc. * | 74,877 | 3,229,445 | ||||||
Matthews International Corp., Class A | 50,984 | 1,791,578 | ||||||
Orient-Express Hotels Ltd., Class A * | 163,400 | 1,393,802 | ||||||
P.F. Chang’s China Bistro, Inc. | 40,742 | 1,267,076 | ||||||
Papa John’s International, Inc. * | 34,955 | 1,180,081 | ||||||
Peet’s Coffee & Tea, Inc. * | 23,900 | 1,522,908 | ||||||
Pinnacle Entertainment, Inc. * | 107,285 | 1,214,466 | ||||||
Regis Corp. | 103,049 | 1,685,882 | ||||||
Ruby Tuesday, Inc. * | 118,600 | 995,054 | ||||||
Scientific Games Corp., Class A * | 103,000 | 895,070 | ||||||
Shuffle Master, Inc. * | 98,600 | 1,046,146 | ||||||
Six Flags Entertainment Corp. | 100,000 | 3,590,000 | ||||||
Sonic Corp. * | 89,529 | 663,410 | ||||||
Speedway Motorsports, Inc. | 21,584 | 280,592 | ||||||
Steiner Leisure Ltd. * | 25,809 | 1,243,478 | ||||||
Stewart Enterprises, Inc., Class A | 144,000 | 927,360 | ||||||
Strayer Education, Inc. | 23,600 | 2,010,956 | ||||||
Texas Roadhouse, Inc. | 101,096 | 1,448,706 | ||||||
The Cheesecake Factory, Inc. * | 103,000 | 2,882,970 | ||||||
The Wendy’s Co. | 559,600 | 2,831,576 | ||||||
Universal Technical Institute, Inc. * | 38,600 | 551,208 | ||||||
Vail Resorts, Inc. | 62,571 | 2,788,164 | ||||||
76,516,700 | ||||||||
Diversified Financials 2.4% | ||||||||
BGC Partners, Inc., Class A | 135,000 | 924,750 | ||||||
BlackRock Kelso Capital Corp. | 91,300 | 779,702 | ||||||
Cash America International, Inc. | 53,170 | 2,911,057 | ||||||
Cohen & Steers, Inc. | 30,628 | 832,163 | ||||||
Credit Acceptance Corp. * | 16,500 | 1,137,180 | ||||||
DFC Global Corp. * | 78,800 | 1,727,296 | ||||||
Duff & Phelps Corp., Class A | 51,300 | 650,997 | ||||||
Encore Capital Group, Inc. * | 24,700 | 669,123 | ||||||
Evercore Partners, Inc., Class A | 31,200 | 856,128 | ||||||
EZCORP, Inc., Class A * | 89,500 | 2,486,310 | ||||||
Fifth Street Finance Corp. | 139,100 | 1,371,526 |
See financial notes 19
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Financial Engines, Inc. * | 56,100 | 1,274,031 | ||||||
First Cash Financial Services, Inc. * | 55,100 | 2,286,650 | ||||||
GAMCO Investors, Inc., Class A | 8,700 | 409,770 | ||||||
GFI Group, Inc. | 92,868 | 401,190 | ||||||
Interactive Brokers Group, Inc., Class A | 72,700 | 1,118,126 | ||||||
Investment Technology Group, Inc. * | 71,265 | 813,134 | ||||||
KBW, Inc. | 47,000 | 665,520 | ||||||
Knight Capital Group, Inc., Class A * | 179,000 | 2,235,710 | ||||||
MarketAxess Holdings, Inc. | 65,260 | 1,907,550 | ||||||
MCG Capital Corp. | 136,200 | 631,968 | ||||||
MF Global Holdings Ltd. (a)(b)* | 283,600 | 68,064 | ||||||
Nelnet, Inc., Class A | 35,600 | 764,688 | ||||||
NewStar Financial, Inc. * | 46,600 | 499,552 | ||||||
PHH Corp. * | 99,363 | 1,833,247 | ||||||
PICO Holdings, Inc. * | 41,600 | 950,144 | ||||||
Piper Jaffray Cos., Inc. * | 29,439 | 611,154 | ||||||
Portfolio Recovery Associates, Inc. * | 29,643 | 2,079,160 | ||||||
Prospect Capital Corp. | 188,900 | 1,807,773 | ||||||
World Acceptance Corp. * | 27,200 | 1,840,080 | ||||||
36,543,743 | ||||||||
Energy 5.4% | ||||||||
Apco Oil & Gas International, Inc. | 15,900 | 1,319,700 | ||||||
Approach Resources, Inc. (c)* | 47,400 | 1,157,034 | ||||||
ATP Oil & Gas Corp. (c)* | 70,100 | 739,555 | ||||||
Basic Energy Services, Inc. * | 51,600 | 946,344 | ||||||
Bill Barrett Corp. * | 84,200 | 3,502,720 | ||||||
BPZ Resources, Inc. (c)* | 129,900 | 388,401 | ||||||
Bristow Group, Inc. | 67,087 | 3,339,591 | ||||||
Cal Dive International, Inc. * | 115,700 | 259,168 | ||||||
Carrizo Oil & Gas, Inc. * | 64,200 | 1,746,240 | ||||||
Clayton Williams Energy, Inc. * | 11,000 | 718,740 | ||||||
Clean Energy Fuels Corp. (c)* | 81,700 | 965,694 | ||||||
Cloud Peak Energy, Inc. * | 106,500 | 2,444,175 | ||||||
Comstock Resources, Inc. * | 82,300 | 1,501,152 | ||||||
Contango Oil & Gas Co. * | 23,200 | 1,492,688 | ||||||
CVR Energy, Inc. * | 139,600 | 3,456,496 | ||||||
Energy Partners Ltd. * | 62,700 | 899,118 | ||||||
Energy XXI (Bermuda) Ltd. * | 130,700 | 3,838,659 | ||||||
Exterran Holdings, Inc. * | 100,900 | 958,550 | ||||||
GeoResources, Inc. * | 30,800 | 817,432 | ||||||
Global Industries Ltd. * | 174,282 | 1,385,542 | ||||||
Goodrich Petroleum Corp. (c)* | 44,700 | 708,495 | ||||||
GulfMark Offshore, Inc., Class A * | 44,800 | 1,863,232 | ||||||
Gulfport Energy Corp. * | 70,600 | 2,198,484 | ||||||
Helix Energy Solutions Group, Inc. * | 194,300 | 3,509,058 | ||||||
Hornbeck Offshore Services, Inc. * | 40,445 | 1,328,214 | ||||||
Houston American Energy Corp. (c) | 28,600 | 447,876 | ||||||
Hyperdynamics Corp. (c)* | 271,400 | 1,329,860 | ||||||
ION Geophysical Corp. * | 268,900 | 2,049,018 | ||||||
James River Coal Co. * | 62,100 | 642,735 | ||||||
Key Energy Services, Inc. * | 243,600 | 3,149,748 | ||||||
Knightsbridge Tankers Ltd. (c) | 41,400 | 698,832 | ||||||
Lufkin Industries, Inc. | 55,090 | 3,255,268 | ||||||
Magnum Hunter Resources Corp. * | 197,000 | 886,500 | ||||||
Newpark Resources, Inc. * | 157,210 | 1,403,885 | ||||||
Nordic American Tanker Shipping Ltd. (c) | 83,000 | 1,196,860 | ||||||
Northern Oil & Gas, Inc. * | 101,300 | 2,448,421 | ||||||
Overseas Shipholding Group, Inc. | 36,800 | 459,264 | ||||||
OYO Geospace Corp. * | 7,600 | 597,208 | ||||||
Parker Drilling Co. * | 203,165 | 1,123,502 | ||||||
Penn Virginia Corp. | 68,878 | 419,467 | ||||||
Petroleum Development Corp. * | 37,203 | 971,370 | ||||||
PetroQuest Energy, Inc. * | 78,000 | 568,620 | ||||||
Pioneer Drilling Co. * | 116,500 | 1,152,185 | ||||||
Rex Energy Corp. * | 54,300 | 840,564 | ||||||
Rosetta Resources, Inc. * | 96,500 | 4,278,810 | ||||||
SemGroup Corp. * | 72,200 | 2,020,156 | ||||||
Stone Energy Corp. * | 82,168 | 1,995,861 | ||||||
Swift Energy Co. * | 75,001 | 2,296,531 | ||||||
TETRA Technologies, Inc. * | 135,774 | 1,289,853 | ||||||
USEC, Inc. * | 214,023 | 449,448 | ||||||
Vantage Drilling Co. * | 341,800 | 464,848 | ||||||
Venoco, Inc. * | 38,600 | 375,964 | ||||||
W&T Offshore, Inc. | 63,200 | 1,244,408 | ||||||
Western Refining, Inc. * | 98,322 | 1,571,186 | ||||||
Willbros Group, Inc. * | 57,200 | 291,148 | ||||||
81,403,878 | ||||||||
Food & Staples Retailing 1.3% | ||||||||
Casey’s General Stores, Inc. | 68,000 | 3,369,400 | ||||||
Ingles Markets, Inc., Class A | 23,631 | 356,828 | ||||||
Nash Finch Co. | 22,900 | 602,728 | ||||||
PriceSmart, Inc. | 29,900 | 2,273,596 | ||||||
Rite Aid Corp. * | 1,101,400 | 1,277,624 | ||||||
Ruddick Corp. | 75,100 | 3,282,621 | ||||||
SUPERVALU, Inc. | 368,900 | 2,958,578 | ||||||
The Andersons, Inc. | 34,500 | 1,273,740 | ||||||
United Natural Foods, Inc. * | 87,482 | 3,193,968 | ||||||
Weis Markets, Inc. | 20,000 | 791,000 | ||||||
19,380,083 | ||||||||
Food, Beverage & Tobacco 2.4% | ||||||||
B&G Foods, Inc. | 87,100 | 1,848,262 | ||||||
Cal-Maine Foods, Inc. (c) | 22,300 | 743,036 | ||||||
Central European Distribution Corp. (c)* | 106,900 | 577,260 | ||||||
Chiquita Brands International, Inc. * | 79,302 | 704,202 | ||||||
Coca-Cola Bottling Co. Consolidated | 3,700 | 207,644 | ||||||
Darling International, Inc. * | 209,500 | 2,937,190 | ||||||
Dean Foods Co. * | 338,300 | 3,288,276 | ||||||
Diamond Foods, Inc. (c) | 39,000 | 2,564,250 | ||||||
Dole Food Co., Inc. * | 65,900 | 697,222 | ||||||
Fresh Del Monte Produce, Inc. | 70,300 | 1,789,838 | ||||||
J & J Snack Foods Corp. | 24,900 | 1,284,093 | ||||||
Lancaster Colony Corp. | 33,400 | 2,221,768 | ||||||
National Beverage Corp. | 18,401 | 311,345 | ||||||
Pilgrim’s Pride Corp. * | 134,100 | 675,864 | ||||||
Sanderson Farms, Inc. | 35,700 | 1,767,150 | ||||||
Snyders-Lance, Inc. | 89,000 | 1,888,580 |
20 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Boston Beer Co., Inc., Class A (c)* | 15,600 | 1,380,288 | ||||||
The Hain Celestial Group, Inc. * | 75,531 | 2,534,820 | ||||||
Tootsie Roll Industries, Inc. | 42,895 | 1,062,509 | ||||||
TreeHouse Foods, Inc. * | 63,600 | 3,901,224 | ||||||
Universal Corp. | 40,945 | 1,753,265 | ||||||
Vector Group Ltd. (c) | 102,041 | 1,792,860 | ||||||
35,930,946 | ||||||||
Health Care Equipment & Services 7.2% | ||||||||
Abaxis, Inc. * | 40,500 | 1,136,430 | ||||||
Accretive Health, Inc. (c)* | 57,900 | 1,378,599 | ||||||
Air Methods Corp. * | 20,100 | 1,624,482 | ||||||
Align Technology, Inc. * | 120,000 | 2,763,600 | ||||||
Amedisys, Inc. * | 41,100 | 539,643 | ||||||
AmSurg Corp. * | 55,300 | 1,400,749 | ||||||
Analogic Corp. | 22,254 | 1,203,496 | ||||||
ArthroCare Corp. * | 47,800 | 1,441,170 | ||||||
athenahealth, Inc. * | 61,000 | 3,227,510 | ||||||
Bio-Reference Laboratories, Inc. * | 41,400 | 829,656 | ||||||
Catalyst Health Solutions, Inc. * | 90,100 | 4,952,797 | ||||||
Centene Corp. * | 88,092 | 3,096,434 | ||||||
Chemed Corp. | 40,100 | 2,380,336 | ||||||
Computer Programs & Systems, Inc. | 18,800 | 960,116 | ||||||
CONMED Corp. * | 51,500 | 1,352,905 | ||||||
CorVel Corp. * | 10,300 | 531,171 | ||||||
Cyberonics, Inc. * | 42,800 | 1,232,640 | ||||||
Dexcom, Inc. * | 117,000 | 1,145,430 | ||||||
Emdeon, Inc., Class A * | 42,200 | 800,534 | ||||||
Emeritus Corp. * | 47,800 | 846,538 | ||||||
Ensign Group, Inc. | 22,800 | 518,928 | ||||||
Gentiva Health Services, Inc. * | 21,396 | 88,579 | ||||||
Greatbatch, Inc. * | 41,000 | 915,530 | ||||||
Haemonetics Corp. * | 44,600 | 2,718,370 | ||||||
Hanger Orthopedic Group, Inc. * | 58,300 | 1,012,671 | ||||||
Healthspring, Inc. * | 123,844 | 6,680,145 | ||||||
HeartWare International, Inc. * | 12,400 | 842,332 | ||||||
HMS Holdings Corp. * | 156,000 | 3,812,640 | ||||||
ICU Medical, Inc. * | 20,800 | 817,648 | ||||||
Insulet Corp. * | 80,800 | 1,318,656 | ||||||
Integra LifeSciences Holdings * | 38,348 | 1,229,437 | ||||||
Invacare Corp. | 56,911 | 1,277,652 | ||||||
IPC The Hospitalist Co. * | 28,300 | 1,186,619 | ||||||
Kindred Healthcare, Inc. * | 93,275 | 1,086,654 | ||||||
Landauer, Inc. | 16,700 | 855,875 | ||||||
LHC Group, Inc. * | 26,400 | 414,216 | ||||||
LifePoint Hospitals, Inc. * | 91,600 | 3,541,256 | ||||||
Magellan Health Services, Inc. * | 58,300 | 3,000,701 | ||||||
MAKO Surgical Corp. (c)* | 59,700 | 2,295,465 | ||||||
Masimo Corp. | 110,700 | 2,289,276 | ||||||
MedAssets, Inc. * | 80,500 | 858,130 | ||||||
Medidata Solutions, Inc. * | 33,500 | 602,330 | ||||||
Meridian Bioscience, Inc. | 72,150 | 1,314,573 | ||||||
Molina Healthcare, Inc. * | 44,100 | 934,038 | ||||||
MWI Veterinary Supply, Inc. * | 22,500 | 1,698,750 | ||||||
National Healthcare Corp. | 13,688 | 524,387 | ||||||
Neogen Corp. * | 40,950 | 1,582,718 | ||||||
NuVasive, Inc. * | 70,300 | 1,041,846 | ||||||
NxStage Medical, Inc. * | 67,800 | 1,558,722 | ||||||
Omnicell, Inc. * | 58,300 | 871,585 | ||||||
Orthofix International N.V. * | 30,800 | 1,081,388 | ||||||
Owens & Minor, Inc. | 117,500 | 3,515,600 | ||||||
PSS World Medical, Inc. * | 97,066 | 2,159,718 | ||||||
Select Medical Holdings Corp. * | 80,700 | 702,090 | ||||||
SonoSite, Inc. * | 23,800 | 737,562 | ||||||
Team Health Holdings, Inc. * | 29,200 | 593,344 | ||||||
Thoratec Corp. * | 101,700 | 3,713,067 | ||||||
Triple-S Management Corp., Class B * | 37,900 | 720,100 | ||||||
Universal American Corp. * | 86,602 | 995,923 | ||||||
VCA Antech, Inc. * | 160,700 | 3,265,424 | ||||||
Volcano Corp. * | 96,900 | 2,415,717 | ||||||
WellCare Health Plans, Inc. * | 74,600 | 3,656,146 | ||||||
West Pharmaceutical Services, Inc. | 58,465 | 2,272,535 | ||||||
Wright Medical Group, Inc. * | 69,300 | 1,191,267 | ||||||
Zoll Medical Corp. * | 37,700 | 1,425,437 | ||||||
108,179,283 | ||||||||
Household & Personal Products 0.8% | ||||||||
Central Garden & Pet Co., Class A * | 94,700 | 832,413 | ||||||
Elizabeth Arden, Inc. * | 42,598 | 1,460,259 | ||||||
Inter Parfums, Inc. | 26,000 | 479,440 | ||||||
Nu Skin Enterprises, Inc., Class A | 93,622 | 4,730,720 | ||||||
Prestige Brands Holdings, Inc. * | 87,000 | 920,460 | ||||||
Revlon, Inc., Class A * | 22,402 | 329,981 | ||||||
Spectrum Brands Holdings, Inc. * | 31,246 | 793,024 | ||||||
Synutra International, Inc. (c)* | 32,900 | 218,785 | ||||||
USANA Health Sciences, Inc. * | 11,700 | 404,820 | ||||||
WD-40 Co. | 29,500 | 1,298,590 | ||||||
11,468,492 | ||||||||
Insurance 3.2% | ||||||||
American Equity Investment Life Holding Co. | 107,264 | 1,162,742 | ||||||
AmTrust Financial Services, Inc. | 40,705 | 1,033,093 | ||||||
Argo Group International Holdings Ltd. | 54,338 | 1,640,464 | ||||||
CNO Financial Group, Inc. * | 465,800 | 2,911,250 | ||||||
Delphi Financial Group, Inc., Class A | 95,680 | 2,533,606 | ||||||
Employers Holdings, Inc. | 69,300 | 1,124,046 | ||||||
Enstar Group Ltd. * | 13,894 | 1,277,831 | ||||||
FBL Financial Group, Inc., Class A | 27,168 | 887,035 | ||||||
First American Financial Corp. | 183,600 | 2,203,200 | ||||||
Flagstone Reinsurance Holdings S.A. | 80,829 | 686,238 | ||||||
Global Indemnity plc * | 22,055 | 445,291 | ||||||
Greenlight Capital Re Ltd., Class A * | 49,389 | 1,112,734 | ||||||
Harleysville Group, Inc. | 21,063 | 1,237,662 | ||||||
Hilltop Holdings, Inc. * | 73,739 | 581,063 | ||||||
Horace Mann Educators Corp. | 68,378 | 919,684 | ||||||
Infinity Property & Casualty Corp. | 21,792 | 1,263,064 | ||||||
Kemper Corp. | 88,100 | 2,369,009 | ||||||
Maiden Holdings Ltd. | 90,400 | 736,760 | ||||||
Meadowbrook Insurance Group, Inc. | 91,800 | 951,048 | ||||||
Montpelier Re Holdings Ltd. | 115,000 | 2,012,500 | ||||||
National Financial Partners Corp. * | 75,900 | 1,037,553 |
See financial notes 21
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
National Western Life Insurance Co., Class A | 4,494 | 646,102 | ||||||
OneBeacon Insurance Group Ltd., Class A | 46,200 | 703,164 | ||||||
Platinum Underwriters Holdings Ltd. | 68,300 | 2,365,229 | ||||||
Primerica, Inc. | 95,600 | 2,163,428 | ||||||
ProAssurance Corp. | 56,000 | 4,286,800 | ||||||
RLI Corp. | 29,455 | 2,071,865 | ||||||
Safety Insurance Group, Inc. | 26,870 | 1,145,199 | ||||||
Selective Insurance Group, Inc. | 94,614 | 1,516,663 | ||||||
State Auto Financial Corp. | 26,600 | 353,514 | ||||||
Symetra Financial Corp. | 133,600 | 1,238,472 | ||||||
The Navigators Group, Inc. * | 22,485 | 1,025,766 | ||||||
Tower Group, Inc. | 74,065 | 1,757,563 | ||||||
United Fire & Casualty Co. | 37,200 | 699,732 | ||||||
48,099,370 | ||||||||
Materials 5.1% | ||||||||
A. Schulman, Inc. | 57,609 | 1,216,126 | ||||||
AK Steel Holding Corp. (c) | 191,300 | 1,593,529 | ||||||
AMCOL International Corp. | 45,652 | 1,378,234 | ||||||
Balchem Corp. | 51,500 | 1,898,805 | ||||||
Boise, Inc. | 214,400 | 1,297,120 | ||||||
Buckeye Technologies, Inc. | 71,300 | 2,156,112 | ||||||
Calgon Carbon Corp. * | 96,700 | 1,542,365 | ||||||
Carpenter Technology Corp. | 77,400 | 4,390,128 | ||||||
Century Aluminum Co. * | 110,500 | 1,233,180 | ||||||
Chemtura Corp. * | 179,500 | 2,179,130 | ||||||
Clearwater Paper Corp. * | 41,800 | 1,384,834 | ||||||
Coeur d’Alene Mines Corp. * | 156,650 | 4,005,541 | ||||||
Commercial Metals Co. | 215,000 | 2,672,450 | ||||||
Deltic Timber Corp. | 19,104 | 1,293,150 | ||||||
Eagle Materials, Inc. | 71,990 | 1,481,554 | ||||||
Ferro Corp. * | 160,800 | 1,040,376 | ||||||
Georgia Gulf Corp. * | 59,100 | 1,069,710 | ||||||
Globe Specialty Metals, Inc. | 105,400 | 1,757,018 | ||||||
Graphic Packaging Holding Co. * | 217,415 | 960,974 | ||||||
H.B. Fuller Co. | 88,616 | 1,904,358 | ||||||
Hawkins, Inc. | 14,900 | 570,372 | ||||||
Haynes International, Inc. | 20,625 | 1,206,356 | ||||||
Horsehead Holding Corp. * | 79,700 | 691,796 | ||||||
Innophos Holdings, Inc. | 37,300 | 1,640,827 | ||||||
Innospec, Inc. * | 41,400 | 1,250,280 | ||||||
Kaiser Aluminum Corp. | 25,850 | 1,200,991 | ||||||
KapStone Paper & Packaging Corp. * | 66,400 | 1,088,960 | ||||||
Koppers Holdings, Inc. | 36,500 | 1,207,785 | ||||||
Kraton Performance Polymers, Inc. * | 54,300 | 1,068,624 | ||||||
Louisiana-Pacific Corp. * | 229,100 | 1,523,515 | ||||||
LSB Industries, Inc. * | 28,300 | 1,002,669 | ||||||
Materion Corp. * | 37,200 | 983,568 | ||||||
Metals USA Holdings Corp. * | 20,000 | 217,800 | ||||||
Minerals Technologies, Inc. | 34,461 | 1,889,841 | ||||||
NewMarket Corp. | 17,700 | 3,436,278 | ||||||
Olin Corp. | 146,700 | 2,766,762 | ||||||
OM Group, Inc. * | 54,500 | 1,575,595 | ||||||
P.H. Glatfelter Co. | 83,900 | 1,258,500 | ||||||
PolyOne Corp. | 172,875 | 1,934,471 | ||||||
Quaker Chemical Corp. | 20,700 | 720,153 | ||||||
RTI International Metals, Inc. * | 57,666 | 1,521,806 | ||||||
Schnitzer Steel Industries, Inc., Class A | 39,200 | 1,834,560 | ||||||
Schweitzer-Mauduit International, Inc. | 28,100 | 1,975,992 | ||||||
Sensient Technologies Corp. | 87,225 | 3,223,836 | ||||||
Stepan Co. | 13,600 | 1,051,144 | ||||||
Texas Industries, Inc. (c) | 52,451 | 1,573,530 | ||||||
US Gold Corp. * | 184,000 | 835,360 | ||||||
Worthington Industries, Inc. | 96,560 | 1,668,557 | ||||||
77,374,622 | ||||||||
Media 1.7% | ||||||||
Arbitron, Inc. | 46,756 | 1,857,616 | ||||||
Belo Corp., Class A | 166,000 | 1,052,440 | ||||||
Central European Media Enterprises Ltd., Class A * | 68,200 | 752,928 | ||||||
Cinemark Holdings, Inc. | 119,900 | 2,478,333 | ||||||
DG Fastchannel, Inc. * | 44,100 | 822,024 | ||||||
Harte-Hanks, Inc. | 63,516 | 557,670 | ||||||
Knology, Inc. * | 54,100 | 775,253 | ||||||
Live Nation Entertainment, Inc. * | 274,100 | 2,573,799 | ||||||
Meredith Corp. | 64,700 | 1,735,901 | ||||||
National CineMedia, Inc. | 86,000 | 1,040,600 | ||||||
Regal Entertainment Group, Class A | 136,800 | 1,975,392 | ||||||
Scholastic Corp. | 41,269 | 1,108,073 | ||||||
Sinclair Broadcast Group, Inc., Class A | 83,800 | 802,804 | ||||||
The E.W. Scripps Co., Class A * | 53,300 | 444,522 | ||||||
The Madison Square Garden, Inc., Class A * | 109,300 | 2,888,799 | ||||||
The New York Times Co., Class A * | 224,100 | 1,707,642 | ||||||
Valassis Communications, Inc. * | 91,900 | 1,794,807 | ||||||
World Wrestling Entertainment, Inc., Class A (c) | 49,000 | 514,990 | ||||||
24,883,593 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 5.7% | ||||||||
Acorda Therapeutics, Inc. * | 70,100 | 1,530,984 | ||||||
Akorn, Inc. * | 104,300 | 937,657 | ||||||
Alkermes PLC * | 177,642 | 3,106,959 | ||||||
Ardea Biosciences, Inc. * | 27,500 | 547,525 | ||||||
ARIAD Pharmaceuticals, Inc. * | 232,100 | 2,699,323 | ||||||
Auxilium Pharmaceuticals, Inc. * | 86,700 | 1,349,052 | ||||||
AVANIR Pharmaceuticals, Inc., Class A (c)* | 187,200 | 559,728 | ||||||
Cadence Pharmaceuticals, Inc. (c)* | 45,500 | 265,265 | ||||||
Cepheid, Inc. * | 108,100 | 3,878,628 | ||||||
Cubist Pharmaceuticals, Inc. * | 104,932 | 3,967,479 | ||||||
Emergent Biosolutions, Inc. * | 37,400 | 705,364 | ||||||
Enzon Pharmaceuticals, Inc. * | 107,400 | 789,390 | ||||||
Exelixis, Inc. * | 236,872 | 1,831,021 | ||||||
Genomic Health, Inc. * | 26,900 | 575,660 | ||||||
Geron Corp. * | 261,700 | 614,995 | ||||||
Halozyme Therapeutics, Inc. * | 153,100 | 1,290,633 | ||||||
ImmunoGen, Inc. * | 111,800 | 1,518,244 | ||||||
Impax Laboratories, Inc. * | 113,300 | 2,142,503 | ||||||
Incyte Corp. * | 222,163 | 3,059,184 |
22 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ironwood Pharmaceuticals, Inc. * | 106,500 | 1,448,400 | ||||||
Isis Pharmaceuticals, Inc. * | 181,000 | 1,500,490 | ||||||
Jazz Pharmaceuticals, Inc. * | 39,300 | 1,531,128 | ||||||
Lexicon Pharmaceuticals, Inc. * | 457,800 | 553,938 | ||||||
Luminex Corp. * | 65,500 | 1,438,380 | ||||||
MannKind Corp. (c)* | 112,100 | 349,752 | ||||||
MAP Pharmaceuticals, Inc. * | 33,000 | 487,740 | ||||||
Medicis Pharmaceutical Corp., Class A | 111,749 | 4,278,869 | ||||||
Medivation, Inc. * | 61,000 | 1,047,980 | ||||||
Micromet, Inc. * | 158,100 | 1,038,717 | ||||||
Momenta Pharmaceuticals, Inc. * | 79,844 | 1,181,691 | ||||||
Myriad Genetics, Inc. * | 160,600 | 3,417,568 | ||||||
Nektar Therapeutics * | 175,771 | 952,679 | ||||||
NPS Pharmacuticals, Inc. * | 150,500 | 778,085 | ||||||
Opko Health, Inc. * | 216,400 | 1,164,232 | ||||||
Par Pharmaceutical Cos., Inc. * | 68,680 | 2,101,608 | ||||||
PAREXEL International Corp. * | 105,018 | 2,313,546 | ||||||
Pharmasset, Inc. * | 128,400 | 9,039,360 | ||||||
Questcor Pharmaceuticals, Inc. * | 108,100 | 4,389,941 | ||||||
Savient Pharmaceuticals, Inc. (c)* | 84,500 | 316,875 | ||||||
Seattle Genetics, Inc. * | 177,398 | 3,902,756 | ||||||
Sequenom, Inc. * | 182,200 | 905,534 | ||||||
SIGA Technologies, Inc. * | 31,600 | 102,384 | ||||||
Targacept, Inc. * | 41,800 | 735,680 | ||||||
The Medicines Co. * | 94,108 | 1,761,702 | ||||||
Theravance, Inc. * | 117,638 | 2,615,093 | ||||||
ViroPharma, Inc. * | 138,474 | 2,802,714 | ||||||
VIVUS, Inc. * | 148,200 | 1,397,526 | ||||||
84,923,962 | ||||||||
Real Estate 6.5% | ||||||||
Acadia Realty Trust | 73,136 | 1,515,378 | ||||||
Ashford Hospitality Trust | 125,100 | 1,113,390 | ||||||
Associated Estates Reality Corp. | 71,900 | 1,220,862 | ||||||
Brandywine Realty Trust | 236,530 | 2,154,788 | ||||||
Colonial Properties Trust | 154,100 | 3,125,148 | ||||||
CommonWealth REIT | 151,900 | 2,939,265 | ||||||
Cousins Properties, Inc. | 160,773 | 1,054,671 | ||||||
CubeSmart | 164,500 | 1,613,745 | ||||||
DCT Industrial Trust, Inc. | 401,200 | 1,989,952 | ||||||
DiamondRock Hospitality Co. | 284,717 | 2,576,689 | ||||||
DuPont Fabros Technology, Inc. | 112,000 | 2,328,480 | ||||||
EastGroup Properties, Inc. | 46,590 | 2,031,790 | ||||||
Education Realty Trust, Inc. | 125,500 | 1,160,875 | ||||||
Equity Lifestyle Properties, Inc. | 69,259 | 4,580,098 | ||||||
Equity One, Inc. | 108,337 | 1,857,980 | ||||||
Extra Space Storage, Inc. | 169,558 | 3,820,142 | ||||||
FelCor Lodging Trust, Inc. * | 170,200 | 512,302 | ||||||
First Industrial Realty Trust, Inc. * | 151,100 | 1,488,335 | ||||||
First Potomac Realty Trust | 88,500 | 1,257,585 | ||||||
Forestar Group, Inc. * | 61,600 | 800,800 | ||||||
Franklin Street Properties Corp. | 124,565 | 1,581,976 | ||||||
Getty Realty Corp. | 44,642 | 711,593 | ||||||
Glimcher Realty Trust | 189,800 | 1,738,568 | ||||||
Healthcare Realty Trust, Inc. | 126,881 | 2,396,782 | ||||||
Hersha Hospitality Trust | 261,700 | 1,154,097 | ||||||
Home Properties, Inc. | 77,265 | 4,550,908 | ||||||
Inland Real Estate Corp. | 130,436 | 978,270 | ||||||
Investors Real Estate Trust | 135,100 | 1,001,091 | ||||||
iStar Financial, Inc. * | 189,500 | 1,286,705 | ||||||
Kilroy Realty Corp. | 107,100 | 3,929,499 | ||||||
LaSalle Hotel Properties | 148,726 | 3,556,039 | ||||||
Lexington Realty Trust | 223,784 | 1,758,942 | ||||||
LTC Properties, Inc. | 52,867 | 1,499,308 | ||||||
Medical Properties Trust, Inc. | 201,200 | 2,032,120 | ||||||
National Health Investors, Inc. | 51,568 | 2,304,574 | ||||||
Pebblebrook Hotel Trust | 88,600 | 1,686,058 | ||||||
Pennsylvania REIT | 83,312 | 854,781 | ||||||
Post Properties, Inc. | 87,667 | 3,601,360 | ||||||
Potlatch Corp. | 71,603 | 2,325,665 | ||||||
PS Business Parks, Inc. | 33,238 | 1,769,259 | ||||||
Ramco-Gershenson Properties Trust | 66,000 | 636,900 | ||||||
Sabra Health Care REIT, Inc. | 51,866 | 532,664 | ||||||
Saul Centers, Inc. | 19,900 | 713,216 | ||||||
Sovran Self Storage, Inc. | 50,526 | 2,233,249 | ||||||
Strategic Hotel & Resorts, Inc. * | 305,900 | 1,740,571 | ||||||
Sun Communities, Inc. | 39,500 | 1,504,160 | ||||||
Sunstone Hotel Investors, Inc. * | 185,710 | 1,290,685 | ||||||
Tanger Factory Outlet Centers, Inc. | 139,100 | 3,917,056 | ||||||
Tejon Ranch Co. * | 22,192 | 576,770 | ||||||
Universal Health Realty Income Trust | 21,900 | 831,543 | ||||||
Urstadt Biddle Properties, Inc., Class A | 39,400 | 702,896 | ||||||
Washington REIT | 115,400 | 3,341,984 | ||||||
97,881,564 | ||||||||
Retailing 5.3% | ||||||||
99 Cents Only Stores * | 80,806 | 1,761,571 | ||||||
Aaron’s, Inc. | 126,900 | 3,395,844 | ||||||
Ann, Inc. * | 100,300 | 2,671,992 | ||||||
Asbury Automotive Group, Inc. * | 59,400 | 1,107,810 | ||||||
Barnes & Noble, Inc. * | 72,900 | 894,483 | ||||||
bebe stores, Inc. | 43,149 | 309,810 | ||||||
Blue Nile, Inc. * | 23,800 | 1,074,094 | ||||||
Brown Shoe Co., Inc. | 71,175 | 634,169 | ||||||
Cabela’s, Inc. * | 75,236 | 1,874,881 | ||||||
Chico’s FAS, Inc. | 311,500 | 3,850,140 | ||||||
Collective Brands, Inc. * | 114,500 | 1,672,845 | ||||||
DSW, Inc., Class A | 44,922 | 2,351,217 | ||||||
Express, Inc. | 130,500 | 2,947,995 | ||||||
Fred’s, Inc., Class A | 71,500 | 871,585 | ||||||
Genesco, Inc. * | 41,744 | 2,460,391 | ||||||
Group 1 Automotive, Inc. | 42,800 | 1,949,968 | ||||||
hhgregg, Inc. (c)* | 30,400 | 387,600 | ||||||
Hibbett Sports, Inc. * | 47,475 | 1,955,495 | ||||||
HSN, Inc. * | 69,400 | 2,475,498 | ||||||
Jos. A. Bank Clothiers, Inc. * | 49,318 | 2,635,554 | ||||||
Lumber Liquidators Holdings, Inc. * | 40,500 | 606,285 | ||||||
Monro Muffler Brake, Inc. | 54,350 | 2,015,842 | ||||||
Nutrisystem, Inc. | 45,548 | 562,973 | ||||||
Office Depot, Inc. * | 434,600 | 995,234 | ||||||
OfficeMax, Inc. * | 124,900 | 639,488 | ||||||
Orbitz Worldwide, Inc. * | 77,000 | 145,530 | ||||||
Penske Automotive Group, Inc. | 78,516 | 1,600,941 | ||||||
Pier 1 Imports, Inc. * | 211,900 | 2,650,869 | ||||||
Pool Corp. | 90,077 | 2,632,050 | ||||||
RadioShack Corp. | 197,900 | 2,356,989 | ||||||
Rent-A-Center, Inc. | 118,505 | 4,046,946 |
See financial notes 23
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Rue21, Inc. * | 26,200 | 697,968 | ||||||
Saks, Inc. * | 296,300 | 3,131,891 | ||||||
Select Comfort Corp. * | 99,200 | 2,060,384 | ||||||
Shutterfly, Inc. * | 52,600 | 2,191,842 | ||||||
Sonic Automotive, Inc., Class A | 72,500 | 1,063,575 | ||||||
Stage Stores, Inc. | 64,227 | 1,003,868 | ||||||
Systemax, Inc. * | 20,600 | 311,678 | ||||||
The Buckle, Inc. | 46,864 | 2,088,260 | ||||||
The Cato Corp., Class A | 54,604 | 1,399,501 | ||||||
The Children’s Place Retail Stores, Inc. * | 45,213 | 2,122,750 | ||||||
The Finish Line, Inc., Class A | 98,219 | 1,974,202 | ||||||
The Men’s Wearhouse, Inc. | 92,700 | 2,862,576 | ||||||
The Pep Boys - Manny, Moe & Jack | 97,200 | 1,117,800 | ||||||
Vitamin Shoppe, Inc. * | 40,400 | 1,523,484 | ||||||
Zumiez, Inc. * | 38,400 | 873,600 | ||||||
79,959,468 | ||||||||
Semiconductors & Semiconductor Equipment 3.6% | ||||||||
Advanced Energy Industries, Inc. * | 61,700 | 576,278 | ||||||
Amkor Technology, Inc. * | 251,818 | 1,218,799 | ||||||
ANADIGICS, Inc. * | 73,600 | 193,568 | ||||||
Applied Micro Circuits Corp. * | 97,565 | 657,588 | ||||||
ATMI, Inc. * | 55,054 | 1,123,102 | ||||||
Brooks Automation, Inc. | 104,431 | 1,091,304 | ||||||
Cabot Microelectronics Corp. * | 41,400 | 1,594,728 | ||||||
Cavium, Inc. * | 84,500 | 2,762,305 | ||||||
CEVA, Inc. * | 39,400 | 1,224,158 | ||||||
Cirrus Logic, Inc. * | 120,100 | 1,998,464 | ||||||
Cymer, Inc. * | 53,265 | 2,314,364 | ||||||
Diodes, Inc. * | 64,181 | 1,435,729 | ||||||
Entegris, Inc. * | 241,800 | 2,166,528 | ||||||
Entropic Communications, Inc. * | 121,300 | 705,966 | ||||||
FormFactor, Inc. * | 68,473 | 409,469 | ||||||
GT Advanced Technologies, Inc. * | 220,400 | 1,807,280 | ||||||
Hittite Microwave Corp. * | 46,309 | 2,435,853 | ||||||
Integrated Device Technology, Inc. * | 266,900 | 1,622,752 | ||||||
Intersil Corp., Class A | 232,400 | 2,781,828 | ||||||
Kulicke & Soffa Industries, Inc. * | 127,500 | 1,230,375 | ||||||
Lattice Semiconductor Corp. * | 204,800 | 1,296,384 | ||||||
Micrel, Inc. | 86,405 | 952,183 | ||||||
Microsemi Corp. * | 150,419 | 2,776,735 | ||||||
MIPS Technologies, Inc. * | 74,100 | 406,809 | ||||||
MKS Instruments, Inc. | 93,699 | 2,496,141 | ||||||
Monolithic Power Systems * | 64,200 | 799,932 | ||||||
OmniVision Technologies, Inc. * | 74,973 | 1,222,810 | ||||||
Power Integrations, Inc. | 55,162 | 1,965,422 | ||||||
Rubicon Technology, Inc. (c)* | 28,300 | 294,886 | ||||||
Semtech Corp. * | 113,829 | 2,779,704 | ||||||
Sigma Designs, Inc. * | 48,000 | 400,320 | ||||||
Silicon Image, Inc. * | 134,900 | 868,756 | ||||||
Spansion, Inc. * | 99,900 | 1,027,971 | ||||||
Standard Microsystems Corp. * | 39,792 | 985,250 | ||||||
STR Holdings, Inc. * | 56,700 | 484,785 | ||||||
SunPower Corp., Class A (c)* | 78,400 | 785,568 | ||||||
Tessera Technologies, Inc. * | 81,390 | 1,120,740 | ||||||
Ultratech, Inc. * | 44,000 | 959,200 | ||||||
Veeco Instruments, Inc. * | 70,900 | 1,892,321 | ||||||
Volterra Semiconductor Corp. * | 46,400 | 1,099,680 | ||||||
53,966,035 | ||||||||
Software & Services 7.6% | ||||||||
Accelrys, Inc. * | 96,800 | 641,784 | ||||||
ACI Worldwide, Inc. * | 60,759 | 1,863,479 | ||||||
Acxiom Corp. * | 140,976 | 1,859,473 | ||||||
Advent Software, Inc. * | 56,228 | 1,540,647 | ||||||
Ancestry.com, Inc. * | 28,900 | 658,053 | ||||||
Aspen Technology, Inc. * | 138,200 | 2,396,388 | ||||||
Blackbaud, Inc. | 76,269 | 2,137,820 | ||||||
Bottomline Technologies, Inc. * | 57,900 | 1,406,391 | ||||||
CACI International, Inc., Class A * | 55,900 | 3,068,351 | ||||||
Cardtronics, Inc. * | 65,000 | 1,620,450 | ||||||
CommVault Systems, Inc. * | 81,200 | 3,457,496 | ||||||
comScore, Inc. * | 44,600 | 941,506 | ||||||
Constant Contact, Inc. * | 44,000 | 890,560 | ||||||
Convergys Corp. * | 221,300 | 2,367,910 | ||||||
CSG Systems International, Inc. * | 62,600 | 891,424 | ||||||
DealerTrack Holdings, Inc. * | 73,036 | 1,584,151 | ||||||
Deltek, Inc. * | 87,200 | 641,792 | ||||||
Dice Holdings, Inc. * | 60,600 | 616,908 | ||||||
Digital River, Inc. * | 71,100 | 1,303,263 | ||||||
EarthLink, Inc. | 193,881 | 1,359,106 | ||||||
Ebix, Inc. (c)* | 69,100 | 1,182,301 | ||||||
EPIQ Systems, Inc. | 53,800 | 767,188 | ||||||
Euronet Worldwide, Inc. * | 90,036 | 1,743,997 | ||||||
Exlservice Holdings, Inc. * | 26,500 | 691,120 | ||||||
Fair Isaac Corp. | 70,300 | 1,922,705 | ||||||
Forrester Research, Inc. | 25,317 | 906,602 | ||||||
Heartland Payment Systems, Inc. | 68,900 | 1,499,264 | ||||||
iGATE Corp. | 50,540 | 681,279 | ||||||
Interactive Intelligence Group * | 23,200 | 643,800 | ||||||
j2 Global Communications, Inc. | 81,728 | 2,515,588 | ||||||
JDA Software Group, Inc. * | 76,069 | 2,424,319 | ||||||
Kenexa Corp. * | 41,300 | 944,531 | ||||||
KIT Digital, Inc. * | 56,900 | 512,100 | ||||||
Limelight Networks, Inc. * | 86,200 | 239,636 | ||||||
LivePerson, Inc. * | 78,100 | 983,279 | ||||||
LogMeIn, Inc. * | 34,800 | 1,415,316 | ||||||
Manhattan Associates, Inc. * | 39,147 | 1,657,875 | ||||||
ManTech International Corp., Class A | 39,200 | 1,377,096 | ||||||
MAXIMUS, Inc. | 64,148 | 2,587,730 | ||||||
Mentor Graphics Corp. * | 193,267 | 2,195,513 | ||||||
MicroStrategy, Inc., Class A * | 15,062 | 1,984,720 | ||||||
NetScout Systems, Inc. * | 59,100 | 968,649 | ||||||
NetSuite, Inc. * | 36,300 | 1,380,852 | ||||||
NeuStar, Inc., Class A * | 135,900 | 4,320,261 | ||||||
NIC, Inc. | 98,500 | 1,360,285 | ||||||
OpenTable, Inc. (c)* | 35,100 | 1,539,486 | ||||||
OPNET Technologies, Inc. | 37,500 | 1,640,250 | ||||||
Pegasystems, Inc. | 28,300 | 1,069,457 | ||||||
Progress Software Corp. * | 117,720 | 2,479,183 | ||||||
QLIK Technologies, Inc. * | 117,900 | 3,368,403 | ||||||
QuinStreet, Inc. * | 48,600 | 558,414 | ||||||
RealD, Inc. (c)* | 58,100 | 648,977 | ||||||
RealNetworks, Inc. | 24,957 | 243,580 | ||||||
RightNow Technologies, Inc. * | 42,700 | 1,836,527 | ||||||
Sapient Corp. | 212,363 | 2,624,807 | ||||||
Smith Micro Software, Inc. * | 18,800 | 21,996 |
24 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Solarwinds, Inc. * | 79,300 | 2,288,598 | ||||||
Sourcefire, Inc. * | 48,700 | 1,341,685 | ||||||
SS&C Technologies Holdings, Inc. * | 22,500 | 356,850 | ||||||
Synchronoss Technologies, Inc. * | 49,000 | 1,472,940 | ||||||
Take-Two Interactive Software, Inc. * | 149,304 | 2,356,017 | ||||||
Taleo Corp., Class A * | 77,100 | 2,498,040 | ||||||
TeleTech Holdings, Inc. * | 54,500 | 952,660 | ||||||
The Ultimate Software Group, Inc. * | 46,100 | 2,774,298 | ||||||
TiVo, Inc. * | 223,603 | 2,421,621 | ||||||
TNS, Inc. * | 47,300 | 923,769 | ||||||
Tyler Technologies, Inc. * | 45,200 | 1,426,964 | ||||||
Unisys Corp. * | 69,550 | 1,807,605 | ||||||
United Online, Inc. | 154,387 | 912,427 | ||||||
ValueClick, Inc. * | 140,400 | 2,471,040 | ||||||
Virnetx Holding Corp. (c)* | 64,900 | 1,398,595 | ||||||
Vocus, Inc. * | 28,700 | 584,906 | ||||||
Websense, Inc. * | 75,404 | 1,345,207 | ||||||
Wright Express Corp. * | 68,876 | 3,228,907 | ||||||
114,746,167 | ||||||||
Technology Hardware & Equipment 5.1% | ||||||||
Arris Group, Inc. * | 214,860 | 2,311,894 | ||||||
Avid Technology, Inc. * | 26,905 | 166,811 | ||||||
Badger Meter, Inc. | 27,003 | 884,078 | ||||||
Benchmark Electronics, Inc. * | 105,894 | 1,454,984 | ||||||
Black Box Corp. | 31,192 | 873,064 | ||||||
Blue Coat Systems, Inc. * | 74,600 | 1,201,060 | ||||||
Brightpoint, Inc. * | 128,695 | 1,306,254 | ||||||
Calix, Inc. * | 49,100 | 427,661 | ||||||
Checkpoint Systems, Inc. * | 71,644 | 949,283 | ||||||
Cognex Corp. | 72,309 | 2,450,552 | ||||||
Coherent, Inc. * | 47,351 | 2,413,481 | ||||||
Comtech Telecommunications Corp. | 52,500 | 1,738,275 | ||||||
Daktronics, Inc. | 61,300 | 619,130 | ||||||
Diebold, Inc. | 115,500 | 3,728,340 | ||||||
DTS, Inc. * | 29,800 | 837,082 | ||||||
Electronics for Imaging, Inc. * | 80,109 | 1,201,635 | ||||||
Emulex Corp. * | 137,790 | 1,154,680 | ||||||
FARO Technologies, Inc. * | 28,100 | 1,174,018 | ||||||
FEI Co. * | 67,700 | 2,691,752 | ||||||
Harmonic, Inc. * | 182,800 | 1,005,400 | ||||||
Infinera Corp. * | 120,700 | 882,317 | ||||||
Insight Enterprises, Inc. * | 84,400 | 1,426,360 | ||||||
Intermec, Inc. * | 83,640 | 674,975 | ||||||
IPG Photonics Corp. * | 49,018 | 2,591,092 | ||||||
Ixia * | 80,364 | 910,524 | ||||||
KEMET Corp. * | 77,300 | 712,706 | ||||||
Littelfuse, Inc. | 39,600 | 1,938,816 | ||||||
Maxwell Technologies, Inc. * | 48,100 | 960,557 | ||||||
MTS Systems Corp. | 26,475 | 970,838 | ||||||
Multi-Fineline Electronix, Inc. * | 18,600 | 426,684 | ||||||
NETGEAR, Inc. * | 64,300 | 2,280,078 | ||||||
Newport Corp. * | 63,900 | 885,015 | ||||||
Oclaro, Inc. * | 56,100 | 230,571 | ||||||
OSI Systems, Inc. * | 33,300 | 1,475,190 | ||||||
Park Electrochemical Corp. | 37,800 | 1,069,740 | ||||||
Plantronics, Inc. | 85,793 | 2,866,344 | ||||||
Plexus Corp. * | 67,462 | 1,733,773 | ||||||
Power-One, Inc. * | 184,800 | 914,760 | ||||||
Powerwave Technologies, Inc. * | 59,220 | 213,784 | ||||||
QLogic Corp. * | 183,700 | 2,566,289 | ||||||
Quantum Corp. * | 391,800 | 1,022,598 | ||||||
Rofin-Sinar Technologies, Inc. * | 50,236 | 1,306,136 | ||||||
Rogers Corp. * | 28,467 | 1,228,920 | ||||||
Sanmina-SCI Corp. * | 147,200 | 1,296,832 | ||||||
ScanSource, Inc. * | 46,478 | 1,615,575 | ||||||
Sonus Networks, Inc. * | 480,758 | 1,274,009 | ||||||
STEC, Inc. * | 88,500 | 1,001,820 | ||||||
Stratasys, Inc. * | 37,300 | 1,045,892 | ||||||
Super Micro Computer, Inc. * | 42,800 | 684,800 | ||||||
Sycamore Networks, Inc. | 35,711 | 686,366 | ||||||
Synaptics, Inc. * | 66,900 | 2,260,551 | ||||||
SYNNEX Corp. * | 41,000 | 1,183,670 | ||||||
Tekelec * | 99,327 | 975,391 | ||||||
TTM Technologies, Inc. * | 79,400 | 886,898 | ||||||
Universal Display Corp. * | 68,100 | 3,189,123 | ||||||
ViaSat, Inc. * | 72,919 | 3,105,620 | ||||||
77,084,048 | ||||||||
Telecommunication Services 1.3% | ||||||||
AboveNet, Inc. | 47,700 | 2,830,995 | ||||||
Atlantic Tele-Network, Inc. | 17,400 | 660,330 | ||||||
Cbeyond, Inc. * | 53,600 | 441,664 | ||||||
Cincinnati Bell, Inc. * | 373,345 | 1,202,171 | ||||||
Cogent Communications Group, Inc. * | 82,000 | 1,316,100 | ||||||
Consolidated Communications Holdings, Inc. | 42,200 | 796,736 | ||||||
General Communication, Inc., Class A * | 67,800 | 640,710 | ||||||
IDT Corp., Class B | 26,000 | 299,000 | ||||||
Iridium Communications, Inc. * | 73,300 | 466,188 | ||||||
Leap Wireless International, Inc. * | 89,900 | 624,805 | ||||||
Level 3 Communications, Inc. * | 260,298 | 6,947,354 | ||||||
Neutral Tandem, Inc. * | 61,700 | 650,318 | ||||||
NTELOS Holdings Corp. | 50,100 | 952,902 | ||||||
PAETEC Holding Corp. * | 205,100 | 1,123,948 | ||||||
Vonage Holdings Corp. * | 225,500 | 755,425 | ||||||
19,708,646 | ||||||||
Transportation 2.6% | ||||||||
Alexander & Baldwin, Inc. | 75,700 | 3,142,307 | ||||||
Allegiant Travel Co. * | 27,900 | 1,449,684 | ||||||
AMERCO * | 11,904 | 901,252 | ||||||
Arkansas Best Corp. | 46,272 | 953,203 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 45,500 | 1,752,660 | ||||||
Avis Budget Group, Inc. * | 184,500 | 2,601,450 | ||||||
Con-way, Inc. | 97,000 | 2,858,590 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 50,800 | 3,100,832 | ||||||
Forward Air Corp. | 53,682 | 1,758,086 | ||||||
Genco Shipping & Trading Ltd. (c)* | 28,100 | 252,900 | ||||||
Heartland Express, Inc. | 86,200 | 1,155,942 | ||||||
Hub Group, Inc., Class A * | 67,292 | 2,103,548 | ||||||
JetBlue Airways Corp. * | 357,600 | 1,602,048 | ||||||
Knight Transportation, Inc. | 107,600 | 1,635,520 |
See financial notes 25
Schwab Small-Cap Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Landstar System, Inc. | 85,400 | 3,811,402 | ||||||
Old Dominion Freight Line, Inc. * | 76,883 | 2,811,611 | ||||||
RailAmerica, Inc. * | 42,000 | 574,140 | ||||||
Seaspan Corp. | 84,200 | 1,193,114 | ||||||
SkyWest, Inc. | 95,412 | 1,279,475 | ||||||
US Airways Group, Inc. * | 284,000 | 1,638,680 | ||||||
Werner Enterprises, Inc. | 80,543 | 1,908,869 | ||||||
38,485,313 | ||||||||
Utilities 3.9% | ||||||||
ALLETE, Inc. | 54,590 | 2,156,851 | ||||||
American States Water Co. | 34,100 | 1,191,454 | ||||||
Avista Corp. | 104,412 | 2,657,285 | ||||||
Black Hills Corp. | 68,198 | 2,298,955 | ||||||
California Water Service Group | 81,374 | 1,511,115 | ||||||
CH Energy Group, Inc. | 26,297 | 1,451,857 | ||||||
Cleco Corp. | 106,900 | 3,941,403 | ||||||
Dynegy, Inc. * | 158,900 | 583,163 | ||||||
El Paso Electric Co. | 77,416 | 2,479,635 | ||||||
Genie Energy Ltd., Class B * | 26,000 | 215,800 | ||||||
IDACORP, Inc. | 87,700 | 3,541,326 | ||||||
MGE Energy, Inc. | 39,860 | 1,739,490 | ||||||
New Jersey Resources Corp. | 73,800 | 3,470,076 | ||||||
Northwest Natural Gas Co. | 46,895 | 2,190,934 | ||||||
NorthWestern Corp. | 65,912 | 2,270,668 | ||||||
Ormat Technologies, Inc. | 34,800 | 660,852 | ||||||
Otter Tail Corp. | 63,309 | 1,228,828 | ||||||
PNM Resources, Inc. | 157,200 | 2,826,456 | ||||||
Portland General Electric Co. | 132,100 | 3,241,734 | ||||||
SJW Corp. | 20,700 | 481,896 | ||||||
South Jersey Industries, Inc. | 53,760 | 3,027,226 | ||||||
Southwest Gas Corp. | 83,396 | 3,292,474 | ||||||
The Empire District Electric Co. | 72,000 | 1,437,840 | ||||||
The Laclede Group, Inc. | 38,777 | 1,555,733 | ||||||
UIL Holdings Corp. | 91,010 | 3,101,621 | ||||||
Unisource Energy Corp. | 63,517 | 2,367,914 | ||||||
WGL Holdings, Inc. | 91,300 | 3,908,553 | ||||||
58,831,139 | ||||||||
Total Common Stock | ||||||||
(Cost $1,332,736,154) | 1,492,931,898 | |||||||
Rights 0.0% of net assets | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Indevus Pharmaceuticals, Inc. (a)(b)* | 138,800 | — | ||||||
Total Rights | ||||||||
(Cost $—) | — | |||||||
Warrants 0.0% of net assets | ||||||||
Energy 0.0% | ||||||||
Magnum Hunter Resources Corp. (a)(b)* | 19,700 | — | ||||||
Total Warrants | ||||||||
(Cost $—) | — | |||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investment 0.2% of net assets | ||||||||
U.S. Treasury Obligation 0.2% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (d)(e) | 2,705,000 | 2,705,000 | ||||||
Total Short-Term Investment | ||||||||
(Cost $2,705,000) | 2,705,000 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 2.7% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 40,423,756 | 40,423,756 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $40,423,756) | 40,423,756 | |||||||
End of Collateral Invested for Securities on Loan. |
At 10/31/11 tax basis cost of the fund’s investments was $1,342,201,749 and the unrealized appreciation and depreciation were $331,444,840 and ($178,009,691), respectively, with a net unrealized appreciation of $153,435,149.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Illiquid security. At the period end, the value of these securities amounted to $127,375 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. | |
(d) | All or a portion of this security is held as collateral for open futures contracts. | |
(e) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
26 See financial notes
Schwab Small-Cap Index Fund
Portfolio Holdings continued
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contract | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 90 | 6,653,700 | 206,992 |
See financial notes 27
Schwab Total Stock Market Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
99 | .0% | Common Stock | 1,418,654,506 | 1,730,168,207 | ||||||||
0 | .0% | Rights | — | 29 | ||||||||
0 | .0% | Warrants | — | — | ||||||||
0 | .8% | Short-Term Investments | 14,293,902 | 14,293,902 | ||||||||
99 | .8% | Total Investments | 1,432,948,408 | 1,744,462,138 | ||||||||
0 | .3% | Collateral Invested for Securities on Loan | 4,856,627 | 4,856,627 | ||||||||
(0 | .1)% | Other Assets and Liabilities, Net | (2,496,426 | ) | ||||||||
100 | .0% | Net Assets | 1,746,822,339 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 99.0% of net assets | ||||||||
Automobiles & Components 0.9% | ||||||||
American Axle & Manufacturing Holdings, Inc. * | 8,300 | 80,427 | ||||||
BorgWarner, Inc. * | 13,800 | 1,055,562 | ||||||
Cooper Tire & Rubber Co. | 8,900 | 127,537 | ||||||
Dana Holding Corp. * | 16,500 | 233,310 | ||||||
Drew Industries, Inc. | 2,400 | 57,672 | ||||||
Exide Technologies * | 7,500 | 33,750 | ||||||
Federal-Mogul Corp. * | 9,200 | 155,112 | ||||||
Ford Motor Co. * | 469,736 | 5,486,516 | ||||||
General Motors Co. * | 71,000 | 1,835,350 | ||||||
Gentex Corp. | 18,000 | 542,160 | ||||||
Harley-Davidson, Inc. | 28,500 | 1,108,650 | ||||||
Johnson Controls, Inc. | 82,000 | 2,700,260 | ||||||
Lear Corp. | 14,000 | 656,740 | ||||||
Modine Manufacturing Co. * | 8,000 | 84,560 | ||||||
Standard Motor Products, Inc. | 7,500 | 116,625 | ||||||
Stoneridge, Inc. * | 8,200 | 64,534 | ||||||
Strattec Security Corp. | 1,500 | 34,500 | ||||||
Tenneco, Inc. * | 7,480 | 244,746 | ||||||
Tesla Motors, Inc. (d)* | 4,500 | 132,165 | ||||||
The Goodyear Tire & Rubber Co. * | 29,000 | 416,440 | ||||||
Thor Industries, Inc. | 4,500 | 118,980 | ||||||
TRW Automotive Holdings Corp. * | 12,800 | 538,880 | ||||||
Visteon Corp. * | 5,000 | 278,100 | ||||||
Winnebago Industries, Inc. * | 5,100 | 41,514 | ||||||
16,144,090 | ||||||||
Banks 3.0% | ||||||||
1st Source Corp. | 5,528 | 132,893 | ||||||
Ameris Bancorp * | 1,848 | 18,572 | ||||||
Arrow Financial Corp. | 1,180 | 27,541 | ||||||
Associated Banc-Corp. | 21,500 | 239,725 | ||||||
Astoria Financial Corp. | 11,300 | 93,790 | ||||||
BancFirst Corp. | 2,300 | 89,010 | ||||||
BancorpSouth, Inc. | 7,612 | 74,369 | ||||||
BancTrust Financial Group, Inc. * | 2,100 | 3,423 | ||||||
Bank Mutual Corp. | 6,168 | 20,539 | ||||||
Bank of Hawaii Corp. | 6,500 | 274,495 | ||||||
Bank of the Ozarks, Inc. | 5,600 | 139,272 | ||||||
BankUnited, Inc. | 6,000 | 130,740 | ||||||
Banner Corp. | 171 | 3,005 | ||||||
BB&T Corp. | 86,458 | 2,017,930 | ||||||
Beneficial Mutual Bancorp, Inc. * | 7,500 | 61,575 | ||||||
Berkshire Bancorp, Inc. * | 3,600 | 23,832 | ||||||
Berkshire Hills Bancorp, Inc. | 1,400 | 28,028 | ||||||
BOK Financial Corp. | 7,540 | 393,739 | ||||||
Boston Private Financial Holdings, Inc. | 12,129 | 91,938 | ||||||
Brookline Bancorp, Inc. | 8,405 | 70,266 | ||||||
Bryn Mawr Bank Corp. | 2,400 | 44,064 | ||||||
Camco Financial Corp. * | 700 | 840 | ||||||
Camden National Corp. | 700 | 20,776 | ||||||
Capital City Bank Group, Inc. (d) | 4,375 | 44,581 | ||||||
CapitalSource, Inc. | 32,900 | 209,244 | ||||||
Capitol Federal Financial, Inc. | 18,963 | 210,300 | ||||||
Cathay General Bancorp | 9,200 | 128,708 | ||||||
Central Pacific Financial Corp. * | 5,169 | 63,010 | ||||||
Century Bancorp Inc., Class A | 800 | 21,656 | ||||||
Chemical Financial Corp. | 5,383 | 108,360 | ||||||
CIT Group, Inc. * | 25,000 | 871,250 | ||||||
Citizens South Banking Corp. | 1,050 | 4,305 | ||||||
City Holding Co. | 4,800 | 157,728 | ||||||
City National Corp. | 6,100 | 258,762 | ||||||
Columbia Banking System, Inc. | 4,951 | 94,416 | ||||||
Comerica, Inc. | 26,159 | 668,362 | ||||||
Commerce Bancshares, Inc. | 17,011 | 660,027 | ||||||
Community Bank System, Inc. | 4,400 | 112,464 | ||||||
Community Trust Bancorp, Inc. | 2,487 | 70,457 | ||||||
Cullen/Frost Bankers, Inc. | 6,300 | 308,952 | ||||||
CVB Financial Corp. | 10,311 | 100,120 | ||||||
Dime Community Bancshares | 6,875 | 81,950 | ||||||
East West Bancorp, Inc. | 16,600 | 323,202 | ||||||
F.N.B. Corp. | 12,161 | 122,705 | ||||||
Fifth Third Bancorp | 110,714 | 1,329,675 | ||||||
First BanCorp Puerto Rico * | 479 | 1,705 | ||||||
First Busey Corp. | 10,300 | 52,530 | ||||||
First Citizens BancShares, Inc., Class A | 900 | 146,745 | ||||||
First Commonwealth Financial Corp. | 13,504 | 62,253 | ||||||
First Financial Bancorp | 5,339 | 87,560 | ||||||
First Financial Bankshares, Inc. (d) | 6,000 | 190,560 | ||||||
First Financial Corp. | 2,600 | 85,436 | ||||||
First Financial Holdings, Inc. | 3,900 | 29,055 | ||||||
First Horizon National Corp. | 29,316 | 204,919 | ||||||
First M&F Corp. | 2,000 | 6,320 | ||||||
First Merchants Corp. | 6,041 | 48,690 | ||||||
First Midwest Bancorp, Inc. | 9,125 | 82,216 |
28 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
First Niagara Financial Group, Inc. | 37,165 | 341,546 | ||||||
First Place Financial Corp. * | 2,900 | 2,437 | ||||||
First Republic Bank * | 9,000 | 249,300 | ||||||
First United Corp. (d)* | 2,200 | 8,184 | ||||||
FirstMerit Corp. | 13,406 | 187,818 | ||||||
Flagstar Bancorp, Inc. * | 54,100 | 42,198 | ||||||
Flushing Financial Corp. | 6,800 | 83,368 | ||||||
Fulton Financial Corp. | 21,762 | 205,433 | ||||||
Glacier Bancorp, Inc. | 7,697 | 87,361 | ||||||
Great Southern Bancorp, Inc. | 3,400 | 67,626 | ||||||
Hancock Holding Co. | 9,144 | 277,063 | ||||||
Hawthorn Bancshares, Inc. | 843 | 4,940 | ||||||
Heritage Financial Corp. | 3,735 | 47,098 | ||||||
Home Bancshares, Inc. | 3,300 | 77,385 | ||||||
Hudson City Bancorp, Inc. | 59,231 | 370,194 | ||||||
Huntington Bancshares, Inc. | 101,099 | 523,693 | ||||||
IBERIABANK Corp. | 3,875 | 200,415 | ||||||
Independent Bank Corp. | 3,000 | 77,760 | ||||||
Independent Bank Corp., Michigan (d)* | 431 | 741 | ||||||
Indiana Community Bancorp | 800 | 12,136 | ||||||
International Bancshares Corp. | 7,784 | 141,046 | ||||||
Investors Bancorp, Inc. * | 9,600 | 133,248 | ||||||
Kearny Financial Corp. | 6,500 | 63,245 | ||||||
KeyCorp | 116,790 | 824,537 | ||||||
Lakeland Financial Corp. | 3,700 | 88,393 | ||||||
M&T Bank Corp. | 15,949 | 1,213,878 | ||||||
MainSource Financial Group, Inc. | 3,235 | 30,344 | ||||||
MB Financial, Inc. | 5,133 | 85,054 | ||||||
Merchants Bancshares, Inc. | 1,450 | 41,282 | ||||||
MGIC Investment Corp. * | 21,800 | 57,988 | ||||||
MutualFirst Financial, Inc. | 2,000 | 14,940 | ||||||
Nara Bancorp, Inc. * | 7,000 | 59,360 | ||||||
National Penn Bancshares, Inc. | 13,175 | 102,765 | ||||||
NBT Bancorp, Inc. | 4,400 | 94,688 | ||||||
New York Community Bancorp, Inc. | 51,585 | 686,596 | ||||||
North Valley Bancorp * | 300 | 3,030 | ||||||
Northrim BanCorp, Inc. | 4,281 | 81,125 | ||||||
Northwest Bancshares, Inc. | 11,250 | 140,288 | ||||||
OceanFirst Financial Corp. | 5,050 | 65,852 | ||||||
Ocwen Financial Corp. * | 8,420 | 122,090 | ||||||
Old National Bancorp | 9,244 | 106,953 | ||||||
Oriental Financial Group, Inc. | 8,163 | 86,446 | ||||||
Oritani Financial Corp. | 13,200 | 171,072 | ||||||
Pacific Capital Bancorp NA * | 3,117 | 80,699 | ||||||
PacWest Bancorp | 6,000 | 105,840 | ||||||
Park National Corp. (d) | 2,845 | 169,875 | ||||||
People’s United Financial, Inc. | 44,187 | 563,384 | ||||||
Peoples Financial Corp. | 3,000 | 30,000 | ||||||
Pinnacle Financial Partners, Inc. * | 6,475 | 97,190 | ||||||
PNC Financial Services Group, Inc. | 65,532 | 3,519,724 | ||||||
Popular, Inc. * | 125,200 | 232,872 | ||||||
Premier Financial Bancorp, Inc. * | 245 | 1,159 | ||||||
PrivateBancorp, Inc. | 8,000 | 87,200 | ||||||
Prosperity Bancshares, Inc. | 6,400 | 246,336 | ||||||
Provident Financial Holdings, Inc. | 2,750 | 25,218 | ||||||
Provident Financial Services, Inc. | 5,217 | 67,560 | ||||||
Radian Group, Inc. | 15,000 | 35,250 | ||||||
Regions Financial Corp. | 153,962 | 605,071 | ||||||
Renasant Corp. | 4,125 | 59,483 | ||||||
Republic Bancorp, Inc., Class A | 6,521 | 132,637 | ||||||
Roma Financial Corp. | 4,000 | 38,680 | ||||||
S&T Bancorp, Inc. | 4,400 | 82,148 | ||||||
S.Y. Bancorp, Inc. | 1,470 | 30,253 | ||||||
Sandy Spring Bancorp, Inc. | 5,900 | 100,359 | ||||||
SCBT Financial Corp. | 3,000 | 88,590 | ||||||
Seacoast Banking Corp. of Florida * | 1,980 | 2,950 | ||||||
Shore Bancshares, Inc. | 1,250 | 6,425 | ||||||
Signature Bank * | 5,000 | 278,750 | ||||||
Simmons First National Corp., Class A | 4,000 | 103,840 | ||||||
Southwest Bancorp, Inc. * | 3,300 | 15,510 | ||||||
State Bancorp, Inc. | 3,558 | 42,091 | ||||||
StellarOne Corp. | 3,000 | 35,970 | ||||||
Sterling Bancorp | 1,918 | 15,824 | ||||||
Sterling Financial Corp. * | 5,000 | 75,050 | ||||||
Suffolk Bancorp | 2,400 | 20,424 | ||||||
Sun Bancorp, Inc. * | 4,218 | 12,527 | ||||||
SunTrust Banks, Inc. | 65,342 | 1,289,198 | ||||||
Susquehanna Bancshares, Inc. | 13,468 | 97,778 | ||||||
SVB Financial Group * | 5,200 | 238,888 | ||||||
Synovus Financial Corp. | 87,200 | 130,800 | ||||||
TCF Financial Corp. | 16,100 | 171,304 | ||||||
Texas Capital Bancshares, Inc. * | 4,000 | 112,000 | ||||||
TF Financial Corp. | 735 | 14,259 | ||||||
TFS Financial Corp. * | 19,500 | 179,595 | ||||||
The First of Long Island Corp. | 4,000 | 102,200 | ||||||
The PMI Group, Inc. (a)(c)* | 20,600 | 3,214 | ||||||
Timberland Bancorp, Inc. * | 2,000 | 8,720 | ||||||
Tompkins Financial Corp. | 4,024 | 158,666 | ||||||
Tree.com, Inc. * | 1,044 | 5,638 | ||||||
TriCo Bancshares | 400 | 5,932 | ||||||
TrustCo Bank Corp. NY | 10,357 | 51,371 | ||||||
Trustmark Corp. | 8,300 | 183,762 | ||||||
U.S. Bancorp | 237,031 | 6,065,623 | ||||||
UMB Financial Corp. | 3,574 | 131,773 | ||||||
Umpqua Holdings Corp. | 12,343 | 141,327 | ||||||
Union First Market Bankshares Corp. | 7,050 | 90,381 | ||||||
United Bankshares, Inc. | 7,400 | 175,676 | ||||||
United Community Banks, Inc. * | 5,378 | 39,743 | ||||||
Valley National Bancorp | 20,768 | 249,216 | ||||||
Washington Federal, Inc. | 11,942 | 163,008 | ||||||
Washington Trust Bancorp, Inc. | 2,500 | 58,700 | ||||||
Webster Financial Corp. | 8,663 | 170,141 | ||||||
Wells Fargo & Co. | 616,306 | 15,968,489 | ||||||
WesBanco, Inc. | 4,456 | 88,496 | ||||||
West Coast Bancorp * | 916 | 13,676 | ||||||
Westamerica Bancorp | 5,200 | 233,064 | ||||||
Western Alliance Bancorp * | 6,100 | 39,650 | ||||||
Wintrust Financial Corp. | 5,800 | 167,504 | ||||||
WSFS Financial Corp. | 2,000 | 79,500 | ||||||
Zions Bancorp | 22,725 | 394,506 | ||||||
52,262,188 | ||||||||
Capital Goods 7.9% | ||||||||
3D Systems Corp. * | 6,800 | 110,636 | ||||||
3M Co. | 80,000 | 6,321,600 | ||||||
A.O. Smith Corp. | 4,950 | 183,942 | ||||||
AAON, Inc. | 9,169 | 194,108 |
See financial notes 29
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
AAR CORP. | 5,000 | 99,650 | ||||||
Aceto Corp. | 5,000 | 31,700 | ||||||
Actuant Corp., Class A | 8,680 | 195,300 | ||||||
Acuity Brands, Inc. | 5,200 | 240,760 | ||||||
Aecom Technology Corp. * | 14,000 | 292,880 | ||||||
Aegion Corp. * | 4,300 | 63,597 | ||||||
Aerosonic Corp. * | 300 | 705 | ||||||
AGCO Corp. * | 12,762 | 559,358 | ||||||
Aircastle Ltd. | 5,500 | 66,715 | ||||||
Alamo Group, Inc. | 2,500 | 59,625 | ||||||
Albany International Corp., Class A | 3,918 | 88,508 | ||||||
Alliant Techsystems, Inc. | 4,437 | 257,701 | ||||||
American Science & Engineering, Inc. | 500 | 34,010 | ||||||
American Superconductor Corp. (d)* | 5,200 | 22,672 | ||||||
American Woodmark Corp. | 4,000 | 68,040 | ||||||
AMETEK, Inc. | 18,950 | 748,904 | ||||||
Ampco-Pittsburgh Corp. | 2,800 | 58,772 | ||||||
Apogee Enterprises, Inc. | 1,200 | 13,104 | ||||||
Applied Industrial Technologies, Inc. | 6,525 | 219,371 | ||||||
Armstrong World Industries, Inc. | 3,500 | 149,065 | ||||||
Astronics Corp. * | 3,438 | 104,515 | ||||||
Barnes Group, Inc. | 6,600 | 153,582 | ||||||
BE Aerospace, Inc. * | 13,200 | 498,036 | ||||||
Beacon Roofing Supply, Inc. * | 5,000 | 92,150 | ||||||
Belden, Inc. | 4,400 | 142,032 | ||||||
Blount International, Inc. * | 4,200 | 65,226 | ||||||
Brady Corp., Class A | 6,400 | 196,608 | ||||||
Breeze-Eastern Corp. * | 500 | 4,530 | ||||||
Briggs & Stratton Corp. | 6,500 | 94,900 | ||||||
Carlisle Cos., Inc. | 6,200 | 258,664 | ||||||
Cascade Corp. | 4,400 | 189,640 | ||||||
Caterpillar, Inc. | 71,100 | 6,716,106 | ||||||
Ceradyne, Inc. * | 2,500 | 83,650 | ||||||
Chart Industries, Inc. * | 3,000 | 169,530 | ||||||
CIRCOR International, Inc. | 3,750 | 130,575 | ||||||
CLARCOR, Inc. | 6,400 | 310,272 | ||||||
Coleman Cable, Inc. * | 1,500 | 15,255 | ||||||
Columbus McKinnon Corp. * | 2,400 | 35,976 | ||||||
Cooper Industries plc | 19,000 | 996,740 | ||||||
Crane Co. | 5,000 | 220,550 | ||||||
Cubic Corp. | 2,000 | 94,240 | ||||||
Cummins, Inc. | 22,000 | 2,187,460 | ||||||
Curtiss-Wright Corp. | 6,600 | 216,348 | ||||||
Danaher Corp. | 68,000 | 3,287,800 | ||||||
Deere & Co. | 51,000 | 3,870,900 | ||||||
DigitalGlobe, Inc. * | 3,500 | 71,400 | ||||||
Donaldson Co., Inc. | 9,000 | 576,450 | ||||||
Dover Corp. | 23,700 | 1,316,061 | ||||||
Ducommun, Inc. | 3,200 | 45,664 | ||||||
Dycom Industries, Inc. * | 5,300 | 102,979 | ||||||
Eaton Corp. | 41,800 | 1,873,476 | ||||||
EMCOR Group, Inc. | 7,800 | 195,546 | ||||||
Emerson Electric Co. | 94,000 | 4,523,280 | ||||||
EnerSys * | 4,500 | 101,385 | ||||||
EnPro Industries, Inc. * | 3,000 | 103,320 | ||||||
ESCO Technologies, Inc. | 2,800 | 85,596 | ||||||
Esterline Technologies Corp. * | 2,400 | 134,160 | ||||||
Fastenal Co. | 38,400 | 1,462,656 | ||||||
Federal Signal Corp. | 5,300 | 25,016 | ||||||
Flow International Corp. * | 900 | 2,331 | ||||||
Flowserve Corp. | 6,900 | 639,561 | ||||||
Fluor Corp. | 23,200 | 1,318,920 | ||||||
Fortune Brands Home & Security, Inc. * | 19,000 | 276,070 | ||||||
Foster Wheeler AG * | 8,000 | 170,560 | ||||||
Franklin Electric Co., Inc. | 1,300 | 59,696 | ||||||
FreightCar America, Inc. * | 2,500 | 47,375 | ||||||
FuelCell Energy, Inc. * | 1,200 | 1,284 | ||||||
Furmanite Corp. * | 1,400 | 9,338 | ||||||
Gardner Denver, Inc. | 6,400 | 494,912 | ||||||
GATX Corp. | 4,000 | 151,920 | ||||||
GenCorp, Inc. * | 2,500 | 12,150 | ||||||
General Cable Corp. * | 6,700 | 187,868 | ||||||
General Dynamics Corp. | 38,400 | 2,464,896 | ||||||
General Electric Co. | 1,319,666 | 22,051,619 | ||||||
GeoEye, Inc. * | 6,000 | 201,420 | ||||||
Gibraltar Industries, Inc. * | 2,500 | 27,900 | ||||||
Goodrich Corp. | 16,404 | 2,011,623 | ||||||
Graco, Inc. | 7,012 | 301,095 | ||||||
GrafTech International Ltd. * | 13,100 | 205,801 | ||||||
Granite Construction, Inc. | 4,850 | 109,125 | ||||||
Griffon Corp. * | 5,500 | 52,085 | ||||||
Hardinge, Inc. | 4,800 | 41,856 | ||||||
Harsco Corp. | 9,200 | 212,060 | ||||||
HEICO Corp., Class A | 3,571 | 140,376 | ||||||
Hexcel Corp. * | 13,000 | 321,230 | ||||||
Honeywell International, Inc. | 87,562 | 4,588,249 | ||||||
Hubbell, Inc., Class B | 6,800 | 406,572 | ||||||
Huntington Ingalls Industries, Inc. * | 5,172 | 152,574 | ||||||
IDEX Corp. | 10,225 | 362,476 | ||||||
II-VI, Inc. * | 7,600 | 144,476 | ||||||
Illinois Tool Works, Inc. | 51,700 | 2,514,171 | ||||||
Ingersoll-Rand plc | 41,000 | 1,276,330 | ||||||
Integrated Electrical Services, Inc. * | 5,105 | 12,456 | ||||||
Interline Brands, Inc. * | 4,000 | 59,600 | ||||||
ITT Corp. * | 23,400 | 1,067,040 | ||||||
Jacobs Engineering Group, Inc. * | 16,600 | 644,080 | ||||||
John Bean Technologies Corp. | 4,983 | 80,426 | ||||||
Joy Global, Inc. | 16,350 | 1,425,720 | ||||||
Kadant, Inc. * | 3,001 | 64,972 | ||||||
Kaman Corp. | 3,000 | 99,750 | ||||||
Kaydon Corp. | 3,300 | 103,818 | ||||||
KBR, Inc. | 19,000 | 530,290 | ||||||
Kennametal, Inc. | 10,000 | 388,900 | ||||||
Kratos Defense & Security Solutions, Inc. * | 3,180 | 20,129 | ||||||
L-3 Communications Holdings, Inc. | 15,100 | 1,023,478 | ||||||
Lawson Products, Inc. | 3,000 | 50,010 | ||||||
Lennox International, Inc. | 4,771 | 153,578 | ||||||
Lincoln Electric Holdings, Inc. | 11,800 | 429,520 | ||||||
Lockheed Martin Corp. | 36,052 | 2,736,347 | ||||||
Lydall, Inc. * | 5,500 | 60,280 | ||||||
Magnetek, Inc. * | 16,500 | 17,490 | ||||||
Masco Corp. | 43,300 | 415,680 | ||||||
MasTec, Inc. * | 5,350 | 115,667 | ||||||
Meritor, Inc. * | 9,900 | 94,248 | ||||||
Michael Baker Corp. * | 3,000 | 61,740 | ||||||
Moog, Inc., Class A * | 5,787 | 224,131 | �� | |||||
MSC Industrial Direct Co., Class A | 4,300 | 292,443 | ||||||
Mueller Industries, Inc. | 4,200 | 169,890 |
30 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Mueller Water Products, Inc., Class A | 16,139 | 44,382 | ||||||
NACCO Industries, Inc., Class A | 1,300 | 106,730 | ||||||
Navistar International Corp. * | 9,500 | 399,665 | ||||||
NCI Building Systems, Inc. * | 580 | 5,284 | ||||||
NN, Inc. * | 1,800 | 15,912 | ||||||
Nordson Corp. | 8,000 | 370,960 | ||||||
Northrop Grumman Corp. | 34,032 | 1,965,348 | ||||||
Omega Flex, Inc. * | 700 | 8,253 | ||||||
Orbital Sciences Corp. * | 7,600 | 117,496 | ||||||
Oshkosh Corp. * | 11,000 | 229,460 | ||||||
Owens Corning * | 14,000 | 397,320 | ||||||
PACCAR, Inc. | 44,725 | 1,933,909 | ||||||
Pall Corp. | 12,900 | 660,093 | ||||||
Parker Hannifin Corp. | 19,500 | 1,590,225 | ||||||
Pentair, Inc. | 12,500 | 449,375 | ||||||
Powell Industries, Inc. * | 4,000 | 134,440 | ||||||
Precision Castparts Corp. | 17,602 | 2,871,766 | ||||||
Quanex Building Products Corp. | 5,625 | 82,969 | ||||||
Quanta Services, Inc. * | 27,371 | 571,780 | ||||||
Raven Industries, Inc. | 2,800 | 168,028 | ||||||
Raytheon Co. | 44,900 | 1,984,131 | ||||||
RBC Bearings, Inc. * | 3,000 | 121,500 | ||||||
Regal-Beloit Corp. | 4,500 | 239,085 | ||||||
Robbins & Myers, Inc. | 6,970 | 311,489 | ||||||
Rockwell Automation, Inc. | 18,700 | 1,265,055 | ||||||
Rockwell Collins, Inc. | 20,100 | 1,122,183 | ||||||
Roper Industries, Inc. | 12,500 | 1,013,750 | ||||||
Sauer-Danfoss, Inc. * | 3,800 | 147,136 | ||||||
Seaboard Corp. | 200 | 439,600 | ||||||
Simpson Manufacturing Co., Inc. | 3,200 | 98,112 | ||||||
Snap-on, Inc. | 7,000 | 375,690 | ||||||
Spirit AeroSystems Holdings, Inc., Class A * | 11,000 | 187,770 | ||||||
SPX Corp. | 8,610 | 470,192 | ||||||
Standex International Corp. | 3,000 | 115,830 | ||||||
Stanley Black & Decker, Inc. | 21,652 | 1,382,480 | ||||||
Taser International, Inc. * | 1,700 | 8,449 | ||||||
Tecumseh Products Co., Class A * | 3,200 | 20,352 | ||||||
Teledyne Technologies, Inc. * | 12,157 | 662,192 | ||||||
Tennant Co. | 4,200 | 162,498 | ||||||
Terex Corp. * | 14,400 | 239,616 | ||||||
Textainer Group Holdings Ltd. | 2,500 | 68,625 | ||||||
Textron, Inc. | 35,100 | 681,642 | ||||||
The Babcock & Wilcox Co. * | 15,500 | 340,845 | ||||||
The Boeing Co. | 80,300 | 5,282,937 | ||||||
The Gorman-Rupp Co. | 5,613 | 150,821 | ||||||
The Greenbrier Cos., Inc. * | 4,100 | 76,301 | ||||||
The Manitowoc Co., Inc. | 14,600 | 161,768 | ||||||
The Middleby Corp. * | 5,000 | 421,400 | ||||||
The Shaw Group, Inc. * | 11,500 | 267,490 | ||||||
The Timken Co. | 9,600 | 404,352 | ||||||
The Toro Co. | 4,100 | 221,564 | ||||||
Thomas & Betts Corp. * | 7,300 | 362,737 | ||||||
Titan International, Inc. | 4,125 | 92,813 | ||||||
TransDigm Group, Inc. * | 6,600 | 619,872 | ||||||
Tredegar Corp. | 5,100 | 98,787 | ||||||
Trinity Industries, Inc. | 13,650 | 372,235 | ||||||
Triumph Group, Inc. | 2,400 | 139,440 | ||||||
Tutor Perini Corp. | 5,000 | 72,650 | ||||||
Tyco International Ltd. | 57,733 | 2,629,738 | ||||||
United Rentals, Inc. * | 5,900 | 138,119 | ||||||
United Technologies Corp. | 100,068 | 7,803,303 | ||||||
Universal Forest Products, Inc. | 2,500 | 70,175 | ||||||
URS Corp. * | 10,700 | 381,990 | ||||||
USG Corp. * | 7,400 | 68,524 | ||||||
Valmont Industries, Inc. | 2,400 | 205,800 | ||||||
Vicor Corp. | 4,200 | 38,430 | ||||||
W.W. Grainger, Inc. | 7,300 | 1,250,563 | ||||||
Wabash National Corp. * | 8,000 | 55,200 | ||||||
WABCO Holdings, Inc. * | 8,133 | 408,358 | ||||||
Wabtec Corp. | 5,828 | 391,525 | ||||||
Watsco, Inc. | 3,400 | 209,644 | ||||||
Watts Water Technologies, Inc., Class A | 4,000 | 125,960 | ||||||
WESCO International, Inc. * | 4,800 | 232,608 | ||||||
Woodward, Inc. | 8,000 | 271,040 | ||||||
138,740,360 | ||||||||
Commercial & Professional Supplies 1.0% | ||||||||
A.T. Cross Co., Class A * | 2,900 | 35,264 | ||||||
ABM Industries, Inc. | 4,900 | 99,078 | ||||||
American Reprographics Co. * | 7,000 | 27,930 | ||||||
AMREP Corp. * | 2,500 | 18,575 | ||||||
Avery Dennison Corp. | 12,700 | 337,820 | ||||||
Casella Waste Systems, Inc., Class A * | 6,500 | 40,820 | ||||||
CDI Corp. | 3,700 | 48,581 | ||||||
Cenveo, Inc. * | 7,300 | 27,375 | ||||||
Cintas Corp. | 15,350 | 458,811 | ||||||
Clean Harbors, Inc. * | 5,000 | 291,350 | ||||||
CompX International, Inc. | 2,000 | 30,520 | ||||||
Consolidated Graphics, Inc. * | 3,900 | 177,684 | ||||||
Copart, Inc. * | 8,809 | 383,632 | ||||||
Corrections Corp. of America * | 14,484 | 321,979 | ||||||
CoStar Group, Inc. * | 3,800 | 233,814 | ||||||
Covanta Holding Corp. | 14,700 | 215,502 | ||||||
CRA International, Inc. * | 2,500 | 48,300 | ||||||
Deluxe Corp. | 6,800 | 160,616 | ||||||
EnergySolutions, Inc. * | 10,500 | 39,585 | ||||||
Ennis, Inc. | 4,500 | 65,835 | ||||||
Equifax, Inc. | 15,595 | 548,164 | ||||||
Exponent, Inc. * | 6,000 | 289,080 | ||||||
FTI Consulting, Inc. * | 5,700 | 224,637 | ||||||
G & K Services, Inc., Class A | 4,100 | 124,476 | ||||||
GP Strategies Corp. * | 1,500 | 17,730 | ||||||
Healthcare Services Group, Inc. | 12,656 | 219,582 | ||||||
Heidrick & Struggles International, Inc. | 3,100 | 61,318 | ||||||
Herman Miller, Inc. | 5,700 | 117,705 | ||||||
HNI Corp. | 4,000 | 96,200 | ||||||
Hudson Highland Group, Inc. * | 3,220 | 14,909 | ||||||
IHS, Inc., Class A * | 6,600 | 554,334 | ||||||
Insperity, Inc. | 2,800 | 72,184 | ||||||
Interface, Inc., Class A | 5,800 | 75,632 | ||||||
Iron Mountain, Inc. | 23,180 | 716,957 | ||||||
KAR Auction Services, Inc. * | 6,000 | 82,500 | ||||||
Kelly Services, Inc., Class A | 5,700 | 93,195 | ||||||
Kforce, Inc. * | 4,905 | 62,588 | ||||||
Kimball International, Inc., Class B | 9,100 | 51,233 | ||||||
Knoll, Inc. | 7,000 | 106,750 | ||||||
Korn/Ferry International * | 6,600 | 105,402 | ||||||
M&F Worldwide Corp. * | 4,200 | 103,992 |
See financial notes 31
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Manpower, Inc. | 9,991 | 431,012 | ||||||
McGrath Rentcorp | 4,600 | 122,912 | ||||||
Mine Safety Appliances Co. | 2,700 | 90,585 | ||||||
Mobile Mini, Inc. * | 1,200 | 21,768 | ||||||
Multi-Color Corp. | 4,625 | 122,609 | ||||||
Navigant Consulting, Inc. * | 5,000 | 56,650 | ||||||
Nielsen Holdings N.V. * | 8,000 | 234,800 | ||||||
NL Industries, Inc. | 7,800 | 113,412 | ||||||
On Assignment, Inc. * | 4,700 | 50,713 | ||||||
Pitney Bowes, Inc. | 25,000 | 509,500 | ||||||
Quad Graphics, Inc. | 2,500 | 49,300 | ||||||
R.R. Donnelley & Sons Co. | 23,500 | 383,050 | ||||||
Republic Services, Inc. | 39,645 | 1,128,297 | ||||||
Resources Connection, Inc. | 3,700 | 41,033 | ||||||
Robert Half International, Inc. | 17,000 | 449,310 | ||||||
Rollins, Inc. | 15,018 | 327,092 | ||||||
Steelcase, Inc., Class A | 11,500 | 85,215 | ||||||
Stericycle, Inc. * | 9,400 | 785,652 | ||||||
Sykes Enterprises, Inc. * | 4,026 | 64,134 | ||||||
Tetra Tech, Inc. * | 12,031 | 262,637 | ||||||
The Advisory Board Co. * | 1,000 | 61,250 | ||||||
The Brink’s Co. | 5,600 | 155,624 | ||||||
The Corporate Executive Board Co. | 3,700 | 135,383 | ||||||
The Dun & Bradstreet Corp. | 5,640 | 377,090 | ||||||
The Geo Group, Inc. * | 17,380 | 316,837 | ||||||
The Standard Register Co. | 4,100 | 10,619 | ||||||
Towers Watson & Co., Class A | 6,600 | 433,620 | ||||||
TRC Cos., Inc. * | 3,350 | 14,640 | ||||||
TrueBlue, Inc. * | 6,000 | 79,320 | ||||||
UniFirst Corp. | 1,500 | 78,525 | ||||||
United Stationers, Inc. | 5,800 | 184,498 | ||||||
Verisk Analytics, Inc., Class A * | 16,000 | 562,400 | ||||||
Viad Corp. | 3,625 | 75,871 | ||||||
Virco Mfg. Corp. | 1,170 | 2,059 | ||||||
Waste Connections, Inc. | 13,712 | 466,894 | ||||||
Waste Management, Inc. | 54,100 | 1,781,513 | ||||||
16,867,463 | ||||||||
Consumer Durables & Apparel 1.4% | ||||||||
American Greetings Corp., Class A | 8,500 | 136,085 | ||||||
Blyth, Inc. | 2,700 | 150,741 | ||||||
Brookfield Residential Properties, Inc. * | 2,350 | 17,037 | ||||||
Brunswick Corp. | 9,900 | 174,834 | ||||||
Callaway Golf Co. | 8,100 | 47,061 | ||||||
Carter’s, Inc. * | 8,000 | 304,720 | ||||||
Cavco Industries, Inc. * | 410 | 18,462 | ||||||
Coach, Inc. | 36,008 | 2,343,041 | ||||||
Columbia Sportswear Co. | 4,350 | 233,769 | ||||||
CSS Industries, Inc. | 3,400 | 71,672 | ||||||
D.R. Horton, Inc. | 32,104 | 357,317 | ||||||
Deckers Outdoor Corp. * | 7,500 | 864,300 | ||||||
DGSE Cos., Inc. (d)* | 700 | 5,775 | ||||||
Eastman Kodak Co. (d)* | 30,200 | 33,522 | ||||||
Ethan Allen Interiors, Inc. | 4,200 | 83,160 | ||||||
Flexsteel Industries, Inc. | 600 | 8,550 | ||||||
Foamex International, Inc. (a)(c)* | 2,278 | — | ||||||
Fossil, Inc. * | 5,462 | 566,191 | ||||||
Furniture Brands International, Inc. * | 4,700 | 8,977 | ||||||
Garmin Ltd. | 16,000 | 550,240 | ||||||
Hanesbrands, Inc. * | 11,047 | 291,309 | ||||||
Harman International Industries, Inc. | 8,800 | 379,808 | ||||||
Hasbro, Inc. | 14,500 | 551,870 | ||||||
Helen of Troy Ltd. * | 5,000 | 144,650 | ||||||
Hovnanian Enterprises, Inc., Class A (d)* | 3,700 | 5,328 | ||||||
Iconix Brand Group, Inc. * | 3,200 | 57,440 | ||||||
iRobot Corp. * | 3,000 | 101,580 | ||||||
Jarden Corp. | 11,059 | 354,220 | ||||||
K-Swiss, Inc., Class A * | 2,400 | 10,800 | ||||||
KB HOME | 7,800 | 54,366 | ||||||
Kenneth Cole Productions, Inc., Class A * | 3,100 | 33,356 | ||||||
Kid Brands, Inc. * | 3,000 | 8,790 | ||||||
Leggett & Platt, Inc. | 19,200 | 420,480 | ||||||
Lennar Corp., Class A | 12,190 | 201,623 | ||||||
Liz Claiborne, Inc. * | 8,600 | 68,886 | ||||||
M.D.C. Holdings, Inc. | 4,403 | 98,627 | ||||||
M/I Homes, Inc. * | 1,800 | 13,446 | ||||||
Maidenform Brands, Inc. * | 5,000 | 122,900 | ||||||
Marine Products Corp. * | 405 | 2,240 | ||||||
Mattel, Inc. | 44,800 | 1,265,152 | ||||||
Meritage Homes Corp. * | 1,000 | 17,750 | ||||||
Mohawk Industries, Inc. * | 6,819 | 359,020 | ||||||
Movado Group, Inc. | 3,300 | 55,209 | ||||||
Nautilus, Inc. * | 4,125 | 8,332 | ||||||
Newell Rubbermaid, Inc. | 35,900 | 531,320 | ||||||
NIKE, Inc., Class B | 46,600 | 4,489,910 | ||||||
NVR, Inc. * | 600 | 385,650 | ||||||
Oxford Industries, Inc. | 2,500 | 98,750 | ||||||
Perry Ellis International, Inc. * | 5,500 | 138,050 | ||||||
Polaris Industries, Inc. | 8,200 | 519,388 | ||||||
PulteGroup, Inc. * | 38,376 | 198,788 | ||||||
PVH Corp. | 8,600 | 639,926 | ||||||
Quiksilver, Inc. * | 17,000 | 56,950 | ||||||
Ralph Lauren Corp. | 8,000 | 1,270,320 | ||||||
Skechers U.S.A., Inc., Class A * | 6,500 | 92,690 | ||||||
Skyline Corp. | 2,600 | 17,576 | ||||||
Standard Pacific Corp. * | 9,300 | 28,272 | ||||||
Stanley Furniture Co., Inc. * | 6,875 | 21,244 | ||||||
Steven Madden Ltd. * | 6,075 | 224,167 | ||||||
Sturm, Ruger & Co., Inc. | 6,000 | 181,920 | ||||||
Superior Uniform Group, Inc. | 1,600 | 19,296 | ||||||
Tandy Brands Accessories, Inc. * | 1,000 | 1,035 | ||||||
Tempur-Pedic International, Inc. * | 8,000 | 544,480 | ||||||
The Jones Group, Inc. | 12,156 | 135,783 | ||||||
The Ryland Group, Inc. | 3,700 | 49,950 | ||||||
The Warnaco Group, Inc. * | 5,500 | 270,050 | ||||||
Toll Brothers, Inc. * | 13,700 | 238,928 | ||||||
Tupperware Brands Corp. | 7,800 | 441,012 | ||||||
Universal Electronics, Inc. * | 5,200 | 96,668 | ||||||
VF Corp. | 13,500 | 1,865,970 | ||||||
Whirlpool Corp. | 9,849 | 500,428 | ||||||
Wolverine World Wide, Inc. | 7,800 | 295,854 | ||||||
23,957,011 | ||||||||
Consumer Services 2.4% | ||||||||
Ambassadors Group, Inc. | 3,400 | 16,864 | ||||||
American Public Education, Inc. * | 2,500 | 89,525 |
32 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ameristar Casinos, Inc. | 6,400 | 118,400 | ||||||
Apollo Group, Inc., Class A * | 14,550 | 688,942 | ||||||
Ascent Capital Group, Inc., Class A * | 3,116 | 141,747 | ||||||
Bally Technologies, Inc. * | 5,000 | 181,350 | ||||||
Biglari Holdings, Inc. * | 179 | 61,776 | ||||||
BJ’s Restaurants, Inc. * | 3,000 | 158,790 | ||||||
Bob Evans Farms, Inc. | 4,200 | 138,180 | ||||||
Boyd Gaming Corp. * | 7,800 | 50,544 | ||||||
Brinker International, Inc. | 12,350 | 282,815 | ||||||
Buffalo Wild Wings, Inc. * | 3,000 | 198,660 | ||||||
Career Education Corp. * | 8,614 | 138,944 | ||||||
Carnival Corp. | 50,000 | 1,760,500 | ||||||
CEC Entertainment, Inc. | 2,025 | 64,031 | ||||||
Chipotle Mexican Grill, Inc. * | 3,800 | 1,277,256 | ||||||
Choice Hotels International, Inc. | 6,800 | 243,372 | ||||||
Churchill Downs, Inc. | 2,900 | 139,403 | ||||||
Coinstar, Inc. (d)* | 5,000 | 238,700 | ||||||
Corinthian Colleges, Inc. * | 9,200 | 17,572 | ||||||
CPI Corp. | 2,900 | 17,313 | ||||||
Cracker Barrel Old Country Store, Inc. | 3,446 | 146,076 | ||||||
Darden Restaurants, Inc. | 16,300 | 780,444 | ||||||
DeVry, Inc. | 7,800 | 293,904 | ||||||
DineEquity, Inc. * | 3,000 | 140,880 | ||||||
Domino’s Pizza, Inc. * | 5,100 | 163,353 | ||||||
Dover Downs Gaming & Entertainment, Inc. | 5,899 | 12,624 | ||||||
Dover Motorsports, Inc. * | 1,400 | 1,428 | ||||||
Education Management Corp. (d)* | 3,700 | 73,482 | ||||||
Gaylord Entertainment Co. * | 4,625 | 108,179 | ||||||
H&R Block, Inc. | 36,200 | 553,498 | ||||||
Hillenbrand, Inc. | 8,800 | 185,768 | ||||||
Hyatt Hotels Corp., Class A * | 5,000 | 185,950 | ||||||
International Game Technology | 35,600 | 626,204 | ||||||
International Speedway Corp., Class A | 3,245 | 77,426 | ||||||
Interval Leisure Group, Inc. * | 6,269 | 86,575 | ||||||
Isle of Capri Casinos, Inc. * | 7,400 | 40,256 | ||||||
ITT Educational Services, Inc. (d)* | 6,000 | 371,760 | ||||||
Jack in the Box, Inc. * | 8,400 | 172,872 | ||||||
Krispy Kreme Doughnuts, Inc. * | 2,100 | 14,826 | ||||||
Lakes Entertainment, Inc. * | 6,800 | 14,280 | ||||||
Las Vegas Sands Corp. * | 53,500 | 2,511,825 | ||||||
Learning Tree International, Inc. * | 1,400 | 11,130 | ||||||
LIFE TIME FITNESS, Inc. * | 5,500 | 237,215 | ||||||
Luby’s, Inc. * | 2,400 | 11,592 | ||||||
Marriott International, Inc., Class A | 40,808 | 1,285,452 | ||||||
Matthews International Corp., Class A | 2,900 | 101,906 | ||||||
McDonald’s Corp. | 127,709 | 11,857,781 | ||||||
MGM Resorts International * | 37,500 | 432,000 | ||||||
Monarch Casino & Resort, Inc. * | 8,000 | 82,320 | ||||||
MTR Gaming Group, Inc. * | 5,800 | 9,628 | ||||||
Multimedia Games Holding Co., Inc. * | 5,500 | 36,355 | ||||||
O’Charley’s, Inc. * | 400 | 2,484 | ||||||
Orient-Express Hotels Ltd., Class A * | 8,600 | 73,358 | ||||||
P.F. Chang’s China Bistro, Inc. | 3,800 | 118,180 | ||||||
Panera Bread Co., Class A * | 3,800 | 508,022 | ||||||
Papa John’s International, Inc. * | 3,400 | 114,784 | ||||||
Peet’s Coffee & Tea, Inc. * | 1,800 | 114,696 | ||||||
Penn National Gaming, Inc. * | 9,800 | 352,800 | ||||||
Pinnacle Entertainment, Inc. * | 6,800 | 76,976 | ||||||
Regis Corp. | 6,900 | 112,884 | ||||||
Royal Caribbean Cruises Ltd. | 19,500 | 579,540 | ||||||
Ruby Tuesday, Inc. * | 5,600 | 46,984 | ||||||
School Specialty, Inc. * | 2,600 | 19,890 | ||||||
Scientific Games Corp., Class A * | 9,500 | 82,555 | ||||||
Service Corp. International | 30,100 | 301,000 | ||||||
Shuffle Master, Inc. * | 2,812 | 29,835 | ||||||
Six Flags Entertainment Corp. | 6,000 | 215,400 | ||||||
Sonic Corp. * | 7,968 | 59,043 | ||||||
Sotheby’s | 8,438 | 297,186 | ||||||
Speedway Motorsports, Inc. | 4,800 | 62,400 | ||||||
Starbucks Corp. | 90,900 | 3,848,706 | ||||||
Starwood Hotels & Resorts Worldwide, Inc. | 24,230 | 1,214,165 | ||||||
Steiner Leisure Ltd. * | 3,000 | 144,540 | ||||||
Stewart Enterprises, Inc., Class A | 10,000 | 64,400 | ||||||
Strayer Education, Inc. | 1,000 | 85,210 | ||||||
Texas Roadhouse, Inc. | 5,900 | 84,547 | ||||||
The Cheesecake Factory, Inc. * | 5,887 | 164,777 | ||||||
The Wendy’s Co. | 50,775 | 256,921 | ||||||
Vail Resorts, Inc. | 3,800 | 169,328 | ||||||
Weight Watchers International, Inc. | 8,700 | 649,194 | ||||||
WMS Industries, Inc. * | 8,250 | 180,758 | ||||||
Wyndham Worldwide Corp. | 21,744 | 732,120 | ||||||
Wynn Resorts Ltd. | 11,000 | 1,460,800 | ||||||
Yum! Brands, Inc. | 56,500 | 3,026,705 | ||||||
41,901,861 | ||||||||
Diversified Financials 5.1% | ||||||||
Advance America Cash Advance Centers, Inc. | 12,500 | 105,375 | ||||||
Affiliated Managers Group, Inc. * | 5,300 | 490,833 | ||||||
American Express Co. | 132,650 | 6,714,743 | ||||||
Ameriprise Financial, Inc. | 30,530 | 1,425,140 | ||||||
Asset Acceptance Capital Corp. * | 2,500 | 7,500 | ||||||
ASTA Funding, Inc. | 6,000 | 48,360 | ||||||
Bank of America Corp. | 1,244,956 | 8,503,049 | ||||||
BGC Partners, Inc., Class A | 28,300 | 193,855 | ||||||
BlackRock, Inc. | 11,800 | 1,861,922 | ||||||
Calamos Asset Management, Inc., Class A | 5,000 | 62,450 | ||||||
Capital One Financial Corp. | 55,210 | 2,520,889 | ||||||
Cash America International, Inc. | 6,500 | 355,875 | ||||||
CBOE Holdings, Inc. | 3,000 | 78,390 | ||||||
Citigroup, Inc. | 358,528 | 11,325,900 | ||||||
CME Group, Inc. | 8,330 | 2,295,415 | ||||||
Cohen & Steers, Inc. | 5,400 | 146,718 | ||||||
CompuCredit Holdings Corp. * | 7,277 | 22,704 | ||||||
Cowen Group, Inc., Class A * | 11,889 | 32,338 | ||||||
Credit Acceptance Corp. * | 2,400 | 165,408 | ||||||
DFC Global Corp. * | 9,750 | 213,720 | ||||||
Discover Financial Services | 66,150 | 1,558,494 | ||||||
E*TRADE Financial Corp. * | 21,933 | 237,973 | ||||||
Eaton Vance Corp. | 14,600 | 383,834 | ||||||
Encore Capital Group, Inc. * | 2,000 | 54,180 | ||||||
Evercore Partners, Inc., Class A | 6,500 | 178,360 | ||||||
EZCORP, Inc., Class A * | 8,500 | 236,130 | ||||||
FBR & Co. * | 4,000 | 8,320 |
See financial notes 33
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Federated Investors, Inc., Class B | 9,950 | 194,423 | ||||||
Financial Engines, Inc. * | 3,500 | 79,485 | ||||||
First Cash Financial Services, Inc. * | 3,000 | 124,500 | ||||||
Franklin Resources, Inc. | 18,900 | 2,015,307 | ||||||
GAMCO Investors, Inc., Class A | 3,200 | 150,720 | ||||||
GFI Group, Inc. | 9,900 | 42,768 | ||||||
Greenhill & Co., Inc. | 2,500 | 94,450 | ||||||
ICG Group, Inc. * | 350 | 3,777 | ||||||
Interactive Brokers Group, Inc., Class A | 3,400 | 52,292 | ||||||
IntercontinentalExchange, Inc. * | 8,900 | 1,155,932 | ||||||
INTL FCStone, Inc. * | 737 | 17,865 | ||||||
Invesco Ltd. | 48,000 | 963,360 | ||||||
Investment Technology Group, Inc. * | 4,750 | 54,198 | ||||||
Janus Capital Group, Inc. | 19,200 | 125,952 | ||||||
Jefferies Group, Inc. | 14,200 | 188,292 | ||||||
JPMorgan Chase & Co. | 490,444 | 17,047,833 | ||||||
Knight Capital Group, Inc., Class A * | 9,700 | 121,153 | ||||||
Legg Mason, Inc. | 19,050 | 523,875 | ||||||
Leucadia National Corp. | 24,908 | 668,282 | ||||||
LPL Investment Holdings, Inc. * | 3,000 | 87,030 | ||||||
MarketAxess Holdings, Inc. | 4,000 | 116,920 | ||||||
MF Global Holdings Ltd. (a)(c)* | 14,000 | 3,360 | ||||||
MicroFinancial, Inc. | 1,900 | 10,735 | ||||||
Moody’s Corp. | 26,600 | 944,034 | ||||||
Morgan Stanley | 217,700 | 3,840,228 | ||||||
MSCI, Inc., Class A * | 16,000 | 534,240 | ||||||
Nelnet, Inc., Class A | 5,363 | 115,197 | ||||||
NewStar Financial, Inc. * | 4,000 | 42,880 | ||||||
Northern Trust Corp. | 28,500 | 1,153,395 | ||||||
NYSE Euronext | 31,600 | 839,612 | ||||||
Penson Worldwide, Inc. (d)* | 8,000 | 9,840 | ||||||
PHH Corp. * | 7,186 | 132,582 | ||||||
Piper Jaffray Cos., Inc. * | 3,950 | 82,002 | ||||||
Portfolio Recovery Associates, Inc. * | 2,000 | 140,280 | ||||||
Raymond James Financial, Inc. | 10,350 | 314,329 | ||||||
Resource America, Inc., Class A | 4,000 | 19,480 | ||||||
SEI Investments Co. | 19,400 | 314,086 | ||||||
SLM Corp. | 60,300 | 824,301 | ||||||
State Street Corp. | 60,983 | 2,463,103 | ||||||
Stifel Financial Corp. * | 4,500 | 143,415 | ||||||
SWS Group, Inc. | 8,211 | 45,243 | ||||||
T. Rowe Price Group, Inc. | 32,400 | 1,712,016 | ||||||
TD Ameritrade Holding Corp. | 38,800 | 651,064 | ||||||
The Bank of New York Mellon Corp. | 153,234 | 3,260,820 | ||||||
The Charles Schwab Corp. (b) | 126,026 | 1,547,599 | ||||||
The First Marblehead Corp. * | 7,500 | 7,200 | ||||||
The Goldman Sachs Group, Inc. | 53,500 | 5,860,925 | ||||||
The NASDAQ OMX Group, Inc. * | 17,100 | 428,355 | ||||||
Virtus Investment Partners, Inc. * | 475 | 29,640 | ||||||
Waddell & Reed Financial, Inc., Class A | 10,250 | 284,232 | ||||||
Walter Investment Management Corp. | 5,289 | 134,129 | ||||||
Westwood Holdings Group, Inc. | 4,285 | 157,002 | ||||||
World Acceptance Corp. * | 5,000 | 338,250 | ||||||
89,439,863 | ||||||||
Energy 11.2% | ||||||||
Abraxas Petroleum Corp. (d)* | 8,500 | 33,150 | ||||||
Adams Resources & Energy, Inc. | 1,400 | 33,180 | ||||||
Alon USA Energy, Inc. | 8,700 | 66,120 | ||||||
Alpha Natural Resources, Inc. * | 29,330 | 705,093 | ||||||
Anadarko Petroleum Corp. | 65,160 | 5,115,060 | ||||||
Apache Corp. | 47,472 | 4,729,635 | ||||||
Apco Oil & Gas International, Inc. | 1,800 | 149,400 | ||||||
Approach Resources, Inc. (d)* | 4,000 | 97,640 | ||||||
Arch Coal, Inc. | 18,500 | 337,070 | ||||||
ATP Oil & Gas Corp. (d)* | 6,600 | 69,630 | ||||||
Atwood Oceanics, Inc. * | 4,800 | 205,152 | ||||||
Baker Hughes, Inc. | 58,750 | 3,406,913 | ||||||
Basic Energy Services, Inc. * | 6,000 | 110,040 | ||||||
Berry Petroleum Co., Class A | 4,000 | 138,200 | ||||||
Bill Barrett Corp. * | 3,700 | 153,920 | ||||||
Brigham Exploration Co. * | 13,500 | 491,603 | ||||||
Bristow Group, Inc. | 6,800 | 338,504 | ||||||
Cabot Oil & Gas Corp. | 11,200 | 870,464 | ||||||
Cal Dive International, Inc. * | 9,000 | 20,160 | ||||||
Callon Petroleum Co. * | 8,000 | 37,680 | ||||||
Cameron International Corp. * | 30,047 | 1,476,510 | ||||||
CARBO Ceramics, Inc. | 2,200 | 298,870 | ||||||
Carrizo Oil & Gas, Inc. * | 3,000 | 81,600 | ||||||
Chesapeake Energy Corp. | 82,500 | 2,319,900 | ||||||
Chevron Corp. | 248,739 | 26,130,032 | ||||||
Cimarex Energy Co. | 11,008 | 704,512 | ||||||
Clayton Williams Energy, Inc. * | 2,500 | 163,350 | ||||||
Clean Energy Fuels Corp. (d)* | 4,000 | 47,280 | ||||||
Cloud Peak Energy, Inc. * | 6,500 | 149,175 | ||||||
Cobalt International Energy, Inc. * | 7,000 | 72,240 | ||||||
Complete Production Services, Inc. * | 9,100 | 298,480 | ||||||
Comstock Resources, Inc. * | 4,500 | 82,080 | ||||||
Concho Resources, Inc. * | 12,400 | 1,174,528 | ||||||
ConocoPhillips | 163,223 | 11,368,482 | ||||||
CONSOL Energy, Inc. | 27,600 | 1,180,176 | ||||||
Contango Oil & Gas Co. * | 2,000 | 128,680 | ||||||
Continental Resources, Inc. * | 10,000 | 606,500 | ||||||
CREDO Petroleum Corp. * | 6,700 | 64,655 | ||||||
Crosstex Energy, Inc. | 6,200 | 80,786 | ||||||
CVR Energy, Inc. * | 9,900 | 245,124 | ||||||
Delek US Holdings, Inc. | 7,000 | 101,360 | ||||||
Denbury Resources, Inc. * | 48,725 | 764,982 | ||||||
Devon Energy Corp. | 49,560 | 3,218,922 | ||||||
Diamond Offshore Drilling, Inc. | 8,200 | 537,428 | ||||||
Dresser-Rand Group, Inc. * | 9,000 | 435,600 | ||||||
Dril-Quip, Inc. * | 3,100 | 201,810 | ||||||
El Paso Corp. | 100,587 | 2,515,681 | ||||||
Energen Corp. | 8,200 | 402,292 | ||||||
ENGlobal Corp. * | 4,000 | 10,440 | ||||||
EOG Resources, Inc. | 33,700 | 3,013,791 | ||||||
EQT Corp. | 19,300 | 1,225,550 | ||||||
EXCO Resources, Inc. | 22,000 | 277,420 | ||||||
Exterran Holdings, Inc. * | 10,720 | 101,840 | ||||||
Exxon Mobil Corp. | 605,034 | 47,247,105 | ||||||
FMC Technologies, Inc. * | 29,364 | 1,316,094 | ||||||
Forest Oil Corp. * | 12,450 | 145,167 | ||||||
General Maritime Corp. | 14,720 | 3,827 | ||||||
Geomet, Inc. * | 4,000 | 4,240 | ||||||
Global Industries Ltd. * | 14,400 | 114,480 |
34 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Goodrich Petroleum Corp. (d)* | 3,500 | 55,475 | ||||||
Gulf Island Fabrication, Inc. | 2,800 | 77,980 | ||||||
GulfMark Offshore, Inc., Class A * | 4,100 | 170,519 | ||||||
Gulfport Energy Corp. * | 5,000 | 155,700 | ||||||
Halliburton Co. | 112,200 | 4,191,792 | ||||||
Harvest Natural Resources, Inc. (d)* | 6,000 | 64,020 | ||||||
Helix Energy Solutions Group, Inc. * | 11,564 | 208,846 | ||||||
Helmerich & Payne, Inc. | 12,600 | 670,068 | ||||||
Hercules Offshore, Inc. * | 12,900 | 48,891 | ||||||
Hess Corp. | 41,700 | 2,608,752 | ||||||
HollyFrontier Corp. | 29,854 | 916,219 | ||||||
Hornbeck Offshore Services, Inc. * | 5,000 | 164,200 | ||||||
Houston American Energy Corp. (d) | 4,000 | 62,640 | ||||||
ION Geophysical Corp. * | 13,900 | 105,918 | ||||||
James River Coal Co. * | 5,500 | 56,925 | ||||||
Key Energy Services, Inc. * | 16,300 | 210,759 | ||||||
Kinder Morgan, Inc. | 11,500 | 328,900 | ||||||
Lufkin Industries, Inc. | 7,000 | 413,630 | ||||||
Magnum Hunter Resources Corp. * | 339 | 1,526 | ||||||
Marathon Oil Corp. | 86,808 | 2,259,612 | ||||||
Marathon Petroleum Corp. | 43,404 | 1,558,204 | ||||||
Matrix Service Co. * | 8,000 | 84,960 | ||||||
McDermott International, Inc. * | 28,000 | 307,440 | ||||||
McMoRan Exploration Co. * | 4,500 | 54,810 | ||||||
Murphy Oil Corp. | 24,500 | 1,356,565 | ||||||
Nabors Industries Ltd. * | 34,634 | 634,841 | ||||||
National Oilwell Varco, Inc. | 52,122 | 3,717,862 | ||||||
Natural Gas Services Group * | 7,500 | 103,200 | ||||||
Newfield Exploration Co. * | 17,100 | 688,446 | ||||||
Newpark Resources, Inc. * | 11,500 | 102,695 | ||||||
Noble Corp. * | 29,500 | 1,060,230 | ||||||
Noble Energy, Inc. | 21,718 | 1,940,286 | ||||||
Occidental Petroleum Corp. | 100,820 | 9,370,211 | ||||||
Oceaneering International, Inc. | 10,400 | 435,032 | ||||||
Oil States International, Inc. * | 6,600 | 459,426 | ||||||
Overseas Shipholding Group, Inc. | 3,700 | 46,176 | ||||||
OYO Geospace Corp. * | 500 | 39,290 | ||||||
Panhandle Oil & Gas, Inc., Class A | 2,000 | 66,640 | ||||||
Parker Drilling Co. * | 18,300 | 101,199 | ||||||
Patriot Coal Corp. * | 9,700 | 121,832 | ||||||
Patterson-UTI Energy, Inc. | 18,200 | 369,824 | ||||||
Peabody Energy Corp. | 34,700 | 1,504,939 | ||||||
Penn Virginia Corp. | 5,000 | 30,450 | ||||||
Petroleum Development Corp. * | 4,000 | 104,440 | ||||||
PetroQuest Energy, Inc. * | 7,200 | 52,488 | ||||||
PHI, Inc. - Non Voting Shares * | 4,000 | 88,280 | ||||||
Pioneer Drilling Co. * | 9,200 | 90,988 | ||||||
Pioneer Natural Resources Co. | 13,133 | 1,101,859 | ||||||
Plains Exploration & Production Co. * | 15,765 | 496,598 | ||||||
QEP Resources, Inc. | 22,200 | 789,210 | ||||||
Quicksilver Resources, Inc. * | 14,900 | 114,730 | ||||||
Range Resources Corp. | 20,600 | 1,418,104 | ||||||
Resolute Energy Corp. * | 5,000 | 65,000 | ||||||
REX American Resources Corp. * | 4,875 | 88,920 | ||||||
Rex Energy Corp. * | 8,000 | 123,840 | ||||||
Rosetta Resources, Inc. * | 6,600 | 292,644 | ||||||
Rowan Cos., Inc. * | 14,400 | 496,656 | ||||||
RPC, Inc. | 17,212 | 319,627 | ||||||
SandRidge Energy, Inc. * | 41,331 | 316,595 | ||||||
Schlumberger Ltd. | 170,260 | 12,509,002 | ||||||
SEACOR Holdings, Inc. | 1,250 | 106,438 | ||||||
SemGroup Corp. * | 3,000 | 83,940 | ||||||
Ship Finance International Ltd. (d) | 6,100 | 87,291 | ||||||
SM Energy Co. | 7,400 | 613,534 | ||||||
Southern Union Co. | 15,874 | 667,184 | ||||||
Southwestern Energy Co. * | 42,000 | 1,765,680 | ||||||
Spectra Energy Corp. | 80,678 | 2,309,811 | ||||||
Stone Energy Corp. * | 4,383 | 106,463 | ||||||
Sunoco, Inc. | 17,000 | 632,910 | ||||||
Superior Energy Services, Inc. * | 9,900 | 278,388 | ||||||
Swift Energy Co. * | 5,500 | 168,410 | ||||||
Teekay Corp. | 6,000 | 154,560 | ||||||
Tesoro Corp. * | 17,600 | 456,544 | ||||||
TETRA Technologies, Inc. * | 8,300 | 78,850 | ||||||
The Williams Cos., Inc. | 73,360 | 2,208,870 | ||||||
Tidewater, Inc. | 7,700 | 379,071 | ||||||
Ultra Petroleum Corp. * | 13,000 | 414,180 | ||||||
Union Drilling, Inc. * | 2,500 | 18,725 | ||||||
Unit Corp. * | 4,400 | 215,864 | ||||||
USEC, Inc. * | 14,300 | 30,030 | ||||||
VAALCO Energy, Inc. * | 9,000 | 61,290 | ||||||
Valero Energy Corp. | 70,980 | 1,746,108 | ||||||
Verenium Corp. (d)* | 91 | 229 | ||||||
W&T Offshore, Inc. | 7,500 | 147,675 | ||||||
Warren Resources, Inc. * | 5,000 | 15,650 | ||||||
Weatherford International Ltd. * | 90,000 | 1,395,000 | ||||||
Western Refining, Inc. * | 5,600 | 89,488 | ||||||
Westmoreland Coal Co. * | 6,500 | 71,565 | ||||||
Whiting Petroleum Corp. * | 13,600 | 633,080 | ||||||
World Fuel Services Corp. | 8,200 | 326,770 | ||||||
196,079,112 | ||||||||
Food & Staples Retailing 2.0% | ||||||||
Arden Group, Inc., Class A | 600 | 54,426 | ||||||
Casey’s General Stores, Inc. | 5,100 | 252,705 | ||||||
Costco Wholesale Corp. | 53,600 | 4,462,200 | ||||||
CVS Caremark Corp. | 168,140 | 6,103,482 | ||||||
Ingles Markets, Inc., Class A | 300 | 4,530 | ||||||
Nash Finch Co. | 1,700 | 44,744 | ||||||
PriceSmart, Inc. | 3,500 | 266,140 | ||||||
Rite Aid Corp. * | 75,000 | 87,000 | ||||||
Ruddick Corp. | 6,100 | 266,631 | ||||||
Safeway, Inc. | 44,900 | 869,713 | ||||||
Spartan Stores, Inc. | 500 | 8,560 | ||||||
SUPERVALU, Inc. | 24,332 | 195,143 | ||||||
Sysco Corp. | 71,136 | 1,971,890 | ||||||
The Andersons, Inc. | 1,000 | 36,920 | ||||||
The Fresh Market, Inc. * | 4,000 | 160,000 | ||||||
The Kroger Co. | 71,800 | 1,664,324 | ||||||
The Pantry, Inc. * | 1,000 | 14,140 | ||||||
United Natural Foods, Inc. * | 5,600 | 204,456 | ||||||
Wal-Mart Stores, Inc. | 218,100 | 12,370,632 | ||||||
Walgreen Co. | 115,400 | 3,831,280 | ||||||
Weis Markets, Inc. | 1,700 | 67,235 | ||||||
Whole Foods Market, Inc. | 19,400 | 1,399,128 | ||||||
Winn-Dixie Stores, Inc. * | 5,000 | 31,700 | ||||||
34,366,979 |
See financial notes 35
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Food, Beverage & Tobacco 5.4% | ||||||||
Alico, Inc. | 500 | 11,385 | ||||||
Alliance One International, Inc. * | 16,800 | 44,856 | ||||||
Altria Group, Inc. | 257,300 | 7,088,615 | ||||||
Archer-Daniels-Midland Co. | 71,458 | 2,067,995 | ||||||
B&G Foods, Inc. | 3,000 | 63,660 | ||||||
Beam, Inc. | 19,000 | 939,170 | ||||||
Bridgford Foods Corp. | 300 | 2,637 | ||||||
Brown-Forman Corp., Class B | 12,390 | 925,905 | ||||||
Bunge Ltd. | 18,000 | 1,111,860 | ||||||
Campbell Soup Co. | 20,400 | 678,300 | ||||||
Chiquita Brands International, Inc. * | 6,200 | 55,056 | ||||||
Coca-Cola Bottling Co. Consolidated | 3,400 | 190,808 | ||||||
Coca-Cola Enterprises, Inc. | 41,000 | 1,099,620 | ||||||
ConAgra Foods, Inc. | 54,293 | 1,375,242 | ||||||
Constellation Brands, Inc., Class A * | 21,100 | 426,642 | ||||||
Corn Products International, Inc. | 11,800 | 572,300 | ||||||
Darling International, Inc. * | 12,500 | 175,250 | ||||||
Dean Foods Co. * | 19,113 | 185,778 | ||||||
Diamond Foods, Inc. (d) | 3,000 | 197,250 | ||||||
Dole Food Co., Inc. * | 6,000 | 63,480 | ||||||
Dr Pepper Snapple Group, Inc. | 31,500 | 1,179,675 | ||||||
Flowers Foods, Inc. | 10,737 | 216,780 | ||||||
Fresh Del Monte Produce, Inc. | 4,200 | 106,932 | ||||||
General Mills, Inc. | 75,100 | 2,893,603 | ||||||
Green Mountain Coffee Roasters, Inc. * | 15,150 | 985,053 | ||||||
Griffin Land & Nurseries, Inc. | 300 | 8,046 | ||||||
H.J. Heinz Co. | 39,900 | 2,132,256 | ||||||
Hansen Natural Corp. * | 10,000 | 890,900 | ||||||
Harbinger Group, Inc. * | 8,000 | 41,120 | ||||||
Hormel Foods Corp. | 23,000 | 677,810 | ||||||
J & J Snack Foods Corp. | 5,693 | 293,588 | ||||||
John B. Sanfilippo & Son, Inc. * | 5,000 | 43,000 | ||||||
Kellogg Co. | 29,400 | 1,593,774 | ||||||
Kraft Foods, Inc., Class A | 200,513 | 7,054,047 | ||||||
Lancaster Colony Corp. | 3,400 | 226,168 | ||||||
Lorillard, Inc. | 18,048 | 1,997,192 | ||||||
McCormick & Co., Inc. - Non Voting Shares | 14,300 | 694,408 | ||||||
Mead Johnson Nutrition Co. | 24,500 | 1,760,325 | ||||||
Molson Coors Brewing Co., Class B | 17,000 | 719,780 | ||||||
National Beverage Corp. | 4,500 | 76,140 | ||||||
PepsiCo, Inc. | 195,858 | 12,329,261 | ||||||
Philip Morris International, Inc. | 220,300 | 15,392,361 | ||||||
Pilgrim’s Pride Corp. * | 9,000 | 45,360 | ||||||
Primo Water Corp. * | 1,000 | 6,080 | ||||||
Ralcorp Holdings, Inc. * | 6,700 | 541,628 | ||||||
Reynolds American, Inc. | 42,328 | 1,637,247 | ||||||
Rocky Mountain Chocolate Factory, Inc. | 3,427 | 29,438 | ||||||
Sanderson Farms, Inc. | 1,750 | 86,625 | ||||||
Sara Lee Corp. | 72,378 | 1,288,328 | ||||||
Smithfield Foods, Inc. * | 16,800 | 384,048 | ||||||
Snyders-Lance, Inc. | 2,900 | 61,538 | ||||||
The Boston Beer Co., Inc., Class A (d)* | 2,500 | 221,200 | ||||||
The Coca-Cola Co. | 262,700 | 17,947,664 | ||||||
The Hain Celestial Group, Inc. * | 4,406 | 147,865 | ||||||
The Hershey Co. | 19,400 | 1,110,262 | ||||||
The JM Smucker Co. | 15,246 | 1,174,247 | ||||||
Tootsie Roll Industries, Inc. | 2,769 | 68,588 | ||||||
TreeHouse Foods, Inc. * | 3,722 | 228,308 | ||||||
Tyson Foods, Inc., Class A | 33,340 | 643,462 | ||||||
Universal Corp. | 4,800 | 205,536 | ||||||
Vector Group Ltd. (d) | 4,762 | 83,668 | ||||||
94,499,120 | ||||||||
Health Care Equipment & Services 4.3% | ||||||||
ABIOMED, Inc. * | 3,800 | 57,228 | ||||||
Accretive Health, Inc. (d)* | 3,700 | 88,097 | ||||||
Aetna, Inc. | 49,200 | 1,956,192 | ||||||
Alere, Inc. * | 9,441 | 246,032 | ||||||
Align Technology, Inc. * | 8,700 | 200,361 | ||||||
Alliance HealthCare Services, Inc. * | 1,800 | 1,998 | ||||||
Allscripts Healthcare Solutions, Inc. * | 23,460 | 449,259 | ||||||
Amedisys, Inc. * | 3,334 | 43,775 | ||||||
American Dental Partners, Inc. * | 3,000 | 31,680 | ||||||
AMERIGROUP Corp. * | 7,300 | 406,099 | ||||||
AmerisourceBergen Corp. | 33,796 | 1,378,877 | ||||||
AMN Healthcare Services, Inc. * | 7,110 | 33,701 | ||||||
AmSurg Corp. * | 4,300 | 108,919 | ||||||
Analogic Corp. | 1,400 | 75,712 | ||||||
ArthroCare Corp. * | 3,000 | 90,450 | ||||||
Assisted Living Concepts, Inc., Class A | 4,000 | 56,840 | ||||||
athenahealth, Inc. * | 4,000 | 211,640 | ||||||
Baxter International, Inc. | 70,418 | 3,871,582 | ||||||
Becton, Dickinson & Co. | 26,300 | 2,057,449 | ||||||
BioScrip, Inc. * | 2,172 | 14,118 | ||||||
Boston Scientific Corp. * | 184,568 | 1,087,106 | ||||||
Brookdale Senior Living, Inc. * | 11,300 | 187,354 | ||||||
C.R. Bard, Inc. | 11,300 | 971,235 | ||||||
Cantel Medical Corp. | 3,571 | 98,560 | ||||||
Cardinal Health, Inc. | 42,260 | 1,870,850 | ||||||
CareFusion Corp. * | 27,080 | 693,248 | ||||||
Catalyst Health Solutions, Inc. * | 4,900 | 269,353 | ||||||
Centene Corp. * | 7,000 | 246,050 | ||||||
Cerner Corp. * | 16,800 | 1,065,624 | ||||||
Chemed Corp. | 3,900 | 231,504 | ||||||
Chindex International, Inc. * | 3,300 | 36,663 | ||||||
CIGNA Corp. | 34,400 | 1,525,296 | ||||||
Community Health Systems, Inc. * | 12,100 | 211,508 | ||||||
CONMED Corp. * | 4,200 | 110,334 | ||||||
CorVel Corp. * | 2,850 | 146,975 | ||||||
Coventry Health Care, Inc. * | 23,937 | 761,436 | ||||||
Covidien plc | 60,500 | 2,845,920 | ||||||
Cross Country Healthcare, Inc. * | 7,100 | 35,500 | ||||||
CryoLife, Inc. * | 4,250 | 19,593 | ||||||
Cyberonics, Inc. * | 4,200 | 120,960 | ||||||
DaVita, Inc. * | 14,250 | 997,500 | ||||||
DENTSPLY International, Inc. | 18,100 | 668,976 | ||||||
Dexcom, Inc. * | 8,600 | 84,194 | ||||||
Edwards Lifesciences Corp. * | 13,800 | 1,040,796 | ||||||
Emdeon, Inc., Class A * | 5,000 | 94,850 | ||||||
Emeritus Corp. * | 3,400 | 60,214 |
36 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ensign Group, Inc. | 3,000 | 68,280 | ||||||
Express Scripts, Inc. * | 60,400 | 2,762,092 | ||||||
Five Star Quality Care, Inc. * | 3,635 | 9,415 | ||||||
Gen-Probe, Inc. * | 6,400 | 384,640 | ||||||
Gentiva Health Services, Inc. * | 3,250 | 13,455 | ||||||
Greatbatch, Inc. * | 4,100 | 91,553 | ||||||
Haemonetics Corp. * | 3,700 | 225,515 | ||||||
Hanger Orthopedic Group, Inc. * | 5,400 | 93,798 | ||||||
HCA Holdings, Inc. * | 15,500 | 363,475 | ||||||
Health Management Associates, Inc., Class A * | 27,900 | 244,404 | ||||||
Health Net, Inc. * | 11,100 | 308,469 | ||||||
HEALTHSOUTH Corp. * | 20,000 | 353,200 | ||||||
Healthspring, Inc. * | 9,100 | 490,854 | ||||||
HealthStream, Inc. * | 1,500 | 22,770 | ||||||
Healthways, Inc. * | 3,100 | 22,196 | ||||||
Henry Schein, Inc. * | 10,600 | 734,792 | ||||||
Hill-Rom Holdings, Inc. | 7,800 | 262,626 | ||||||
HMS Holdings Corp. * | 10,000 | 244,400 | ||||||
Hologic, Inc. * | 32,512 | 524,093 | ||||||
Humana, Inc. | 20,900 | 1,774,201 | ||||||
ICU Medical, Inc. * | 3,550 | 139,551 | ||||||
IDEXX Laboratories, Inc. * | 8,000 | 575,920 | ||||||
Insulet Corp. * | 4,500 | 73,440 | ||||||
Integra LifeSciences Holdings * | 3,100 | 99,386 | ||||||
Intuitive Surgical, Inc. * | 5,050 | 2,190,993 | ||||||
Invacare Corp. | 4,000 | 89,800 | ||||||
IPC The Hospitalist Co. * | 2,000 | 83,860 | ||||||
Kindred Healthcare, Inc. * | 6,508 | 75,818 | ||||||
Kinetic Concepts, Inc. * | 8,600 | 588,154 | ||||||
Laboratory Corp. of America Holdings * | 12,800 | 1,073,280 | ||||||
Landauer, Inc. | 1,100 | 56,375 | ||||||
LCA-Vision, Inc. * | 2,500 | 8,075 | ||||||
LeMaitre Vascular, Inc. | 2,000 | 11,560 | ||||||
LifePoint Hospitals, Inc. * | 6,707 | 259,293 | ||||||
Lincare Holdings, Inc. | 12,650 | 297,907 | ||||||
Magellan Health Services, Inc. * | 3,007 | 154,770 | ||||||
MAKO Surgical Corp. (d)* | 5,000 | 192,250 | ||||||
Masimo Corp. | 5,500 | 113,740 | ||||||
McKesson Corp. | 30,500 | 2,487,275 | ||||||
MedAssets, Inc. * | 6,000 | 63,960 | ||||||
MedCath Corp. | 4,500 | 32,400 | ||||||
Medco Health Solutions, Inc. * | 51,066 | 2,801,481 | ||||||
Medical Action Industries, Inc. * | 6,250 | 32,750 | ||||||
MEDNAX, Inc. * | 6,000 | 394,800 | ||||||
Medtronic, Inc. | 134,874 | 4,685,523 | ||||||
Meridian Bioscience, Inc. | 11,250 | 204,975 | ||||||
Merit Medical Systems, Inc. * | 2,777 | 37,267 | ||||||
Molina Healthcare, Inc. * | 3,750 | 79,425 | ||||||
MWI Veterinary Supply, Inc. * | 3,000 | 226,500 | ||||||
National Healthcare Corp. | 2,100 | 80,451 | ||||||
Neogen Corp. * | 1,405 | 54,303 | ||||||
NuVasive, Inc. * | 10,000 | 148,200 | ||||||
NxStage Medical, Inc. * | 6,000 | 137,940 | ||||||
Omnicare, Inc. | 15,000 | 447,300 | ||||||
Omnicell, Inc. * | 3,000 | 44,850 | ||||||
OraSure Technologies, Inc. * | 1,500 | 13,935 | ||||||
Orthofix International N.V. * | 1,000 | 35,110 | ||||||
Owens & Minor, Inc. | 7,500 | 224,400 | ||||||
Patterson Cos., Inc. | 13,100 | 412,257 | ||||||
PDI, Inc. * | 2,900 | 18,676 | ||||||
PharMerica Corp. * | 3,413 | 53,243 | ||||||
PSS World Medical, Inc. * | 5,800 | 129,050 | ||||||
Quality Systems, Inc. | 4,000 | 155,640 | ||||||
Quest Diagnostics, Inc. | 19,820 | 1,105,956 | ||||||
ResMed, Inc. * | 18,000 | 509,400 | ||||||
RTI Biologics, Inc. * | 1,700 | 7,650 | ||||||
Sirona Dental Systems, Inc. * | 7,000 | 335,300 | ||||||
SonoSite, Inc. * | 2,800 | 86,772 | ||||||
St. Jude Medical, Inc. | 42,300 | 1,649,700 | ||||||
STERIS Corp. | 6,100 | 188,978 | ||||||
Stryker Corp. | 37,100 | 1,777,461 | ||||||
Sunrise Senior Living, Inc. * | 6,400 | 35,200 | ||||||
Symmetry Medical, Inc. * | 3,000 | 27,270 | ||||||
Teleflex, Inc. | 4,300 | 257,398 | ||||||
Tenet Healthcare Corp. * | 55,650 | 263,224 | ||||||
The Cooper Cos., Inc. | 5,781 | 400,623 | ||||||
The Providence Service Corp. * | 3,000 | 37,500 | ||||||
Thoratec Corp. * | 5,636 | 205,770 | ||||||
U.S. Physical Therapy, Inc. | 3,500 | 68,320 | ||||||
UnitedHealth Group, Inc. | 137,080 | 6,578,469 | ||||||
Universal American Corp. * | 4,000 | 46,000 | ||||||
Universal Health Services, Inc., Class B | 12,000 | 479,640 | ||||||
Utah Medical Products, Inc. | 2,500 | 65,988 | ||||||
Varian Medical Systems, Inc. * | 14,900 | 874,928 | ||||||
VCA Antech, Inc. * | 9,900 | 201,168 | ||||||
Volcano Corp. * | 7,500 | 186,975 | ||||||
WellCare Health Plans, Inc. * | 6,200 | 303,862 | ||||||
WellPoint, Inc. | 47,023 | 3,239,885 | ||||||
West Pharmaceutical Services, Inc. | 4,600 | 178,802 | ||||||
Wright Medical Group, Inc. * | 4,200 | 72,198 | ||||||
Young Innovations, Inc. | 2,000 | 57,500 | ||||||
Zimmer Holdings, Inc. * | 23,300 | 1,226,279 | ||||||
Zoll Medical Corp. * | 3,000 | 113,430 | ||||||
75,523,365 | ||||||||
Household & Personal Products 2.2% | ||||||||
Avon Products, Inc. | 53,500 | 977,980 | ||||||
Central Garden & Pet Co., Class A * | 6,200 | 54,498 | ||||||
Church & Dwight Co., Inc. | 15,900 | 702,462 | ||||||
Colgate-Palmolive Co. | 60,500 | 5,467,385 | ||||||
Elizabeth Arden, Inc. * | 3,500 | 119,980 | ||||||
Energizer Holdings, Inc. * | 9,333 | 688,682 | ||||||
Herbalife Ltd. | 15,600 | 972,816 | ||||||
Inter Parfums, Inc. | 4,013 | 74,000 | ||||||
Kimberly-Clark Corp. | 49,139 | 3,425,479 | ||||||
Medifast, Inc. * | 3,500 | 57,540 | ||||||
Nu Skin Enterprises, Inc., Class A | 6,500 | 328,445 | ||||||
Nutraceutical International Corp. * | 5,000 | 69,000 | ||||||
Oil-Dri Corp. of America | 500 | 10,025 | ||||||
Orchids Paper Products Co. | 2,500 | 29,200 | ||||||
Prestige Brands Holdings, Inc. * | 6,500 | 68,770 | ||||||
Revlon, Inc., Class A * | 3,500 | 51,555 | ||||||
Schiff Nutrition International, Inc. * | 3,500 | 42,770 | ||||||
Spectrum Brands Holdings, Inc. * | 2,000 | 50,760 | ||||||
The Clorox Co. | 14,700 | 984,018 | ||||||
The Estee Lauder Cos., Inc., Class A | 16,000 | 1,575,200 | ||||||
The Female Health Co. | 3,500 | 15,925 | ||||||
The Procter & Gamble Co. | 343,215 | 21,962,328 |
See financial notes 37
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
USANA Health Sciences, Inc. * | 3,500 | 121,100 | ||||||
WD-40 Co. | 1,600 | 70,432 | ||||||
37,920,350 | ||||||||
Insurance 3.8% | ||||||||
21st Century Holding Co. * | 1,500 | 3,660 | ||||||
ACE Ltd. | 41,000 | 2,958,150 | ||||||
Aflac, Inc. | 56,600 | 2,552,094 | ||||||
Alleghany Corp. * | 240 | 76,157 | ||||||
Allied World Assurance Co. Holdings AG | 4,900 | 284,690 | ||||||
American Equity Investment Life Holding Co. | 6,400 | 69,376 | ||||||
American Financial Group, Inc. | 10,750 | 385,172 | ||||||
American International Group, Inc. * | 25,596 | 631,965 | ||||||
American National Insurance Co. | 1,300 | 92,898 | ||||||
American Safety Insurance Holdings Ltd. * | 3,000 | 61,230 | ||||||
AmTrust Financial Services, Inc. | 7,500 | 190,350 | ||||||
Aon Corp. | 35,996 | 1,678,134 | ||||||
Arch Capital Group Ltd. * | 20,700 | 744,579 | ||||||
Argo Group International Holdings Ltd. | 4,556 | 137,546 | ||||||
Arthur J. Gallagher & Co. | 12,800 | 395,520 | ||||||
Aspen Insurance Holdings Ltd. | 9,000 | 238,410 | ||||||
Assurant, Inc. | 13,500 | 520,290 | ||||||
Assured Guaranty Ltd. | 20,500 | 261,170 | ||||||
Axis Capital Holdings Ltd. | 15,200 | 476,520 | ||||||
Baldwin & Lyons, Inc., Class B | 750 | 17,273 | ||||||
Berkshire Hathaway, Inc., Class B * | 236,774 | 18,435,224 | ||||||
Brown & Brown, Inc. | 14,000 | 309,120 | ||||||
Cincinnati Financial Corp. | 19,450 | 562,883 | ||||||
Citizens, Inc. * | 5,000 | 39,200 | ||||||
CNA Financial Corp. | 23,900 | 635,740 | ||||||
CNO Financial Group, Inc. * | 25,000 | 156,250 | ||||||
Crawford & Co., Class B | 1,600 | 11,376 | ||||||
Delphi Financial Group, Inc., Class A | 6,772 | 179,323 | ||||||
Eastern Insurance Holdings, Inc. | 2,500 | 33,100 | ||||||
EMC Insurance Group, Inc. | 1,200 | 23,328 | ||||||
Employers Holdings, Inc. | 4,200 | 68,124 | ||||||
Endurance Specialty Holdings Ltd. | 5,000 | 186,000 | ||||||
Erie Indemnity Co., Class A | 5,500 | 434,225 | ||||||
Everest Re Group Ltd. | 5,900 | 530,528 | ||||||
FBL Financial Group, Inc., Class A | 5,090 | 166,189 | ||||||
Fidelity National Financial, Inc., Class A | 27,727 | 428,105 | ||||||
First American Financial Corp. | 10,800 | 129,600 | ||||||
Flagstone Reinsurance Holdings S.A. | 7,500 | 63,675 | ||||||
Genworth Financial, Inc., Class A * | 58,500 | 373,230 | ||||||
Greenlight Capital Re Ltd., Class A * | 3,000 | 67,590 | ||||||
Harleysville Group, Inc. | 1,800 | 105,768 | ||||||
Hartford Financial Services Group, Inc. | 53,400 | 1,027,950 | ||||||
HCC Insurance Holdings, Inc. | 13,950 | 371,209 | ||||||
Hilltop Holdings, Inc. * | 3,726 | 29,361 | ||||||
Horace Mann Educators Corp. | 4,300 | 57,835 | ||||||
Independence Holding Co. | 2,700 | 22,383 | ||||||
Infinity Property & Casualty Corp. | 2,500 | 144,900 | ||||||
Kemper Corp. | 5,600 | 150,584 | ||||||
Lincoln National Corp. | 38,426 | 732,015 | ||||||
Loews Corp. | 44,645 | 1,772,406 | ||||||
Markel Corp. * | 1,200 | 463,800 | ||||||
Marsh & McLennan Cos., Inc. | 66,500 | 2,036,230 | ||||||
MBIA, Inc. (d)* | 25,250 | 222,200 | ||||||
Mercury General Corp. | 5,400 | 233,820 | ||||||
MetLife, Inc. | 103,000 | 3,621,480 | ||||||
Montpelier Re Holdings Ltd. | 8,100 | 141,750 | ||||||
National Financial Partners Corp. * | 2,500 | 34,175 | ||||||
National Western Life Insurance Co., Class A | 300 | 43,131 | ||||||
Old Republic International Corp. | 20,822 | 184,066 | ||||||
OneBeacon Insurance Group Ltd., Class A | 8,200 | 124,804 | ||||||
PartnerRe Ltd. | 8,900 | 553,758 | ||||||
Platinum Underwriters Holdings Ltd. | 4,500 | 155,835 | ||||||
Presidential Life Corp. | 1,000 | 9,920 | ||||||
Primerica, Inc. | 4,500 | 101,835 | ||||||
Principal Financial Group, Inc. | 36,900 | 951,282 | ||||||
ProAssurance Corp. | 3,670 | 280,939 | ||||||
Protective Life Corp. | 10,500 | 195,300 | ||||||
Prudential Financial, Inc. | 60,000 | 3,252,000 | ||||||
Reinsurance Group of America, Inc. | 10,100 | 527,523 | ||||||
RenaissanceRe Holdings Ltd. | 5,800 | 395,096 | ||||||
RLI Corp. | 2,800 | 196,952 | ||||||
Safety Insurance Group, Inc. | 1,000 | 42,620 | ||||||
Selective Insurance Group, Inc. | 5,400 | 86,562 | ||||||
StanCorp Financial Group, Inc. | 5,000 | 169,700 | ||||||
State Auto Financial Corp. | 3,800 | 50,502 | ||||||
Stewart Information Services Corp. | 1,400 | 14,056 | ||||||
Symetra Financial Corp. | 11,500 | 106,605 | ||||||
The Allstate Corp. | 60,874 | 1,603,421 | ||||||
The Chubb Corp. | 37,094 | 2,487,153 | ||||||
The Hanover Insurance Group, Inc. | 4,900 | 186,984 | ||||||
The Navigators Group, Inc. * | 1,500 | 68,430 | ||||||
The Phoenix Cos., Inc. * | 9,500 | 14,155 | ||||||
The Progressive Corp. | 78,700 | 1,496,087 | ||||||
The Travelers Cos., Inc. | 55,050 | 3,212,167 | ||||||
Torchmark Corp. | 15,900 | 650,787 | ||||||
Tower Group, Inc. | 4,000 | 94,920 | ||||||
Transatlantic Holdings, Inc. | 8,437 | 439,061 | ||||||
United Fire & Casualty Co. | 5,000 | 94,050 | ||||||
Unum Group | 38,914 | 927,710 | ||||||
Validus Holdings Ltd. | 10,920 | 298,771 | ||||||
W. R. Berkley Corp. | 22,950 | 798,889 | ||||||
White Mountains Insurance Group Ltd. | 400 | 168,000 | ||||||
XL Group plc | 40,200 | 873,948 | ||||||
66,632,879 | ||||||||
Materials 4.1% | ||||||||
A. M. Castle & Co. * | 4,000 | 54,760 | ||||||
A. Schulman, Inc. | 5,300 | 111,883 | ||||||
AbitibiBowater, Inc. * | 8,500 | 144,500 | ||||||
AEP Industries, Inc. * | 1,900 | 51,357 | ||||||
Air Products & Chemicals, Inc. | 25,700 | 2,213,798 |
38 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Airgas, Inc. | 7,500 | 517,125 | ||||||
AK Steel Holding Corp. (d) | 11,527 | 96,020 | ||||||
Albemarle Corp. | 11,000 | 586,190 | ||||||
Alcoa, Inc. | 127,664 | 1,373,665 | ||||||
Allegheny Technologies, Inc. | 11,292 | 523,949 | ||||||
Allied Nevada Gold Corp. * | 4,000 | 151,920 | ||||||
AMCOL International Corp. | 3,000 | 90,570 | ||||||
AptarGroup, Inc. | 6,900 | 330,993 | ||||||
Ashland, Inc. | 14,523 | 769,138 | ||||||
Balchem Corp. | 3,000 | 110,610 | ||||||
Ball Corp. | 21,400 | 739,798 | ||||||
Bemis Co., Inc. | 13,400 | 376,674 | ||||||
Boise, Inc. | 9,500 | 57,475 | ||||||
Buckeye Technologies, Inc. | 7,700 | 232,848 | ||||||
Cabot Corp. | 13,200 | 398,376 | ||||||
Calgon Carbon Corp. * | 7,000 | 111,650 | ||||||
Carpenter Technology Corp. | 5,000 | 283,600 | ||||||
Celanese Corp., Series A | 18,500 | 805,675 | ||||||
Century Aluminum Co. * | 7,100 | 79,236 | ||||||
CF Industries Holdings, Inc. | 8,400 | 1,363,068 | ||||||
Chase Corp. | 200 | 2,800 | ||||||
Chemtura Corp. * | 11,500 | 139,610 | ||||||
Clearwater Paper Corp. * | 1,572 | 52,080 | ||||||
Cliffs Natural Resources, Inc. | 16,300 | 1,111,986 | ||||||
Coeur d’Alene Mines Corp. * | 11,500 | 294,055 | ||||||
Commercial Metals Co. | 12,000 | 149,160 | ||||||
Compass Minerals International, Inc. | 5,000 | 380,350 | ||||||
Crown Holdings, Inc. * | 19,900 | 672,421 | ||||||
Cytec Industries, Inc. | 6,600 | 294,822 | ||||||
Deltic Timber Corp. | 3,700 | 250,453 | ||||||
Domtar Corp. | 5,250 | 430,028 | ||||||
E.I. du Pont de Nemours & Co. | 112,695 | 5,417,249 | ||||||
Eagle Materials, Inc. | 4,143 | 85,263 | ||||||
Eastman Chemical Co. | 16,200 | 636,498 | ||||||
Ecolab, Inc. | 27,000 | 1,453,680 | ||||||
Ferro Corp. * | 8,200 | 53,054 | ||||||
FMC Corp. | 9,200 | 725,788 | ||||||
Freeport-McMoran Copper & Gold, Inc. | 116,244 | 4,679,983 | ||||||
Graphic Packaging Holding Co. * | 4,000 | 17,680 | ||||||
Greif, Inc., Class A | 7,400 | 331,372 | ||||||
H.B. Fuller Co. | 6,500 | 139,685 | ||||||
Hawkins, Inc. | 1,900 | 72,732 | ||||||
Headwaters, Inc. * | 12,000 | 21,120 | ||||||
Hecla Mining Co. * | 28,500 | 178,695 | ||||||
Horsehead Holding Corp. * | 4,000 | 34,720 | ||||||
Huntsman Corp. | 24,500 | 287,630 | ||||||
Innophos Holdings, Inc. | 6,500 | 285,935 | ||||||
International Flavors & Fragrances, Inc. | 9,900 | 599,544 | ||||||
International Paper Co. | 50,304 | 1,393,421 | ||||||
Intrepid Potash, Inc. * | 6,500 | 180,895 | ||||||
Koppers Holdings, Inc. | 2,500 | 82,725 | ||||||
Kraton Performance Polymers, Inc. * | 3,500 | 68,880 | ||||||
Kronos Worldwide, Inc. | 12,120 | 268,943 | ||||||
Landec Corp. * | 6,500 | 40,365 | ||||||
Louisiana-Pacific Corp. * | 13,800 | 91,770 | ||||||
LSB Industries, Inc. * | 3,000 | 106,290 | ||||||
LyondellBasell Industries N.V., Class A | 40,500 | 1,330,830 | ||||||
Martin Marietta Materials, Inc. | 4,200 | 303,114 | ||||||
Materion Corp. * | 4,000 | 105,760 | ||||||
MeadWestvaco Corp. | 19,974 | 557,474 | ||||||
Minerals Technologies, Inc. | 3,100 | 170,004 | ||||||
Mod-Pac Corp. * | 500 | 2,960 | ||||||
Molycorp, Inc. (d)* | 3,500 | 133,945 | ||||||
Monsanto Co. | 69,290 | 5,040,847 | ||||||
Myers Industries, Inc. | 8,080 | 98,738 | ||||||
Nalco Holding Co. | 16,100 | 607,131 | ||||||
Neenah Paper, Inc. | 4,231 | 69,812 | ||||||
NewMarket Corp. | 2,000 | 388,280 | ||||||
Newmont Mining Corp. | 59,251 | 3,959,744 | ||||||
Nucor Corp. | 33,500 | 1,265,630 | ||||||
Olin Corp. | 7,320 | 138,055 | ||||||
OM Group, Inc. * | 2,400 | 69,384 | ||||||
Omnova Solutions, Inc. * | 6,400 | 28,352 | ||||||
Owens-Illinois, Inc. * | 20,200 | 405,616 | ||||||
P.H. Glatfelter Co. | 7,000 | 105,000 | ||||||
Packaging Corp. of America | 11,000 | 286,880 | ||||||
Penford Corp. * | 6,200 | 31,682 | ||||||
PolyOne Corp. | 15,200 | 170,088 | ||||||
PPG Industries, Inc. | 20,400 | 1,762,764 | ||||||
Praxair, Inc. | 37,300 | 3,792,291 | ||||||
Reliance Steel & Aluminum Co. | 8,500 | 375,615 | ||||||
Rock-Tenn Co., Class A | 7,713 | 456,532 | ||||||
Rockwood Holdings, Inc. * | 5,900 | 271,636 | ||||||
Royal Gold, Inc. | 5,200 | 372,216 | ||||||
RPM International, Inc. | 15,600 | 350,532 | ||||||
RTI International Metals, Inc. * | 4,500 | 118,755 | ||||||
Schnitzer Steel Industries, Inc., Class A | 1,650 | 77,220 | ||||||
Schweitzer-Mauduit International, Inc. | 3,300 | 232,056 | ||||||
Sealed Air Corp. | 18,500 | 329,300 | ||||||
Sensient Technologies Corp. | 4,800 | 177,408 | ||||||
Sigma-Aldrich Corp. | 12,600 | 825,048 | ||||||
Silgan Holdings, Inc. | 11,600 | 435,464 | ||||||
Solutia, Inc. * | 14,000 | 227,500 | ||||||
Sonoco Products Co. | 13,500 | 423,765 | ||||||
Southern Copper Corp. | 25,900 | 794,612 | ||||||
Spartech Corp. * | 8,200 | 33,292 | ||||||
Steel Dynamics, Inc. | 26,000 | 324,740 | ||||||
Stepan Co. | 1,200 | 92,748 | ||||||
Stillwater Mining Co. * | 11,233 | 127,607 | ||||||
Temple-Inland, Inc. | 11,800 | 375,358 | ||||||
Texas Industries, Inc. (d) | 4,000 | 120,000 | ||||||
The Dow Chemical Co. | 144,766 | 4,036,076 | ||||||
The Mosaic Co. | 33,500 | 1,961,760 | ||||||
The Scotts Miracle-Gro Co., Class A | 5,600 | 271,656 | ||||||
The Sherwin-Williams Co. | 13,000 | 1,075,230 | ||||||
The Valspar Corp. | 10,400 | 362,648 | ||||||
Titanium Metals Corp. | 16,307 | 273,142 | ||||||
United States Steel Corp. (d) | 14,900 | 377,864 | ||||||
Valhi, Inc. | 9,600 | 567,264 | ||||||
Vulcan Materials Co. | 19,592 | 613,034 | ||||||
W.R. Grace & Co. * | 7,000 | 292,530 | ||||||
Walter Energy, Inc. | 7,600 | 574,940 | ||||||
Wausau Paper Corp. | 8,700 | 65,250 | ||||||
Westlake Chemical Corp. | 2,100 | 86,541 | ||||||
Worthington Industries, Inc. | 7,200 | 124,416 |
See financial notes 39
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Zep, Inc. | 6,600 | 100,584 | ||||||
70,755,280 | ||||||||
Media 3.0% | ||||||||
AH Belo Corp., Class A | 7,880 | 39,400 | ||||||
AMC Networks, Inc., Class A * | 7,400 | 241,388 | ||||||
Arbitron, Inc. | 2,120 | 84,228 | ||||||
Belo Corp., Class A | 9,400 | 59,596 | ||||||
Cablevision Systems Corp., Class A | 29,600 | 428,312 | ||||||
Carmike Cinemas, Inc. * | 2,500 | 16,200 | ||||||
CBS Corp., Class B - Non Voting Shares | 77,106 | 1,990,106 | ||||||
Charter Communications, Inc., Class A * | 4,500 | 206,730 | ||||||
Cinemark Holdings, Inc. | 6,500 | 134,355 | ||||||
Clear Channel Outdoor Holdings, Inc., Class A * | 28,700 | 315,700 | ||||||
Comcast Corp., Class A | 277,004 | 6,495,744 | ||||||
Comcast Corp., Special Class A | 64,200 | 1,476,600 | ||||||
Crown Media Holdings, Inc., Class A (d)* | 6,000 | 9,480 | ||||||
Cumulus Media Inc., Class A (d)* | 4,351 | 13,097 | ||||||
DG Fastchannel, Inc. * | 3,000 | 55,920 | ||||||
DIRECTV, Class A * | 96,126 | 4,369,888 | ||||||
Discovery Communications, Inc., Class A * | 36,561 | 1,588,941 | ||||||
DISH Network Corp., Class A * | 25,700 | 621,169 | ||||||
DreamWorks Animation SKG, Inc., Class A * | 8,200 | 152,110 | ||||||
Entercom Communications Corp., Class A * | 3,000 | 19,680 | ||||||
Gannett Co., Inc. | 27,000 | 315,630 | ||||||
Harte-Hanks, Inc. | 8,100 | 71,118 | ||||||
John Wiley & Sons, Inc., Class A | 6,300 | 299,628 | ||||||
Journal Communications, Inc., Class A * | 11,500 | 44,390 | ||||||
Lamar Advertising Co., Class A * | 9,200 | 206,908 | ||||||
Liberty Global, Inc., Series A * | 27,575 | 1,107,963 | ||||||
Liberty Media Corp - Liberty Starz - Class A * | 4,464 | 304,891 | ||||||
Liberty Media Corp. - Liberty Capital, Class A * | 11,161 | 857,388 | ||||||
Live Nation Entertainment, Inc. * | 15,457 | 145,141 | ||||||
Martha Stewart Living Omnimedia, Inc., Class A * | 3,900 | 15,093 | ||||||
Media General, Inc., Class A (d)* | 5,000 | 15,100 | ||||||
Meredith Corp. | 3,800 | 101,954 | ||||||
Morningstar, Inc. | 3,200 | 188,704 | ||||||
News Corp., Class A | 286,950 | 5,027,364 | ||||||
Omnicom Group, Inc. | 36,600 | 1,627,968 | ||||||
Regal Entertainment Group, Class A | 12,100 | 174,724 | ||||||
Salem Communications Corp., Class A | 900 | 2,241 | ||||||
Scholastic Corp. | 2,200 | 59,070 | ||||||
Scripps Networks Interactive, Class A | 12,000 | 509,760 | ||||||
Sinclair Broadcast Group, Inc., Class A | 7,300 | 69,934 | ||||||
Sirius XM Radio, Inc. * | 472,800 | 846,312 | ||||||
The E.W. Scripps Co., Class A * | 7,000 | 58,380 | ||||||
The Interpublic Group of Cos., Inc. | 55,937 | 530,283 | ||||||
The Madison Square Garden, Inc., Class A * | 7,275 | 192,278 | ||||||
The McGraw-Hill Cos., Inc. | 39,600 | 1,683,000 | ||||||
The New York Times Co., Class A * | 13,200 | 100,584 | ||||||
The Walt Disney Co. | 219,693 | 7,662,892 | ||||||
The Washington Post Co., Class B | 600 | 204,096 | ||||||
Time Warner Cable, Inc. | 42,711 | 2,720,264 | ||||||
Time Warner, Inc. | 137,350 | 4,805,876 | ||||||
Valassis Communications, Inc. * | 5,700 | 111,321 | ||||||
Viacom Inc., Class B | 65,106 | 2,854,898 | ||||||
Virgin Media, Inc. | 35,000 | 853,300 | ||||||
World Wrestling Entertainment, Inc., Class A (d) | 4,900 | 51,499 | ||||||
52,138,596 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 7.1% | ||||||||
Abbott Laboratories | 193,305 | 10,413,340 | ||||||
Acorda Therapeutics, Inc. * | 5,000 | 109,200 | ||||||
Acura Pharmaceuticals, Inc. (d)* | 4,500 | 19,980 | ||||||
Adolor Corp. * | 8,700 | 38,802 | ||||||
Affymax, Inc. * | 2,900 | 15,428 | ||||||
Affymetrix, Inc. * | 13,400 | 74,906 | ||||||
Agilent Technologies, Inc. * | 43,317 | 1,605,761 | ||||||
Albany Molecular Research, Inc. * | 8,600 | 27,606 | ||||||
Alexion Pharmaceuticals, Inc. * | 22,400 | 1,512,224 | ||||||
Alkermes PLC * | 11,500 | 201,135 | ||||||
Allergan, Inc. | 37,468 | 3,151,808 | ||||||
Allos Therapeutics, Inc. * | 11,000 | 16,170 | ||||||
Alnylam Pharmaceuticals, Inc. * | 7,400 | 60,088 | ||||||
AMAG Pharmaceuticals, Inc. * | 3,000 | 42,330 | ||||||
Amgen, Inc. | 115,268 | 6,601,398 | ||||||
Amicus Therapeutics, Inc. * | 500 | 1,645 | ||||||
Amylin Pharmaceuticals, Inc. * | 15,400 | 177,408 | ||||||
Arena Pharmaceuticals, Inc. * | 6,300 | 8,883 | ||||||
ARIAD Pharmaceuticals, Inc. * | 14,500 | 168,635 | ||||||
ArQule, Inc. * | 8,800 | 51,128 | ||||||
Astex Pharmaceuticals * | 5,900 | 11,387 | ||||||
Auxilium Pharmaceuticals, Inc. * | 5,000 | 77,800 | ||||||
AVEO Pharmaceuticals, Inc. * | 5,000 | 80,300 | ||||||
Bio-Rad Laboratories, Inc., Class A * | 3,000 | 298,650 | ||||||
BioCryst Pharmaceuticals, Inc. * | 4,900 | 15,043 | ||||||
Biogen Idec, Inc. * | 31,125 | 3,621,705 | ||||||
BioMarin Pharmaceuticals, Inc. * | 12,800 | 436,608 | ||||||
Bristol-Myers Squibb Co. | 212,450 | 6,711,295 | ||||||
Bruker Corp. * | 14,600 | 210,678 | ||||||
Caliper Life Sciences, Inc. * | 11,200 | 117,376 | ||||||
Cambrex Corp. * | 16,400 | 90,364 | ||||||
Celgene Corp. * | 58,445 | 3,788,989 | ||||||
Cepheid, Inc. * | 8,500 | 304,980 | ||||||
Charles River Laboratories International, Inc. * | 7,416 | 239,388 | ||||||
Codexis, Inc. * | 1,870 | 8,621 | ||||||
Covance, Inc. * | 8,800 | 446,424 | ||||||
Cubist Pharmaceuticals, Inc. * | 8,900 | 336,509 | ||||||
Dendreon Corp. * | 16,900 | 184,886 | ||||||
Durect Corp. * | 14,500 | 23,055 | ||||||
Dyax Corp. * | 7,000 | 9,450 |
40 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Eli Lilly & Co. | 121,900 | 4,529,804 | ||||||
Emergent Biosolutions, Inc. * | 6,000 | 113,160 | ||||||
Endo Pharmaceuticals Holdings, Inc. * | 13,000 | 420,030 | ||||||
Enzo Biochem, Inc. * | 9,281 | 26,544 | ||||||
Enzon Pharmaceuticals, Inc. * | 10,900 | 80,115 | ||||||
eResearch Technology, Inc. * | 9,125 | 46,629 | ||||||
Exelixis, Inc. * | 14,800 | 114,404 | ||||||
Forest Laboratories, Inc. * | 36,300 | 1,136,190 | ||||||
Furiex Pharmaceuticals, Inc. * | 1,000 | 14,200 | ||||||
Genomic Health, Inc. * | 5,000 | 107,000 | ||||||
Geron Corp. * | 11,500 | 27,025 | ||||||
Gilead Sciences, Inc. * | 99,640 | 4,151,002 | ||||||
GTX, Inc. * | 3,000 | 13,170 | ||||||
Halozyme Therapeutics, Inc. * | 9,000 | 75,870 | ||||||
Harvard Bioscience, Inc. * | 6,500 | 29,640 | ||||||
Hospira, Inc. * | 21,070 | 662,652 | ||||||
Human Genome Sciences, Inc. * | 22,600 | 231,876 | ||||||
Illumina, Inc. * | 15,200 | 465,424 | ||||||
ImmunoGen, Inc. * | 10,000 | 135,800 | ||||||
Impax Laboratories, Inc. * | 8,500 | 160,735 | ||||||
Incyte Corp. * | 15,100 | 207,927 | ||||||
InterMune, Inc. * | 4,600 | 117,300 | ||||||
Ironwood Pharmaceuticals, Inc. * | 6,000 | 81,600 | ||||||
Isis Pharmaceuticals, Inc. * | 10,300 | 85,387 | ||||||
Jazz Pharmaceuticals, Inc. * | 5,000 | 194,800 | ||||||
Johnson & Johnson | 338,670 | 21,806,961 | ||||||
Lexicon Pharmaceuticals, Inc. * | 42,400 | 51,304 | ||||||
Life Technologies Corp. * | 23,362 | 950,133 | ||||||
Ligand Pharmaceuticals, Inc. * | 448 | 6,586 | ||||||
Luminex Corp. * | 7,800 | 171,288 | ||||||
MannKind Corp. (d)* | 7,000 | 21,840 | ||||||
MAP Pharmaceuticals, Inc. * | 4,000 | 59,120 | ||||||
Maxygen, Inc. | 10,000 | 59,000 | ||||||
Medicis Pharmaceutical Corp., Class A | 7,900 | 302,491 | ||||||
Medivation, Inc. * | 5,000 | 85,900 | ||||||
Merck & Co., Inc. | 380,170 | 13,115,865 | ||||||
Mettler-Toledo International, Inc. * | 4,800 | 737,280 | ||||||
Momenta Pharmaceuticals, Inc. * | 4,000 | 59,200 | ||||||
Mylan, Inc. * | 52,900 | 1,035,253 | ||||||
Myrexis, Inc. * | 7,200 | 20,016 | ||||||
Myriad Genetics, Inc. * | 14,800 | 314,944 | ||||||
Nabi Biopharmaceuticals * | 10,300 | 18,952 | ||||||
Nektar Therapeutics * | 13,300 | 72,086 | ||||||
Neurocrine Biosciences, Inc. * | 10,900 | 68,234 | ||||||
NPS Pharmacuticals, Inc. * | 7,500 | 38,775 | ||||||
Onyx Pharmaceuticals, Inc. * | 7,500 | 306,975 | ||||||
Opko Health, Inc. * | 19,000 | 102,220 | ||||||
Pain Therapeutics, Inc. * | 7,400 | 32,930 | ||||||
Par Pharmaceutical Cos., Inc. * | 8,900 | 272,340 | ||||||
PAREXEL International Corp. * | 7,800 | 171,834 | ||||||
PDL BioPharma, Inc. | 16,000 | 97,120 | ||||||
PerkinElmer, Inc. | 14,477 | 299,240 | ||||||
Perrigo Co. | 10,300 | 929,884 | ||||||
Pfizer, Inc. | 996,301 | 19,188,757 | ||||||
Pharmaceutical Product Development, Inc. | 14,000 | 461,860 | ||||||
Pharmasset, Inc. * | 9,000 | 633,600 | ||||||
POZEN, Inc. * | 4,800 | 12,240 | ||||||
Questcor Pharmaceuticals, Inc. * | 8,000 | 324,880 | ||||||
Regeneron Pharmaceuticals, Inc. * | 9,200 | 508,760 | ||||||
Salix Pharmaceuticals Ltd. * | 7,000 | 239,785 | ||||||
Sangamo BioSciences, Inc. * | 4,700 | 15,604 | ||||||
Savient Pharmaceuticals, Inc. (d)* | 6,800 | 25,500 | ||||||
Seattle Genetics, Inc. * | 11,500 | 253,000 | ||||||
Sequenom, Inc. * | 15,000 | 74,550 | ||||||
Sucampo Pharmaceuticals, Inc., Class A * | 6,500 | 28,600 | ||||||
Synta Pharmaceuticals Corp. * | 8,500 | 31,450 | ||||||
Techne Corp. | 3,800 | 261,440 | ||||||
The Medicines Co. * | 8,300 | 155,376 | ||||||
Theravance, Inc. * | 9,700 | 215,631 | ||||||
Thermo Fisher Scientific, Inc. * | 48,602 | 2,443,223 | ||||||
United Therapeutics Corp. * | 6,000 | 262,380 | ||||||
Vertex Pharmaceuticals, Inc. * | 25,144 | 995,451 | ||||||
Vical, Inc. * | 6,600 | 19,734 | ||||||
ViroPharma, Inc. * | 13,000 | 263,120 | ||||||
VIVUS, Inc. * | 8,500 | 80,155 | ||||||
Warner Chilcott plc, Class A * | 17,000 | 308,040 | ||||||
Waters Corp. * | 10,700 | 857,284 | ||||||
Watson Pharmaceuticals, Inc. * | 15,732 | 1,056,561 | ||||||
XenoPort, Inc. * | 2,500 | 15,250 | ||||||
Zalicus, Inc. * | 10,500 | 15,435 | ||||||
124,495,104 | ||||||||
Real Estate 3.1% | ||||||||
Acadia Realty Trust | 6,000 | 124,320 | ||||||
Alexander’s, Inc. | 700 | 303,590 | ||||||
Alexandria Real Estate Equities, Inc. | 7,500 | 495,675 | ||||||
American Assets Trust, Inc. | 3,000 | 60,810 | ||||||
American Campus Communities, Inc. | 7,500 | 291,975 | ||||||
American Capital Agency Corp. | 21,200 | 583,212 | ||||||
American Realty Investors, Inc. * | 1,537 | 2,982 | ||||||
Annaly Capital Management, Inc. | 120,600 | 2,032,110 | ||||||
Anworth Mortgage Asset Corp. | 24,200 | 156,090 | ||||||
Apartment Investment & Management Co., Class A | 13,711 | 338,250 | ||||||
Ashford Hospitality Trust | 9,000 | 80,100 | ||||||
Associated Estates Reality Corp. | 5,000 | 84,900 | ||||||
AvalonBay Communities, Inc. | 11,192 | 1,496,258 | ||||||
Avatar Holdings, Inc. * | 4,500 | 42,750 | ||||||
BioMed Realty Trust, Inc. | 17,000 | 307,870 | ||||||
Boston Properties, Inc. | 17,900 | 1,771,921 | ||||||
Brandywine Realty Trust | 14,863 | 135,402 | ||||||
BRE Properties, Inc. | 8,000 | 400,960 | ||||||
Brookfield Office Properties, Inc. | 35,200 | 581,504 | ||||||
Camden Property Trust | 7,800 | 472,992 | ||||||
Capstead Mortgage Corp. | 9,240 | 111,989 | ||||||
CBL & Associates Properties, Inc. | 16,485 | 253,539 | ||||||
CBRE Group, Inc. * | 36,500 | 648,970 | ||||||
Chimera Investment Corp. | 119,900 | 360,899 | ||||||
Colonial Properties Trust | 10,067 | 204,159 | ||||||
CommonWealth REIT | 8,850 | 171,248 | ||||||
Consolidated-Tomoka Land Co. | 1,100 | 32,945 | ||||||
Corporate Office Properties Trust | 9,000 | 218,250 | ||||||
Cousins Properties, Inc. | 9,145 | 59,991 | ||||||
CreXus Investment Corp. | 9,000 | 86,040 | ||||||
CubeSmart | 11,000 | 107,910 | ||||||
CYS Investments, Inc. (d) | 8,500 | 107,780 | ||||||
DCT Industrial Trust, Inc. | 29,300 | 145,328 |
See financial notes 41
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
DDR Corp. | 27,784 | 355,913 | ||||||
DiamondRock Hospitality Co. | 19,786 | 179,063 | ||||||
Digital Realty Trust, Inc. | 12,000 | 747,960 | ||||||
Douglas Emmett, Inc. | 14,000 | 273,000 | ||||||
Duke Realty Corp. | 30,290 | 371,961 | ||||||
DuPont Fabros Technology, Inc. | 7,500 | 155,925 | ||||||
EastGroup Properties, Inc. | 3,900 | 170,079 | ||||||
Education Realty Trust, Inc. | 9,000 | 83,250 | ||||||
Entertainment Properties Trust | 5,200 | 232,960 | ||||||
Equity Lifestyle Properties, Inc. | 6,000 | 396,780 | ||||||
Equity One, Inc. | 12,100 | 207,515 | ||||||
Equity Residential | 37,500 | 2,200,500 | ||||||
Essex Property Trust, Inc. | 3,800 | 542,488 | ||||||
Extra Space Storage, Inc. | 11,000 | 247,830 | ||||||
Federal Realty Investment Trust | 8,200 | 727,832 | ||||||
FelCor Lodging Trust, Inc. * | 12,200 | 36,722 | ||||||
First Industrial Realty Trust, Inc. * | 15,900 | 156,615 | ||||||
First Potomac Realty Trust | 6,000 | 85,260 | ||||||
Forest City Enterprises, Inc., Class A * | 15,400 | 210,672 | ||||||
Forestar Group, Inc. * | 2,933 | 38,129 | ||||||
Franklin Street Properties Corp. | 14,000 | 177,800 | ||||||
General Growth Properties, Inc. | 48,409 | 711,612 | ||||||
Getty Realty Corp. | 2,000 | 31,880 | ||||||
Glimcher Realty Trust | 12,300 | 112,668 | ||||||
Government Properties Income Trust | 3,000 | 70,590 | ||||||
Gramercy Capital Corp. * | 9,528 | 28,393 | ||||||
Hatteras Financial Corp. | 9,000 | 231,300 | ||||||
HCP, Inc. | 50,048 | 1,994,413 | ||||||
Health Care REIT, Inc. | 23,200 | 1,222,408 | ||||||
Healthcare Realty Trust, Inc. | 7,900 | 149,231 | ||||||
Hersha Hospitality Trust | 13,500 | 59,535 | ||||||
Highwoods Properties, Inc. | 8,600 | 266,428 | ||||||
Home Properties, Inc. | 5,500 | 323,950 | ||||||
Hospitality Properties Trust | 14,600 | 350,838 | ||||||
Host Hotels & Resorts, Inc. | 82,263 | 1,173,893 | ||||||
Inland Real Estate Corp. | 8,500 | 63,750 | ||||||
Invesco Mortgage Capital, Inc. | 12,000 | 189,360 | ||||||
Investors Real Estate Trust | 8,000 | 59,280 | ||||||
iStar Financial, Inc. * | 9,390 | 63,758 | ||||||
Jones Lang LaSalle, Inc. | 5,300 | 342,486 | ||||||
Kilroy Realty Corp. | 6,800 | 249,492 | ||||||
Kimco Realty Corp. | 49,595 | 866,425 | ||||||
LaSalle Hotel Properties | 8,600 | 205,626 | ||||||
Lexington Realty Trust | 14,367 | 112,925 | ||||||
Liberty Property Trust | 13,300 | 425,600 | ||||||
LTC Properties, Inc. | 2,800 | 79,408 | ||||||
Mack-Cali Realty Corp. | 11,400 | 319,884 | ||||||
Maui Land & Pineapple Co., Inc. * | 800 | 3,512 | ||||||
Medical Properties Trust, Inc. | 12,300 | 124,230 | ||||||
MFA Financial, Inc. | 41,000 | 276,750 | ||||||
Mid-America Apartment Communities, Inc. | 5,500 | 343,200 | ||||||
Mission West Properties, Inc. | 3,500 | 27,230 | ||||||
MPG Office Trust, Inc. * | 18,500 | 44,215 | ||||||
National Health Investors, Inc. | 6,100 | 272,609 | ||||||
National Retail Properties, Inc. | 9,320 | 253,970 | ||||||
New Century Financial Corp. (a)(c)* | 3,600 | — | ||||||
OMEGA Healthcare Investors, Inc. | 12,284 | 218,164 | ||||||
Parkway Properties, Inc. | 3,500 | 44,975 | ||||||
Pebblebrook Hotel Trust | 5,000 | 95,150 | ||||||
Pennsylvania REIT | 8,500 | 87,210 | ||||||
PennyMac Mortgage Investment Trust | 6,000 | 102,600 | ||||||
Piedmont Office Realty Trust, Inc., Class A | 20,000 | 339,600 | ||||||
Plum Creek Timber Co., Inc. | 20,547 | 773,800 | ||||||
PMC Commercial Trust | 4,500 | 34,830 | ||||||
Post Properties, Inc. | 5,200 | 213,616 | ||||||
Potlatch Corp. | 5,753 | 186,857 | ||||||
ProLogis, Inc. | 57,034 | 1,697,332 | ||||||
PS Business Parks, Inc. | 3,000 | 159,690 | ||||||
Public Storage | 17,590 | 2,269,989 | ||||||
RAIT Financial Trust (d) | 5,599 | 29,115 | ||||||
Ramco-Gershenson Properties Trust | 4,900 | 47,285 | ||||||
Rayonier, Inc. REIT | 14,082 | 587,642 | ||||||
Realty Income Corp. | 16,600 | 554,606 | ||||||
Redwood Trust, Inc. | 8,500 | 98,770 | ||||||
Regency Centers Corp. | 10,700 | 438,272 | ||||||
Sabra Health Care REIT, Inc. | 8,000 | 82,160 | ||||||
Saul Centers, Inc. | 5,100 | 182,784 | ||||||
Senior Housing Properties Trust | 17,450 | 391,578 | ||||||
Simon Property Group, Inc. | 36,083 | 4,634,501 | ||||||
SL Green Realty Corp. | 9,750 | 672,653 | ||||||
Sovran Self Storage, Inc. | 3,800 | 167,960 | ||||||
Starwood Property Trust, Inc. | 11,300 | 212,327 | ||||||
Strategic Hotel & Resorts, Inc. * | 15,000 | 85,350 | ||||||
Sun Communities, Inc. | 3,000 | 114,240 | ||||||
Sunstone Hotel Investors, Inc. * | 13,000 | 90,350 | ||||||
Tanger Factory Outlet Centers, Inc. | 9,200 | 259,072 | ||||||
Taubman Centers, Inc. | 7,100 | 434,733 | ||||||
Tejon Ranch Co. * | 3,674 | 95,487 | ||||||
The Howard Hughes Corp. * | 3,500 | 167,930 | ||||||
The Macerich Co. | 16,805 | 836,217 | ||||||
The St. Joe Co. (d)* | 12,900 | 185,115 | ||||||
Two Harbors Investment Corp. | 16,200 | 151,470 | ||||||
UDR, Inc. | 27,361 | 682,110 | ||||||
UMH Properties, Inc. | 4,100 | 41,164 | ||||||
Universal Health Realty Income Trust | 3,900 | 148,083 | ||||||
Urstadt Biddle Properties, Inc. | 500 | 8,455 | ||||||
Urstadt Biddle Properties, Inc., Class A | 4,500 | 80,280 | ||||||
Ventas, Inc. | 32,750 | 1,821,227 | ||||||
Vornado Realty Trust REIT | 23,641 | 1,957,711 | ||||||
Washington REIT | 8,100 | 234,576 | ||||||
Weingarten Realty Investors | 14,475 | 335,965 | ||||||
Weyerhaeuser Co. | 66,592 | 1,197,324 | ||||||
Winthrop Realty Trust | 10,000 | 90,500 | ||||||
54,262,647 | ||||||||
Retailing 3.9% | ||||||||
99 Cents Only Stores * | 6,066 | 132,239 | ||||||
Aaron’s, Inc. | 9,375 | 250,875 | ||||||
Abercrombie & Fitch Co., Class A | 11,800 | 877,920 | ||||||
Advance Auto Parts, Inc. | 9,540 | 620,768 | ||||||
Aeropostale, Inc. * | 9,900 | 135,234 | ||||||
Amazon.com, Inc. * | 43,200 | 9,223,632 | ||||||
America’s Car-Mart, Inc. * | 3,750 | 125,175 | ||||||
American Eagle Outfitters, Inc. | 24,150 | 317,089 |
42 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Ann, Inc. * | 9,825 | 261,738 | ||||||
Asbury Automotive Group, Inc. * | 4,100 | 76,465 | ||||||
Ascena Retail Group, Inc. * | 6,818 | 197,040 | ||||||
Audiovox Corp., Class A * | 1,600 | 11,376 | ||||||
AutoNation, Inc. * | 6,600 | 257,004 | ||||||
AutoZone, Inc. * | 3,600 | 1,164,924 | ||||||
Barnes & Noble, Inc. * | 7,400 | 90,798 | ||||||
Bed Bath & Beyond, Inc. * | 30,700 | 1,898,488 | ||||||
Best Buy Co., Inc. | 39,225 | 1,028,872 | ||||||
Big Lots, Inc. * | 11,100 | 418,359 | ||||||
Brown Shoe Co., Inc. | 6,675 | 59,474 | ||||||
Cabela’s, Inc. * | 6,500 | 161,980 | ||||||
CarMax, Inc. * | 27,546 | 828,033 | ||||||
Charming Shoppes, Inc. * | 10,200 | 35,394 | ||||||
Chico’s FAS, Inc. | 22,800 | 281,808 | ||||||
Christopher & Banks Corp. | 2,900 | 9,657 | ||||||
Coldwater Creek, Inc. * | 8,502 | 8,927 | ||||||
Collective Brands, Inc. * | 5,906 | 86,287 | ||||||
Destination Maternity Corp. | 5,000 | 82,850 | ||||||
Dick’s Sporting Goods, Inc. * | 11,000 | 429,990 | ||||||
Dillard’s, Inc., Class A | 8,500 | 438,005 | ||||||
Dollar General Corp. * | 2,500 | 99,150 | ||||||
Dollar Tree, Inc. * | 14,975 | 1,197,401 | ||||||
DSW, Inc., Class A | 7,980 | 417,673 | ||||||
Duckwall-ALCO Stores, Inc. * | 1,800 | 18,612 | ||||||
Expedia, Inc. | 31,345 | 823,120 | ||||||
Family Dollar Stores, Inc. | 15,700 | 920,491 | ||||||
Foot Locker, Inc. | 20,100 | 439,386 | ||||||
GameStop Corp., Class A * | 17,548 | 448,702 | ||||||
Geeknet, Inc. * | 452 | 8,800 | ||||||
Genesco, Inc. * | 4,300 | 253,442 | ||||||
Genuine Parts Co. | 20,500 | 1,177,315 | ||||||
Group 1 Automotive, Inc. | 4,400 | 200,464 | ||||||
Guess?, Inc. | 7,900 | 260,621 | ||||||
Hibbett Sports, Inc. * | 3,543 | 145,936 | ||||||
HSN, Inc. * | 6,269 | 223,615 | ||||||
J.C. Penney Co., Inc. | 27,400 | 878,992 | ||||||
Kirkland’s, Inc. * | 6,000 | 67,440 | ||||||
Kohl’s Corp. | 33,300 | 1,765,233 | ||||||
Liberty Interactive Corp., Class A * | 72,309 | 1,188,037 | ||||||
Limited Brands, Inc. | 33,520 | 1,431,639 | ||||||
Lithia Motors, Inc., Class A | 700 | 14,399 | ||||||
LKQ Corp. * | 18,000 | 525,240 | ||||||
Lowe’s Cos., Inc. | 170,000 | 3,573,400 | ||||||
Macy’s, Inc. | 51,452 | 1,570,830 | ||||||
MarineMax, Inc. * | 800 | 6,512 | ||||||
Midas, Inc. * | 6,800 | 62,016 | ||||||
Monro Muffler Brake, Inc. | 2,362 | 87,607 | ||||||
Netflix, Inc. * | 6,000 | 492,480 | ||||||
Nordstrom, Inc. | 20,600 | 1,044,214 | ||||||
O’Reilly Automotive, Inc. * | 17,899 | 1,361,219 | ||||||
Office Depot, Inc. * | 26,000 | 59,540 | ||||||
OfficeMax, Inc. * | 9,400 | 48,128 | ||||||
Pacific Sunwear of California, Inc. * | 7,475 | 9,344 | ||||||
Penske Automotive Group, Inc. | 5,000 | 101,950 | ||||||
PetSmart, Inc. | 14,100 | 661,995 | ||||||
Pool Corp. | 5,662 | 165,444 | ||||||
Priceline.com, Inc. * | 6,083 | 3,088,461 | ||||||
RadioShack Corp. | 13,700 | 163,167 | ||||||
Rent-A-Center, Inc. | 7,750 | 264,662 | ||||||
Ross Stores, Inc. | 13,400 | 1,175,582 | ||||||
Saks, Inc. * | 14,800 | 156,436 | ||||||
Sally Beauty Holdings, Inc. * | 12,950 | 248,511 | ||||||
Sears Holdings Corp. (d)* | 6,385 | 499,179 | ||||||
Shoe Carnival, Inc. * | 4,200 | 114,618 | ||||||
Signet Jewelers Ltd. * | 9,500 | 409,545 | ||||||
Sonic Automotive, Inc., Class A | 4,400 | 64,548 | ||||||
Stage Stores, Inc. | 5,700 | 89,091 | ||||||
Staples, Inc. | 90,300 | 1,350,888 | ||||||
Stein Mart, Inc. | 6,800 | 49,300 | ||||||
Systemax, Inc. * | 2,500 | 37,825 | ||||||
Target Corp. | 78,300 | 4,286,925 | ||||||
The Buckle, Inc. | 5,875 | 261,790 | ||||||
The Cato Corp., Class A | 7,300 | 187,099 | ||||||
The Children’s Place Retail Stores, Inc. * | 1,800 | 84,510 | ||||||
The Finish Line, Inc., Class A | 5,061 | 101,726 | ||||||
The Gap, Inc. | 48,900 | 924,210 | ||||||
The Home Depot, Inc. | 201,570 | 7,216,206 | ||||||
The Men’s Wearhouse, Inc. | 6,600 | 203,808 | ||||||
The Pep Boys - Manny, Moe & Jack | 5,000 | 57,500 | ||||||
The Talbots, Inc. (d)* | 5,700 | 14,991 | ||||||
The TJX Cos., Inc. | 48,400 | 2,852,212 | ||||||
The Wet Seal, Inc., Class A * | 11,500 | 48,185 | ||||||
Tiffany & Co. | 14,500 | 1,156,085 | ||||||
Tractor Supply Co. | 8,000 | 567,520 | ||||||
Trans World Entertainment Corp. * | 1,500 | 2,985 | ||||||
Tuesday Morning Corp. * | 2,500 | 9,050 | ||||||
Ulta Salon, Cosmetics & Fragrance, Inc. * | 7,000 | 471,030 | ||||||
Urban Outfitters, Inc. * | 15,800 | 430,550 | ||||||
West Marine, Inc. * | 5,500 | 49,995 | ||||||
Williams-Sonoma, Inc. | 12,200 | 457,988 | ||||||
Winmark Corp. | 1,200 | 59,556 | ||||||
Zale Corp. * | 10,520 | 38,819 | ||||||
68,455,341 | ||||||||
Semiconductors & Semiconductor Equipment 2.7% | ||||||||
Advanced Energy Industries, Inc. * | 6,900 | 64,446 | ||||||
Advanced Micro Devices, Inc. * | 68,200 | 397,606 | ||||||
Altera Corp. | 39,900 | 1,513,008 | ||||||
Amkor Technology, Inc. * | 14,400 | 69,696 | ||||||
Amtech Systems, Inc. * | 3,500 | 35,770 | ||||||
ANADIGICS, Inc. * | 8,150 | 21,435 | ||||||
Analog Devices, Inc. | 35,200 | 1,287,264 | ||||||
Applied Materials, Inc. | 163,098 | 2,009,367 | ||||||
Applied Micro Circuits Corp. * | 7,000 | 47,180 | ||||||
Atmel Corp. * | 56,400 | 595,584 | ||||||
ATMI, Inc. * | 4,400 | 89,760 | ||||||
AXT, Inc. * | 3,500 | 16,450 | ||||||
Broadcom Corp., Class A * | 57,200 | 2,064,348 | ||||||
Brooks Automation, Inc. | 8,085 | 84,488 | ||||||
Cabot Microelectronics Corp. * | 2,160 | 83,203 | ||||||
Cavium, Inc. * | 7,000 | 228,830 | ||||||
CEVA, Inc. * | 3,433 | 106,663 | ||||||
Cirrus Logic, Inc. * | 6,800 | 113,152 | ||||||
Cohu, Inc. | 4,600 | 51,014 | ||||||
Cree, Inc. * | 12,000 | 319,680 | ||||||
Cymer, Inc. * | 4,200 | 182,490 | ||||||
Cypress Semiconductor Corp. * | 19,500 | 372,645 | ||||||
Diodes, Inc. * | 6,412 | 143,436 |
See financial notes 43
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
DSP Group, Inc. * | 6,300 | 38,934 | ||||||
Energy Conversion Devices, Inc. (d)* | 600 | 294 | ||||||
Entegris, Inc. * | 14,299 | 128,119 | ||||||
Entropic Communications, Inc. * | 8,000 | 46,560 | ||||||
Exar Corp. * | 9,834 | 60,086 | ||||||
Fairchild Semiconductor International, Inc. * | 14,600 | 218,562 | ||||||
First Solar, Inc. (d)* | 6,900 | 343,413 | ||||||
FormFactor, Inc. * | 8,500 | 50,830 | ||||||
GSI Technology, Inc. * | 8,500 | 41,650 | ||||||
GT Advanced Technologies, Inc. * | 14,000 | 114,800 | ||||||
Hittite Microwave Corp. * | 4,500 | 236,700 | ||||||
Integrated Device Technology, Inc. * | 16,120 | 98,010 | ||||||
Integrated Silicon Solutions, Inc. * | 6,038 | 55,610 | ||||||
Intel Corp. | 661,732 | 16,238,903 | ||||||
International Rectifier Corp. * | 8,600 | 208,894 | ||||||
Intersil Corp., Class A | 15,364 | 183,907 | ||||||
IXYS Corp. * | 6,900 | 94,323 | ||||||
KLA-Tencor Corp. | 19,500 | 918,255 | ||||||
Kopin Corp. * | 2,500 | 10,125 | ||||||
Kulicke & Soffa Industries, Inc. * | 10,400 | 100,360 | ||||||
Lam Research Corp. * | 15,600 | 670,644 | ||||||
Lattice Semiconductor Corp. * | 12,100 | 76,593 | ||||||
Linear Technology Corp. | 25,000 | 807,750 | ||||||
LSI Corp. * | 73,387 | 458,669 | ||||||
Marvell Technology Group Ltd. * | 65,400 | 914,946 | ||||||
Maxim Integrated Products, Inc. | 38,000 | 994,080 | ||||||
MEMC Electronic Materials, Inc. * | 27,300 | 163,527 | ||||||
Micrel, Inc. | 6,800 | 74,936 | ||||||
Microchip Technology, Inc. | 21,975 | 794,616 | ||||||
Micron Technology, Inc. * | 116,199 | 649,552 | ||||||
Microsemi Corp. * | 10,652 | 196,636 | ||||||
MIPS Technologies, Inc. * | 7,100 | 38,979 | ||||||
MKS Instruments, Inc. | 6,300 | 167,832 | ||||||
Monolithic Power Systems * | 6,500 | 80,990 | ||||||
MoSys, Inc. * | 1,200 | 4,644 | ||||||
Nanometrics, Inc. * | 3,300 | 55,704 | ||||||
Netlogic Microsystems, Inc. * | 9,000 | 442,800 | ||||||
Novellus Systems, Inc. * | 11,171 | 385,958 | ||||||
NVIDIA Corp. * | 72,000 | 1,065,600 | ||||||
OmniVision Technologies, Inc. * | 7,800 | 127,218 | ||||||
ON Semiconductor Corp. * | 54,665 | 413,814 | ||||||
Pericom Semiconductor Corp. * | 6,600 | 56,034 | ||||||
Photronics, Inc. * | 12,900 | 80,883 | ||||||
PLX Technology, Inc. * | 1,300 | 4,225 | ||||||
PMC-Sierra, Inc. * | 27,300 | 173,082 | ||||||
Power Integrations, Inc. | 3,000 | 106,890 | ||||||
Rambus, Inc. * | 13,700 | 242,901 | ||||||
RF Micro Devices, Inc. * | 30,020 | 220,347 | ||||||
Rudolph Technologies, Inc. * | 4,318 | 31,824 | ||||||
Semtech Corp. * | 8,000 | 195,360 | ||||||
Silicon Image, Inc. * | 9,000 | 57,960 | ||||||
Silicon Laboratories, Inc. * | 5,000 | 213,750 | ||||||
Skyworks Solutions, Inc. * | 22,689 | 449,469 | ||||||
Spansion, Inc. * | 4,000 | 41,160 | ||||||
Standard Microsystems Corp. * | 3,600 | 89,136 | ||||||
SunPower Corp., Class A (d)* | 13,300 | 133,266 | ||||||
Supertex, Inc. * | 4,900 | 90,454 | ||||||
Teradyne, Inc. * | 21,559 | 308,725 | ||||||
Tessera Technologies, Inc. * | 6,000 | 82,620 | ||||||
Texas Instruments, Inc. | 145,397 | 4,468,050 | ||||||
TriQuint Semiconductor, Inc. * | 19,310 | 102,729 | ||||||
Ultratech, Inc. * | 4,800 | 104,640 | ||||||
Varian Semiconductor Equipment Associates, Inc. * | 9,875 | 619,854 | ||||||
Veeco Instruments, Inc. * | 5,500 | 146,795 | ||||||
Volterra Semiconductor Corp. * | 3,000 | 71,100 | ||||||
Xilinx, Inc. | 31,600 | 1,057,336 | ||||||
46,819,928 | ||||||||
Software & Services 9.3% | ||||||||
Accelrys, Inc. * | 13,264 | 87,940 | ||||||
Accenture plc, Class A | 85,500 | 5,152,230 | ||||||
ACI Worldwide, Inc. * | 5,200 | 159,484 | ||||||
Activision Blizzard, Inc. | 69,732 | 933,711 | ||||||
Actuate Corp. * | 5,862 | 38,103 | ||||||
Acxiom Corp. * | 13,300 | 175,427 | ||||||
Adobe Systems, Inc. * | 62,210 | 1,829,596 | ||||||
Advent Software, Inc. * | 8,200 | 224,680 | ||||||
Akamai Technologies, Inc. * | 22,138 | 596,398 | ||||||
Alliance Data Systems Corp. * | 6,600 | 676,104 | ||||||
Ancestry.com, Inc. * | 3,000 | 68,310 | ||||||
ANSYS, Inc. * | 10,786 | 586,327 | ||||||
AOL, Inc. * | 14,122 | 199,403 | ||||||
Ariba, Inc. * | 11,570 | 366,538 | ||||||
Aspen Technology, Inc. * | 11,500 | 199,410 | ||||||
Autodesk, Inc. * | 27,300 | 944,580 | ||||||
Automatic Data Processing, Inc. | 59,600 | 3,118,868 | ||||||
Blackbaud, Inc. | 6,000 | 168,180 | ||||||
BMC Software, Inc. * | 29,000 | 1,008,040 | ||||||
Bottomline Technologies, Inc. * | 5,000 | 121,450 | ||||||
Broadridge Financial Solutions, Inc. | 15,025 | 334,306 | ||||||
CA, Inc. | 50,508 | 1,094,003 | ||||||
CACI International, Inc., Class A * | 4,100 | 225,049 | ||||||
Cadence Design Systems, Inc. * | 33,100 | 366,417 | ||||||
Cardtronics, Inc. * | 5,000 | 124,650 | ||||||
CIBER, Inc. * | 7,300 | 25,404 | ||||||
Citrix Systems, Inc. * | 22,000 | 1,602,260 | ||||||
Cognizant Technology Solutions Corp., Class A * | 38,200 | 2,779,050 | ||||||
Computer Sciences Corp. | 18,238 | 573,767 | ||||||
Compuware Corp. * | 27,900 | 235,755 | ||||||
Constant Contact, Inc. * | 3,000 | 60,720 | ||||||
Convergys Corp. * | 13,500 | 144,450 | ||||||
CoreLogic, Inc. * | 13,800 | 167,946 | ||||||
CSG Systems International, Inc. * | 5,400 | 76,896 | ||||||
DealerTrack Holdings, Inc. * | 6,100 | 132,309 | ||||||
Deltek, Inc. * | 3,000 | 22,080 | ||||||
Digimarc Corp. * | 2,142 | 57,299 | ||||||
Digital River, Inc. * | 5,100 | 93,483 | ||||||
DST Systems, Inc. | 8,100 | 406,539 | ||||||
Dynamics Research Corp. * | 1,200 | 11,568 | ||||||
EarthLink, Inc. | 17,050 | 119,520 | ||||||
EasyLink Services International Corp., Class A * | 12,500 | 59,625 | ||||||
eBay, Inc. * | 139,848 | 4,451,362 | ||||||
Ebix, Inc. * | 3,000 | 51,330 | ||||||
Edgewater Technology, Inc. * | 767 | 2,209 | ||||||
Electronic Arts, Inc. * | 40,400 | 943,340 | ||||||
EPIQ Systems, Inc. | 3,825 | 54,545 |
44 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Equinix, Inc. * | 5,565 | 534,296 | ||||||
Euronet Worldwide, Inc. * | 5,500 | 106,535 | ||||||
Exlservice Holdings, Inc. * | 8,000 | 208,640 | ||||||
FactSet Research Systems, Inc. | 5,250 | 521,955 | ||||||
Fair Isaac Corp. | 7,744 | 211,798 | ||||||
FalconStor Software, Inc. * | 1,200 | 4,068 | ||||||
Fidelity National Information Services, Inc. | 38,506 | 1,008,087 | ||||||
Fiserv, Inc. * | 18,300 | 1,077,321 | ||||||
Forrester Research, Inc. | 4,100 | 146,821 | ||||||
Fortinet, Inc. * | 13,000 | 299,780 | ||||||
Gartner, Inc. * | 10,300 | 396,756 | ||||||
Genpact Ltd. * | 15,000 | 242,250 | ||||||
Global Cash Access Holdings, Inc. * | 21,600 | 64,368 | ||||||
Global Payments, Inc. | 9,240 | 424,301 | ||||||
Google, Inc., Class A * | 31,450 | 18,638,528 | ||||||
GSE Systems, Inc. * | 2,424 | 4,169 | ||||||
Heartland Payment Systems, Inc. | 4,500 | 97,920 | ||||||
IAC/InterActiveCorp * | 15,672 | 639,888 | ||||||
iGATE Corp. | 9,600 | 129,408 | ||||||
Informatica Corp. * | 12,200 | 555,100 | ||||||
Information Services Group, Inc. * | 7,500 | 7,650 | ||||||
InfoSpace, Inc. * | 3,872 | 33,919 | ||||||
Interactive Intelligence Group * | 7,500 | 208,125 | ||||||
Internap Network Services Corp. * | 9,500 | 53,960 | ||||||
International Business Machines Corp. | 150,710 | 27,825,587 | ||||||
IntraLinks Holdings, Inc. * | 3,000 | 26,070 | ||||||
Intuit, Inc. | 36,430 | 1,955,198 | ||||||
j2 Global Communications, Inc. | 6,000 | 184,680 | ||||||
Jack Henry & Associates, Inc. | 9,300 | 301,413 | ||||||
JDA Software Group, Inc. * | 4,500 | 143,415 | ||||||
Lender Processing Services, Inc. | 11,157 | 195,805 | ||||||
Lionbridge Technologies, Inc. * | 12,400 | 33,604 | ||||||
LookSmart Ltd. * | 480 | 648 | ||||||
Magma Design Automation, Inc. * | 10,700 | 56,496 | ||||||
Manhattan Associates, Inc. * | 4,300 | 182,105 | ||||||
ManTech International Corp., Class A | 5,000 | 175,650 | ||||||
Mastech Holdings, Inc. * | 640 | 2,291 | ||||||
MasterCard, Inc., Class A | 12,800 | 4,444,672 | ||||||
Mattersight Corp. * | 190 | 960 | ||||||
MAXIMUS, Inc. | 8,400 | 338,856 | ||||||
Mentor Graphics Corp. * | 11,200 | 127,232 | ||||||
MICROS Systems, Inc. * | 18,000 | 885,960 | ||||||
Microsoft Corp. | 924,750 | 24,626,092 | ||||||
MicroStrategy, Inc., Class A * | 856 | 112,795 | ||||||
ModusLink Global Solutions, Inc. | 10,450 | 43,681 | ||||||
MoneyGram International, Inc. * | 15,500 | 39,680 | ||||||
Monotype Imaging Holdings, Inc. * | 4,500 | 61,065 | ||||||
Monster Worldwide, Inc. * | 14,300 | 131,989 | ||||||
Move, Inc. * | 34,520 | 63,517 | ||||||
NetScout Systems, Inc. * | 7,300 | 119,647 | ||||||
NetSuite, Inc. * | 3,500 | 133,140 | ||||||
NeuStar, Inc., Class A * | 9,300 | 295,647 | ||||||
NIC, Inc. | 8,000 | 110,480 | ||||||
Nuance Communications, Inc. * | 28,474 | 753,992 | ||||||
OpenTable, Inc. (d)* | 2,500 | 109,650 | ||||||
Openwave Systems, Inc. * | 7,771 | 12,045 | ||||||
OPNET Technologies, Inc. | 5,100 | 223,074 | ||||||
Oracle Corp. | 473,249 | 15,508,370 | ||||||
Parametric Technology Corp. * | 15,680 | 326,614 | ||||||
Paychex, Inc. | 38,900 | 1,133,546 | ||||||
PRGX Global, Inc. * | 2,000 | 10,680 | ||||||
Progress Software Corp. * | 9,300 | 195,858 | ||||||
Quest Software, Inc. * | 7,700 | 135,443 | ||||||
Rackspace Hosting, Inc. * | 12,500 | 517,375 | ||||||
RealNetworks, Inc. | 4,725 | 46,116 | ||||||
Red Hat, Inc. * | 22,600 | 1,122,090 | ||||||
Reis, Inc. * | 1,400 | 13,692 | ||||||
RightNow Technologies, Inc. * | 3,000 | 129,030 | ||||||
Rovi Corp. * | 12,812 | 634,706 | ||||||
S1 Corp. * | 12,930 | 125,809 | ||||||
Saba Software, Inc. * | 4,549 | 31,570 | ||||||
SAIC, Inc. * | 44,000 | 546,920 | ||||||
Salesforce.com, Inc. * | 14,800 | 1,970,916 | ||||||
Sapient Corp. | 12,100 | 149,556 | ||||||
SeaChange International, Inc. * | 6,350 | 53,594 | ||||||
Solera Holdings, Inc. | 8,000 | 437,040 | ||||||
StarTek, Inc. * | 3,900 | 9,165 | ||||||
Support.com, Inc. * | 11,600 | 24,476 | ||||||
Symantec Corp. * | 93,673 | 1,593,378 | ||||||
Synopsys, Inc. * | 18,684 | 500,918 | ||||||
Syntel, Inc. | 2,500 | 122,250 | ||||||
Take-Two Interactive Software, Inc. * | 9,000 | 142,020 | ||||||
Taleo Corp., Class A * | 4,500 | 145,800 | ||||||
TeleCommunication Systems, Inc., Class A * | 10,800 | 35,640 | ||||||
TeleTech Holdings, Inc. * | 5,000 | 87,400 | ||||||
Teradata Corp. * | 23,800 | 1,419,908 | ||||||
The Hackett Group, Inc. * | 1,700 | 7,021 | ||||||
The Ultimate Software Group, Inc. * | 3,000 | 180,540 | ||||||
The Western Union Co. | 81,932 | 1,431,352 | ||||||
THQ, Inc. * | 11,925 | 25,400 | ||||||
TIBCO Software, Inc. * | 21,000 | 606,690 | ||||||
TiVo, Inc. * | 13,000 | 140,790 | ||||||
Total System Services, Inc. | 28,204 | 560,978 | ||||||
Tyler Technologies, Inc. * | 4,000 | 126,280 | ||||||
Unisys Corp. * | 4,000 | 103,960 | ||||||
United Online, Inc. | 12,150 | 71,807 | ||||||
ValueClick, Inc. * | 8,500 | 149,600 | ||||||
VeriFone Systems, Inc. * | 11,600 | 489,636 | ||||||
VeriSign, Inc. | 20,875 | 669,879 | ||||||
Virtusa Corp. * | 3,000 | 48,870 | ||||||
Visa, Inc., Class A | 59,900 | 5,586,274 | ||||||
VistaPrint N.V. * | 4,500 | 157,140 | ||||||
VMware, Inc., Class A * | 13,100 | 1,280,525 | ||||||
Web.com Group, Inc. * | 223 | 2,154 | ||||||
WebMD Health Corp. * | 7,074 | 254,310 | ||||||
Websense, Inc. * | 7,500 | 133,800 | ||||||
Wright Express Corp. * | 4,500 | 210,960 | ||||||
Yahoo!, Inc. * | 150,144 | 2,348,252 | ||||||
161,959,538 | ||||||||
Technology Hardware & Equipment 6.9% | ||||||||
Acme Packet, Inc. * | 4,000 | 144,840 | ||||||
ADTRAN, Inc. | 7,000 | 235,200 | ||||||
Agilysys, Inc. * | 4,860 | 41,261 | ||||||
Amphenol Corp., Class A | 21,600 | 1,025,784 | ||||||
Anaren, Inc. * | 5,300 | 101,389 |
See financial notes 45
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Anixter International, Inc. * | 3,300 | 193,677 | ||||||
Apple, Inc. * | 114,900 | 46,509,222 | ||||||
Arris Group, Inc. * | 12,775 | 137,459 | ||||||
Arrow Electronics, Inc. * | 14,000 | 504,700 | ||||||
Aruba Networks, Inc. * | 10,200 | 241,638 | ||||||
Aviat Networks, Inc. * | 10,677 | 21,888 | ||||||
Avid Technology, Inc. * | 3,756 | 23,287 | ||||||
Avnet, Inc. * | 17,788 | 539,154 | ||||||
AVX Corp. | 14,000 | 187,740 | ||||||
Badger Meter, Inc. | 4,000 | 130,960 | ||||||
Benchmark Electronics, Inc. * | 7,830 | 107,584 | ||||||
Black Box Corp. | 1,700 | 47,583 | ||||||
Blue Coat Systems, Inc. * | 4,180 | 67,298 | ||||||
Brightpoint, Inc. * | 7,454 | 75,658 | ||||||
Brocade Communications Systems, Inc. * | 56,535 | 247,623 | ||||||
Checkpoint Systems, Inc. * | 4,600 | 60,950 | ||||||
Ciena Corp. * | 9,970 | 131,405 | ||||||
Cisco Systems, Inc. | 685,009 | 12,693,217 | ||||||
Cognex Corp. | 4,900 | 166,061 | ||||||
Coherent, Inc. * | 2,800 | 142,716 | ||||||
Comtech Telecommunications Corp. | 2,175 | 72,014 | ||||||
Corning, Inc. | 191,807 | 2,740,922 | ||||||
CTS Corp. | 8,800 | 81,664 | ||||||
Daktronics, Inc. | 8,700 | 87,870 | ||||||
DDi Corp. | 5,501 | 50,554 | ||||||
Dell, Inc. * | 206,400 | 3,263,184 | ||||||
Diebold, Inc. | 7,300 | 235,644 | ||||||
Digi International, Inc. * | 6,000 | 76,740 | ||||||
Dolby Laboratories, Inc., Class A * | 8,800 | 257,312 | ||||||
DTS, Inc. * | 2,000 | 56,180 | ||||||
Echelon Corp. * | 7,200 | 48,672 | ||||||
EchoStar Corp., Class A * | 7,540 | 198,754 | ||||||
Electro Rent Corp. | 5,100 | 81,957 | ||||||
Electro Scientific Industries, Inc. * | 4,800 | 58,992 | ||||||
Electronics for Imaging, Inc. * | 6,400 | 96,000 | ||||||
EMC Corp. * | 253,686 | 6,217,844 | ||||||
Emulex Corp. * | 8,900 | 74,582 | ||||||
Extreme Networks, Inc. * | 19,500 | 57,525 | ||||||
F5 Networks, Inc. * | 9,700 | 1,008,315 | ||||||
FEI Co. * | 4,500 | 178,920 | ||||||
Finisar Corp. * | 12,000 | 245,880 | ||||||
FLIR Systems, Inc. | 18,600 | 489,180 | ||||||
Frequency Electronics, Inc. * | 500 | 4,135 | ||||||
Gerber Scientific, Inc. (a)(c)* | 8,900 | — | ||||||
Harmonic, Inc. * | 9,842 | 54,131 | ||||||
Harris Corp. | 17,000 | 641,750 | ||||||
Hewlett-Packard Co. | 268,636 | 7,148,404 | ||||||
Hutchinson Technology, Inc. * | 6,000 | 10,680 | ||||||
I.D. Systems, Inc. * | 5,500 | 30,195 | ||||||
Identive Group, Inc. (d)* | 1,200 | 2,844 | ||||||
Imation Corp. * | 5,500 | 36,960 | ||||||
Immersion Corp. * | 4,300 | 29,541 | ||||||
Infinera Corp. * | 10,500 | 76,755 | ||||||
Ingram Micro, Inc., Class A * | 19,900 | 355,812 | ||||||
Insight Enterprises, Inc. * | 4,650 | 78,585 | ||||||
Intellicheck Mobilisa, Inc. * | 500 | 473 | ||||||
InterDigital, Inc. | 4,500 | 195,525 | ||||||
Intermec, Inc. * | 5,600 | 45,192 | ||||||
IPG Photonics Corp. * | 2,900 | 153,294 | ||||||
Itron, Inc. * | 4,500 | 165,555 | ||||||
Ixia * | 8,200 | 92,906 | ||||||
Jabil Circuit, Inc. | 25,400 | 522,224 | ||||||
JDS Uniphase Corp. * | 26,053 | 312,636 | ||||||
Juniper Networks, Inc. * | 63,565 | 1,555,436 | ||||||
LeCroy Corp. * | 5,400 | 55,404 | ||||||
Lexmark International, Inc., Class A * | 10,900 | 345,530 | ||||||
LightPath Technologies, Inc., Class A * | 75 | 107 | ||||||
Littelfuse, Inc. | 2,000 | 97,920 | ||||||
Loral Space & Communications, Inc. * | 1,500 | 90,750 | ||||||
Maxwell Technologies, Inc. * | 4,500 | 89,865 | ||||||
Measurement Specialties, Inc. * | 3,200 | 99,872 | ||||||
Mercury Computer Systems, Inc. * | 3,600 | 52,560 | ||||||
Methode Electronics, Inc. | 6,600 | 61,314 | ||||||
MOCON, Inc. | 600 | 9,342 | ||||||
Molex, Inc. | 16,125 | 398,126 | ||||||
Motorola Mobility Holdings, Inc. * | 35,556 | 1,382,417 | ||||||
Motorola Solutions, Inc. | 38,779 | 1,819,123 | ||||||
MTS Systems Corp. | 3,781 | 138,649 | ||||||
Multi-Fineline Electronix, Inc. * | 2,500 | 57,350 | ||||||
National Instruments Corp. | 11,512 | 307,486 | ||||||
NCR Corp. * | 23,800 | 453,152 | ||||||
NetApp, Inc. * | 44,500 | 1,822,720 | ||||||
NETGEAR, Inc. * | 6,000 | 212,760 | ||||||
Network Equipment Technologies, Inc. * | 8,500 | 16,235 | ||||||
Newport Corp. * | 4,200 | 58,170 | ||||||
Oplink Communications, Inc. * | 4,157 | 67,427 | ||||||
OSI Systems, Inc. * | 3,700 | 163,910 | ||||||
Park Electrochemical Corp. | 3,600 | 101,880 | ||||||
PC Connection, Inc. * | 7,000 | 58,450 | ||||||
PC-Tel, Inc. * | 8,900 | 64,436 | ||||||
Performance Technologies, Inc. * | 1,600 | 2,928 | ||||||
Plantronics, Inc. | 6,000 | 200,460 | ||||||
Plexus Corp. * | 3,700 | 95,090 | ||||||
Polycom, Inc. * | 22,400 | 370,272 | ||||||
Power-One, Inc. * | 9,500 | 47,025 | ||||||
Presstek, Inc. * | 5,100 | 3,876 | ||||||
Pulse Electronics Corp. | 11,500 | 40,595 | ||||||
QLogic Corp. * | 17,044 | 238,105 | ||||||
QUALCOMM, Inc. | 207,600 | 10,712,160 | ||||||
RadiSys Corp. * | 7,200 | 42,192 | ||||||
Research Frontiers, Inc. (d)* | 2,800 | 10,976 | ||||||
Richardson Electronics Ltd. | 4,800 | 62,352 | ||||||
Riverbed Technology, Inc. * | 18,500 | 510,230 | ||||||
Rofin-Sinar Technologies, Inc. * | 3,800 | 98,800 | ||||||
Rogers Corp. * | 2,500 | 107,925 | ||||||
SanDisk Corp. * | 28,000 | 1,418,760 | ||||||
Sanmina-SCI Corp. * | 8,500 | 74,885 | ||||||
ScanSource, Inc. * | 3,200 | 111,232 | ||||||
Seagate Technology plc | 57,066 | 921,616 | ||||||
Sonus Networks, Inc. * | 19,400 | 51,410 | ||||||
STEC, Inc. * | 3,500 | 39,620 | ||||||
Stratasys, Inc. * | 2,700 | 75,708 | ||||||
Sycamore Networks, Inc. | 2,790 | 53,624 | ||||||
Symmetricom, Inc. * | 11,950 | 61,542 | ||||||
Synaptics, Inc. * | 5,250 | 177,397 | ||||||
SYNNEX Corp. * | 3,000 | 86,610 | ||||||
TE Connectivity Ltd. | 55,200 | 1,962,360 | ||||||
Tech Data Corp. * | 5,300 | 260,654 |
46 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Tekelec * | 8,700 | 85,434 | ||||||
Tellabs, Inc. | 38,064 | 164,817 | ||||||
TESSCO Technologies, Inc. | 4,025 | 56,028 | ||||||
The Western Digital Corp. * | 28,200 | 751,248 | ||||||
TransAct Technologies, Inc. * | 1,500 | 11,565 | ||||||
Trimble Navigation Ltd. * | 14,792 | 597,745 | ||||||
TTM Technologies, Inc. * | 7,900 | 88,243 | ||||||
UTStarcom Holdings Corp. * | 36,000 | 51,480 | ||||||
ViaSat, Inc. * | 5,500 | 234,245 | ||||||
Vishay Intertechnology, Inc. * | 36,688 | 394,396 | ||||||
Vishay Precision Group, Inc. * | 5,620 | 81,996 | ||||||
Xerox Corp. | 167,056 | 1,366,518 | ||||||
Xybernaut Corp. (a)(c)* | 1,400 | — | ||||||
Zebra Technologies Corp., Class A * | 6,375 | 227,842 | ||||||
Zygo Corp. * | 7,000 | 107,380 | ||||||
121,052,328 | ||||||||
Telecommunication Services 2.7% | ||||||||
AboveNet, Inc. | 3,000 | 178,050 | ||||||
Alaska Communication Systems Group, Inc. (d) | 5,000 | 35,350 | ||||||
American Tower Corp., Class A * | 48,800 | 2,688,880 | ||||||
AT&T, Inc. | 734,556 | 21,529,836 | ||||||
Atlantic Tele-Network, Inc. | 3,250 | 123,338 | ||||||
CenturyLink, Inc. | 74,778 | 2,636,672 | ||||||
Cincinnati Bell, Inc. * | 22,268 | 71,703 | ||||||
Clearwire Corp., Class A (d)* | 23,100 | 44,352 | ||||||
Cogent Communications Group, Inc. * | 3,900 | 62,595 | ||||||
Consolidated Communications Holdings, Inc. | 5,622 | 106,143 | ||||||
Crown Castle International Corp. * | 30,776 | 1,272,895 | ||||||
Frontier Communications Corp. | 122,868 | 769,154 | ||||||
General Communication, Inc., Class A * | 10,500 | 99,225 | ||||||
HickoryTech Corp. | 4,600 | 51,336 | ||||||
Leap Wireless International, Inc. * | 7,700 | 53,515 | ||||||
Level 3 Communications, Inc. * | 17,706 | 472,573 | ||||||
MetroPCS Communications, Inc. * | 33,000 | 280,500 | ||||||
NII Holdings, Inc. * | 19,900 | 468,247 | ||||||
NTELOS Holdings Corp. | 3,000 | 57,060 | ||||||
PAETEC Holding Corp. * | 16,000 | 87,680 | ||||||
Premiere Global Services, Inc. * | 5,100 | 46,206 | ||||||
SBA Communications Corp., Class A * | 12,800 | 487,552 | ||||||
Shenandoah Telecommunications Co. | 2,500 | 33,900 | ||||||
Sprint Nextel Corp. * | 364,330 | 936,328 | ||||||
SureWest Communications | 5,500 | 63,085 | ||||||
Telephone & Data Systems, Inc. | 10,600 | 245,708 | ||||||
tw telecom, Inc. * | 20,000 | 370,000 | ||||||
United States Cellular Corp. * | 9,100 | 362,817 | ||||||
USA Mobility, Inc. | 5,500 | 71,885 | ||||||
Verizon Communications, Inc. | 348,072 | 12,871,703 | ||||||
Warwick Valley Telephone Co. | 1,100 | 13,255 | ||||||
Windstream Corp. | 62,709 | 763,169 | ||||||
47,354,712 | ||||||||
Transportation 1.9% | ||||||||
Alaska Air Group, Inc. * | 4,400 | 292,732 | ||||||
Alexander & Baldwin, Inc. | 3,400 | 141,134 | ||||||
AMERCO * | 3,900 | 295,269 | ||||||
AMR Corp. * | 35,700 | 93,891 | ||||||
Arkansas Best Corp. | 1,100 | 22,660 | ||||||
Atlas Air Worldwide Holdings, Inc. * | 3,000 | 115,560 | ||||||
Avis Budget Group, Inc. * | 3,000 | 42,300 | ||||||
C.H. Robinson Worldwide, Inc. | 21,000 | 1,458,030 | ||||||
Con-way, Inc. | 5,500 | 162,085 | ||||||
Covenant Transport Group, Inc., Class A * | 3,000 | 9,630 | ||||||
CSX Corp. | 137,100 | 3,044,991 | ||||||
Delta Air Lines, Inc. * | 101,100 | 861,372 | ||||||
Dollar Thrifty Automotive Group, Inc. * | 3,500 | 213,640 | ||||||
Expeditors International of Washington, Inc. | 27,200 | 1,240,320 | ||||||
FedEx Corp. | 35,563 | 2,910,120 | ||||||
Forward Air Corp. | 2,600 | 85,150 | ||||||
Genco Shipping & Trading Ltd. (d)* | 5,500 | 49,500 | ||||||
Genesee & Wyoming, Inc., Class A * | 6,000 | 355,260 | ||||||
Heartland Express, Inc. | 8,941 | 119,899 | ||||||
Hertz Global Holdings, Inc. * | 37,000 | 429,200 | ||||||
Hub Group, Inc., Class A * | 4,400 | 137,544 | ||||||
J.B. Hunt Transport Services, Inc. | 13,000 | 550,030 | ||||||
JetBlue Airways Corp. * | 30,962 | 138,710 | ||||||
Kansas City Southern * | 13,550 | 855,954 | ||||||
Kirby Corp. * | 5,600 | 344,624 | ||||||
Knight Transportation, Inc. | 9,050 | 137,560 | ||||||
Landstar System, Inc. | 15,200 | 678,376 | ||||||
MAIR Holdings, Inc. (a)(c)* | 1,100 | 1,793 | ||||||
Norfolk Southern Corp. | 44,000 | 3,255,560 | ||||||
Old Dominion Freight Line, Inc. * | 6,075 | 222,163 | ||||||
Pacer International, Inc. * | 2,800 | 13,188 | ||||||
Park-Ohio Holdings Corp. * | 2,600 | 42,068 | ||||||
Pinnacle Airlines Corp. * | 7,500 | 19,275 | ||||||
Republic Airways Holdings, Inc. * | 7,500 | 19,500 | ||||||
Ryder System, Inc. | 6,400 | 326,016 | ||||||
Saia, Inc. * | 6,100 | 81,435 | ||||||
SkyWest, Inc. | 7,000 | 93,870 | ||||||
Southwest Airlines Co. | 89,715 | 767,063 | ||||||
Swift Transporation Co. * | 8,000 | 71,200 | ||||||
Union Pacific Corp. | 60,400 | 6,014,028 | ||||||
United Continental Holdings, Inc. * | 41,900 | 809,508 | ||||||
United Parcel Service, Inc., Class B | 87,380 | 6,137,571 | ||||||
US Airways Group, Inc. * | 17,400 | 100,398 | ||||||
UTI Worldwide, Inc. | 11,300 | 165,093 | ||||||
Werner Enterprises, Inc. | 5,832 | 138,218 | ||||||
33,063,488 | ||||||||
Utilities 3.7% | ||||||||
AGL Resources, Inc. | 9,800 | 411,012 | ||||||
ALLETE, Inc. | 5,233 | 206,756 | ||||||
Alliant Energy Corp. | 14,800 | 603,544 | ||||||
Ameren Corp. | 31,100 | 991,468 |
See financial notes 47
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
American Electric Power Co., Inc. | 57,520 | 2,259,386 | ||||||
American States Water Co. | 2,000 | 69,880 | ||||||
American Water Works Co., Inc. | 22,200 | 677,766 | ||||||
Aqua America, Inc. | 15,094 | 334,936 | ||||||
Atmos Energy Corp. | 12,200 | 418,704 | ||||||
Avista Corp. | 7,800 | 198,510 | ||||||
Black Hills Corp. | 3,900 | 131,469 | ||||||
California Water Service Group | 6,000 | 111,420 | ||||||
Calpine Corp. * | 42,900 | 650,793 | ||||||
CenterPoint Energy, Inc. | 48,500 | 1,010,740 | ||||||
Central Vermont Public Service Corp. | 6,200 | 219,294 | ||||||
CH Energy Group, Inc. | 1,900 | 104,899 | ||||||
Chesapeake Utilities Corp. | 647 | 27,426 | ||||||
Cleco Corp. | 6,400 | 235,968 | ||||||
CMS Energy Corp. | 29,900 | 622,518 | ||||||
Consolidated Edison, Inc. | 34,400 | 1,990,728 | ||||||
Constellation Energy Group, Inc. | 21,500 | 853,550 | ||||||
Dominion Resources, Inc. | 71,580 | 3,692,812 | ||||||
DPL, Inc. | 14,452 | 438,618 | ||||||
DTE Energy Co. | 20,301 | 1,057,885 | ||||||
Duke Energy Corp. | 163,556 | 3,339,814 | ||||||
Dynegy, Inc. * | 15,416 | 56,577 | ||||||
Edison International | 37,710 | 1,531,026 | ||||||
El Paso Electric Co. | 5,300 | 169,759 | ||||||
Entergy Corp. | 21,700 | 1,500,989 | ||||||
Exelon Corp. | 82,474 | 3,661,021 | ||||||
FirstEnergy Corp. | 52,656 | 2,367,414 | ||||||
GenOn Energy, Inc. * | 86,304 | 263,227 | ||||||
Great Plains Energy, Inc. | 17,341 | 359,652 | ||||||
Hawaiian Electric Industries, Inc. | 10,700 | 271,031 | ||||||
IDACORP, Inc. | 4,200 | 169,596 | ||||||
Integrys Energy Group, Inc. | 10,540 | 557,671 | ||||||
ITC Holdings Corp. | 5,000 | 363,400 | ||||||
MDU Resources Group, Inc. | 22,425 | 462,179 | ||||||
MGE Energy, Inc. | 2,000 | 87,280 | ||||||
Middlesex Water Co. | 3,000 | 56,850 | ||||||
National Fuel Gas Co. | 8,800 | 539,352 | ||||||
New Jersey Resources Corp. | 6,225 | 292,700 | ||||||
NextEra Energy, Inc. | 50,900 | 2,870,760 | ||||||
Nicor, Inc. | 6,000 | 337,500 | ||||||
NiSource, Inc. | 36,864 | 814,326 | ||||||
Northeast Utilities | 20,124 | 695,687 | ||||||
Northwest Natural Gas Co. | 5,700 | 266,304 | ||||||
NorthWestern Corp. | 7,100 | 244,595 | ||||||
NRG Energy, Inc. * | 30,600 | 655,452 | ||||||
NSTAR | 13,734 | 619,266 | ||||||
NV Energy, Inc. | 27,976 | 448,735 | ||||||
OGE Energy Corp. | 12,500 | 646,750 | ||||||
ONEOK, Inc. | 12,900 | 981,045 | ||||||
Ormat Technologies, Inc. | 2,800 | 53,172 | ||||||
Otter Tail Corp. | 4,100 | 79,581 | ||||||
Pepco Holdings, Inc. | 26,300 | 520,740 | ||||||
PG&E Corp. | 48,000 | 2,059,200 | ||||||
Piedmont Natural Gas Co., Inc. | 6,300 | 205,947 | ||||||
Pinnacle West Capital Corp. | 17,800 | 811,324 | ||||||
PNM Resources, Inc. | 8,500 | 152,830 | ||||||
Portland General Electric Co. | 8,200 | 201,228 | ||||||
PPL Corp. | 70,200 | 2,061,774 | ||||||
Progress Energy, Inc. | 34,959 | 1,821,364 | ||||||
Public Service Enterprise Group, Inc. | 63,300 | 2,133,210 | ||||||
Questar Corp. | 22,200 | 427,794 | ||||||
SCANA Corp. | 15,405 | 651,323 | ||||||
Sempra Energy | 26,675 | 1,433,248 | ||||||
South Jersey Industries, Inc. | 2,500 | 140,775 | ||||||
Southern Co. | 104,100 | 4,497,120 | ||||||
Southwest Gas Corp. | 11,600 | 457,968 | ||||||
TECO Energy, Inc. | 26,700 | 495,819 | ||||||
The AES Corp. * | 96,396 | 1,081,563 | ||||||
The Empire District Electric Co. | 3,500 | 69,895 | ||||||
The Laclede Group, Inc. | 3,300 | 132,396 | ||||||
UGI Corp. | 13,700 | 392,779 | ||||||
UIL Holdings Corp. | 6,166 | 210,137 | ||||||
Unisource Energy Corp. | 3,800 | 141,664 | ||||||
Unitil Corp. | 600 | 16,002 | ||||||
Vectren Corp. | 8,766 | 248,779 | ||||||
Westar Energy, Inc. | 11,700 | 318,942 | ||||||
WGL Holdings, Inc. | 6,000 | 256,860 | ||||||
Wisconsin Energy Corp. | 28,300 | 917,769 | ||||||
Xcel Energy, Inc. | 59,395 | 1,535,361 | ||||||
65,476,604 | ||||||||
Total Common Stock | ||||||||
(Cost $1,418,654,506) | 1,730,168,207 | |||||||
Rights 0.0% of net assets | ||||||||
Banks 0.0% | ||||||||
First Bancorp (a)(c)(d)* | 479 | 29 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.0% | ||||||||
Indevus Pharmaceuticals, Inc. (a)(c)* | 1,800 | — | ||||||
Total Rights | ||||||||
(Cost $—) | 29 | |||||||
Warrants 0.0% of net assets | ||||||||
Magnum Hunter Resources Corp. (a)(c)* | 33 | — | ||||||
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
Short-Term Investments 0.8% of net assets | ||||||||
Time Deposit 0.7% | ||||||||
Bank of America | ||||||||
0.03%, 11/01/11 | 12,648,902 | 12,648,902 |
48 See financial notes
Schwab Total Stock Market Index Fund
Portfolio Holdings continued
Face | ||||||||
Security | Amount | Value | ||||||
Rate, Maturity Date | ($) | ($) | ||||||
U.S. Treasury Obligation 0.1% | ||||||||
U.S. Treasury Bill | ||||||||
0.00%, 12/15/11 (e)(f) | 1,645,000 | 1,645,000 | ||||||
Total Short-Term Investments | ||||||||
(Cost $14,293,902) | 14,293,902 | |||||||
End of Investments. | ||||||||
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Collateral Invested for Securities on Loan 0.3% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 4,856,627 | 4,856,627 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $4,856,627) | 4,856,627 | |||||||
End of collateral invested for securities on loan. |
At 10/31/11 tax basis cost of the fund’s investments was $1,444,456,294 and the unrealized appreciation and depreciation were $505,574,423 and ($205,568,579), respectively, with a net unrealized appreciation of $300,005,844.
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. | |
(b) | Issuer is affiliated with the fund’s adviser. | |
(c) | Illiquid security. At the period end, the value of these amounted to $8,396 or 0.0% of net assets. | |
(d) | All or a portion of this security is on loan. | |
(e) | All or a portion of this security is held as collateral for open futures contracts. | |
(f) | The rate shown is the purchase yield. |
REIT — | Real Estate Investment Trust |
In addition to the above, the fund held the following at 10/31/11.
Contract | Unrealized | |||||||||||
Number of | Value | Gains | ||||||||||
Contracts | ($) | ($) | ||||||||||
Futures Contracts | ||||||||||||
Russell 2000 Index, mini, Long, expires 12/16/11 | 70 | 5,175,100 | 396,770 | |||||||||
S&P 500 Index, e-mini, Long, expires 12/16/11 | 135 | 8,432,775 | 643,476 | |||||||||
Net unrealized gains | 1,040,246 | |||||||||||
See financial notes 49
Schwab International Index Fund
Portfolio Holdings as of October 31, 2011
This section shows all the securities in the fund’s portfolio and their values as of the report date.
The fund files its complete schedule of portfolio holdings with the SEC for the first and third quarters of each fiscal year on Form N-Q. The fund’s Form N-Q is available on the SEC’s website at http://www.sec.gov and may be viewed and copied at the SEC’s Public Reference Room in Washington, D.C. Call 1-800-SEC-0330 for information on the operation of the Public Reference Room. The schedule of portfolio holdings filed on a fund’s most recent Form N-Q is also available by visiting the fund’s website at www.schwabfunds.com/prospectus.
Cost | Value | |||||||||||
Holdings by Category | ($) | ($) | ||||||||||
95 | .1% | Common Stock | 1,064,505,397 | 1,308,416,799 | ||||||||
0 | .3% | Preferred Stock | 2,869,550 | 3,798,553 | ||||||||
4 | .1% | Other Investment Company | 59,206,235 | 56,297,750 | ||||||||
99 | .5% | Total Investments | 1,126,581,182 | 1,368,513,102 | ||||||||
0 | .4% | Collateral Invested for Securities on Loan | 5,801,760 | 5,801,760 | ||||||||
0 | .1% | Other Assets and Liabilities, Net | 823,975 | |||||||||
100 | .0% | Total Net Assets | 1,375,138,837 |
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Common Stock 95.1% of net assets | ||||||||
Australia 7.4% | ||||||||
Banks 3.0% | ||||||||
Australia & New Zealand Banking Group Ltd. | 397,907 | 8,991,269 | ||||||
Commonwealth Bank of Australia | 239,050 | 12,280,005 | ||||||
National Australia Bank Ltd. | 333,721 | 8,913,492 | ||||||
Westpac Banking Corp. | 459,492 | 10,663,077 | ||||||
40,847,843 | ||||||||
Diversified Financials 0.1% | ||||||||
Macquarie Group Ltd. | 48,387 | 1,245,784 | ||||||
Energy 0.4% | ||||||||
Origin Energy Ltd. | 164,755 | 2,482,759 | ||||||
Woodside Petroleum Ltd. | 92,147 | 3,508,684 | ||||||
5,991,443 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
Wesfarmers Ltd. | 178,845 | 6,067,945 | ||||||
Woolworths Ltd. | 184,527 | 4,612,773 | ||||||
10,680,718 | ||||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Foster’s Group Ltd. | 282,819 | 1,588,675 | ||||||
Treasury Wine Estates | 101,382 | 395,844 | ||||||
1,984,519 | ||||||||
Insurance 0.3% | ||||||||
QBE Insurance Group Ltd. | 165,434 | 2,546,511 | ||||||
Suncorp Group Ltd. | 184,453 | 1,655,448 | ||||||
4,201,959 | ||||||||
Materials 2.1% | ||||||||
BHP Billiton Ltd. | 486,822 | 19,056,448 | ||||||
Fortescue Metals Group Ltd. | 258,090 | 1,296,344 | ||||||
Newcrest Mining Ltd. | 117,189 | 4,141,670 | ||||||
Rio Tinto Ltd. | 66,103 | 4,745,803 | ||||||
29,240,265 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.2% | ||||||||
CSL Ltd. | 84,539 | 2,546,227 | ||||||
Real Estate 0.3% | ||||||||
Westfield Group | 326,682 | 2,629,915 | ||||||
Westfield Retail Trust | 426,196 | 1,135,810 | ||||||
3,765,725 | ||||||||
Telecommunication Services 0.1% | ||||||||
Telstra Corp., Ltd. | 350,763 | 1,138,904 | ||||||
101,643,387 | ||||||||
Austria 0.1% | ||||||||
Banks 0.0% | ||||||||
Erste Group Bank AG | 36,594 | 780,127 | ||||||
Energy 0.1% | ||||||||
OMV AG | 23,936 | 834,081 | ||||||
Utilities 0.0% | ||||||||
Verbund AG | 11,898 | 345,495 | ||||||
1,959,703 | ||||||||
Belgium 0.6% | ||||||||
Banks 0.1% | ||||||||
KBC GROEP N.V. | 31,902 | 707,456 | ||||||
Diversified Financials 0.1% | ||||||||
Groupe Bruxelles Lambert S.A. | 12,176 | 935,927 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Anheuser-Busch InBev N.V. | 122,612 | 6,799,588 | ||||||
Telecommunication Services 0.0% | ||||||||
Belgacom S.A. | 21,546 | 651,525 | ||||||
9,094,496 | ||||||||
Canada 9.5% | ||||||||
Banks 2.9% | ||||||||
Bank of Montreal (c) | 96,675 | 5,711,754 | ||||||
Bank of Nova Scotia | 164,704 | 8,680,112 | ||||||
Canadian Imperial Bank of Commerce | 60,710 | 4,574,187 | ||||||
Royal Bank of Canada | 217,968 | 10,632,159 | ||||||
The Toronto-Dominion Bank | 136,432 | 10,297,245 | ||||||
39,895,457 | ||||||||
Energy 2.7% | ||||||||
Cameco Corp. | 57,409 | 1,231,982 | ||||||
Canadian Natural Resources Ltd. | 166,476 | 5,872,381 | ||||||
Canadian Oil Sands Ltd. | 37,447 | 867,846 | ||||||
Cenovus Energy, Inc. | 115,400 | 3,952,602 | ||||||
Enbridge, Inc. | 119,560 | 4,141,868 | ||||||
Encana Corp. | 109,962 | 2,385,130 | ||||||
Husky Energy, Inc. | 41,310 | 1,060,570 | ||||||
Imperial Oil Ltd. | 38,359 | 1,588,622 | ||||||
Nexen, Inc. | 79,674 | 1,353,279 |
50 See financial notes
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Suncor Energy, Inc. | 238,799 | 7,606,590 | ||||||
Talisman Energy, Inc. | 155,142 | 2,200,861 | ||||||
TransCanada Corp. | 108,882 | 4,628,373 | ||||||
36,890,104 | ||||||||
Food & Staples Retailing 0.0% | ||||||||
Loblaw Cos., Ltd. | 15,800 | 604,735 | ||||||
Insurance 0.7% | ||||||||
Great-West Lifeco, Inc. | 41,000 | 912,756 | ||||||
Manulife Financial Corp. | 274,097 | 3,618,878 | ||||||
Power Corp. of Canada | 50,603 | 1,274,277 | ||||||
Power Financial Corp. | 36,366 | 981,435 | ||||||
Sun Life Financial, Inc. | 86,957 | 2,194,972 | ||||||
8,982,318 | ||||||||
Materials 2.1% | ||||||||
Agnico-Eagle Mines Ltd. | 26,140 | 1,133,979 | ||||||
Agrium, Inc. | 23,300 | 1,921,037 | ||||||
Barrick Gold Corp. | 153,921 | 7,599,150 | ||||||
Goldcorp, Inc. | 124,351 | 6,050,688 | ||||||
Ivanhoe Mines Ltd. * | 44,390 | 908,509 | ||||||
Kinross Gold Corp. | 172,191 | 2,454,812 | ||||||
Potash Corp. of Saskatchewan, Inc. | 129,740 | 6,141,092 | ||||||
Teck Resources Ltd., Class B | 72,000 | 2,886,501 | ||||||
29,095,768 | ||||||||
Media 0.1% | ||||||||
Thomson Reuters Corp. | 55,800 | 1,650,908 | ||||||
Real Estate 0.2% | ||||||||
Brookfield Asset Management, Inc., Class A | 79,629 | 2,303,988 | ||||||
Technology Hardware & Equipment 0.1% | ||||||||
Research In Motion Ltd. * | 67,948 | 1,374,298 | ||||||
Telecommunication Services 0.3% | ||||||||
BCE, Inc. | 39,549 | 1,567,676 | ||||||
Rogers Communications, Inc., Class B | 67,178 | 2,449,882 | ||||||
4,017,558 | ||||||||
Transportation 0.4% | ||||||||
Canadian National Railway Co. | 68,378 | 5,356,363 | ||||||
130,171,497 | ||||||||
China 0.2% | ||||||||
Household & Personal Products 0.1% | ||||||||
Hengan International Group Co., Ltd. | 122,000 | 1,057,538 | ||||||
Retailing 0.1% | ||||||||
Belle International Holdings Ltd. | 633,000 | 1,241,457 | ||||||
2,298,995 | ||||||||
Denmark 0.8% | ||||||||
Banks 0.1% | ||||||||
Danske Bank A/S * | 105,780 | 1,446,277 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Carlsberg A/S, Class B | 16,473 | 1,115,226 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.5% | ||||||||
Novo Nordisk A/S, Class B | 64,228 | 6,818,855 | ||||||
Transportation 0.1% | ||||||||
AP Moller - Maersk A/S, Series A | 85 | 547,248 | ||||||
AP Moller - Maersk A/S, Series B | 203 | 1,372,846 | ||||||
1,920,094 | ||||||||
11,300,452 | ||||||||
Finland 0.7% | ||||||||
Capital Goods 0.1% | ||||||||
Kone Oyj, Class B | 30,253 | 1,665,632 | ||||||
Insurance 0.2% | ||||||||
Sampo Oyj, Class A | 72,086 | 1,981,424 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Nokia Oyj | 581,306 | 3,911,712 | ||||||
Utilities 0.1% | ||||||||
Fortum Oyj | 64,051 | 1,558,883 | ||||||
9,117,651 | ||||||||
France 9.3% | ||||||||
Automobiles & Components 0.2% | ||||||||
Cie Generale des Etablissements Michelin, Class B | 26,393 | 1,911,122 | ||||||
Renault S.A. | 31,415 | 1,312,586 | ||||||
3,223,708 | ||||||||
Banks 0.9% | ||||||||
BNP Paribas S.A. | 162,308 | 7,247,842 | ||||||
Credit Agricole S.A. | 168,718 | 1,305,934 | ||||||
Natixis | 134,252 | 425,478 | ||||||
Societe Generale | 118,741 | 3,399,761 | ||||||
12,379,015 | ||||||||
Capital Goods 1.4% | ||||||||
Alstom S.A. | 31,808 | 1,184,466 | ||||||
Areva S.A. * | 7,200 | 210,772 | ||||||
Bouygues S.A. | 35,016 | 1,307,803 | ||||||
Compagnie de Saint-Gobain | 66,570 | 3,076,698 | ||||||
European Aeronautic Defence & Space Co. | 60,931 | 1,796,200 | ||||||
Safran S.A. | 32,911 | 1,074,742 | ||||||
Schneider Electric S.A. | 82,901 | 4,867,920 | ||||||
Vallourec S.A. | 16,512 | 1,001,226 | ||||||
Vinci S.A. | 85,891 | 4,211,951 | ||||||
18,731,778 | ||||||||
Consumer Durables & Apparel 0.8% | ||||||||
Christian Dior S.A. | 8,074 | 1,139,111 | ||||||
Hermes International | 7,829 | 2,662,342 | ||||||
LVMH Moet Hennessy Louis Vuitton S.A. | 40,499 | 6,712,466 | ||||||
10,513,919 | ||||||||
Energy 1.3% | ||||||||
Total S.A. | 356,248 | 18,588,030 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Carrefour S.A. | 91,099 | 2,410,297 | ||||||
Food, Beverage & Tobacco 0.7% | ||||||||
DANONE S.A. | 98,288 | 6,813,609 | ||||||
Pernod Ricard S.A. | 26,749 | 2,489,116 | ||||||
9,302,725 |
See financial notes 51
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Essilor International S.A. | 31,433 | 2,271,796 | ||||||
Household & Personal Products 0.3% | ||||||||
L’Oreal S.A. | 35,842 | 3,946,395 | ||||||
Insurance 0.3% | ||||||||
AXA S.A. | 282,310 | 4,540,657 | ||||||
CNP Assurances | 18,752 | 286,370 | ||||||
4,827,027 | ||||||||
Materials 0.5% | ||||||||
Air Liquide S.A. | 42,907 | 5,540,033 | ||||||
Lafarge S.A. | 28,029 | 1,134,904 | ||||||
6,674,937 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.9% | ||||||||
Sanofi | 175,865 | 12,581,207 | ||||||
Real Estate 0.2% | ||||||||
Unibail-Rodamco SE | 13,680 | 2,719,712 | ||||||
Retailing 0.1% | ||||||||
PPR | 11,455 | 1,777,534 | ||||||
Telecommunication Services 0.7% | ||||||||
France Telecom S.A. | 293,431 | 5,275,542 | ||||||
Vivendi | 188,741 | 4,217,684 | ||||||
9,493,226 | ||||||||
Utilities 0.6% | ||||||||
EDF S.A. | 44,728 | 1,338,602 | ||||||
GDF Suez | 218,472 | 6,154,949 | ||||||
Veolia Environnement | 79,396 | 1,124,217 | ||||||
8,617,768 | ||||||||
128,059,074 | ||||||||
Germany 7.6% | ||||||||
Automobiles & Components 0.9% | ||||||||
Bayerische Motoren Werke AG | 48,997 | 3,980,227 | ||||||
Continental AG * | 12,051 | 898,620 | ||||||
Daimler AG - Reg’d | 135,920 | 6,903,250 | ||||||
Volkswagen AG | 5,252 | 821,332 | ||||||
12,603,429 | ||||||||
Capital Goods 1.0% | ||||||||
MAN SE | 9,431 | 830,967 | ||||||
Siemens AG - Reg’d | 124,799 | 13,081,531 | ||||||
13,912,498 | ||||||||
Consumer Durables & Apparel 0.2% | ||||||||
Adidas AG | 31,986 | 2,252,669 | ||||||
Diversified Financials 0.5% | ||||||||
Deutsche Bank AG - Reg’d | 141,002 | 5,830,229 | ||||||
Deutsche Boerse AG | 29,888 | 1,644,795 | ||||||
7,475,024 | ||||||||
Food & Staples Retailing 0.1% | ||||||||
Metro AG | 20,225 | 937,099 | ||||||
Health Care Equipment & Services 0.2% | ||||||||
Fresenius Medical Care AG & Co. KGaA | 29,500 | 2,148,947 | ||||||
Household & Personal Products 0.1% | ||||||||
Beiersdorf AG | 13,999 | 807,039 | ||||||
Henkel AG & Co. KGaA | 17,072 | 833,623 | ||||||
1,640,662 | ||||||||
Insurance 0.8% | ||||||||
Allianz SE - Reg’d | 68,946 | 7,671,076 | ||||||
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d | 24,420 | 3,270,311 | ||||||
10,941,387 | ||||||||
Materials 1.3% | ||||||||
BASF SE | 139,330 | 10,170,503 | ||||||
K+S AG - Reg’d | 24,027 | 1,522,490 | ||||||
Linde AG | 26,300 | 4,166,381 | ||||||
ThyssenKrupp AG | 50,861 | 1,457,095 | ||||||
17,316,469 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Bayer AG - Reg’d | 125,445 | 7,992,347 | ||||||
Merck KGaA | 10,200 | 951,810 | ||||||
8,944,157 | ||||||||
Software & Services 0.6% | ||||||||
SAP AG | 136,681 | 8,264,816 | ||||||
Telecommunication Services 0.4% | ||||||||
Deutsche Telekom AG - Reg’d | 447,726 | 5,687,969 | ||||||
Transportation 0.1% | ||||||||
Deutsche Post AG - Reg’d | 127,466 | 1,933,469 | ||||||
Utilities 0.7% | ||||||||
E.ON AG | 303,545 | 7,319,981 | ||||||
RWE AG | 61,483 | 2,620,832 | ||||||
9,940,813 | ||||||||
103,999,408 | ||||||||
Hong Kong 2.3% | ||||||||
Banks 0.2% | ||||||||
BOC Hong Kong (Holdings) Ltd. | 532,500 | 1,266,266 | ||||||
Hang Seng Bank Ltd. | 107,836 | 1,390,485 | ||||||
2,656,751 | ||||||||
Capital Goods 0.4% | ||||||||
Hutchison Whampoa Ltd. | 348,370 | 3,186,345 | ||||||
Jardine Matheson Holdings Ltd. | 46,800 | 2,358,654 | ||||||
Jardine Strategic Holdings Ltd. | 40,000 | 1,172,845 | ||||||
6,717,844 | ||||||||
Consumer Services 0.1% | ||||||||
Sands China Ltd. * | 377,200 | 1,133,556 | ||||||
Diversified Financials 0.2% | ||||||||
Hong Kong Exchanges & Clearing Ltd. | 161,218 | 2,732,950 | ||||||
Real Estate 0.8% | ||||||||
Cheung Kong (Holdings) Ltd. | 210,656 | 2,611,277 | ||||||
Hang Lung Properties Ltd. | 310,000 | 1,128,962 | ||||||
Henderson Land Development Co., Ltd. | 136,000 | 743,380 | ||||||
Hongkong Land Holdings Ltd. | 177,000 | 930,141 | ||||||
Sun Hung Kai Properties Ltd. | 227,604 | 3,133,828 | ||||||
Swire Pacific Ltd., Class A | 105,590 | 1,220,151 | ||||||
The Wharf Holdings Ltd. | 219,100 | 1,165,446 | ||||||
10,933,185 |
52 See financial notes
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Retailing 0.1% | ||||||||
Li & Fung Ltd. | 908,000 | 1,749,892 | ||||||
Transportation 0.1% | ||||||||
Cathay Pacific Airways Ltd. | 174,000 | 315,840 | ||||||
MTR Corp., Ltd. | 213,500 | 689,173 | ||||||
1,005,013 | ||||||||
Utilities 0.4% | ||||||||
CLP Holdings Ltd. | 286,580 | 2,552,891 | ||||||
Hong Kong & China Gas Co., Ltd. | 722,392 | 1,628,686 | ||||||
Power Assets Holdings Ltd. | 179,500 | 1,363,986 | ||||||
5,545,563 | ||||||||
32,474,754 | ||||||||
Ireland 0.1% | ||||||||
Materials 0.1% | ||||||||
CRH plc | 108,884 | 1,965,467 | ||||||
Israel 0.5% | ||||||||
Materials 0.1% | ||||||||
Israel Chemicals Ltd. | 57,844 | 685,892 | ||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.4% | ||||||||
Teva Pharmaceutical Industries Ltd. | 144,184 | 5,878,144 | ||||||
6,564,036 | ||||||||
Italy 2.5% | ||||||||
Automobiles & Components 0.1% | ||||||||
Fiat S.p.A. | 121,350 | 743,082 | ||||||
Banks 0.5% | ||||||||
Intesa Sanpaolo | 2,111,196 | 3,726,265 | ||||||
UniCredit S.p.A. | 2,974,349 | 3,451,389 | ||||||
7,177,654 | ||||||||
Capital Goods 0.1% | ||||||||
Fiat Industrial S.p.A. * | 107,968 | 940,022 | ||||||
Consumer Durables & Apparel 0.0% | ||||||||
Luxottica Group S.p.A. | 22,503 | 663,142 | ||||||
Energy 0.9% | ||||||||
Eni S.p.A. | 447,375 | 9,888,733 | ||||||
Saipem S.p.A. | 37,303 | 1,666,788 | ||||||
Tenaris S.A. | 74,437 | 1,187,731 | ||||||
12,743,252 | ||||||||
Insurance 0.3% | ||||||||
Assicurazioni Generali S.p.A. | 201,556 | 3,606,253 | ||||||
Telecommunication Services 0.1% | ||||||||
Telecom Italia S.p.A. | 1,432,279 | 1,782,150 | ||||||
Transportation 0.1% | ||||||||
Atlantia S.p.A. | 49,252 | 750,174 | ||||||
Utilities 0.4% | ||||||||
Enel S.p.A. | 980,832 | 4,627,659 | ||||||
Snam Rete Gas S.p.A. | 259,567 | 1,268,807 | ||||||
5,896,466 | ||||||||
34,302,195 | ||||||||
Japan 13.9% | ||||||||
Automobiles & Components 2.1% | ||||||||
Bridgestone Corp. | 96,657 | 2,266,324 | ||||||
Denso Corp. | 73,900 | 2,272,667 | ||||||
Honda Motor Co., Ltd. | 237,139 | 7,091,342 | ||||||
Nissan Motor Co., Ltd. | 344,996 | 3,172,151 | ||||||
Suzuki Motor Corp. | 57,800 | 1,225,888 | ||||||
Toyota Motor Corp. | 403,303 | 13,389,969 | ||||||
29,418,341 | ||||||||
Banks 1.5% | ||||||||
Mitsubishi UFJ Financial Group, Inc. | 2,147,209 | 9,331,634 | ||||||
Mizuho Financial Group, Inc. | 3,459,234 | 4,841,852 | ||||||
Sumitomo Mitsui Financial Group, Inc. | 214,546 | 5,996,883 | ||||||
20,170,369 | ||||||||
Capital Goods 2.2% | ||||||||
Asahi Glass Co., Ltd. | 152,000 | 1,331,053 | ||||||
Fanuc Corp. | 29,500 | 4,769,860 | ||||||
ITOCHU Corp. | 216,000 | 2,136,335 | ||||||
Komatsu Ltd. | 135,809 | 3,357,850 | ||||||
Kubota Corp. | 156,000 | 1,284,846 | ||||||
Marubeni Corp. | 242,000 | 1,408,577 | ||||||
Mitsubishi Corp. | 222,000 | 4,565,862 | ||||||
Mitsubishi Electric Corp. | 293,000 | 2,711,187 | ||||||
Mitsubishi Heavy Industries Ltd. | 519,000 | 2,114,679 | ||||||
Mitsui & Co., Ltd. | 240,000 | 3,502,685 | ||||||
Nidec Corp. | 15,300 | 1,257,319 | ||||||
Sumitomo Corp. | 173,700 | 2,150,605 | ||||||
30,590,858 | ||||||||
Consumer Durables & Apparel 0.5% | ||||||||
Panasonic Corp. | 293,912 | 2,971,182 | ||||||
Sharp Corp. | 128,785 | 1,187,146 | ||||||
Sony Corp. | 154,800 | 3,229,655 | ||||||
7,387,983 | ||||||||
Diversified Financials 0.2% | ||||||||
Nomura Holdings, Inc. | 588,200 | 2,241,143 | ||||||
Energy 0.3% | ||||||||
Inpex Corp. | 337 | 2,224,901 | ||||||
JX Holdings, Inc. | 348,000 | 2,027,060 | ||||||
4,251,961 | ||||||||
Food & Staples Retailing 0.2% | ||||||||
Seven & i Holdings Co., Ltd. | 116,803 | 3,116,973 | ||||||
Food, Beverage & Tobacco 0.4% | ||||||||
Japan Tobacco, Inc. | 680 | 3,398,748 | ||||||
Kirin Holdings Co., Ltd. | 136,000 | 1,663,895 | ||||||
5,062,643 | ||||||||
Health Care Equipment & Services 0.1% | ||||||||
Terumo Corp. | 22,500 | 1,143,225 | ||||||
Household & Personal Products 0.2% | ||||||||
Kao Corp. | 75,619 | 1,983,816 | ||||||
Insurance 0.5% | ||||||||
MS&AD Insurance Group Holdings, Inc. | 82,362 | 1,613,170 | ||||||
NKSJ Holdings, Inc. | 60,500 | 1,209,988 |
See financial notes 53
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
The Dai-ichi Life Insurance Co., Ltd. | 1,285 | 1,463,361 | ||||||
Tokio Marine Holdings, Inc. | 112,199 | 2,675,326 | ||||||
6,961,845 | ||||||||
Materials 0.5% | ||||||||
JFE Holdings, Inc. | 71,700 | 1,364,634 | ||||||
Nippon Steel Corp. | 788,000 | 2,054,488 | ||||||
Shin-Etsu Chemical Co., Ltd. | 55,260 | 2,837,864 | ||||||
Sumitomo Metal Industries Ltd. | 559,000 | 1,051,255 | ||||||
7,308,241 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 0.7% | ||||||||
Astellas Pharma, Inc. | 67,270 | 2,460,292 | ||||||
Daiichi Sankyo Co., Ltd. | 95,500 | 1,855,050 | ||||||
Takeda Pharmaceutical Co., Ltd. | 108,600 | 4,895,839 | ||||||
9,211,181 | ||||||||
Real Estate 0.4% | ||||||||
Mitsubishi Estate Co., Ltd. | 189,502 | 3,209,600 | ||||||
Mitsui Fudosan Co., Ltd. | 125,777 | 2,091,707 | ||||||
5,301,307 | ||||||||
Retailing 0.1% | ||||||||
Fast Retailing Co., Ltd. | 8,400 | 1,508,936 | ||||||
Software & Services 0.2% | ||||||||
Nintendo Co., Ltd. | 16,439 | 2,480,161 | ||||||
Yahoo Japan Corp. | 2,630 | 844,650 | ||||||
3,324,811 | ||||||||
Technology Hardware & Equipment 1.8% | ||||||||
Canon, Inc. | 182,895 | 8,303,031 | ||||||
FUJIFILM Holdings Corp. | 69,011 | 1,688,989 | ||||||
Fujitsu Ltd. | 293,000 | 1,566,860 | ||||||
Hitachi Ltd. | 697,079 | 3,735,150 | ||||||
Hoya Corp. | 67,307 | 1,470,440 | ||||||
Keyence Corp. | 6,200 | 1,576,106 | ||||||
Kyocera Corp. | 23,800 | 2,092,165 | ||||||
Murata Manufacturing Co., Ltd. | 29,174 | 1,629,602 | ||||||
Ricoh Co., Ltd. | 89,000 | 729,443 | ||||||
Toshiba Corp. | 584,178 | 2,547,830 | ||||||
25,339,616 | ||||||||
Telecommunication Services 1.1% | ||||||||
KDDI Corp. | 417 | 3,054,674 | ||||||
Nippon Telegraph & Telephone Corp. | 73,278 | 3,758,853 | ||||||
NTT DOCOMO, Inc. | 2,098 | 3,726,138 | ||||||
SOFTBANK Corp. | 130,500 | 4,235,460 | ||||||
14,775,125 | ||||||||
Transportation 0.4% | ||||||||
Central Japan Railway Co. | 254 | 2,160,781 | ||||||
East Japan Railway Co. | 53,360 | 3,235,127 | ||||||
5,395,908 | ||||||||
Utilities 0.5% | ||||||||
Chubu Electric Power Co., Inc. | 96,200 | 1,760,050 | ||||||
The Kansai Electric Power Co., Inc. | 111,300 | 1,641,832 | ||||||
The Tokyo Electric Power Co., Inc. | 213,190 | 782,016 | ||||||
Tohoku Electric Power Co., Inc. | 72,800 | 804,388 | ||||||
Tokyo Gas Co., Ltd. | 339,201 | 1,460,708 | ||||||
6,448,994 | ||||||||
190,943,276 | ||||||||
Netherlands 2.2% | ||||||||
Capital Goods 0.2% | ||||||||
Koninklijke Philips Electronics N.V. | 155,188 | 3,230,503 | ||||||
Diversified Financials 0.4% | ||||||||
ING Groep N.V. CVA * | 592,635 | 5,109,090 | ||||||
Food & Staples Retailing 0.2% | ||||||||
Koninklijke Ahold N.V. | 175,504 | 2,242,304 | ||||||
Food, Beverage & Tobacco 0.9% | ||||||||
Heineken Holding N.V. | 18,010 | 770,454 | ||||||
Heineken N.V. | 43,050 | 2,091,443 | ||||||
Unilever N.V. CVA | 260,118 | 8,980,225 | ||||||
11,842,122 | ||||||||
Materials 0.1% | ||||||||
Akzo Nobel N.V. | 34,522 | 1,815,237 | ||||||
Semiconductors & Semiconductor Equipment 0.2% | ||||||||
ASML Holding N.V. | 66,323 | 2,782,182 | ||||||
Telecommunication Services 0.2% | ||||||||
Koninklijke (Royal) KPN N.V. | 224,136 | 2,934,594 | ||||||
29,956,032 | ||||||||
Norway 0.8% | ||||||||
Banks 0.1% | ||||||||
DnB NOR A.S.A. | 133,336 | 1,542,296 | ||||||
Energy 0.4% | ||||||||
Seadrill Ltd. | 52,200 | 1,714,199 | ||||||
Statoil A.S.A. | 160,311 | 4,067,740 | ||||||
5,781,939 | ||||||||
Materials 0.1% | ||||||||
Yara International A.S.A. | 29,350 | 1,387,943 | ||||||
Telecommunication Services 0.2% | ||||||||
Telenor A.S.A. | 114,038 | 2,031,329 | ||||||
10,743,507 | ||||||||
Portugal 0.2% | ||||||||
Energy 0.0% | ||||||||
Galp Energia, SGPS, S.A., B Shares | 38,642 | 794,703 | ||||||
Telecommunication Services 0.1% | ||||||||
Portugal Telecom, SGPS, S.A. - Reg’d | 142,374 | 1,018,143 | ||||||
Utilities 0.1% | ||||||||
EDP - Energias de Portugal S.A. | 416,138 | 1,307,304 | ||||||
3,120,150 | ||||||||
Singapore 1.2% | ||||||||
Banks 0.6% | ||||||||
DBS Group Holdings Ltd. | 252,246 | 2,463,880 | ||||||
Oversea-Chinese Banking Corp., Ltd. | 423,552 | 2,835,663 | ||||||
United Overseas Bank Ltd. | 185,233 | 2,512,229 | ||||||
7,811,772 | ||||||||
Capital Goods 0.1% | ||||||||
Keppel Corp., Ltd. | 217,800 | 1,630,477 |
54 See financial notes
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Consumer Services 0.1% | ||||||||
Genting Singapore plc * | 836,000 | 1,142,289 | ||||||
Food, Beverage & Tobacco 0.1% | ||||||||
Wilmar International Ltd. | 372,000 | 1,606,231 | ||||||
Real Estate 0.1% | ||||||||
Capitaland Ltd. | 444,000 | 956,574 | ||||||
Telecommunication Services 0.2% | ||||||||
Singapore Telecommunications Ltd. | 1,131,237 | 2,860,119 | ||||||
Transportation 0.0% | ||||||||
Singapore Airlines Ltd. | 74,000 | 685,667 | ||||||
16,693,129 | ||||||||
Spain 3.3% | ||||||||
Banks 1.3% | ||||||||
Banco Bilbao Vizcaya Argentaria S.A. | 744,928 | 6,704,291 | ||||||
Banco Santander S.A. | 1,306,490 | 11,057,944 | ||||||
CaixaBank | 86,902 | 423,681 | ||||||
18,185,916 | ||||||||
Capital Goods 0.1% | ||||||||
ACS, Actividades de Construccion y Servicios S.A. | 25,945 | 982,853 | ||||||
Energy 0.3% | ||||||||
Repsol YPF S.A. | 125,460 | 3,776,308 | ||||||
Retailing 0.2% | ||||||||
Industria de Diseno Textil S.A. | 31,878 | 2,893,868 | ||||||
Telecommunication Services 0.9% | ||||||||
Telefonica S.A. | 613,907 | 13,046,504 | ||||||
Transportation 0.1% | ||||||||
Abertis Infraestructuras S.A. | 47,351 | 779,188 | ||||||
Utilities 0.4% | ||||||||
Gas Natural SDG S.A. | 42,673 | 793,201 | ||||||
Iberdrola S.A. | 619,293 | 4,480,566 | ||||||
5,273,767 | ||||||||
44,938,404 | ||||||||
Sweden 2.0% | ||||||||
Banks 0.7% | ||||||||
Nordea Bank AB | 399,325 | 3,626,219 | ||||||
Skandinaviska Enskilda Banken AB, A Shares | 252,575 | 1,583,369 | ||||||
Svenska Handelsbanken AB, A Shares | 72,434 | 2,080,337 | ||||||
Swedbank AB, A Shares | 142,056 | 1,988,851 | ||||||
9,278,776 | ||||||||
Capital Goods 0.5% | ||||||||
Atlas Copco AB, A Shares | 101,869 | 2,214,579 | ||||||
Sandvik AB | 162,375 | 2,232,104 | ||||||
Volvo AB, B Shares | 220,084 | 2,739,320 | ||||||
7,186,003 | ||||||||
Retailing 0.3% | ||||||||
Hennes & Mauritz AB, B Shares | 146,828 | 4,854,771 | ||||||
Technology Hardware & Equipment 0.3% | ||||||||
Telefonaktiebolaget LM Ericsson, B Shares | 456,849 | 4,761,976 | ||||||
Telecommunication Services 0.2% | ||||||||
TeliaSonera AB | 321,861 | 2,237,231 | ||||||
28,318,757 | ||||||||
Switzerland 8.6% | ||||||||
Capital Goods 0.5% | ||||||||
ABB Ltd. - Reg’d * | 353,351 | 6,651,977 | ||||||
Commercial & Professional Supplies 0.1% | ||||||||
SGS S.A. - Reg’d | 795 | 1,363,765 | ||||||
Consumer Durables & Apparel 0.5% | ||||||||
Compagnie Financiere Richemont S.A., Series A | 86,837 | 4,946,634 | ||||||
Swatch Group AG - Bearer Shares | 4,585 | 1,930,222 | ||||||
6,876,856 | ||||||||
Diversified Financials 0.9% | ||||||||
Credit Suisse Group AG - Reg’d * | 154,492 | 4,455,709 | ||||||
UBS AG - Reg’d * | 581,118 | 7,344,290 | ||||||
11,799,999 | ||||||||
Food, Beverage & Tobacco 2.2% | ||||||||
Nestle S.A. - Reg’d | 525,628 | 30,401,094 | ||||||
Health Care Equipment & Services 0.1% | ||||||||
Synthes, Inc. - Reg’d | 9,102 | 1,522,121 | ||||||
Insurance 0.6% | ||||||||
Swiss Re Ltd. * | 56,150 | 3,065,704 | ||||||
Zurich Financial Services AG * | 22,369 | 5,154,791 | ||||||
8,220,495 | ||||||||
Materials 0.5% | ||||||||
Holcim Ltd. - Reg’d * | 40,426 | 2,560,019 | ||||||
Syngenta AG - Reg’d * | 14,731 | 4,488,844 | ||||||
7,048,863 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 3.0% | ||||||||
Novartis AG - Reg’d | 416,501 | 23,463,696 | ||||||
Roche Holding AG | 106,576 | 17,485,852 | ||||||
Roche Holding AG - Bearer Shares | 4,345 | 742,280 | ||||||
41,691,828 | ||||||||
Telecommunication Services 0.1% | ||||||||
Swisscom AG - Reg’d | 3,444 | 1,387,389 | ||||||
Transportation 0.1% | ||||||||
Kuehne & Nagel International AG - Reg’d | 8,541 | 1,058,154 | ||||||
118,022,541 | ||||||||
United Kingdom 21.3% | ||||||||
Banks 3.0% | ||||||||
Barclays plc | 1,869,537 | 5,795,457 | ||||||
HSBC Holdings plc | 2,706,394 | 23,614,121 | ||||||
Lloyds Banking Group plc * | 6,093,560 | 3,151,112 | ||||||
Royal Bank of Scotland Group plc * | 2,970,251 | 1,146,280 | ||||||
Standard Chartered plc | 294,899 | 6,881,269 | ||||||
40,588,239 |
See financial notes 55
Schwab International Index Fund
Portfolio Holdings continued
Number | Value | |||||||
Security | of Shares | ($) | ||||||
Capital Goods 0.4% | ||||||||
BAE Systems plc | 501,869 | 2,225,610 | ||||||
Rolls-Royce Holdings plc * | 286,935 | 3,229,873 | ||||||
Rolls-Royce Holdings plc, C Shares (a)(b)* | 20,515,011 | 32,986 | ||||||
5,488,469 | ||||||||
Commercial & Professional Supplies 0.1% | ||||||||
Experian plc | 151,272 | 1,965,136 | ||||||
Consumer Services 0.2% | ||||||||
Compass Group plc | 287,959 | 2,614,910 | ||||||
Energy 5.0% | ||||||||
BG Group plc | 514,209 | 11,150,114 | ||||||
BP plc | 2,873,603 | 21,146,375 | ||||||
Royal Dutch Shell plc, A Shares | 548,991 | 19,447,845 | ||||||
Royal Dutch Shell plc, B Shares | 408,945 | 14,672,192 | ||||||
Tullow Oil plc | 134,158 | 3,014,250 | ||||||
69,430,776 | ||||||||
Food & Staples Retailing 0.8% | ||||||||
J Sainsbury plc | 193,124 | 925,443 | ||||||
Tesco plc | 1,215,869 | 7,839,211 | ||||||
WM Morrison Supermarkets plc | 391,531 | 1,898,700 | ||||||
10,663,354 | ||||||||
Food, Beverage & Tobacco 2.9% | ||||||||
Associated British Foods plc | 49,782 | 883,576 | ||||||
British American Tobacco plc | 300,013 | 13,755,690 | ||||||
Diageo plc | 379,847 | 7,861,224 | ||||||
Imperial Tobacco Group plc | 156,844 | 5,713,342 | ||||||
SABMiller plc | 141,143 | 5,140,458 | ||||||
Unilever plc | 201,174 | 6,743,382 | ||||||
40,097,672 | ||||||||
Household & Personal Products 0.4% | ||||||||
Reckitt Benckiser Group plc | 95,410 | 4,897,366 | ||||||
Insurance 0.6% | ||||||||
Aviva plc | 433,333 | 2,364,076 | ||||||
Old Mutual plc | 791,903 | 1,392,271 | ||||||
Prudential plc | 390,366 | 4,032,132 | ||||||
7,788,479 | ||||||||
Materials 2.6% | ||||||||
Anglo American plc | 200,720 | 7,358,490 | ||||||
Antofagasta plc | 55,917 | 1,040,729 | ||||||
BHP Billiton plc | 320,394 | 10,089,040 | ||||||
Fresnillo plc | 24,967 | 676,879 | ||||||
Rio Tinto plc | 223,527 | 12,092,567 | ||||||
Xstrata plc | 299,933 | 4,995,848 | ||||||
36,253,553 | ||||||||
Media 0.4% | ||||||||
British Sky Broadcasting Group plc | 159,997 | 1,804,042 | ||||||
Pearson plc | 122,113 | 2,243,319 | ||||||
WPP plc | 185,093 | 1,915,910 | ||||||
5,963,271 | ||||||||
Pharmaceuticals, Biotechnology & Life Sciences 2.2% | ||||||||
AstraZeneca plc | 204,392 | 9,812,691 | ||||||
GlaxoSmithKline plc | 770,586 | 17,293,765 | ||||||
Shire plc | 84,515 | 2,652,552 | ||||||
29,759,008 | ||||||||
Telecommunication Services 1.8% | ||||||||
BT Group plc | 1,180,057 | 3,560,498 | ||||||
Vodafone Group plc | 7,714,407 | 21,420,479 | ||||||
24,980,977 | ||||||||
Utilities 0.9% | ||||||||
Centrica plc | 779,695 | 3,711,815 | ||||||
National Grid plc | 546,136 | 5,429,706 | ||||||
SSE plc | 143,346 | 3,097,157 | ||||||
12,238,678 | ||||||||
292,729,888 | ||||||||
Total Common Stock | ||||||||
(Cost $1,064,505,397) | 1,308,416,799 | |||||||
Preferred Stock 0.3% of net assets | ||||||||
Germany 0.3% | ||||||||
Automobiles & Components 0.3% | ||||||||
Volkswagen AG | 21,812 | 3,798,553 | ||||||
Total Preferred Stock | ||||||||
(Cost $2,869,550) | 3,798,553 | |||||||
Other Investment Company 4.1% of net assets | ||||||||
United States 4.1% | ||||||||
iShares MSCI EAFE Index Fund | 1,075,000 | 56,297,750 | ||||||
Total Other Investment Company | ||||||||
(Cost $59,206,235) | 56,297,750 | |||||||
End of Investments. | ||||||||
Collateral Invested for Securities on Loan 0.4% of net assets | ||||||||
Invesco Short Term Investments Trust Government & Agency Portfolio | 5,801,760 | 5,801,760 | ||||||
Total Collateral Invested for Securities on Loan | ||||||||
(Cost $5,801,760) | 5,801,760 | |||||||
End of collateral invested for securities on loan. |
At 10/31/11, the tax basis cost of the fund’s investments was $1,145,372,793 and the unrealized appreciation and depreciation were $412,847,229 and ($189,706,920), respectively, with a net unrealized appreciation of $223,140,309.
At 10/31/11, the values of certain foreign securities held by the fund aggregating $1,178,330,751 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees. (See financial note 2)
* | Non-income producing security. | |
(a) | Fair-valued by management in accordance with procedures approved by the Board of Trustees. |
56 See financial notes
Schwab International Index Fund
Portfolio Holdings continued
(b) | Illiquid security. At the period end, the value of these amounted to $32,986 or 0.0% of net assets. | |
(c) | All or a portion of this security is on loan. |
CVA — | Dutch Certificate | |
Reg’d — | Registered |
See financial notes 57
Item 7: Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies.
Not applicable.
Item 8: Portfolio Managers of Closed-End Management Investment Companies.
Not applicable.
Item 9: Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers.
Not applicable.
Item 10: Submission of Matters to a Vote of Security Holders.
Not applicable.
Item 11: Controls and Procedures.
(a) | Based on their evaluation of Registrant’s disclosure controls and procedures, as of a date within 90 days of the filing date, Registrant’s Chief Executive Officer, Marie Chandoha and Registrant’s Principal Financial Officer, George Pereira, have concluded that Registrant’s disclosure controls and procedures are: (i) reasonably designed to ensure that information required to be disclosed in this report is appropriately communicated to Registrant’s officers to allow timely decisions regarding disclosures required in this report; (ii) reasonably designed to ensure that information required to be disclosed in this report is recorded, processed, summarized and reported in a timely manner; and (iii) are effective in achieving the goals described in (i) and (ii) above. | |
(b) | During the second fiscal quarter of the period covered by this report, there have been no changes in Registrant’s internal control over financial reporting that the above officers believe to have materially affected, or to be reasonably likely to materially affect, Registrant’s internal control over financial reporting. |
Item 12: Exhibits.
(a) | (1) Registrant’s code of ethics (that is the subject of the disclosure required by Item 2(a)) is attached. |
(2) | Separate certifications for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(a) under the 1940 Act, are attached. | ||
(3) | Not applicable. |
(b) | A certification for Registrant’s principal executive officer and principal financial officer, as required by Rule 30a-2(b) under the 1940 Act, is attached. This certification is being furnished to the Securities and Exchange Commission solely pursuant to 18 U.S.C. section 1350 and is not being filed as part of the Form N-CSR with the Commission. |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
(Registrant) Schwab Capital Trust
By: | /s/ Marie Chandoha | |||
Marie Chandoha | ||||
Chief Executive Officer |
Date: 12/16/2011
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
By: | /s/ Marie Chandoha | |||
Marie Chandoha | ||||
Chief Executive Officer |
Date: 12/16/2011
By: | /s/ George Pereira | |||
George Pereira | ||||
Principal Financial Officer |
Date: 12/16/2011