Schwab Core Equity Fund (SWANX) N-CSRS Certified semi-annual shareholder report (management investment company)

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM N-CSR

CERTIFIED SHAREHOLDER REPORT
OF
REGISTERED MANAGEMENT INVESTMENT COMPANIES

Investment Company Act file number: 811-7704

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)

Marie Chandoha
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: April 30, 2012

Item 1: Report(s) to Shareholders.

Semiannual report dated April 30, 2012, 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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This wrapper is not part of the shareholder report.

Schwab Equity Index Funds

Semiannual Report

April 30, 2012

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®	31
Schwab Total Stock Market Index Fund®	38
Schwab International Index Fund®	45
Financial Notes	53
Trustees and Officers	64
Glossary	67

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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 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)	12.73%
S&P 500® Index	12.77%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	pages 6-7
Schwab 1000 Index® Fund (Ticker Symbol: SNXFX)	12.65%
Schwab 1000 Index®	12.80%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	pages 8-9
Schwab Small-Cap Index Fund® (Ticker Symbol: SWSSX)	10.71%
Russell 2000® Index*	11.02%
Fund Category: Morningstar Small-Cap Blend	10.79%
Performance Details	pages 10-11
Schwab Total Stock Market Index Fund® (Ticker Symbol: SWTSX)	12.70%
Dow Jones U.S. Total Stock Market IndexSM	12.78%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	pages 12-13
Schwab International Index Fund®1 (Ticker Symbol: SWISX)	3.54%
MSCI EAFE Index®**	2.71%
Fund Category: Morningstar Foreign Large-Cap Blend	4.83%
Performance Details	pages 14-15

Minimum Initial Investment² $ 100

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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.

*	Effective December 14, 2011, the fund changed its primary benchmark index to the Russell 2000 Index from the Schwab Small-Cap Index in connection with a change to the fund’s investment strategy that requires the fund to invest 80% of its net assets in the stocks that are included in the Russell 2000 Index. 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.
**	Effective December 20, 2011, the fund changed its primary benchmark index to the MSCI Europe, Australasia, Far East Index (MSCI EAFE Index®) from the Schwab International Index in connection with a change to the fund’s investment strategy that requires the fund to invest 80% of its net assets in stocks that are included in the MSCI EAFE Index. The 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 detail and eligibility requirements.

2 Schwab Equity Index Funds

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab Equity Index Funds.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab Equity Index Funds. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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

	Agnes Hong, CFA, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day co-management of the funds. Prior to joining the firm in September 2009, she worked for 5 years as a portfolio manager for a major asset management firm. Prior to that, she worked in strategy and management consulting for five years. In addition, she also worked as a senior product manager servicing global financial services clients.
	Larry Mano, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day management 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, 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

Performance and Fund Facts as of 04/30/12

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.

 Pre-Tax Average Annual Total Returns^1,2,3,4

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab S&P 500 Index Fund (5/19/97)		12.73	%		4.75	%		1.03	%		4.66	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		4.13	%

Fund Expense Ratios⁵: Net 0.09%; Gross 0.10%

 Average Annual Total Returns After Tax^1,2,3,4

	6 Months			1 Year			5 Years			10 Years
Fund: Schwab S&P 500 Index Fund (5/19/97)
Pre-Liquidation (still own shares)		12.36	%		4.40	%		0.72	%		4.27	%
Post-Liquidation (shares were sold)		8.62	%		3.41	%		0.81	%		3.90	%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		9.54	%		-0.55	%		-0.73	%		3.47	%
Post-Liquidation (shares were sold)		6.57	%		0.04	%		-0.33	%		3.28	%

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

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	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 returns 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 4/30/12 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.

6 Schwab Equity Index Funds

 Schwab S&P 500 Index Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	502
Weighted Average Market Cap ($ x 1,000,000)	$108,309
Price/Earnings Ratio (P/E)	15.8
Price/Book Ratio (P/B)	2.3
Portfolio Turnover Rate1	0%

 Sector Weightings % of Investments

Information Technology	20.0%
Financials	14.5%
Health Care	11.2%
Energy	11.1%
Consumer Discretionary	11.1%
Consumer Staples	10.7%
Industrials	10.4%
Utilities	3.4%
Materials	3.4%
Telecommunication Services	2.9%
Other	1.3%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Apple, Inc.	4.2%
Exxon Mobil Corp.	3.2%
International Business Machines Corp.	1.9%
Microsoft Corp.	1.9%
Chevron Corp.	1.6%
General Electric Co.	1.6%
AT&T, Inc.	1.5%
Johnson & Johnson	1.4%
Wells Fargo & Co.	1.4%
The Procter & Gamble Co.	1.4%
Total	20.1%

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

1	Not annualized. Less than 1%.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Equity Index Funds 7

Schwab 1000 Index^® Fund

Performance and Fund Facts as of 04/30/12

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.

 Pre-Tax Average Annual Total Returns^1,2,3,4

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab 1000 Index® Fund (4/2/91)		12.65	%		3.78	%		1.14	%		4.85	%
Schwab 1000 Index®		12.80	%		3.97	%		1.37	%		5.16	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		4.13	%

Fund Expense Ratios⁵: Net 0.29%; Gross 0.34%

 Average Annual Total Returns After Tax^1,2,3,4

	6 Months			1 Year			5 Years			10 Years
Fund: Schwab 1000 Index® Fund (4/2/91)
Pre-Liquidation (still own shares)		11.61	%		2.82	%		0.70	%		4.43	%
Post-Liquidation (shares were sold)		9.32	%		3.47	%		0.90	%		4.08	%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		9.54	%		-0.55	%		-0.73	%		3.47	%
Post-Liquidation (shares were sold)		6.57	%		0.04	%		-0.33	%		3.28	%

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and 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 returns 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 4/30/12 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.

8 Schwab Equity Index Funds

 Schwab 1000 Index^® Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	993
Weighted Average Market Cap ($ x 1,000,000)	$95,787
Price/Earnings Ratio (P/E)	16.3
Price/Book Ratio (P/B)	2.3
Portfolio Turnover Rate1	3%

 Sector Weightings % of Investments

Information Technology	19.5%
Financials	15.2%
Consumer Discretionary	11.9%
Health Care	11.2%
Industrials	11.0%
Energy	10.9%
Consumer Staples	10.0%
Materials	3.9%
Utilities	3.6%
Telecommunication Services	2.7%
Other	0.1%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Apple, Inc.	3.8%
Exxon Mobil Corp.	2.8%
International Business Machines Corp.	1.7%
Microsoft Corp.	1.7%
Chevron Corp.	1.5%
General Electric Co.	1.4%
AT&T, Inc.	1.3%
Johnson & Johnson	1.2%
Wells Fargo & Co.	1.2%
The Procter & Gamble Co.	1.2%
Total	17.8%

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Equity Index Funds 9

Schwab Small-Cap Index Fund^®

Performance and Fund Facts as of 04/30/12

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.

 Pre-Tax Average Annual Total Returns^1,2,3,4

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Small-Cap Index Fund® (5/19/97)		10.71	%		-2.94	%		2.84	%		6.78	%
Russell 2000® Index5		11.02	%		-4.25	%		1.45	%		6.19	%
Schwab Small-Cap Index®		12.02	%		-1.80	%		3.26	%		7.02	%
Small-Cap Spliced Index6		10.56	%		-3.07	%		2.99	%		6.88	%
Fund Category: Morningstar Small-Cap Blend		10.79	%		-4.00	%		1.13	%		6.29	%

Fund Expense Ratios⁷: Net 0.17%; Gross 0.19%

 Average Annual Total Returns After Tax^1,2,3,4

	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Small-Cap Index Fund® (5/19/97)
Pre-Liquidation (still own shares)		8.65	%		-4.75	%		1.67	%		5.78	%
Post-Liquidation (shares were sold)		7.56	%		-1.38	%		2.02	%		5.56	%
Fund Category: Morningstar Small-Cap Blend
Pre-Liquidation (still own shares)		9.12	%		-5.51	%		0.24	%		5.29	%
Post-Liquidation (shares were sold)		6.61	%		-2.97	%		0.57	%		5.13	%

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

Index ownership – “Russell 2000^®” is a registered mark of the Frank Russell Company (“Russell”) and has been licensed for use by the Schwab Small-Cap Index Fund. The Schwab Small-Cap Index Fund is not sponsored, endorsed, sold or promoted by Russell and Russell makes no representation regarding the advisability of investing in the fund.

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 returns 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 4/30/12 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	Effective December 14, 2011, the fund changed its primary benchmark index to the Russell 2000 Index from the Schwab Small-Cap Index in connection with a change to the fund’s investment strategy that requires the fund to invest 80% of its net assets in the stocks that are included in the Russell 2000 Index. 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.
6	The Small-Cap Spliced Index is comprised of the Schwab Small-Cap Index from inception of the Schwab Small-Cap Index Fund until the close of business on December 14, 2011 and the Russell 2000 Index from December 15, 2011 forward.
7	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.

10 Schwab Equity Index Funds

 Schwab Small-Cap Index Fund^®

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	1,951
Weighted Average Market Cap ($ x 1,000,000)	$1,377
Price/Earnings Ratio (P/E)	40.3
Price/Book Ratio (P/B)	1.9
Portfolio Turnover Rate1	30%

 Sector Weightings % of Investments

Financials	22.6%
Information Technology	16.3%
Industrials	15.3%
Consumer Discretionary	13.5%
Health Care	12.2%
Energy	6.4%
Materials	4.5%
Consumer Staples	3.5%
Utilities	3.2%
Telecommunication Services	0.8%
Other	1.7%
Total	100.0%

 Top Equity Holdings % of Net Assets²

American Campus Communities, Inc.	0.3%
Kilroy Realty Corp.	0.3%
Clean Harbors, Inc.	0.3%
Extra Space Storage, Inc.	0.3%
World Fuel Services Corp.	0.3%
BioMed Realty Trust, Inc.	0.3%
Signature Bank	0.3%
Jack Henry & Associates, Inc.	0.3%
Home Properties, Inc.	0.2%
Nu Skin Enterprises, Inc., Class A	0.2%
Total	2.8%

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	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Equity Index Funds 11

Schwab Total Stock Market Index Fund^®

Performance and Fund Facts as of 04/30/12

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.

 Pre-Tax Average Annual Total Returns^1,2,3,4

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Total Stock Market Index Fund® (6/1/99)		12.70	%		3.70	%		1.62	%		5.48	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		1.49	%		5.49	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		4.13	%

Fund Expense Ratios⁵: Net 0.09%; Gross 0.11%

 Average Annual Total Returns After Tax^1,2,3,4

	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Total Stock Market Index Fund® (6/1/99)
Pre-Liquidation (still own shares)		12.36	%		3.39	%		1.33	%		5.12	%
Post-Liquidation (shares were sold)		8.57	%		2.70	%		1.32	%		4.63	%
Fund Category: Morningstar Large-Cap Blend
Pre-Liquidation (still own shares)		9.54	%		-0.55	%		-0.73	%		3.47	%
Post-Liquidation (shares were sold)		6.57	%		0.04	%		-0.33	%		3.28	%

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

“Dow Jones” and “The Dow Jones U.S. Total Stock Market Index^SM” 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 Index^SM, 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	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 returns 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 4/30/12 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.

12 Schwab Equity Index Funds

 Schwab Total Stock Market Index Fund^®

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	2,271
Weighted Average Market Cap ($ x 1,000,000)	$89,125
Price/Earnings Ratio (P/E)	16.9
Price/Book Ratio (P/B)	2.3
Portfolio Turnover Rate1	0%

 Sector Weightings % of Investments

Information Technology	19.4%
Financials	15.6%
Consumer Discretionary	12.1%
Health Care	11.4%
Industrials	10.8%
Energy	10.4%
Consumer Staples	9.4%
Materials	3.9%
Utilities	3.5%
Telecommunication Services	2.5%
Other	1.0%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Apple, Inc.	3.5%
Exxon Mobil Corp.	2.7%
Microsoft Corp.	1.5%
International Business Machines Corp.	1.5%
Chevron Corp.	1.4%
General Electric Co.	1.3%
AT&T, Inc.	1.3%
Johnson & Johnson	1.1%
Pfizer, Inc.	1.1%
The Procter & Gamble Co.	1.1%
Total	16.5%

Portfolio holdings may have changed since the report date.

Source of Sector Classification: S&P and MSCI.

1	Not annualized. Less than 1%.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Equity Index Funds 13

Schwab International Index Fund^®

Performance and Fund Facts as of 04/30/12

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.

 Pre-Tax Average Annual Total Returns^1,2,3,4

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab International Index Fund® (5/19/97)		3.54	%		-13.16	%		-4.13	%		5.21	%
MSCI EAFE Index®5		2.71	%		-12.38	%		-4.25	%		5.89	%
Schwab International Index®		1.88	%		-13.54	%		-4.28	%		5.43	%
International Spliced Index6		2.60	%		-12.93	%		-4.14	%		5.51	%
Fund Category: Morningstar Foreign Large-Cap Blend		4.83	%		-12.59	%		-3.98	%		4.97	%

Fund Expense Ratios⁷: Net 0.19%; Gross 0.21%

 Average Annual Total Returns After Tax^1,2,3,4

	6 Months			1 Year			5 Years			10 Years
Fund: Schwab International Index Fund® (5/19/97)
Pre-Liquidation (still own shares)		2.96	%		-13.64	%		-4.49	%		4.69	%
Post-Liquidation (shares were sold)		3.06	%		-7.92	%		-3.38	%		4.43	%
Fund Category: Morningstar Foreign Large-Cap Blend
Pre-Liquidation (still own shares)		2.95	%		-14.30	%		-5.18	%		4.00	%
Post-Liquidation (shares were sold)		2.35	%		-8.86	%		-3.87	%		3.92	%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

Index ownership — “MSCI EAFE” is a registered mark of MSCI and has been licensed for use by the Schwab International Index Fund. The Schwab International Index Fund is not sponsored, endorsed, sold or promoted by MSCI and MSCI bears no liability with respect to the fund. The Statement of Additional Information contains a more detailed description of the limited relationship MSCI has with the fund.

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 returns 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 4/30/12 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	Effective December 20, 2011, the fund changed its primary benchmark index to the MSCI Europe, Australasia, Far East Index (MSCI EAFE Index®) from the Schwab International Index in connection with a change to the fund’s investment strategy that requires the fund to invest 80% of its net assets in stocks that are included in the MSCI EAFE Index. The 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.
6	The International Spliced Index is comprised of the Schwab International Index from inception of the Schwab International Index Fund until the close of business on December 20, 2011 and the MSCI EAFE Index from December 21, 2011 forward.
7	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.

14 Schwab Equity Index Funds

 Schwab International Index Fund^®

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	918
Weighted Average Market Cap ($ x 1,000,000)	$49,208
Price/Earnings Ratio (P/E)	18.1
Price/Book Ratio (P/B)	1.2
Portfolio Turnover Rate1	25%

 Sector Weightings % of Investments

Financials	21.9%
Industrials	12.5%
Consumer Staples	11.4%
Consumer Discretionary	10.7%
Materials	10.2%
Health Care	9.6%
Energy	8.6%
Telecommunication Services	5.4%
Information Technology	4.6%
Utilities	4.2%
Other	0.9%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Nestle S.A. – Reg’d	2.0%
HSBC Holdings plc	1.5%
Vodafone Group plc	1.3%
BP plc	1.3%
Novartis AG – Reg’d	1.3%
Royal Dutch Shell plc, A Shares	1.2%
Roche Holding AG	1.2%
BHP Billiton Ltd.	1.2%
GlaxoSmithKline plc	1.1%
Toyota Motor Corp.	1.1%
Total	13.2%

 Country Weightings % of Equity Investments

United Kingdom	23.1%
Japan	21.1%
France	8.8%
Australia	8.7%
Switzerland	8.5%
Germany	8.4%
Sweden	3.2%
Hong Kong	2.9%
Spain	2.5%
Other	12.8%
Total	100.0%

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.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Schwab S&P 500 Index Fund
Actual Return		0.09%	$	1,000	$	1,127.30	$	0.48
Hypothetical 5% Return		0.09%	$	1,000	$	1,024.42	$	0.45
Schwab 1000 Index® Fund
Actual Return		0.29%	$	1,000	$	1,126.50	$	1.53
Hypothetical 5% Return		0.29%	$	1,000	$	1,023.42	$	1.46
Schwab Small-Cap Index Fund®
Actual Return		0.17%	$	1,000	$	1,107.10	$	0.89
Hypothetical 5% Return		0.17%	$	1,000	$	1,024.02	$	0.86
Schwab Total Stock Market Index Fund®
Actual Return		0.09%	$	1,000	$	1,127.00	$	0.48
Hypothetical 5% Return		0.09%	$	1,000	$	1,024.42	$	0.45
Schwab International Index Fund®
Actual Return		0.19%	$	1,000	$	1,035.40	$	0.96
Hypothetical 5% Return		0.19%	$	1,000	$	1,023.92	$	0.96

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

16 Schwab Equity Index Funds

Schwab S&P 500 Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		19.82			18.70			16.28			15.28			24.28			21.56
Income (loss) from investment operations:
Net investment income (loss)		0.22			0.39			0.35			0.20			0.44			0.41
Net realized and unrealized gains (losses)		2.25			1.09			2.31			1.22			(9.02	)		2.68
Total from investment operations		2.47			1.48			2.66			1.42			(8.58	)		3.09
Less distributions:
Distributions from net investment income		(0.40	)		(0.36	)		(0.24	)		(0.42	)		(0.42	)		(0.37	)
Net asset value at end of period		21.89			19.82			18.70			16.28			15.28			24.28
Total return (%)		12.73	2		7.97			16.50			9.81			(35.92	)		14.50
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.09	3		0.09			0.09			0.13	4		0.19			0.19
Gross operating expenses		0.10	3		0.10			0.10			0.16			0.21			0.20
Net investment income (loss)		2.11	3		1.96			1.97			2.09			2.06			1.78
Portfolio turnover rate		0	2,5		3			2			3	6		3			2
Net assets, end of period ($ x 1,000,000)		12,403			10,909			10,007			8,718			2,598			4,345

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

⁵ Less than 1%.

⁶ 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 April 30, 2012 (Unaudited)

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	.6%	Common Stock		9,105,724,184		12,224,127,212
	1	.3%	Short-Term Investments		161,349,372		161,349,372
	99	.9%	Total Investments		9,267,073,556		12,385,476,584
	0	.2%	Collateral Invested for Securities on Loan		19,347,114		19,347,114
	(0	.1)%	Other Assets and Liabilities, Net				(1,499,570	)
	100	.0%	Net Assets				12,403,324,128

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 98.6% of net assets
Automobiles & Components 0.7%
Other Securities				0.7		85,092,533
Banks 2.9%
U.S. Bancorp		1,872,428		0.5		60,236,009
Wells Fargo & Co.		5,093,509		1.4		170,276,006
Other Securities				1.0		132,865,222
				2.9		363,377,237
Capital Goods 8.1%
3M Co.		667,919		0.5		59,685,242
Caterpillar, Inc.		625,062		0.5		64,237,622
General Electric Co.		10,258,352		1.6		200,858,532
The Boeing Co.		715,754		0.4		54,969,907
United Technologies Corp.		888,535		0.6		72,539,997
Other Securities				4.5		547,138,693
				8.1		999,429,993
Commercial & Professional Supplies 0.5%
Other Securities				0.5		62,778,001
Consumer Durables & Apparel 1.1%
Other Securities				1.1		132,852,915
Consumer Services 2.1%
McDonald’s Corp.		983,838		0.8		95,875,013
Other Securities				1.3		160,427,887
				2.1		256,302,900
Diversified Financials 5.9%
American Express Co.		975,741		0.5		58,749,366
Bank of America Corp.		10,433,211		0.7		84,613,341
Citigroup, Inc.		2,828,847		0.8		93,465,105
JPMorgan Chase & Co.		3,687,331		1.3		158,481,486
The Charles Schwab Corp. (a)		1,085,681		0.1		15,525,238
The Goldman Sachs Group, Inc.		484,569		0.4		55,798,120
Other Securities				2.1		269,305,883
				5.9		735,938,539
Energy 11.1%
Chevron Corp.		1,909,634		1.6		203,490,599
ConocoPhillips		1,242,590		0.7		89,006,721
Exxon Mobil Corp.		4,560,241		3.2		393,731,208
Occidental Petroleum Corp.		786,450		0.6		71,739,969
Schlumberger Ltd.		1,293,715		0.8		95,916,030
Other Securities				4.2		517,100,219
				11.1		1,370,984,746
Food & Staples Retailing 2.2%
CVS Caremark Corp.		1,258,851		0.5		56,169,931
Wal-Mart Stores, Inc.		1,687,102		0.8		99,387,179
Other Securities				0.9		114,395,386
				2.2		269,952,496
Food, Beverage & Tobacco 6.3%
Altria Group, Inc.		1,982,091		0.5		63,843,151
Kraft Foods, Inc., Class A		1,715,154		0.6		68,383,190
PepsiCo, Inc.		1,517,163		0.8		100,132,758
Philip Morris International, Inc.		1,665,946		1.2		149,118,827
The Coca-Cola Co.		2,186,128		1.3		166,845,289
Other Securities				1.9		229,806,794
				6.3		778,130,009
Health Care Equipment & Services 3.8%
UnitedHealth Group, Inc.		1,011,410		0.5		56,790,671
Other Securities				3.3		412,938,993
				3.8		469,729,664
Household & Personal Products 2.2%
The Procter & Gamble Co.		2,664,990		1.4		169,599,963
Other Securities				0.8		108,101,909
				2.2		277,701,872
Insurance 3.5%
Berkshire Hathaway, Inc., Class B *		1,703,130		1.1		137,016,808
Other Securities				2.4		299,114,268
				3.5		436,131,076

18 See financial notes

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Materials 3.4%
Other Securities				3.4		421,662,679
Media 3.1%
Comcast Corp., Class A		2,601,964		0.6		78,917,568
The Walt Disney Co.		1,735,183		0.6		74,803,739
Other Securities				1.9		236,625,710
				3.1		390,347,017
Pharmaceuticals, Biotechnology & Life Sciences 7.4%
Abbott Laboratories		1,529,086		0.8		94,895,077
Johnson & Johnson		2,656,025		1.4		172,880,667
Merck & Co., Inc.		2,940,314		0.9		115,377,921
Pfizer, Inc.		7,293,833		1.3		167,247,591
Other Securities				3.0		372,287,134
				7.4		922,688,390
Real Estate 2.1%
Other Securities				2.1		258,569,052
Retailing 4.1%
Amazon.com, Inc. *		350,580		0.7		81,299,502
The Home Depot, Inc.		1,491,550		0.6		77,247,374
Other Securities				2.8		347,613,268
				4.1		506,160,144
Semiconductors & Semiconductor Equipment 2.3%
Intel Corp.		4,830,405		1.1		137,183,502
Other Securities				1.2		150,990,686
				2.3		288,174,188
Software & Services 9.5%
Google, Inc., Class A *		245,375		1.2		148,508,311
International Business Machines Corp.		1,121,090		1.9		232,155,317
Microsoft Corp.		7,225,431		1.9		231,358,301
Oracle Corp.		3,786,586		0.9		111,287,762
Visa, Inc., Class A		483,700		0.5		59,485,426
Other Securities				3.1		391,936,936
				9.5		1,174,732,053
Technology Hardware & Equipment 8.2%
Apple, Inc. *		902,140		4.2		527,066,274
Cisco Systems, Inc.		5,241,228		0.9		105,610,744
EMC Corp. *		2,000,645		0.5		56,438,196
QUALCOMM, Inc.		1,633,165		0.8		104,261,254
Other Securities				1.8		223,847,017
				8.2		1,017,223,485
Telecommunication Services 2.9%
AT&T, Inc.		5,731,136		1.5		188,611,686
Verizon Communications, Inc.		2,738,878		0.9		110,595,893
Other Securities				0.5		56,325,262
				2.9		355,532,841
Transportation 1.8%
United Parcel Service, Inc., Class B		923,318		0.6		72,148,069
Other Securities				1.2		151,741,965
				1.8		223,890,034
Utilities 3.4%
Other Securities				3.4		426,745,348
Total Common Stock
(Cost $9,105,724,184)						12,224,127,212
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investments 1.3% of net assets
Time Deposit 1.2%
Bank of America
0.03%, 05/01/12		148,350,643		1.2		148,350,643
U.S. Treasury Obligations 0.1%
Other Securities				0.1		12,998,729
Total Short-Term Investments
(Cost $161,349,372)						161,349,372
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 0.2% of net assets
Wells Fargo Advantage Government Money Market Fund		19,347,114		0.2		19,347,114
Total Collateral Invested for Securities on Loan
(Cost $19,347,114)						19,347,114
End of Collateral Invested for Securities on Loan.

At 04/30/12, tax basis cost of the fund’s investments was $9,311,633,508 and the unrealized appreciation and depreciation were $4,273,809,673 and ($1,199,966,597), respectively, with a net unrealized appreciation of $3,073,843,076.

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.
(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 (Unaudited) continued

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		2,300		160,264,000		3,785,225

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$12,224,127,212		$—		$—		$12,224,127,212
Short-Term Investments(a)		—		161,349,372		—		161,349,372
Total		$12,224,127,212		$161,349,372		$—		$12,385,476,584
Other Financial Instruments
Collateral Invested for Securities on Loan		$19,347,114		$—		$—		$19,347,114
Futures Contract*		3,785,225		—		—		3,785,225

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

20 See financial notes

 Schwab S&P 500 Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated issuers, at value (cost $12,551,700)		$15,525,238
Investments in unaffiliated issuers, at value (cost $9,254,521,856) including securities on loan of $18,788,505	+	12,369,951,346
Total investments, at value (cost $9,267,073,556)		12,385,476,584
Collateral invested for securities on loan		19,347,114
Receivables:
Investments sold		1,361,978
Fund shares sold		14,463,268
Dividends		12,180,661
Income from securities on loan		75,399
Foreign tax reclaims		22,710
Interest		124
Prepaid expenses	+	143,408
Total assets		12,433,071,246
Liabilities
Collateral held for securities on loan		19,347,114
Payables:
Investment adviser and administrator fees		59,976
Shareholder service fees		23,603
Fund shares redeemed		9,426,615
Due to brokers for futures		563,500
Accrued expenses	+	326,310
Total liabilities		29,747,118
Net Assets
Total assets		12,433,071,246
Total liabilities	−	29,747,118
Net assets		$12,403,324,128
Net Assets by Source
Capital received from investors		9,666,237,740
Net investment income not yet distributed		74,150,384
Net realized capital losses		(460,790,074	)
Net unrealized capital gains		3,123,726,078
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$12,403,324,128		566,714,301			$21.89

See financial notes 21

 Schwab S&P 500 Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated issuer		$121,198
Dividends received from unaffiliated underlying funds		125,279,601
Interest		28,149
Securities on loan	+	484,309
Total investment income		125,913,257
Expenses
Investment adviser and administrator fees		3,441,765
Shareholder service fees		1,118,574
Transfer agent fees		262,367
Shareholder reports		148,700
Portfolio accounting fees		129,476
Custodian fees		101,584
Registration fees		65,435
Professional fees		52,578
Trustees’ fees		41,017
Other expenses	+	180,331
Total expenses		5,541,827
Expense reduction by CSIM and its affiliates	−	379,179
Net expenses	−	5,162,648
Net investment income		120,750,609
Realized and Unrealized Gains (Losses)
Net realized gains on investments		3,793,625
Net realized gains on futures contracts	+	24,412,163
Net realized gains		28,205,788
Net unrealized gains on affiliated issuer		2,071,955
Net unrealized gains on unaffiliated investments		1,241,696,245
Net unrealized losses on futures contracts	+	(4,332,638	)
Net unrealized gains	+	1,239,435,562
Net realized and unrealized gains		1,267,641,350
Increase in net assets resulting from operations		$1,388,391,959

22 See financial notes

 Schwab S&P 500 Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$120,750,609			$212,608,956
Net realized gains		28,205,788			137,575,248
Net unrealized gains	+	1,239,435,562			450,444,867
Increase in net assets from operations		1,388,391,959			800,629,071
Distributions to Shareholders
Distributions from net investment income		($218,494,240	)		($191,615,698	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			46,462,004		$957,005,745			93,309,499		$1,842,476,643
Shares reinvested			10,225,170		196,221,005			9,010,183		172,725,206
Shares redeemed	+		(40,370,884	)	(828,389,933	)		(87,190,945	)	(1,722,551,980	)
Net transactions in fund shares			16,316,290		$324,836,817			15,128,737		$292,649,869
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			550,398,011		$10,908,589,592			535,269,274		$10,006,926,350
Total increase	+		16,316,290		1,494,734,536			15,128,737		901,663,242
End of period			566,714,301		$12,403,324,128			550,398,011		$10,908,589,592
Net investment income not yet distributed					$74,150,384					$171,894,015

See financial notes 23

Schwab 1000 Index^® Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		37.44			35.79			31.00			28.69			45.81			40.40
Income (loss) from investment operations:
Net investment income (loss)		0.35	2		0.62	2		0.57	2		0.54	2		0.66	2		0.60	2
Net realized and unrealized gains (losses)		4.07			2.07			4.80			2.41			(17.13	)		5.33
Total from investment operations		4.42			2.69			5.37			2.95			(16.47	)		5.93
Less distributions:
Distributions from net investment income		(0.72	)		(0.57	)		(0.58	)		(0.64	)		(0.62	)		(0.52	)
Distributions from net realized gains		(1.52	)		(0.47	)		—			—			(0.03	)		—
Total distributions		(2.24	)		(1.04	)		(0.58	)		(0.64	)		(0.65	)		(0.52	)
Net asset value at end of period		39.62			37.44			35.79			31.00			28.69			45.81
Total return (%)		12.65	3		7.60			17.51			10.72			(36.43	)		14.81
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.29	4		0.29			0.29			0.38	5		0.49			0.48
Gross operating expenses		0.34	4		0.34			0.35			0.44			0.49			0.48
Net investment income (loss)		1.87	4		1.64			1.71			1.96			1.68			1.39
Portfolio turnover rate		3	3		5			5			4			4			6
Net assets, end of period ($ x 1,000,000)		4,922			4,552			4,575			4,279			2,260			3,974

* Unaudited.

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 Not annualized.

⁴ Annualized.

⁵ 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 April 30, 2012 (Unaudited)

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	.8%	Common Stock		2,021,522,422		4,912,758,546
	0	.1%	Other Investment Company		4,249,266		4,249,266
	0	.0%	Short-Term Investment		1,999,805		1,999,805
	99	.9%	Total Investments		2,027,771,493		4,919,007,617
	0	.5%	Collateral Invested for Securities on Loan		22,423,968		22,423,968
	(0	.4)%	Other Assets and Liabilities, Net				(19,314,242	)
	100	.0%	Net Assets				4,922,117,343

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 99.8% of net assets
Automobiles & Components 0.9%
Other Securities				0.9		43,037,877
Banks 3.0%
U.S. Bancorp		648,905		0.4		20,875,274
Wells Fargo & Co.		1,796,996		1.2		60,073,576
Other Securities				1.4		64,688,999
				3.0		145,637,849
Capital Goods 8.4%
3M Co.		238,354		0.4		21,299,313
Caterpillar, Inc.		219,896		0.5		22,598,712
General Electric Co.		3,589,902		1.4		70,290,281
The Boeing Co.		252,689		0.4		19,406,515
United Technologies Corp.		308,103		0.5		25,153,529
Other Securities				5.2		253,327,677
				8.4		412,076,027
Commercial & Professional Supplies 0.7%
Other Securities				0.7		33,802,210
Consumer Durables & Apparel 1.3%
Other Securities				1.3		64,928,668
Consumer Services 2.2%
McDonald’s Corp.		347,936		0.7		33,906,363
Other Securities				1.5		76,591,190
				2.2		110,497,553
Diversified Financials 5.6%
American Express Co.		345,777		0.4		20,819,233
Bank of America Corp.		3,646,541		0.6		29,573,448
Citigroup, Inc.		997,956		0.7		32,972,466
JPMorgan Chase & Co.		1,300,878		1.1		55,911,736
The Charles Schwab Corp. (a)		367,065		0.1		5,249,030
The Goldman Sachs Group, Inc.		168,632		0.4		19,417,975
Other Securities				2.3		110,418,494
				5.6		274,362,382
Energy 10.9%
Chevron Corp.		677,137		1.5		72,155,719
ConocoPhillips		443,866		0.6		31,794,122
Exxon Mobil Corp.		1,611,863		2.8		139,168,251
Occidental Petroleum Corp.		276,016		0.5		25,178,179
Schlumberger Ltd.		456,347		0.7		33,833,567
Other Securities				4.8		234,703,074
				10.9		536,832,912
Food & Staples Retailing 2.0%
CVS Caremark Corp.		442,611		0.4		19,749,303
Wal-Mart Stores, Inc.		593,927		0.7		34,988,240
Other Securities				0.9		43,752,424
				2.0		98,489,967
Food, Beverage & Tobacco 5.8%
Altria Group, Inc.		699,305		0.5		22,524,614
Kraft Foods, Inc., Class A		600,764		0.5		23,952,461
PepsiCo, Inc.		531,585		0.7		35,084,610
Philip Morris International, Inc.		590,665		1.1		52,870,424
The Coca-Cola Co.		772,274		1.2		58,939,952
Other Securities				1.8		94,642,887
				5.8		288,014,948
Health Care Equipment & Services 3.9%
UnitedHealth Group, Inc.		362,492		0.4		20,353,926
Other Securities				3.5		172,576,822
				3.9		192,930,748
Household & Personal Products 2.1%
The Procter & Gamble Co.		935,519		1.2		59,536,429
Other Securities				0.9		45,920,640
				2.1		105,457,069
Insurance 3.7%
Berkshire Hathaway, Inc., Class B *		597,812		1.0		48,093,975

See financial notes 25

 Schwab 1000 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Other Securities				2.7		136,111,766
				3.7		184,205,741
Materials 3.9%
Other Securities				3.9		190,967,419
Media 3.2%
Comcast Corp., Class A		918,923		0.6		27,870,935
The Walt Disney Co.		610,860		0.5		26,334,175
Other Securities				2.1		103,554,990
				3.2		157,760,100
Pharmaceuticals, Biotechnology & Life Sciences 7.3%
Abbott Laboratories		529,746		0.7		32,876,037
Bristol-Myers Squibb Co.		576,239		0.4		19,229,095
Johnson & Johnson		928,587		1.2		60,441,728
Merck & Co., Inc.		1,036,418		0.8		40,669,042
Pfizer, Inc.		2,590,851		1.2		59,408,213
Other Securities				3.0		145,361,321
				7.3		357,985,436
Real Estate 3.0%
Other Securities				3.0		146,333,234
Retailing 4.2%
Amazon.com, Inc. *		123,741		0.6		28,695,538
The Home Depot, Inc.		524,235		0.6		27,150,131
Other Securities				3.0		152,464,984
				4.2		208,310,653
Semiconductors & Semiconductor Equipment 2.3%
Intel Corp.		1,716,980		1.0		48,762,232
Other Securities				1.3		66,963,058
				2.3		115,725,290
Software & Services 9.4%
Google, Inc., Class A *		85,904		1.1		51,991,678
International Business Machines Corp.		396,740		1.7		82,156,919
Microsoft Corp.		2,545,838		1.7		81,517,733
Oracle Corp.		1,338,010		0.8		39,324,114
Visa, Inc., Class A		172,900		0.4		21,263,242
Other Securities				3.7		185,974,920
				9.4		462,228,606
Technology Hardware & Equipment 7.7%
Apple, Inc. *		317,614		3.8		185,562,803
Cisco Systems, Inc.		1,828,015		0.7		36,834,502
EMC Corp. *		693,624		0.4		19,567,133
QUALCOMM, Inc.		571,578		0.7		36,489,540
Other Securities				2.1		102,135,572
				7.7		380,589,550
Telecommunication Services 2.7%
AT&T, Inc.		2,015,077		1.3		66,316,184
Verizon Communications, Inc.		962,657		0.8		38,872,090
Other Securities				0.6		25,970,347
				2.7		131,158,621
Transportation 2.0%
United Parcel Service, Inc., Class B		328,135		0.5		25,640,469
Other Securities				1.5		70,541,385
				2.0		96,181,854
Utilities 3.6%
Other Securities				3.6		175,243,832
Total Common Stock
(Cost $2,021,522,422)						4,912,758,546
Other Investment Company 0.1% of net assets
Money Market Fund 0.1%
Other Securities				0.1		4,249,266
Total Other Investment Company
(Cost $4,249,266)						4,249,266
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.0% of net assets
U.S. Treasury Obligation 0.0%
Other Securities				0.0		1,999,805
Total Short-Term Investment
(Cost $1,999,805)						1,999,805
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 0.5% of net assets
State Street Institutional U.S. Government Money Market Fund		22,423,968		0.5		22,423,968
Total Collateral Invested for Securities on Loan
(Cost $22,423,968)						22,423,968
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $2,003,689,212 and the unrealized appreciation and depreciation were $3,014,654,957 and ($99,336,552), respectively, with a net unrealized appreciation of $2,915,318,405.

26 See financial notes

 Schwab 1000 Index Fund

Portfolio Holdings (Unaudited) continued

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.
(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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		70		4,877,600		115,202

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$4,912,758,546		$—		$—		$4,912,758,546
Other Investment Company(a)		4,249,266		—		—		4,249,266
Short-Term Investment(a)		—		1,999,805		—		1,999,805
Total		$4,917,007,812		$1,999,805		$—		$4,919,007,617
Other Financial Instruments
Collateral Invested for Securities on Loan		$22,423,968		$—		$—		$22,423,968
Futures Contract*		115,202		—		—		115,202

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 27

 Schwab 1000 Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated issuers, at value (cost $1,803,228)		$5,249,030
Investments in unaffiliated issuers, at value (cost $2,025,968,265) including securities on loan of $24,181,428	+	4,913,758,587
Total investments, at value (cost $2,027,771,493)		4,919,007,617
Collateral invested for securities on loan		22,423,968
Receivables:
Dividends		4,585,610
Fund shares sold		1,557,338
Income from securities on loan		72,294
Foreign tax reclaims		7,855
Interest		134
Prepaid expenses	+	82,934
Total assets		4,947,737,750
Liabilities
Collateral held for securities on loan		22,423,968
Payables:
Investment adviser and administrator fees		72,347
Shareholder service fees		43,637
Fund shares redeemed		2,861,404
Due to brokers for futures		22,685
Accrued expenses	+	196,366
Total liabilities		25,620,407
Net Assets
Total assets		4,947,737,750
Total liabilities	−	25,620,407
Net assets		$4,922,117,343
Net Assets by Source
Capital received from investors		1,863,710,221
Net investment income not yet distributed		26,008,729
Net realized capital gains		139,573,101
Net unrealized capital gains		2,892,825,292
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$4,922,117,343		124,228,033			$39.62

28 See financial notes

 Schwab 1000 Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated issuer		$42,236
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $74,272)		50,123,535
Interest		8,049
Securities on loan	+	305,283
Total investment income		50,479,103
Expenses
Investment adviser and administrator fees		5,330,618
Shareholder service fees		2,277,752
Shareholder reports		99,957
Portfolio accounting fees		68,592
Transfer agent fees		66,695
Custodian fees		44,761
Professional fees		34,673
Trustees’ fees		26,776
Registration fees		21,208
Interest expense		2,071
Other expenses	+	62,052
Total expenses		8,035,155
Expense reduction by CSIM and its affiliates	−	1,268,535
Custody credits	−	46
Net expenses	−	6,766,574
Net investment income		43,712,529
Realized and Unrealized Gains (Losses)
Net realized gains on unaffiliated investments		115,023,570
Net realized gains on futures contracts	+	1,177,264
Net realized gains		116,200,834
Net unrealized gains on affiliated issuer		738,753
Net unrealized gains on unaffiliated investments		400,511,547
Net unrealized gains on futures contracts	+	115,202
Net unrealized gains	+	401,365,502
Net realized and unrealized gains		517,566,336
Increase in net assets resulting from operations		$561,278,865

See financial notes 29

 Schwab 1000 Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$43,712,529			$78,010,205
Net realized gains		116,200,834			201,802,116
Net unrealized gains	+	401,365,502			69,288,970
Increase in net assets from operations		561,278,865			349,101,291
Distributions to Shareholders
Distributions from net investment income		(86,671,033	)		(72,629,008	)
Distributions from net realized gains	+	(183,283,175	)		(59,077,498	)
Total distributions		($269,954,208	)		($131,706,506	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			3,665,456		$137,285,240			8,119,509		$304,265,267
Shares reinvested			6,777,525		235,112,352			3,151,858		114,822,202
Shares redeemed	+		(7,790,197	)	(293,159,370	)		(17,520,002	)	(660,242,679	)
Net transactions in fund shares			2,652,784		$79,238,222			(6,248,635	)	($241,155,210	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			121,575,249		$4,551,554,464			127,823,884		$4,575,314,889
Total increase or decrease	+		2,652,784		370,562,879			(6,248,635	)	(23,760,425	)
End of period			124,228,033		$4,922,117,343			121,575,249		$4,551,554,464
Net investment income not yet distributed					$26,008,729					$68,967,233

30 See financial notes

Schwab Small-Cap Index Fund^®

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		20.55			19.18			15.14			13.85			25.35			25.97
Income (loss) from investment operations:
Net investment income (loss)		0.18	2		0.25	2		0.22	2		0.18	2		0.33	2		0.35	2
Net realized and unrealized gains (losses)		1.82			1.37			3.97			1.40			(7.89	)		2.36
Total from investment operations		2.00			1.62			4.19			1.58			(7.56	)		2.71
Less distributions:
Distributions from net investment income		(0.35	)		(0.20	)		(0.15	)		(0.29	)		(0.32	)		(0.28	)
Distributions from net realized gains		(1.16	)		(0.05	)		—			—			(3.62	)		(3.05	)
Total distributions		(1.51	)		(0.25	)		(0.15	)		(0.29	)		(3.94	)		(3.33	)
Net asset value at end of period		21.04			20.55			19.18			15.14			13.85			25.35
Total return (%)		10.71	3		8.45			27.85			11.98			(34.48	)		11.35
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.17	4		0.19			0.19			0.28	5		0.42			0.42
Gross operating expenses		0.20	4		0.19			0.20			0.33			0.42			0.42
Net investment income (loss)		1.77	4		1.18			1.23			1.41			1.78			1.43
Portfolio turnover rate		30	3		26			33			26			64			31
Net assets, end of period ($ x 1,000,000)		1,644			1,502			1,406			1,142			628			969

* Unaudited.

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 Not annualized.

⁴ Annualized.

⁵ 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 31

 Schwab Small-Cap Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.3%	Common Stock		1,314,574,537		1,615,955,126
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.7%	Short-Term Investments		27,907,579		27,907,579
	100	.0%	Total Investments		1,342,482,116		1,643,862,705
	5	.4%	Collateral Invested for Securities on Loan		88,178,306		88,178,306
	(5	.4)%	Other Assets and Liabilities, Net				(88,461,247	)
	100	.0%	Net Assets				1,643,579,764

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 98.3% of net assets
Automobiles & Components 0.8%
Other Securities				0.8		12,910,010
Banks 7.5%
Hancock Holding Co.		102,249		0.2		3,290,373
Signature Bank *		61,709		0.2		4,053,664
SVB Financial Group *		57,400		0.2		3,678,766
Other Securities				6.9		112,965,308
				7.5		123,988,111
Capital Goods 9.2%
Acuity Brands, Inc.		58,100		0.2		3,228,617
CLARCOR, Inc.		67,600		0.2		3,246,152
Hexcel Corp. *		131,383		0.2		3,597,266
United Rentals, Inc. (c)*		83,800		0.2		3,911,784
Woodward, Inc.		82,500		0.2		3,431,175
Other Securities				8.2		133,187,128
				9.2		150,602,122
Commercial & Professional Supplies 3.9%
Clean Harbors, Inc. *		62,800		0.3		4,285,472
Other Securities				3.6		59,353,379
				3.9		63,638,851
Consumer Durables & Apparel 3.0%
Carter’s, Inc. *		65,814		0.2		3,573,700
Other Securities				2.8		45,375,585
				3.0		48,949,285
Consumer Services 4.1%
Sotheby’s		90,600		0.2		3,562,392
Other Securities				3.9		63,165,830
				4.1		66,728,222
Diversified Financials 2.8%
Other Securities				2.8		46,880,213
Energy 6.4%
Cheniere Energy, Inc. *		205,800		0.2		3,768,198
CVR Energy, Inc. (c)*		117,600		0.2		3,570,336
Energy XXI (Bermuda) Ltd. *		100,900		0.2		3,801,912
Lufkin Industries, Inc.		44,890		0.2		3,449,348
Rosetta Resources, Inc. *		71,000		0.2		3,569,170
World Fuel Services Corp.		94,800		0.3		4,176,888
Other Securities				5.1		83,246,282
				6.4		105,582,134
Food & Staples Retailing 1.1%
Other Securities				1.1		18,500,728
Food, Beverage & Tobacco 1.7%
Other Securities				1.7		27,444,412
Health Care Equipment & Services 6.0%
athenahealth, Inc. *		46,700		0.2		3,383,415
WellCare Health Plans, Inc. *		57,100		0.2		3,493,378
Other Securities				5.6		92,441,994
				6.0		99,318,787
Household & Personal Products 0.7%
Nu Skin Enterprises, Inc., Class A		73,422		0.2		3,913,393
Other Securities				0.5		7,263,208
				0.7		11,176,601
Insurance 2.6%
ProAssurance Corp.		41,000		0.2		3,611,690
Other Securities				2.4		39,749,766
				2.6		43,361,456
Materials 4.5%
Other Securities				4.5		74,150,812
Media 1.2%
Other Securities				1.2		20,066,521

32 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Pharmaceuticals, Biotechnology & Life Sciences 6.2%
ARIAD Pharmaceuticals, Inc. *		214,600		0.2		3,497,980
Cepheid, Inc. *		88,800		0.2		3,410,808
Cubist Pharmaceuticals, Inc. *		84,232		0.2		3,561,329
Medivation, Inc. *		42,000		0.2		3,396,960
Onyx Pharmaceuticals, Inc. *		84,900		0.2		3,863,799
Salix Pharmaceuticals Ltd. *		78,200		0.2		3,863,080
Other Securities				5.0		80,032,282
				6.2		101,626,238
Real Estate 9.6%
American Campus Communities, Inc.		99,300		0.3		4,413,885
BioMed Realty Trust, Inc.		209,800		0.3		4,158,236
CBL & Associates Properties, Inc.		198,700		0.2		3,701,781
Extra Space Storage, Inc.		138,358		0.3		4,199,165
Hatteras Financial Corp.		127,700		0.2		3,719,901
Highwoods Properties, Inc.		96,600		0.2		3,354,918
Home Properties, Inc.		64,365		0.2		3,929,483
Kilroy Realty Corp.		93,000		0.3		4,412,850
LaSalle Hotel Properties		113,926		0.2		3,350,564
MFA Financial, Inc.		476,900		0.2		3,519,522
Mid-America Apartment Communities, Inc.		54,800		0.2		3,730,236
National Retail Properties, Inc.		141,200		0.2		3,866,056
Post Properties, Inc.		72,267		0.2		3,519,403
Tanger Factory Outlet Centers, Inc.		115,100		0.2		3,604,932
Other Securities				6.4		104,169,333
				9.6		157,650,265
Retailing 4.5%
Ascena Retail Group, Inc. *		168,600		0.2		3,452,928
Other Securities				4.3		70,426,915
				4.5		73,879,843
Semiconductors & Semiconductor Equipment 3.2%
Other Securities				3.2		52,763,258
Software & Services 8.0%
Concur Technologies, Inc. *		59,900		0.2		3,387,944
Jack Henry & Associates, Inc.		115,800		0.2		3,932,568
Parametric Technology Corp. *		159,800		0.2		3,448,484
Solarwinds, Inc. *		76,300		0.2		3,579,233
Wright Express Corp. *		51,776		0.2		3,304,344
Other Securities				7.0		114,431,349
				8.0		132,083,922
Technology Hardware & Equipment 5.0%
Other Securities				5.0		82,151,499
Telecommunication Services 0.8%
Other Securities				0.8		12,421,436
Transportation 2.3%
Alaska Air Group, Inc. *		96,000		0.2		3,244,800
Other Securities				2.1		33,884,703
				2.3		37,129,503
Utilities 3.2%
Cleco Corp.		81,700		0.2		3,333,360
Other Securities				3.0		49,617,537
				3.2		52,950,897
Total Common Stock
(Cost $1,314,574,537)						1,615,955,126
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 Investments 1.7% of net assets
Time Deposit 1.5%
Bank of America
0.03%, 05/01/12		24,957,845		1.5		24,957,845
U.S. Treasury Obligations 0.2%
Other Securities				0.2		2,949,734
Total Short-Term Investments
(Cost $27,907,579)						27,907,579
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 5.4% of net assets
Wells Fargo Advantage Government Money Market Fund		88,178,306		5.4		88,178,306
Total Collateral Invested for Securities on Loan
(Cost $88,178,306)						88,178,306
End of Collateral Invested for Securities on Loan.

See financial notes 33

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12 the tax basis cost of the fund’s investments was $1,347,303,690 and the unrealized appreciation and depreciation were $412,189,439 and ($115,630,424), respectively, with a net unrealized appreciation of $296,559,015.

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 $0 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		330		26,891,700		456,803

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$1,615,955,126		$—		$—		$1,615,955,126
Rights(a)		—		—		—		—
Warrants(a)		—		—		—		—
Short-Term Investments(a)		—		27,907,579		—		27,907,579
Total		$1,615,955,126		$27,907,579		$—		$1,643,862,705
Other Financial Instruments
Collateral Invested for Securities on Loan		$88,178,306		$—		$—		$88,178,306
Futures Contract*		456,803		—		—		456,803

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

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		April 30,
Investments in Securities	2011		(Losses)			(Losses)		Purchases		Sales			in**		out**		2012
Common Stock		$127,375		($3,526,188	)		$3,494,645		$—		($95,832	)		$—		$—		$—
Total		$127,375		($3,526,188	)		$3,494,645		$—		($95,832	)		$—		$—		$—

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

34 See financial notes

 Schwab Small-Cap Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $1,342,482,116) including securities on loan of $83,054,277		$1,643,862,705
Collateral invested for securities on loan		88,178,306
Receivables:
Investments sold		2,746,287
Fund shares sold		2,460,056
Dividends		639,998
Income from securities on loan		255,119
Receivable from investment adviser		623
Interest		21
Prepaid expenses	+	24,484
Total assets		1,738,167,599
Liabilities
Collateral held for securities on loan		88,178,306
Payables:
Investments bought		4,236,159
Investment adviser and administrator fees		16,164
Shareholder service fees		3,484
Fund shares redeemed		1,732,901
Due to brokers for futures		332,970
Accrued expenses	+	87,851
Total liabilities		94,587,835
Net Assets
Total assets		1,738,167,599
Total liabilities	−	94,587,835
Net assets		$1,643,579,764
Net Assets by Source
Capital received from investors		1,336,221,379
Net investment income not yet distributed		9,388,617
Net realized capital losses		(6,746,262	)
Net unrealized capital gains		304,716,030
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$1,643,579,764		78,099,929			$21.04

See financial notes 35

 Schwab Small-Cap Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $11,066)		$13,303,071
Interest		1,919
Securities on loan	+	1,756,294
Total investment income		15,061,284
Expenses
Investment adviser and administrator fees		1,165,675
Shareholder service fees		153,064
Index fee		62,055
Shareholder reports		38,022
Portfolio accounting fees		37,675
Transfer agent fees		33,298
Registration fees		27,572
Professional fees		24,585
Custodian fees		17,541
Trustees’ fees		8,006
Interest expense		646
Other expenses	+	20,698
Total expenses		1,588,837
Expense reduction by CSIM and its affiliates	−	267,093
Net expenses	−	1,321,744
Net investment income		13,739,540
Realized and Unrealized Gains (Losses)
Net realized gains on investments		697,989
Net realized losses on futures contracts		(136,566	)
Net realized gains on foreign currency transactions	+	350
Net realized gains		561,773
Net unrealized gains on investments		144,063,532
Net unrealized gains on futures contracts		249,811
Net unrealized losses on foreign currency translations	+	(49	)
Net unrealized gains	+	144,313,294
Net realized and unrealized gains		144,875,067
Increase in net assets resulting from operations		$158,614,607

36 See financial notes

 Schwab Small-Cap Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$13,739,540			$18,466,000
Net realized gains		561,773			95,376,181
Net unrealized gains	+	144,313,294			8,082,589
Increase in net assets from operations		158,614,607			121,924,770
Distributions to Shareholders
Distributions from net investment income		(25,652,389	)		(14,254,530	)
Distributions from net realized gains	+	(84,544,390	)		(4,031,438	)
Total distributions		($110,196,779	)		($18,285,968	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			5,903,794		$120,956,494			14,936,269		$309,163,569
Shares reinvested			5,456,861		101,552,189			814,081		16,827,051
Shares redeemed	+		(6,352,381	)	(129,022,757	)		(15,965,406	)	(333,977,185	)
Net transactions in fund shares			5,008,274		$93,485,926			(215,056	)	($7,986,565	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			73,091,655		$1,501,676,010			73,306,711		$1,406,023,773
Total increase or decrease	+		5,008,274		141,903,754			(215,056	)	95,652,237
End of period			78,099,929		$1,643,579,764			73,091,655		$1,501,676,010
Net investment income not yet distributed					$9,388,617					$21,301,466

See financial notes 37

Schwab Total Stock Market Index Fund^®

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		22.92			21.57			18.50			17.08			27.04			23.90
Income (loss) from investment operations:
Net investment income (loss)		0.24			0.41			0.37			0.24			0.40			0.37
Net realized and unrealized gains (losses)		2.61			1.33			3.02			1.55			(9.93	)		3.09
Total from investment operations		2.85			1.74			3.39			1.79			(9.53	)		3.46
Less distributions:
Distributions from net investment income		(0.42	)		(0.39	)		(0.32	)		(0.37	)		(0.37	)		(0.32	)
Distributions from net realized gains		—			—			—			—			(0.06	)		—
Total distributions		(0.42	)		(0.39	)		(0.32	)		(0.37	)		(0.43	)		(0.32	)
Net asset value at end of period		25.35			22.92			21.57			18.50			17.08			27.04
Total return (%)		12.70	2		8.14			18.53			10.92			(35.76	)		14.62
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.09	3		0.09			0.09			0.21	4		0.38			0.37
Gross operating expenses		0.10	3		0.11			0.11			0.28			0.38			0.37
Net investment income (loss)		2.06	3		1.79			1.85			2.02			1.71			1.49
Portfolio turnover rate		0	2,5		1			3			5			1			0	5
Net assets, end of period ($ x 1,000,000)		2,010			1,747			1,470			1,205			585			906

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

⁵ Less than 1%.

38 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.8%	Common Stock		1,474,801,458		1,987,650,809
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.0%	Short-Term Investments		19,537,730		19,537,730
	99	.8%	Total Investments		1,494,339,188		2,007,188,539
	0	.6%	Collateral Invested for Securities on Loan		12,025,131		12,025,131
	(0	.4)%	Other Assets and Liabilities, Net				(8,755,558	)
	100	.0%	Net Assets				2,010,458,112

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 98.8% of net assets
Automobiles & Components 0.8%
Other Securities				0.8		16,792,144
Banks 3.3%
U.S. Bancorp		247,031		0.4		7,946,987
Wells Fargo & Co.		642,306		1.1		21,472,290
Other Securities				1.8		37,849,212
				3.3		67,268,489
Capital Goods 8.1%
3M Co.		83,000		0.4		7,416,880
Caterpillar, Inc.		75,400		0.4		7,748,858
General Electric Co.		1,362,666		1.3		26,681,000
United Technologies Corp.		102,068		0.4		8,332,832
Other Securities				5.6		112,706,112
				8.1		162,885,682
Commercial & Professional Supplies 0.9%
Other Securities				0.9		18,434,133
Consumer Durables & Apparel 1.5%
Other Securities				1.5		29,153,213
Consumer Services 2.4%
McDonald’s Corp.		132,709		0.6		12,932,492
Other Securities				1.8		35,544,908
				2.4		48,477,400
Diversified Financials 5.1%
American Express Co.		132,650		0.4		7,986,856
Bank of America Corp.		1,301,956		0.5		10,558,863
Citigroup, Inc.		374,528		0.6		12,374,405
JPMorgan Chase & Co.		489,944		1.0		21,057,793
The Charles Schwab Corp. (b)		131,526		0.1		1,880,822
Other Securities				2.5		49,582,254
				5.1		103,440,993
Energy 10.4%
Chevron Corp.		258,539		1.4		27,549,916
ConocoPhillips		160,723		0.6		11,512,588
Exxon Mobil Corp.		619,034		2.7		53,447,396
Occidental Petroleum Corp.		104,820		0.5		9,561,680
Schlumberger Ltd.		173,260		0.6		12,845,496
Other Securities				4.6		93,491,245
				10.4		208,408,321
Food & Staples Retailing 1.9%
CVS Caremark Corp.		171,140		0.4		7,636,267
Wal-Mart Stores, Inc.		225,100		0.7		13,260,641
Other Securities				0.8		17,164,967
				1.9		38,061,875
Food, Beverage & Tobacco 5.5%
Altria Group, Inc.		264,800		0.4		8,529,208
Kraft Foods, Inc., Class A		228,013		0.5		9,090,878
PepsiCo, Inc.		200,858		0.7		13,256,628
Philip Morris International, Inc.		223,300		1.0		19,987,583
The Coca-Cola Co.		268,700		1.0		20,507,184
Other Securities				1.9		38,559,267
				5.5		109,930,748
Health Care Equipment & Services 4.2%
UnitedHealth Group, Inc.		139,080		0.4		7,809,342
Other Securities				3.8		75,643,420
				4.2		83,452,762
Household & Personal Products 2.0%
The Procter & Gamble Co.		352,215		1.1		22,414,963
Other Securities				0.9		18,120,680
				2.0		40,535,643
Insurance 3.7%
Berkshire Hathaway, Inc., Class B *		246,274		1.0		19,812,743
Other Securities				2.7		54,262,066
				3.7		74,074,809

See financial notes 39

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Materials 3.9%
Other Securities				3.9		78,942,945
Media 3.1%
Comcast Corp., Class A		277,004		0.4		8,401,531
The Walt Disney Co.		218,193		0.5		9,406,300
Other Securities				2.2		44,205,055
				3.1		62,012,886
Pharmaceuticals, Biotechnology & Life Sciences 7.2%
Abbott Laboratories		201,305		0.6		12,492,988
Amgen, Inc.		115,268		0.4		8,196,708
Bristol-Myers Squibb Co.		221,450		0.4		7,389,787
Johnson & Johnson		353,170		1.1		22,987,835
Merck & Co., Inc.		396,670		0.8		15,565,331
Pfizer, Inc.		992,801		1.1		22,764,927
Other Securities				2.8		55,857,025
				7.2		145,254,601
Real Estate 3.4%
Other Securities				3.4		69,143,647
Retailing 4.3%
Amazon.com, Inc. *		45,400		0.5		10,528,260
The Home Depot, Inc.		199,070		0.5		10,309,835
Other Securities				3.3		64,725,053
				4.3		85,563,148
Semiconductors & Semiconductor Equipment 2.5%
Intel Corp.		656,232		0.9		18,636,989
Other Securities				1.6		31,416,898
				2.5		50,053,887
Software & Services 9.2%
Google, Inc., Class A *		32,765		1.0		19,830,361
International Business Machines Corp.		145,710		1.5		30,173,627
Microsoft Corp.		962,750		1.5		30,827,255
Oracle Corp.		501,749		0.7		14,746,403
Visa, Inc., Class A		66,300		0.4		8,153,574
Other Securities				4.1		81,894,069
				9.2		185,625,289
Technology Hardware & Equipment 7.6%
Apple, Inc. *		119,700		3.5		69,933,528
Cisco Systems, Inc.		694,509		0.7		13,994,356
EMC Corp. *		262,686		0.4		7,410,372
QUALCOMM, Inc.		216,600		0.7		13,827,744
Other Securities				2.3		47,871,316
				7.6		153,037,316
Telecommunication Services 2.5%
AT&T, Inc.		766,056		1.3		25,210,903
Verizon Communications, Inc.		364,072		0.7		14,701,227
Other Securities				0.5		11,212,203
				2.5		51,124,333
Transportation 1.8%
Union Pacific Corp.		62,000		0.3		6,971,280
Other Securities				1.5		29,442,264
				1.8		36,413,544
Utilities 3.5%
Other Securities				3.5		69,563,001
Total Common Stock
(Cost $1,474,801,458)						1,987,650,809
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 Investments 1.0% of net assets
Time Deposit 0.9%
Bank of America
0.03%, 05/01/12		17,987,881		0.9		17,987,881
U.S. Treasury Obligation 0.1%
Other Securities				0.1		1,549,849
Total Short-Term Investments
(Cost $19,537,730)						19,537,730
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 0.6% of net assets
Wells Fargo Advantage Government Money Market Fund		12,025,131		0.6		12,025,131
Total Collateral Invested for Securities on Loan
(Cost $12,025,131)						12,025,131
End of Collateral Invested for Securities on Loan.

40 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12 the tax basis cost of the fund’s investments was $1,505,644,571 and the unrealized appreciation and depreciation were $667,599,688 and ($166,055,720), respectively, with a net unrealized appreciation of $501,543,968.

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 $1,793 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contracts
Russell 2000 Index, mini, Long, expires 06/15/12		100		8,149,000		135,825
S&P 500 Index, e-mini, Long, expires 06/15/12		150		10,452,000		246,863
Net unrealized gains						382,688

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$1,922,084,052		$—		$—		$1,922,084,052
Consumer Durables & Apparel		29,149,052		—		4,161		29,153,213
Transportation		36,411,751		—		1,793		36,413,544
Rights(a)		—		—		—		—
Short-Term Investments(a)		—		19,537,730		—		19,537,730
Warrants		—		—		—		—
Total		$1,987,644,855		$19,537,730		$5,954		$2,007,188,539
Other Financial Instruments
Collateral Invested for Securities on Loan		$12,025,131		$—		$—		$12,025,131
Futures Contracts*		382,688		—		—		382,688

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

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		April 30,
Investments in Securities	2011		(Losses)			(Losses)			Purchases		Sales			in**		out**		2012
Common Stock		$8,367		($613,436	)		$610,087			$—		($4,839	)		$5,775		$—		$5,954
Rights		29		3			(29	)		—		(3	)		—		—		—
Total		$8,396		($613,433	)		$610,058			$—		($4,842	)		$5,775		$—		$5,954

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are ($1,614).

See financial notes 41

 Schwab Total Stock Market Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated issuers, at value (cost $2,564,134)		$1,880,822
Investments in unaffiliated issuers, at value (cost $1,491,775,054) including securities on loan of $11,748,617	+	2,005,307,717
Total investments, at value (cost $1,494,339,188)		2,007,188,539
Collateral invested for securities on loan		12,025,131
Receivables:
Investments sold		357,174
Fund shares sold		3,545,663
Dividends		1,781,151
Income from securities on loan		53,723
Foreign tax reclaims		3,037
Interest		15
Prepaid expenses	+	24,864
Total assets		2,024,979,297
Liabilities
Collateral held for securities on loan		12,025,131
Payables:
Investments bought		1,729,762
Investment adviser and administrator fees		8,280
Shareholder service fees		4,526
Fund shares redeemed		570,543
Due to brokers for futures		125,750
Accrued expenses	+	57,193
Total liabilities		14,521,185
Net Assets
Total assets		2,024,979,297
Total liabilities	−	14,521,185
Net assets		$2,010,458,112
Net Assets by Source
Capital received from investors		1,514,688,240
Net investment income not yet distributed		12,078,679
Net realized capital losses		(30,248,943	)
Net unrealized capital gains		513,940,136
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$2,010,458,112		79,309,249			$25.35

42 See financial notes

 Schwab Total Stock Market Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated issuer		$15,123
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $32,064)		19,562,930
Interest		4,905
Securities on loan	+	240,422
Total investment income		19,823,380
Expenses
Investment adviser and administrator fees		553,281
Shareholder service fees		180,739
Transfer agent fees		49,751
Portfolio accounting fees		48,047
Professional fees		26,460
Shareholder reports		24,865
Registration fees		21,601
Custodian fees		11,984
Trustees’ fees		5,852
Interest expense		30
Other expenses	+	21,672
Total expenses		944,282
Expense reduction by CSIM and its affiliates	−	118,096
Net expenses	−	826,186
Net investment income		18,997,194
Realized and Unrealized Gains (Losses)
Net realized gains on investments		160,319
Net realized gains on futures contracts	+	1,965,310
Net realized gains		2,125,629
Net unrealized gains on affiliated issuer		255,453
Net unrealized gains on unaffiliated investments		201,788,265
Net unrealized losses on futures contracts	+	(657,558	)
Net unrealized gains	+	201,386,160
Net realized and unrealized gains		203,511,789
Increase in net assets resulting from operations		$222,508,983

See financial notes 43

 Schwab Total Stock Market Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$18,997,194			$30,636,588
Net realized gains		2,125,629			2,761,150
Net unrealized gains	+	201,386,160			81,349,337
Increase in net assets from operations		222,508,983			114,747,075
Distributions to Shareholders
Distributions from net investment income		($32,188,219	)		($26,769,873	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			9,163,463		$219,506,176			22,264,739		$513,941,756
Shares reinvested			1,240,438		27,500,498			1,030,256		22,943,799
Shares redeemed	+		(7,319,998	)	(173,691,665	)		(15,226,159	)	(348,432,230	)
Net transactions in fund shares			3,083,903		$73,315,009			8,068,836		$188,453,325
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			76,225,346		$1,746,822,339			68,156,510		$1,470,391,812
Total increase	+		3,083,903		263,635,773			8,068,836		276,430,527
End of period			79,309,249		$2,010,458,112			76,225,346		$1,746,822,339
Net investment income not yet distributed					$12,078,679					$25,269,704

44 See financial notes

Schwab International Index Fund^®

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		16.02			17.31			16.26			13.95			25.95			21.14
Income (loss) from investment operations:
Net investment income (loss)		0.29			0.57			0.48			0.37			0.68			0.54
Net realized and unrealized gains (losses)		0.22			(1.38	)		1.01			2.58			(12.13	)		4.93
Total from investment operations		0.51			(0.81	)		1.49			2.95			(11.45	)		5.47
Less distributions:
Distributions from net investment income		(0.60	)		(0.48	)		(0.44	)		(0.64	)		(0.55	)		(0.66	)
Net asset value at end of period		15.93			16.02			17.31			16.26			13.95			25.95
Total return (%)		3.54	2		(4.83	)		9.31			22.55			(45.02	)		26.50
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.19	3		0.19			0.19			0.32	4		0.50			0.50
Gross operating expenses		0.22	3		0.21			0.22			0.41			0.54			0.54
Net investment income (loss)		3.75	3		3.26			2.88			2.92			3.15			2.34
Portfolio turnover rate		25	2		10			13			21			10			5
Net assets, end of period ($ x 1,000,000)		1,403			1,375			1,471			1,369			711			1,264

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ 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 45

 Schwab International Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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				($)		($)
	97	.7%	Common Stock		1,163,863,477		1,371,693,600
	0	.6%	Preferred Stock		5,995,172		7,789,713
	0	.8%	Other Investment Company		11,327,697		11,287,500
	0	.1%	Short-Term Investment		1,570,310		1,570,310
	99	.2%	Total Investments		1,182,756,656		1,392,341,123
	3	.1%	Collateral Invested for Securities on Loan		43,878,380		43,878,380
	(2	.3)%	Other Assets and Liabilities, Net				(33,022,145	)
	100	.0%	Net Assets				1,403,197,358

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 97.7% of net assets
Australia 8.6%
Australia & New Zealand Banking Group Ltd.		356,001		0.6		8,819,305
BHP Billiton Ltd.		435,626		1.2		16,164,868
Commonwealth Bank of Australia		212,688		0.8		11,473,020
National Australia Bank Ltd.		297,767		0.6		7,783,418
Westpac Banking Corp.		410,573		0.7		9,675,653
Other Securities				4.7		67,410,791
				8.6		121,327,055
Austria 0.2%
Other Securities				0.2		3,483,990
Belgium 1.0%
Anheuser-Busch InBev N.V. (b)		109,149		0.6		7,866,967
Other Securities				0.4		6,173,636
				1.0		14,040,603
Denmark 1.2%
Novo Nordisk A/S, Class B		57,578		0.6		8,488,319
Other Securities				0.6		7,806,497
				1.2		16,294,816
Finland 0.8%
Other Securities				0.8		11,275,265
France 8.8%
DANONE S.A.		78,735		0.4		5,542,870
LVMH Moet Hennessy Louis Vuitton S.A.		34,297		0.4		5,689,724
Sanofi		154,320		0.8		11,787,240
Total S.A.		287,862		1.0		13,818,413
Other Securities				6.2		86,019,126
				8.8		122,857,373
Germany 7.8%
Allianz SE - Reg’d		61,483		0.5		6,857,894
BASF SE (b)		124,582		0.7		10,257,223
Bayer AG - Reg’d (b)		111,979		0.6		7,890,476
Daimler AG - Reg’d		122,572		0.5		6,782,099
E.ON AG (b)		244,203		0.4		5,529,192
SAP AG		124,580		0.6		8,261,335
Siemens AG - Reg’d		111,626		0.7		10,361,169
Other Securities				3.8		53,169,248
				7.8		109,108,636
Greece 0.1%
Other Securities				0.1		1,169,061
Hong Kong 2.9%
Other Securities				2.9		40,615,972
Ireland 0.3%
Other Securities				0.3		3,946,211
Israel 0.6%
Teva Pharmaceutical Industries Ltd.		128,323		0.4		5,867,842
Other Securities				0.2		3,244,407
				0.6		9,112,249
Italy 2.1%
Eni S.p.A.		327,921		0.5		7,286,342
Other Securities				1.6		22,741,679
				2.1		30,028,021
Japan 21.0%
Canon, Inc.		153,895		0.5		6,975,723
Honda Motor Co., Ltd.		221,539		0.6		7,973,008
Mitsubishi UFJ Financial Group, Inc.		1,725,609		0.6		8,285,528
Sumitomo Mitsui Financial Group, Inc.		182,246		0.4		5,831,650
Toyota Motor Corp.		374,003		1.1		15,325,796
Other Securities				17.8		249,709,170
				21.0		294,100,875

46 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Netherlands 2.3%
Unilever N.V. CVA		220,395		0.5		7,549,476
Other Securities				1.8		25,427,451
				2.3		32,976,927
New Zealand 0.1%
Other Securities				0.1		1,732,831
Norway 1.0%
Other Securities				1.0		13,339,119
Portugal 0.2%
Other Securities				0.2		2,737,287
Singapore 1.8%
Other Securities				1.8		25,460,587
Spain 2.5%
Banco Santander S.A.		1,151,685		0.5		7,230,996
Telefonica S.A.		560,486		0.6		8,184,638
Other Securities				1.4		19,852,623
				2.5		35,268,257
Sweden 3.1%
Other Securities				3.1		43,912,026
Switzerland 8.4%
Nestle S.A. - Reg’d		446,989		2.0		27,395,622
Novartis AG - Reg’d		316,679		1.2		17,485,822
Roche Holding AG		95,297		1.2		17,416,527
UBS AG - Reg’d *		492,059		0.4		6,144,926
Other Securities				3.6		49,613,435
				8.4		118,056,332
United Kingdom 22.9%
Anglo American plc		179,033		0.5		6,918,685
AstraZeneca plc		176,485		0.6		7,733,819
Barclays plc		1,563,453		0.4		5,535,162
BG Group plc		459,872		0.8		10,850,760
BHP Billiton plc		286,240		0.7		9,214,594
BP plc		2,572,053		1.3		18,580,763
British American Tobacco plc		266,775		1.0		13,682,756
Diageo plc		338,960		0.6		8,549,674
GlaxoSmithKline plc		683,760		1.1		15,795,870
HSBC Holdings plc		2,424,143		1.6		21,883,160
Rio Tinto plc		185,805		0.7		10,415,253
Royal Dutch Shell plc, A Shares		493,817		1.3		17,612,441
Royal Dutch Shell plc, B Shares		360,605		0.9		13,196,175
Standard Chartered plc		322,141		0.6		7,874,942
Tesco plc		1,080,820		0.4		5,569,110
Unilever plc		173,177		0.4		5,916,068
Vodafone Group plc		6,809,854		1.3		18,849,399
Other Securities				8.7		122,671,476
				22.9		320,850,107
Total Common Stock
(Cost $1,163,863,477)						1,371,693,600
Preferred Stock 0.6% of net assets
Germany 0.6%
Other Securities				0.6		7,745,766
United Kingdom 0.0%
Other Securities				0.0		43,947
Total Preferred Stock
(Cost $5,995,172)						7,789,713
Other Investment Company 0.8% of net assets
United States 0.8%
iShares MSCI EAFE Index Fund		210,000		0.8		11,287,500
Total Other Investment Company
(Cost $11,327,697)						11,287,500
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Other Securities				0.1		1,570,310
Total Short-Term Investment
(Cost $1,570,310)						1,570,310
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 3.1% of net assets
Wells Fargo Advantage Government Money Market Fund		43,878,380		3.1		43,878,380
Total Collateral Invested for Securities on Loan
(Cost $43,878,380)						43,878,380
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $1,188,832,336 and the unrealized appreciation and depreciation were $366,863,082 and ($163,354,295), respectively, with a net unrealized appreciation of $203,508,787.

See financial notes 47

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12, the values of certain foreign securities held by the fund aggregating $1,355,878,319 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)	All or a portion of this security is on loan.

CDI —	CHESS Depositary Interest.
CVA —	Dutch Certificate
Reg’d —	Registered
REIT —	Real Estate Investment Trust.
RSP —	Risparmio (Convertible Savings Shares).
SDR —	Swedish Depositary Receipt.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$—		$514,615,466		$—		$514,615,466
Belgium		7,866,967		6,173,636		—		14,040,603
Greece		496,507		672,554		—		1,169,061
Hong Kong		18,449		40,597,523		—		40,615,972
Japan		251,130		293,849,745		—		294,100,875
Netherlands		4,888,702		28,088,225		—		32,976,927
Spain		405,725		34,862,532		—		35,268,257
Switzerland		9,089,819		108,966,513		—		118,056,332
United Kingdom		543,748		320,306,359		—		320,850,107
Preferred Stock(a)		—		7,745,766		—		7,745,766
United Kingdom		—		—		43,947		43,947
Other Investment Company(a)		11,287,500		—		—		11,287,500
Short-Term Investment(a)		—		1,570,310		—		1,570,310
Total		$34,848,547		$1,357,448,629		$43,947		$1,392,341,123
Other Financial Instruments
Collateral Invested for Securities on Loan		$43,878,380		$—		$—		$43,878,380

(a) As categorized in complete schedule of holdings.

48 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) 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		April 30,
Investments in Securities	2011		(Losses)			(Losses)			Purchases		Sales			in*		out*		2012
Common Stock
United Kingdom		$32,986		($587	)		($174	)		$—		($32,225	)		$—		$—		$—
Preferred Stock
United Kingdom		—		—			246			43,701		—			—		—		43,947
Total		$32,986		($587	)		$72			$43,701		($32,225	)		$—		$—		$43,947

* 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are $246.

See financial notes 49

 Schwab International Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $1,182,756,656) including securities on loan of $40,596,540		$1,392,341,123
Foreign currency, at value (cost $1,571,144)		1,571,646
Collateral invested for securities on loan		43,878,380
Receivables:
Dividends		7,483,511
Fund shares sold		1,497,039
Foreign tax reclaims		732,044
Income from securities on loan		229,911
Interest		1
Prepaid expenses	+	25,568
Total assets		1,447,759,223
Liabilities
Collateral held for securities on loan		43,878,380
Payables:
Investments bought		52,698
Investment adviser and administrator fees		14,143
Shareholder service fees		2,507
Fund shares redeemed		497,258
Accrued expenses	+	116,879
Total liabilities		44,561,865
Net Assets
Total assets		1,447,759,223
Total liabilities	−	44,561,865
Net assets		$1,403,197,358
Net Assets by Source
Capital received from investors		1,215,847,677
Net investment income not yet distributed		7,652,599
Net realized capital losses		(30,052,152	)
Net unrealized capital gains		209,749,234
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$1,403,197,358		88,088,527			$15.93

50 See financial notes

 Schwab International Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $2,010,321)		$26,281,974
Interest		521
Securities on loan	+	486,525
Total investment income		26,769,020
Expenses
Investment adviser and administrator fees		1,019,738
Shareholder service fees		133,578
Custodian fees		110,964
Index fee		55,300
Transfer agent fees		41,313
Shareholder reports		40,813
Portfolio accounting fees		40,622
Professional fees		25,800
Registration fees		23,212
Interest expense		8,594
Trustees’ fees		7,603
Other expenses	+	20,750
Total expenses		1,528,287
Expense reduction by CSIM and its affiliates	−	228,025
Net expenses	−	1,300,262
Net investment income		25,468,758
Realized and Unrealized Gains (Losses)
Net realized gains on investments		56,538,095
Net realized losses on foreign currency transactions	+	(141,056	)
Net realized gains		56,397,039
Net unrealized losses on investments		(32,347,453	)
Net unrealized gains on foreign currency translations	+	229,099
Net unrealized losses	+	(32,118,354	)
Net realized and unrealized gains		24,278,685
Increase in net assets resulting from operations		$49,747,443

See financial notes 51

 Schwab International Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$25,468,758			$48,709,948
Net realized gains		56,397,039			35,464,233
Net unrealized losses	+	(32,118,354	)		(151,198,441	)
Increase (Decrease) in net assets from operations		49,747,443			(67,024,260	)
Distributions to Shareholders
Distributions from net investment income		($51,830,156	)		($40,811,469	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			8,397,096		$128,453,326			15,538,810		$265,131,011
Shares reinvested			3,211,483		47,080,346			2,149,594		36,392,628
Shares redeemed	+		(9,366,058	)	(145,392,438	)		(16,818,082	)	(289,204,022	)
Net transactions in fund shares			2,242,521		$30,141,234			870,322		$12,319,617
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			85,846,006		$1,375,138,837			84,975,684		$1,470,654,949
Total increase or decrease	+		2,242,521		28,058,521			870,322		(95,516,112	)
End of period			88,088,527		$1,403,197,358			85,846,006		$1,375,138,837
Net investment income not yet distributed					$7,652,599					$34,013,997

52 See financial notes

 Schwab Equity Index Funds

Financial Notes, unaudited

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 10) at closing net asset value per share (“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 it is de-listed or its trading is halted or suspended, when a security’s primary pricing source is unable or unwilling to provide a price, or when a security’s primary trading market is closed during regular market hours. Each fund makes fair

53

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 are traded in markets that close prior to the funds valuing 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 foreign currency exchange 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

54 

 Schwab Equity Index Funds

Financial Notes, unaudited (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 funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

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

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (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 Exchange 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 exchange 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 April 30, 2012 and the value of the related collateral are disclosed in the complete Portfolio Holdings and 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

55

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 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 April 30, 2012, if any, are reflected in the funds’ Statement of Assets and Liabilities.

56 

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(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.

Equity 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. For example, a fund may not invest in certain securities in the benchmark Index, or match the securities’ weightings to the benchmark, due to regulatory, operational, custodial or liquidity constraints; corporate transactions; asset valuations; transaction costs and timing; tax considerations; and index rebalancing, which may result in tracking error.

Each fund invests in companies measured by its respective Index. It follows these stocks during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, the fund’s performance may be below that of the 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.

To the extent that a fund’s or the index’s portfolio is concentrated in the securities of issuers in a particular market, industry, group of industries, sector, country or asset class, the fund may be adversely affected by the performance of those securities, may

57

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

be subject to increased price volatility and may be more susceptible to adverse economic, market, political or regulatory occurrences affecting that market, industry, group of industries, sector, country or asset class.

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.

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 funds may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are futures, options on futures. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day.

A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to credit risk, leverage risk, lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately larger impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.

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.

58 

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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%

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%		0.17%		0.09%		0.19%

59

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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		11/01/11		11/01/11
Fund	10/31/11		Additions		Sales		04/30/12		04/30/12		to 04/30/12		to 04/30/12
Schwab S&P 500 Index Fund		1,009,981		75,700		—		1,085,681		$15,525,238		$—		$121,198
Schwab 1000 Index Fund		351,965		15,100		—		367,065		5,249,030		—		42,236
Schwab Total Stock Market Index Fund		126,026		5,500		—		131,526		1,880,822		—		15,123

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 April 30, 2012.

								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		1.8%			—%		7.4%		—%		10.3%
Schwab Growth Portfolio		2.3%			—%		8.3%		—%		9.6%
Schwab Balanced Portfolio		1.1%			—%		4.0%		—%		4.6%
Schwab Conservative Portfolio		0.3%			—%		1.2%		—%		1.3%
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		0.2%			—%		—%		—%		—%
Schwab Target 2025 Fund		0.1%			—%		—%		—%		—%
Schwab Target 2030 Fund		0.3%			—%		—%		—%		—%
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 April 30, 2012, 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 0.9% and 2.0%, 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 April 30, 2012, 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.

60 

 Schwab Equity Index Funds

Financial Notes, unaudited (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 trusts were in compliance with 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. Derivatives:

Certain funds entered into equity index futures contracts (“futures”) during the report period. 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 April 30, 2012 and the realized/unrealized gains (losses) on futures contracts held during the period ended April 30, 2012 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 values 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		$175,375,500		2,650
Schwab 1000 Index Fund		15,615,325		231
Schwab Small-Cap Index Fund		15,397,500		191
Schwab Total Stock Market Index Fund		16,756,983		233
Schwab International Index Fund		—		—

9. Purchases and Sales/Maturities of Investment Securities:

For the period ended April 30, 2012, 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		$337,828,215		$50,646,655
Schwab 1000 Index Fund		145,503,586		288,492,947
Schwab Small-Cap Index Fund		478,495,151		470,291,161
Schwab Total Stock Market Index Fund		71,745,544		8,351,870
Schwab International Index Fund		341,454,672		342,779,262

61

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Schwab S&P 500 Index Fund		$108,802		$176,039
Schwab 1000 Index Fund		12,785		35,850
Schwab Small-Cap Index Fund		9,023		25,087
Schwab Total Stock Market Index Fund		134,720		108,924
Schwab International Index Fund		4,952		16,287

11. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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

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.

62 

 Schwab Equity Index Funds

Financial Notes, unaudited (continued)

11. 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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

63

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

64 

 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).	75	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.	75	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.	92	None

65

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

66 

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 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.

67

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR13562-15

Semiannual report dated April 30, 2012, enclosed.

Schwab Active Equity Funds

Schwab Premier Equity Fund^®

(closed to new investors)

Schwab Core Equity Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

Schwab^® International Core

Equity Fund

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This wrapper is not part of the shareholder report.

Schwab Active Equity Funds

Semiannual Report

April 30, 2012

Schwab Premier Equity Fund^® (closed to new investors)

Schwab Core Equity Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

Schwab^® International Core

Equity Fund

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™	7
Schwab Dividend Equity Fund™	8
Schwab Large-Cap Growth Fund™	9
Schwab Small-Cap Equity Fund™	10
Schwab Hedged Equity Fund™	11
Schwab Financial Services Fund™	12
Schwab Health Care Fund™	13
Schwab® International Core Equity Fund	14
Fund Expenses	16
Financial Statements and Portfolio Holdings
Schwab Premier Equity Fund®	17
Schwab Core Equity Fund™	24
Schwab Dividend Equity Fund™	31
Schwab Large-Cap Growth Fund™	38
Schwab Small-Cap Equity Fund™	45
Schwab Hedged Equity Fund™	54
Schwab Financial Services Fund™	63
Schwab Health Care Fund™	69
Schwab® International Core Equity Fund	76
Financial Notes	86
Trustees and Officers	97
Glossary	100

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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)	10.56%
S&P 500® Index	12.77%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	page 6
Schwab Core Equity Fundtm(Ticker Symbol: SWANX)	12.24%
S&P 500® Index	12.77%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	page 7
Schwab Dividend Equity Fundtm(Ticker Symbol: SWDSX)	10.71%
S&P 500® Index	12.77%
Fund Category: Morningstar Large-Cap Value	10.87%
Performance Details	page 8
Schwab Large-Cap Growth Fundtm(Ticker Symbol: SWLSX)	14.43%
Russell 1000 Growth Index	14.13%
Fund Category: Morningstar Large-Cap Growth	12.43%
Performance Details	page 9
Schwab Small-Cap Equity Fundtm(Ticker Symbol: SWSCX)	10.30%
Russell 2000® Index	11.02%
Fund Category: Morningstar Small-Cap Blend	10.79%
Performance Details	page 10
Schwab Hedged Equity Fundtm(Ticker Symbol: SWHEX)	5.35%
S&P 500® Index	12.77%
Fund Category: Morningstar Long-Short	3.14%
Performance Details	page 11
Schwab Financial Services Fundtm(Ticker Symbol: SWFFX)	14.61%
S&P 1500 SuperComposite Financials Sector Index	15.53%
Fund Category: Morningstar Financial Services	13.03%
Performance Details	page 12
Schwab Health Care Fundtm1(Ticker Symbol: SWHFX)	12.34%
Dow Jones Global Health Care Index	11.09%
Fund Category: Morningstar Health Care	15.75%
Performance Details	page 13
Schwab® International Core Equity Fund1 (Ticker Symbol: SICNX)	6.81%
MSCI EAFE Index®*	2.71%
Fund Category: Morningstar Foreign Large-Cap Blend	4.83%
Performance Details	pages 14-15

Minimum Initial Investment² $ 100

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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 MSCI 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 detail and eligibility requirements.

2 Schwab Active Equity Funds

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab Active Equity Funds.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab Active Equity Funds. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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^®

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Premier Equity Fund® (3/21/05)		10.56	%		-2.96	%		-1.79	%		3.19	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.44	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		3.91	%

Fund Expense Ratios⁴: Net 1.02%; Gross 1.04%

 Statistics

Number of Holdings	102
Weighted Average Market Cap ($ x 1,000,000)	$28,331
Price/Earnings Ratio (P/E)	15.8
Price/Book Ratio (P/B)	1.8
Portfolio Turnover Rate5	66%

 Sector Weightings % of Investments

Information Technology	19.2%
Financials	12.9%
Health Care	12.8%
Consumer Staples	12.7%
Consumer Discretionary	10.4%
Energy	8.8%
Industrials	8.7%
Utilities	5.6%
Materials	3.2%
Telecommunication Services	1.5%
Other	4.2%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Pfizer, Inc.	1.3%
Macy’s, Inc.	1.3%
Warner Chilcott plc, Class A	1.2%
NCR Corp.	1.2%
McKesson Corp.	1.2%
Delta Air Lines, Inc.	1.2%
Merck & Co., Inc.	1.2%
Tech Data Corp.	1.2%
Constellation Brands, Inc., Class A	1.2%
Wells Fargo & Co.	1.2%
Total	12.2%

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

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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

6 Schwab Active Equity Funds

Schwab Core Equity Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Core Equity Fundtm (7/1/96)		12.24	%		1.33	%		0.10	%		5.14	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		4.13	%

Fund Expense Ratio⁴: 0.73%

 Statistics

Number of Holdings	137
Weighted Average Market Cap ($ x 1,000,000)	$96,627
Price/Earnings Ratio (P/E)	16.5
Price/Book Ratio (P/B)	2.1
Portfolio Turnover Rate5	22%

 Sector Weightings % of Investments

Information Technology	20.6%
Financials	14.6%
Health Care	12.3%
Energy	12.1%
Consumer Staples	11.2%
Consumer Discretionary	9.3%
Industrials	9.1%
Materials	3.7%
Telecommunication Services	3.4%
Utilities	2.8%
Other	0.9%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Apple, Inc.	4.1%
Wells Fargo & Co.	3.3%
Exxon Mobil Corp.	3.2%
JPMorgan Chase & Co.	3.2%
Philip Morris International, Inc.	3.2%
Chevron Corp.	3.1%
General Electric Co.	2.3%
Bristol-Myers Squibb Co.	2.3%
Pfizer, Inc.	2.0%
International Business Machines Corp.	1.9%
Total	28.6%

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

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 May 21, 2009, the Laudus U.S. MarketMasters Fund merged into the fund.
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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

Schwab Active Equity Funds 7

Schwab Dividend Equity Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Dividend Equity Fundtm (9/2/03)		10.71	%		4.42	%		0.58	%		7.19	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		5.96	%
Fund Category: Morningstar Large-Cap Value		10.87	%		0.16	%		-1.23	%		5.54	%

Fund Expense Ratio⁴: 0.89%

 Yields¹

30-Day SEC Yield 1.59%

 Statistics

Number of Holdings	116
Weighted Average Market Cap ($ x 1,000,000)	$88,667
Price/Earnings Ratio (P/E)	16.0
Price/Book Ratio (P/B)	2.1
Portfolio Turnover Rate5	30%

 Sector Weightings % of Investments

Information Technology	17.4%
Energy	12.7%
Financials	12.0%
Consumer Staples	11.9%
Health Care	11.8%
Consumer Discretionary	9.2%
Industrials	8.6%
Utilities	5.5%
Materials	4.7%
Telecommunication Services	4.2%
Other	2.0%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Exxon Mobil Corp.	4.6%
Chevron Corp.	3.3%
Philip Morris International, Inc.	3.1%
JPMorgan Chase & Co.	3.1%
Merck & Co., Inc.	2.7%
Verizon Communications, Inc.	2.7%
Pfizer, Inc.	2.7%
General Electric Co.	2.2%
Bristol-Myers Squibb Co.	2.0%
DTE Energy Co.	1.9%
Total	28.3%

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

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 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

8 Schwab Active Equity Funds

Schwab Large-Cap Growth Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Large-Cap Growth Fundtm (10/3/05)		14.43	%		4.26	%		1.75	%		4.20	%
Russell 1000 Growth Index		14.13	%		7.26	%		4.11	%		5.86	%
Fund Category: Morningstar Large-Cap Growth		12.43	%		3.13	%		2.59	%		4.54	%

Fund Expense Ratios⁴: Net 0.99%; Gross 1.05%

 Statistics

Number of Holdings	107
Weighted Average Market Cap ($ x 1,000,000)	$106,532
Price/Earnings Ratio (P/E)	15.1
Price/Book Ratio (P/B)	3.5
Portfolio Turnover Rate5	41%

 Sector Weightings % of Investments

Information Technology	29.5%
Consumer Discretionary	12.8%
Consumer Staples	11.2%
Health Care	10.2%
Energy	10.2%
Industrials	10.1%
Financials	5.9%
Materials	5.4%
Telecommunication Services	2.7%
Utilities	0.9%
Other	1.1%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Apple, Inc.	7.5%
Exxon Mobil Corp.	4.4%
Philip Morris International, Inc.	3.9%
International Business Machines Corp.	3.4%
Yum! Brands, Inc.	2.3%
Microsoft Corp.	2.3%
Dell, Inc.	2.0%
PPG Industries, Inc.	2.0%
BMC Software, Inc.	1.9%
Macy’s, Inc.	1.9%
Total	31.6%

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

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 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

Schwab Active Equity Funds 9

Schwab Small-Cap Equity Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Small-Cap Equity Fundtm (7/1/03)		10.30	%		-2.33	%		-0.63	%		9.03	%
Russell 2000® Index		11.02	%		-4.25	%		1.45	%		8.41	%
Fund Category: Morningstar Small-Cap Blend		10.79	%		-4.00	%		1.13	%		8.42	%

Fund Expense Ratio⁴: 1.12%

 Statistics

Number of Holdings	350
Weighted Average Market Cap ($ x 1,000,000)	$1,275
Price/Earnings Ratio (P/E)	28.2
Price/Book Ratio (P/B)	1.8
Portfolio Turnover Rate5	53%

 Sector Weightings % of Investments

Financials	19.3%
Information Technology	16.2%
Consumer Discretionary	16.2%
Industrials	14.2%
Health Care	10.0%
Energy	9.5%
Materials	5.6%
Utilities	3.1%
Consumer Staples	2.7%
Telecommunication Services	1.0%
Other	2.2%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Helix Energy Solutions Group, Inc.	1.0%
Energy XXI (Bermuda) Ltd.	1.0%
LaSalle Hotel Properties	0.9%
CBL & Associates Properties, Inc.	0.9%
Brunswick Corp.	0.9%
Ascena Retail Group, Inc.	0.9%
Portland General Electric Co.	0.8%
Unisys Corp.	0.8%
Par Pharmaceutical Cos., Inc.	0.8%
PAREXEL International Corp.	0.8%
Total	8.8%

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

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	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. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

10 Schwab Active Equity Funds

Schwab Hedged Equity Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Hedged Equity Fundtm (9/3/02)		5.35	%		-1.34	%		-0.11	%		6.00	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		6.58	%
Fund Category: Morningstar Long-Short		3.14	%		-2.89	%		-0.30	%		5.71	%

Fund Expense Ratios⁴: Net 1.87%; Gross 1.89%

 Statistics

Number of Holdings
Long Holdings	118
Short Holdings	91
Weighted Average Market Cap ($ x 1,000,000)
Long Holdings	$47,722
Short Holdings	$4,968
Price/Earnings Ratio (P/E)
Long Holdings	14.5
Short Holdings	1,273.9
Price/Book Ratio (P/B)
Long Holdings	1.7
Short Holdings	2.5
Portfolio Turnover Rate5	61%
Portfolio Turnover Rate excluding short sales5	29%

 Top Equity Long Holdings

 % of Net Assets⁶

Apple, Inc.	2.6%
Exxon Mobil Corp.	2.5%
Pfizer, Inc.	1.8%
Chevron Corp.	1.6%
JPMorgan Chase & Co.	1.6%
Total	10.1%

 Top Equity Short Holdings

 % of Net Assets⁶

PulteGroup, Inc.	0.6%
Universal Display Corp.	0.6%
USG Corp.	0.5%
Louisiana-Pacific Corp.	0.5%
ServiceSource International, Inc.	0.5%
Total	2.7%

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

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. 

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. Includes acquired fund fees and expenses incurred indirectly by the fund through its investments in other investment companies. The annualized weighted average expense ratio of these investment companies was 0.01%. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

Schwab Active Equity Funds 11

Schwab Financial Services Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Financial Services Fundtm (7/3/00)		14.61	%		-3.49	%		-7.82	%		1.95	%
S&P 1500 SuperComposite Financials Sector Index		15.53	%		-3.12	%		-12.70	%		-2.09	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Financial Services		13.03	%		-6.02	%		-7.56	%		0.33	%

Fund Expense Ratios³: Net 0.94%; Gross 1.06%

 Statistics

Number of Holdings	76
Weighted Average Market Cap ($ x 1,000,000)	$43,041
Price/Earnings Ratio (P/E)	14.5
Price/Book Ratio (P/B)	1.0
Portfolio Turnover Rate4	46%

 Industry Weightings % of Investments

Diversified Financials	33.0%
Insurance	25.2%
Banks	23.8%
Real Estate	14.4%
Other	3.6%
Total	100.0%

 Top Equity Holdings % of Net Assets⁵

JPMorgan Chase & Co.	7.1%
Wells Fargo & Co.	6.9%
American Express Co.	3.8%
MetLife, Inc.	3.4%
Citigroup, Inc.	3.2%
Capital One Financial Corp.	3.1%
The Travelers Cos., Inc.	2.8%
Bank of America Corp.	2.8%
State Street Corp.	2.7%
Aflac, Inc.	2.6%
Total	38.4%

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

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.

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	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.
4	Not annualized.
5	This list is not a recommendation of any security by the investment adviser.

12 Schwab Active Equity Funds

Schwab Health Care Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Health Care Fundtm (7/3/00)		12.34	%		6.67	%		4.00	%		9.24	%
Dow Jones Global Health Care Index		11.09	%		5.48	%		2.86	%		5.42	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Health Care		15.75	%		6.21	%		4.98	%		6.63	%

Fund Expense Ratios³: Net 0.82%; Gross 0.85%

 Statistics

Number of Holdings	94
Weighted Average Market Cap ($ x 1,000,000)	$46,790
Price/Earnings Ratio (P/E)	17.6
Price/Book Ratio (P/B)	2.4
Portfolio Turnover Rate4	28%

 Industry Weightings % of Investments

Pharmaceuticals, Biotechnology & Life Sciences	69.6%
Healthcare – Services	25.6%
Other	4.8%
Total	100.0%

 Top Equity Holdings % of Net Assets⁵

Pfizer, Inc.	4.6%
Bristol-Myers Squibb Co.	4.6%
Merck & Co., Inc.	4.5%
Amgen, Inc.	4.2%
UnitedHealth Group, Inc.	3.2%
Biogen Idec, Inc.	3.1%
Eli Lilly & Co.	3.1%
Roche Holding AG	2.9%
Celgene Corp.	2.9%
Sanofi	2.8%
Total	35.9%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

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.

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	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.
4	Not annualized.
5	This list is not a recommendation of any security by the investment adviser.

Schwab Active Equity Funds 13

Schwab^® International Core Equity Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab® International Core Equity Fund (5/30/08)		6.81	%		-8.99	%		14.14	%		-4.56	%
MSCI EAFE Index®*		2.71	%		-12.38	%		12.30	%		-5.22	%
Fund Category: Morningstar Foreign Large-Cap Blend		4.83	%		-12.59	%		12.56	%		-5.62	%

Fund Expense Ratios⁴: Net 0.87%; Gross 1.23%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

*	The MSCI 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. Includes acquired fund fees and expenses incurred indirectly by the fund through its investments in other investment companies. The annualized weighted average expense ratio of these investment companies was 0.01%. 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.

14 Schwab Active Equity Funds

 Schwab^® International Core Equity Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	175
Weighted Average Market Cap ($ x 1,000,000)	$36,803
Price/Earnings Ratio (P/E)	12.8
Price/Book Ratio (P/B)	1.4
Portfolio Turnover Rate1	53%

 Sector Weightings % of Investments

Financials	20.4%
Industrials	14.8%
Health Care	13.1%
Consumer Discretionary	10.9%
Energy	9.4%
Consumer Staples	8.4%
Information Technology	8.0%
Materials	7.9%
Telecommunication Services	3.4%
Utilities	1.3%
Other	2.4%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Roche Holding AG	1.8%
Novartis AG – Reg’d	1.7%
GlaxoSmithKline plc	1.6%
Sanofi	1.6%
Nestle S.A. – Reg’d	1.5%
Total S.A.	1.5%
Vodafone Group plc	1.4%
Novo Nordisk A/S, Class B	1.3%
Bayer AG – Reg’d	1.3%
Royal Dutch Shell plc, B Shares	1.2%
Total	14.9%

 Country Weightings % of Equity Investments

United Kingdom	22.1%
Japan	20.4%
Australia	7.7%
Switzerland	7.6%
Germany	7.4%
France	7.2%
Netherlands	3.6%
Hong Kong	3.3%
Other Countries	20.7%
Total	100.0%

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.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Active Equity 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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12			11/1/11–4/30/12
Schwab Premier Equity Fund®
Actual Return		1.02%	$	1,000	$	1,105.60		$	5.34
Hypothetical 5% Return		1.02%	$	1,000	$	1,019.79	��	$	5.12
Schwab Core Equity Fundtm
Actual Return		0.73%	$	1,000	$	1,122.40		$	3.85
Hypothetical 5% Return		0.73%	$	1,000	$	1,021.23		$	3.67
Schwab Dividend Equity Fundtm
Actual Return		0.89%	$	1,000	$	1,107.10		$	4.66
Hypothetical 5% Return		0.89%	$	1,000	$	1,020.44		$	4.47
Schwab Large-Cap Growth Fundtm
Actual Return		0.99%	$	1,000	$	1,144.30		$	5.28
Hypothetical 5% Return		0.99%	$	1,000	$	1,019.94		$	4.97
Schwab Small-Cap Equity Fundtm
Actual Return		1.11%	$	1,000	$	1,103.00		$	5.80
Hypothetical 5% Return		1.11%	$	1,000	$	1,019.34		$	5.57
Schwab Hedged Equity Fundtm
Actual Return		1.99%	$	1,000	$	1,053.50		$	10.16
Hypothetical 5% Return		1.99%	$	1,000	$	1,014.97		$	9.97
Schwab Financial Services Fundtm
Actual Return		0.94%	$	1,000	$	1,146.10		$	5.02
Hypothetical 5% Return		0.94%	$	1,000	$	1,020.19		$	4.72
Schwab Health Care Fundtm
Actual Return		0.82%	$	1,000	$	1,123.40		$	4.33
Hypothetical 5% Return		0.82%	$	1,000	$	1,020.79		$	4.12
Schwab® International Core Equity Fund
Actual Return		0.86%	$	1,000	$	1,068.10		$	4.42
Hypothetical 5% Return		0.86%	$	1,000	$	1,020.59		$	4.32

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

16 Schwab Active Equity Funds

Schwab Premier Equity Fund^®

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/081–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		10.27			9.67			8.46			8.05			14.01			12.51
Income (loss) from investment operations:
Net investment income (loss)		0.03			0.07			0.04			0.04			0.06			0.04
Net realized and unrealized gains (losses)		1.05			0.58			1.22			0.43			(5.11	)		1.48
Total from investment operations		1.08			0.65			1.26			0.47			(5.05	)		1.52
Less distributions:
Distributions from net investment income		(0.06	)		(0.05	)		(0.05	)		(0.06	)		(0.05	)		(0.02	)
Distributions from net realized gains		—			—			—			—			(0.86	)		—
Total distributions		(0.06	)		(0.05	)		(0.05	)		(0.06	)		(0.91	)		(0.02	)
Net asset value at end of period		11.29			10.27			9.67			8.46			8.05			14.01
Total return (%)		10.56	2		6.74			14.96			6.01			(38.32	)		12.20
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.02	3		1.01	4		1.02			1.04	5		1.02			1.01
Gross operating expenses		1.05	3		1.04			1.04			1.04			1.02			1.01
Net investment income (loss)		0.56	3		0.65			0.34			0.54			0.50			0.32
Portfolio turnover rate		66	2		77			80			98			92			72
Net assets, end of period ($ x 1,000,000)		228			235			292			365			441			983

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ The ratio of net operating expenses would have been 1.02%, if payment for state filing fees had not been included.

⁵ 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 17

 Schwab Premier Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.5%	Common Stock		205,100,535		217,482,130
	3	.9%	Other Investment Company		8,847,796		8,847,796
	0	.3%	Short-Term Investment		599,941		599,941
	99	.7%	Total Investments		214,548,272		226,929,867
	0	.3%	Other Assets and Liabilities, Net				765,631
	100	.0%	Total Net Assets				227,695,498

	Number		Value
Security	of Shares		($)
Common Stock 95.5% of net assets
Automobiles & Components 1.6%
Ford Motor Co.		200,000		2,256,000
TRW Automotive Holdings Corp. *		31,000		1,417,010
				3,673,010
Banks 3.2%
Fifth Third Bancorp		165,000		2,347,950
Huntington Bancshares, Inc.		349,000		2,334,810
Wells Fargo & Co.		79,000		2,640,970
				7,323,730
Capital Goods 5.4%
AGCO Corp. *		43,000		2,002,510
Dover Corp.		24,000		1,503,840
General Electric Co.		133,000		2,604,140
Roper Industries, Inc.		23,000		2,343,700
Valmont Industries, Inc.		13,000		1,611,090
Wabtec Corp.		29,000		2,255,620
				12,320,900
Commercial & Professional Supplies 1.0%
Equifax, Inc.		49,000		2,245,180
Consumer Services 0.9%
H&R Block, Inc.		136,000		1,999,200
Diversified Financials 4.9%
Affiliated Managers Group, Inc. *		14,000		1,590,680
Interactive Brokers Group, Inc., Class A		160,000		2,427,200
JPMorgan Chase & Co.		60,000		2,578,800
SLM Corp.		151,000		2,239,330
State Street Corp.		49,000		2,264,780
				11,100,790
Energy 8.8%
Apache Corp.		25,000		2,398,500
Chevron Corp.		24,000		2,557,440
EOG Resources, Inc.		20,000		2,196,200
Exxon Mobil Corp.		25,000		2,158,500
Marathon Oil Corp.		52,000		1,525,680
Murphy Oil Corp.		42,000		2,308,740
Nabors Industries Ltd. *		85,000		1,415,250
Occidental Petroleum Corp.		24,000		2,189,280
Oceaneering International, Inc.		30,000		1,548,900
Tesoro Corp. *		70,000		1,627,500
				19,925,990
Food & Staples Retailing 5.8%
Costco Wholesale Corp.		27,000		2,380,590
CVS Caremark Corp.		59,000		2,632,580
Harris Teeter Supermarkets, Inc.		40,000		1,518,800
Safeway, Inc.		100,000		2,033,000
The Kroger Co.		110,000		2,559,700
Wal-Mart Stores, Inc.		37,000		2,179,670
				13,304,340
Food, Beverage & Tobacco 5.9%
Archer-Daniels-Midland Co.		49,000		1,510,670
Bunge Ltd.		33,000		2,128,500
Coca-Cola Enterprises, Inc.		81,000		2,439,720
ConAgra Foods, Inc.		86,000		2,220,520
Constellation Brands, Inc., Class A *		123,000		2,656,800
Corn Products International, Inc.		43,000		2,453,580
				13,409,790
Health Care Equipment & Services 4.0%
Centene Corp. *		25,000		989,750
Covidien plc		23,000		1,270,290
Henry Schein, Inc. *		29,000		2,225,460
Hologic, Inc. *		104,000		1,988,480
McKesson Corp.		30,000		2,742,300
				9,216,280
Household & Personal Products 0.9%
Nu Skin Enterprises, Inc., Class A		38,000		2,025,400
Insurance 3.7%
Aflac, Inc.		48,000		2,161,920
MetLife, Inc.		55,000		1,981,650
Principal Financial Group, Inc.		76,000		2,102,920
Reinsurance Group of America, Inc.		38,000		2,209,320
				8,455,810
Materials 3.2%
International Paper Co.		75,000		2,498,250

18 See financial notes

 Schwab Premier Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Minerals Technologies, Inc.		35,000		2,348,500
PPG Industries, Inc.		24,000		2,525,760
				7,372,510
Media 4.7%
Comcast Corp., Class A		76,000		2,305,080
Liberty Global, Inc., Series A *		34,000		1,693,540
News Corp., Class A		110,000		2,156,000
Omnicom Group, Inc.		45,000		2,308,950
Time Warner, Inc.		62,000		2,322,520
				10,786,090
Pharmaceuticals, Biotechnology & Life Sciences 8.7%
Agilent Technologies, Inc.		54,000		2,277,720
Biogen Idec, Inc. *		19,000		2,546,190
Life Technologies Corp. *		48,000		2,225,280
Merck & Co., Inc.		69,000		2,707,560
Par Pharmaceutical Cos., Inc. *		50,000		2,117,000
Pfizer, Inc.		124,000		2,843,320
Thermo Fisher Scientific, Inc.		40,000		2,226,000
Warner Chilcott plc, Class A *		130,000		2,827,500
				19,770,570
Real Estate 1.0%
Host Hotels & Resorts, Inc.		140,000		2,329,600
Retailing 3.2%
Ascena Retail Group, Inc. *		104,000		2,129,920
Foot Locker, Inc.		75,000		2,294,250
Macy’s, Inc.		69,000		2,830,380
				7,254,550
Semiconductors & Semiconductor Equipment 0.6%
Fairchild Semiconductor International, Inc. *		92,000		1,303,640
Software & Services 7.4%
Alliance Data Systems Corp. *		18,000		2,312,820
BMC Software, Inc. *		41,000		1,691,660
CA, Inc.		82,000		2,166,440
Computer Sciences Corp.		59,000		1,655,540
IAC/InterActiveCorp		35,000		1,685,250
Symantec Corp. *		145,000		2,395,400
Synopsys, Inc. *		85,000		2,550,850
Total System Services, Inc.		98,000		2,304,960
				16,762,920
Technology Hardware & Equipment 11.2%
Avnet, Inc. *		63,000		2,273,040
AVX Corp.		140,000		1,778,000
Brocade Communications Systems, Inc. *		445,000		2,465,300
Cisco Systems, Inc.		112,000		2,256,800
Dell, Inc. *		155,000		2,537,350
Diebold, Inc.		58,000		2,288,100
Motorola Solutions, Inc.		44,000		2,245,320
NCR Corp. *		120,000		2,820,000
Tech Data Corp. *		50,000		2,689,500
Western Digital Corp. *		64,000		2,483,840
Xerox Corp.		226,000		1,758,280
				25,595,530
Telecommunication Services 1.5%
Crown Castle International Corp. *		40,000		2,264,400
MetroPCS Communications, Inc. *		155,000		1,131,500
				3,395,900
Transportation 2.3%
Delta Air Lines, Inc. *		250,000		2,740,000
FedEx Corp.		28,000		2,470,720
				5,210,720
Utilities 5.6%
Allete, Inc.		38,000		1,565,980
Ameren Corp.		79,000		2,590,410
CMS Energy Corp.		104,000		2,390,960
DTE Energy Co.		30,000		1,691,400
Edison International		53,000		2,332,530
The AES Corp. *		170,000		2,128,400
				12,699,680
Total Common Stock
(Cost $205,100,535)				217,482,130
Other Investment Company 3.9% of net assets
Money Market Fund 3.9%
State Street Institutional U.S. Government Money Market Fund		8,847,796		8,847,796
Total Other Investment Company
(Cost $8,847,796)				8,847,796
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.3% of net assets
U.S. Treasury Obligation 0.3%
U.S. Treasury Bill
0.08%, 06/14/12 (a)(b)		600,000		599,941
Total Short-Term Investment
(Cost $599,941)				599,941
End of Investments.

See financial notes 19

 Schwab Premier Equity Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12, the tax basis cost of the fund’s investments was $215,129,830 and the unrealized appreciation and depreciation were $18,952,681 and ($7,152,644), respectively, with a net unrealized appreciation of $11,800,037.

*	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.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		130		9,058,400		220,648

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$217,482,130		$—		$—		$217,482,130
Other Investment Company(a)		8,847,796		—		—		8,847,796
Short-Term Investment(a)		—		599,941		—		599,941
Total		$226,329,926		$599,941		$—		$226,929,867
Other Financial Instruments
Futures Contract*		$220,648		$—		$—		$220,648

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

20 See financial notes

 Schwab Premier Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $214,548,272)		$226,929,867
Receivables:
Investments sold		3,298,747
Dividends		90,423
Fund shares sold		5,350
Interest		84
Income from securities on loan		5
Prepaid expenses	+	5,108
Total assets		230,329,584
Liabilities
Payables:
Investments bought		2,153,763
Investment adviser and administrator fees		13,314
Shareholder service fees		5,425
Fund shares redeemed		391,152
Due to brokers for futures		31,850
Accrued expenses	+	38,582
Total liabilities		2,634,086
Net Assets
Total assets		230,329,584
Total liabilities	−	2,634,086
Net assets		$227,695,498
Net Assets by Source
Capital received from investors		337,985,136
Net investment income not yet distributed		278,945
Net realized capital losses		(123,170,826	)
Net unrealized capital gains		12,602,243
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$227,695,498		20,164,367			$11.29

See financial notes 21

 Schwab Premier Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$1,832,880
Interest		1,746
Securities on loan	+	919
Total investment income		1,835,545
Expenses
Investment adviser and administrator fees		846,735
Shareholder service fees		285,396
Professional fees		20,152
Portfolio accounting fees		19,738
Transfer agent fees		12,087
Registration fees		10,709
Shareholder reports		10,120
Custodian fees		4,814
Trustees’ fees		3,641
Interest expense		5
Other expenses	+	3,711
Total expenses		1,217,108
Expense reduction by CSIM and its affiliates	−	33,994
Net expenses	−	1,183,114
Net investment income		652,431
Realized and Unrealized Gains (Losses)
Net realized gains on investments		22,278,873
Net realized gains on futures contracts	+	1,079,595
Net realized gains		23,358,468
Net unrealized losses on investments		(119,854	)
Net unrealized losses on futures contracts	+	(312,935	)
Net unrealized losses	+	(432,789	)
Net realized and unrealized gains		22,925,679
Increase in net assets resulting from operations		$23,578,110

22 See financial notes

 Schwab Premier Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$652,431			$1,796,579
Net realized gains		23,358,468			44,531,752
Net unrealized losses	+	(432,789	)		(24,825,480	)
Increase in net assets from operations		23,578,110			21,502,851
Distributions to Shareholders
Distributions from net investment income		($1,292,587	)		($1,518,547	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			256,906		$2,812,689			531,893		$5,739,431
Shares reinvested			108,085		1,111,114			122,796		1,291,812
Shares redeemed	+		(3,110,957	)	(33,729,361	)		(7,918,946	)	(83,668,298	)
Net transactions in fund shares			(2,745,966	)	($29,805,558	)		(7,264,257	)	($76,637,055	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			22,910,333		$235,215,533			30,174,590		$291,868,284
Total decrease	+		(2,745,966	)	(7,520,035	)		(7,264,257	)	(56,652,751	)
End of period			20,164,367		$227,695,498			22,910,333		$235,215,533
Net investment income not yet distributed					$278,945					$919,101

See financial notes 23

Schwab Core Equity Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		16.81			15.78			14.26			13.43			20.49			18.40
Income (loss) from investment operations:
Net investment income (loss)		0.12			0.19			0.17			0.17			0.23			0.16
Net realized and unrealized gains (losses)		1.92			1.01			1.50			0.88			(7.06	)		2.35
Total from investment operations		2.04			1.20			1.67			1.05			(6.83	)		2.51
Less distributions:
Distributions from net investment income		(0.17	)		(0.17	)		(0.15	)		(0.22	)		(0.18	)		(0.10	)
Distributions from net realized gains		—			—			—			—			(0.05	)		(0.32	)
Total distributions		(0.17	)		(0.17	)		(0.15	)		(0.22	)		(0.23	)		(0.42	)
Net asset value at end of period		18.68			16.81			15.78			14.26			13.43			20.49
Total return (%)		12.24	1		7.60			11.77			8.11			(33.71	)		13.88
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.73	2		0.73			0.73			0.75			0.75			0.75
Gross operating expenses		0.73	2		0.73			0.74			0.78			0.78			0.78
Net investment income (loss)		1.37	2		1.06			1.05			1.39			1.28			0.91
Portfolio turnover rate		22	1		35			49			41	3		35			18
Net assets, end of period ($ x 1,000,000)		1,740			1,719			1,792			1,770			1,449			2,133

* Unaudited.

¹ Not annualized.

² Annualized.

³ Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.

24 See financial notes

 Schwab Core Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		1,448,619,046		1,724,000,727
	0	.8%	Other Investment Company		14,448,419		14,448,419
	0	.0%	Short-Term Investment		579,972		579,972
	99	.9%	Total Investments		1,463,647,437		1,739,029,118
	0	.1%	Other Assets and Liabilities, Net				1,176,958
	100	.0%	Total Net Assets				1,740,206,076

	Number		Value
Security	of Shares		($)
Common Stock 99.1% of net assets
Automobiles & Components 0.4%
Ford Motor Co.		550,000		6,204,000
Banks 4.8%
Fifth Third Bancorp		30,327		431,553
KeyCorp		900,000		7,236,000
PNC Financial Services Group, Inc.		300,000		19,896,000
Wells Fargo & Co.		1,700,000		56,831,000
				84,394,553
Capital Goods 7.2%
AGCO Corp. *		118,000		5,495,260
Caterpillar, Inc.		175,000		17,984,750
General Dynamics Corp.		95,000		6,412,500
General Electric Co.		2,075,000		40,628,500
PACCAR, Inc.		100,000		4,296,000
Parker Hannifin Corp.		71,000		6,225,990
Roper Industries, Inc.		20,500		2,088,950
Textron, Inc.		470,000		12,520,800
The Boeing Co.		269,500		20,697,600
The Timken Co.		110,000		6,216,100
URS Corp.		52,500		2,168,775
				124,735,225
Commercial & Professional Supplies 0.5%
Towers Watson & Co., Class A		131,500		8,600,100
Consumer Durables & Apparel 0.5%
Jarden Corp.		103,500		4,339,755
Mohawk Industries, Inc. *		52,000		3,485,040
Newell Rubbermaid, Inc.		68,000		1,237,600
				9,062,395
Consumer Services 1.4%
Hyatt Hotels Corp., Class A *		144,500		6,217,835
Yum! Brands, Inc.		253,000		18,400,690
				24,618,525
Diversified Financials 6.9%
American Express Co.		260,500		15,684,705
Capital One Financial Corp.		145,500		8,072,340
Discover Financial Services		402,050		13,629,495
JPMorgan Chase & Co.		1,297,140		55,751,077
Lazard Ltd., Class A		155,000		4,264,050
Raymond James Financial, Inc.		90,000		3,295,800
SLM Corp.		1,260,000		18,685,800
				119,383,267
Energy 12.1%
Anadarko Petroleum Corp.		109,000		7,979,890
Apache Corp.		50,000		4,797,000
Chevron Corp.		510,000		54,345,600
EOG Resources, Inc.		38,000		4,172,780
Exxon Mobil Corp.		649,500		56,077,830
Halliburton Co.		125,000		4,277,500
Hess Corp.		50,000		2,607,000
Murphy Oil Corp.		351,365		19,314,534
Nabors Industries Ltd. *		95,000		1,581,750
National Oilwell Varco, Inc.		148,950		11,284,452
Occidental Petroleum Corp.		332,690		30,347,982
Valero Energy Corp.		550,000		13,585,000
				210,371,318
Food & Staples Retailing 4.0%
Costco Wholesale Corp.		200,000		17,634,000
CVS Caremark Corp.		115,000		5,131,300
The Kroger Co.		1,430,900		33,297,043
Wal-Mart Stores, Inc.		56,800		3,346,088
Whole Foods Market, Inc.		121,400		10,084,698
				69,493,129
Food, Beverage & Tobacco 6.7%
Bunge Ltd.		135,400		8,733,300
ConAgra Foods, Inc.		190,000		4,905,800
Constellation Brands, Inc., Class A *		210,000		4,536,000
Corn Products International, Inc.		185,000		10,556,100
Philip Morris International, Inc.		622,100		55,684,171
Smithfield Foods, Inc. *		357,000		7,482,720
Tyson Foods, Inc., Class A		1,400,000		25,550,000
				117,448,091
Health Care Equipment & Services 2.0%
AmerisourceBergen Corp.		150,000		5,581,500
DaVita, Inc. *		85,000		7,529,300
Henry Schein, Inc. *		49,000		3,760,260

See financial notes 25

 Schwab Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Hologic, Inc. *		125,000		2,390,000
McKesson Corp.		57,150		5,224,081
UnitedHealth Group, Inc.		175,000		9,826,250
				34,311,391
Household & Personal Products 0.4%
Energizer Holdings, Inc. *		106,800		7,618,044
Insurance 1.1%
Aflac, Inc.		145,500		6,553,320
American Financial Group, Inc.		79,290		3,085,967
Arch Capital Group Ltd. *		52,000		2,042,560
Reinsurance Group of America, Inc.		38,500		2,238,390
The Travelers Cos., Inc.		77,300		4,971,936
				18,892,173
Materials 3.7%
Alcoa, Inc.		348,600		3,391,878
International Paper Co.		867,000		28,879,770
MeadWestvaco Corp.		115,000		3,659,300
PPG Industries, Inc.		267,200		28,120,128
				64,051,076
Media 1.9%
CBS Corp., Class B - Non Voting Shares		68,800		2,294,480
Comcast Corp., Class A		384,000		11,646,720
Discovery Communications, Inc., Class A *		123,500		6,720,870
Liberty Global, Inc., Series A *		250,000		12,452,500
				33,114,570
Pharmaceuticals, Biotechnology & Life Sciences 10.4%
Agilent Technologies, Inc.		190,000		8,014,200
Amgen, Inc.		178,052		12,661,278
Biogen Idec, Inc. *		86,000		11,524,860
Bristol-Myers Squibb Co.		1,190,700		39,733,659
Celgene Corp. *		21,000		1,531,320
Life Technologies Corp. *		297,137		13,775,271
Merck & Co., Inc.		522,580		20,506,039
Mylan, Inc. *		100,000		2,171,000
Pfizer, Inc.		1,549,000		35,518,570
Thermo Fisher Scientific, Inc.		239,000		13,300,350
Watson Pharmaceuticals, Inc. *		286,000		21,552,960
				180,289,507
Real Estate 1.8%
CBRE Group, Inc., Class A *		300,000		5,643,000
Host Hotels & Resorts, Inc.		1,272,000		21,166,080
Jones Lang LaSalle, Inc.		55,200		4,412,688
				31,221,768
Retailing 5.2%
Dollar Tree, Inc. *		55,200		5,611,632
Foot Locker, Inc.		200,000		6,118,000
Macy’s, Inc.		531,500		21,802,130
O’Reilly Automotive, Inc. *		100,000		10,546,000
PetSmart, Inc.		390,000		22,721,400
The Gap, Inc.		137,000		3,904,500
The Home Depot, Inc.		100,000		5,179,000
The TJX Cos., Inc.		330,000		13,764,300
				89,646,962
Semiconductors & Semiconductor Equipment 1.4%
Applied Materials, Inc.		1,000,000		11,990,000
Intel Corp.		229,685		6,523,054
Micron Technology, Inc. *		900,000		5,931,000
				24,444,054
Software & Services 9.9%
Activision Blizzard, Inc.		688,400		8,859,708
Alliance Data Systems Corp. *		78,000		10,022,220
BMC Software, Inc. *		369,140		15,230,716
CA, Inc.		780,000		20,607,600
Computer Sciences Corp.		400,000		11,224,000
International Business Machines Corp.		162,100		33,567,668
Microsoft Corp.		450,000		14,409,000
Oracle Corp.		669,800		19,685,422
Rackspace Hosting, Inc. *		65,000		3,775,850
Symantec Corp. *		1,625,000		26,845,000
Synopsys, Inc. *		160,342		4,811,864
Visa, Inc., Class A		32,000		3,935,360
				172,974,408
Technology Hardware & Equipment 9.2%
Apple, Inc. *		123,000		71,861,520
Cisco Systems, Inc.		509,000		10,256,350
Dell, Inc. *		1,000,000		16,370,000
EMC Corp. *		457,400		12,903,254
Hewlett-Packard Co.		530,100		13,125,276
Western Digital Corp. *		700,000		27,167,000
Xerox Corp.		1,169,533		9,098,967
				160,782,367
Telecommunication Services 3.4%
AT&T, Inc.		150,100		4,939,791
Crown Castle International Corp. *		190,500		10,784,205
SBA Communications Corp., Class A *		32,000		1,719,680
Sprint Nextel Corp. *		1,300,000		3,224,000
Telephone & Data Systems, Inc.		222,171		5,396,534
Verizon Communications, Inc.		823,400		33,248,892
				59,313,102
Transportation 1.4%
FedEx Corp.		165,000		14,559,600
Hertz Global Holdings, Inc. *		180,000		2,773,800
Ryder System, Inc.		100,000		4,872,000
United Parcel Service, Inc., Class B		35,000		2,734,900
				24,940,300

26 See financial notes

 Schwab Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Utilities 2.8%
Ameren Corp.		331,000		10,853,490
American Water Works Co., Inc.		23,000		787,520
Calpine Corp. *		245,000		4,593,750
CMS Energy Corp.		200,000		4,598,000
DTE Energy Co.		123,900		6,985,482
Pinnacle West Capital Corp.		100,000		4,835,000
The AES Corp. *		1,233,000		15,437,160
				48,090,402
Total Common Stock
(Cost $1,448,619,046)				1,724,000,727
Other Investment Company 0.8% of net assets
Money Market Fund 0.8%
State Street Institutional U.S. Government Money Market Fund		14,448,419		14,448,419
Total Other Investment Company
(Cost $14,448,419)				14,448,419
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.0% of net assets
U.S. Treasury Obligation 0.0%
U.S. Treasury Bill (a)(b)
0.04%, 06/14/12		580,000		579,972
Total Short-Term Investment
(Cost $579,972)				579,972
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $1,466,930,487 and the unrealized appreciation and depreciation were $309,899,195 and ($37,800,564), respectively, with a net unrealized appreciation of $272,098,631.

*	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.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Losses
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		150		10,452,000		(113,888	)

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$1,724,000,727			$—		$—		$1,724,000,727
Other Investment Company(a)		14,448,419			—		—		14,448,419
Short-Term Investment(a)		—			579,972		—		579,972
Total		$1,738,449,146			$579,972		$—		$1,739,029,118
Liabilities Valuation Input
Other Financial Instruments
Futures Contract*		($113,888	)		$—		$—		($113,888	)

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 27

 Schwab Core Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $1,463,647,437)		$1,739,029,118
Receivables:
Dividends		2,046,103
Fund shares sold		733,035
Interest		147
Prepaid expenses	+	30,659
Total assets		1,741,839,062
Liabilities
Payables:
Investment adviser and administrator fees		67,673
Shareholder service fees		57,959
Fund shares redeemed		1,351,910
Due to brokers for futures		36,750
Accrued expenses	+	118,694
Total liabilities		1,632,986
Net Assets
Total assets		1,741,839,062
Total liabilities	−	1,632,986
Net assets		$1,740,206,076
Net Assets by Source
Capital received from investors		1,576,250,133
Net investment income not yet distributed		6,968,875
Net realized capital losses		(118,283,449	)
Net unrealized capital gains		275,270,517
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$1,740,206,076		93,180,049			$18.68

28 See financial notes

 Schwab Core Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$17,789,140
Interest		3,110
Securities on loan	+	150
Total investment income		17,792,400
Expenses
Investment adviser and administrator fees		3,992,626
Shareholder service fees		2,011,978
Transfer agent fees		43,980
Shareholder reports		39,429
Portfolio accounting fees		34,836
Professional fees		22,357
Registration fees		17,906
Custodian fees		16,856
Trustees’ fees		8,830
Interest expense		140
Other expenses	+	23,787
Total expenses		6,212,725
Expense reduction by CSIM and its affiliates	−	43,980
Custody credits	−	8
Net expenses	−	6,168,737
Net investment income		11,623,663
Realized and Unrealized Gains (Losses)
Net realized gains on investments		92,037,199
Net realized gains on futures contracts	+	1,532,965
Net realized gains		93,570,164
Net unrealized gains on investments		91,639,631
Net unrealized losses on futures contracts	+	(1,132,546	)
Net unrealized gains	+	90,507,085
Net realized and unrealized gains		184,077,249
Increase in net assets resulting from operations		$195,700,912

See financial notes 29

 Schwab Core Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$11,623,663			$19,259,987
Net realized gains		93,570,164			112,592,315
Net unrealized gains	+	90,507,085			7,883,076
Increase in net assets from operations		195,700,912			139,735,378
Distributions to Shareholders
Distributions from net investment income		($16,915,653	)		($18,535,012	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			3,641,717		$65,242,101			12,323,341		$209,712,682
Shares reinvested			457,501		7,672,291			518,572		8,706,829
Shares redeemed	+		(13,168,909	)	(230,514,978	)		(24,183,912	)	(413,021,730	)
Net transactions in fund shares			(9,069,691	)	($157,600,586	)		(11,341,999	)	($194,602,219	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			102,249,740		$1,719,021,403			113,591,739		$1,792,423,256
Total increase or decrease	+		(9,069,691	)	21,184,673			(11,341,999	)	(73,401,853	)
End of period			93,180,049		$1,740,206,076			102,249,740		$1,719,021,403
Net investment income not yet distributed					$6,968,875					$12,260,865

30 See financial notes

Schwab Dividend Equity Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		13.15			12.08			10.94			10.63			15.66			14.60
Income (loss) from investment operations:
Net investment income (loss)		0.13			0.23			0.21			0.25			0.32			0.28
Net realized and unrealized gains (losses)		1.27			1.06			1.14			0.31			(4.97	)		1.37
Total from investment operations		1.40			1.29			1.35			0.56			(4.65	)		1.65
Less distributions:
Distributions from net investment income		(0.14	)		(0.22	)		(0.21	)		(0.25	)		(0.33	)		(0.28	)
Distributions from net realized gains		—			—			—			—			(0.05	)		(0.31	)
Total distributions		(0.14	)		(0.22	)		(0.21	)		(0.25	)		(0.38	)		(0.59	)
Net asset value at end of period		14.41			13.15			12.08			10.94			10.63			15.66
Total return (%)		10.71	2		10.73			12.42			5.62			(30.23	)		11.55
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.89	3		0.89			0.89			0.90	4		0.89			0.89
Gross operating expenses		0.89	3		0.89			0.89			0.91			0.89			0.89
Net investment income (loss)		1.89	3		1.77			1.74			2.40			2.33			1.83
Portfolio turnover rate		30	2		31			37			39			22			18
Net assets, end of period ($ x 1,000,000)		1,477			1,325			1,322			1,297			824			1,340

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ 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 31

 Schwab Dividend Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		1,195,836,113		1,444,885,995
	2	.0%	Short-Term Investments		28,667,256		28,667,256
	99	.8%	Total Investments		1,224,503,369		1,473,553,251
	0	.2%	Other Assets and Liabilities, Net				3,323,871
	100	.0%	Total Net Assets				1,476,877,122

		Number		Value
Security		of Shares		($)
Common Stock 97.8% of net assets
Banks 3.6%
Commerce Bancshares, Inc.			178,237		7,147,304
Fifth Third Bancorp			225,000		3,201,750
KeyCorp			290,000		2,331,600
People’s United Financial, Inc.			336,000		4,146,240
PNC Financial Services Group, Inc.			84,800		5,623,936
Regions Financial Corp.			1,241,000		8,364,340
Wells Fargo & Co.			650,000		21,729,500
					52,544,670
Capital Goods 7.4%
Caterpillar, Inc.			100,000		10,277,000
General Dynamics Corp.			75,000		5,062,500
General Electric Co.			1,639,500		32,101,410
KBR, Inc.			80,000		2,708,800
L-3 Communications Holdings, Inc.			37,000		2,720,980
Masco Corp.			75,000		988,500
Northrop Grumman Corp.			30,400		1,923,712
PACCAR, Inc.			8,500		365,160
Roper Industries, Inc.			61,000		6,215,900
The Boeing Co.			325,000		24,960,000
The Timken Co.			125,000		7,063,750
United Technologies Corp.			192,200		15,691,208
					110,078,920
Commercial & Professional Supplies 0.0%
Towers Watson & Co., Class A			10,000		654,000
Consumer Durables & Apparel 0.6%
Newell Rubbermaid, Inc.			259,000		4,713,800
Whirlpool Corp.			73,700		4,718,274
					9,432,074
Consumer Services 1.9%
H&R Block, Inc.			830,000		12,201,000
Yum! Brands, Inc.			216,000		15,709,680
					27,910,680
Diversified Financials 6.2%
American Express Co.			310,700		18,707,247
Capital One Financial Corp.			8,000		443,840
JPMorgan Chase & Co.			1,046,984		44,999,372
Morgan Stanley			322,500		5,572,800
Northern Trust Corp.			18,000		856,620
Raymond James Financial, Inc.			15,500		567,610
SLM Corp.			1,225,600		18,175,648
State Street Corp.			45,000		2,079,900
					91,403,037
Energy 12.7%
Anadarko Petroleum Corp.			142,000		10,395,820
Apache Corp.			50,000		4,797,000
Chevron Corp.			460,500		49,070,880
EOG Resources, Inc.			26,500		2,909,965
Exxon Mobil Corp.			792,000		68,381,280
Halliburton Co.			50,000		1,711,000
Murphy Oil Corp.			175,000		9,619,750
Occidental Petroleum Corp.	��		200,000		18,244,000
The Williams Cos., Inc.			169,700		5,774,891
Valero Energy Corp.			675,000		16,672,500
					187,577,086
Food & Staples Retailing 4.5%
Costco Wholesale Corp.			294,600		25,974,882
CVS Caremark Corp.			160,000		7,139,200
The Kroger Co.			400,000		9,308,000
Wal-Mart Stores, Inc.			417,500		24,594,925
					67,017,007
Food, Beverage & Tobacco 7.2%
Archer-Daniels-Midland Co.			387,000		11,931,210
ConAgra Foods, Inc.			731,000		18,874,420
Corn Products International, Inc.			219,700		12,536,082
Philip Morris International, Inc.			514,500		46,052,895
Tyson Foods, Inc., Class A			923,100		16,846,575
					106,241,182
Health Care Equipment & Services 2.1%
AmerisourceBergen Corp.			150,000		5,581,500
McKesson Corp.			250,000		22,852,500
UnitedHealth Group, Inc.			50,000		2,807,500
					31,241,500
Household & Personal Products 0.2%
Nu Skin Enterprises, Inc., Class A			50,000		2,665,000
Insurance 1.8%
Marsh & McLennan Cos., Inc.			215,000		7,191,750

32 See financial notes

 Schwab Dividend Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
MetLife, Inc.		65,000		2,341,950
The Travelers Cos., Inc.		243,000		15,629,760
W. R. Berkley Corp.		28,000		1,054,480
				26,217,940
Materials 4.7%
CF Industries Holdings, Inc.		37,000		7,143,220
Eastman Chemical Co.		111,000		5,990,670
International Paper Co.		412,000		13,723,720
MeadWestvaco Corp.		452,100		14,385,822
Monsanto Co.		17,700		1,348,386
PPG Industries, Inc.		256,000		26,941,440
				69,533,258
Media 1.3%
Gannett Co., Inc.		100,000		1,382,000
The Interpublic Group of Cos., Inc.		500,000		5,905,000
Time Warner, Inc.		313,000		11,724,980
Viacom Inc., Class B		8,400		389,676
				19,401,656
Pharmaceuticals, Biotechnology & Life Sciences 9.7%
Amgen, Inc.		260,452		18,520,742
Bristol-Myers Squibb Co.		904,200		30,173,154
Eli Lilly & Co.		351,800		14,561,002
Merck & Co., Inc.		1,020,500		40,044,420
Pfizer, Inc.		1,731,500		39,703,295
				143,002,613
Real Estate 0.5%
Host Hotels & Resorts, Inc.		435,000		7,238,400
Retailing 5.3%
Advance Auto Parts, Inc.		129,000		11,842,200
Foot Locker, Inc.		180,000		5,506,200
Macy’s, Inc.		548,500		22,499,470
PetSmart, Inc.		204,000		11,885,040
The Home Depot, Inc.		392,500		20,327,575
The TJX Cos., Inc.		147,400		6,148,054
				78,208,539
Semiconductors & Semiconductor Equipment 4.5%
Applied Materials, Inc.		1,798,500		21,564,015
Intel Corp.		854,900		24,279,160
KLA-Tencor Corp.		293,000		15,279,950
Maxim Integrated Products, Inc.		170,000		5,028,600
				66,151,725
Software & Services 7.0%
Activision Blizzard, Inc.		474,400		6,105,528
CA, Inc.		840,500		22,206,010
Computer Sciences Corp.		298,000		8,361,880
Fidelity National Information Services, Inc.		310,000		10,437,700
Global Payments, Inc.		42,500		1,973,275
International Business Machines Corp.		134,700		27,893,676
Microsoft Corp.		295,000		9,445,900
Oracle Corp.		250,300		7,356,317
Total System Services, Inc.		254,500		5,985,840
Visa, Inc., Class A		35,000		4,304,300
				104,070,426
Technology Hardware & Equipment 5.8%
Cisco Systems, Inc.		524,000		10,558,600
Hewlett-Packard Co.		653,900		16,190,564
Jabil Circuit, Inc.		595,500		13,964,475
Molex, Inc.		178,000		4,911,020
QUALCOMM, Inc.		160,500		10,246,320
TE Connectivity Ltd.		276,000		10,062,960
Xerox Corp.		2,585,000		20,111,300
				86,045,239
Telecommunication Services 4.2%
AT&T, Inc.		661,307		21,763,613
Verizon Communications, Inc.		987,500		39,875,250
				61,638,863
Transportation 1.1%
FedEx Corp.		6,500		573,560
Ryder System, Inc.		75,000		3,654,000
United Parcel Service, Inc., Class B		150,000		11,721,000
				15,948,560
Utilities 5.5%
Ameren Corp.		525,500		17,231,145
CMS Energy Corp.		235,000		5,402,650
DTE Energy Co.		498,000		28,077,240
Edison International		175,000		7,701,750
PG&E Corp.		97,000		4,285,460
Pinnacle West Capital Corp.		225,000		10,878,750
Public Service Enterprise Group, Inc.		227,500		7,086,625
				80,663,620
Total Common Stock
(Cost $1,195,836,113)				1,444,885,995
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 2.0% of net assets
Time Deposit 1.9%
Bank of America
0.03%, 05/01/12		27,267,393		27,267,393

See financial notes 33

 Schwab Dividend Equity Fund

Portfolio Holdings (Unaudited) continued

	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
U.S. Treasury Obligation 0.1%
U.S. Treasury Bill
0.08%, 06/14/12 (a)(b)		1,400,000		1,399,863
Total Short-Term Investments
(Cost $28,667,256)				28,667,256
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $1,225,358,250 and the unrealized appreciation and depreciation were $263,214,466 and ($15,019,465), respectively, with a net unrealized appreciation of $248,195,001.

(a)	All or a portion of this security is held as collateral for open futures contracts.
(b)	The rate shown is the purchase yield.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		310		21,600,800		405,407

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$1,444,885,995		$—		$—		$1,444,885,995
Short-Term Investments(a)		—		28,667,256		—		28,667,256
Total		$1,444,885,995		$28,667,256		$—		$1,473,553,251
Other Financial Instruments
Futures Contract*		$405,407		$—		$—		$405,407

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

34 See financial notes

 Schwab Dividend Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $1,224,503,369)		$1,473,553,251
Receivables:
Fund shares sold		2,297,378
Dividends		2,037,376
Interest		23
Prepaid expenses	+	25,304
Total assets		1,477,913,332
Liabilities
Payables:
Investment adviser and administrator fees		75,665
Shareholder service fees		32,472
Fund shares redeemed		760,448
Due to brokers for futures		68,128
Accrued expenses	+	99,497
Total liabilities		1,036,210
Net Assets
Total assets		1,477,913,332
Total liabilities	−	1,036,210
Net assets		$1,476,877,122
Net Assets by Source
Capital received from investors		1,333,856,211
Net investment income not yet distributed		1,323,934
Net realized capital losses		(107,758,312	)
Net unrealized capital gains		249,455,289
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$1,476,877,122		102,474,550			$14.41

See financial notes 35

 Schwab Dividend Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$19,291,512
Interest	+	4,060
Total investment income		19,295,572
Expenses
Investment adviser and administrator fees		4,305,364
Shareholder service fees		1,704,022
Shareholder reports		36,985
Portfolio accounting fees		32,185
Transfer agent fees		24,605
Professional fees		22,475
Custodian fees		19,056
Registration fees		16,349
Trustees’ fees		7,485
Other expenses	+	18,182
Total expenses		6,186,708
Expense reduction by CSIM and its affiliates	−	24,605
Net expenses	−	6,162,103
Net investment income		13,133,469
Realized and Unrealized Gains (Losses)
Net realized gains on investments		64,017,291
Net realized gains on futures contracts	+	3,938,088
Net realized gains		67,955,379
Net unrealized gains on investments		63,188,136
Net unrealized losses on futures contracts	+	(1,365,117	)
Net unrealized gains	+	61,823,019
Net realized and unrealized gains		129,778,398
Increase in net assets resulting from operations		$142,911,867

36 See financial notes

 Schwab Dividend Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$13,133,469			$24,245,439
Net realized gains		67,955,379			43,566,448
Net unrealized gains	+	61,823,019			71,468,313
Increase in net assets from operations		142,911,867			139,280,200
Distributions to Shareholders
Distributions from net investment income		($14,348,655	)		($23,212,957	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			10,732,853		$147,758,619			13,544,141		$176,264,263
Shares reinvested			565,735		7,833,169			949,738		12,332,976
Shares redeemed	+		(9,585,694	)	(131,870,327	)		(23,171,863	)	(301,886,000	)
Net transactions in fund shares			1,712,894		$23,721,461			(8,677,984	)	($113,288,761	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			100,761,656		$1,324,592,449			109,439,640		$1,321,813,967
Total increase or decrease	+		1,712,894		152,284,673			(8,677,984	)	2,778,482
End of period			102,474,550		$1,476,877,122			100,761,656		$1,324,592,449
Net investment income not yet distributed					$1,323,934					$2,539,120

See financial notes 37

Schwab Large-Cap Growth Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.18			10.48			9.10			8.22			12.77			11.09
Income (loss) from investment operations:
Net investment income (loss)		0.03			0.07			0.05			0.05			0.06			0.04
Net realized and unrealized gains (losses)		1.58			0.69			1.39			0.87			(4.56	)		1.67
Total from investment operations		1.61			0.76			1.44			0.92			(4.50	)		1.71
Less distributions:
Distributions from net investment income		(0.06	)		(0.06	)		(0.06	)		(0.04	)		(0.05	)		(0.03	)
Net asset value at end of period		12.73			11.18			10.48			9.10			8.22			12.77
Total return (%)		14.43	2		7.25			15.83			11.36			(35.36	)		15.47
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.99	3		0.99			1.00	4		0.99			0.99			0.99
Gross operating expenses		1.05	3		1.05			1.04			1.03			1.01			1.03
Net investment income (loss)		0.55	3		0.56			0.39			0.65			0.53			0.33
Portfolio turnover rate		41	2		62			57			63			49			30
Net assets, end of period ($ x 1,000,000)		232			213			219			360			332			492

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ The ratio of net operating expenses would have been 0.99%, if certain non-routine expenses had not been incurred.

38 See financial notes

 Schwab Large-Cap Growth Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		190,267,659		229,452,960
	1	.1%	Short-Term Investments		2,454,116		2,454,116
	99	.9%	Total Investments		192,721,775		231,907,076
	0	.1%	Other Assets and Liabilities, Net				335,902
	100	.0%	Total Net Assets				232,242,978

	Number		Value
Security	of Shares		($)
Common Stock 98.8% of net assets
Automobiles & Components 0.6%
Delphi Automotive plc *		5,000		153,450
Ford Motor Co.		101,500		1,144,920
				1,298,370
Banks 0.4%
Wells Fargo & Co.		26,900		899,267
Capital Goods 7.2%
AGCO Corp. *		41,600		1,937,312
Caterpillar, Inc.		33,000		3,391,410
General Electric Co.		75,000		1,468,500
KBR, Inc.		10,000		338,600
PACCAR, Inc.		7,500		322,200
Roper Industries, Inc.		11,800		1,202,420
Textron, Inc.		95,000		2,530,800
The Boeing Co.		47,000		3,609,600
The Timken Co.		35,000		1,977,850
				16,778,692
Commercial & Professional Supplies 0.4%
Equifax, Inc.		18,500		847,670
Consumer Durables & Apparel 1.4%
Newell Rubbermaid, Inc.		91,500		1,665,300
NIKE, Inc., Class B		15,000		1,678,050
				3,343,350
Consumer Services 3.1%
H&R Block, Inc.		74,500		1,095,150
Hyatt Hotels Corp., Class A *		13,000		559,390
Starwood Hotels & Resorts Worldwide, Inc.		4,500		266,400
Yum! Brands, Inc.		74,000		5,382,020
				7,302,960
Diversified Financials 1.9%
Affiliated Managers Group, Inc. *		22,000		2,499,640
American Express Co.		10,800		650,268
JPMorgan Chase & Co.		2,100		90,258
SLM Corp.		84,700		1,256,101
				4,496,267
Energy 10.2%
Chevron Corp.		40,000		4,262,400
EOG Resources, Inc.		32,100		3,524,901
Exxon Mobil Corp.		119,000		10,274,460
Halliburton Co.		30,000		1,026,600
Murphy Oil Corp.		28,000		1,539,160
National Oilwell Varco, Inc.		3,400		257,584
Occidental Petroleum Corp.		26,500		2,417,330
Valero Energy Corp.		11,500		284,050
				23,586,485
Food & Staples Retailing 3.3%
Costco Wholesale Corp.		35,000		3,085,950
CVS Caremark Corp.		30,000		1,338,600
Wal-Mart Stores, Inc.		41,000		2,415,310
Whole Foods Market, Inc.		9,400		780,858
				7,620,718
Food, Beverage & Tobacco 7.2%
Archer-Daniels-Midland Co.		32,000		986,560
Coca-Cola Enterprises, Inc.		101,200		3,048,144
ConAgra Foods, Inc.		70,000		1,807,400
Philip Morris International, Inc.		101,600		9,094,216
Tyson Foods, Inc., Class A		100,000		1,825,000
				16,761,320
Health Care Equipment & Services 4.6%
AmerisourceBergen Corp.		12,600		468,846
DaVita, Inc. *		46,100		4,083,538
Henry Schein, Inc. *		33,300		2,555,442
McKesson Corp.		39,000		3,564,990
				10,672,816
Household & Personal Products 0.7%
Herbalife Ltd.		22,700		1,596,264
Insurance 0.6%
Aflac, Inc.		30,800		1,387,232
Materials 5.4%
Albemarle Corp.		14,300		933,790
Ashland, Inc.		5,000		329,350
CF Industries Holdings, Inc.		6,000		1,158,360

See financial notes 39

 Schwab Large-Cap Growth Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Eastman Chemical Co.		5,000		269,850
International Paper Co.		80,000		2,664,800
MeadWestvaco Corp.		45,000		1,431,900
Monsanto Co.		13,600		1,036,048
PPG Industries, Inc.		43,900		4,620,036
				12,444,134
Media 0.9%
DISH Network Corp., Class A		10,000		319,700
Liberty Global, Inc., Series A *		34,500		1,718,445
				2,038,145
Pharmaceuticals, Biotechnology & Life Sciences 5.6%
Agilent Technologies, Inc.		15,000		632,700
Biogen Idec, Inc. *		19,800		2,653,398
Bristol-Myers Squibb Co.		18,000		600,660
Celgene Corp. *		36,800		2,683,456
Eli Lilly & Co.		12,600		521,514
Gilead Sciences, Inc. *		22,000		1,144,220
Life Technologies Corp. *		16,000		741,760
Mylan, Inc. *		61,500		1,335,165
Waters Corp. *		14,000		1,177,540
Watson Pharmaceuticals, Inc. *		20,500		1,544,880
				13,035,293
Real Estate 2.9%
CBRE Group, Inc., Class A *		45,000		846,450
Host Hotels & Resorts, Inc.		230,000		3,827,200
Jones Lang LaSalle, Inc.		8,000		639,520
Simon Property Group, Inc.		9,500		1,478,200
				6,791,370
Retailing 6.8%
Advance Auto Parts, Inc.		19,000		1,744,200
Dollar Tree, Inc. *		15,300		1,555,398
Macy’s, Inc.		105,000		4,307,100
O’Reilly Automotive, Inc. *		3,500		369,110
PetSmart, Inc.		65,800		3,833,508
The Home Depot, Inc.		20,000		1,035,800
The TJX Cos., Inc.		70,000		2,919,700
				15,764,816
Semiconductors & Semiconductor Equipment 1.1%
Applied Materials, Inc.		109,500		1,312,905
LSI Corp. *		50,000		402,000
NVIDIA Corp. *		64,500		838,500
				2,553,405
Software & Services 15.6%
Alliance Data Systems Corp. *		20,000		2,569,800
Autodesk, Inc. *		71,500		2,814,955
BMC Software, Inc. *		106,000		4,373,560
CA, Inc.		130,000		3,434,600
International Business Machines Corp.		38,600		7,993,288
Microsoft Corp.		165,000		5,283,300
Oracle Corp.		38,300		1,125,637
Rackspace Hosting, Inc. *		36,100		2,097,049
Symantec Corp. *		98,000		1,618,960
Visa, Inc., Class A		12,500		1,537,250
Western Union Co.		188,900		3,471,982
				36,320,381
Technology Hardware & Equipment 12.8%
Apple, Inc. *		30,000		17,527,200
Dell, Inc. *		285,000		4,665,450
Hewlett-Packard Co.		17,400		430,824
QUALCOMM, Inc.		25,000		1,596,000
TE Connectivity Ltd.		49,000		1,786,540
Western Digital Corp. *		94,000		3,648,140
				29,654,154
Telecommunication Services 2.7%
Crown Castle International Corp. *		13,500		764,235
SBA Communications Corp., Class A *		50,000		2,687,000
Verizon Communications, Inc.		72,300		2,919,474
				6,370,709
Transportation 2.5%
Delta Air Lines, Inc. *		334,300		3,663,928
Hertz Global Holdings, Inc. *		60,500		932,305
United Parcel Service, Inc., Class B		16,100		1,258,054
				5,854,287
Utilities 0.9%
Calpine Corp. *		92,500		1,734,375
The AES Corp. *		24,000		300,480
				2,034,855
Total Common Stock
(Cost $190,267,659)				229,452,960
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 1.1% of net assets
Time Deposit 1.0%
Bank of America
0.03%, 05/01/12		2,254,135		2,254,135
U.S. Treasury Obligation 0.1%
U.S. Treasury Bill
0.08%, 06/14/12 (a)(b)		200,000		199,981
Total Short-Term Investments
(Cost $2,454,116)				2,454,116
End of Investments.

40 See financial notes

 Schwab Large-Cap Growth Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12, the tax basis cost of the fund’s investments was $192,721,775 and the unrealized appreciation and depreciation were $40,496,593 and ($1,311,292), respectively, with a net unrealized appreciation of $39,185,301.

*	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.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		20		1,393,600		28,315

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$229,452,960		$—		$—		$229,452,960
Short-Term Investments(a)		—		2,454,116		—		2,454,116
Total		$229,452,960		$2,454,116		$—		$231,907,076
Other Financial Instruments
Futures Contracts*		$28,315		$—		$—		$28,315

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 41

 Schwab Large-Cap Growth Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $192,721,775)		$231,907,076
Receivables:
Investments sold		4,611,058
Fund shares sold		407,811
Dividends		134,272
Interest		2
Prepaid expenses	+	6,598
Total assets		237,066,817
Liabilities
Payables:
Investments bought		4,570,921
Investment adviser and administrator fees		13,028
Shareholder service fees		5,045
Fund shares redeemed		161,615
Due to brokers for futures		4,900
Accrued expenses	+	68,330
Total liabilities		4,823,839
Net Assets
Total assets		237,066,817
Total liabilities	−	4,823,839
Net assets		$232,242,978
Net Assets by Source
Capital received from investors		246,699,488
Net investment income not yet distributed		289,220
Net realized capital losses		(53,959,346	)
Net unrealized capital gains		39,213,616
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$232,242,978		18,249,498			$12.73

42 See financial notes

 Schwab Large-Cap Growth Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$1,681,139
Interest	+	396
Total investment income		1,681,535
Expenses
Investment adviser and administrator fees		788,651
Shareholder service fees		270,933
Portfolio accounting fees		19,502
Shareholder reports		19,287
Professional fees		16,842
Registration fees		12,471
Transfer agent fees		11,840
Custodian fees		4,858
Trustees’ fees		3,556
Other expenses	+	3,184
Total expenses		1,151,124
Expense reduction by CSIM and its affiliates	−	66,728
Net expenses	−	1,084,396
Net investment income		597,139
Realized and Unrealized Gains (Losses)
Net realized gains on investments		21,072,490
Net realized gains on futures contracts	+	272,480
Net realized gains		21,344,970
Net unrealized gains on investments		7,778,492
Net unrealized losses on futures contracts	+	(44,446	)
Net unrealized gains	+	7,734,046
Net realized and unrealized gains		29,079,016
Increase in net assets resulting from operations		$29,676,155

See financial notes 43

 Schwab Large-Cap Growth Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$597,139			$1,283,025
Net realized gains		21,344,970			22,676,262
Net unrealized gains (losses)	+	7,734,046			(7,897,223	)
Increase in net assets from operations		29,676,155			16,062,064
Distributions to Shareholders
Distributions from net investment income		($1,032,046	)		($1,241,602	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,588,605		$19,249,069			3,665,376		$41,539,298
Shares reinvested			45,503		506,911			51,489		572,556
Shares redeemed	+		(2,456,580	)	(29,437,971	)		(5,580,743	)	(63,063,162	)
Net transactions in fund shares			(822,472	)	($9,681,991	)		(1,863,878	)	($20,951,308	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			19,071,970		$213,280,860			20,935,848		$219,411,706
Total increase or decrease	+		(822,472	)	18,962,118			(1,863,878	)	(6,130,846	)
End of period			18,249,498		$232,242,978			19,071,970		$213,280,860
Net investment income not yet distributed					$289,220					$724,127

44 See financial notes

Schwab Small-Cap Equity Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		15.61			13.96			11.14			10.55			18.22			17.80
Income (loss) from investment operations:
Net investment income (loss)		0.02			(0.01	)		(0.04	)		(0.02	)		(0.01	)		(0.10	)
Net realized and unrealized gains (losses)		1.59			1.66			2.86			0.61			(6.59	)		0.60
Total from investment operations		1.61			1.65			2.82			0.59			(6.60	)		0.50
Less distributions:
Distributions from net investment income		(0.01	)		—			—			(0.00	)2		—			—
Distributions from net realized gains		—			—			—			—			(1.07	)		(0.08	)
Total distributions		(0.01	)		—			—			(0.00	)2		(1.07	)		(0.08	)
Net asset value at end of period		17.21			15.61			13.96			11.14			10.55			18.22
Total return (%)		10.30	3		11.82			25.31			5.65			(38.16	)		2.80
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.11	4		1.11			1.12			1.12			1.11			1.09
Gross operating expenses		1.12	4		1.12			1.14			1.17			1.12			1.09
Net investment income (loss)		0.26	4		(0.05	)		(0.26	)		(0.16	)		(0.09	)		(0.28	)
Portfolio turnover rate		53	3		72			64			85			50			106
Net assets, end of period ($ x 1,000,000)		397			226			219			202			79			228

* Unaudited.

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.

³ Not annualized.

⁴ Annualized.

See financial notes 45

 Schwab Small-Cap Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		341,237,443		388,296,327
	2	.2%	Short-Term Investments		8,739,163		8,739,163
	100	.0%	Total Investments		349,976,606		397,035,490
	0	.6%	Collateral Invested for Securities on Loan		2,414,793		2,414,793
	(0	.6)%	Other Assets and Liabilities, Net				(2,275,868	)
	100	.0%	Total Net Assets				397,174,415

	Number		Value
Security	of Shares		($)
Common Stock 97.8% of net assets
Automobiles & Components 0.2%
Dana Holding Corp.		29,300		428,366
Standard Motor Products, Inc.		10,400		156,728
Tower International, Inc. *		4,000		42,560
				627,654
Banks 7.2%
1st Source Corp.		25,600		580,864
Ameris Bancorp *		5,800		71,920
BancFirst Corp.		21,700		904,890
BancorpSouth, Inc.		101,200		1,363,164
Bank Mutual Corp.		15,400		60,060
Bank of Kentucky Financial Corp.		9,300		234,453
Banner Corp.		136,571		2,997,734
Beneficial Mutual Bancorp, Inc. *		25,500		221,085
Capital City Bank Group, Inc.		2,000		16,700
Cathay General Bancorp		11,900		204,918
Chemical Financial Corp.		39,200		865,144
CoBiz Financial, Inc.		15,600		97,500
Columbia Banking System, Inc.		15,700		321,693
Community Trust Bancorp, Inc.		12,400		396,180
Enterprise Financial Services Corp.		13,700		165,633
F.N.B. Corp.		77,700		881,895
First Busey Corp.		86,400		400,896
First Citizens BancShares, Inc., Class A		9,100		1,577,030
First Defiance Financial Corp.		21,400		367,652
First Interstate BancSystem, Inc.		1,712		24,122
First Merchants Corp.		59,300		731,169
First Midwest Bancorp, Inc.		36,700		390,855
Great Southern Bancorp, Inc.		2,400		57,696
Heritage Commerce Corp. *		96,800		652,432
MainSource Financial Group, Inc.		19,800		231,462
MB Financial, Inc.		45,300		936,351
Metro Bancorp, Inc. *		12,400		143,468
PacWest Bancorp		109,500		2,608,290
Peoples Bancorp, Inc.		6,500		119,535
Pinnacle Financial Partners, Inc. *		44,900		821,670
PrivateBancorp, Inc.		171,300		2,694,549
Renasant Corp.		12,500		200,000
Republic Bancorp, Inc., Class A		19,200		451,776
S&T Bancorp, Inc.		7,700		144,144
Seacoast Banking Corp. of Florida *		18,500		29,970
StellarOne Corp.		23,400		292,734
Sterling Financial Corp. *		21,300		413,646
Synovus Financial Corp.		1,321,600		2,775,360
The Bancorp, Inc. *		9,700		99,619
TriCo Bancshares		2,300		37,812
Union First Market Bankshares Corp.		13,100		182,876
Univest Corp. of Pennsylvania		3,100		49,910
Virginia Commerce Bancorp, Inc. *		62,300		487,809
WesBanco, Inc.		24,500		501,760
West Bancorp		5,100		48,960
Western Alliance Bancorp *		185,300		1,626,934
Wilshire Bancorp, Inc. *		43,700		234,232
				28,718,552
Capital Goods 9.2%
Aceto Corp.		65,700		591,300
Actuant Corp., Class A		76,900		2,097,063
Aircastle Ltd.		209,970		2,551,135
Alamo Group, Inc.		41,100		1,384,248
Albany International Corp., Class A		25,100		604,910
Altra Holdings, Inc. *		11,600		212,048
American Railcar Industries, Inc. *		42,600		1,149,348
Apogee Enterprises, Inc.		18,300		281,088
Argan, Inc.		5,600		81,648
Cascade Corp.		13,600		640,152
Ceradyne, Inc.		40,700		1,030,524
Columbus McKinnon Corp. *		19,300		286,219
Curtiss-Wright Corp.		84,100		2,967,889
Dycom Industries, Inc. *		19,700		460,783
EnerSys *		19,100		667,545
Flow International Corp. *		95,100		390,861
FreightCar America, Inc.		57,700		1,246,320
Gibraltar Industries, Inc. *		64,900		877,448
Granite Construction, Inc.		108,700		3,026,208
Great Lakes Dredge & Dock Co.		156,000		1,155,960
H&E Equipment Services, Inc. *		27,300		526,890
Harsco Corp.		31,800		709,140
Kadant, Inc. *		30,000		776,100
Lydall, Inc. *		47,100		496,905
Moog, Inc., Class A *		61,500		2,599,605
NACCO Industries, Inc., Class A		25,700		2,916,179
NCI Building Systems, Inc. *		62,100		744,579
Pike Electric Corp. *		28,000		230,160
Primoris Services Corp.		68,000		980,560
Sauer-Danfoss, Inc.		52,100		2,256,451
Thermon Group Holdings, Inc. *		19,800		439,956
TriMas Corp. *		91,000		2,002,910
Xerium Technologies, Inc. *		60,200		282,940
				36,665,072

46 See financial notes

 Schwab Small-Cap Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Commercial & Professional Supplies 2.5%
Clean Harbors, Inc. *		7,300		498,152
Consolidated Graphics, Inc. *		41,900		1,675,581
EnergySolutions, Inc. *		240,700		1,013,347
Franklin Covey Co. *		2,300		21,367
G&K Services, Inc., Class A		44,400		1,458,984
Hudson Highland Group, Inc. *		20,400		110,976
Insperity, Inc.		46,100		1,257,147
Intersections, Inc.		35,200		423,456
Kelly Services, Inc., Class A		45,600		637,944
RPX Corp. *		20,100		347,328
Steelcase, Inc., Class A		119,000		1,028,160
Sykes Enterprises, Inc. *		47,100		746,535
Viad Corp.		32,800		593,024
				9,812,001
Consumer Durables & Apparel 4.2%
Arctic Cat, Inc. *		26,200		1,159,088
Brunswick Corp.		133,600		3,512,344
CSS Industries, Inc.		15,300		292,995
Ethan Allen Interiors, Inc.		49,800		1,155,360
Helen of Troy Ltd. *		11,200		387,520
Jarden Corp.		40,100		1,681,393
La-Z-Boy, Inc. *		137,600		2,073,632
Leapfrog Enterprises, Inc. *		127,300		1,188,982
Libbey, Inc. *		74,600		1,064,542
Movado Group, Inc.		65,900		1,868,265
Oxford Industries, Inc.		25,800		1,238,142
Sealy Corp. (a)*		118,100		243,286
Smith & Wesson Holding Corp. *		94,700		781,275
				16,646,824
Consumer Services 3.8%
Biglari Holdings, Inc. *		4,900		1,991,017
Churchill Downs, Inc.		9,600		569,856
Coinstar, Inc. (a)*		50,300		3,158,337
Denny’s Corp. *		33,600		139,104
DineEquity, Inc. *		8,600		417,788
Mac-Gray Corp.		4,000		59,600
Multimedia Games Holding Co., Inc. *		185,300		2,105,008
Service Corp. International		135,000		1,563,300
Shuffle Master, Inc. *		72,900		1,288,143
Six Flags Entertainment Corp.		13,500		646,785
Steiner Leisure Ltd. *		31,700		1,488,632
Town Sports International Holdings, Inc. *		139,083		1,783,044
				15,210,614
Diversified Financials 2.4%
Calamos Asset Management, Inc., Class A		80,300		1,037,476
Edelman Financial Group, Inc.		19,900		175,717
Gain Capital Holdings, Inc.		71,300		365,769
Interactive Brokers Group, Inc., Class A		159,100		2,413,547
Investment Technology Group, Inc. *		39,300		400,860
Janus Capital Group, Inc.		329,600		2,498,368
Marlin Business Services, Inc.		4,900		71,932
Nelnet, Inc., Class A		37,388		965,358
Oppenheimer Holdings, Inc., Class A		6,300		107,478
Piper Jaffray Cos., Inc. *		19,100		463,175
Pzena Investment Management, Inc., Class A		6,100		35,929
SWS Group, Inc.		154,600		871,944
				9,407,553
Energy 9.5%
Alon USA Energy, Inc.		138,400		1,251,136
ATP Oil & Gas Corp. (a)*		123,500		933,660
Basic Energy Services, Inc. *		26,800		385,920
Bristow Group, Inc.		27,600		1,348,260
Callon Petroleum Co. *		116,300		675,703
Crosstex Energy, Inc.		109,500		1,631,550
Energy Partners Ltd. *		54,400		885,632
Energy XXI (Bermuda) Ltd. *		101,800		3,835,824
Global Geophysical Services, Inc. *		24,300		232,551
GulfMark Offshore, Inc., Class A *		24,100		1,160,897
Helix Energy Solutions Group, Inc. *		190,900		3,896,269
Isramco, Inc. *		500		46,395
Key Energy Services, Inc. *		32,000		405,120
Matrix Service Co. *		15,200		207,480
Mitcham Industries, Inc. *		5,600		133,056
Parker Drilling Co. *		379,000		1,959,430
Pioneer Drilling Co. *		204,700		1,613,036
REX American Resources Corp. *		15,400		427,196
SEACOR Holdings, Inc. *		7,400		687,682
SemGroup Corp., Class A *		102,400		3,256,320
Stone Energy Corp. *		86,500		2,426,325
Targa Resources Corp.		64,000		3,077,760
Teekay Offshore Partners L.P.		90,900		2,673,369
VAALCO Energy, Inc. *		79,000		716,530
W&T Offshore, Inc.		121,600		2,404,032
Western Refining, Inc.		75,900		1,445,895
				37,717,028
Food & Staples Retailing 0.3%
Rite Aid Corp. *		758,200		1,099,390
Food, Beverage & Tobacco 2.0%
Coca-Cola Bottling Co. Consolidated		23,200		1,488,280
Dean Foods Co. *		228,300		2,803,524
Farmer Brothers Co. *		11,100		101,010
The Hain Celestial Group, Inc. *		11,700		553,410
Universal Corp.		61,900		2,836,877
				7,783,101
Health Care Equipment & Services 3.5%
Air Methods Corp. *		5,300		445,783
Align Technology, Inc. *		19,100		605,661
Alliance HealthCare Services, Inc. *		69,100		94,667
Analogic Corp.		7,500		511,575
ArthroCare Corp. *		22,600		564,096
Cantel Medical Corp.		55,350		1,299,618
Centene Corp. *		38,100		1,508,379
CONMED Corp.		14,700		420,273
CryoLife, Inc. *		46,100		243,869
Cyberonics, Inc. *		14,100		540,030
Greatbatch, Inc. *		28,300		659,107

See financial notes 47

 Schwab Small-Cap Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Invacare Corp.		18,000		285,300
Molina Healthcare, Inc. *		83,200		2,134,080
National Healthcare Corp.		16,600		756,960
NuVasive, Inc. *		18,500		306,545
Providence Service Corp. *		11,700		164,502
RTI Biologics, Inc. *		208,300		729,050
Sun Healthcare Group, Inc. *		96,700		699,141
Symmetry Medical, Inc. *		19,600		139,356
Team Health Holdings, Inc. *		23,000		495,420
Thoratec Corp. *		22,700		790,187
West Pharmaceutical Services, Inc.		10,800		484,920
				13,878,519
Household & Personal Products 0.5%
Elizabeth Arden, Inc. *		48,100		1,874,938
Insurance 2.7%
American Equity Investment Life Holding Co.		90,900		1,114,434
American Financial Group, Inc.		39,100		1,521,772
First American Financial Corp.		155,700		2,607,975
Maiden Holdings Ltd.		77,900		646,570
National Financial Partners Corp. *		141,700		2,090,075
Primerica, Inc.		22,600		592,798
ProAssurance Corp.		23,200		2,043,688
				10,617,312
Materials 5.6%
AEP Industries, Inc. *		18,000		627,660
Boise, Inc.		52,400		400,336
Buckeye Technologies, Inc.		83,900		2,719,199
Coeur d’Alene Mines Corp. *		113,700		2,450,235
Commercial Metals Co.		45,200		668,056
Georgia Gulf Corp. *		51,900		1,839,855
Graphic Packaging Holding Co. *		204,100		1,091,935
Handy & Harman Ltd. *		21,100		305,317
KapStone Paper & Packaging Corp. *		19,100		344,946
Koppers Holdings, Inc.		46,000		1,788,480
Minerals Technologies, Inc.		42,800		2,871,880
Neenah Paper, Inc.		101,400		2,895,984
Omnova Solutions, Inc. *		21,000		164,640
P.H. Glatfelter Co.		75,100		1,170,058
Rockwood Holdings, Inc. *		32,900		1,820,686
Spartech Corp. *		27,900		136,152
Tredegar Corp.		53,500		928,225
Verso Paper Corp. *		6,700		11,055
				22,234,699
Media 1.0%
AH Belo Corp., Class A		25,000		110,250
Entravision Communications Corp., Class A		35,900		56,363
Fisher Communications, Inc. *		16,500		541,035
Journal Communications, Inc., Class A *		78,800		330,172
LIN TV Corp., Class A *		95,300		376,435
Scholastic Corp.		66,200		2,022,410
The E.W. Scripps Co., Class A *		74,600		683,336
				4,120,001
Pharmaceuticals, Biotechnology & Life Sciences 6.5%
Acorda Therapeutics, Inc. *		38,100		961,644
Albany Molecular Research, Inc. *		54,300		173,217
AMAG Pharmaceuticals, Inc. *		23,200		363,312
Bio-Rad Laboratories, Inc., Class A *		12,000		1,295,880
Cambrex Corp. *		218,700		1,417,176
Charles River Laboratories International, Inc. *		75,700		2,689,621
Enzo Biochem, Inc. *		51,800		141,932
MEDTOX Scientific, Inc. *		9,400		207,740
Momenta Pharmaceuticals, Inc. *		90,900		1,443,492
Myriad Genetics, Inc. *		69,300		1,802,493
Obagi Medical Products, Inc. *		37,200		488,064
Orexigen Therapeutics, Inc. *		587,600		2,056,600
Par Pharmaceutical Cos., Inc. *		77,500		3,281,350
PAREXEL International Corp. *		121,500		3,273,210
PerkinElmer, Inc.		19,900		549,240
POZEN, Inc. *		58,700		390,942
Progenics Pharmaceuticals, Inc. *		150,400		1,652,896
SciClone Pharmaceuticals, Inc. *		52,800		316,272
The Medicines Co. *		125,900		2,781,131
ViroPharma, Inc. *		30,400		661,200
				25,947,412
Real Estate 7.0%
Acadia Realty Trust		20,700		479,826
Apartment Investment & Management Co., Class A		39,600		1,075,140
CapLease, Inc.		113,700		471,855
CBL & Associates Properties, Inc.		191,100		3,560,193
Coresite Realty Corp.		11,500		286,465
DCT Industrial Trust, Inc.		547,700		3,247,861
Extra Space Storage, Inc.		82,100		2,491,735
First Industrial Realty Trust, Inc. *		248,900		3,071,426
Kite Realty Group Trust		51,500		263,165
LaSalle Hotel Properties		123,100		3,620,371
Mission West Properties, Inc.		52,700		462,706
Pennsylvania Real Estate Investment Trust		198,800		2,801,092
RLJ Lodging Trust		11,300		212,214
Strategic Hotels & Resorts, Inc. *		399,200		2,718,552
Sunstone Hotel Investors, Inc. *		304,200		3,102,840
				27,865,441
Retailing 7.0%
Aaron’s, Inc.		45,200		1,228,084
ANN, Inc. *		108,900		3,015,441
Ascena Retail Group, Inc. *		166,200		3,403,776
Bebe Stores, Inc.		88,300		724,060
Build-A-Bear Workshop, Inc. *		9,600		43,296
Charming Shoppes, Inc. *		485,400		2,863,860
Core-Mark Holding Co., Inc.		21,200		818,320
Cost Plus, Inc. *		49,500		958,815
Dillard’s, Inc., Class A		7,300		471,288
Group 1 Automotive, Inc.		49,100		2,841,908
Kirkland’s, Inc. *		39,300		575,352
Office Depot, Inc. *		59,300		180,272
Orbitz Worldwide, Inc. *		167,400		611,010
Pier 1 Imports, Inc.		179,300		3,080,374

48 See financial notes

 Schwab Small-Cap Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Rent-A-Center, Inc.		90,400		3,092,584
Saks, Inc. *		286,200		3,136,752
Systemax, Inc. *		14,400		247,248
VOXX International Corp. *		31,100		394,659
				27,687,099
Semiconductors & Semiconductor Equipment 1.6%
Entegris, Inc. *		156,400		1,384,140
Fairchild Semiconductor International, Inc. *		40,400		572,468
IXYS Corp. *		13,500		168,210
LTX-Credence Corp. *		110,300		761,070
MKS Instruments, Inc.		31,400		868,210
Photronics, Inc. *		264,500		1,637,255
Standard Microsystems Corp. *		15,900		421,032
Tessera Technologies, Inc. *		38,200		597,448
				6,409,833
Software & Services 10.9%
ACI Worldwide, Inc. *		55,100		2,196,286
Acxiom Corp. *		217,800		2,990,394
AOL, Inc. *		38,700		969,048
CACI International, Inc., Class A *		52,500		3,209,325
Convergys Corp. *		221,000		2,954,770
CoreLogic, Inc. *		98,600		1,646,620
CSG Systems International, Inc. *		61,100		879,840
DST Systems, Inc.		8,600		481,428
Earthlink, Inc.		2,200		17,864
Euronet Worldwide, Inc. *		145,800		3,153,654
Heartland Payment Systems, Inc.		44,600		1,358,962
iGATE Corp. *		83,000		1,615,180
InfoSpace, Inc. *		17,000		189,210
JDA Software Group, Inc. *		83,200		2,402,816
MAXIMUS, Inc.		69,100		3,057,675
Mentor Graphics Corp. *		218,200		3,152,990
MoneyGram International, Inc. *		123,624		2,081,828
Monotype Imaging Holdings, Inc. *		65,000		922,350
NetScout Systems, Inc. *		26,100		540,009
Support.com, Inc. *		34,200		124,146
TeleTech Holdings, Inc. *		90,300		1,368,045
The Hackett Group, Inc. *		27,500		157,025
TIBCO Software, Inc. *		19,700		648,130
TNS, Inc. *		122,700		2,503,080
Unisys Corp. *		175,940		3,283,041
United Online, Inc.		106,700		505,758
VASCO Data Security International, Inc. *		22,800		177,612
Websense, Inc. *		27,500		570,350
				43,157,436
Technology Hardware & Equipment 3.7%
Black Box Corp.		7,600		171,836
Electro Scientific Industries, Inc.		22,500		320,850
Electronics for Imaging, Inc. *		57,600		1,028,160
Extreme Networks, Inc. *		82,600		316,358
FEI Co. *		21,300		1,068,621
Insight Enterprises, Inc. *		132,600		2,693,106
Itron, Inc. *		19,300		787,440
Ixia *		78,800		992,880
KEMET Corp. *		21,800		185,518
LeCroy Corp. *		7,400		76,516
MTS Systems Corp.		29,300		1,405,521
Newport Corp. *		37,200		635,004
Plexus Corp. *		18,500		598,845
Quantum Corp. *		156,500		372,470
Radisys Corp. *		65,400		415,290
Richardson Electronics Ltd.		25,800		325,338
Sanmina-SCI Corp. *		103,400		920,260
Symmetricom, Inc. *		74,300		413,108
Vishay Intertechnology, Inc. *		170,600		1,914,132
Zygo Corp. *		5,300		104,887
				14,746,140
Telecommunication Services 1.0%
Cbeyond, Inc. *		42,200		271,346
Cogent Communications Group, Inc. *		65,700		1,230,561
IDT Corp., Class B		170,500		1,435,610
Premiere Global Services, Inc. *		116,000		1,038,200
				3,975,717
Transportation 2.5%
Alaska Air Group, Inc. *		80,400		2,717,520
AMERCO		10,100		1,014,444
Arkansas Best Corp.		23,800		365,092
Avis Budget Group, Inc. *		153,000		2,013,480
Con-way, Inc.		15,200		494,000
International Shipholding Corp.		21,400		452,824
Park-Ohio Holdings Corp. *		15,500		334,645
RailAmerica, Inc. *		7,250		168,055
Republic Airways Holdings, Inc. *		52,900		269,261
US Airways Group, Inc. *		212,300		2,178,198
				10,007,519
Utilities 3.0%
NorthWestern Corp.		36,900		1,310,688
PNM Resources, Inc.		166,300		3,119,788
Portland General Electric Co.		127,800		3,301,074
Southwest Gas Corp.		74,100		3,113,682
Unisource Energy Corp.		34,100		1,241,240
				12,086,472
Total Common Stock
(Cost $341,237,443)				388,296,327
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 2.2% of net assets
Time Deposits 2.1%
Bank of America
0.03%, 05/01/12		8,299,204		8,299,204

See financial notes 49

 Schwab Small-Cap Equity Fund

Portfolio Holdings (Unaudited) continued

	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
U.S. Treasury Obligations 0.1%
U.S. Treasury Bills
0.08%, 06/14/12 (b)(c)		400,000		399,961
0.05%, 06/14/12 (b)(c)		40,000		39,998
				439,959
Total Short-Term Investments
(Cost $8,739,163)				8,739,163
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.6% of net assets
Wells Fargo Advantage Government Money Market Fund		2,414,793		2,414,793
Total Collateral Invested for Securities on Loan
(Cost $2,414,793)				2,414,793
End of Collateral Invested for Securities on Loan

At 04/30/12, the tax basis cost of the fund’s investments was $350,401,797 and the unrealized appreciation and depreciation were $56,711,670 and ($10,077,977), respectively, with a net unrealized appreciation of $46,633,693.

*	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.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		50		4,074,500		73,662

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$388,296,327		$—		$—		$388,296,327
Short-Term Investments(a)		—		8,739,163		—		8,739,163
Total		$388,296,327		$8,739,163		$—		$397,035,490
Other Financial Instruments
Collateral Invested for Securities on Loan		$2,414,793		$—		$—		$2,414,793
Futures Contract*		73,662		—		—		73,662

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

50 See financial notes

 Schwab Small-Cap Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $349,976,606) including securities on loan of $2,339,167		$397,035,490
Collateral invested for securities on loan		2,414,793
Receivables:
Investments sold		5,850
Fund shares sold		252,320
Dividends		216,808
Income from securities on loan		15,086
Interest		7
Prepaid expenses	+	2,864
Total assets		399,943,218
Liabilities
Collateral held for securities on loan		2,414,793
Payables:
Investment adviser and administrator fees		26,569
Shareholder service fees		6,122
Fund shares redeemed		233,277
Due to brokers for futures		44,500
Accrued expenses	+	43,542
Total liabilities		2,768,803
Net Assets
Total assets		399,943,218
Total liabilities	−	2,768,803
Net assets		$397,174,415
Net Assets by Source
Capital received from investors		384,749,539
Net investment income not yet distributed		127,259
Net realized capital losses		(34,883,251	)
Net unrealized capital gains		47,180,868
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$397,174,415		23,074,803			$17.21

See financial notes 51

 Schwab Small-Cap Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$2,373,931
Interest		1,272
Securities on loan	+	74,414
Total investment income		2,449,617
Expenses
Investment adviser and administrator fees		1,445,989
Shareholder service fees		438,839
Registration fees		30,075
Portfolio accounting fees		20,667
Shareholder reports		18,542
Professional fees		17,363
Transfer agent fees		10,554
Custodian fees		7,553
Trustees’ fees		3,800
Other expenses	+	3,531
Total expenses		1,996,913
Expense reduction by CSIM and its affiliates	−	14,024
Net expenses	−	1,982,889
Net investment income		466,728
Realized and Unrealized Gains (Losses)
Net realized gains on investments		12,684,518
Net realized gains on futures contracts	+	1,417,269
Net realized gains		14,101,787
Net unrealized gains on investments		32,926,602
Net unrealized losses on futures contracts	+	(401,734	)
Net unrealized gains	+	32,524,868
Net realized and unrealized gains		46,626,655
Increase in net assets resulting from operations		$47,093,383

52 See financial notes

 Schwab Small-Cap Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income (loss)		$466,728			($107,754	)
Net realized gains		14,101,787			42,777,267
Net unrealized gains (losses)	+	32,524,868			(15,822,877	)
Increase in net assets from operations		47,093,383			26,846,636
Distributions to Shareholders
Distributions from net investment income		($177,045	)		$—

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			10,510,777		$156,226,188			2,170,598		$33,586,870
Shares reinvested			3,977		61,875			—		—
Shares redeemed	+		(1,947,028	)	(32,430,918	)		(3,345,626	)	(52,956,292	)
Net transactions in fund shares			8,567,726		$123,857,145			(1,175,028	)	($19,369,422	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			14,507,077		$226,400,932			15,682,105		$218,923,718
Total increase or decrease	+		8,567,726		170,773,483			(1,175,028	)	7,477,214
End of period			23,074,803		$397,174,415			14,507,077		$226,400,932
Net investment income not yet distributed/(Distributions in excess of net investment income)					$127,259					($162,424	)

See financial notes 53

Schwab Hedged Equity Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		15.32			14.79			13.45			12.55			16.39			15.98
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)		(0.05	)		(0.08	)		(0.05	)		(0.05	)		0.14
Net realized and unrealized gains (losses)		0.86			0.58			1.42			0.96			(3.63	)		0.36
Total from investment operations		0.82			0.53			1.34			0.91			(3.68	)		0.50
Less distributions:
Distributions from net investment income		—			—			—			(0.01	)		(0.16	)		(0.09	)
Total distributions		—			—			—			(0.01	)		(0.16	)		(0.09	)
Net asset value at end of period		16.14			15.32			14.79			13.45			12.55			16.39
Total return (%)		5.35	2		3.58			9.96			7.28			(22.66	)		3.11
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses (including dividend expense on short sales)		1.99	3		1.86			1.97			2.07	4		2.17	5		2.03	5
Net operating expenses (excluding dividend expense on short sales)		1.52	3,6		1.44	7		1.38	6		1.62	4,6		1.77			1.77
Gross operating expenses		2.03	3		1.88			1.99			2.29			2.19			2.04
Net investment income (loss)		(0.44	)3		(0.25	)		(0.54	)		(0.41	)		(0.17	)		0.79
Portfolio turnover rate		61	2		98			115			169			138			72
Net assets, end of period ($ x 1,000,000)		215			236			329			306			343			948

* Unaudited.

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 Not annualized.

³ Annualized.

⁴ Effective May 5, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

⁵ 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.

⁶ The ratio of net operating expenses would have been 1.47% , 1.31% and 1.33% for the period ended 10/31/09, 10/31/10 and 04/30/12, respectively, if stock loan fees on short sales had not been incurred.

⁷ The ratio of net operating expenses would have been 1.33%, if stock loan fees on short sales and payment for state filing fees had not been included.

54 See financial notes

 Schwab Hedged Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.8%	Common Stock		176,258,708			205,803,349
	3	.6%	Other Investment Company		7,825,888			7,825,888
	0	.3%	Short-Term Investments		474,960			474,960
	99	.7%	Total Investments		184,559,556			214,104,197
	(34	.2)%	Short Sales		(73,925,667	)		(73,359,808	)
	34	.5%	Other Assets and Liabilities, Net					74,058,283
	100	.0%	Total Net Assets					214,802,672

	Number		Value
Security	of Shares		($)
Common Stock 95.8% of net assets
Automobiles & Components 0.3%
Ford Motor Co.		64,521		727,797
Banks 3.6%
Fifth Third Bancorp		78,998		1,124,142
KeyCorp		208,300		1,674,732
Regions Financial Corp.		248,600		1,675,564
SunTrust Banks, Inc.		13,534		328,605
Wells Fargo & Co. (a)		87,391		2,921,481
				7,724,524
Capital Goods 5.3%
AGCO Corp. *		34,373		1,600,751
Curtiss-Wright Corp.		43,600		1,538,644
General Electric Co.		54,905		1,075,040
Roper Industries, Inc.		6,500		662,350
Textron, Inc.		84,735		2,257,340
The Timken Co.		44,517		2,515,656
Wabtec Corp.		22,900		1,781,162
				11,430,943
Commercial & Professional Supplies 1.4%
Equifax, Inc.		13,800		632,316
Towers Watson & Co., Class A		37,626		2,460,740
				3,093,056
Consumer Durables & Apparel 3.4%
Brunswick Corp.		84,978		2,234,072
Harman International Industries, Inc.		40,000		1,983,200
Jarden Corp. (a)		7,711		323,322
Mohawk Industries, Inc. (a)*		38,020		2,548,100
Newell Rubbermaid, Inc.		12,600		229,320
				7,318,014
Consumer Services 2.4%
Brinker International, Inc.		86,426		2,719,826
H&R Block, Inc.		85,400		1,255,380
Penn National Gaming, Inc. (a)*		27,359		1,230,608
				5,205,814
Diversified Financials 3.7%
JPMorgan Chase & Co. (a)		80,812		3,473,300
SLM Corp. (a)		146,709		2,175,694
State Street Corp.		4,600		212,612
The NASDAQ OMX Group, Inc. (a)*		84,244		2,069,875
				7,931,481
Energy 9.3%
Chevron Corp.		32,596		3,473,430
Exxon Mobil Corp.		61,420		5,303,003
Hess Corp.		43,078		2,246,087
Marathon Oil Corp.		79,400		2,329,596
Murphy Oil Corp. (a)		44,653		2,454,575
Oceaneering International, Inc. (a)		24,501		1,264,987
Teekay Offshore Partners L.P.		27,100		797,011
Tesoro Corp. *		9,127		212,203
Valero Energy Corp. (a)		77,678		1,918,646
				19,999,538
Food & Staples Retailing 2.6%
Costco Wholesale Corp.		1,000		88,170
Harris Teeter Supermarkets, Inc.		12,904		489,965
Safeway, Inc. (a)		126,183		2,565,300
The Kroger Co. (a)		108,743		2,530,450
				5,673,885
Food, Beverage & Tobacco 6.3%
Bunge Ltd.		36,744		2,369,988
ConAgra Foods, Inc.		1,800		46,476
Constellation Brands, Inc., Class A (a)*		122,879		2,654,186
Corn Products International, Inc. (a)		44,649		2,547,672
Smithfield Foods, Inc. (a)*		109,403		2,293,087
Tyson Foods, Inc., Class A (a)		120,358		2,196,534
Universal Corp.		32,400		1,484,892
				13,592,835
Health Care Equipment & Services 1.5%
Henry Schein, Inc. *		4,100		314,634
McKesson Corp.		31,128		2,845,410
The Cooper Cos., Inc.		1,100		96,987
				3,257,031
Household & Personal Products 0.2%
Nu Skin Enterprises, Inc., Class A		7,600		405,080

See financial notes 55

 Schwab Hedged Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Insurance 2.3%
American Financial Group, Inc.		65,535		2,550,622
Principal Financial Group, Inc.		39,132		1,082,783
Reinsurance Group of America, Inc.		8,300		482,562
The Travelers Cos., Inc.		9,900		636,768
Torchmark Corp.		1,800		87,678
				4,840,413
Materials 5.5%
CF Industries Holdings, Inc.		944		182,249
Coeur d’Alene Mines Corp. *		42,400		913,720
International Paper Co. (a)		66,916		2,228,972
MeadWestvaco Corp. (a)		81,747		2,601,190
Minerals Technologies, Inc. (a)		38,946		2,613,277
PPG Industries, Inc.		20,072		2,112,377
Rockwood Holdings, Inc. *		19,828		1,097,281
				11,749,066
Media 1.3%
CBS Corp., Class B - Non Voting Shares (a)		83,342		2,779,456
Pharmaceuticals, Biotechnology & Life Sciences 7.0%
Agilent Technologies, Inc.		18,884		796,527
Bristol-Myers Squibb Co. (a)		66,464		2,217,904
Merck & Co., Inc.		43,700		1,714,788
Mylan, Inc. *		50,253		1,090,993
PerkinElmer, Inc. (a)		82,041		2,264,331
Pfizer, Inc. (a)		164,087		3,762,515
Watson Pharmaceuticals, Inc. (a)*		40,661		3,064,213
				14,911,271
Real Estate 2.7%
CBL & Associates Properties, Inc.		93,000		1,732,590
CBRE Group, Inc., Class A (a)*		69,178		1,301,238
Host Hotels & Resorts, Inc.		163,700		2,723,968
				5,757,796
Retailing 5.5%
Ascena Retail Group, Inc. *		115,000		2,355,200
Dillard’s, Inc., Class A		44,957		2,902,424
Foot Locker, Inc.		11,400		348,726
Macy’s, Inc.		67,321		2,761,507
PetSmart, Inc. (a)		43,852		2,554,817
Pier 1 Imports, Inc. (a)		56,337		967,870
				11,890,544
Semiconductors & Semiconductor Equipment 2.9%
Amkor Technology, Inc. *		154,276		797,607
Fairchild Semiconductor International, Inc. (a)*		120,810		1,711,878
LSI Corp. *		278,566		2,239,670
Micron Technology, Inc. *		208,354		1,373,053
				6,122,208
Software & Services 11.0%
ACI Worldwide, Inc. *		1,679		66,925
Activision Blizzard, Inc.		128,416		1,652,714
BMC Software, Inc. *		15,300		631,278
CA, Inc. (a)		112,506		2,972,409
Cadence Design Systems, Inc. (a)*		137,800		1,608,126
Computer Sciences Corp. (a)		916		25,703
Convergys Corp. (a)*		169,222		2,262,498
DST Systems, Inc.		45,439		2,543,675
IAC/InterActiveCorp		50,218		2,417,997
MAXIMUS, Inc. (a)		55,603		2,460,433
Symantec Corp. (a)*		124,425		2,055,501
Synopsys, Inc. (a)*		64,346		1,931,023
Total System Services, Inc.		124,600		2,930,592
				23,558,874
Technology Hardware & Equipment 7.9%
Apple, Inc. *		9,728		5,683,487
AVX Corp.		63,681		808,749
Brocade Communications Systems, Inc. (a)*		349,224		1,934,701
EchoStar Corp., Class A (a)*		56,967		1,654,891
Jabil Circuit, Inc.		38,188		895,509
NCR Corp. (a)*		114,249		2,684,851
Tech Data Corp. (a)*		41,545		2,234,705
Western Digital Corp. *		18,779		728,813
Xerox Corp.		47,342		368,321
				16,994,027
Telecommunication Services 1.9%
Telephone & Data Systems, Inc. (a)		71,820		1,744,508
Verizon Communications, Inc.		59,933		2,420,094
				4,164,602
Transportation 4.6%
Alaska Air Group, Inc. *		73,322		2,478,284
Delta Air Lines, Inc. *		271,300		2,973,448
FedEx Corp.		27,592		2,434,718
US Airways Group, Inc. *		188,000		1,928,880
				9,815,330
Utilities 3.2%
Ameren Corp. (a)		79,266		2,599,132
Portland General Electric Co.		41,000		1,059,030
Southwest Gas Corp. (a)		40,370		1,696,347
The AES Corp. (a)*		120,228		1,505,255
				6,859,764
Total Common Stock
(Cost $176,258,708)				205,803,349

56 See financial notes

 Schwab Hedged Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Other Investment Company 3.6% of net assets
Money Market Fund 3.6%
State Street Institutional U.S. Government Money Market Fund		7,825,888		7,825,888
Total Other Investment Company
(Cost $7,825,888)				7,825,888
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 0.3% of net assets
U.S. Treasury Obligations 0.3%
U.S. Treasury Bills
0.07%, 06/14/12 (b)(c)		325,000		324,974
0.08%, 06/14/12 (b)(c)		150,000		149,986
Total Short-Term Investments
(Cost $474,960)				474,960
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $184,768,156 and the unrealized appreciation and depreciation were $33,727,681 and ($4,391,640), respectively, with a net unrealized appreciation of $29,336,041.

*	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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		96		6,689,280		49,542

See financial notes 57

 Schwab Hedged Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Short Sales 34.2% of net assets
Automobiles & Components 1.1%
Gentex Corp.		48,000		1,054,560
Johnson Controls, Inc.		8,900		284,533
Thor Industries, Inc.		32,291		1,092,405
				2,431,498
Banks 1.8%
BankUnited, Inc.		21,100		519,060
Capitol Federal Financial, Inc.		86,500		1,021,565
IBERIABANK Corp.		19,300		985,651
MGIC Investment Corp. *		6,400		22,144
New York Community Bancorp, Inc.		29,400		396,606
Valley National Bancorp		79,800		1,005,480
				3,950,506
Capital Goods 1.8%
GrafTech International Ltd. *		42,000		493,080
Joy Global, Inc.		8,500		601,545
MasTec, Inc. *		26,500		460,835
Rockwell Collins, Inc.		18,300		1,022,787
USG Corp. *		65,400		1,180,470
				3,758,717
Consumer Durables & Apparel 1.6%
Carter’s, Inc. *		14,400		781,920
Deckers Outdoor Corp. *		5,900		300,959
M.D.C. Holdings, Inc.		38,900		1,093,479
PulteGroup, Inc. *		122,500		1,205,400
				3,381,758
Consumer Services 0.2%
Chipotle Mexican Grill, Inc. *		800		331,320
Diversified Financials 0.6%
Greenhill & Co., Inc.		1,800		69,930
Leucadia National Corp.		5,900		146,674
T. Rowe Price Group, Inc.		16,500		1,041,397
				1,258,001
Energy 3.3%
Cabot Oil & Gas Corp.		31,100		1,092,854
Carrizo Oil & Gas, Inc. *		38,700		1,085,148
Continental Resources, Inc. *		12,100		1,079,925
Dril-Quip, Inc. *		15,400		1,037,806
Gulfport Energy Corp. *		7,600		199,196
Kodiak Oil & Gas Corp. *		95,784		847,688
Oasis Petroleum, Inc. *		32,400		1,071,468
Quicksilver Resources, Inc. *		151,100		710,170
				7,124,255
Food & Staples Retailing 0.6%
PriceSmart, Inc.		2,100		173,334
Sysco Corp.		35,300		1,020,170
				1,193,504
Food, Beverage & Tobacco 1.6%
General Mills, Inc.		100		3,889
Green Mountain Coffee Roasters, Inc. *		15,100		736,125
Reynolds American, Inc.		24,128		985,146
Sanderson Farms, Inc.		20,200		1,042,522
Snyders-Lance, Inc.		23,900		618,532
				3,386,214
Health Care Equipment & Services 0.4%
DexCom, Inc. *		90,800		888,932
Insurance 1.4%
MBIA, Inc. *		106,500		1,073,520
Old Republic International Corp.		98,800		983,060
Platinum Underwriters Holdings Ltd.		24,700		904,514
				2,961,094
Materials 4.0%
AK Steel Holding Corp.		41,900		310,898
Allied Nevada Gold Corp. *		31,600		925,564
Eagle Materials, Inc.		30,700		1,081,254
International Flavors & Fragrances, Inc.		17,100		1,029,591
Louisiana-Pacific Corp. *		125,900		1,139,395
Praxair, Inc.		8,900		1,029,730
Southern Copper Corp.		32,985		1,084,547
United States Steel Corp.		35,700		1,011,381
Walter Energy, Inc.		16,000		1,060,960
				8,673,320
Media 0.5%
DreamWorks Animation SKG, Inc., Class A *		58,100		1,046,381
Pharmaceuticals, Biotechnology & Life Sciences 1.4%
Human Genome Sciences, Inc. *		50,600		744,326
Regeneron Pharmaceuticals, Inc. *		7,300		987,398
Theravance, Inc. *		12,387		268,055
Vertex Pharmaceuticals, Inc. *		27,000		1,038,960
				3,038,739
Real Estate 0.4%
DuPont Fabros Technology, Inc.		30,200		819,930
Retailing 2.1%
CarMax, Inc. *		32,300		997,101
Guess?, Inc.		34,600		1,013,088
Shutterfly, Inc. *		11,000		342,320
The Buckle, Inc.		22,300		1,029,814
Urban Outfitters, Inc. *		35,800		1,036,768
				4,419,091

58 See financial notes

 Schwab Hedged Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Semiconductors & Semiconductor Equipment 1.1%
Cavium, Inc. *		24,500		716,870
Cree, Inc. *		34,000		1,050,600
MEMC Electronic Materials, Inc. *		172,800		620,352
				2,387,822
Software & Services 4.3%
Ariba, Inc. *		29,100		1,111,620
Concur Technologies, Inc. *		18,500		1,046,360
LinkedIn Corp., Class A *		7,100		769,995
MicroStrategy, Inc., Class A *		7,100		992,438
NetSuite, Inc. *		21,300		945,294
Pegasystems, Inc.		26,700		992,973
QLIK Technologies, Inc. *		33,400		962,254
ServiceSource International, Inc. *		67,900		1,125,782
TiVo, Inc. *		27,000		291,330
WebMD Health Corp. *		6,800		154,700
Zynga, Inc. *		111,600		930,744
				9,323,490
Technology Hardware & Equipment 3.2%
Acme Packet, Inc. *		38,200		1,072,274
Aruba Networks, Inc. *		52,900		1,117,248
Ciena Corp. *		65,600		972,192
Fusion-io, Inc. *		38,400		984,960
IPG Photonics Corp. *		1,900		91,960
Loral Space & Communications, Inc.		7,000		434,350
National Instruments Corp.		10,600		288,320
SanDisk Corp. *		20,800		769,808
Universal Display Corp. *		26,300		1,182,711
				6,913,823
Transportation 2.8%
Atlas Air Worldwide Holdings, Inc. *		22,700		1,045,335
C.H. Robinson Worldwide, Inc.		15,400		919,996
Heartland Express, Inc.		72,600		1,004,058
Hub Group, Inc., Class A *		28,800		1,008,000
J.B. Hunt Transport Services, Inc.		3,000		165,990
Kirby Corp. *		12,800		849,536
Spirit Airlines, Inc. *		44,900		1,078,498
				6,071,413
Total Short Sales
(Proceeds $73,925,667)				73,359,808
End of Short Sale Positions.

* Non-income producing security

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

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)		$205,803,349			$—		$—		$205,803,349
Other Investment Company(a)		7,825,888			—		—		7,825,888
Short-Term Investments(a)		—			474,960		—		474,960
Total		$213,629,237			$474,960		$—		$214,104,197
Other Financial Instruments
Futures Contracts*		$49,542			$—		$—		$49,542
Liabilities Valuation Input
Other Financial Instruments
Short Sales(a)		($73,359,808	)		$—		$—		($73,359,808	)

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 59

 Schwab Hedged Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $184,559,556)		$214,104,197
Deposits with broker for short sales		73,931,713
Receivables:
Fund shares sold		211,147
Dividends		138,713
Interest		97
Prepaid expenses	+	6,329
Total assets		288,392,196
Liabilities
Securities sold short, at value (proceeds $73,925,667)		73,359,808
Payables:
Investment adviser and administrator fees		17,986
Shareholder service fees		5,090
Fund shares redeemed		137,945
Due to brokers for futures		23,520
Dividends on short sales		7,736
Accrued expenses	+	37,439
Total liabilities		73,589,524
Net Assets
Total assets		288,392,196
Total liabilities	−	73,589,524
Net assets		$214,802,672
Net Assets by Source
Capital received from investors		196,285,861
Net investment loss		(485,182	)
Net realized capital losses		(11,160,447	)
Net unrealized capital gains		30,162,440
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$214,802,672		13,311,491			$16.14

60 See financial notes

 Schwab Hedged Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$1,718,140
Interest	+	2,139
Total investment income		1,720,279
Expenses
Investment adviser and administrator fees		1,163,259
Shareholder service fees		260,263
Dividends on short sales		526,803
Stock loan fees on short sales		205,768
Professional fees		24,816
Transfer agent fees		23,759
Portfolio accounting fees		18,955
Registration fees		12,199
Custodian fees		3,952
Shareholder reports		3,592
Trustees’ fees		2,372
Interest expense		60
Other expenses	+	3,831
Total expenses		2,249,629
Expense reduction by CSIM and its affiliates	−	44,167
Custody credits	−	1
Net expenses	−	2,205,461
Net investment loss		(485,182	)
Realized and Unrealized Gains (Losses)
Net realized gains on investments		12,246,315
Net realized gains on futures contracts		846,280
Net realized losses on short sales	+	(5,927,881	)
Net realized gains		7,164,714
Net unrealized gains on investments		11,564,824
Net unrealized losses on futures contracts		(104,887	)
Net unrealized losses on short sales	+	(6,463,414	)
Net unrealized gains	+	4,996,523
Net realized and unrealized gains		12,161,237
Increase in net assets resulting from operations		$11,676,055

See financial notes 61

 Schwab Hedged Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment loss		($485,182	)		($727,399	)
Net realized gains		7,164,714			13,253,459
Net unrealized gains (losses)	+	4,996,523			(2,318,472	)
Increase in net assets from operations		$11,676,055			$10,207,588

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,287,628		$20,338,163			3,890,847		$60,873,641
Shares redeemed	+		(3,357,940	)	(52,835,754	)		(10,766,228	)	(164,542,266	)
Net transactions in fund shares			(2,070,312	)	($32,497,591	)		(6,875,381	)	($103,668,625	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			15,381,803		$235,624,208			22,257,184		$329,085,245
Total decrease	+		(2,070,312	)	(20,821,536	)		(6,875,381	)	(93,461,037	)
End of period			13,311,491		$214,802,672			15,381,803		$235,624,208
Net investment loss					($485,182	)				$—

62 See financial notes

Schwab Financial Services Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		9.17			9.74			8.77			9.05			15.88			15.75
Income (loss) from investment operations:
Net investment income (loss)		0.05			0.05			0.04			0.08			0.18			0.18
Net realized and unrealized gains (losses)		1.28			(0.58	)		0.99			(0.21	)		(6.78	)		0.25
Total from investment operations		1.33			(0.53	)		1.03			(0.13	)		(6.60	)		0.43
Less distributions:
Distributions from net investment income		(0.05	)		(0.04	)		(0.06	)		(0.15	)		(0.21	)		(0.11	)
Distributions from net realized gains		—			—			—			—			(0.02	)		(0.19	)
Total distributions		(0.05	)		(0.04	)		(0.06	)		(0.15	)		(0.23	)		(0.30	)
Net asset value at end of period		10.45			9.17			9.74			8.77			9.05			15.88
Total return (%)		14.61	1		(5.51	)		11.79			(1.10	)		(42.08	)		2.75
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.94	2		0.93	3		0.95	4		0.96	5		0.94			0.90
Gross operating expenses		1.11	2		1.06			1.04			0.99			0.94			0.90
Net investment income (loss)		0.97	2		0.45			0.37			0.91			1.56			1.06
Portfolio turnover rate		46	1		77			54			47			59			54
Net assets, end of period ($ x 1,000,000)		47			40			52			64			84			94

* Unaudited.

¹ Not annualized.

² Annualized.

³ The ratio of net operating expenses would have been 0.94%, if payment for state filing fees had not been included.

⁴ The ratio of net operating expenses would have been 0.94%, if certain non-routine expenses had not been incurred.

⁵ Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

See financial notes 63

 Schwab Financial Services Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.7%	Common Stock		42,176,588		46,371,023
	3	.6%	Short-Term Investments		1,716,411		1,716,411
	101	.3%	Total Investments		43,892,999		48,087,434
	(1	.3)%	Other Assets and Liabilities, Net				(637,701	)
	100	.0%	Total Net Assets				47,449,733

	Number		Value
Security	of Shares		($)
Common Stock 97.7% of net assets
Banks 24.1%
1st Source Corp.		3,100		70,339
Banner Corp.		14,428		316,695
BB&T Corp.		17,400		557,496
Beneficial Mutual Bancorp, Inc. *		5,500		47,685
BOK Financial Corp.		2,100		119,763
Comerica, Inc.		2,800		89,656
Commerce Bancshares, Inc.		15,540		623,154
East West Bancorp, Inc.		21,400		487,278
Enterprise Financial Services Corp.		100		1,209
Fifth Third Bancorp		70,700		1,006,061
First Citizens BancShares, Inc., Class A		400		69,320
First Interstate BancSystem, Inc.		4,500		63,405
Heritage Commerce Corp. *		6,100		41,114
Home Bancorp, Inc. *		2,000		34,720
Huntington Bancshares, Inc.		31,300		209,397
KeyCorp		106,600		857,064
MainSource Financial Group, Inc.		15,700		183,533
PNC Financial Services Group, Inc.		7,100		470,872
Regions Financial Corp.		151,700		1,022,458
StellarOne Corp.		8,900		111,339
SunTrust Banks, Inc.		43,400		1,053,752
Synovus Financial Corp.		15,500		32,550
U.S. Bancorp		12,500		402,125
Virginia Commerce Bancorp, Inc. *		5,000		39,150
Washington Federal, Inc.		5,400		94,716
Wells Fargo & Co.		98,500		3,292,855
WesBanco, Inc.		2,600		53,248
Western Alliance Bancorp *		8,700		76,386
				11,427,340
Diversified Financials 33.5%
Affiliated Managers Group, Inc. *		8,300		943,046
American Express Co.		30,100		1,812,321
Bank of America Corp.		161,900		1,313,009
Calamos Asset Management, Inc., Class A		8,600		111,112
Capital One Financial Corp.		26,400		1,464,672
Citigroup, Inc.		45,250		1,495,060
Interactive Brokers Group, Inc., Class A		53,600		813,112
Jefferies Group, Inc.		3,800		60,534
JPMorgan Chase & Co.		78,300		3,365,334
Legg Mason, Inc.		11,100		289,377
Morgan Stanley		4,900		84,672
Northern Trust Corp.		3,400		161,806
Raymond James Financial, Inc.		23,100		845,922
SLM Corp.		56,900		843,827
State Street Corp.		27,900		1,289,538
SWS Group, Inc.		32,200		181,608
The NASDAQ OMX Group, Inc. *		33,100		813,267
				15,888,217
Insurance 25.6%
Aflac, Inc.		27,000		1,216,080
American Equity Investment Life Holding Co.		4,300		52,718
American Financial Group, Inc.		20,250		788,130
American National Insurance Co.		4,900		343,980
Assurant, Inc.		18,900		762,426
Axis Capital Holdings Ltd.		7,900		268,758
CNO Financial Group, Inc. *		6,700		48,709
Loews Corp.		26,400		1,085,832
MetLife, Inc.		44,800		1,614,144
Principal Financial Group, Inc.		34,600		957,382
Prudential Financial, Inc.		18,600		1,126,044
Reinsurance Group of America, Inc.		15,600		906,984
Stewart Information Services Corp.		9,900		145,728
Symetra Financial Corp.		44,800		544,768
The Travelers Cos., Inc.		21,000		1,350,720
Torchmark Corp.		19,000		925,490
				12,137,893
Real Estate 14.5%
Apartment Investment & Management Co., Class A		32,500		882,375
Camden Property Trust		5,500		372,185
CBL & Associates Properties, Inc.		6,800		126,684
First Industrial Realty Trust, Inc. *		61,400		757,676
Host Hotels & Resorts, Inc.		63,700		1,059,968
Kite Realty Group Trust		52,900		270,319
LaSalle Hotel Properties		23,500		691,135
Pennsylvania Real Estate Investment Trust		36,000		507,240
RLJ Lodging Trust		6,100		114,558
Simon Property Group, Inc.		7,037		1,094,957
Sunstone Hotel Investors, Inc. *		81,100		827,220
Thomas Properties Group, Inc.		43,700		213,256
				6,917,573
Total Common Stock
(Cost $42,176,588)				46,371,023

64 See financial notes

 Schwab Financial Services Fund

Portfolio Holdings (Unaudited) continued

	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 3.6% of net assets
Time Deposits 3.4%
Bank of America
0.03%, 05/01/12		1,430,330		1,430,330
Citibank
0.03%, 05/01/12		201,089		201,089
				1,631,419
U.S. Treasury Obligations 0.2%
U.S. Treasury Bills
0.07%, 06/14/12 (a)(b)		10,000		9,999
0.08%, 06/14/12 (a)(b)		75,000		74,993
				84,992
Total Short-Term Investments
(Cost $1,716,411)				1,716,411
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $43,892,999 and the unrealized appreciation and depreciation were $4,992,908 and ($798,473), respectively, with a net unrealized appreciation of $4,194,435.

*	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.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		7		487,760		12,615

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$46,371,023		$—		$—		$46,371,023
Short-Term Investments(a)		—		1,716,411		—		1,716,411
Total		$46,371,023		$1,716,411		$—		$48,087,434
Other Financial Instruments
Futures Contracts*		$12,615		$—		$—		$12,615

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 65

 Schwab Financial Services Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $43,892,999)		$48,087,434
Receivables:
Investments sold		3,278,316
Fund shares sold		229,147
Dividends		16,965
Interest		1
Prepaid expenses	+	1,128
Total assets		51,612,991
Liabilities
Payables:
Investments bought		4,103,484
Investment adviser and administrator fees		1,778
Shareholder service fees		3,033
Fund shares redeemed		33,381
Due to brokers for futures		1,715
Accrued expenses	+	19,867
Total liabilities		4,163,258
Net Assets
Total assets		51,612,991
Total liabilities	−	4,163,258
Net assets		$47,449,733
Net Assets by Source
Capital received from investors		79,693,115
Net investment income not yet distributed		88,274
Net realized capital losses		(36,545,478	)
Net unrealized capital gains		4,213,822
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$47,449,733		4,539,510			$10.45

66 See financial notes

 Schwab Financial Services Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends		$401,736
Interest		124
Securities on loan	+	17
Total investment income		401,877
Expenses
Investment adviser and administrator fees		113,428
Shareholder service fees		50,809
Portfolio accounting fees		17,542
Transfer agent fees		16,609
Professional fees		14,254
Registration fees		10,494
Shareholder reports		4,762
Trustees’ fees		2,951
Custodian fees		1,291
Other expenses	+	791
Total expenses		232,931
Expense reduction by CSIM and its affiliates	−	35,483
Net expenses	−	197,448
Net investment income		204,429
Realized and Unrealized Gains (Losses)
Net realized gains on investments		718,395
Net realized gains on futures contracts	+	31,722
Net realized gains		750,117
Net unrealized gains on investments		4,760,546
Net unrealized gains on futures contracts	+	12,615
Net unrealized gains	+	4,773,161
Net realized and unrealized gains		5,523,278
Increase in net assets resulting from operations		$5,727,707

See financial notes 67

 Schwab Financial Services Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$204,429			$218,566
Net realized gains		750,117			343,656
Net unrealized gains (losses)	+	4,773,161			(2,420,332	)
Increase (Decrease) in net assets from operations		5,727,707			(1,858,110	)
Distributions to Shareholders
Distributions from net investment income		($224,748	)		($200,494	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			737,309		$7,363,256			944,737		$9,521,425
Shares reinvested			21,794		196,795			17,076		178,785
Shares redeemed	+		(610,719	)	(5,868,792	)		(1,921,163	)	(19,499,334	)
Net transactions in fund shares			148,384		$1,691,259			(959,350	)	($9,799,124	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			4,391,126		$40,255,515			5,350,476		$52,113,243
Total increase or decrease	+		148,384		7,194,218			(959,350	)	(11,857,728	)
End of period			4,539,510		$47,449,733			4,391,126		$40,255,515
Net investment income not yet distributed					$88,274					$108,593

68 See financial notes

Schwab Health Care Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		17.29			15.48			13.41			12.55			17.08			15.05
Income (loss) from investment operations:
Net investment income (loss)		0.12			0.15			0.19			0.13			0.08			0.05
Net realized and unrealized gains (losses)		2.00			1.85			2.01			0.82			(4.46	)		2.11
Total from investment operations		2.12			2.00			2.20			0.95			(4.38	)		2.16
Less distributions:
Distributions from net investment income		(0.15	)		(0.19	)		(0.13	)		(0.09	)		(0.05	)		—
Distributions from net realized gains		—			—			—			—			(0.10	)		(0.13	)
Total distributions		(0.15	)		(0.19	)		(0.13	)		(0.09	)		(0.15	)		(0.13	)
Net asset value at end of period		19.26			17.29			15.48			13.41			12.55			17.08
Total return (%)		12.34	1		13.00			16.49			7.65			(25.87	)		14.49
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.82	2		0.81	3		0.82			0.83	4		0.82			0.82
Gross operating expenses		0.85	2		0.85			0.86			0.85			0.82			0.82
Net investment income (loss)		1.29	2		0.85			1.14			0.88			0.48			0.32
Portfolio turnover rate		28	1		24			37			36			50			34
Net assets, end of period ($ x 1,000,000)		464			414			410			430			545			834

* Unaudited.

¹ Not annualized.

² Annualized.

³ The ratio of net operating expenses would have been 0.82%, if payment for state filing fees and a voluntary reduction of Investment Adviser fees had not been included.

⁴ Effective July 1, 2009, the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

See financial notes 69

 Schwab Health Care Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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				($)		($)
	75	.0%	Common Stock		277,204,244		348,189,940
	20	.1%	Foreign Common Stock		78,984,148		93,219,481
	4	.8%	Short-Term Investments		22,166,019		22,166,019
	99	.9%	Total Investments		378,354,411		463,575,440
	0	.7%	Collateral Invested for Securities on Loan		3,058,960		3,058,960
	(0	.6)%	Other Assets and Liabilities, Net				(2,441,700	)
	100	.0%	Total Net Assets				464,192,700

	Number		Value
Security	of Shares		($)
Common Stock 75.0% of net assets
Health Care Equipment & Services 25.3%
Aetna, Inc.		15,000		660,600
Alere, Inc. *		20,000		477,800
AmerisourceBergen Corp.		175,000		6,511,750
Boston Scientific Corp. *		1,663,000		10,410,380
CareFusion Corp. *		288,000		7,462,080
Centene Corp. *		39,000		1,544,010
CONMED Corp.		9,000		257,310
Cynosure, Inc., Class A *		17,000		351,390
DaVita, Inc. *		100,000		8,858,000
Greatbatch, Inc. *		115,000		2,678,350
Health Management Associates, Inc., Class A *		100,000		720,000
Henry Schein, Inc. *		102,000		7,827,480
Hill-Rom Holdings, Inc.		36,000		1,168,200
Hologic, Inc. *		455,000		8,699,600
ICU Medical, Inc. *		20,000		1,049,800
IDEXX Laboratories, Inc. *		5,000		439,650
Integra LifeSciences Holdings *		25,000		930,750
Invacare Corp.		135,000		2,139,750
LifePoint Hospitals, Inc. *		75,000		2,926,500
McKesson Corp.		85,000		7,769,850
MedAssets, Inc. *		161,000		2,030,210
Medtronic, Inc.		100,000		3,820,000
Omnicare, Inc.		15,000		522,600
RTI Biologics, Inc. *		81,000		283,500
Sirona Dental Systems, Inc. *		78,000		3,939,780
Stryker Corp.		50,000		2,728,500
Teleflex, Inc.		25,000		1,566,750
The Cooper Cos., Inc.		118,000		10,404,060
Thoratec Corp. *		25,000		870,250
UnitedHealth Group, Inc.		265,000		14,879,750
Wright Medical Group, Inc. *		130,000		2,421,900
Zimmer Holdings, Inc.		15,000		943,950
				117,294,500
Pharmaceuticals, Biotechnology & Life Sciences 49.7%
Abbott Laboratories		85,000		5,275,100
Acorda Therapeutics, Inc. *		62,000		1,564,880
Agilent Technologies, Inc.		39,000		1,645,020
AMAG Pharmaceuticals, Inc. *		46,000		720,360
Amgen, Inc.		275,000		19,555,250
Astex Pharmaceuticals *		108,000		190,080
Bio-Rad Laboratories, Inc., Class A *		20,000		2,159,800
Biogen Idec, Inc. *		109,000		14,607,090
Bristol-Myers Squibb Co.		640,000		21,356,800
Celgene Corp. *		184,000		13,417,280
Eli Lilly & Co.		350,000		14,486,500
Endo Pharmaceuticals Holdings, Inc. *		25,000		878,500
Forest Laboratories, Inc. *		163,000		5,677,290
Gilead Sciences, Inc. *		150,000		7,801,500
Life Technologies Corp. *		209,000		9,689,240
MAP Pharmaceuticals, Inc. *		141,000		1,807,620
Merck & Co., Inc.		532,000		20,875,680
Momenta Pharmaceuticals, Inc. *		100,000		1,588,000
Mylan, Inc. *		447,000		9,704,370
Myriad Genetics, Inc. *		256,000		6,658,560
Obagi Medical Products, Inc. *		34,000		446,080
Orexigen Therapeutics, Inc. *		32,000		112,000
Par Pharmaceutical Cos., Inc. *		229,000		9,695,860
PAREXEL International Corp. *		35,000		942,900
PerkinElmer, Inc.		133,000		3,670,800
Pfizer, Inc.		934,000		21,416,620
POZEN, Inc. *		37,000		246,420
Progenics Pharmaceuticals, Inc. *		45,000		494,550
Repligen Corp. *		18,000		79,380
Sucampo Pharmaceuticals, Inc., Class A *		13,000		108,160
The Medicines Co. *		75,000		1,656,750
Thermo Fisher Scientific, Inc.		85,000		4,730,250
United Therapeutics Corp. *		48,000		2,100,000
ViroPharma, Inc. *		186,000		4,045,500
Warner Chilcott plc, Class A *		555,000		12,071,250
Watson Pharmaceuticals, Inc. *		125,000		9,420,000
				230,895,440
Total Common Stock
(Cost $277,204,244)				348,189,940
Foreign Common Stock 20.1% of net assets
Australia 1.8%
Health Care Equipment & Services 0.2%
Cochlear Ltd.		10,000		681,082
Pharmaceuticals, Biotechnology & Life Sciences 1.6%
CSL Ltd.		196,000		7,463,779
				8,144,861

70 See financial notes

 Schwab Health Care Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Belgium 0.3%
Pharmaceuticals, Biotechnology & Life Sciences 0.3%
UCB S.A. (a)		25,000		1,169,007
Denmark 2.2%
Pharmaceuticals, Biotechnology & Life Sciences 2.2%
H. Lundbeck A/S		21,000		421,026
Novo Nordisk A/S, Class B		65,700		9,685,689
				10,106,715
France 2.8%
Pharmaceuticals, Biotechnology & Life Sciences 2.8%
Sanofi		170,000		12,984,907
Germany 0.6%
Pharmaceuticals, Biotechnology & Life Sciences 0.6%
Bayer AG - Reg’d (a)		26,000		1,832,061
Merck KGaA		10,000		1,099,199
				2,931,260
Israel 0.3%
Pharmaceuticals, Biotechnology & Life Sciences 0.3%
Teva Pharmaceutical Industries Ltd.		35,000		1,600,449
Japan 2.6%
Health Care Equipment & Services 0.0%
Fukuda Denshi Co., Ltd.		2,000		60,142
Pharmaceuticals, Biotechnology & Life Sciences 2.6%
Astellas Pharma, Inc.		90,000		3,650,003
Daiichi Sankyo Co., Ltd.		20,000		343,467
Dainippon Sumitomo Pharma Co., Ltd.		56,000		560,831
Eisai Co., Ltd.		78,000		3,048,502
Kyowa Hakko Kirin Co., Ltd.		404,000		4,246,614
Ono Pharmaceutical Co., Ltd.		5,000		283,102
				12,132,519
				12,192,661
Switzerland 5.5%
Health Care Equipment & Services 0.1%
Sonova Holding AG - Reg’d *		5,000		552,602
Pharmaceuticals, Biotechnology & Life Sciences 5.4%
Novartis AG - Reg’d		205,000		11,319,328
Roche Holding AG		74,400		13,597,381
				24,916,709
				25,469,311
United Kingdom 4.0%
Pharmaceuticals, Biotechnology & Life Sciences 4.0%
AstraZeneca plc		186,500		8,172,690
Genus plc		10,000		229,248
GlaxoSmithKline plc		400,000		9,240,593
Shire plc		30,000		977,779
				18,620,310
Total Foreign Common Stock
(Cost $78,984,148)				93,219,481
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 4.8% of net assets
Time Deposits 4.6%
Bank of America
0.03%, 05/01/12		13,959,764		13,959,764
Citibank
0.03%, 05/01/12		7,186,342		7,186,342
				21,146,106
U.S. Treasury Obligations 0.2%
U.S. Treasury Bills
0.03%, 06/14/12 (b)(c)		200,000		199,993
0.07%, 06/14/12 (b)(c)		20,000		19,998
0.08%, 06/14/12 (b)(c)		800,000		799,922
				1,019,913
Total Short-Term Investments
(Cost $22,166,019)				22,166,019
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.7% of net assets
Wells Fargo Advantage Government Money Market Fund		3,058,960		3,058,960
Total Collateral Invested for Securities on Loan
(Cost $3,058,960)				3,058,960
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $378,354,411 and the unrealized appreciation and depreciation were $90,854,864 and ($5,633,835), respectively, with a net unrealized appreciation of $85,221,029.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $93,219,481 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)

See financial notes 71

 Schwab Health Care Fund

Portfolio Holdings (Unaudited) continued

*	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.

Reg’d — Registered

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		245		17,071,600		293,174

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$348,189,940		$—		$—		$348,189,940
Foreign Common Stock
Australia(a)		—		8,144,861		—		8,144,861
Belgium(a)		—		1,169,007		—		1,169,007
Denmark(a)		—		10,106,715		—		10,106,715
France(a)		—		12,984,907		—		12,984,907
Germany(a)		—		2,931,260		—		2,931,260
Israel(a)		—		1,600,449		—		1,600,449
Japan(a)		—		12,192,661		—		12,192,661
Switzerland(a)		—		25,469,311		—		25,469,311
United Kingdom(a)		—		18,620,310		—		18,620,310
Short-Term Investments(a)		—		22,166,019		—		22,166,019
Total		$348,189,940		$115,385,500		$—		$463,575,440
Other Financial Instruments
Collateral Invested for Securities on Loan		$3,058,960		$—		$—		$3,058,960
Futures Contract*		293,174		—		—		293,174

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

72 See financial notes

 Schwab Health Care Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $378,354,411) including securities on loan of $2,848,677		$463,575,440
Foreign currency, at value (cost $47,946)		47,946
Collateral invested for securities on loan		3,058,960
Receivables:
Fund shares sold		550,353
Dividends		420,945
Foreign tax reclaims		212,784
Income from securities on loan		7,961
Interest		18
Prepaid expenses	+	7,941
Total assets		467,882,348
Liabilities
Collateral held for securities on loan		3,058,960
Payables:
Investment adviser and administrator fees		20,356
Shareholder service fees		22,868
Fund shares redeemed		484,614
Due to brokers for futures		60,025
Accrued expenses	+	42,825
Total liabilities		3,689,648
Net Assets
Total assets		467,882,348
Total liabilities	−	3,689,648
Net assets		$464,192,700
Net Assets by Source
Capital received from investors		356,558,656
Net investment income not yet distributed		2,768,113
Net realized capital gains		19,346,467
Net unrealized capital gains		85,519,464
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$464,192,700		24,099,127			$19.26

See financial notes 73

 Schwab Health Care Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $207,933)		$4,544,902
Interest		2,545
Securities on loan	+	7,961
Total investment income		4,555,408
Expenses
Investment adviser and administrator fees		1,163,022
Shareholder service fees		528,910
Transfer agent fees		46,419
Portfolio accounting fees		24,230
Professional fees		16,411
Registration fees		13,204
Shareholder reports		12,253
Custodian fees		7,615
Trustees’ fees		2,782
Other expenses	+	6,944
Total expenses		1,821,790
Expense reduction by CSIM and its affiliates	−	52,982
Net expenses	−	1,768,808
Net investment income		2,786,600
Realized and Unrealized Gains (Losses)
Net realized gains on investments		32,916,654
Net realized gains on futures contracts		1,794,137
Net realized losses on foreign currency transactions	+	(2,230	)
Net realized gains		34,708,561
Net unrealized gains on investments		13,823,503
Net unrealized losses on futures contracts		(507,200	)
Net unrealized losses on foreign currency translations	+	(2,401	)
Net unrealized gains	+	13,313,902
Net realized and unrealized gains		48,022,463
Increase in net assets resulting from operations		$50,809,063

74 See financial notes

 Schwab Health Care Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$2,786,600			$3,549,515
Net realized gains		34,708,561			29,312,204
Net unrealized gains	+	13,313,902			17,540,015
Increase in net assets from operations		50,809,063			50,401,734
Distributions to Shareholders
Distributions from net investment income		($3,529,101	)		($4,837,988	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,231,669		$40,539,032			3,540,237		$60,660,382
Shares reinvested			178,373		3,114,387			268,207		4,275,226
Shares redeemed	+		(2,238,672	)	(40,532,448	)		(6,338,786	)	(106,395,149	)
Net transactions in fund shares			171,370		$3,120,971			(2,530,342	)	($41,459,541	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			23,927,757		$413,791,767			26,458,099		$409,687,562
Total increase or decrease	+		171,370		50,400,933			(2,530,342	)	4,104,205
End of period			24,099,127		$464,192,700			23,927,757		$413,791,767
Net investment income not yet distributed					$2,768,113					$3,510,614

See financial notes 75

Schwab^® International Core Equity Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			5/30/082–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		7.32			7.80			7.25			5.85			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.09			0.17			0.16			0.03			0.06
Net realized and unrealized gains (losses)		0.38			(0.46	)		0.57			1.46			(4.21	)
Total from investment operations		0.47			(0.29	)		0.73			1.49			(4.15	)
Less distributions:
Distributions from net investment income		(0.20	)		(0.19	)		(0.18	)		(0.09	)		—
Net asset value at end of period		7.59			7.32			7.80			7.25			5.85
Total return (%)		6.81	3		(3.89	)		10.09			25.98			(41.50	)3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.86	4		0.80	5		0.87	6		0.86			0.86	4
Gross operating expenses		1.17	4		1.22			1.27			1.60			1.39	4
Net investment income (loss)		2.66	4		2.32			1.85			1.19			1.67	4
Portfolio turnover rate		53	3		86			91	7		94			56	3
Net assets, end of period ($ x 1,000,000)		65			60			53			37			3

* Unaudited.

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 Annualized.

⁵ 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)

⁶ The ratio of net operating expenses would have been 0.86%, if certain non-routine expenses had not been incurred.

⁷ Portfolio turnover excludes the impact of investment activity resulting from a merger with another fund.

76 See financial notes

 Schwab International Core Equity Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.0%	Common Stock		58,770,057		63,443,945
	0	.0%	Preferred Stock		8,041		8,086
	2	.3%	Other Investment Companies		1,470,613		1,526,810
	99	.3%	Total Investments		60,248,711		64,978,841
	0	.7%	Other Assets and Liabilities, Net				446,699
	100	.0%	Net Assets				65,425,540

	Number		Value
Security	of Shares		($)
Common Stock 97.0% of net assets
Australia 7.7%
Automobiles & Components 0.3%
Fleetwood Corp. Ltd.		13,818		187,801
Capital Goods 0.8%
Emeco Holdings Ltd.		447,285		481,909
Diversified Financials 0.7%
Challenger Ltd.		99,231		409,081
Perpetual Ltd.		1,404		37,038
				446,119
Energy 1.0%
Beach Energy Ltd.		99,795		144,610
Woodside Petroleum Ltd.		14,566		526,756
				671,366
Health Care Equipment & Services 0.8%
Sigma Pharmaceuticals Ltd.		795,090		547,292
Materials 3.4%
BHP Billiton Ltd.		8,387		311,218
Grange Resources Ltd.		70,613		43,609
Iluka Resources Ltd.		25,409		443,855
OZ Minerals Ltd.		50,154		482,912
Rio Tinto Ltd.		6,138		419,992
St. Barbara Ltd. *		226,916		537,828
				2,239,414
Retailing 0.6%
Pacific Brands Ltd.		537,985		343,207
Wotif.com Holdings Ltd.		9,455		43,279
				386,486
Software & Services 0.1%
carsales.com Ltd.		11,012		65,646
				5,026,033
Austria 1.2%
Capital Goods 0.3%
Strabag SE - BR		8,296		222,064
Transportation 0.9%
Oesterreichische Post AG		15,840		561,857
				783,921
Belgium 0.0%
Food, Beverage & Tobacco 0.0%
Anheuser-Busch InBev N.V.		240		17,298
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
UCB S.A.		35		1,637
				18,935
Brazil 0.4%
Consumer Durables & Apparel 0.4%
Ez Tec Empreendimentos e Participacoes S.A.		24,900		274,976
Canada 1.3%
Banks 0.2%
National Bank of Canada		2,100		163,902
Capital Goods 0.4%
Aecon Group, Inc.		19,600		265,077
Toromont Industries Ltd.		600		13,447
				278,524
Food & Staples Retailing 0.5%
Alimentation Couche-Tard, Inc., Class B		1,000		43,377
The Jean Coutu Group (PJC), Inc., Class A		18,400		263,562
				306,939
Materials 0.2%
Inmet Mining Corp.		1,900		104,516
				853,881
China 1.4%
Banks 0.4%
China Citic Bank Corp. Ltd., Class H		385,000		243,944
Capital Goods 0.6%
Harbin Power Equipment Co., Ltd. *		204,000		211,811
Shanghai Electric Group Co., Ltd., Class H *		342,000		171,224
				383,035
Energy 0.2%
China Coal Energy Co., Ltd., Class H *		154,000		175,943
Materials 0.1%
Sinopec Yizheng Chemical Fibre Co., Ltd.		308,000		70,264
Real Estate 0.1%
Beijing Capital Land Ltd.		218,000		59,776
				932,962

See financial notes 77

 Schwab International Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Denmark 1.3%
Pharmaceuticals, Biotechnology & Life Sciences 1.3%
Novo Nordisk A/S, Class B		5,852		862,719
Finland 1.6%
Capital Goods 1.0%
Wartsila Oyj		15,580		631,343
Technology Hardware & Equipment 0.6%
Nokia Oyj		113,048		409,427
				1,040,770
France 7.2%
Automobiles & Components 0.2%
Renault S.A.		3,480		158,308
Capital Goods 0.8%
Bouygues S.A.		14,773		403,060
Nexans S.A.		1,897		95,076
				498,136
Commercial & Professional Supplies 0.2%
Derichebourg S.A.		4,960		14,694
Societe BIC S.A.		1,175		129,430
				144,124
Consumer Durables & Apparel 1.0%
Hermes International		1,430		505,421
Nexity S.A.		4,480		127,579
				633,000
Energy 1.5%
Total S.A.		20,183		968,857
Pharmaceuticals, Biotechnology & Life Sciences 1.6%
Sanofi		13,811		1,054,909
Retailing 0.9%
PPR		3,358		561,960
Software & Services 0.8%
UbiSoft Entertainment S.A. *		78,382		540,328
Telecommunication Services 0.2%
Vivendi S.A.		7,131		131,899
				4,691,521
Germany 7.3%
Automobiles & Components 1.1%
Bayerische Motoren Werke AG		7,649		727,513
Capital Goods 0.8%
Bilfinger Berger SE		5,711		522,511
Health Care Equipment & Services 0.9%
Fresenius SE & Co KGaA		5,624		561,487
Materials 0.9%
BASF SE		6,876		566,123
Pharmaceuticals, Biotechnology & Life Sciences 2.1%
Bayer AG - Reg’d		12,215		860,716
Merck KGaA		4,779		525,307
				1,386,023
Semiconductors & Semiconductor Equipment 0.5%
Infineon Technologies AG		36,553		364,270
Software & Services 0.7%
SAP AG		7,266		481,834
Utilities 0.3%
RWE AG		3,994		171,690
				4,781,451
Hong Kong 3.3%
Energy 0.6%
CNOOC Ltd.		174,000		367,688
Materials 0.1%
China Vanadium Titano - Magnetite Mining Co Ltd. *		189,000		42,786
Real Estate 2.5%
Cheung Kong (Holdings) Ltd.		41,000		542,227
Midland Holdings Ltd.		682,000		341,998
Sino Land Co., Ltd.		90,000		154,381
Sun Hung Kai Properties Ltd.		49,000		586,917
				1,625,523
Utilities 0.1%
Power Assets Holdings Ltd.		12,500		93,324
				2,129,321
Israel 0.0%
Banks 0.0%
Israel Discount Bank, Class A *		16,959		21,993
Italy 1.6%
Energy 1.2%
Eni S.p.A.		34,705		771,138
Health Care Equipment & Services 0.0%
Sorin S.p.A. *		9,617		18,055
Telecommunication Services 0.4%
Telecom Italia S.p.A. *		231,155		262,242
				1,051,435
Japan 20.3%
Automobiles & Components 1.1%
Daihatsu Motor Co., Ltd.		8,000		151,015
Honda Motor Co., Ltd.		4,700		169,149
Toyota Motor Corp.		9,700		397,484
				717,648
Banks 4.7%
Aozora Bank Ltd.		164,000		420,624
Sumitomo Mitsui Financial Group, Inc.		23,100		739,172
Suruga Bank Ltd.		50,000		498,691
The Chiba Bank Ltd.		79,000		479,965
The Chugoku Bank Ltd.		36,000		454,905
The Shizuoka Bank Ltd.		49,000		512,771
				3,106,128
Capital Goods 2.6%
Mitsubishi Heavy Industries Ltd.		121,000		548,738

78 See financial notes

 Schwab International Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
NEC Networks & System Integration Corp.		28,600		425,667
Shimizu Corp.		9,000		34,212
Taihei Kogyo Co., Ltd.		93,000		488,023
Taisei Corp.		77,000		195,581
				1,692,221
Consumer Durables & Apparel 0.7%
Namco Bandai Holdings, Inc.		33,300		476,147
Diversified Financials 2.5%
Acom Co., Ltd. *		3,430		73,752
Credit Saison Co., Ltd.		23,100		495,750
Jaccs Co., Ltd.		95,000		341,613
Mitsubishi UFJ Lease & Finance Co., Ltd.		11,150		463,259
ORIX Corp.		2,710		259,105
				1,633,479
Energy 0.8%
Inpex Corp.		83		548,008
Food, Beverage & Tobacco 3.1%
Ajinomoto Co., Inc.		45,000		580,781
Japan Tobacco, Inc.		114		631,524
Kewpie Corp.		33,300		499,528
Toyo Suisan Kaisha Ltd.		12,000		308,055
				2,019,888
Household & Personal Products 1.3%
Kao Corp.		21,800		584,138
Shiseido Co., Ltd.		14,100		246,850
				830,988
Media 0.7%
SKY Perfect JSAT Holdings, Inc.		1,038		452,070
Real Estate 0.7%
Nomura Real Estate Holdings, Inc.		24,600		430,037
Semiconductors & Semiconductor Equipment 0.7%
Nuflare Technology, Inc.		72		446,708
Software & Services 1.0%
Nihon Unisys Ltd.		86,500		649,714
Transportation 0.4%
Central Japan Railway Co.		31		257,366
				13,260,402
Mexico 0.4%
Materials 0.4%
Grupo Mexico S.A.B. de C.V., Series B		82,000		252,749
Netherlands 3.6%
Capital Goods 1.1%
European Aeronautic Defence & Space Co., N.V.		18,029		712,482
Food & Staples Retailing 0.8%
Koninklijke Ahold N.V.		41,427		525,809
Materials 0.4%
Koninklijke DSM N.V.		4,377		251,174
Semiconductors & Semiconductor Equipment 1.3%
ASML Holding N.V.		13,210		672,165
STMicroelectronics N.V.		35,340		203,482
				875,647
				2,365,112
New Zealand 0.4%
Telecommunication Services 0.4%
Telecom Corp. of New Zealand Ltd.		136,001		292,395
Republic of Korea 0.8%
Automobiles & Components 0.3%
Hyundai Motor Co.		430		101,510
Kia Motors Corp.		1,331		97,668
				199,178
Banks 0.4%
Korea Exchange Bank		34,140		258,186
Capital Goods 0.1%
Daelim Industrial Co., Ltd.		463		42,620
Household & Personal Products 0.0%
Amorepacific Group		58		14,578
				514,562
Singapore 0.8%
Real Estate 0.8%
UOL Group Ltd.		137,000		499,276
South Africa 0.9%
Materials 0.4%
Kumba Iron Ore Ltd.		3,666		259,621
Retailing 0.5%
Woolworths Holdings Ltd.		52,470		328,460
				588,081
Spain 1.8%
Capital Goods 0.6%
Ferrovial S.A.		37,157		414,344
Software & Services 0.4%
Amadeus IT Holding S.A., A Shares		13,096		268,100
Transportation 0.4%
Abertis Infraestructuras S.A.		15,555		240,937
Utilities 0.4%
Endesa S.A.		13,489		241,881
				1,165,262
Sweden 2.2%
Banks 0.9%
Svenska Handelsbanken AB, A Shares		18,888		611,373
Capital Goods 0.1%
Saab AB, Class B		5,141		85,501
Food, Beverage & Tobacco 0.1%
Swedish Match AB		1,194		48,639
Materials 0.9%
Billerud AB		11,737		113,630

See financial notes 79

 Schwab International Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Boliden AB		28,492		458,175
Svenska Cellulosa AB, B Shares		489		7,752
				579,557
Real Estate 0.0%
Fabege AB		1,004		8,477
Retailing 0.1%
Bilia AB, A Shares		1,552		29,845
Software & Services 0.1%
Industrial & Financial Systems AB, B Shares		3,551		60,757
				1,424,149
Switzerland 7.5%
Capital Goods 0.9%
Geberit AG - Reg’d *		2,479		524,149
OC Oerlikon Corp. AG - Reg’d *		5,570		55,059
				579,208
Diversified Financials 0.7%
GAM Holding AG *		38,110		489,926
Food, Beverage & Tobacco 1.5%
Nestle S.A. - Reg’d		15,812		969,106
Insurance 0.9%
Swiss Re AG *		7,084		444,826
Zurich Financial Services AG *		627		153,617
				598,443
Pharmaceuticals, Biotechnology & Life Sciences 3.5%
Novartis AG - Reg’d		20,563		1,135,411
Roche Holding AG		6,242		1,140,791
				2,276,202
Transportation 0.0%
SAir Group (a)(b)*		30		—
				4,912,885
Taiwan 0.5%
Automobiles & Components 0.1%
China Motor Corp.		40,000		32,893
Technology Hardware & Equipment 0.4%
Asustek Computer, Inc.		32,000		321,458
				354,351
Thailand 0.5%
Real Estate 0.5%
LPN Development PCL		550,300		309,600
Turkey 1.1%
Automobiles & Components 0.2%
Ford Otomotiv Sanayi A/S		11,421		105,140
Banks 0.6%
Turkiye Halk Bankasi A/S		37,856		265,369
Turkiye Vakiflar Bankasi T.A.O., Class D		51,606		92,631
				358,000
Utilities 0.3%
Aygaz A.S.		48,506		224,557
				687,697
United Kingdom 21.9%
Banks 1.1%
HSBC Holdings plc		77,376		698,487
Capital Goods 2.1%
Bodycote plc		107,529		742,628
Qinetiq Group plc		8,962		22,259
Rolls-Royce Holdings plc *		47,005		628,476
				1,393,363
Commercial & Professional Supplies 0.8%
Berendsen plc		60,597		506,736
Consumer Durables & Apparel 1.0%
Persimmon plc		65,989		673,037
Consumer Services 0.8%
William Hill plc		119,332		545,089
Diversified Financials 1.0%
Aberdeen Asset Management plc		83,310		383,432
Intermediate Capital Group plc		67,977		283,382
				666,814
Energy 4.0%
BP plc		74,957		541,497
John Wood Group plc		45,854		582,273
Petrofac Ltd.		23,441		661,958
Royal Dutch Shell plc, B Shares		22,036		806,397
				2,592,125
Food, Beverage & Tobacco 1.1%
British American Tobacco plc		6,305		323,380
SABMiller plc		9,452		397,253
				720,633
Insurance 1.0%
Lancashire Holdings Ltd.		49,025		640,814
Materials 1.1%
Rio Tinto plc		13,270		743,847
Pharmaceuticals, Biotechnology & Life Sciences 2.8%
AstraZeneca plc		17,281		757,277
GlaxoSmithKline plc		45,760		1,057,124
				1,814,401
Real Estate 0.6%
Savills plc		65,709		381,466
Retailing 0.9%
Debenhams plc		52,266		70,083
WH Smith plc		60,037		513,517
				583,600
Software & Services 1.0%
Micro Focus International plc		70,104		529,339
The Sage Group plc		30,976		143,917
				673,256
Technology Hardware & Equipment 0.1%
Spectris plc		2,259		69,167
Telecommunication Services 2.4%
BT Group plc		180,505		617,408

80 See financial notes

 Schwab International Core Equity Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Vodafone Group plc		334,794		926,696
				1,544,104
Utilities 0.1%
National Grid plc		9,313		100,567
				14,347,506
Total Common Stock
(Cost $58,770,057)				63,443,945
Preferred Stock 0.0% of net assets
United Kingdom 0.0%
Rolls-Royce Holdings plc, C Shares (a)*		4,982,530		8,086
Total Preferred Stock
(Cost $8,041)				8,086
Other Investment Companies 2.3% of net assets
United States 2.3%
iShares MSCI EAFE Index Fund		11,530		619,737
State Street Institutional U.S. Government Money Market Fund		907,073		907,073
Total Other Investment Companies
(Cost $1,470,613)				1,526,810
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $60,261,823 and the unrealized appreciation and depreciation were $6,786,369 and ($2,069,351), respectively, with a net unrealized appreciation of $4,717,018.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $61,002,519 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 $0 or 0.0% of net assets.

Reg’d — Registered

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$—		$57,944,543		$—		$57,944,543
Belgium(a)		—		1,637		—		1,637
Food, Beverage & Tobacco		17,298		—		—		17,298
Brazil(a)		274,976		—		—		274,976
Canada(a)		853,881		—		—		853,881
Mexico(a)		252,749		—		—		252,749
Netherlands(a)		—		1,489,465		—		1,489,465
Semiconductors & Semiconductor Equipment		672,165		203,482		—		875,647
Sweden(a)		—		1,363,392		—		1,363,392
Software & Services		60,757		—		—		60,757
Thailand(a)		309,600		—		—		309,600
Other Investment Companies(a)		1,526,810		—		—		1,526,810
Preferred Stock(a)		—		—		8,086		8,086
Total		$3,968,236		$61,002,519		$8,086		$64,978,841

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

See financial notes 81

 Schwab International Core Equity Fund

Portfolio Holdings (Unaudited) 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		April 30,
Investments in Securities	2011		(Losses)		(Losses)		Purchases		Sales		in**		out**		2012
Preferred Stock
United Kingdom		$—		$—		$45		$8,041		$—		$—		$—		$8,086
Total		$—		$—		$45		$8,041		$—		$—		$—		$8,086

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are $45.

82 See financial notes

 Schwab International Core Equity Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $60,248,711)		$64,978,841
Foreign currency, at value (cost $42,913)		42,899
Receivables:
Dividends		294,773
Fund shares sold		182,946
Foreign tax reclaims		54,016
Interest	+	8
Total assets		65,553,483
Liabilities
Payables:
Investments bought		8,086
Investment adviser and administrator fees		2,031
Shareholder service fees		2,062
Fund shares redeemed		77,881
Distribution and shareholder services fees		695
Accrued expenses	+	37,188
Total liabilities		127,943
Net Assets
Total assets		65,553,483
Total liabilities	−	127,943
Net assets		$65,425,540
Net Assets by Source
Capital received from investors		79,205,725
Net investment income not yet distributed		400,384
Net realized capital losses		(18,917,290	)
Net unrealized capital gains		4,736,721
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$65,425,540		8,621,083			$7.59

See financial notes 83

 Schwab International Core Equity Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $68,626)		$1,068,336
Expenses
Investment adviser and administrator fees		175,820
Shareholder service fees		75,707
Portfolio accounting fees		26,198
Professional fees		23,371
Custodian fees		20,566
Registration fees		12,289
Transfer agent fees		9,292
Shareholder reports		6,372
Trustees’ fees		3,015
Interest expense		25
Other expenses	+	2,859
Total expenses		355,514
Expense reduction by CSIM and its affiliates	−	94,790
Net expenses	−	260,724
Net investment income		807,612
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(1,277,448	)
Net realized losses on foreign currency transactions	+	(14,526	)
Net realized losses		(1,291,974	)
Net unrealized gains on investments		4,638,777
Net unrealized gains on foreign currency translations	+	8,132
Net unrealized gains	+	4,646,909
Net realized and unrealized gains		3,354,935
Increase in net assets resulting from operations		$4,162,547

84 See financial notes

 Schwab International Core Equity Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$807,612			$1,403,431
Net realized gains (losses)		(1,291,974	)		2,297,715
Net unrealized gains (losses)	+	4,646,909			(6,610,970	)
Increase (Decrease) in net assets from operations		4,162,547			(2,909,824	)
Distributions to Shareholders
Distributions from net investment income		($1,709,354	)		($1,304,611	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,510,630		$10,899,425			3,331,795		$26,421,070
Shares reinvested			151,161		1,017,316			125,830		983,995
Shares redeemed	+		(1,216,097	)	(8,757,866	)		(2,027,829	)	(15,977,680	)
Net transactions in fund shares			445,694		$3,158,875			1,429,796		$11,427,385
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			8,175,389		$59,813,472			6,745,593		$52,600,522
Total increase	+		445,694		5,612,068			1,429,796		7,212,950
End of period			8,621,083		$65,425,540			8,175,389		$59,813,472
Net investment income not yet distributed					$400,384					$1,302,126

See financial notes 85

 Schwab Active Equity Funds

Financial Notes, unaudited

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 Small-Cap MarketMasters Fund
Schwab Premier Equity Fund	Laudus International MarketMasters Fund
Schwab Core Equity Fund	Schwab Balanced Fund
Schwab Dividend Equity Fund	Schwab Target 2010 Fund
Schwab Large-Cap Growth Fund	Schwab Target 2015 Fund
Schwab Small-Cap Equity Fund	Schwab Target 2020 Fund
Schwab Hedged Equity Fund	Schwab Target 2025 Fund
Schwab Financial Services Fund	Schwab Target 2030 Fund
Schwab Health Care Fund	Schwab Target 2035 Fund
Schwab International Core Equity Fund	Schwab Target 2040 Fund
Schwab S&P 500 Index Fund	Schwab Fundamental US Large Company Index Fund
Schwab Small-Cap Index Fund	Schwab Fundamental US Small-Mid Company Index Fund
Schwab Total Stock Market Index Fund	Schwab Fundamental International Large Company Index Fund
Schwab International Index Fund	Schwab Fundamental International Small-Mid Company Index Fund
Schwab MarketTrack All Equity Portfolio	Schwab Fundamental Emerging Markets Index Fund
Schwab MarketTrack Growth Portfolio	Schwab Monthly Income Fund – Moderate Payout
Schwab MarketTrack Balanced Portfolio	Schwab Monthly Income Fund – Enhanced Payout
Schwab MarketTrack Conservative Portfolio	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 10) at closing net asset value per share (“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.

Effective March 30, 2012, the Schwab Premier Equity Fund is closed to new investors.

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 it is de-listed or its trading is halted or suspended, when a security’s primary pricing source is unable or unwilling to provide a price, or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The 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 are traded in markets that close prior to the funds valuing 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

86 

 Schwab Active Equity Funds

Financial Notes, unaudited (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 foreign currency exchange 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

87

 Schwab Active Equity Funds

Financial Notes, unaudited (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 funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

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

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (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 Exchange 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 exchange 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 April 30, 2012 and the value of the related collateral are disclosed in the Portfolio Holdings and the Statement of Assets and Liabilities.

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 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

88 

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

(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.

89

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(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 April 30, 2012, 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.

Equity 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.

90 

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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.

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.

To the extent that a fund invests in dividend paying stocks, the fund’s performance will correlate directly with the performance of the dividend paying stock segment of the stock market, and the fund may underperform funds that do not limit their investments to dividend paying stocks. If stocks held by a fund reduce or stop paying dividends, the fund’s ability to generate income may be affected.

The principal types of derivatives used by a fund are futures contracts. A futures contract is an agreement to buy or sell a financial instrument at a specific price on a specific day.

A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to credit risk, leverage risk, lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately larger impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.

Convertible securities generally are debt obligations that pay income, but which may convert into common or preferred stock under certain circumstances. These investments, which are often issued by smaller or less established companies, are subject to the equity risks described above, but they also are subject to fixed income risks. For example, an issuer may fail to pay interest or dividends, and prices of convertible securities generally will fall when interest rates rise.

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.

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.

To the extent a fund establishes both long and short positions in equity securities the fund’s long positions could decline in value at the same time that the value of the stocks sold short increase, thereby increasing the fund’s overall potential for loss. The fund’s short sales may result in a loss if the prices of the borrowed securities rise and it costs more to replace the borrowed securities. In contrast to a fund’s long positions, the potential loss on the fund’s short positions is unlimited. In addition, the lender of the borrowed securities may require the fund to return the securities on short notice, which may require the fund to purchase the borrowed securities at an unfavorable price, resulting in a loss.

91

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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 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

92 

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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%. 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.

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 April 30, 2012.

	Schwab		Schwab		Schwab
	Core		Dividend		Small-Cap
	Equity Fund		Equity Fund		Equity Fund
Schwab Target Funds:
Schwab Target 2010 Fund		0.2%		0.1%		0.6%
Schwab Target 2015 Fund		0.3%		0.1%		0.7%
Schwab Target 2020 Fund		1.7%		0.9%		4.3%
Schwab Target 2025 Fund		0.8%		0.4%		2.1%
Schwab Target 2030 Fund		3.0%		1.6%		7.8%
Schwab Target 2035 Fund		0.7%		0.4%		1.9%
Schwab Target 2040 Fund		3.3%		1.7%		8.5%
Schwab Monthly Income Funds:
Schwab Monthly Income Fund - Moderate Payout		—%		0.3%		—%
Schwab Monthly Income Fund - Enhanced Payout		—%		0.6%		—%
Schwab Monthly Income Fund - Maximum Payout		—%		0.3%		—%
Schwab Balanced Fund		2.5%		—%		—%

The funds may also let a related party own shares of the funds. As of April 30, 2012, 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 5.0%.

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.

93

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

This practice is limited to funds that share the same investment adviser, trustees and/or officers. For the period ended April 30, 2012, 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.

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. Derivatives:

Certain funds entered into equity index futures contracts (“futures”) during the report period. 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 April 30, 2012 and the realized/unrealized gains (losses) on futures contracts held during the period ended April 30, 2012 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 values 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		$6,958,233		104
Schwab Core Equity Fund		7,754,625		117
Schwab Dividend Equity Fund		21,016,442		318
Schwab Large-Cap Growth Fund		1,162,917		18
Schwab Small-Cap Equity Fund		6,015,330		78
Schwab Hedged Equity Fund		4,475,662		67
Schwab Financial Services Fund		307,678		5
Schwab Health Care Fund		13,457,200		201
Schwab International Core Equity Fund		—		—

94 

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

9. Purchases and Sales/Maturities of Investment Securities:

For the period ended April 30, 2012, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:

	Purchases of Securities		Sales/Maturities of Securities
Schwab Premier Equity Fund		$147,438,440		$179,344,809
Schwab Core Equity Fund		376,507,692		536,147,651
Schwab Dividend Equity Fund		429,759,443		407,128,977
Schwab Large-Cap Growth Fund		89,882,223		100,589,098
Schwab Small-Cap Equity Fund		311,945,179		188,070,180
Schwab Hedged Equity Fund*		131,113,270		153,859,552
Schwab Financial Services Fund		20,284,109		19,163,823
Schwab Health Care Fund		118,968,224		124,520,193
Schwab International Core Equity Fund		33,672,505		32,047,540

* Including securities sold short.

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Schwab Premier Equity Fund		$278		$5,348
Schwab Core Equity Fund		8,840		22,228
Schwab Dividend Equity Fund		10,635		26,900
Schwab Large-Cap Growth Fund		1,090		24,056
Schwab Small-Cap Equity Fund		2,745		8,490
Schwab Hedged Equity Fund		2,918		7,560
Schwab Financial Services Fund		3,844		3,360
Schwab Health Care Fund		3,817		17,659
Schwab International Core Equity Fund		874		4,402

11. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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

95

 Schwab Active Equity Funds

Financial Notes, unaudited (continued)

11. Federal Income Taxes (continued):

					Schwab
	Schwab		Schwab		International
	Financial		Health Care		Core
Expiration Date	Services Fund		Fund		Equity Fund
					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

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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

96 

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

97

 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).	75	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.	75	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.	92	None

98 

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

99

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 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.

100 

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR27230-09

Semiannual report dated April 30, 2012, 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

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.

This wrapper is not part of the shareholder report.

Schwab Fundamental Index* Funds

Semiannual Report

April 30, 2012

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 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.

This page is intentionally left blank.

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	7
Schwab Fundamental International Large Company Index Fund	8
Schwab Fundamental International Small-Mid Company Index Fund	10
Schwab Fundamental Emerging Markets Index Fund	12
Fund Expenses	14
Financial Statements and Portfolio Holdings
Schwab Fundamental US Large Company Index Fund	15
Schwab Fundamental US Small-Mid Company Index Fund	22
Schwab Fundamental International Large Company Index Fund	29
Schwab Fundamental International Small-Mid Company Index Fund	37
Schwab Fundamental Emerging Markets Index Fund	46
Financial Notes	54
Trustees and Officers	64
Glossary	67

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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 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)	11.12%
FTSE RAFI US 1000 Index®	11.28%
Fund Category: Morningstar Large-Cap Value	10.87%
Performance Details	page 6
Schwab Fundamental US Small-Mid* Company Index Fund (Ticker Symbol: SFSNX)	11.15%
FTSE RAFI US Mid Small 1500 Index®	11.26%
Fund Category: Morningstar Small-Cap Blend	10.79%
Performance Details	page 7
Schwab Fundamental International* Large Company Index Fund1 (Ticker Symbol: SFNNX)	0.39%
FTSE RAFI Developed ex US 1000 Index®	-0.73%
Fund Category: Morningstar Foreign Large-Cap Value	2.29%
Performance Details	pages 8-9
Schwab Fundamental International* Small-Mid Company Index Fund1 (Ticker Symbol: SFILX)	4.14%
FTSE RAFI Developed ex US Mid Small 1500 Index®	3.25%
Fund Category: Morningstar Foreign Small/Mid Growth	8.46%
Performance Details	pages 10-11
Schwab Fundamental Emerging Markets* Index Fund1 (Ticker Symbol: SFENX)	4.15%
FTSE RAFI Emerging Index®	4.18%
Fund Category: Morningstar Diversified Emerging Markets	4.92%
Performance Details	pages 12-13

Minimum Initial Investment² $ 100

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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 a fund.

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 detail and eligibility requirements.

2 Schwab Fundamental Index Funds

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab Fundamental Index Funds.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab Fundamental Index Funds. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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

	Agnes Hong, CFA, a managing director and portfolio manager of the investment adviser, is responsible for the day-to-day co-management of the funds. Prior to joining the firm in September 2009, she worked for 5 years as a portfolio manager for a major asset management firm. Prior to that, she worked in strategy and management consulting for five years. In addition, she also worked as a senior product manager servicing global financial services clients.
	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

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Fundamental US Large* Company Index Fund (4/2/07)		11.12	%		0.54	%		1.71	%		2.51	%
FTSE RAFI US 1000 Index®		11.28	%		0.79	%		1.83	%		2.59	%
Fund Category: Morningstar Large-Cap Value		10.87	%		0.16	%		-1.23	%		-0.35	%

Fund Expense Ratios⁴: Net 0.35%; Gross 0.44%

 Statistics

Number of Holdings	1,005
Weighted Average Market Cap ($ x 1,000,000)	$79,158
Price/Earnings Ratio (P/E)	15.9
Price/Book Ratio (P/B)	1.6
Portfolio Turnover Rate5	10%

 Sector Weightings % of Investments

Financials	21.8%
Energy	11.4%
Industrials	11.3%
Information Technology	10.7%
Consumer Discretionary	10.6%
Consumer Staples	10.2%
Health Care	10.1%
Utilities	5.3%
Telecommunication Services	4.4%
Materials	3.8%
Other	0.4%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Exxon Mobil Corp.	3.0%
Bank of America Corp.	2.3%
AT&T, Inc.	2.2%
General Electric Co.	2.2%
JPMorgan Chase & Co.	1.9%
Chevron Corp.	1.8%
Citigroup, Inc.	1.7%
Pfizer, Inc.	1.5%
Verizon Communications, Inc.	1.5%
Wal-Mart Stores, Inc.	1.5%
Total	19.6%

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

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	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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

6 Schwab Fundamental Index Funds

Schwab Fundamental US Small-Mid* Company Index Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Fundamental US Small-Mid* Company Index Fund (4/2/07)		11.15	%		-4.61	%		3.62	%		3.94	%
FTSE RAFI US Mid Small 1500 Index®		11.26	%		-4.44	%		4.25	%		4.62	%
Fund Category: Morningstar Small-Cap Blend		10.79	%		-4.00	%		1.13	%		1.61	%

Fund Expense Ratios⁴: Net 0.35%; Gross 0.50%

 Statistics

Number of Holdings	1,503
Weighted Average Market Cap ($ x 1,000,000)	$1,534
Price/Earnings Ratio (P/E)	-353.9
Price/Book Ratio (P/B)	1.6
Portfolio Turnover Rate5	28%

 Sector Weightings % of Investments

Financials	21.4%
Consumer Discretionary	17.6%
Industrials	17.1%
Information Technology	16.9%
Health Care	8.3%
Materials	5.8%
Energy	5.7%
Consumer Staples	3.4%
Utilities	1.6%
Telecommunication Services	1.4%
Other	0.8%
Total	100.0%

 Top Equity Holdings % of Net Assets⁶

Liz Claiborne, Inc.	0.2%
US Airways Group, Inc.	0.2%
Howard Hughes Corp.	0.2%
The Ryland Group, Inc.	0.2%
Skechers U.S.A., Inc, Class A	0.2%
Douglas Emmet, Inc.	0.2%
The Cooper Cos., Inc.	0.2%
The Geo Group, Inc.	0.2%
HealthSouth Corp.	0.2%
Sunstone Hotel Investors, Inc.	0.2%
Total	2.0%

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

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	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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.

Schwab Fundamental Index Funds 7

Schwab Fundamental International* Large Company Index Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Fundamental International* Large Company Index Fund (4/2/07)		0.39	%		-18.57	%		-4.41	%		-3.81	%
FTSE RAFI Developed ex US 1000 Index®		-0.73	%		-18.23	%		-3.73	%		-2.81	%
Fund Category: Morningstar Foreign Large-Cap Value		2.29	%		-14.36	%		-5.41	%		-4.54	%

Fund Expense Ratios⁴: Net 0.35%; Gross 0.57%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

*	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.

8 Schwab Fundamental Index Funds

 Schwab Fundamental International* Large Company Index Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	1,029
Weighted Average Market Cap ($ x 1,000,000)	$43,999
Price/Earnings Ratio (P/E)	124.2
Price/Book Ratio (P/B)	1.0
Portfolio Turnover Rate1	23%

 Sector Weightings % of Investments

Financials	27.1%
Industrials	11.8%
Energy	11.0%
Consumer Discretionary	9.8%
Materials	8.6%
Telecommunication Services	7.6%
Consumer Staples	7.4%
Utilities	6.1%
Health Care	5.2%
Information Technology	4.4%
Other	1.0%
Total	100.0%

 Top Equity Holdings % of Net Assets²

BP plc	1.8%
HSBC Holdings plc	1.6%
Vodafone Group plc	1.5%
Royal Dutch Shell plc, A Shares	1.4%
Total S.A.	1.3%
Royal Dutch Shell plc, B Shares	1.0%
Banco Santander S.A.	1.0%
Telefonica S.A.	1.0%
Nestle S.A. – Reg’d	0.9%
iShares MSCI EAFE Index Fund	0.9%
Total	12.4%

 Country Weightings % of Equity Investments

United Kingdom	19.8%
Japan	17.8%
France	10.8%
Germany	8.9%
Canada	6.7%
Australia	5.1%
Switzerland	4.7%
Italy	4.2%
Republic of Korea	4.2%
Spain	3.8%
Netherlands	2.9%
Other Countries	11.1%
Total	100.0%

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.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Fundamental Index Funds 9

Schwab Fundamental International* Small-Mid Company Index Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab Fundamental International* Small-Mid Company Index Fund (1/31/08)		4.14	%		-11.07	%		17.92	%		2.26	%
FTSE RAFI Developed ex US Mid Small 1500 Index®		3.25	%		-10.21	%		19.31	%		4.23	%
Fund Category: Morningstar Foreign Small/Mid Growth		8.46	%		-9.34	%		21.02	%		0.10	%

Fund Expense Ratios⁴: Net 0.55%; Gross 0.99%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

*	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.

10 Schwab Fundamental Index Funds

 Schwab Fundamental International* Small-Mid Company Index Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	1,515
Weighted Average Market Cap ($ x 1,000,000)	$2,455
Price/Earnings Ratio (P/E)	-163.4
Price/Book Ratio (P/B)	1.0
Portfolio Turnover Rate1	35%

 Sector Weightings % of Investments

Industrials	22.3%
Consumer Discretionary	17.8%
Financials	17.8%
Materials	10.8%
Information Technology	8.9%
Consumer Staples	7.9%
Energy	5.6%
Health Care	4.6%
Utilities	1.9%
Telecommunication Services	1.1%
Other	1.3%
Total	100.0%

 Top Equity Holdings % of Net Assets²

iShares MSCI EAFE Small Cap Index Fund	1.0%
Oki Electric Industry Co., Ltd.	0.2%
Yamazaki Baking Co., Ltd.	0.2%
London Stock Exchange Group plc	0.2%
Societe BIC S.A.	0.2%
Gemalto N.V.	0.2%
OC Oerlikon Corp. AG – Reg’d	0.2%
Leopalace21 Corp.	0.2%
CJ CheilJedang Corp.	0.2%
MTU Aero Engines Holding AG	0.1%
Total	2.7%

 Country Weightings % of Equity Investments

Japan	32.1%
Canada	9.6%
United Kingdom	9.2%
Republic of Korea	6.0%
Hong Kong	5.6%
Australia	5.2%
Germany	4.2%
France	3.9%
Switzerland	3.3%
Italy	2.7%
Singapore	2.5%
Other Countries	15.7%
Total	100.0%

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.

Foreign securities can involve risks such as political and economic instability and currency risk.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Fundamental Index Funds 11

Schwab Fundamental Emerging Markets* Index Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2,3

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab Fundamental Emerging Markets* Index Fund (1/31/08)		4.15	%		-15.26	%		15.38	%		0.90	%
FTSE RAFI Emerging Index®		4.18	%		-13.16	%		17.83	%		3.14	%
Fund Category: Morningstar Diversified Emerging Markets		4.92	%		-13.24	%		17.88	%		-1.09	%

Fund Expense Ratios⁴: Net 0.60%; Gross 0.91%

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

The fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

*	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.

12 Schwab Fundamental Index Funds

 Schwab Fundamental Emerging Markets* Index Fund

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	362
Weighted Average Market Cap ($ x 1,000,000)	$37,171
Price/Earnings Ratio (P/E)	12.3
Price/Book Ratio (P/B)	1.5
Portfolio Turnover Rate1	38%

 Sector Weightings % of Investments

Financials	24.5%
Energy	22.5%
Materials	12.4%
Telecommunication Services	11.4%
Information Technology	10.7%
Industrials	5.6%
Utilities	4.8%
Consumer Staples	4.0%
Consumer Discretionary	3.2%
Health Care	0.3%
Other	0.6%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Gazprom ADR	3.4%
LUKOIL ADR	3.0%
Petroleo Brasileiro S.A.	2.8%
Taiwan Semiconductor Manufacturing Co., Ltd.	2.3%
China Mobile Ltd.	2.3%
Petroleo Brasileiro S.A. – Petrobras	2.0%
China Construction Bank Corp., Class H	2.0%
America Movil S.A.B. de C.V., Series L	1.7%
Bank of China Ltd., Class H	1.6%
Industrial & Commercial Bank of China Ltd., Class H	1.5%
Total	22.6%

 Country Weightings % of Equity Investments

Brazil	19.3%
Taiwan	17.4%
China	16.9%
Russia	11.4%
South Africa	10.1%
India	5.7%
Malaysia	3.6%
Mexico	2.8%
Poland	2.5%
Other Countries	10.3%
Total	100.0%

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.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Schwab Fundamental Index Funds 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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Schwab Fundamental US Large Company Index Fund
Actual Return		0.35%	$	1,000	$	1,111.20	$	1.84
Hypothetical 5% Return		0.35%	$	1,000	$	1,023.12	$	1.76
Schwab Fundamental US Small-Mid Company Index Fund
Actual Return		0.35%	$	1,000	$	1,111.50	$	1.84
Hypothetical 5% Return		0.35%	$	1,000	$	1,023.12	$	1.76
Schwab Fundamental International Large Company Index Fund
Actual Return		0.35%	$	1,000	$	1,003.90	$	1.74
Hypothetical 5% Return		0.35%	$	1,000	$	1,023.12	$	1.76
Schwab Fundamental International Small-Mid Company Index Fund
Actual Return		0.46%	$	1,000	$	1,041.40	$	2.33
Hypothetical 5% Return		0.46%	$	1,000	$	1,022.58	$	2.31
Schwab Fundamental Emerging Markets Index Fund
Actual Return		0.61%	$	1,000	$	1,041.50	$	3.10
Hypothetical 5% Return		0.61%	$	1,000	$	1,021.83	$	3.07

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

14 Schwab Fundamental Index Funds

Schwab Fundamental US Large Company Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			4/2/072–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		9.51			9.05			7.63			6.47			10.75			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.10			0.18			0.14			0.10			0.20			0.05
Net realized and unrealized gains (losses)		0.94			0.43			1.37			1.26			(4.38	)		0.70
Total from investment operations		1.04			0.61			1.51			1.36			(4.18	)		0.75
Less distributions:
Distributions from net investment income		(0.18	)		(0.15	)		(0.09	)		(0.20	)		(0.09	)		—
Distributions from net realized gains		—			—			—			—			(0.01	)		—
Total distributions		(0.18	)		(0.15	)		(0.09	)		(0.20	)		(0.10	)		—
Net asset value at end of period		10.37			9.51			9.05			7.63			6.47			10.75
Total return (%)		11.12	3		6.74			19.95			22.04			(39.22	)		7.50	3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.35	4		0.35			0.35			0.35			0.35			0.35	4
Gross operating expenses		0.43	4		0.44			0.45			0.53			0.52			0.60	4
Net investment income (loss)		2.15	4		2.06			1.77			1.88			2.19			1.66	4
Portfolio turnover rate		10	3		11			27			28			26			2	3
Net assets, end of period ($ x 1,000,000)		1,840			1,490			1,019			663			277			345

* Unaudited.

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 15

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.3%	Common Stock		1,581,799,924		1,826,786,531
	0	.3%	Other Investment Company		5,974,881		5,974,881
	0	.1%	Short-Term Investment		1,924,823		1,924,823
	99	.7%	Total Investments		1,589,699,628		1,834,686,235
	0	.9%	Collateral Invested for Securities on Loan		16,972,883		16,972,883
	(0	.6)%	Other Assets and Liabilities, Net				(11,229,236	)
	100	.0%	Net Assets				1,840,429,882

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 99.3% of net assets
Automobiles & Components 1.3%
Ford Motor Co.		680,374		0.4		7,674,619
Other Securities				0.9		15,290,394
				1.3		22,965,013
Banks 4.0%
U.S. Bancorp		275,100		0.5		8,849,967
Wells Fargo & Co.		723,425		1.3		24,184,098
Other Securities				2.2		40,951,022
				4.0		73,985,087
Capital Goods 8.5%
General Electric Co.		2,033,625		2.2		39,818,377
The Boeing Co.		86,740		0.4		6,661,632
United Technologies Corp.		97,815		0.4		7,985,617
Other Securities				5.5		102,487,580
				8.5		156,953,206
Commercial & Professional Supplies 0.8%
Other Securities				0.8		14,988,672
Consumer Durables & Apparel 1.0%
Other Securities				1.0		18,388,103
Consumer Services 1.3%
McDonald’s Corp.		72,880		0.4		7,102,156
Other Securities				0.9		17,286,281
				1.3		24,388,437
Diversified Financials 9.5%
American Express Co.		120,725		0.4		7,268,852
Bank of America Corp.		5,306,960		2.3		43,039,446
Citigroup, Inc.		959,133		1.7		31,689,754
JPMorgan Chase & Co.		828,442		1.9		35,606,437
The Charles Schwab Corp. (b)		141,215		0.1		2,019,375
The Goldman Sachs Group, Inc.		109,211		0.7		12,575,647
Other Securities				2.4		42,566,614
				9.5		174,766,125
Energy 11.4%
Chevron Corp.		312,805		1.8		33,332,501
ConocoPhillips		320,510		1.2		22,958,131
Exxon Mobil Corp.		647,284		3.0		55,886,501
Valero Energy Corp.		277,525		0.4		6,854,868
Other Securities				5.0		90,334,237
				11.4		209,366,238
Food & Staples Retailing 3.4%
CVS Caremark Corp.		185,335		0.4		8,269,648
Wal-Mart Stores, Inc.		460,025		1.5		27,100,073
Other Securities				1.5		27,505,654
				3.4		62,875,375
Food, Beverage & Tobacco 5.1%
Altria Group, Inc.		387,380		0.7		12,477,510
Kraft Foods, Inc., Class A		231,092		0.5		9,213,638
PepsiCo, Inc.		160,208		0.6		10,573,728
Philip Morris International, Inc.		98,520		0.5		8,818,525
The Coca-Cola Co.		168,665		0.7		12,872,513
Other Securities				2.1		39,816,190
				5.1		93,772,104
Health Care Equipment & Services 4.2%
UnitedHealth Group, Inc.		137,775		0.4		7,736,066
WellPoint, Inc.		120,870		0.4		8,197,403
Other Securities				3.4		61,933,306
				4.2		77,866,775
Household & Personal Products 1.7%
The Procter & Gamble Co.		294,195		1.0		18,722,570
Other Securities				0.7		12,058,456
				1.7		30,781,026
Insurance 5.8%
Berkshire Hathaway, Inc., Class A *		101		0.7		12,200,800
Berkshire Hathaway, Inc., Class B *		151,411		0.7		12,181,015

16 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
The Travelers Cos., Inc.		115,195		0.4		7,409,342
Other Securities				4.0		75,426,965
				5.8		107,218,122
Materials 3.8%
The Dow Chemical Co.		208,800		0.4		7,074,144
Other Securities				3.4		62,549,907
				3.8		69,624,051
Media 3.1%
Comcast Corp., Class A		230,540		0.4		6,992,278
The Walt Disney Co.		173,650		0.4		7,486,051
Time Warner, Inc.		219,788		0.4		8,233,258
Other Securities				1.9		33,509,329
				3.1		56,220,916
Pharmaceuticals, Biotechnology & Life Sciences 5.9%
Abbott Laboratories		153,690		0.5		9,538,001
Bristol-Myers Squibb Co.		222,850		0.4		7,436,504
Eli Lilly & Co.		177,355		0.4		7,340,723
Johnson & Johnson		306,695		1.1		19,962,778
Merck & Co., Inc.		360,657		0.8		14,152,181
Pfizer, Inc.		1,237,299		1.5		28,371,266
Other Securities				1.2		21,215,153
				5.9		108,016,606
Real Estate 2.4%
Other Securities				2.4		43,155,278
Retailing 3.9%
Target Corp.		114,695		0.4		6,645,428
The Home Depot, Inc.		194,996		0.5		10,098,843
Other Securities				3.0		55,664,981
				3.9		72,409,252
Semiconductors & Semiconductor Equipment 1.7%
Intel Corp.		514,310		0.8		14,606,404
Other Securities				0.9		17,177,666
				1.7		31,784,070
Software & Services 4.7%
International Business Machines Corp.		79,495		0.9		16,461,825
Microsoft Corp.		588,115		1.0		18,831,442
Oracle Corp.		257,360		0.4		7,563,811
Other Securities				2.4		43,588,555
				4.7		86,445,633
Technology Hardware & Equipment 4.2%
Apple, Inc. *		18,330		0.6		10,709,119
Cisco Systems, Inc.		485,465		0.5		9,782,120
Hewlett-Packard Co.		500,975		0.7		12,404,141
Other Securities				2.4		44,449,157
				4.2		77,344,537
Telecommunication Services 4.4%
AT&T, Inc.		1,222,285		2.2		40,225,399
Verizon Communications, Inc.		676,730		1.5		27,326,357
Other Securities				0.7		12,848,044
				4.4		80,399,800
Transportation 1.9%
Other Securities				1.9		35,120,890
Utilities 5.3%
Other Securities				5.3		97,951,215
Total Common Stock
(Cost $1,581,799,924)						1,826,786,531
Other Investment Company 0.3% of net assets
Money Market Fund 0.3%
Other Securities				0.3		5,974,881
Total Other Investment Company
(Cost $5,974,881)						5,974,881
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.1% of net assets
U.S. Treasury Obligation 0.1%
Other Securities				0.1		1,924,823
Total Short-Term Investment
(Cost $1,924,823)						1,924,823
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 0.9% of net assets
State Street Institutional U.S. Government Money Market Fund		16,972,883		0.9		16,972,883
Total Collateral Invested for Securities on Loan
(Cost $16,972,883)						16,972,883
End of Collateral Invested for Securities on Loan.

At 04/30/12 the tax basis cost of the fund’s investments was $1,616,669,731 and the unrealized appreciation and depreciation were $274,812,884 and ($56,796,380), respectively, with a net unrealized appreciation of $218,016,504.

See financial notes 17

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

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.
(d)	The rate shown is the purchase yield.

REIT — Real Estate Investment Trust.

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		130		9,058,400		177,848

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$1,826,786,531		$—		$—		$1,826,786,531
Other Investment Company(a)		5,974,881		—		—		5,974,881
Short-Term Investments(a)		—		1,924,823		—		1,924,823
Total		$1,832,761,412		$1,924,823		$—		$1,834,686,235
Other Financial Instruments
Collateral Invested for Securities on Loan		$16,972,883		$—		$—		$16,972,883
Futures Contract*		177,848		—		—		177,848

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

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		April 30,
Investments in Securities	2011		(Losses)			(Losses)		Purchases		Sales			in**		out**		2012
Common Stock		$9,216		($260,695	)		$261,421		$—		($9,942	)		$—		$—		$—
Total		$9,216		($260,695	)		$261,421		$—		($9,942	)		$—		$—		$—

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

18 See financial notes

 Schwab Fundamental US Large Company Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

			��
Assets
Investments in affiliated issuers, at value (cost $2,325,794)		$2,019,375
Investments in unaffiliated issuers, at value (cost $1,587,373,834) including securities on loan of $16,738,329	+	1,832,666,860
Total investments, at value (cost $1,589,699,628)		1,834,686,235
Collateral invested for securities on loan		16,972,883
Receivables:
Fund shares sold		5,388,333
Dividends		2,036,364
Income from securities on loan		62,936
Foreign tax reclaims		4,358
Interest		120
Prepaid expenses	+	12,899
Total assets		1,859,164,128
Liabilities
Collateral held for securities on loan		16,972,883
Payables:
Investment adviser and administrator fees		27,945
Shareholder service fees		21,986
Fund shares redeemed		1,385,783
Due to brokers for futures		24,028
Accrued expenses	+	301,621
Total liabilities		18,734,246
Net Assets
Total assets		1,859,164,128
Total liabilities	−	18,734,246
Net assets		$1,840,429,882
Net Assets by Source
Capital received from investors		1,698,604,461
Net investment income not yet distributed		11,164,088
Net realized capital losses		(114,756,378	)
Net unrealized capital gains		245,417,711
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$1,840,429,882		177,456,808			$10.37

See financial notes 19

 Schwab Fundamental US Large Company Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated issuer		$11,342
Dividends received from unaffiliated issuers (net of foreign withholding taxes of $33,795)		20,238,084
Interest		1,949
Securities on loan	+	322,650
Total investment income		20,574,025
Expenses
Investment adviser and administrator fees		2,010,670
Shareholder service fees		691,867
Index fee		504,411
Transfer agent fees		153,371
Portfolio accounting fees		37,226
Registration fees		36,546
Custodian fees		26,701
Professional fees		26,566
Shareholder reports		25,482
Trustees’ fees		7,974
Interest expense		462
Other expenses	+	17,366
Total expenses		3,538,642
Expense reduction by CSIM and its affiliates	−	655,831
Custody credits	−	10
Net expenses	−	2,882,801
Net investment income		17,691,224
Realized and Unrealized Gains (Losses)
Net realized gains on investments		11,830,297
Net realized gains on futures contracts	+	1,286,895
Net realized gains		13,117,192
Net unrealized gains on affiliated issuer		144,580
Net unrealized gains on unaffiliated investments		143,033,148
Net unrealized losses on futures contracts	+	(231,992	)
Net unrealized gains	+	142,945,736
Net realized and unrealized gains		156,062,928
Increase in net assets resulting from operations		$173,754,152

20 See financial notes

 Schwab Fundamental US Large Company Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$17,691,224			$26,024,188
Net realized gains		13,117,192			2,673,938
Net unrealized gains	+	142,945,736			33,110,169
Increase in net assets from operations		173,754,152			61,808,295
Distributions to Shareholders
Distributions from net investment income		($28,518,465	)		($16,798,869	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			41,786,669		$411,258,520			67,864,083		$655,800,808
Shares reinvested			1,765,688		16,261,985			795,894		7,465,485
Shares redeemed	+		(22,709,336	)	(222,104,662	)		(24,620,341	)	(237,836,004	)
Net transactions in fund shares			20,843,021		$205,415,843			44,039,636		$425,430,289
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			156,613,787		$1,489,778,352			112,574,151		$1,019,338,637
Total increase	+		20,843,021		350,651,530			44,039,636		470,439,715
End of period			177,456,808		$1,840,429,882			156,613,787		$1,489,778,352
Net investment income not yet distributed					$11,164,088					$21,991,329

See financial notes 21

Schwab Fundamental US Small-Mid Company Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			4/2/072–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		10.11			10.10			7.88			6.30			10.36			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.07			0.11			0.09			0.06			0.05			0.05
Net realized and unrealized gains (losses)		0.94			0.47			2.19			1.59			(4.04	)		0.31
Total from investment operations		1.01			0.58			2.28			1.65			(3.99	)		0.36
Less distributions:
Distributions from net investment income		(0.12	)		(0.10	)		(0.06	)		(0.07	)		(0.06	)		—
Distributions from net realized gains		(0.71	)		(0.47	)		—			—			(0.01	)		—
Total distributions		(0.83	)		(0.57	)		(0.06	)		(0.07	)		(0.07	)		—
Net asset value at end of period		10.29			10.11			10.10			7.88			6.30			10.36
Total return (%)		11.15	3		5.55			29.07			26.68			(38.73	)		3.60	3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.35	4		0.35			0.35			0.35			0.35			0.35	4
Gross operating expenses		0.49	4		0.50			0.53			0.60			0.71			0.89	4
Net investment income (loss)		1.49	4		1.18			1.03			1.00			1.44			1.36	4
Portfolio turnover rate		28	3		35			41			29			37			4	3
Net assets, end of period ($ x 1,000,000)		639			563			412			298			131			33

* Unaudited.

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.

22 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.9%	Common Stock		553,941,661		631,381,904
	0	.0%	Warrants		—		—
	0	.7%	Other Investment Company		4,712,628		4,712,628
	0	.1%	Short-Term Investment		799,922		799,922
	99	.7%	Total Investments		559,454,211		636,894,454
	5	.0%	Collateral Invested for Securities on Loan		31,624,888		31,624,888
	(4	.7)%	Other Assets and Liabilities, Net				(29,765,750	)
	100	.0%	Net Assets				638,753,592

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 98.9% of net assets
Automobiles & Components 1.0%
Thor Industries, Inc.		34,300		0.2		1,160,369
Other Securities				0.8		5,083,024
				1.0		6,243,393
Banks 8.7%
Citizens Republic Bancorp, Inc. *		66,550		0.2		1,122,698
Other Securities				8.5		54,411,566
				8.7		55,534,264
Capital Goods 9.9%
Brady Corp., Class A		35,500		0.2		1,101,565
CNH Global N.V. *		24,800		0.2		1,135,096
NACCO Industries, Inc., Class A		10,740		0.2		1,218,668
WABCO Holdings, Inc. *		18,600		0.2		1,172,358
Watsco, Inc.		15,745		0.2		1,132,853
Other Securities				8.9		57,594,134
				9.9		63,354,674
Commercial & Professional Supplies 4.3%
The Geo Group, Inc. *		59,980		0.2		1,242,186
Towers Watson & Co., Class A		17,315		0.2		1,132,401
Verisk Analytics, Inc., Class A *		23,900		0.2		1,169,905
Other Securities				3.7		23,901,585
				4.3		27,446,077
Consumer Durables & Apparel 3.9%
American Greetings Corp., Class A		70,400		0.2		1,126,400
Liz Claiborne, Inc. *		116,500		0.2		1,561,100
M.D.C. Holdings, Inc.		39,900		0.2		1,121,589
Skechers U.S.A., Inc., Class A *		67,245		0.2		1,255,464
The Ryland Group, Inc.		59,500		0.2		1,339,345
Other Securities				2.9		18,305,765
				3.9		24,709,663
Consumer Services 5.6%
Cracker Barrel Old Country Store, Inc.		19,120		0.2		1,099,782
The Cheesecake Factory, Inc. *		36,335		0.2		1,144,552
Other Securities				5.2		33,219,179
				5.6		35,463,513
Diversified Financials 2.2%
Other Securities				2.2		14,120,078
Energy 5.7%
Other Securities				5.7		36,045,251
Food & Staples Retailing 0.7%
The Andersons, Inc.		22,125		0.2		1,115,100
Other Securities				0.5		3,291,442
				0.7		4,406,542
Food, Beverage & Tobacco 2.0%
TreeHouse Foods, Inc. *		19,685		0.2		1,132,084
Other Securities				1.8		11,287,352
				2.0		12,419,436
Health Care Equipment & Services 5.7%
Amedisys, Inc. *		81,870		0.2		1,205,945
HealthSouth Corp. *		55,300		0.2		1,238,167
ResMed, Inc. *		32,340		0.2		1,099,883
The Cooper Cos., Inc.		14,100		0.2		1,243,197
Other Securities				4.9		31,725,850
				5.7		36,513,042
Household & Personal Products 0.8%
Other Securities				0.8		5,167,925
Insurance 2.7%
Other Securities				2.7		17,367,009
Materials 5.8%
Carpenter Technology Corp.		22,200		0.2		1,235,652
Compass Minerals International, Inc.		14,930		0.2		1,142,444
Georgia Gulf Corp. *		33,724		0.2		1,195,516
Louisiana-Pacific Corp. *		127,300		0.2		1,152,065

See financial notes 23

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
NewMarket Corp.		5,095		0.2		1,137,306
Other Securities				4.8		31,112,767
				5.8		36,975,750
Media 2.2%
Other Securities				2.2		14,122,735
Pharmaceuticals, Biotechnology & Life Sciences 2.5%
Bio-Rad Laboratories, Inc., Class A *		10,400		0.2		1,123,096
Other Securities				2.3		15,052,560
				2.5		16,175,656
Real Estate 7.7%
Capstead Mortgage Corp.		86,550		0.2		1,188,331
Douglas Emmett, Inc.		53,600		0.2		1,245,664
Howard Hughes Corp. *		20,100		0.2		1,348,911
LaSalle Hotel Properties		41,140		0.2		1,209,927
Mid-America Apartment Communities, Inc.		16,845		0.2		1,146,639
Newcastle Investment Corp.		155,500		0.2		1,099,385
NorthStar Realty Finance Corp.		199,432		0.2		1,136,762
Pennsylvania Real Estate Investment Trust		79,500		0.2		1,120,155
Post Properties, Inc.		22,520		0.2		1,096,724
Sabra Health Care REIT, Inc.		66,933		0.2		1,120,458
Sunstone Hotel Investors, Inc. *		121,300		0.2		1,237,260
Other Securities				5.5		36,201,825
				7.7		49,152,041
Retailing 4.9%
Charming Shoppes, Inc. *		201,300		0.2		1,187,670
Chico’s FAS, Inc.		74,300		0.2		1,141,248
GNC Holdings, Inc., Class A		29,300		0.2		1,144,458
Sally Beauty Holdings, Inc. *		44,465		0.2		1,182,769
Other Securities				4.1		26,851,565
				4.9		31,507,710
Semiconductors & Semiconductor Equipment 3.7%
Skyworks Solutions, Inc. *		40,700		0.2		1,104,598
Other Securities				3.5		22,285,062
				3.7		23,389,660
Software & Services 7.2%
Other Securities				7.2		46,225,387
Technology Hardware & Equipment 5.9%
Arris Group, Inc. *		93,105		0.2		1,203,848
Other Securities				5.7		36,559,250
				5.9		37,763,098
Telecommunication Services 1.4%
Other Securities				1.4		8,780,101
Transportation 2.8%
Old Dominion Freight Line, Inc. *		25,250		0.2		1,122,867
US Airways Group, Inc. *		147,400		0.2		1,512,324
Other Securities				2.4		15,519,345
				2.8		18,154,536
Utilities 1.6%
Northwest Natural Gas Co.		24,505		0.2		1,119,878
Other Securities				1.4		9,224,485
				1.6		10,344,363
Total Common Stock
(Cost $553,941,661)						631,381,904
Warrants 0.0% of net assets
Energy 0.0%
Other Securities				0.0		—
Total Warrants
(Cost $—)						—
Other Investment Company 0.7% of net assets
Money Fund 0.7%
State Street Institutional U.S. Government Money Market Fund		4,712,628		0.7		4,712,628
Total Other Investment Company
(Cost $4,712,628)						4,712,628
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.1% of net assets
U.S. Treasury Obligation 0.1%
Other Securities				0.1		799,922
Total Short-Term Investment
(Cost $799,922)						799,922
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 5.0% of net assets
State Street Institutional U.S. Government Money Market Fund		31,624,888		5.0		31,624,888
Total Collateral Invested for Securities on Loan
(Cost $31,624,888)						31,624,888
End of Collateral Invested for Securities on Loan.

At 04/30/12 the tax basis cost of the fund’s investments was $564,706,890 and the unrealized appreciation and depreciation

24 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

were $119,668,780 and ($47,481,216), respectively, with a net unrealized appreciation of $72,187,564.

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 $95,839 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		75		6,111,750		74,309

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$554,705,215		$—		$—		$554,705,215
Consumer Services		35,431,395		—		32,118		35,463,513
Energy		36,015,725		—		29,526		36,045,251
Household & Personal Products		5,133,730		—		34,195		5,167,925
Warrants(a)		—		—		—		—
Other Investment Company(a)		4,712,628		—		—		4,712,628
Short-Term Investment(a)		—		799,922		—		799,922
Total		$635,998,693		$799,922		$95,839		$636,894,454
Other Financial Instruments
Collateral Invested for Securities on Loan		$31,624,888		$—		$—		$31,624,888
Futures Contract*		74,309		—		—		74,309

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in complete schedule of holdings.

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		April 30,
Investments in Securities	2011		(Losses)			(Losses)			Purchases		Sales			in**		out**		2012
Common Stock		$40,139		($593,218	)		$107,804			$386,085		($15,165	)		$170,194		$—		$95,839
Rights		6,053		217			(6,053	)		—		(217	)		—		—		—
Total		$46,192		($593,001	)		$101,751			$386,085		($15,382	)		$170,194		$—		$95,839

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are ($456,441).

See financial notes 25

 Schwab Fundamental US Small-Mid Company Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $559,454,211) including securities on loan of $30,412,332		$636,894,454
Foreign currency, at value (cost $34)		30
Collateral invested for securities on loan		31,624,888
Receivables:
Investments sold		500,270
Fund shares sold		1,524,749
Dividends		229,290
Income from securities on loan		108,740
Interest		32
Prepaid expenses	+	6,890
Total assets		670,889,343
Liabilities
Collateral held for securities on loan		31,624,888
Payables:
Investment adviser and administrator fees		8,554
Shareholder service fees		6,750
Fund shares redeemed		267,312
Due to brokers for futures		61,909
Accrued expenses	+	166,338
Total liabilities		32,135,751
Net Assets
Total assets		670,889,343
Total liabilities	−	32,135,751
Net assets		$638,753,592
Net Assets by Source
Capital received from investors		537,356,612
Net investment income not yet distributed		2,502,045
Net realized capital gains		20,634,132
Net unrealized capital gains		78,260,803
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$638,753,592		62,076,214			$10.29

26 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $1,655)		$4,611,533
Interest		3,234
Securities on loan	+	758,808
Total investment income		5,373,575
Expenses
Investment adviser and administrator fees		842,255
Shareholder service fees		249,757
Index fee		179,117
Transfer agent fees		51,111
Portfolio accounting fees		30,930
Professional fees		23,154
Shareholder reports		20,956
Registration fees		20,398
Custodian fees		12,840
Trustees’ fees		4,731
Interest expense		162
Other expenses	+	6,408
Total expenses		1,441,819
Expense reduction by CSIM and its affiliates	−	418,131
Custody credits	−	25
Net expenses	−	1,023,663
Net investment income		4,349,912
Realized and Unrealized Gains (Losses)
Net realized gains on investments		25,012,939
Net realized losses on futures contracts	+	(36,527	)
Net realized gains		24,976,412
Net unrealized gains on investments		30,319,428
Net unrealized losses on futures contracts		(244,380	)
Net unrealized losses on foreign currency translations	+	(2	)
Net unrealized gains	+	30,075,046
Net realized and unrealized gains		55,051,458
Increase in net assets resulting from operations		$59,401,370

See financial notes 27

 Schwab Fundamental US Small-Mid Company Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$4,349,912			$6,660,972
Net realized gains		24,976,412			36,178,006
Net unrealized gains (losses)	+	30,075,046			(22,432,154	)
Increase in net assets from operations		59,401,370			20,406,824
Distributions to Shareholders
Distributions from net investment income		(6,659,188	)		(4,928,997	)
Distributions from net realized gains	+	(39,248,349	)		(22,135,589	)
Total distributions		($45,907,537	)		($27,064,586	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			10,729,870		$106,781,956			28,330,596		$298,407,637
Shares reinvested			1,892,528		17,089,526			863,850		9,079,063
Shares redeemed	+		(6,229,446	)	(61,773,093	)		(14,343,010	)	(150,006,790	)
Net transactions in fund shares			6,392,952		$62,098,389			14,851,436		$157,479,910
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			55,683,262		$563,161,370			40,831,826		$412,339,222
Total increase	+		6,392,952		75,592,222			14,851,436		150,822,148
End of period			62,076,214		$638,753,592			55,683,262		$563,161,370
Net investment income not yet distributed					$2,502,045					$4,811,321

28 See financial notes

Schwab Fundamental International Large Company Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			4/2/072–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		7.26			8.09			7.69			6.01			11.40			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.12			0.23			0.21			0.16			0.28			0.08
Net realized and unrealized gains (losses)		(0.11	)		(0.85	)		0.41			1.81			(5.56	)		1.32
Total from investment operations		0.01			(0.62	)		0.62			1.97			(5.28	)		1.40
Less distributions:
Distributions from net investment income		(0.24	)		(0.21	)		(0.22	)		(0.29	)		(0.09	)		—
Distributions from net realized gains		—			—			—			—			(0.02	)		—
Total distributions		(0.24	)		(0.21	)		(0.22	)		(0.29	)		(0.11	)		—
Net asset value at end of period		7.03			7.26			8.09			7.69			6.01			11.40
Total return (%)		0.39	3		(7.88	)		8.27			34.89			(46.70	)		14.00	3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.35	4		0.35			0.35			0.35			0.35			0.36	5,6
Gross operating expenses		0.56	4		0.57			0.61			0.76			0.74			1.28	5
Net investment income (loss)		3.39	4		3.24			2.70			2.80			3.41			2.30	5
Portfolio turnover rate		23	3		35			65			82			74			50	3
Net assets, end of period ($ x 1,000,000)		392			372			301			253			145			166

* Unaudited.

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 Annualized.

⁶ The ratio of net operating expenses would have been 0.35%, if interest expense had not been incurred.

See financial notes 29

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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				($)		($)
	97	.9%	Common Stock		398,182,531		383,771,434
	0	.4%	Preferred Stock		1,394,128		1,845,479
	0	.0%	Warrants		—		149
	0	.9%	Other Investment Company		3,391,695		3,493,750
	0	.1%	Short-Term Investment		211,429		211,429
	99	.3%	Total Investments		403,179,783		389,322,241
	3	.9%	Collateral Invested for Securities on Loan		15,290,058		15,290,058
	(3	.2)%	Other Assets and Liabilities, Net				(12,657,441	)
	100	.0%	Net Assets				391,954,858

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 97.9% of net assets
Australia 5.1%
Australia & New Zealand Banking Group Ltd.		61,735		0.4		1,529,377
BHP Billiton Ltd.		51,148		0.5		1,897,960
Commonwealth Bank of Australia		33,021		0.5		1,781,250
National Australia Bank Ltd.		68,998		0.5		1,803,559
Westpac Banking Corp.		69,899		0.4		1,647,255
Other Securities				2.8		11,235,180
				5.1		19,894,581
Austria 0.4%
Other Securities				0.4		1,765,438
Belgium 0.8%
Other Securities				0.8		3,181,147
Canada 6.6%
Royal Bank of Canada		30,344		0.4		1,753,646
Other Securities				6.2		24,231,857
				6.6		25,985,503
China 0.0%
Other Securities				0.0		18,217
Cyprus 0.0%
Other Securities				0.0		177,692
Denmark 0.7%
Other Securities				0.7		2,577,013
Finland 1.0%
Other Securities				1.0		4,006,971
France 10.7%
AXA S.A.		178,354		0.6		2,534,437
BNP Paribas S.A.		65,138		0.7		2,628,932
France Telecom S.A.		170,895		0.6		2,342,639
GDF Suez		95,524		0.6		2,199,367
Sanofi		41,647		0.8		3,181,073
Societe Generale S.A.		63,652		0.4		1,506,913
Total S.A.		107,601		1.3		5,165,236
Other Securities				5.7		22,337,639
				10.7		41,896,236
Germany 8.4%
Allianz SE - Reg’d		26,736		0.8		2,982,168
BASF SE (c)		26,551		0.6		2,186,026
Daimler AG - Reg’d		46,465		0.7		2,570,981
Deutsche Bank AG - Reg’d		51,587		0.6		2,239,551
Deutsche Telekom AG - Reg’d		237,705		0.7		2,680,058
E.ON AG (c)		133,419		0.8		3,020,845
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d (c)		11,069		0.4		1,607,775
RWE AG		43,204		0.5		1,857,210
Siemens AG - Reg’d		24,021		0.6		2,229,638
Other Securities				2.7		11,529,748
				8.4		32,904,000
Greece 0.3%
Other Securities				0.3		1,146,801
Hong Kong 1.8%
Other Securities				1.8		7,124,465
Ireland 0.2%
Other Securities				0.2		693,497
Israel 0.4%
Other Securities				0.4		1,411,970
Italy 4.2%
Enel S.p.A.		594,513		0.5		1,949,643
Eni S.p.A.		151,965		0.9		3,376,633
Telecom Italia S.p.A. *		1,355,408		0.4		1,537,689
UniCredit S.p.A.		417,755		0.4		1,666,264
Other Securities				2.0		7,874,733
				4.2		16,404,962

30 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Japan 17.7%
Honda Motor Co., Ltd.		44,200		0.4		1,590,722
Mitsubishi UFJ Financial Group, Inc.		499,934		0.6		2,400,438
Sumitomo Mitsui Financial Group, Inc.		49,910		0.4		1,597,059
Toyota Motor Corp.		83,100		0.9		3,405,250
Other Securities				15.4		60,332,592
				17.7		69,326,061
Netherlands 2.9%
ING Groep N.V. CVA *		274,709		0.5		1,938,038
Other Securities				2.4		9,253,087
				2.9		11,191,125
New Zealand 0.1%
Other Securities				0.1		373,128
Norway 1.0%
Other Securities				1.0		3,825,444
Portugal 0.4%
Other Securities				0.4		1,462,213
Republic of Korea 4.1%
Samsung Electronics Co., Ltd.		2,684		0.8		3,285,112
Other Securities				3.3		12,905,489
				4.1		16,190,601
Singapore 0.9%
Other Securities				0.9		3,564,520
Spain 3.7%
Banco Bilbao Vizcaya Argentaria S.A.		272,011		0.5		1,840,711
Banco Santander S.A.		609,942		1.0		3,829,596
Telefonica S.A.		254,588		0.9		3,717,686
Other Securities				1.3		5,243,414
				3.7		14,631,407
Sweden 2.1%
Other Securities				2.1		8,215,051
Switzerland 4.7%
Nestle S.A. - Reg’d		57,324		0.9		3,513,345
Novartis AG - Reg’d		44,961		0.6		2,482,577
Roche Holding AG		10,824		0.5		1,978,200
Zurich Financial Services AG *		6,410		0.4		1,570,468
Other Securities				2.3		8,976,621
				4.7		18,521,211
United Kingdom 19.7%
AstraZeneca plc		43,970		0.5		1,926,827
Barclays plc		681,942		0.6		2,414,310
BP plc		972,291		1.8		7,023,926
British American Tobacco plc		30,876		0.4		1,583,615
GlaxoSmithKline plc		128,327		0.8		2,964,544
HSBC Holdings plc		674,213		1.6		6,086,238
Royal Dutch Shell plc, A Shares		149,322		1.4		5,325,708
Royal Dutch Shell plc, B Shares		111,423		1.0		4,077,474
Tesco plc		371,905		0.5		1,916,304
Vodafone Group plc		2,037,800		1.4		5,640,548
Other Securities				9.7		38,322,686
				19.7		77,282,180
Total Common Stock
(Cost $398,182,531)						383,771,434
Preferred Stock 0.4% of net assets
Germany 0.4%
Other Securities				0.4		1,713,338
Italy 0.0%
Other Securities				0.0		127,350
United Kingdom 0.0%
Other Securities				0.0		4,791
Total Preferred Stock
(Cost $1,394,128)						1,845,479
Warrants 0.0% of net assets
Spain 0.0%
Other Securities				0.0		149
Total Warrants
(Cost $—)						149
Other Investment Company 0.9% of net assets
United States 0.9%
iShares MSCI EAFE Index Fund		65,000		0.9		3,493,750
Total Other Investment Company
(Cost $3,391,695)						3,493,750
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Other Securities				0.1		211,429
Total Short-Term Investment
(Cost $211,429)						211,429
End of Investments.

See financial notes 31

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 3.9% of net assets
Wells Fargo Advantage Government Money Market Fund		15,290,058		3.9		15,290,058
Total Collateral Invested for Securities on Loan
(Cost $15,290,058)						15,290,058
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $430,328,900 unrealized appreciation and depreciation were $19,757,605 and ($60,764,264), respectively, with a net unrealized depreciation of ($41,006,659).

At 04/30/12, the values of certain foreign securities held by the fund aggregating $355,614,487 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 $18,366 or 0.0% of net assets.
(c)	All or a portion of this security is on loan.

CVA —	Dutch Certificate
Reg’d —	Registered
REIT —	Real Estate Investment Trust.
RSP —	Risparmio (Convertible Savings Shares).

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$—		$222,436,687		$—		$222,436,687
Belgium		775,965		2,405,182		—		3,181,147
Canada		25,985,503		—		—		25,985,503
China		—		—		18,217		18,217
Greece		102,554		1,044,247		—		1,146,801
Hong Kong		11,269		7,113,196		—		7,124,465
Ireland		114,531		578,966		—		693,497
Netherlands		484,248		10,706,877		—		11,191,125
Republic of Korea		115,014		16,075,587		—		16,190,601
Switzerland		2,179,241		16,341,970		—		18,521,211
United Kingdom		211,093		77,071,087		—		77,282,180
Preferred Stock(a)		—		1,840,688		—		1,840,688
United Kingdom		—		—		4,791		4,791
Warrants(a)		—		—		149		149
Other Investment Company(a)		3,493,750		—		—		3,493,750
Short-Term Investment(a)		—		211,429		—		211,429
Total		$33,473,168		$355,825,916		$23,157		$389,322,241
Other Financial Instruments
Collateral Invested for Securities on Loan		$15,290,058		$—		$—		$15,290,058

(a) As categorized in complete schedule of holdings.

32 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) 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		April 30,
Investments in Securities	2011		(Losses)			(Losses)			Purchases		Sales			in*		out*		2012
Common Stock
Canada		$27,028		$—			($27,028	)		$—		$—			$—		$—		$—
China		24,258		—			(6,041	)		—		—			—		—		18,217
United Kingdom		4,188		(74	)		(22	)		—		(4,092	)		—		—		—
Preferred Stock
United Kingdom		—		—			27			4,764		—			—		—		4,791
Rights							—
Hong Kong		20,125		9,267			(20,125	)		—		(9,267	)		—		—		—
Republic of Korea		1,790		647			(1,790	)		—		(647	)		—		—		—
Warrants
Spain		—		—			(268	)		—		—			417		—		149
Total		$77,389		$9,840			($55,247	)		$4,764		($14,006	)		$417		$—		$23,157

* 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are ($6,281).

See financial notes 33

 Schwab Fundamental International Large Company Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $403,179,783) including securities on loan of $14,231,582		$389,322,241
Foreign currency, at value (cost $605,422)		605,584
Collateral invested for securities on loan		15,290,058
Receivables:
Dividends		1,875,969
Fund shares sold		459,375
Foreign tax reclaims		130,555
Income from securities on loan		84,546
Prepaid expenses	+	4,809
Total assets		407,773,137
Liabilities
Collateral held for securities on loan		15,290,058
Payables:
Investments bought		10,544
Investment adviser and administrator fees		3,220
Shareholder service fees		3,365
Fund shares redeemed		414,209
Accrued expenses	+	96,883
Total liabilities		15,818,279
Net Assets
Total assets		407,773,137
Total liabilities	−	15,818,279
Net assets		$391,954,858
Net Assets by Source
Capital received from investors		520,937,507
Net investment income not yet distributed		3,495,529
Net realized capital losses		(118,659,614	)
Net unrealized capital losses		(13,818,564	)
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$391,954,858		55,777,907			$7.03

34 See financial notes

 Schwab Fundamental International Large Company Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $584,527)		$6,752,395
Interest		97
Securities on loan	+	202,600
Total investment income		6,955,092
Expenses
Investment adviser and administrator fees		558,526
Shareholder service fees		160,173
Index fee		114,033
Custodian fees		91,593
Portfolio accounting fees		34,144
Professional fees		24,412
Transfer agent fees		23,922
Registration fees		17,419
Shareholder reports		7,299
Trustees’ fees		4,041
Interest expense		1,302
Other expenses	+	7,541
Total expenses		1,044,405
Expense reduction by CSIM and its affiliates	−	391,490
Net expenses	−	652,915
Net investment income		6,302,177
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(5,533,273	)
Net realized losses on foreign currency transactions	+	(47,137	)
Net realized losses		(5,580,410	)
Net unrealized losses on investments		(126,233	)
Net unrealized gains on foreign currency translations	+	52,869
Net unrealized losses	+	(73,364	)
Net realized and unrealized losses		(5,653,774	)
Increase in net assets resulting from operations		$648,403

See financial notes 35

 Schwab Fundamental International Large Company Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$6,302,177			$11,287,685
Net realized gains (losses)		(5,580,410	)		3,313,328
Net unrealized losses	+	(73,364	)		(43,691,063	)
Increase (Decrease) in net assets from operations		648,403			(29,090,050	)
Distributions to Shareholders
Distributions from net investment income		($12,260,320	)		($8,005,998	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			11,792,074		$81,535,665			22,477,614		$174,921,214
Shares reinvested			1,363,648		9,013,714			755,041		5,964,829
Shares redeemed	+		(8,668,778	)	(59,244,596	)		(9,127,025	)	(72,203,924	)
Net transactions in fund shares			4,486,944		$31,304,783			14,105,630		$108,682,119
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			51,290,963		$372,261,992			37,185,333		$300,675,921
Total increase	+		4,486,944		19,692,866			14,105,630		71,586,071
End of period			55,777,907		$391,954,858			51,290,963		$372,261,992
Net investment income not yet distributed					$3,495,529					$9,453,672

36 See financial notes

Schwab Fundamental International Small-Mid Company Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			1/31/082–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		9.53			9.96			9.00			6.22			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.10	3		0.24	3		0.16	3		0.12	3		0.27	3
Net realized and unrealized gains (losses)		0.23			(0.40	)		1.09			2.92			(4.05	)
Total from investment operations		0.33			(0.16	)		1.25			3.04			(3.78	)
Less distributions:
Distributions from net investment income		(0.25	)		(0.27	)		(0.29	)		(0.26	)		—
Distributions from net realized gains		(0.39	)		—			—			—			—
Total distributions		(0.64	)		(0.27	)		(0.29	)		(0.26	)		—
Net asset value at end of period		9.22			9.53			9.96			9.00			6.22
Total return (%)		4.14	4		(1.76	)		14.32			51.19			(37.80	)4
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.46	5,6		0.54			0.55			0.55			0.56	5,7
Gross operating expenses		0.82	5,6		0.99			1.07			3.82			5.44	5
Net investment income (loss)		2.34	5		2.29			1.77			1.59			3.55	5
Portfolio turnover rate		35	4		63			63			81			132	4
Net assets, end of period ($ x 1,000,000)		98			93			74			47			3

* Unaudited.

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 net operating and gross operating expense ratios would have been 0.55% and 0.91%, respectively, if vendor payments had not been included.

⁷ The ratio of net operating expenses would have been 0.55%, if interest expenses had not been incurred.

See financial notes 37

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.0%	Common Stock		94,785,736		96,511,949
	0	.3%	Preferred Stock		166,261		289,693
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.0%	Other Investment Company		942,530		955,680
	0	.3%	Short-Term Investment		303,187		303,187
	99	.6%	Total Investments		96,197,714		98,060,509
	1	.7%	Collateral Invested for Securities on Loan		1,721,428		1,721,428
	(1	.3)%	Other Assets and Liabilities, Net				(1,360,328	)
	100	.0%	Net Assets				98,421,609

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 98.0% of net assets
Australia 5.2%
APA Group		26,831		0.1		145,287
Bank of Queensland Ltd.		18,980		0.1		146,612
UGL Ltd.		11,364		0.2		154,027
Other Securities				4.8		4,662,103
				5.2		5,108,029
Austria 0.8%
Andritz AG		2,902		0.2		152,021
Other Securities				0.6		692,522
				0.8		844,543
Belgium 1.0%
Other Securities				1.0		1,036,929
Canada 9.6%
AltaGas Ltd.		4,900		0.2		158,580
Groupe Aeroplan, Inc.		11,400		0.1		146,561
Progressive Waste Solutions Ltd.		7,000		0.2		151,855
RONA, Inc.		14,400		0.2		154,517
Other Securities				8.9		8,811,504
				9.6		9,423,017
Denmark 1.1%
Other Securities				1.1		1,067,517
Finland 1.6%
Other Securities				1.6		1,545,423
France 3.9%
Gecina S.A.		1,588		0.1		147,312
Gemalto N.V.		2,328		0.2		173,423
Havas S.A.		25,602		0.1		144,911
Societe BIC S.A.		1,577		0.2		173,712
Other Securities				3.3		3,176,579
				3.9		3,815,937
Germany 3.9%
Axel Springer AG (c)		3,268		0.2		149,103
Fraport AG		2,233		0.1		145,200
Kabel Deutschland Holding AG *		2,587		0.2		163,092
MTU Aero Engines Holding AG		1,956		0.2		164,807
QIAGEN N.V. *		9,158		0.2		151,424
Stada Arzneimittel AG		4,414		0.1		146,541
Other Securities				2.9		2,882,490
				3.9		3,802,657
Greece 0.3%
Other Securities				0.3		294,816
Hong Kong 5.6%
Hengan International Group Co., Ltd.		14,000		0.2		147,933
Hysan Development Co., Ltd.		33,000		0.2		149,175
VTech Holdings Ltd.		13,000		0.1		145,448
Other Securities				5.1		5,041,012
				5.6		5,483,568
Ireland 0.4%
Other Securities				0.4		411,985
Israel 1.1%
Other Securities				1.1		1,055,630
Italy 2.7%
Pirelli & C. S.p.A.		12,099		0.1		147,422
Other Securities				2.6		2,471,694
				2.7		2,619,116
Japan 32.0%
Aiful Corp. (c)*		69,500		0.2		150,936
Air Water, Inc.		12,000		0.2		151,263
Alps Electric Co., Ltd.		16,200		0.1		147,345
Ebara Corp.		36,000		0.1		145,646
Hitachi Chemical Co., Ltd.		8,600		0.2		159,423
Hitachi Construction Machinery Co., Ltd.		7,200		0.2		155,708
Keikyu Corp.		17,000		0.1		145,943

38 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Konami Corp.		5,200		0.2		150,388
Kyowa Hakko Kirin Co., Ltd.		14,000		0.1		147,160
Leopalace21 Corp. *		54,800		0.2		170,264
Minebea Co., Ltd.		32,000		0.1		144,993
NHK Spring Co., Ltd.		14,000		0.1		146,130
Oki Electric Industry Co., Ltd. *		123,000		0.2		209,387
Rengo Co., Ltd.		21,000		0.2		153,548
TOTO Ltd.		20,000		0.2		147,979
Yamazaki Baking Co., Ltd.		12,000		0.2		177,456
Other Securities				29.4		29,000,992
				32.0		31,504,561
Netherlands 1.4%
Other Securities				1.4		1,415,416
New Zealand 0.6%
Other Securities				0.6		555,389
Norway 1.4%
Subsea 7 S.A. *		5,611		0.1		145,319
Other Securities				1.3		1,213,634
				1.4		1,358,953
Portugal 0.5%
Other Securities				0.5		549,871
Republic of Korea 6.0%
CJ CheilJedang Corp.		498		0.2		164,523
NHN Corp.		695		0.2		157,115
Other Securities				5.6		5,569,714
				6.0		5,891,352
Singapore 2.5%
Ascendas REIT		88,000		0.1		147,627
Other Securities				2.4		2,319,955
				2.5		2,467,582
Spain 1.7%
Other Securities				1.7		1,709,646
Sweden 2.3%
Other Securities				2.3		2,297,335
Switzerland 3.3%
Logitech International S.A. - Reg’d (c)*		14,660		0.2		149,554
OC Oerlikon Corp. AG - Reg’d *		17,355		0.2		171,552
Other Securities				2.9		2,932,525
				3.3		3,253,631
United Kingdom 9.1%
Aberdeen Asset Management plc		34,475		0.2		158,670
Bellway plc		11,548		0.1		147,562
London Stock Exchange Group plc		9,967		0.2		175,974
Petrofac Ltd.		5,457		0.2		154,102
Other Securities				8.4		8,362,738
				9.1		8,999,046
Total Common Stock
(Cost $94,785,736)						96,511,949
Preferred Stock 0.3% of net assets
Germany 0.3%
Other Securities				0.3		265,262
Republic of Korea 0.0%
Other Securities				0.0		19,639
Sweden 0.0%
Other Securities				0.0		4,792
Total Preferred Stock
(Cost $166,261)						289,693
Rights 0.0% of net assets
United Kingdom 0.0%
Other Securities				0.0		—
Total Rights
(Cost $—)						—
Warrants 0.0% of net assets
Netherlands 0.0%
Other Securities				0.0		—
Total Warrants
(Cost $—)						—
Other Investment Company 1.0% of net assets
United States 1.0%
iShares MSCI EAFE Small Cap Index Fund		24,000		1.0		955,680
Total Other Investment Company
(Cost $942,530)						955,680

See financial notes 39

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) 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%, 05/01/12		303,187		0.3		303,187
Total Short-Term Investment
(Cost $303,187)						303,187
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 1.7% of net assets
Wells Fargo Advantage Government Money Market Fund		1,721,428		1.7		1,721,428
Total Collateral Invested for Securities on Loan
(Cost $1,721,428)						1,721,428
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $96,680,688 and the unrealized appreciation and depreciation were $12,098,751 and ($10,718,930), respectively, with a net unrealized appreciation of $1,379,821.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $86,253,323 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 $115,765 or 0.1% of net assets.
(c)	All or a portion of this security is on loan.

CVA —	Dutch Certificate.
Reg’d —	Registered
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares).

40 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$—		$48,731,899		$—		$48,731,899
Australia		34,512		5,041,368		32,149		5,108,029
Canada		9,423,017		—		—		9,423,017
France		94,045		3,721,892		—		3,815,937
Hong Kong		—		5,438,144		45,424		5,483,568
Ireland		162,891		249,094		—		411,985
Italy		6,332		2,612,784		—		2,619,116
Netherlands		—		1,405,501		9,915		1,415,416
Norway		95,680		1,263,273		—		1,358,953
Republic of Korea		139,684		5,698,324		53,344		5,891,352
Switzerland		98,513		3,155,118		—		3,253,631
United Kingdom		348,021		8,651,025		—		8,999,046
Preferred Stock(a)		—		284,901		—		284,901
Sweden		4,792		—		—		4,792
Rights(a)		—		—		—		—
Warrants(a)		—		—		—		—
Other Investment Company(a)		955,680		—		—		955,680
Short-Term Investment(a)		—		303,187		—		303,187
Total		$11,363,167		$86,556,510		$140,832		$98,060,509
Other Financial Instruments
Collateral Invested for Securities on Loan		$1,721,428		$—		$—		$1,721,428

(a) As categorized in complete schedule of holdings.

See financial notes 41

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) 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			April 30,
Investments in Securities	2011		(Losses)			(Losses)			Purchases		Sales			in*		out*			2012
Common Stock
Australia		$—		($13,386	)		($8,220	)		$11,291		($6,685	)		$49,149		$—			$32,149
Hong Kong		—		—			(23,663	)		45,906		—			23,181		—			45,424
Netherlands		9,824		—			91			—		—			—		—			9,915
Republic of Korea		124,137		—			(20,518	)		—		—			73,862		(124,137	)		53,344
Spain		—		—			(10,410	)		—		—			10,410		—			—
Sweden		64,107		21,795			(22,704	)		—		(63,198	)		—		—			—
Preferred Stock
United Kingdom		1,741		(5	)		5			—		(1,741	)		—		—			—
Rights
Australia		3,656		935			(3,656	)		—		(935	)		—		—			—
Republic of Korea		9,073		3,350			(9,073	)		—		(3,350	)		—		—			—
Total		$212,538		$12,689			($98,148	)		$57,197		($75,909	)		$156,602		($124,137	)		$140,832

* 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are ($83,474).

42 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $96,197,714) including securities on loan of $1,509,707		$98,060,509
Foreign currency, at value (cost $60,469)		60,527
Collateral invested for securities on loan		1,721,428
Receivables:
Dividends		474,546
Fund shares sold		117,040
Foreign tax reclaims		14,066
Income from securities on loan		10,844
Prepaid expenses	+	1,015
Total assets		100,459,975
Liabilities
Collateral held for securities on loan		1,721,428
Payables:
Investments bought		199,050
Investment adviser and administrator fees		829
Shareholder service fees		983
Fund shares redeemed		72,295
Accrued expenses	+	43,781
Total liabilities		2,038,366
Net Assets
Total assets		100,459,975
Total liabilities	−	2,038,366
Net assets		$98,421,609
Net Assets by Source
Capital received from investors		97,891,444
Distributions in excess of net investment income		(42,975	)
Net realized capital losses		(1,300,636	)
Net unrealized capital gains		1,873,776
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$98,421,609		10,673,535			$9.22

See financial notes 43

 Schwab Fundamental International Small-Mid Company Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $107,936)		$1,241,118
Interest		33
Securities on loan	+	52,441
Total investment income		1,293,592
Expenses
Investment adviser and administrator fees		184,355
Shareholder service fees		33,940
Custodian fees		47,813
Portfolio accounting fees		34,096
Professional fees		23,411
Transfer agent fees		22,582
Registration fees		12,289
Shareholder reports		5,131
Index fee1		4,361
Trustees’ fees		3,142
Interest expense		400
Other expenses	+	8,074
Total expenses		379,594
Expense reduction by CSIM and its affiliates	−	165,706
Net expenses	−	213,888
Net investment income		1,079,704
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(716,119	)
Net realized gains on foreign currency transactions	+	1,329
Net realized losses		(714,790	)
Net unrealized gains on investments		3,194,120
Net unrealized gains on foreign currency translations	+	14,624
Net unrealized gains	+	3,208,744
Net realized and unrealized gains		2,493,954
Increase in net assets resulting from operations		$3,573,658

¹ Index fees are net of vendor payments of $40,000.

44 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$1,079,704			$2,100,406
Net realized gains (losses)		(714,790	)		4,379,938
Net unrealized gains (losses)	+	3,208,744			(9,760,905	)
Increase (Decrease) in net assets from operations		3,573,658			(3,280,561	)
Distributions to Shareholders
Distributions from net investment income		(2,493,429	)		(2,008,011	)
Distributions from net realized gains	+	(3,900,690	)		—
Total distributions		($6,394,119	)		($2,008,011	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,292,457		$20,657,707			4,357,124		$45,080,122
Shares reinvested			531,718		4,487,698			127,659		1,268,928
Shares redeemed	+		(1,855,880	)	(16,411,407	)		(2,197,870	)	(22,426,178	)
Net transactions in fund shares			968,295		$8,733,998			2,286,913		$23,922,872
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			9,705,240		$92,508,072			7,418,327		$73,873,772
Total increase	+		968,295		5,913,537			2,286,913		18,634,300
End of period			10,673,535		$98,421,609			9,705,240		$92,508,072
(Distributions in excess of net investment income)/Net investment income not yet distributed					($42,975	)				$1,370,750

See financial notes 45

Schwab Fundamental Emerging Markets Index Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			1/31/082–
	4/30/12*			10/31/11			10/31/10			10/31/091			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		9.17			10.81			8.91			5.74			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.06			0.24			0.17			0.05			0.16
Net realized and unrealized gains (losses)		0.28			(1.37	)		1.81			3.27			(4.42	)
Total from investment operations		0.34			(1.13	)		1.98			3.32			(4.26	)
Less distributions:
Distributions from net investment income		(0.22	)		(0.15	)		(0.08	)		(0.15	)		—
Distributions from net realized gains		(0.17	)		(0.36	)		—			—			—
Total distributions		(0.39	)		(0.51	)		(0.08	)		(0.15	)		—
Net asset value at end of period		9.12			9.17			10.81			8.91			5.74
Total return (%)		4.15	3		(10.99	)		22.36			59.55			(42.60	)3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		0.61	4,5		0.61	4		0.61	4		0.61	4		0.61	4,5
Gross operating expenses		0.88	5		0.91			0.98			1.70			4.06	5
Net investment income (loss)		1.33	5		2.51			2.31			1.56			2.31	5
Portfolio turnover rate		38	3		56			91			103			159	3
Net assets, end of period ($ x 1,000,000)		349			310			294			119			6

* Unaudited.

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.

46 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

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	.8%	Common Stock		302,779,011		309,600,525
	10	.4%	Preferred Stock		40,542,555		36,190,063
	0	.0%	Rights		—		1,589
	0	.4%	Other Investment Company		1,479,785		1,477,000
	0	.1%	Short-Term Investment		233,014		233,014
	99	.7%	Total Investments		345,034,365		347,502,191
	0	.1%	Collateral Invested for Securities on Loan		506,200		506,200
	0	.2%	Other Assets and Liabilities, Net				671,208
	100	.0%	Net Assets				348,679,599

	Number		% of Net		Value
Security	of Shares		Assets		($)
Common Stock 88.8% of net assets
Brazil 9.0%
Banco do Brasil S.A.		223,700		0.8		2,767,278
Companhia Siderurgica Nacional S.A.		197,500		0.5		1,694,056
Petroleo Brasileiro S.A. - Petrobras		599,200		2.0		7,038,317
Vale S.A.		169,100		1.1		3,779,167
Other Securities				4.6		15,993,768
				9.0		31,272,586
Chile 1.6%
Other Securities				1.6		5,781,634
China 16.8%
Bank of China Ltd., Class H		13,466,234		1.6		5,607,632
China Construction Bank Corp., Class H		8,796,000		2.0		6,826,081
China Life Insurance Co., Ltd., Class H *		674,000		0.5		1,794,556
China Mobile Ltd.		714,500		2.3		7,904,888
China Petroleum & Chemical Corp., Class H		3,510,000		1.1		3,728,008
China Unicom (Hong Kong) Ltd.		1,001,056		0.5		1,750,823
CNOOC Ltd.		1,470,000		0.9		3,106,327
Industrial & Commercial Bank of China Ltd., Class H		7,831,172		1.5		5,203,296
PetroChina Co., Ltd., Class H		2,911,000		1.2		4,342,326
Other Securities				5.2		18,460,550
				16.8		58,724,487
Czech Republic 0.8%
CEZ A/S		41,155		0.5		1,659,475
Other Securities				0.3		1,059,551
				0.8		2,719,026
Egypt 0.6%
Other Securities				0.6		1,975,887
Hungary 1.2%
MOL Hungarian Oil & Gas plc *		18,610		0.4		1,538,581
OTP Bank Nyrt. plc		105,904		0.5		1,856,464
Other Securities				0.3		649,016
				1.2		4,044,061
India 5.7%
Reliance Industries Ltd.		186,056		0.8		2,624,330
Other Securities				4.9		17,207,072
				5.7		19,831,402
Indonesia 1.7%
PT Telekomunikasi Indonesia Tbk		1,653,000		0.4		1,524,176
Other Securities				1.3		4,358,034
				1.7		5,882,210
Malaysia 3.6%
Public Bank Berhad		344,900		0.4		1,557,232
Other Securities				3.2		10,919,244
				3.6		12,476,476
Mexico 2.7%
America Movil S.A.B. de C.V., Series L		4,566,800		1.7		6,096,803
Other Securities				1.0		3,455,341
				2.7		9,552,144
Poland 2.5%
KGHM Polska Miedz S.A.		35,362		0.4		1,563,595
Polski Koncern Naftowy Orlen S.A. *		154,565		0.5		1,803,225
Other Securities				1.6		5,401,124
				2.5		8,767,944
Russia 11.4%
Gazprom ADR		1,037,398		3.4		12,015,197
LUKOIL ADR		169,646		3.0		10,436,830
Mobile TeleSystems ADR		102,651		0.6		2,007,854
Rosneft Oil Co. GDR - Reg’d *		306,272		0.6		2,193,063
Sberbank of Russia ADR		199,747		0.7		2,567,382
Tatneft ADR		58,865		0.6		2,185,031

See financial notes 47

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		% of Net		Value
Security	of Shares		Assets		($)
Other Securities				2.5		8,253,493
				11.4		39,658,850
South Africa 10.1%
FirstRand Ltd.		572,605		0.5		1,862,244
Impala Platinum Holdings Ltd.		85,819		0.5		1,675,285
MTN Group Ltd.		200,376		1.0		3,504,146
Sasol Ltd.		69,929		1.0		3,324,741
Standard Bank Group Ltd.		232,755		1.0		3,438,325
Other Securities				6.1		21,460,123
				10.1		35,264,864
Taiwan 17.3%
Asustek Computer, Inc.		184,041		0.5		1,848,796
AU Optronics Corp.		4,142,800		0.5		1,864,146
China Steel Corp.		2,120,733		0.6		2,105,422
Chunghwa Telecom Co., Ltd.		622,906		0.6		1,947,713
Compal Electronics, Inc.		1,385,305		0.5		1,585,949
Formosa Chemicals & Fibre Corp.		668,420		0.6		1,929,297
Formosa Plastics Corp.		821,820		0.7		2,324,435
Hon Hai Precision Industry Co., Ltd.		1,617,042		1.5		5,084,263
Nan Ya Plastics Corp.		1,231,160		0.7		2,526,099
Quanta Computer, Inc.		661,500		0.5		1,730,855
Taiwan Semiconductor Manufacturing Co., Ltd.		2,700,689		2.3		7,982,248
Other Securities				8.3		29,525,365
				17.3		60,454,588
Thailand 1.7%
PTT PCL		144,687		0.5		1,646,844
Other Securities				1.2		4,332,788
				1.7		5,979,632
Turkey 2.1%
Other Securities				2.1		7,214,734
Total Common Stock
(Cost $302,779,011)						309,600,525
Preferred Stock 10.4% of net assets
Brazil 10.3%
Banco Bradesco S.A.		234,878		1.1		3,774,264
Companhia de Bebidas das Americas		37,069		0.4		1,561,404
Itau Unibanco Holding S.A.		268,300		1.2		4,222,648
Petroleo Brasileiro S.A.		864,600		2.8		9,656,813
Vale S.A., Class A		215,000		1.3		4,675,262
Other Securities				3.5		12,024,337
				10.3		35,914,728
Chile 0.1%
Other Securities				0.1		275,335
Total Preferred Stock
(Cost $40,542,555)						36,190,063
Rights 0.0% of net assets
Brazil 0.0%
Other Securities				0.0		1,589
Total Rights
(Cost $—)						1,589
Other Investment Company 0.4% of net assets
United States 0.4%
Other Securities				0.4		1,477,000
Total Other Investment Company
(Cost $1,479,785)						1,477,000
	Face
Security	Amount		% of Net		Value
Rate, Maturity Date	($)		Assets		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Other Securities				0.1		233,014
Total Short-Term Investment
(Cost $233,014)						233,014
End of Investments.
	Number		% of Net		Value
Security	of Shares		Assets		($)
Collateral Invested for Securities on Loan 0.1% of net assets
Wells Fargo Advantage Government Money Market Fund		506,200		0.1		506,200
Total Collateral Invested for Securities on Loan
(Cost $506,200)						506,200
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $349,568,887 and the unrealized appreciation and depreciation were $30,846,370 and ($32,913,066), respectively, with a net unrealized depreciation of ($2,066,696).

48 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

At 04/30/12, the values of certain foreign securities held by the fund aggregating $250,558,288 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 $218,943 or 0.1% of net assets.

ADR —	American Depositary Receipt
GDR —	Global Depositary Receipt
Reg’d —	Registered

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$—		$125,160,042		$—		$125,160,042
Brazil		31,272,586		—		—		31,272,586
Chile		5,781,634		—		—		5,781,634
Czech Republic		2,406,889		312,137		—		2,719,026
Egypt		1,975,887		—		—		1,975,887
India		713,196		19,118,206		—		19,831,402
Mexico		9,552,144		—		—		9,552,144
Russia		2,007,854		37,650,996		—		39,658,850
Taiwan		365,542		60,089,046		—		60,454,588
Thailand		4,843,906		1,135,726		—		5,979,632
Turkey		122,599		7,092,135		—		7,214,734
Preferred Stock
Brazil(a)		35,914,728		—		—		35,914,728
Chile(a)		275,335		—		—		275,335
Rights(a)		—		—		1,589		1,589
Other Investment Company(a)		1,477,000		—		—		1,477,000
Short-Term Investment(a)		—		233,014		—		233,014
Total		$96,709,300		$250,791,302		$1,589		$347,502,191
Other Financial Instruments
Collateral Invested for Securities on Loan		$506,200		$—		$—		$506,200

(a) As categorized in complete schedule of holdings.

See financial notes 49

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) 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		April 30,
Investments in Securities	2011		(Losses)		(Losses)		Purchases		Sales			in*		out*		2012
Rights
Brazil		$—		$—		$1,589		$—		$—			$—		$—		$1,589
Colombia		—		33		—		—		(33	)		—		—		—
Total		$—		$33		$1,589		$—		($33	)		$—		$—		$1,589

* 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are $1,589.

50 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $345,034,365) including securities on loan of $449,466		$347,502,191
Foreign currency, at value (cost $301,384)		300,449
Collateral invested for securities on loan		506,200
Receivables:
Dividends		1,012,332
Fund shares sold		416,648
Income from securities on loan		1,846
Prepaid expenses	+	3,190
Total assets		349,742,856
Liabilities
Collateral held for securities on loan		506,200
Payables:
Investments bought		174,380
Investment adviser and administrator fees		7,771
Fund shares redeemed		251,326
Accrued expenses	+	123,580
Total liabilities		1,063,257
Net Assets
Total assets		349,742,856
Total liabilities	−	1,063,257
Net assets		$348,679,599
Net Assets by Source
Capital received from investors		348,859,983
Net investment income not yet distributed		1,320,036
Net realized capital losses		(3,951,217	)
Net unrealized capital gains		2,450,797
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$348,679,599		38,231,262			$9.12

See financial notes 51

 Schwab Fundamental Emerging Markets Index Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $240,589)		$3,132,483
Interest		90
Securities on loan	+	13,522
Total investment income		3,146,095
Expenses
Investment adviser and administrator fees		812,980
Shareholder service fees		107,279
Index fee		170,726
Custodian fees		166,273
Transfer agent fees		58,659
Portfolio accounting fees		29,606
Professional fees		24,629
Registration fees		22,056
Interest expense		11,608
Shareholder reports		10,152
Trustees’ fees		3,849
Other expenses	+	18,108
Total expenses		1,435,925
Expense reduction by CSIM and its affiliates	−	448,742
Net expenses	−	987,183
Net investment income		2,158,912
Realized and Unrealized Gains (Losses)
Net realized gains on investments		1,148,150
Net realized losses on foreign currency transactions	+	(130,170	)
Net realized gains		1,017,980
Net unrealized gains on investments		8,998,430
Net unrealized losses on foreign currency translations	+	(30,633	)
Net unrealized gains	+	8,967,797
Net realized and unrealized gains		9,985,777
Increase in net assets resulting from operations		$12,144,689

52 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$2,158,912			$7,932,589
Net realized gains		1,017,980			4,801,593
Net unrealized gains (losses)	+	8,967,797			(50,393,763	)
Increase (Decrease) in net assets from operations		12,144,689			(37,659,581	)
Distributions to Shareholders
Distributions from net investment income		(7,541,071	)		(4,207,384	)
Distributions from net realized gains	+	(5,755,205	)		(9,830,980	)
Total distributions		($13,296,276	)		($14,038,364	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			11,911,132		$106,236,178			17,110,504		$176,362,625
Shares reinvested			938,276		7,843,990			806,425		8,346,494
Shares redeemed	+		(8,444,941	)	(74,583,345	)		(11,306,201	)	(117,012,298	)
Net transactions in fund shares			4,404,467		$39,496,823			6,610,728		$67,696,821
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			33,826,795		$310,334,363			27,216,067		$294,335,487
Total increase	+		4,404,467		38,345,236			6,610,728		15,998,876
End of period			38,231,262		$348,679,599			33,826,795		$310,334,363
Net investment income not yet distributed					$1,320,036					$6,702,195

See financial notes 53

 Schwab Fundamental Index Funds

Financial Notes, unaudited

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 10) at closing net asset value per share (“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 it is de-listed or its trading is halted or suspended, when a security’s primary pricing source is unable or unwilling to provide a price, or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The 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 are traded in markets that close prior to the funds valuing 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

54 

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 foreign currency exchange 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 due to the lack of observable inputs may significantly impact the resulting fair value and therefore the funds’ results of operations.

55

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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

The funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

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

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (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 Exchange 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 exchange 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 April 30, 2012 and the value of the related collateral are disclosed in the complete Portfolio Holdings and 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.

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”).

56 

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(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 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 April 30, 2012, 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

57

 Schwab Fundamental Index Funds

Financial Notes, unaudited (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 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. For example, a fund may not invest in certain securities in the benchmark Index, or match the securities’ weightings to the benchmark, due to regulatory, operational, custodial or liquidity constraints; corporate transactions; asset valuations; transaction costs and timing; tax considerations; and index rebalancing, which may result in tracking error.

Each fund invests in companies measured by its respective Index. It follows these stocks during upturns as well as downturns. Because of its indexing strategy, a fund does not take steps to reduce market exposure or to lessen the effects of a declining market. In addition, because of a fund’s expenses, the fund’s performance may be below that of the Index.

If a fund uses a sampling method, the fund will not fully replicate the benchmark Index and may hold securities not included in the Index. As a result, the fund is subject to the risk that the investment adviser’s investment management strategy, the implementation of which is subject to a number of constraints, may not produce the intended results. If a fund utilizes a sampling approach, it may not track the return of the Index as well as it would if the fund purchased all of the securities in its benchmark Index.

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

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.

58 

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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 a fund’s investments in emerging market countries, which may be magnified by currency fluctuations relative to the U.S. dollar.

A fund may purchase shares of ETF’s to gain exposure to a particular portion of the market while awaiting an opportunity to purchase securities directly. When a fund invests in an ETF, in addition to directly bearing the expenses associated with its own operations, it will bear a pro rata portion of the ETF’s expenses. Therefore, it may be more costly to own an ETF than to own the underlying securities directly. In addition, while the risks of owning shares of an ETF generally reflect the risks of owning the underlying securities the ETF is designed to track, lack of liquidity in an ETF can result in its value being more volatile than the underlying portfolio securities.

The funds may use derivatives to enhance returns or hedge against market declines. Examples of derivatives are options, futures, options on futures and swaps. An option is the right to buy or sell an instrument at a specific price before a specific date. A future is an agreement to buy or sell a financial instrument at a specific price on a specific day. A swap is an agreement whereby two parties agree to exchange payment streams calculated in relation to a rate, index, instrument or certain securities and a predetermined amount.

A fund’s use of derivative instruments involves risks different from, or possibly greater than, the risks associated with investing directly in securities and other traditional investments. Certain of these risks, such as liquidity risk and market risk, are discussed elsewhere in this section. A fund’s use of derivatives is also subject to credit risk, leverage risk, lack of availability risk, valuation risk, correlation risk and tax risk. Lack of availability risk is the risk that suitable derivative transactions may not be available in all circumstances for risk management or other purposes. Credit risk is the risk that the counterparty to a derivatives transaction may not fulfill its obligations. Leverage risk is the risk that a small percentage of assets invested in derivatives can have a disproportionately larger impact on a fund. Valuation risk is the risk that a particular derivative may be valued incorrectly. Correlation risk is the risk that changes in the value of the derivative may not correlate perfectly with the underlying asset, rate or index. Tax risk is the risk that the use of derivatives may cause the fund to realize higher amounts of short-term capital gain. These risks could cause a fund to lose more than the principal amount invested.

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.

59

 Schwab Fundamental Index Funds

Financial Notes, unaudited (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		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 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		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

11/01/11

11/01/11

Fund

10/31/11

Additions

Sales

04/30/12

04/30/12

to 04/30/12

to 04/30/12

Schwab Fundamental US Large Company Index Fund

94,515

46,700

—

141,215

$2,019,375

$—

$11,342

60 

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

The funds may also let a related party own shares of the funds. As of April 30, 2012, 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 12.2%.

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 April 30, 2012, each fund’s total aggregate security transactions with other Schwab Funds were as follows:

Schwab Fundamental US Large Company Index Fund	$18,319,026
Schwab Fundamental US Small-Mid Company Index Fund	18,319,026
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.

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. Derivatives:

Certain funds entered into equity index futures contracts (“futures”) during the report period. 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 April 30, 2012 and the realized/unrealized gains (losses) on futures contracts held during the period ended April 30, 2012 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

61

 Schwab Fundamental Index Funds

Financial Notes, unaudited (continued)

8. Derivatives (continued):

monthly average contract values 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		$9,870,117		148
Schwab Fundamental US Small-Mid Company Index Fund		4,433,292		56
Schwab Fundamental International Large Company Index Fund		—		—
Schwab Fundamental International Small-Mid Company Index Fund		—		—
Schwab Fundamental Emerging Markets Index Fund		—		—

9. Purchases and Sales/Maturities of Investment Securities:

For the period ended April 30, 2012, 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		$371,233,658		$172,022,017
Schwab Fundamental US Small-Mid Company Index Fund		186,988,554		163,300,692
Schwab Fundamental International Large Company Index Fund		111,130,083		87,108,198
Schwab Fundamental International Small-Mid Company Index Fund		36,619,967		32,656,043
Schwab Fundamental Emerging Markets Index Fund		152,741,559		124,147,486

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Schwab Fundamental US Large Company Index Fund		$19,721		$18,099
Schwab Fundamental US Small-Mid Company Index Fund		4,748		10,864
Schwab Fundamental International Large Company Index Fund		2,595		9,544
Schwab Fundamental International Small-Mid Company Index Fund		470		3,703
Schwab Fundamental Emerging Markets Index Fund		6,843		15,248

11. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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		$—		$—

62 

 Schwab Fundamental Index Funds

Financial Notes, unaudited (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		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		$—

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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

63

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

64 

 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).	75	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.	75	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.	92	None

65

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

66 

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 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.

67

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR37675-05

Semiannual report dated April 30, 2012, enclosed.

Schwab Target Funds

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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This wrapper is not part of the shareholder report.

Schwab Target Funds

Semiannual Report

April 30, 2012

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

This page is intentionally left blank.

Schwab Target Funds

In This Report

Performance at a Glance	2
From the President	4
Fund Management	6
Fund Summaries
Schwab Target 2010 Fund	7
Schwab Target 2015 Fund	8
Schwab Target 2020 Fund	9
Schwab Target 2025 Fund	10
Schwab Target 2030 Fund	11
Schwab Target 2035 Fund	12
Schwab Target 2040 Fund	13
Fund Expenses	14
Financial Statements and Portfolio Holdings
Schwab Target 2010 Fund	15
Schwab Target 2015 Fund	21
Schwab Target 2020 Fund	27
Schwab Target 2025 Fund	33
Schwab Target 2030 Fund	39
Schwab Target 2035 Fund	45
Schwab Target 2040 Fund	51
Financial Notes	57
Trustees and Officers	72
Glossary	75

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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)	5.60%
Target 2010 Composite Index	5.07%
Fund Category: Morningstar Target-Date 2000-2010	5.31%
Performance Details	page 7
Schwab Target 2015 Fund (Ticker Symbol: SWGRX)	6.46%
Target 2015 Composite Index	5.82%
Fund Category: Morningstar Target-Date 2011-2015	5.91%
Performance Details	page 8
Schwab Target 2020 Fund (Ticker Symbol: SWCRX)	7.59%
Target 2020 Composite Index	6.87%
Fund Category: Morningstar Target-Date 2016-2020	6.64%
Performance Details	page 9
Schwab Target 2025 Fund (Ticker Symbol: SWHRX)	8.35%
Target 2025 Composite Index	7.64%
Fund Category: Morningstar Target-Date 2021-2025	7.39%
Performance Details	page 10

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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 components that make up each of the following composite indices may vary over time.

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: 28.0% Dow Jones U.S. Total Stock Market Index, 8.9% MSCI EAFE Index, 30.0% Barclays U.S. Aggregate Bond Index, 2.0% FTSE EPRA/NAREIT Global Index, 4.4% Barclays U.S. Aggregate Intermediate Bond Index, 0.5% MSCI Emerging Markets Index, 4.2% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 12.5% Barclays U.S. Government/Credit: 1-5 Years, and 7.0% Barclays 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: 35.0% Dow Jones U.S. Total Stock Market Index, 11.1% MSCI EAFE Index, 27.6% Barclays U.S. Aggregate Bond Index, 2.5% FTSE EPRA/NAREIT Global Index, 3.8% Barclays U.S. Aggregate Intermediate Bond Index, 0.6% MSCI Emerging Markets Index, 3.4% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 8.5% Barclays U.S. Government/Credit: 1-5 Years, and 5.0% Barclays 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: 43.5% Dow Jones U.S. Total Stock Market Index, 13.8% MSCI EAFE Index, 25.6% Barclays U.S. Aggregate Bond Index, 3.1% FTSE EPRA/NAREIT Global Index, 3.0% Barclays U.S. Aggregate Intermediate Bond Index, 0.7% MSCI Emerging Markets Index, 2.8% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 3.0% Barclays U.S. Government/Credit: 1-5 Years, and 2.0% Barclays 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, 15.8% MSCI EAFE Index, 20.9% Barclays U.S. Aggregate Bond Index, 3.5% FTSE EPRA/NAREIT Global Index, 2.9% Barclays U.S. Aggregate Intermediate Bond Index, 0.8% MSCI Emerging Markets Index, 2.1% Barclays U.S. TIPS Index, 2.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months.

2 Schwab Target Funds

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)	8.83%
Target 2030 Composite Index	8.18%
Fund Category: Morningstar Target-Date 2026-2030	7.74%
Performance Details	page 11
Schwab Target 2035 Fund (Ticker Symbol: SWIRX)	9.37%
Target 2035 Composite Index	8.79%
Fund Category: Morningstar Target-Date 2031-2035	8.45%
Performance Details	page 12
Schwab Target 2040 Fund (Ticker Symbol: SWERX)	9.84%
Target 2040 Composite Index	9.12%
Fund Category: Morningstar Target-Date 2036-2040	8.43%
Performance Details	page 13

Minimum Initial Investment¹ $ 100

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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 components that make up each of the following composite indices may vary over time.

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: 55.1% Dow Jones U.S. Total Stock Market Index, 17.5% MSCI EAFE Index, 15.1% Barclays U.S. Aggregate Bond Index, 3.9% FTSE EPRA/ NAREIT Global Index, 2.2% Barclays U.S. Aggregate Intermediate Bond Index, 0.9% MSCI Emerging Markets Index, 1.5% Barclays U.S. TIPS Index, 1.8% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays 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: 60.0% Dow Jones U.S. Total Stock Market Index, 19.0% MSCI EAFE Index, 10.0% Barclays U.S. Aggregate Bond Index, 4.2% FTSE EPRA/NAREIT Global Index, 1.5% Barclays U.S. Aggregate Intermediate Bond Index, 1.0% MSCI Emerging Markets Index, 1.0% Barclays U.S. TIPS Index, 1.3% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays 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: 63.3% Dow Jones U.S. Total Stock Market Index, 20.0% MSCI EAFE Index, 6.5% Barclays U.S. Aggregate Bond Index, 4.4% FTSE EPRA/NAREIT Global Index, 1.0% Barclays U.S. Aggregate Intermediate Bond Index, 1.1% MSCI Emerging Markets Index, 0.8% Barclays U.S. TIPS Index, 0.9% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months.

¹ Please see prospectus for further detail and eligibility requirements.

Schwab Target Funds 3

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab Target Funds.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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.

4 Schwab Target Funds

From the President continued

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab Target Funds. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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.

Schwab Target Funds 5

Fund Management

Zifan Tang, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the funds. She was appointed portfolio manager of the funds in February 2012. Prior to joining the firm in 2012, she had been employed by a large business data provider as a product manager since 2010. Prior to that position, she had been employed by a large investment manager as a portfolio manager since 1997.

Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period.

6 Schwab Target Funds

Schwab Target 2010 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Target 2010 Fund (7/1/05)		5.60	%		3.44	%		0.86	%		4.08	%
Target 2010 Composite Index3		5.07	%		3.41	%		2.56	%		5.23	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		1.49	%		5.02	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.57	%
Fund Category: Morningstar Target-Date 2000-2010		5.31	%		1.16	%		1.99	%		4.21	%

Fund Expense Ratios⁴: Net 0.55%; Gross 0.69%

 Statistics

Number of Holdings	23
Portfolio Turnover Rate5	9%

 Asset Class Weightings % of Investments⁶

Fixed-Income Funds – Intermediate-Term Bond	34.1%
Equity Funds – Large-Cap	23.0%
Fixed-Income Funds – Short-Term Bond	12.5%
Equity Funds – International	9.5%
Equity Funds – Small-Cap	5.6%
Fixed Income Funds – Inflation-Protected Bond	4.2%
Short-Term Investments	3.6%
Money Market Funds	3.1%
Fixed Income Funds – International Bond	2.3%
Equity Funds – Global Real Estate	2.1%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Total Bond Market Fund	19.6%
Schwab Short-Term Bond Market Fund	12.5%
Schwab Core Equity Fund	6.3%
PIMCO Total Return Fund, Institutional Shares	6.1%
Laudus Growth Investors U.S. Large Cap Growth Fund	6.0%
Schwab S&P 500 Index Fund	4.9%
Schwab Premier Income Fund	4.4%
Schwab Treasury Inflation Protected Securities Fund	4.2%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares	4.0%
Schwab Small-Cap Equity Fund	3.6%
Total	71.6%

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

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	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	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: 28.0% Dow Jones U.S. Total Stock Market Index, 8.9% MSCI EAFE Index, 30.0% Barclays U.S. Aggregate Bond Index, 2.0% FTSE EPRA/NAREIT Global Index, 4.4% Barclays U.S. Aggregate Intermediate Bond Index, 0.5% MSCI Emerging Markets Index, 4.2% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 12.5% Barclays U.S. Government/Credit: 1-5 Years, and 7.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.55%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

Schwab Target Funds 7

Schwab Target 2015 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab Target 2015 Fund (3/12/08)		6.46	%		2.64	%		13.59	%		4.05	%
Target 2015 Composite Index3		5.82	%		2.40	%		13.67	%		3.93	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		20.12	%		4.37	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		7.06	%		6.40	%
Fund Category: Morningstar Target-Date 2011-2015		5.91	%		0.37	%		13.50	%		2.73	%

Fund Expense Ratios⁴: Net 0.63%; Gross 0.85%

 Statistics

Number of Holdings	23
Portfolio Turnover Rate5	11%

 Asset Class Weightings % of Investments⁶

Fixed-Income Funds – Intermediate-Term Bond	30.5%
Equity Funds – Large-Cap	29.6%
Equity Funds – International	11.3%
Fixed-Income Funds – Short-Term Bond	8.1%
Equity Funds – Small-Cap	7.1%
Short-Term Investments	4.0%
Fixed-Income Funds – Inflation-Protected Bond	3.3%
Equity Funds – Global Real Estate	2.4%
Fixed-Income Funds – International Bond	2.4%
Money Market Funds	1.3%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Total Bond Market Fund	18.3%
Schwab Short-Term Bond Market Fund	8.1%
Laudus Growth Investors U.S. Large Cap Growth Fund	7.9%
Schwab Core Equity Fund	7.8%
Schwab S&P 500 Index Fund	6.5%
PIMCO Total Return Fund, Institutional Shares	5.0%
Schwab Small-Cap Equity Fund	4.6%
Laudus International MarketMasters Fund, Select Shares	4.3%
TCW Relative Value Large Cap Fund	3.8%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares	3.7%
Total	70.0%

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

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	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	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: 35.0% Dow Jones U.S. Total Stock Market Index, 11.1% MSCI EAFE Index, 27.6% Barclays U.S. Aggregate Bond Index, 2.5% FTSE EPRA/NAREIT Global Index, 3.8% Barclays U.S. Aggregate Intermediate Bond Index, 0.6% MSCI Emerging Markets Index, 3.4% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 8.5% Barclays U.S. Government/Credit: 1-5 Years, and 5.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.63%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

8 Schwab Target Funds

Schwab Target 2020 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Target 2020 Fund (7/1/05)		7.59	%		2.09	%		1.61	%		4.93	%
Target 2020 Composite Index3		6.87	%		1.94	%		2.42	%		5.39	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		1.49	%		5.02	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.57	%
Fund Category: Morningstar Target-Date 2016-2020		6.64	%		0.84	%		1.12	%		3.94	%

Fund Expense Ratios⁴: Net 0.68%; Gross 0.74%

 Statistics

Number of Holdings	21
Portfolio Turnover Rate5	12%

 Asset Class Weightings % of Investments⁶

Equity Funds – Large-Cap	35.8%
Fixed-Income Funds – Intermediate-Term Bond	28.1%
Equity Funds – International	14.3%
Equity Funds – Small-Cap	8.8%
Equity Funds – Global Real Estate	3.1%
Fixed-Income Funds – Short-Term Bond	2.9%
Fixed Income Funds – Inflation-Protected Bond	2.6%
Fixed Income Funds – International Bond	2.4%
Short-Term Investments	2.0%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Total Bond Market Fund	18.7%
Schwab Core Equity Fund	9.7%
Laudus Growth Investors U.S. Large Cap Growth Fund	9.3%
Schwab S&P 500 Index Fund	7.9%
Schwab Small-Cap Equity Fund	5.7%
Laudus International MarketMasters Fund, Select Shares	5.4%
TCW Relative Value Large Cap Fund	4.5%
Schwab Dividend Equity Fund	4.4%
PIMCO Total Return Fund, Institutional Shares	4.0%
Schwab Global Real Estate Fund	3.1%
Total	72.7%

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

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	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	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: 43.5% Dow Jones U.S. Total Stock Market Index, 13.8% MSCI EAFE Index, 25.6% Barclays U.S. Aggregate Bond Index, 3.1% FTSE EPRA/NAREIT Global Index, 3.0% Barclays U.S. Aggregate Intermediate Bond Index, 0.7% MSCI Emerging Markets Index, 2.8% Barclays U.S. TIPS Index, 2.5% Citigroup Non-U.S. Dollar World Government Bond Index, 3.0% Barclays U.S. Government/Credit: 1-5 Years, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.68%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

Schwab Target Funds 9

Schwab Target 2025 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab Target 2025 Fund (3/12/08)		8.35	%		1.69	%		16.02	%		5.30	%
Target 2025 Composite Index3		7.64	%		1.35	%		15.19	%		4.03	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		20.12	%		4.37	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		7.06	%		6.40	%
Fund Category: Morningstar Target-Date 2021-2025		7.39	%		-0.71	%		15.39	%		2.53	%

Fund Expense Ratios⁴: Net 0.74%; Gross 0.88%

 Statistics

Number of Holdings	20
Portfolio Turnover Rate5	12%

 Asset Class Weightings % of Investments⁶

Equity Funds – Large-Cap	41.6%
Fixed-Income Funds – Intermediate-Term Bond	22.5%
Equity Funds – International	16.1%
Equity Funds – Small-Cap	10.2%
Equity Funds – Global Real Estate	3.4%
Short-Term Investments	2.4%
Fixed-Income Funds – Inflation-Protected Bond	2.0%
Fixed-Income Funds – International Bond	1.8%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Total Bond Market Fund	15.6%
Schwab Core Equity Fund	11.0%
Laudus Growth Investors U.S. Large Cap Growth Fund	11.0%
Schwab S&P 500 Index Fund	9.2%
Schwab Small-Cap Equity Fund	6.6%
Laudus International MarketMasters Fund, Select Shares	6.1%
TCW Relative Value Large Cap Fund	5.4%
Schwab Dividend Equity Fund	5.0%
Laudus Small-Cap MarketMasters Fund, Select Shares	3.6%
Schwab Global Real Estate Fund	3.4%
Total	76.9%

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

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	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	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, 15.8% MSCI EAFE Index, 20.9% Barclays U.S. Aggregate Bond Index, 3.5% FTSE EPRA/NAREIT Global Index, 2.9% Barclays U.S. Aggregate Intermediate Bond Index, 0.8% MSCI Emerging Markets Index, 2.1% Barclays U.S. TIPS Index, 2.0% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.74%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

10 Schwab Target Funds

Schwab Target 2030 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Target 2030 Fund (7/1/05)		8.83	%		0.96	%		1.77	%		5.26	%
Target 2030 Composite Index3		8.18	%		0.71	%		2.04	%		5.35	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		1.49	%		5.02	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.57	%
Fund Category: Morningstar Target-Date 2026-2030		7.74	%		-0.74	%		0.20	%		3.65	%

Fund Expense Ratios⁴: Net 0.77%; Gross 0.82%

 Statistics

Number of Holdings	19
Portfolio Turnover Rate5	12%

 Asset Class Weightings % of Investments⁶

Equity Funds – Large-Cap	45.2%
Equity Funds – International	17.8%
Fixed-Income Funds – Intermediate-Term Bond	16.6%
Equity Funds – Small-Cap	11.1%
Equity Funds – Global Real Estate	3.8%
Short-Term Investments	2.4%
Fixed Income Funds – International Bond	1.7%
Fixed Income Funds – Inflation-Protected Bond	1.4%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Total Bond Market Fund	12.5%
Schwab Core Equity Fund	12.2%
Laudus Growth Investors U.S. Large Cap Growth Fund	11.8%
Schwab S&P 500 Index Fund	10.0%
Schwab Small-Cap Equity Fund	7.2%
Laudus International MarketMasters Fund, Select Shares	6.8%
TCW Relative Value Large Cap Fund	5.7%
Schwab Dividend Equity Fund	5.4%
Laudus Small-Cap MarketMasters Fund, Select Shares	3.9%
Schwab Global Real Estate Fund	3.8%
Total	79.3%

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

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	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	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: 55.1% Dow Jones U.S. Total Stock Market Index, 17.5% MSCI EAFE Index, 15.1% Barclays U.S. Aggregate Bond Index, 3.9% FTSE EPRA/ NAREIT Global Index, 2.2% Barclays U.S. Aggregate Intermediate Bond Index, 0.9% MSCI Emerging Markets Index, 1.5% Barclays U.S. TIPS Index, 1.8% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.77%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

Schwab Target Funds 11

Schwab Target 2035 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			3 Years			Since Inception
Fund: Schwab Target 2035 Fund (3/12/08)		9.37	%		0.54	%		17.23	%		5.09	%
Target 2035 Composite Index3		8.79	%		0.34	%		16.12	%		3.80	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		20.12	%		4.37	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		7.06	%		6.40	%
Fund Category: Morningstar Target-Date 2031-2035		8.45	%		-1.68	%		16.34	%		2.34	%

Fund Expense Ratios⁴: Net 0.82%; Gross 0.99%

 Statistics

Number of Holdings	19
Portfolio Turnover Rate5	11%

 Asset Class Weightings % of Investments⁶

Equity Funds – Large-Cap	49.4%
Equity Funds – International	19.2%
Equity Fund – Small-Cap	12.2%
Fixed-Income Funds – Intermediate-Term Bond	10.7%
Equity Funds – Global Real Estate	4.1%
Short-Term Investments	2.4%
Fixed-Income Funds – International Bond	1.1%
Fixed-Income Funds – Inflation-Protected Bond	0.9%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Core Equity Fund	13.1%
Laudus Growth Investors U.S. Large Cap Growth Fund	13.0%
Schwab S&P 500 Index Fund	10.9%
Schwab Total Bond Market Fund	8.3%
Schwab Small-Cap Equity Fund	7.9%
Laudus International MarketMasters Fund, Select Shares	7.3%
TCW Relative Value Large Cap Fund	6.4%
Schwab Dividend Equity Fund	5.9%
Laudus Small-Cap MarketMasters Fund, Select Shares	4.2%
Schwab Global Real Estate Fund	4.1%
Total	81.1%

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

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	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	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: 60.0% Dow Jones U.S. Total Stock Market Index, 19.0% MSCI EAFE Index, 10.0% Barclays U.S. Aggregate Bond Index, 4.2% FTSE EPRA/NAREIT Global Index, 1.5% Barclays U.S. Aggregate Intermediate Bond Index, 1.0% MSCI Emerging Markets Index, 1.0% Barclays U.S. TIPS Index, 1.3% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.82%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

12 Schwab Target Funds

Schwab Target 2040 Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			Since Inception
Fund: Schwab Target 2040 Fund (7/1/05)		9.84	%		0.21	%		1.60	%		5.45	%
Target 2040 Composite Index3		9.12	%		-0.02	%		1.64	%		5.33	%
Dow Jones U.S. Total Stock Market IndexSM		12.78	%		3.52	%		1.49	%		5.02	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.57	%
Fund Category: Morningstar Target-Date 2036-2040		8.43	%		-1.66	%		-0.12	%		3.61	%

Fund Expense Ratios⁴: Net 0.84%; Gross 0.90%

 Statistics

Number of Holdings	19
Portfolio Turnover Rate5	12%

 Asset Class Weightings % of Investments⁶

Equity Funds – Large-Cap	51.7%
Equity Funds – International	20.4%
Equity Funds – Small-Cap	12.7%
Fixed-Income Funds – Intermediate-Term Bond	7.0%
Equity Funds – Global Real Estate	4.4%
Short-Term Investments	2.3%
Fixed-Income Funds – International Bond	0.8%
Fixed-Income Funds – Inflation-Protected Bond	0.7%
Total	100.0%

 Top Holdings % of Net Assets^7,8

Schwab Core Equity Fund	13.9%
Laudus Growth Investors U.S. Large Cap Growth Fund	13.5%
Schwab S&P 500 Index Fund	11.5%
Schwab Small-Cap Equity Fund	8.2%
Laudus International MarketMasters Fund, Select Shares	7.8%
TCW Relative Value Large Cap Fund	6.6%
Schwab Dividend Equity Fund	6.2%
Schwab Total Bond Market Fund	5.7%
Laudus Small-Cap MarketMasters Fund, Select Shares	4.4%
Schwab Global Real Estate Fund	4.4%
Total	82.2%

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

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	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	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: 63.3% Dow Jones U.S. Total Stock Market Index, 20.0% MSCI EAFE Index, 6.5% Barclays U.S. Aggregate Bond Index, 4.4% FTSE EPRA/NAREIT Global Index, 1.0% Barclays U.S. Aggregate Intermediate Bond Index, 1.1% MSCI Emerging Markets Index, 0.8% Barclays U.S. TIPS Index, 0.9% Citigroup Non-U.S. Dollar World Government Bond Index, and 2.0% Barclays U.S. Treasury Bills: 1-3 Months. The components that make up the composite index may vary over time.
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 0.84%. 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.
5	Not annualized.
6	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.
7	This list is not a recommendation of any security by the investment adviser.
8	The holdings listed exclude any temporary liquidity investments.

Schwab Target Funds 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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Schwab Target 2010 Fund
Actual Return		0.00%	$	1,000	$	1,056.00	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2015 Fund
Actual Return		0.00%	$	1,000	$	1,064.60	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2020 Fund
Actual Return		0.00%	$	1,000	$	1,075.90	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2025 Fund
Actual Return		0.00%	$	1,000	$	1,083.50	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2030 Fund
Actual Return		0.00%	$	1,000	$	1,088.30	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2035 Fund
Actual Return		0.00%	$	1,000	$	1,093.70	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	0.00
Schwab Target 2040 Fund
Actual Return		0.00%	$	1,000	$	1,098.40	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	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 182 days of the period, and divided by the 366 days of the fiscal year.

14 Schwab Target Funds

Schwab Target 2010 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		10.56			10.34			9.46			8.76			12.65			11.42
Income (loss) from investment operations:
Net investment income (loss)		0.13			0.23			0.23			0.28			0.32			0.23
Net realized and unrealized gains (losses)		0.45			0.24			0.89			0.75			(3.73	)		1.24
Total from investment operations		0.58			0.47			1.12			1.03			(3.41	)		1.47
Less distributions:
Distributions from net investment income		(0.25	)		(0.25	)		(0.24	)		(0.33	)		(0.38	)		(0.21	)
Distributions from net realized gains		—			—			—			—			(0.10	)		(0.03	)
Total distributions		(0.25	)		(0.25	)		(0.24	)		(0.33	)		(0.48	)		(0.24	)
Net asset value at end of period		10.89			10.56			10.34			9.46			8.76			12.65
Total return (%)		5.60	1		4.63	2		11.99			12.24			(27.87	)		13.02
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses3		—	4		—			0.00	5		0.03	6		0.06			0.06
Gross operating expenses3		0.17	4		0.14			0.16			0.16			0.11			0.09
Net investment income (loss)		2.47	4		2.11			2.21			3.04			2.89			2.10
Portfolio turnover rate		9	1		11			24			47			50	7		1
Net assets, end of period ($ x 1,000,000)		63			64			73			75			80			138

* Unaudited.

¹ Not annualized

² Includes proceeds from a litigation settlement related to an affiliated underlying fund. Without the litigation proceeds, performance would have been lower.

³ The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

⁴ Annualized.

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 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.

See financial notes 15

 Schwab Target 2010 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.2%	Other Investment Companies		52,188,006		61,038,294
	3	.6%	Short-Term Investments		2,262,893		2,262,893
	99	.8%	Total Investments		54,450,899		63,301,187
	0	.2%	Other Assets and Liabilities, Net				118,435
	100	.0%	Total Net Assets				63,419,622

	Number		Value
Security	of Shares		($)
Other Investment Companies 96.2% of net assets
Equity Funds 40.0%
Global Real Estate 2.0%
Schwab Global Real Estate Fund (a)		200,360		1,304,346
International 9.5%
American Century International Growth Fund, Institutional Shares		106,696		1,137,384
Laudus International MarketMasters Fund, Select Shares (a)		121,221		2,253,494
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		32,014		297,093
Laudus Mondrian International Equity Fund, Institutional Shares (a)		158,943		1,107,833
William Blair International Small Cap Growth Fund, Institutional Shares		91,819		1,205,589
				6,001,393
Large-Cap 22.9%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		257,918		3,819,762
Schwab Core Equity Fund (a)		214,855		4,013,499
Schwab Dividend Equity Fund (a)		123,906		1,785,484
Schwab S&P 500 Index Fund (a)		141,479		3,096,976
TCW Relative Value Large Cap Fund		124,644		1,819,797
				14,535,518
Small-Cap 5.6%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		94,945		1,262,766
Schwab Small-Cap Equity Fund (a)		133,823		2,303,093
				3,565,859
				25,407,116
Fixed-Income Funds 53.1%
Inflation-Protected Bond 4.2%
Schwab Treasury Inflation Protected Securities Fund (a)		223,616		2,658,797
Intermediate-Term Bond 34.1%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares		202,692		2,527,564
PIMCO Total Return Fund, Institutional Shares		344,173		3,861,621
Schwab Premier Income Fund (a)		263,658		2,773,687
Schwab Total Bond Market Fund (a)		1,290,763		12,430,050
				21,592,922
International Bond 2.3%
Laudus Mondrian International Fixed Income Fund (a)		125,200		1,483,625
Short-Term Bond 12.5%
Schwab Short-Term Bond Market Fund (a)		853,326		7,927,403
				33,662,747
Money Market Fund 3.1%
Schwab Value Advantage Money Fund, Institutional Prime Shares (a)		1,968,431		1,968,431
Total Other Investment Companies
(Cost $52,188,006)				61,038,294
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 3.6% of net assets
Time Deposits 3.6%
Bank of America
0.03%, 05/01/12		1,903,590		1,903,590
Citibank
0.03%, 05/01/12		359,303		359,303
Total Short-Term Investments
(Cost $2,262,893)				2,262,893
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $55,399,987 and the unrealized appreciation and depreciation were $7,901,200 and ($0), respectively, with a net unrealized appreciation of $7,901,200.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

16 See financial notes

 Schwab Target 2010 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$61,038,294		$—		$—		$61,038,294
Short-Term Investments(a)		—		2,262,893		—		2,262,893
Total		$61,038,294		$2,262,893		$—		$63,301,187

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 17

 Schwab Target 2010 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $43,019,958)		$50,486,339
Investments in unaffiliated issuers, at value (cost $11,430,941)	+	12,814,848
Total investments, at value (cost $54,450,899)		63,301,187
Receivables:
Fund shares sold		98,782
Dividends		50,171
Due from investment adviser		788
Interest		2
Prepaid expenses	+	1,306
Total assets		63,452,236
Liabilities
Payables:
Fund shares redeemed		3,626
Accrued expenses	+	28,988
Total liabilities		32,614
Net Assets
Total assets		63,452,236
Total liabilities	−	32,614
Net assets		$63,419,622
Net Assets by Source
Capital received from investors		73,578,246
Net investment income not yet distributed		215,517
Net realized capital losses		(19,224,429	)
Net unrealized capital gains		8,850,288
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$63,419,622		5,822,650			$10.89

18 See financial notes

 Schwab Target 2010 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$576,086
Dividends received from unaffiliated underlying funds		206,259
Interest	+	152
Total investment income		782,497
Expenses
Professional fees		18,082
Registration fees		10,146
Portfolio accounting fees		7,726
Transfer agent fees		6,428
Shareholder reports		4,978
Trustees’ fees		3,056
Custodian fees		2,694
Other expenses	+	982
Total expenses		54,092
Expense reduction by CSIM	−	54,092
Net investment income		782,497
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		124,593
Realized capital gain distributions received from unaffiliated underlying funds		25,096
Net realized gains on sales of affiliated underlying funds*		1,013,300
Net realized gains on sales of unaffiliated underlying funds	+	23,176
Net realized gains		1,186,165
Net unrealized gains on affiliated underlying funds		1,075,359
Net unrealized gains on unaffiliated underlying funds	+	436,138
Net unrealized gains	+	1,511,497
Net realized and unrealized gains		2,697,662
Increase in net assets resulting from operations		$3,480,159

* Includes $2,765 from a litigation settlement related to an affiliated underlying fund.

See financial notes 19

 Schwab Target 2010 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$782,497			$1,473,932
Net realized gains		1,186,165			1,864,017
Net unrealized gains (losses)	+	1,511,497			(88,618	)
Increase in net assets from operations		3,480,159			3,249,331
Distributions to Shareholders
Distributions from net investment income		($1,479,450	)		($1,782,231	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			498,355		$5,299,348			1,007,663		$10,502,110
Shares reinvested			135,161		1,389,450			163,465		1,673,878
Shares redeemed	+		(872,320	)	(9,269,396	)		(2,213,519	)	(23,100,427	)
Net transactions in fund shares			(238,804	)	($2,580,598	)		(1,042,391	)	($10,924,439	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			6,061,454		$63,999,511			7,103,845		$73,456,850
Total decrease	+		(238,804	)	(579,889	)		(1,042,391	)	(9,457,339	)
End of period			5,822,650		$63,419,622			6,061,454		$63,999,511
Net investment income not yet distributed					$215,517					$912,470

20 See financial notes

Schwab Target 2015 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			3/12/081–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		10.48			10.16			9.09			8.15			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.13			0.19			0.16			0.19			0.06
Net realized and unrealized gains (losses)		0.53			0.32			1.06			0.91			(1.91	)
Total from investment operations		0.66			0.51			1.22			1.10			(1.85	)
Less distributions:
Distributions from net investment income		(0.21	)		(0.19	)		(0.15	)		(0.16	)		—
Distributions from net realized gains		—			—			—			(0.00	)2		—
Total distributions		(0.21	)		(0.19	)		(0.15	)		(0.16	)		—
Net asset value at end of period		10.93			10.48			10.16			9.09			8.15
Total return (%)		6.46	3		5.10			13.55			13.82			(18.50	)3
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses4		—	5		—			0.00	6		0.02	7		0.05	5
Gross operating expenses4		0.19	5		0.22			0.39			0.85			1.90	5
Net investment income (loss)		2.45	5		1.94			1.91			2.57			1.87	5
Portfolio turnover rate		11	3		16			13			39			35	3
Net assets, end of period ($ x 1,000,000)		62			53			37			17			6

* Unaudited.

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 Annualized.

⁶ Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.

⁷ Effective April 20, 2009 the net operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

See financial notes 21

 Schwab Target 2015 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.9%	Other Investment Companies		52,025,145		59,723,695
	4	.0%	Short-Term Investments		2,484,619		2,484,619
	99	.9%	Total Investments		54,509,764		62,208,314
	0	.1%	Other Assets and Liabilities, Net				70,743
	100	.0%	Total Net Assets				62,279,057

	Number		Value
Security	of Shares		($)
Other Investment Companies 95.9% of net assets
Equity Funds 50.4%
Global Real Estate 2.4%
Schwab Global Real Estate Fund (a)		234,326		1,525,461
International 11.3%
American Century International Growth Fund, Institutional Shares		121,204		1,292,030
Laudus International MarketMasters Fund, Select Shares (a)		143,237		2,662,780
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		37,971		352,375
Laudus Mondrian International Equity Fund, Institutional Shares (a)		179,993		1,254,549
William Blair International Small Cap Growth Fund, Institutional Shares		111,928		1,469,620
				7,031,354
Large-Cap 29.6%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		333,534		4,939,641
Schwab Core Equity Fund (a)		260,785		4,871,462
Schwab Dividend Equity Fund (a)		151,108		2,177,460
Schwab S&P 500 Index Fund (a)		184,689		4,042,837
TCW Relative Value Large Cap Fund		162,997		2,379,759
				18,411,159
Small-Cap 7.1%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		115,739		1,539,333
Schwab Small-Cap Equity Fund (a)		167,352		2,880,130
				4,419,463
				31,387,437
Fixed-Income Funds 44.2%
Inflation-Protected Bond 3.3%
Schwab Treasury Inflation Protected Securities Fund (a)		174,418		2,073,830
Intermediate-Term Bond 30.4%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares		183,448		2,287,599
PIMCO Total Return Fund, Institutional Shares		276,069		3,097,492
Schwab Premier Income Fund (a)		208,242		2,190,704
Schwab Total Bond Market Fund (a)		1,182,757		11,389,949
				18,965,744
International Bond 2.4%
Laudus Mondrian International Fixed Income Fund (a)		124,364		1,473,711
Short-Term Bond 8.1%
Schwab Short-Term Bond Market Fund (a)		541,585		5,031,322
				27,544,607
Money Market Fund 1.3%
Schwab Value Advantage Money Fund, Institutional Prime Shares (a)		791,651		791,651
Total Other Investment Companies
(Cost $52,025,145)				59,723,695
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 4.0% of net assets
Time Deposits 4.0%
Bank of America
0.03%, 05/01/12		1,865,125		1,865,125
Citibank
0.03%, 05/01/12		619,494		619,494
Total Short-Term Investments
(Cost $2,484,619)				2,484,619
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $54,947,702 and the unrealized appreciation and depreciation were $7,260,612 and ($0), respectively, with a net unrealized appreciation of $7,260,612.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

22 See financial notes

 Schwab Target 2015 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$59,723,695		$—		$—		$59,723,695
Short-Term Investments(a)		—		2,484,619		—		2,484,619
Total		$59,723,695		$2,484,619		$—		$62,208,314

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 23

 Schwab Target 2015 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $42,350,053)		$49,197,195
Investments in unaffiliated issuers, at value (cost $12,159,711)	+	13,011,119
Total investments, at value (cost $54,509,764)		62,208,314
Receivables:
Fund shares sold		254,979
Dividends		41,616
Due from investment adviser		802
Interest		2
Prepaid expenses	+	439
Total assets		62,506,152
Liabilities
Payables:
Investments bought		120,000
Fund shares redeemed		92,884
Accrued expenses	+	14,211
Total liabilities		227,095
Net Assets
Total assets		62,506,152
Total liabilities	−	227,095
Net assets		$62,279,057
Net Assets by Source
Capital received from investors		55,268,750
Net investment income not yet distributed		177,747
Net realized capital losses		(865,990	)
Net unrealized capital gains		7,698,550
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$62,279,057		5,698,937			$10.93

24 See financial notes

 Schwab Target 2015 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$525,532
Dividends received from unaffiliated underlying funds		163,445
Interest	+	174
Total investment income		689,151
Expenses
Professional fees		18,038
Registration fees		11,478
Portfolio accounting fees		7,602
Transfer agent fees		6,352
Shareholder reports		4,412
Trustees’ fees		2,995
Custodian fees		2,704
Other expenses	+	803
Total expenses		54,384
Expense reduction by CSIM	−	54,384
Net investment income		689,151
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		106,998
Realized capital gain distributions received from unaffiliated underlying funds		17,204
Net realized gains on sales of affiliated underlying funds		61,176
Net realized losses on sales of unaffiliated underlying funds	+	(18,685	)
Net realized gains		166,693
Net unrealized gains on affiliated underlying funds		2,241,406
Net unrealized gains on unaffiliated underlying funds	+	509,190
Net unrealized gains	+	2,750,596
Net realized and unrealized gains		2,917,289
Increase in net assets resulting from operations		$3,606,440

See financial notes 25

 Schwab Target 2015 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$689,151			$923,076
Net realized gains (losses)		166,693			(16,926	)
Net unrealized gains	+	2,750,596			1,064,571
Increase in net assets from operations		3,606,440			1,970,721
Distributions to Shareholders
Distributions from net investment income		($1,073,035	)		($789,680	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,197,471		$12,687,948			2,925,717		$30,532,243
Shares reinvested			100,440		1,025,491			74,372		760,827
Shares redeemed	+		(649,899	)	(6,881,709	)		(1,635,376	)	(17,009,209	)
Net transactions in fund shares			648,012		$6,831,730			1,364,713		$14,283,861
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			5,050,925		$52,913,922			3,686,212		$37,449,020
Total increase	+		648,012		9,365,135			1,364,713		15,464,902
End of period			5,698,937		$62,279,057			5,050,925		$52,913,922
Net investment income not yet distributed					$177,747					$561,631

26 See financial notes

Schwab Target 2020 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.13			10.80			9.63			8.59			12.88			11.56
Income (loss) from investment operations:
Net investment income (loss)		0.15			0.22			0.20			0.24			0.30			0.21
Net realized and unrealized gains (losses)		0.68			0.34			1.18			1.08			(4.11	)		1.33
Total from investment operations		0.83			0.56			1.38			1.32			(3.81	)		1.54
Less distributions:
Distributions from net investment income		(0.23	)		(0.23	)		(0.21	)		(0.28	)		(0.38	)		(0.19	)
Distributions from net realized gains		—			—			—			—			(0.10	)		(0.03	)
Total distributions		(0.23	)		(0.23	)		(0.21	)		(0.28	)		(0.48	)		(0.22	)
Net asset value at end of period		11.73			11.13			10.80			9.63			8.59			12.88
Total return (%)		7.59	1		5.18			14.47			15.89			(30.59	)		13.47
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		—	3		0.00	4		0.00	4		0.02	5		0.04			0.04
Gross operating expenses2		0.06	3		0.06			0.07			0.09			0.08			0.07
Net investment income (loss)		2.56	3		1.92			2.01			2.75			2.67			1.84
Portfolio turnover rate		12	1		15			15			48			34	6		—
Net assets, end of period ($ x 1,000,000)		297			273			240			198			163			225

* Unaudited.

¹ Not annualized

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized.

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 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.

See financial notes 27

 Schwab Target 2020 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.9%	Other Investment Companies			241,836,942		291,155,297
	2	.1%	Short-Term Investment			6,095,189		6,095,189
	100	.0%	Total Investments			247,932,131		297,250,486
	0	.0%	Other Assets and Liabilities, Net	��				93,076
	100	.0%	Total Net Assets					297,343,562

	Number		Value
Security	of Shares		($)
Other Investment Companies 97.9% of net assets
Equity Funds 61.9%
Global Real Estate 3.1%
Schwab Global Real Estate Fund (a)		1,411,094		9,186,219
International 14.3%
American Century International Growth Fund, Institutional Shares		759,474		8,095,988
Laudus International MarketMasters Fund, Select Shares (a)		855,933		15,911,799
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		230,704		2,140,934
Laudus Mondrian International Equity Fund, Institutional Shares (a)		1,097,893		7,652,315
William Blair International Small Cap Growth Fund, Institutional Shares		660,328		8,670,111
				42,471,147
Large-Cap 35.7%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		1,873,557		27,747,374
Schwab Core Equity Fund (a)		1,538,057		28,730,903
Schwab Dividend Equity Fund (a)		897,769		12,936,852
Schwab S&P 500 Index Fund (a)		1,079,338		23,626,699
TCW Relative Value Large Cap Fund		909,665		13,281,112
				106,322,940
Small-Cap 8.8%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		685,832		9,121,566
Schwab Small-Cap Equity Fund (a)		983,846		16,931,990
				26,053,556
				184,033,862
Fixed-Income Funds 36.0%
Inflation-Protected Bond 2.6%
Schwab Treasury Inflation Protected Securities Fund (a)		661,918		7,870,205
Intermediate-Term Bond 28.1%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares		589,979		7,357,039
PIMCO Total Return Fund, Institutional Shares		1,048,583		11,765,105
Schwab Premier Income Fund (a)		813,599		8,559,063
Schwab Total Bond Market Fund (a)		5,788,066		55,739,077
				83,420,284
International Bond 2.4%
Laudus Mondrian International Fixed Income Fund (a)		615,923		7,298,691
Short-Term Bond 2.9%
Schwab Short-Term Bond Market Fund (a)		918,434		8,532,255
				107,121,435
Total Other Investment Companies
(Cost $241,836,942)				291,155,297
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 2.1% of net assets
Time Deposit 2.1%
Bank of America
0.03%, 05/01/12		6,095,189		6,095,189
Total Short-Term Investment
(Cost $6,095,189)				6,095,189
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $250,283,077 and the unrealized appreciation and depreciation were $47,834,893 and ($867,484), respectively, with a net unrealized appreciation of $46,967,409.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

28 See financial notes

 Schwab Target 2020 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$291,155,297		$—		$—		$291,155,297
Short-Term Investment(a)		—		6,095,189		—		6,095,189
Total		$291,155,297		$6,095,189		$—		$297,250,486

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 29

 Schwab Target 2020 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $199,343,330)		$241,985,942
Investments in unaffiliated issuers, at value (cost $48,588,801)	+	55,264,544
Total investments, at value (cost $247,932,131)		297,250,486
Receivables:
Fund shares sold		183,812
Dividends		177,316
Due from investment adviser		1,182
Interest		5
Prepaid expenses	+	3,792
Total assets		297,616,593
Liabilities
Payables:
Fund shares redeemed		227,283
Accrued expenses	+	45,748
Total liabilities		273,031
Net Assets
Total assets		297,616,593
Total liabilities	−	273,031
Net assets		$297,343,562
Net Assets by Source
Capital received from investors		286,665,752
Net investment income not yet distributed		785,074
Net realized capital losses		(39,425,619	)
Net unrealized capital gains		49,318,355
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$297,343,562		25,339,889			$11.73

30 See financial notes

 Schwab Target 2020 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$2,873,401
Dividends received from unaffiliated underlying funds		715,715
Interest	+	446
Total investment income		3,589,562
Expenses
Professional fees		20,209
Shareholder reports		14,959
Registration fees		14,511
Transfer agent fees		10,218
Portfolio accounting fees		9,891
Custodian fees		4,623
Trustees’ fees		3,782
Other expenses	+	3,407
Total expenses		81,600
Expense reduction by CSIM	−	81,600
Net investment income		3,589,562
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		603,534
Realized capital gain distributions received from unaffiliated underlying funds		49,298
Net realized gains on sales of affiliated underlying funds*		1,469,801
Net realized losses on sales of unaffiliated underlying funds	+	(16,507	)
Net realized gains		2,106,126
Net unrealized gains on affiliated underlying funds		12,330,974
Net unrealized gains on unaffiliated underlying funds	+	2,780,804
Net unrealized gains	+	15,111,778
Net realized and unrealized gains		17,217,904
Increase in net assets resulting from operations		$20,807,466

* Includes $2,327 from a litigation settlement related to an affiliated underlying fund.

See financial notes 31

 Schwab Target 2020 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$3,589,562			$5,133,317
Net realized gains (losses)		2,106,126			(66,826	)
Net unrealized gains	+	15,111,778			7,056,875
Increase in net assets from operations		20,807,466			12,123,366
Distributions to Shareholders
Distributions from net investment income		($5,540,387	)		($5,113,390	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,696,128		$30,587,868			6,727,716		$75,400,663
Shares reinvested			494,589		5,361,345			452,434		4,949,629
Shares redeemed	+		(2,371,258	)	(26,853,415	)		(4,872,189	)	(54,205,363	)
Net transactions in fund shares			819,459		$9,095,798			2,307,961		$26,144,929
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			24,520,430		$272,980,685			22,212,469		$239,825,780
Total increase	+		819,459		24,362,877			2,307,961		33,154,905
End of period			25,339,889		$297,343,562			24,520,430		$272,980,685
Net investment income not yet distributed					$785,074					$2,735,899

32 See financial notes

Schwab Target 2025 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			3/12/081–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		10.84			10.46			9.21			7.99			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.13			0.19			0.16			0.17			0.05
Net realized and unrealized gains (losses)		0.76			0.38			1.24			1.21			(2.06	)
Total from investment operations		0.89			0.57			1.40			1.38			(2.01	)
Less distributions:
Distributions from net investment income		(0.19	)		(0.19	)		(0.15	)		(0.16	)		—
Net asset value at end of period		11.54			10.84			10.46			9.21			7.99
Total return (%)		8.35	2		5.44			15.34			17.61			(20.10	)2
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses3		0.00	4,5		—			0.00	4		0.01	6		0.04	5
Gross operating expenses3		0.11	5		0.14			0.24			0.57			1.27	5
Net investment income (loss)		2.46	5		1.66			1.62			2.15			1.60	5
Portfolio turnover rate		12	2		9			13			44			3	2
Net assets, end of period ($ x 1,000,000)		127			104			63			26			8

* Unaudited.

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 Annualized.

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.

See financial notes 33

 Schwab Target 2025 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.6%	Other Investment Companies		106,829,791		124,407,082
	2	.3%	Short-Term Investment		3,002,881		3,002,881
	99	.9%	Total Investments		109,832,672		127,409,963
	0	.1%	Other Assets and Liabilities, Net				69,859
	100	.0%	Total Net Assets				127,479,822

	Number		Value
Security	of Shares		($)
Other Investment Companies 97.6% of net assets
Equity Funds 71.3%
Global Real Estate 3.4%
Schwab Global Real Estate Fund (a)		674,049		4,388,059
International 16.1%
American Century International Growth Fund, Institutional Shares		349,629		3,727,042
Laudus International MarketMasters Fund, Select Shares (a)		420,628		7,819,479
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		107,098		993,873
Laudus Mondrian International Equity Fund, Institutional Shares (a)		530,926		3,700,557
William Blair International Small Cap Growth Fund, Institutional Shares		325,420		4,272,767
				20,513,718
Large-Cap 41.6%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		950,005		14,069,577
Schwab Core Equity Fund (a)		753,320		14,072,022
Schwab Dividend Equity Fund (a)		439,196		6,328,817
Schwab S&P 500 Index Fund (a)		533,843		11,685,825
TCW Relative Value Large Cap Fund		467,741		6,829,012
				52,985,253
Small-Cap 10.2%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		340,364		4,526,841
Schwab Small-Cap Equity Fund (a)		489,966		8,432,311
				12,959,152
				90,846,182
Fixed-Income Funds 26.3%
Inflation-Protected Bond 2.0%
Schwab Treasury Inflation Protected Securities Fund (a)		215,624		2,563,766
Intermediate-Term Bond 22.5%
Natixis Loomis Sayles Investment Grade Bond Fund, Class Y Shares		143,101		1,784,464
PIMCO Total Return Fund, Institutional Shares		314,526		3,528,983
Schwab Premier Income Fund (a)		326,004		3,429,558
Schwab Total Bond Market Fund (a)		2,068,343		19,918,139
				28,661,144
International Bond 1.8%
Laudus Mondrian International Fixed Income Fund (a)		197,130		2,335,990
				33,560,900
Total Other Investment Companies
(Cost $106,829,791)				124,407,082
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 2.3% of net assets
Time Deposit 2.3%
Bank of America
0.03%, 05/01/12		3,002,881		3,002,881
Total Short-Term Investment
(Cost $3,002,881)				3,002,881
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $110,863,003 and the unrealized appreciation and depreciation were $16,594,134 and ($47,174), respectively, with a net unrealized appreciation of $16,546,960.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

34 See financial notes

 Schwab Target 2025 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$124,407,082		$—		$—		$124,407,082
Short-Term Investment(a)		—		3,002,881		—		3,002,881
Total		$124,407,082		$3,002,881		$—		$127,409,963

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 35

 Schwab Target 2025 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $88,463,077)		$104,264,814
Investments in unaffiliated issuers, at value (cost $21,369,595)	+	23,145,149
Total investments, at value (cost $109,832,672)		127,409,963
Receivables:
Fund shares sold		193,242
Dividends		59,525
Due from investment adviser		905
Interest		2
Prepaid expenses	+	740
Total assets		127,664,377
Liabilities
Payables:
Investments bought		140,000
Fund shares redeemed		24,504
Accrued expenses	+	20,051
Total liabilities		184,555
Net Assets
Total assets		127,664,377
Total liabilities	−	184,555
Net assets		$127,479,822
Net Assets by Source
Capital received from investors		111,397,817
Net investment income not yet distributed		266,564
Net realized capital losses		(1,761,850	)
Net unrealized capital gains		17,577,291
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$127,479,822		11,048,491			$11.54

36 See financial notes

 Schwab Target 2025 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$1,144,144
Dividends received from unaffiliated underlying funds		242,643
Interest	+	189
Total investment income		1,386,976
Expenses
Professional fees		18,517
Registration fees		13,648
Portfolio accounting fees		8,151
Transfer agent fees		6,974
Shareholder reports		6,917
Trustees’ fees		3,195
Custodian fees		3,032
Interest expense		12
Other expenses	+	1,357
Total expenses		61,803
Expense reduction by CSIM	−	61,791
Net expenses	−	12
Net investment income		1,386,964
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		250,740
Realized capital gain distributions received from unaffiliated underlying funds		12,760
Net realized losses on sales of affiliated underlying funds	+	(381,709	)
Net realized losses		(118,209	)
Net unrealized gains on affiliated underlying funds		6,829,517
Net unrealized gains on unaffiliated underlying funds	+	1,223,428
Net unrealized gains	+	8,052,945
Net realized and unrealized gains		7,934,736
Increase in net assets resulting from operations		$9,321,700

See financial notes 37

 Schwab Target 2025 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$1,386,964			$1,434,137
Net realized losses		(118,209	)		(122,004	)
Net unrealized gains	+	8,052,945			1,690,609
Increase in net assets from operations		9,321,700			3,002,742
Distributions to Shareholders
Distributions from net investment income		($1,878,136	)		($1,192,290	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,163,680		$24,043,021			4,868,311		$53,244,649
Shares reinvested			174,782		1,847,442			109,885		1,176,870
Shares redeemed	+		(911,523	)	(10,128,000	)		(1,355,247	)	(14,727,440	)
Net transactions in fund shares			1,426,939		$15,762,463			3,622,949		$39,694,079
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			9,621,552		$104,273,795			5,998,603		$62,769,264
Total increase	+		1,426,939		23,206,027			3,622,949		41,504,531
End of period			11,048,491		$127,479,822			9,621,552		$104,273,795
Net investment income not yet distributed					$266,564					$757,736

38 See financial notes

Schwab Target 2030 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.43			11.05			9.69			8.51			13.15			11.67
Income (loss) from investment operations:
Net investment income (loss)		0.14			0.19			0.17			0.20			0.28			0.18
Net realized and unrealized gains (losses)		0.85			0.38			1.36			1.23			(4.47	)		1.48
Total from investment operations		0.99			0.57			1.53			1.43			(4.19	)		1.66
Less distributions:
Distributions from net investment income		(0.19	)		(0.19	)		(0.17	)		(0.25	)		(0.35	)		(0.16	)
Distributions from net realized gains		—			—			—			—			(0.10	)		(0.02	)
Total distributions		(0.19	)		(0.19	)		(0.17	)		(0.25	)		(0.45	)		(0.18	)
Net asset value at end of period		12.23			11.43			11.05			9.69			8.51			13.15
Total return (%)		8.83	1		5.20			15.97			17.31			(32.83	)		14.45
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		—	3		—			0.00	4		0.01	5		0.03			0.03
Gross operating expenses2		0.05	3		0.05			0.08			0.11			0.10			0.09
Net investment income (loss)		2.35	3		1.60			1.64			2.37			2.35			1.50
Portfolio turnover rate		12	1		8			14			50			31	6		—
Net assets, end of period ($ x 1,000,000)		429			372			296			200			129			162

* Unaudited.

¹ Not annualized

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized.

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 The portfolio turnover ratio increased due to additional rebalancing activity of the underlying funds during the period.

See financial notes 39

 Schwab Target 2030 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.5%	Other Investment Companies		340,553,120		418,218,436
	2	.4%	Short-Term Investment		10,317,246		10,317,246
	99	.9%	Total Investments		350,870,366		428,535,682
	0	.1%	Other Assets and Liabilities, Net				388,762
	100	.0%	Total Net Assets				428,924,444

	Number		Value
Security	of Shares		($)
Other Investment Companies 97.5% of net assets
Equity Funds 77.8%
Global Real Estate 3.8%
Schwab Global Real Estate Fund (a)		2,512,867		16,358,765
International 17.8%
American Century International Growth Fund, Institutional Shares		1,331,241		14,191,034
Laudus International MarketMasters Fund, Select Shares (a)		1,561,631		29,030,713
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		428,307		3,974,685
Laudus Mondrian International Equity Fund, Institutional Shares (a)		1,928,094		13,438,817
William Blair International Small Cap Growth Fund, Institutional Shares		1,204,545		15,815,678
				76,450,927
Large-Cap 45.1%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		3,411,573		50,525,397
Schwab Core Equity Fund (a)		2,796,992		52,247,818
Schwab Dividend Equity Fund (a)		1,621,619		23,367,523
Schwab S&P 500 Index Fund (a)		1,957,842		42,857,170
TCW Relative Value Large Cap Fund		1,683,376		24,577,293
				193,575,201
Small-Cap 11.1%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		1,250,203		16,627,706
Schwab Small-Cap Equity Fund (a)		1,794,495		30,883,260
				47,510,966
				333,895,859
Fixed-Income Funds 19.7%
Inflation-Protected Bond 1.4%
Schwab Treasury Inflation Protected Securities Fund (a)		495,390		5,890,188
Intermediate-Term Bond 16.6%
PIMCO Total Return Fund, Institutional Shares		803,606		9,016,456
Schwab Premier Income Fund (a)		828,662		8,717,529
Schwab Total Bond Market Fund (a)		5,545,597		53,404,102
				71,138,087
International Bond 1.7%
Laudus Mondrian International Fixed Income Fund (a)		615,553		7,294,302
				84,322,577
Total Other Investment Companies
(Cost $340,553,120)				418,218,436
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 2.4% of net assets
Time Deposit 2.4%
Bank of America
0.03%, 05/01/12		10,317,246		10,317,246
Total Short-Term Investment
(Cost $10,317,246)				10,317,246
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $355,049,493 and the unrealized appreciation and depreciation were $74,157,124 and ($670,935), respectively, with a net unrealized appreciation of $73,486,189.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

40 See financial notes

 Schwab Target 2030 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$418,218,436		$—		$—		$418,218,436
Short-Term Investment(a)		—		10,317,246		—		10,317,246
Total		$418,218,436		$10,317,246		$—		$428,535,682

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 41

 Schwab Target 2030 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $285,850,854)		$354,617,975
Investments in unaffiliated issuers, at value (cost $65,019,512)	+	73,917,707
Total investments, at value (cost $350,870,366)		428,535,682
Receivables:
Fund shares sold		480,530
Dividends		157,637
Due from investment adviser		1,345
Interest		8
Prepaid expenses	+	4,243
Total assets		429,179,445
Liabilities
Payables:
Fund shares redeemed		200,491
Accrued expenses	+	54,510
Total liabilities		255,001
Net Assets
Total assets		429,179,445
Total liabilities	−	255,001
Net assets		$428,924,444
Net Assets by Source
Capital received from investors		384,711,287
Net investment income not yet distributed		738,051
Net realized capital losses		(34,190,210	)
Net unrealized capital gains		77,665,316
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$428,924,444		35,062,840			$12.23

42 See financial notes

 Schwab Target 2030 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$3,908,048
Dividends received from unaffiliated underlying funds		685,480
Interest	+	685
Total investment income		4,594,213
Expenses
Shareholder reports		21,353
Professional fees		21,261
Registration fees		14,844
Transfer agent fees		14,565
Portfolio accounting fees		10,899
Custodian fees		5,099
Trustees’ fees		4,101
Other expenses	+	4,718
Total expenses		96,840
Expense reduction by CSIM	−	96,840
Net investment income		4,594,213
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		855,235
Net realized losses on sales of affiliated underlying funds*		(1,199,379	)
Net realized losses on sales of unaffiliated underlying funds	+	(12,979	)
Net realized losses		(357,123	)
Net unrealized gains on affiliated underlying funds		25,205,343
Net unrealized gains on unaffiliated underlying funds	+	4,396,465
Net unrealized gains	+	29,601,808
Net realized and unrealized gains		29,244,685
Increase in net assets resulting from operations		$33,838,898

* Includes $1,190 from a litigation settlement related to an affiliated underlying fund.

See financial notes 43

 Schwab Target 2030 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$4,594,213			$5,671,726
Net realized losses		(357,123	)		(992,639	)
Net unrealized gains	+	29,601,808			9,985,667
Increase in net assets from operations		33,838,898			14,664,754
Distributions to Shareholders
Distributions from net investment income		($6,263,907	)		($5,459,742	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			4,759,936		$55,851,494			10,393,929		$120,477,375
Shares reinvested			547,142		6,095,164			465,434		5,296,644
Shares redeemed	+		(2,763,523	)	(32,167,476	)		(5,173,535	)	(59,799,151	)
Net transactions in fund shares			2,543,555		$29,779,182			5,685,828		$65,974,868
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			32,519,285		$371,570,271			26,833,457		$296,390,391
Total increase	+		2,543,555		57,354,173			5,685,828		75,179,880
End of period			35,062,840		$428,924,444			32,519,285		$371,570,271
Net investment income not yet distributed					$738,051					$2,407,745

44 See financial notes

Schwab Target 2035 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			3/12/081–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08
Per-Share Data ($)
Net asset value at beginning of period		10.70			10.32			9.00			7.76			10.00
Income (loss) from investment operations:
Net investment income (loss)		0.12			0.16			0.13			0.15			0.04
Net realized and unrealized gains (losses)		0.87			0.38			1.33			1.23			(2.28	)
Total from investment operations		0.99			0.54			1.46			1.38			(2.24	)
Less distributions:
Distributions from net investment income		(0.16	)		(0.16	)		(0.14	)		(0.14	)		—
Net asset value at end of period		11.53			10.70			10.32			9.00			7.76
Total return (%)		9.37	2		5.27			16.29			18.22			(22.40	)2
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses3		—	4		—			0.00	5		0.01	6		0.02	4
Gross operating expenses3		0.14	4		0.17			0.30			0.67			1.57	4
Net investment income (loss)		2.22	4		1.41			1.38			1.92			1.32	4
Portfolio turnover rate		11	2		4			14			49			7	2
Net assets, end of period ($ x 1,000,000)		96			77			49			22			6

* Unaudited.

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 Annualized.

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.

See financial notes 45

 Schwab Target 2035 Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.4%	Other Investment Companies		78,162,930		93,378,615
	2	.4%	Short-Term Investment		2,274,640		2,274,640
	99	.8%	Total Investments		80,437,570		95,653,255
	0	.2%	Other Assets and Liabilities, Net				211,356
	100	.0%	Total Net Assets				95,864,611

	Number		Value
Security	of Shares		($)
Other Investment Companies 97.4% of net assets
Equity Funds 84.7%
Global Real Estate 4.1%
Schwab Global Real Estate Fund (a)		607,821		3,956,914
International 19.2%
American Century International Growth Fund, Institutional Shares		312,690		3,333,278
Laudus International MarketMasters Fund, Select Shares (a)		376,326		6,995,909
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		103,661		961,970
Laudus Mondrian International Equity Fund, Institutional Shares (a)		468,864		3,267,980
William Blair International Small Cap Growth Fund, Institutional Shares		289,795		3,805,013
				18,364,150
Large-Cap 49.3%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		840,316		12,445,085
Schwab Core Equity Fund (a)		674,226		12,594,536
Schwab Dividend Equity Fund (a)		393,839		5,675,226
Schwab S&P 500 Index Fund (a)		475,473		10,408,108
TCW Relative Value Large Cap Fund		418,142		6,104,877
				47,227,832
Small-Cap 12.1%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		305,959		4,069,260
Schwab Small-Cap Equity Fund (a)		439,687		7,567,012
				11,636,272
				81,185,168
Fixed-Income Funds 12.7%
Inflation-Protected Bond 0.9%
Schwab Treasury Inflation Protected Securities Fund (a)		75,484		897,507
Intermediate-Term Bond 10.7%
PIMCO Total Return Fund, Institutional Shares		84,079		943,363
Schwab Premier Income Fund (a)		122,751		1,291,343
Schwab Total Bond Market Fund (a)		829,569		7,988,746
				10,223,452
International Bond 1.1%
Laudus Mondrian International Fixed Income Fund (a)		90,505		1,072,488
				12,193,447
Total Other Investment Companies
(Cost $78,162,930)				93,378,615
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 2.4% of net assets
Time Deposit 2.4%
Bank of America
0.03%, 05/01/12		2,274,640		2,274,640
Total Short-Term Investment
(Cost $2,274,640)				2,274,640
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $81,309,844 and the unrealized appreciation and depreciation were $14,387,870 and ($44,459), respectively, with a net unrealized appreciation of $14,343,411.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

46 See financial notes

 Schwab Target 2035 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$93,378,615		$—		$—		$93,378,615
Short-Term Investment(a)		—		2,274,640		—		2,274,640
Total		$93,378,615		$2,274,640		$—		$95,653,255

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 47

 Schwab Target 2035 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $65,503,312)		$79,192,084
Investments in unaffiliated issuers, at value (cost $14,934,258)	+	16,461,171
Total investments, at value (cost $80,437,570)		95,653,255
Receivables:
Fund shares sold		855,502
Dividends		22,412
Due from investment adviser		854
Interest		2
Prepaid expenses	+	584
Total assets		96,532,609
Liabilities
Payables:
Investments bought		610,000
Fund shares redeemed		38,152
Accrued expenses	+	19,846
Total liabilities		667,998
Net Assets
Total assets		96,532,609
Total liabilities	−	667,998
Net assets		$95,864,611
Net Assets by Source
Capital received from investors		81,965,263
Net investment income not yet distributed		122,959
Net realized capital losses		(1,439,296	)
Net unrealized capital gains		15,215,685
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$95,864,611		8,311,463			$11.53

48 See financial notes

 Schwab Target 2035 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$797,442
Dividends received from unaffiliated underlying funds		135,028
Interest	+	170
Total investment income		932,640
Expenses
Professional fees		18,268
Registration fees		11,938
Portfolio accounting fees		7,839
Shareholder reports		6,826
Transfer agent fees		6,565
Trustees’ fees		3,076
Custodian fees		2,353
Other expenses	+	1,045
Total expenses		57,910
Expense reduction by CSIM	−	57,910
Net investment income		932,640
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		196,134
Net realized losses on sales of affiliated underlying funds	+	(344,226	)
Net realized losses		(148,092	)
Net unrealized gains on affiliated underlying funds		5,991,658
Net unrealized gains on unaffiliated underlying funds	+	1,035,330
Net unrealized gains	+	7,026,988
Net realized and unrealized gains		6,878,896
Increase in net assets resulting from operations		$7,811,536

See financial notes 49

 Schwab Target 2035 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$932,640			$927,810
Net realized gains (losses)		(148,092	)		18,391
Net unrealized gains	+	7,026,988			1,171,771
Increase in net assets from operations		7,811,536			2,117,972
Distributions to Shareholders
Distributions from net investment income		($1,173,912	)		($819,461	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,513,305		$16,752,121			3,517,865		$38,278,820
Shares reinvested			110,095		1,149,391			74,569		798,641
Shares redeemed	+		(550,596	)	(6,104,806	)		(1,062,462	)	(11,556,596	)
Net transactions in fund shares			1,072,804		$11,796,706			2,529,972		$27,520,865
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			7,238,659		$77,430,281			4,708,687		$48,610,905
Total increase	+		1,072,804		18,434,330			2,529,972		28,819,376
End of period			8,311,463		$95,864,611			7,238,659		$77,430,281
Net investment income not yet distributed					$122,959					$364,231

50 See financial notes

Schwab Target 2040 Fund

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.55			11.16			9.71			8.48			13.45			11.83
Income (loss) from investment operations:
Net investment income (loss)		0.13			0.17			0.15			0.18			0.28			0.17
Net realized and unrealized gains (losses)		0.99			0.40			1.46			1.27			(4.80	)		1.62
Total from investment operations		1.12			0.57			1.61			1.45			(4.52	)		1.79
Less distributions:
Distributions from net investment income		(0.17	)		(0.18	)		(0.16	)		(0.22	)		(0.36	)		(0.15	)
Distributions from net realized gains		—			—			—			—			(0.09	)		(0.02	)
Total distributions		(0.17	)		(0.18	)		(0.16	)		(0.22	)		(0.45	)		(0.17	)
Net asset value at end of period		12.50			11.55			11.16			9.71			8.48			13.45
Total return (%)		9.84	1		5.08			16.71			17.66			(34.60	)		15.32
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		—	3		—			0.00	4		0.00	4,5		0.01			0.01
Gross operating expenses2		0.06	3		0.06			0.10			0.15			0.15			0.13
Net investment income (loss)		2.19	3		1.42			1.44			2.15			2.22			1.19
Portfolio turnover rate		12	1		3			15			51			36	6		—
Net assets, end of period ($ x 1,000,000)		409			342			259			163			94			118

* Unaudited.

¹ Not annualized.

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized.

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 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 April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.6%	Other Investment Companies		324,469,908		399,363,379
	2	.3%	Short-Term Investment		9,449,656		9,449,656
	99	.9%	Total Investments		333,919,564		408,813,035
	0	.1%	Other Assets and Liabilities, Net				317,462
	100	.0%	Total Net Assets				409,130,497

	Number		Value
Security	of Shares		($)
Other Investment Companies 97.6% of net assets
Equity Funds 89.1%
Global Real Estate 4.3%
Schwab Global Real Estate Fund (a)		2,738,712		17,829,014
International 20.4%
American Century International Growth Fund, Institutional Shares		1,413,435		15,067,214
Laudus International MarketMasters Fund, Select Shares (a)		1,707,405		31,740,664
Laudus Mondrian Emerging Markets Fund, Institutional Shares (a)		470,587		4,367,050
Laudus Mondrian International Equity Fund, Institutional Shares (a)		2,144,907		14,950,002
William Blair International Small Cap Growth Fund, Institutional Shares		1,310,471		17,206,487
				83,331,417
Large-Cap 51.7%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		3,735,223		55,318,653
Schwab Core Equity Fund (a)		3,039,424		56,776,441
Schwab Dividend Equity Fund (a)		1,756,135		25,305,901
Schwab S&P 500 Index Fund (a)		2,142,404		46,897,223
TCW Relative Value Large Cap Fund		1,860,172		27,158,518
				211,456,736
Small-Cap 12.7%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		1,366,334		18,172,243
Schwab Small-Cap Equity Fund (a)		1,956,325		33,668,360
				51,840,603
				364,457,770
Fixed-Income Funds 8.5%
Inflation-Protected Bond 0.7%
Schwab Treasury Inflation Protected Securities Fund (a)		247,450		2,942,176
Intermediate-Term Bond 7.0%
PIMCO Total Return Fund, Institutional Shares		131,636		1,476,952
Schwab Premier Income Fund (a)		351,671		3,699,575
Schwab Total Bond Market Fund (a)		2,436,756		23,465,957
				28,642,484
International Bond 0.8%
Laudus Mondrian International Fixed Income Fund (a)		280,249		3,320,949
				34,905,609
Total Other Investment Companies
(Cost $324,469,908)				399,363,379
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 2.3% of net assets
Time Deposit 2.3%
Bank of America
0.03%, 05/01/12		9,449,656		9,449,656
Total Short-Term Investment
(Cost $9,449,656)				9,449,656
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $338,286,999 and the unrealized appreciation and depreciation were $70,526,036 and ($0), respectively, with a net unrealized appreciation of $70,526,036.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

52 See financial notes

 Schwab Target 2040 Fund

Portfolio Holdings (Unaudited) continued

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$399,363,379		$—		$—		$399,363,379
Short-Term Investment(a)		—		9,449,656		—		9,449,656
Total		$399,363,379		$9,449,656		$—		$408,813,035

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 53

 Schwab Target 2040 Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $272,150,872)		$338,454,208
Investments in unaffiliated issuers, at value (cost $61,768,692)	+	70,358,827
Total investments, at value (cost $333,919,564)		408,813,035
Receivables:
Fund shares sold		799,484
Dividends		62,008
Due from investment adviser		1,526
Interest		8
Prepaid expenses	+	3,610
Total assets		409,679,671
Liabilities
Payables:
Investments bought		375,000
Fund shares redeemed		104,735
Accrued expenses	+	69,439
Total liabilities		549,174
Net Assets
Total assets		409,679,671
Total liabilities	−	549,174
Net assets		$409,130,497
Net Assets by Source
Capital received from investors		361,496,357
Net investment income not yet distributed		421,780
Net realized capital losses		(27,681,111	)
Net unrealized capital gains		74,893,471
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$409,130,497		32,724,179			$12.50

54 See financial notes

 Schwab Target 2040 Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$3,417,521
Dividends received from unaffiliated underlying funds		577,232
Interest	+	568
Total investment income		3,995,321
Expenses
Shareholder reports		33,502
Professional fees		20,918
Transfer agent fees		18,521
Registration fees		14,581
Portfolio accounting fees		10,557
Custodian fees		4,509
Trustees’ fees		4,012
Other expenses	+	4,157
Total expenses		110,757
Expense reduction by CSIM	−	110,757
Net investment income		3,995,321
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		880,167
Net realized losses on sales of affiliated underlying funds*		(2,048,823	)
Net realized losses on sales of unaffiliated underlying funds	+	(27,464	)
Net realized losses		(1,196,120	)
Net unrealized gains on affiliated underlying funds		27,534,946
Net unrealized gains on unaffiliated underlying funds	+	4,582,018
Net unrealized gains	+	32,116,964
Net realized and unrealized gains		30,920,844
Increase in net assets resulting from operations		$34,916,165

* Includes $853 from a litigation settlement related to an affiliated underlying fund.

See financial notes 55

 Schwab Target 2040 Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$3,995,321			$4,533,448
Net realized losses		(1,196,120	)		(391,406	)
Net unrealized gains	+	32,116,964			7,589,199
Increase in net assets from operations		34,916,165			11,731,241
Distributions to Shareholders
Distributions from net investment income		($5,065,636	)		($4,347,408	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			5,107,623		$61,190,201			10,468,609		$123,614,335
Shares reinvested			440,155		4,960,552			366,999		4,260,852
Shares redeemed	+		(2,453,404	)	(29,231,712	)		(4,450,866	)	(52,299,460	)
Net transactions in fund shares			3,094,374		$36,919,041			6,384,742		$75,575,727
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			29,629,805		$342,360,927			23,245,063		$259,401,367
Total increase	+		3,094,374		66,769,570			6,384,742		82,959,560
End of period			32,724,179		$409,130,497			29,629,805		$342,360,927
Net investment income not yet distributed					$421,780					$1,492,095

56 See financial notes

 Schwab Target Funds

Financial Notes, unaudited

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 per share (“NAV”), which is the price for all outstanding shares of a fund. Each share has a par value of 1/1,000 of a cent, and the 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 the valuation (Level 3 measurements). If the funds determine that either the volume and/or level of activity for an asset or

57

 Schwab Target Funds

Financial Notes, unaudited (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 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 funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

(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.

58 

 Schwab Target Funds

Financial Notes, unaudited (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.

(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.

(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.

Affiliated Fund Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. However, the portfolio manager is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds, without taking fees into consideration.

59

 Schwab Target Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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 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-advisers) 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. An underlying 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.

•  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

60 

 Schwab Target Funds

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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, 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.

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.

61

 Schwab Target Funds

Financial Notes, unaudited (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 April 30, 2012, 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%			0.7%			4.5%		2.1%		8.0%		1.9%		8.7%
International:
Laudus International MarketMasters Fund		0.1%			0.2%			1.0%		0.5%		1.8%		0.4%		1.9%
Laudus Mondrian Emerging Markets Fund		0.2%			0.2%			1.3%		0.6%		2.5%		0.6%		2.7%
Laudus Mondrian International Equity Fund		0.9%			1.1%			6.5%		3.1%		11.4%		2.8%		12.7%
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		0.4%			0.5%			2.6%		1.3%		4.7%		1.1%		5.1%
Schwab Core Equity Fund		0.2%			0.3%			1.7%		0.8%		3.0%		0.7%		3.3%
Schwab Dividend Equity Fund		0.1%			0.1%			0.9%		0.4%		1.6%		0.4%		1.7%
Schwab S&P 500 Index Fund		0.0%	*		0.0%	*		0.2%		0.1%		0.3%		0.1%		0.4%
Small-Cap:
Laudus Small-Cap MarketMasters Fund		0.8%			1.0%			5.8%		2.9%		10.5%		2.6%		11.5%
Schwab Small-Cap Equity Fund		0.6%			0.7%			4.3%		2.1%		7.8%		1.9%		8.5%
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		0.8%			0.6%			2.3%		0.7%		1.7%		0.3%		0.8%
Intermediate-Term Bond:
Schwab Premier Income Fund		0.6%			0.5%			2.0%		0.8%		2.0%		0.3%		0.9%
Schwab Total Bond Market Fund		1.3%			1.2%			5.7%		2.0%		5.4%		0.8%		2.4%
International Bond:
Laudus Mondrian International Fixed Income Fund		0.2%			0.2%			0.8%		0.3%		0.8%		0.1%		0.4%
Short-Term Bond:
Schwab Short-Term Bond Market Fund		2.0%			1.3%			2.2%		—%		—%		—%		—%
Money Market Fund:
Schwab Value Advantage Money Fund		0.0%	*		0.0%	*		—%		—%		—%		—%		—%

* Less than 0.05%

62 

 Schwab Target Funds

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended April 30, 2012.

Schwab Target 2010 Fund:
	Balance							Balance				Realized			Distributions
	of Shares							of Shares		Market		Gains (Losses)			Received*
	Held at		Gross		Gross			Held at		Value at		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		207,569		10,260		(17,469	)		200,360		$1,304,346		($23,519	)		$13,477
International:
Laudus International MarketMasters Fund, Select Shares		136,896		13,518		(29,193	)		121,221		2,253,494		83,646			25,457
Laudus Mondrian Emerging Markets Fund, Institutional Shares		94,911		—		(62,897	)		32,014		297,093		10,270			17,255
Laudus Mondrian International Equity Fund, Institutional Shares		152,484		13,627		(7,168	)		158,943		1,107,833		1,983			59,581
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		198,308		83,781		(24,171	)		257,918		3,819,762		24,540			55,303
Schwab Core Equity Fund		304,554		7,602		(97,301	)		214,855		4,013,499		188,337			51,538
Schwab Dividend Equity Fund		95,242		38,314		(9,650	)		123,906		1,785,484		5,970			15,503
Schwab S&P 500 Index Fund		229,811		9,761		(98,093	)		141,479		3,096,976		642,595			91,024
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		75,447		29,760		(10,262	)		94,945		1,262,766		8,637			—
Schwab Small-Cap Equity Fund		110,790		39,351		(16,318	)		133,823		2,303,093		14,923			864
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		162,879		66,237		(5,500	)		223,616		2,658,797		981			26,692
Intermediate-Term Bond:
Schwab Premier Income Fund		359,700		—		(96,042	)		263,658		2,773,687		58,212			73,117
Schwab Total Bond Market Fund		1,326,136		72,623		(107,996	)		1,290,763		12,430,050		(11,938	)		175,050
International Bond:
Laudus Mondrian International Fixed Income Fund		126,926		11,062		(12,788	)		125,200		1,483,625		5,743			52,065
Short-Term Bond:
Schwab Short-Term Bond Market Fund		859,166		23,360		(29,200	)		853,326		7,927,403		155			43,335
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		3,468,431		—		(1,500,000	)		1,968,431		1,968,431		—			418
Total											$50,486,339		$1,010,535			$700,679

63

 Schwab Target Funds

Financial Notes, unaudited (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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		298,566		24,651		(88,891	)		234,326		$1,525,461		($75,422	)		$17,855
International:
Laudus International MarketMasters Fund, Select Shares		136,706		21,914		(15,383	)		143,237		2,662,780		(32,568	)		25,738
Laudus Mondrian Emerging Markets Fund, Institutional Shares		114,210		3,736		(79,975	)		37,971		352,375		(35,483	)		20,763
Laudus Mondrian International Equity Fund, Institutional Shares		162,344		20,913		(3,264	)		179,993		1,254,549		(3,819	)		63,219
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		199,713		140,987		(7,166	)		333,534		4,939,641		3,130			56,488
Schwab Core Equity Fund		319,081		32,012		(90,308	)		260,785		4,871,462		93,985			54,302
Schwab Dividend Equity Fund		98,443		52,665		—			151,108		2,177,460		—			17,122
Schwab S&P 500 Index Fund		240,503		29,675		(85,489	)		184,689		4,042,837		103,978			96,185
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		100,280		17,832		(2,373	)		115,739		1,539,333		(1,443	)		—
Schwab Small-Cap Equity Fund		150,005		23,901		(6,554	)		167,352		2,880,130		8,567			1,182
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		132,905		41,513		—			174,418		2,073,830		—			21,495
Intermediate-Term Bond:
Schwab Premier Income Fund		196,056		22,924		(10,738	)		208,242		2,190,704		(481	)		44,300
Schwab Total Bond Market Fund		997,635		195,582		(10,460	)		1,182,757		11,389,949		732			145,177
International Bond:
Laudus Mondrian International Fixed Income Fund		102,177		22,187		—			124,364		1,473,711		—			43,621
Short-Term Bond:
Schwab Short-Term Bond Market Fund		426,993		114,592		—			541,585		5,031,322		—			24,868
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		1,791,651		—		(1,000,000	)		791,651		791,651		—			215
Total											$49,197,195		$61,176			$632,530

64 

 Schwab Target Funds

Financial Notes, unaudited (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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		1,660,883		18,149		(267,938	)		1,411,094		$9,186,219		($553,035	)		$102,537
International:
Laudus International MarketMasters Fund, Select Shares		864,568		51,688		(60,323	)		855,933		15,911,799		(25,789	)		160,074
Laudus Mondrian Emerging Markets Fund, Institutional Shares		744,546		17,278		(531,120	)		230,704		2,140,934		(334,037	)		135,359
Laudus Mondrian International Equity Fund, Institutional Shares		1,022,140		83,023		(7,270	)		1,097,893		7,652,315		(6,398	)		392,621
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		1,263,479		652,868		(42,790	)		1,873,557		27,747,374		54,728			355,796
Schwab Core Equity Fund		2,110,854		27,640		(600,437	)		1,538,057		28,730,903		(26,790	)		357,073
Schwab Dividend Equity Fund		632,350		265,419		—			897,769		12,936,852		—			106,684
Schwab S&P 500 Index Fund		1,518,287		33,287		(472,236	)		1,079,338		23,626,699		2,384,647			600,323
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		586,685		121,756		(22,609	)		685,832		9,121,566		11,276			—
Schwab Small-Cap Equity Fund		841,120		186,325		(43,599	)		983,846		16,931,990		2,911			6,525
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		573,400		88,518		—			661,918		7,870,205		—			91,841
Intermediate-Term Bond:
Schwab Premier Income Fund		761,332		52,267		—			813,599		8,559,063		—			171,265
Schwab Total Bond Market Fund		5,288,857		759,522		(260,313	)		5,788,066		55,739,077		(40,039	)		727,857
International Bond:
Laudus Mondrian International Fixed Income Fund		527,811		88,112		—			615,923		7,298,691		—			223,339
Short-Term Bond:
Schwab Short-Term Bond Market Fund		871,286		47,148		—			918,434		8,532,255		—			45,282
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		3,187,964		—		(3,187,964	)		—		—		—			359
Total											$241,985,942		$1,467,474			$3,476,935

65

 Schwab Target Funds

Financial Notes, unaudited (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			11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12			to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		703,826		56,508		(86,285	)		674,049		$4,388,059			($80,468	)		$46,543
International:
Laudus International MarketMasters Fund, Select Shares		381,082		58,079		(18,533	)		420,628		7,819,479			(49,590	)		72,210
Laudus Mondrian Emerging Markets Fund, Institutional Shares		312,968		12,199		(218,069	)		107,098		993,873			(130,860	)		57,757
Laudus Mondrian International Equity Fund, Institutional Shares		452,359		78,567		—			530,926		3,700,557			—			177,524
Large-Cap:												��
Laudus Growth Investors U.S. Large Cap Growth Fund		553,297		410,958		(14,250	)		950,005		14,069,577			8,976			161,376
Schwab Core Equity Fund		956,556		73,210		(276,446	)		753,320		14,072,022			(90,186	)		165,024
Schwab Dividend Equity Fund		289,198		149,998		—			439,196		6,328,817			—			49,748
Schwab S&P 500 Index Fund		627,841		77,570		(171,568	)		533,843		11,685,825			(52,091	)		252,112
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		260,766		87,794		(8,196	)		340,364		4,526,841			(3,575	)		—
Schwab Small-Cap Equity Fund		399,641		104,102		(13,777	)		489,966		8,432,311			14,361			3,158
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		173,927		41,697		—			215,624		2,563,766			—			28,893
Intermediate-Term Bond:
Schwab Premier Income Fund		213,823		112,181		—			326,004		3,429,558			—			55,178
Schwab Total Bond Market Fund		1,738,844		360,879		(31,380	)		2,068,343		19,918,139			1,724			253,489
International Bond:
Laudus Mondrian International Fixed Income Fund		156,064		41,066		—			197,130		2,335,990			—			71,711
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		1,398,128		—		(1,398,128	)		—		—			—			161
Total											$104,264,814			($381,709	)		$1,394,884

66 

 Schwab Target Funds

Financial Notes, unaudited (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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		2,726,695		33,898		(247,726	)		2,512,867		$16,358,765		($513,559	)		$173,498
International:
Laudus International MarketMasters Fund, Select Shares		1,429,231		143,383		(10,983	)		1,561,631		29,030,713		(15,925	)		263,552
Laudus Mondrian Emerging Markets Fund, Institutional Shares		1,301,561		56,040		(929,294	)		428,307		3,974,685		(847,548	)		236,624
Laudus Mondrian International Equity Fund, Institutional Shares		1,725,566		202,528		—			1,928,094		13,438,817		—			667,912
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		2,020,252		1,391,321		—			3,411,573		50,525,397		—			568,903
Schwab Core Equity Fund		3,881,565		123,551		(1,208,124	)		2,796,992		52,247,818		(182,355	)		655,208
Schwab Dividend Equity Fund		1,011,752		609,867		—			1,621,619		23,367,523		—			182,195
Schwab S&P 500 Index Fund		2,342,665		107,002		(491,825	)		1,957,842		42,857,170		386,186			928,867
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		1,143,509		121,846		(15,152	)		1,250,203		16,627,706		(354	)		—
Schwab Small-Cap Equity Fund		1,676,570		170,196		(52,271	)		1,794,495		30,883,260		(27,014	)		12,742
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		424,155		71,235		—			495,390		5,890,188		—			71,267
Intermediate-Term Bond:
Schwab Premier Income Fund		544,479		284,183		—			828,662		8,717,529		—			139,269
Schwab Total Bond Market Fund		4,880,271		665,326		—			5,545,597		53,404,102		—			689,656
International Bond:
Laudus Mondrian International Fixed Income Fund		392,824		222,729		—			615,553		7,294,302		—			173,071
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		4,558,910		—		(4,558,910	)		—		—		—			519
Total											$354,617,975		($1,200,569	)		$4,763,283

67

 Schwab Target Funds

Financial Notes, unaudited (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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		610,226		33,270		(35,675	)		607,821		$3,956,914		($56,841	)		$40,494
International:
Laudus International MarketMasters Fund, Select Shares		315,685		60,641		—			376,326		6,995,909		—			59,379
Laudus Mondrian Emerging Markets Fund, Institutional Shares		278,801		20,470		(195,610	)		103,661		961,970		(132,350	)		52,388
Laudus Mondrian International Equity Fund, Institutional Shares		387,136		81,728		—			468,864		3,267,980		—			150,376
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		481,457		358,859		—			840,316		12,445,085		—			138,961
Schwab Core Equity Fund		884,176		55,151		(265,101	)		674,226		12,594,536		(87,984	)		149,967
Schwab Dividend Equity Fund		242,036		151,803		—			393,839		5,675,226		—			43,519
Schwab S&P 500 Index Fund		488,875		54,440		(67,842	)		475,473		10,408,108		(63,228	)		194,918
Small-Cap:-
Laudus Small-Cap MarketMasters Fund, Select Shares		258,735		47,224		—			305,959		4,069,260		—			—
Schwab Small-Cap Equity Fund		378,817		76,802		(15,932	)		439,687		7,567,012		(4,073	)		2,879
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		63,489		11,995		—			75,484		897,507		—			10,824
Intermediate-Term Bond:
Schwab Premier Income Fund		90,073		32,678		—			122,751		1,291,343		—			22,081
Schwab Total Bond Market Fund		695,859		144,159		(10,449	)		829,569		7,988,746		250			101,805
International Bond:
Laudus Mondrian International Fixed Income Fund		57,293		33,213		—			90,505		1,072,488		—			25,888
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		846,451		—		(846,451	)		—		—		—			97
Total											$79,192,084		($344,226	)		$993,576

68 

 Schwab Target Funds

Financial Notes, unaudited (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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Global Real Estate:
Schwab Global Real Estate Fund		2,878,926		117,699		(257,913	)		2,738,712		$17,829,014		($551,310	)		$187,989
International:
Laudus International MarketMasters Fund, Select Shares		1,433,985		273,420		—			1,707,405		31,740,664		—			266,503
Laudus Mondrian Emerging Markets Fund, Institutional Shares		1,317,623		48,575		(895,611	)		470,587		4,367,050		(960,072	)		243,847
Laudus Mondrian International Equity Fund, Institutional Shares		1,868,526		276,381		—			2,144,907		14,950,002		—			702,753
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		2,242,301		1,492,922		—			3,735,223		55,318,653		—			631,432
Schwab Core Equity Fund		4,125,083		191,839		(1,277,498	)		3,039,424		56,776,441		(386,952	)		696,314
Schwab Dividend Equity Fund		1,166,029		590,106		—			1,756,135		25,305,901		—			203,373
Schwab S&P 500 Index Fund		2,173,959		176,469		(208,024	)		2,142,404		46,897,223		(130,050	)		861,974
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		1,178,238		188,096		—			1,366,334		18,172,243		—			—
Schwab Small-Cap Equity Fund		1,759,299		228,599		(31,573	)		1,956,325		33,668,360		(20,903	)		13,370
Fixed-Income Funds:
Inflation-Protected Bond:
Schwab Treasury Inflation Protected Securities Fund		225,421		22,029		—			247,450		2,942,176		—			37,372
Intermediate-Term Bond:
Schwab Premier Income Fund		340,348		44,113		(32,790	)		351,671		3,699,575		(389	)		75,838
Schwab Total Bond Market Fund		1,919,689		517,067		—			2,436,756		23,465,957		—			291,793
International Bond:
Laudus Mondrian International Fixed Income Fund		206,204		74,045		—			280,249		3,320,949		—			84,585
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		4,790,619		—		(4,790,619	)		—		—		—			545
Total											$338,454,208		($2,049,676	)		$4,297,688

* 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

69

 Schwab Target Funds

Financial Notes, unaudited (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 April 30, 2012, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:

	Purchases of Securities		Sales/Maturities of Securities
Schwab Target 2010 Fund		$5,914,000		$10,373,000
Schwab Target 2015 Fund		11,409,000		6,349,000
Schwab Target 2020 Fund		38,178,000		34,425,964
Schwab Target 2025 Fund		26,208,000		13,083,128
Schwab Target 2030 Fund		66,984,000		45,727,910
Schwab Target 2035 Fund		18,960,000		8,948,451
Schwab Target 2040 Fund		71,451,000		42,251,619

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Schwab Target 2010 Fund		$1,177		$3,912
Schwab Target 2015 Fund		2,171		6,220
Schwab Target 2020 Fund		970		7,631
Schwab Target 2025 Fund		1,241		10,063
Schwab Target 2030 Fund		1,868		11,408
Schwab Target 2035 Fund		671		3,665
Schwab Target 2040 Fund		6,530		16,855

70 

 Schwab Target Funds

Financial Notes, unaudited (continued)

10. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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

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

$—

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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

71

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

72 

 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).	75	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.	75	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.	92	None

73

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

74 

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 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 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 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.

75

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR34720-06

Semiannual report dated April 30, 2012, enclosed.

Schwab Balanced Fund^tm

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This wrapper is not part of the shareholder report.

Schwab Balanced Fund^tm

Semiannual Report

April 30, 2012

This page is intentionally left blank.

Schwab Balanced Fund^tm

In This Report

Performance at a Glance	2
From the President	3
Fund Management	5
Fund Summary	6
Fund Expenses	7
Financial Statements and Portfolio Holdings	8
Financial Notes	13
Trustees and Officers	21
Glossary	24

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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 Fund (Ticker Symbol: SWOBX)	8.67%
Balanced Blended Index	8.58%
Fund Category: Morningstar Moderate Allocation	7.40%
Performance Details	page 6

Minimum Initial Investment¹ $ 100

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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 U.S. Aggregate Bond Index. The components that make up the composite index may vary over time.

¹ Please see prospectus for further detail and eligibility requirements.

2 Schwab Balanced Fund

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the fund covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab Balanced Fund.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab Balanced Fund. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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

Zifan Tang, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the fund. She was appointed portfolio manager of the fund in February 2012. Prior to joining the firm in 2012, she had been employed by a large business data provider as a product manager since 2010. Prior to that position, she had been employed by a large investment manager as a portfolio manager since 1997.

Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period.

Schwab Balanced Fund 5

Schwab Balanced Fund

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years
Fund: Schwab Balanced Fundtm (11/18/96)		8.67	%		4.44	%		2.17	%		5.23	%
Balanced Blended Index3		8.58	%		6.23	%		3.57	%		5.45	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.71	%
Fund Category: Morningstar Moderate Allocation		7.40	%		1.04	%		2.01	%		4.91	%

Fund Expense Ratios⁴: Net 0.64%; Gross 0.80%

 Statistics

Number of Holdings	6
Portfolio Turnover Rate5	20%

 Asset Class Weightings % of Investments

Equity Funds – Large-Cap	50.7%
Fixed-Income Funds – Intermediate-Term Bond	36.1%
Equity Funds – Small-Cap	10.1%
Money Market Funds	3.1%
Total	100.0%

 Top Holdings % of Net Assets^6,7

Schwab Core Equity Fund	34.8%
Schwab Total Bond Market Fund	24.2%
Laudus Growth Investors U.S. Large Cap Growth Fund	15.8%
Schwab Premier Income Fund	11.8%
Laudus Small-Cap MarketMasters Fund, Select Shares	10.0%
Total	96.6%

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and 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.

Portfolio holdings may have changed since the report date.

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. The Laudus MarketMasters Funds are part of Schwab Capital Trust and distributed by Charles Schwab & Co., Inc.

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	The Balanced Blended Index is a custom blended index developed by CSIM composed of 60% S&P 500® Index and 40% Barclays U.S. Aggregate Bond Index. The components that make up the composite index may vary over time.
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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.
7	The holdings listed exclude any temporary liquidity investments.

6 Schwab Balanced Fund

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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Schwab Balanced Fundtm
Actual Return		0.00%	$	1,000	$	1,086.70	$	0.00
Hypothetical 5% Return		0.00%	$	1,000	$	1,024.86	$	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 182 days of the period, and divided by the 366 days of the fiscal year.

Schwab Balanced Fund 7

Schwab Balanced Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/081			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.61			11.00			9.99			9.82			13.86			13.39
Income (loss) from investment operations:
Net investment income (loss)		0.09	2		0.17	2		0.17	2		0.22	2		0.20	2		0.25	2
Net realized and unrealized gains (losses)		0.90			0.63			1.03			0.64			(3.26	)		1.06
Total from investment operations		0.99			0.80			1.20			0.86			(3.06	)		1.31
Less distributions:
Distributions from net investment income		(0.17	)		(0.19	)		(0.19	)		(0.37	)		(0.29	)		(0.24	)
Distributions from net realized gains		—			—			—			(0.32	)		(0.69	)		(0.60	)
Total distributions		(0.17	)		(0.19	)		(0.19	)		(0.69	)		(0.98	)		(0.84	)
Net asset value at end of period		12.43			11.61			11.00			9.99			9.82			13.86
Total return (%)		8.67	3		7.28			12.08			9.45			(23.56	)		10.24
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses4		0.00	5,6		0.00	6		0.00	6		0.00			0.36			1.02	7
Gross operating expenses4		0.15	5		0.16			0.20			0.17			0.53			1.27
Net investment income (loss)		1.60	5		1.52			1.67			2.41			1.81			1.84
Portfolio turnover rate		20	3		53			8			21			267			244
Net assets, end of period ($ x 1,000,000)		123			109			88			86			85			112

* Unaudited.

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 Not annualized.

⁴ The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

⁵ Annualized.

⁶ Less than 0.005%; the ratio of net operating expenses would have been 0.00%, if certain non-routine expenses had not been incurred.

⁷ 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 included.

8 See financial notes

 Schwab Balanced Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.7%	Other Investment Companies		111,285,059		122,863,778
	99	.7%	Total Investments		111,285,059		122,863,778
	0	.3%	Other Assets and Liabilities, Net				360,673
	100	.0%	Net Assets				123,224,451

	Number		Value
Security	of Shares		($)
Other Investment Companies 99.7% of net assets
Equity Funds 60.6%
Large-Cap 50.6%
Laudus Growth Investors U.S. Large Cap Growth Fund (a)*		1,313,390		19,451,308
Schwab Core Equity Fund (a)		2,296,313		42,895,125
				62,346,433
Small-Cap 10.0%
Laudus Small-Cap MarketMasters Fund, Select Shares (a)*		928,505		12,349,118
				74,695,551
Fixed-Income Funds 36.0%
Intermediate-Term Bond 36.0%
Schwab Premier Income Fund (a)		1,381,151		14,529,706
Schwab Total Bond Market Fund (a)		3,103,254		29,884,335
				44,414,041
Money Market Fund 3.1%
State Street Institutional U.S. Government Money Market Fund		3,754,186		3,754,186
Total Other Investment Companies
(Cost $111,285,059)				122,863,778
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $113,340,538 and the unrealized appreciation and depreciation were $9,523,240 and ($0), respectively, with a net unrealized appreciation of $9,523,240.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.

The following is a summary of the inputs used to value the funds’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$122,863,778		$—		$—		$122,863,778
Total		$122,863,778		$—		$—		$122,863,778

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 9

 Schwab Balanced Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $107,530,873)		$119,109,592
Investments in unaffiliated issuers, at value (cost $3,754,186)	+	3,754,186
Total investments, at value (cost $111,285,059)		122,863,778
Receivables:
Fund shares sold		348,811
Dividends		88,300
Due from investment adviser		1,142
Interest		28
Prepaid expenses	+	1,948
Total assets		123,304,007
Liabilities
Payables:
Fund shares redeemed		22,284
Accrued expenses	+	57,272
Total liabilities		79,556
Net Assets
Total assets		123,304,007
Total liabilities	−	79,556
Net assets		$123,224,451
Net Assets by Source
Capital received from investors		117,224,213
Net investment income not yet distributed		159,136
Net realized capital losses		(5,737,617	)
Net unrealized capital gains		11,578,719
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$123,224,451		9,917,174			$12.43

10 See financial notes

 Schwab Balanced Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$814,315
Interest	+	645
Total investment income		814,960
Expenses
Professional fees		22,787
Shareholder reports		17,200
Registration fees		12,070
Transfer agent fees		11,481
Portfolio accounting fees		7,834
Trustees’ fees		3,139
Custodian fees		1,485
Interest expense		182
Other expenses	+	1,427
Total expenses		77,605
Expense reduction by CSIM	−	77,423
Net expenses	−	182
Net investment income		814,778
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		446,439
Net realized losses on sales of affiliated underlying funds		(351,380	)
Net realized gains on unaffiliated investments	+	651
Net realized gains		95,710
Net unrealized gains on affiliated underlying funds	+	6,933,427
Net realized and unrealized gains		7,029,137
Increase in net assets resulting from operations		$7,843,915

See financial notes 11

 Schwab Balanced Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$814,778			$1,492,259
Net realized gains (losses)		95,710			(268,656	)
Net unrealized gains	+	6,933,427			6,134,481
Increase in net assets from operations		7,843,915			7,358,084
Distributions to Shareholders
Distributions from net investment income		($1,421,426	)		($1,483,071	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,554,977		$31,346,215			3,803,797		$43,245,177
Shares reinvested			115,862		1,332,417			123,329		1,393,617
Shares redeemed	+		(2,167,200	)	(25,167,191	)		(2,534,648	)	(29,444,848	)
Net transactions in fund shares			503,639		$7,511,441			1,392,478		$15,193,946
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			9,413,535		$109,290,521			8,021,057		$88,221,562
Total increase	+		503,639		13,933,930			1,392,478		21,068,959
End of period			9,917,174		$123,224,451			9,413,535		$109,290,521
Net investment income not yet distributed					$159,136					$765,784

12 See financial notes

 Schwab Balanced Fund

Financial Notes, unaudited

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 per share (“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 liability has significantly decreased (from normal conditions for that asset or liability) or price quotations or observable inputs

13

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 fund’s policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the fund’s investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

(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 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.

(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.

14 

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(e) Distributions to Shareholders:

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

(f) 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.

(g) 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.

(h) 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.

(i) Indemnification:

Under the fund’s organizational documents, the officers and trustees are indemnified against certain liabilities arising out of the performance of their duties to the fund. In addition, in the normal course of business the fund enters into contracts with its vendors and others that provide general indemnifications. The fund’s maximum exposure under these arrangements is unknown as this would involve future claims that may be made against the fund. However, based on experience, the fund expects the risk of loss to be remote.

(j) 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 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.

15

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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.

Affiliated Fund Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. However, the portfolio manager is a fiduciary to the fund and is legally obligated to act in the fund’s best interests when selecting underlying funds, without taking fees into consideration.

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-advisers) 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.

•  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. An underlying 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.

16 

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

•  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.

•  Securities Lending Risk. Certain underlying funds engage in securities lending, which 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. 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.

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.

17

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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 acquired 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 April 30, 2012, 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 April 30, 2012, 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	1.8%
Schwab Core Equity Fund	2.5%
Small-Cap:
Laudus Small-Cap MarketMasters Fund	7.8%
Fixed-Income Funds:
Intermediate-Term Bond:
Schwab Premier Income Fund	3.4%
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 April 30, 2012.

	Balance							Balance				Realized			Distributions
	of Shares							of Shares		Market		Gains (Losses)			Received*
	Held at		Gross		Gross			Held at		Value at		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
Large-Cap:
Laudus Growth Investors U.S. Large Cap Growth Fund		1,231,320		414,249		(332,179	)		1,313,390		$19,451,308		($177,789	)		$320,666
Schwab Core Equity Fund		2,251,895		477,236		(432,818	)		2,296,313		42,895,125		(580,201	)		339,110
Small-Cap:
Laudus Small-Cap MarketMasters Fund, Select Shares		904,643		177,072		(153,210	)		928,505		12,349,118		262,443			—
Fixed-Income Fund:
Intermediate-Term Bond:
Schwab Premier Income Fund		1,239,024		317,920		(175,793	)		1,381,151		14,529,706		18,166			251,149
Schwab Total Bond Market Fund		2,878,871		725,439		(501,056	)		3,103,254		29,884,335		126,001			349,829
Total											$119,109,592		($351,380	)		$1,260,754

* 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 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 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.

18 

 Schwab Balanced Fund

Financial Notes, unaudited (continued)

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 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 (“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 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 April 30, 2012, purchases and sales/maturities of securities (excluding short-term obligations) were as follows:

Purchases of Securities		Sales/Maturities of Securities
	$27,325,000		$20,325,000

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
(11/1/11-4/30/12)		(11/1/10-10/31/11)
	$139,866		$7,174

10. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains for federal income tax purposes. As of 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

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.

19

 Schwab Balanced Fund

Financial Notes, unaudited (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. The fund has adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

20 

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

21

 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).	75	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.	75	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.	92	None

22 

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

23

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 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.

24 

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR34721-06

Semiannual report dated April 30, 2012, enclosed.

Schwab MarketTrack Portfolios ^®

Schwab MarketTrack

All Equity Portfolio^tm

Schwab MarketTrack

Growth Portfolio^tm

Schwab MarketTrack

Balanced Portfolio^tm

Schwab MarketTrack

Conservative Portfolio^tm

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This wrapper is not part of the shareholder report.

Schwab MarketTrack Portfolios ^®

Semiannual Report

April 30, 2012

Schwab MarketTrack

All Equity Portfolio^tm

Schwab MarketTrack

Growth Portfolio^tm

Schwab MarketTrack

Balanced Portfolio^tm

Schwab MarketTrack

Conservative Portfolio^tm

This page is intentionally left blank.

Schwab MarketTrack Portfolios^®

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™	7
Schwab MarketTrack Balanced Portfolio™	8
Schwab MarketTrack Conservative Portfolio™	9
Fund Expenses	10
Financial Statements and Portfolio Holdings
Schwab MarketTrack All Equity Portfolio™	11
Schwab MarketTrack Growth Portfolio™	16
Schwab MarketTrack Balanced Portfolio™	21
Schwab MarketTrack Conservative Portfolio™	26
Financial Notes	31
Trustees and Officers	41
Glossary	44

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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)	9.11%
All Equity Composite Index	9.63%
Fund Category: Morningstar Large-Cap Blend	11.28%
Performance Details	page 6
Schwab MarketTrack Growth Portfoliotm
Investor Shares (Ticker Symbol: SWHGX)	8.08%
P Shares (Ticker Symbol: SWPGX)	8.19%
Growth Composite Index	8.48%
Fund Category: Morningstar Aggressive Allocation	7.67%
Performance Details	page 7
Schwab MarketTrack Balanced Portfoliotm(Ticker Symbol: SWBGX)	6.62%
Balanced Composite Index	6.94%
Fund Category: Morningstar Moderate Allocation	7.40%
Performance Details	page 8
Schwab MarketTrack Conservative Portfoliotm(Ticker Symbol: SWCGX)	5.01%
Conservative Composite Index	5.40%
Fund Category: Morningstar Conservative Allocation	5.19%
Performance Details	page 9

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 may have been partially absorbed by CSIM and its affiliates. Without these reductions, a portfolio’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on portfolio distributions or on the redemption of portfolio 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 components that make up each of the following composite indices may vary over time.

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 CSIM.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM.

¹ Please see prospectus for further detail and eligibility requirements.

2 Schwab MarketTrack Portfolios

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Schwab MarketTrack Portfolios.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

Thank you for investing in the Schwab MarketTrack Portfolios. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions or to consult our website for more information, please visit www.schwabfunds.com. We are also happy to hear from you at 1-800-435-4000.

Sincerely,

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

Zifan Tang, CFA, a portfolio manager of the investment adviser, is responsible for the day-to-day management of the portfolios. She was appointed portfolio manager of the portfolios in February 2012. Prior to joining the firm in 2012, she had been employed by a large business data provider as a product manager since 2010. Prior to that position, she had been employed by a large investment manager as a portfolio manager since 1997.

Ms. Tang replaced Jake Gilliam as portfolio manager during the reporting period.

Schwab MarketTrack Portfolios 5

Schwab MarketTrack All Equity Portfolio™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Portfolio and Inception Date	6 Months			1 Year			5 Years			10 Years
Portfolio: Schwab MarketTrack All Equity Porfoliotm (5/19/98)		9.11	%		-3.17	%		-0.41	%		5.01	%
All Equity Composite Index3		9.63	%		-1.60	%		-0.32	%		5.54	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Fund Category: Morningstar Large-Cap Blend		11.28	%		1.12	%		0.14	%		4.13	%

Fund Expense Ratios⁴: Net 0.65%; Gross 0.68%

 Statistics

Number of Holdings	4
Portfolio Turnover Rate5	6%

 Asset Class Weightings % of Investments

Equity Funds – Large-Cap	45.3%
Equity Funds – International	29.5%
Equity Funds – Small-Cap	24.9%
Short-Term Investments	0.3%
Total	100.0%

 Top Holdings % of Net Assets^6,7

Schwab S&P 500 Index Fund	45.3%
Schwab International Index Fund	29.5%
Schwab Small-Cap Index Fund	24.8%
Total	99.6%

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

Portfolio holdings may have changed since the report date.

Small-company stocks are subject to greater volatility than other asset classes.

Foreign securities can involve risks such as political and economic instability and currency risk.

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 CSIM. The components that make up the composite index may vary over time.
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 0.15%. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.
7	The holdings listed exclude any temporary liquidity investments.

6 Schwab MarketTrack Portfolios

Schwab MarketTrack Growth Portfolio™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Portfolio and Inception Date	6 Months			1 Year			5 Years			10 Years			Since Inception
Investor Shares (11/20/95)		8.08	%		-0.43	%		0.86	%		5.00	%	6.29%
P Shares (4/6/06)		8.19	%		-0.22	%		1.01	%		n/a		2.94%
Growth Composite Index3		8.48	%		0.75	%		1.31	%		5.62	%	(11/20/95) 6.70%
													(4/6/06) 3.38%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%	(11/20/95) 7.37%
													(4/6/06) 3.22%
Fund Category: Morningstar Aggressive Allocation		7.67	%		-2.38	%		0.60	%		4.72	%	(11/20/95) 6.75%
													(4/6/06) 2.46%

Fund Expense Ratios⁴: Investor Shares: Net 0.66%; Gross 0.68% / P Shares: Net 0.51%; Gross 0.54%

 Statistics

Number of Holdings	7
Portfolio Turnover Rate5	7%

 Asset Class Weightings % of Investments

Equity Funds – Large-Cap	40.8%
Equity Funds – Small-Cap	19.9%
Equity Funds – International	19.7%
Fixed-Income Funds – Intermediate-Term Bond	14.9%
Short-Term Investments	3.7%
Money Market Funds	1.0%
Total	100.0%

 Top Holdings % of Net Assets^6,7

Schwab S&P 500 Index Fund	40.8%
Schwab Small-Cap Index Fund	19.9%
Schwab International Index Fund	19.6%
Schwab Total Bond Market Fund	14.9%
Schwab Value Advantage Money Fund, Institutional Prime Shares	1.0%
Total	96.2%

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

Portfolio holdings may have changed since the report date.

Small-company stocks are subject to greater volatility than other asset classes.

Foreign securities can involve risks such as political and economic instability and currency risk.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM. The components that make up the composite index may vary over time.
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 0.16%. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.
7	The holdings listed exclude any temporary liquidity investments.

Schwab MarketTrack Portfolios 7

Schwab MarketTrack Balanced Portfolio™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Portfolio and Inception Date	6 Months			1 Year			5 Years			10 Years
Portfolio: Schwab MarketTrack Balanced Portfoliotm (11/20/95)		6.62	%		1.67	%		1.65	%		4.89	%
Balanced Composite Index3		6.94	%		2.53	%		2.74	%		5.78	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.71	%
Fund Category: Morningstar Moderate Allocation		7.40	%		1.04	%		2.01	%		4.91	%

Fund Expense Ratios⁴: Net 0.69%; Gross 0.71%

 Statistics

Number of Holdings	7
Portfolio Turnover Rate5	10%

 Asset Class Weightings % of Investments

Fixed-Income Funds – Intermediate-Term Bond	34.7%
Equity Funds – Large-Cap	30.7%
Equity Funds – Small-Cap	15.1%
Equity Funds – International	14.8%
Short-Term Investments	3.7%
Money Market Funds	1.0%
Total	100.0%

 Top Holdings % of Net Assets^6,7

Schwab Total Bond Market Fund	34.7%
Schwab S&P 500 Index Fund	30.7%
Schwab Small-Cap Index Fund	15.1%
Schwab International Index Fund	14.8%
Schwab Value Advantage Money Fund, Institutional Prime Shares	1.0%
Total	96.3%

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

Portfolio holdings may have changed since the report date.

Small-company stocks are subject to greater volatility than other asset classes.

Foreign securities can involve risks such as political and economic instability and currency risk.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM. The components that make up the composite index may vary over time.
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 0.19%. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.
7	The holdings listed exclude any temporary liquidity investments.

8 Schwab MarketTrack Portfolios

Schwab MarketTrack Conservative Portfolio™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Portfolio and Inception Date	6 Months			1 Year			5 Years			10 Years
Portfolio: Schwab MarketTrack Conservative Portfoliotm (11/20/95)		5.01	%		3.40	%		2.29	%		4.67	%
Conservative Composite Index3		5.40	%		4.20	%		4.02	%		5.82	%
S&P 500® Index		12.77	%		4.76	%		1.01	%		4.71	%
Barclays U.S. Aggregate Bond Index		2.44	%		7.54	%		6.37	%		5.71	%
Fund Category: Morningstar Conservative Allocation		5.19	%		2.14	%		3.24	%		4.84	%

Fund Expense Ratios⁴: Net 0.72%; Gross 0.77%

 Statistics

Number of Holdings	7
Portfolio Turnover Rate5	16%

 Asset Class Weightings % of Investments

Fixed-Income Funds – Intermediate-Term Bond	54.9%
Equity Funds – Large-Cap	20.6%
Equity Funds – Small-Cap	10.0%
Equity Funds – International	9.8%
Short-Term Investments	3.7%
Money Market Funds	1.0%
Total	100.0%

 Top Holdings % of Net Assets^6,7

Schwab Total Bond Market Fund	54.9%
Schwab S&P 500 Index Fund	20.6%
Schwab Small-Cap Index Fund	10.0%
Schwab International Index Fund	9.8%
Schwab Value Advantage Money Fund, Institutional Prime Shares	1.0%
Total	96.3%

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

Portfolio holdings may have changed since the report date.

Small-company stocks are subject to greater volatility than other asset classes.

Foreign securities can involve risks such as political and economic instability and currency risk.

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 U.S. Aggregate Bond Index, and 5% Barclays U.S. Treasury Bills: 1-3 Months Index. The index is maintained by CSIM. The components that make up the composite index may vary over time.
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 0.22%. 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.
5	Not annualized.
6	This list is not a recommendation of any security by the investment adviser.
7	The holdings listed exclude any temporary liquidity investments.

Schwab MarketTrack Portfolios 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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Schwab MarketTrack All Equity Portfoliotm
Actual Return		0.50%	$	1,000	$	1,091.10	$	2.60
Hypothetical 5% Return		0.50%	$	1,000	$	1,022.38	$	2.51
Schwab MarketTrack Growth Portfoliotm
Investor Shares
Actual Return		0.50%	$	1,000	$	1,080.80	$	2.59
Hypothetical 5% Return		0.50%	$	1,000	$	1,022.38	$	2.51
P Shares
Actual Return		0.35%	$	1,000	$	1,081.90	$	1.81
Hypothetical 5% Return		0.35%	$	1,000	$	1,023.12	$	1.76
Schwab MarketTrack Balanced Portfoliotm
Actual Return		0.50%	$	1,000	$	1,066.20	$	2.57
Hypothetical 5% Return		0.50%	$	1,000	$	1,022.38	$	2.51
Schwab MarketTrack Conservative Portfoliotm
Actual Return		0.50%	$	1,000	$	1,050.10	$	2.55
Hypothetical 5% Return		0.50%	$	1,000	$	1,022.38	$	2.51

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

10 Schwab MarketTrack Portfolios

Schwab MarketTrack All Equity Portfolio™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.52			11.30			9.82			9.44			15.58			13.63
Income (loss) from investment operations:
Net investment income (loss)		0.27			0.16			0.12			0.30			0.20			0.21
Net realized and unrealized gains (losses)		0.78			0.27			1.50			0.83			(6.11	)		2.01
Total from investment operations		1.05			0.43			1.62			1.13			(5.91	)		2.22
Less distributions:
Distributions from net investment income		—			(0.21	)		(0.14	)		(0.23	)		(0.22	)		(0.27	)
Distributions from net realized gains		—			—			—			(0.52	)		(0.01	)		—
Total distributions		—			(0.21	)		(0.14	)		(0.75	)		(0.23	)		(0.27	)
Net asset value at end of period		12.57			11.52			11.30			9.82			9.44			15.58
Total return (%)		9.11	1		3.76			16.62			13.54			(38.46	)		16.55
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		0.50	3		0.50			0.50			0.50			0.50			0.50
Gross operating expenses2		0.54	3		0.53			0.54			0.67			0.73			0.72
Net investment income (loss)		4.34	3		1.37			1.14			3.46			1.46			1.24
Portfolio turnover rate		6	1		12			8			10			10			0	4
Net assets, end of period ($ x 1,000,000)		490			476			489			461			429			682

* Unaudited.

¹ Not annualized.

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized.

⁴ Less than 1%.

See financial notes 11

 Schwab MarketTrack All Equity Portfolio

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		406,167,176		487,895,717
	0	.3%	Short-Term Investment		1,361,588		1,361,588
	99	.9%	Total Investments		407,528,764		489,257,305
	0	.1%	Other Assets and Liabilities, Net				433,728
	100	.0%	Total Net Assets				489,691,033

	Number		Value
Security	of Shares		($)
Other Investment Companies 99.6% of net assets
Equity Funds 99.6%
International 29.5%
Schwab International Index Fund (a)		9,065,026		144,405,867
Large-Cap 45.3%
Schwab S&P 500 Index Fund (a)		10,130,308		221,752,452
Small-Cap 24.8%
Schwab Small-Cap Index Fund (a)		5,785,998		121,737,398
Total Other Investment Companies
(Cost $406,167,176)				487,895,717
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.3% of net assets
Time Deposit 0.3%
Bank of America
0.03%, 05/01/12		1,361,588		1,361,588
Total Short-Term Investment
(Cost $1,361,588)				1,361,588
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $419,254,081 and the unrealized appreciation and depreciation were $70,003,224 and ($0), respectively, with a net unrealized appreciation of $70,003,224.

(a) Issuer is affiliated with the fund’s adviser.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$487,895,717		$—		$—		$487,895,717
Short-Term Investment(a)		—		1,361,588		—		1,361,588
Total		$487,895,717		$1,361,588		$—		$489,257,305

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

12 See financial notes

 Schwab MarketTrack All Equity Portfolio

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $406,167,176)		$487,895,717
Investments in unaffiliated issuers, at value (cost $1,361,588)	+	1,361,588
Total investments, at value (cost $407,528,764)		489,257,305
Receivables:
Investments sold		1,350,000
Fund shares sold		414,892
Interest		1
Prepaid expenses	+	8,726
Total assets		491,030,924
Liabilities
Payables:
Investment adviser and administrator fees		8,091
Shareholder service fees		11,245
Fund shares redeemed		1,245,505
Accrued expenses	+	75,050
Total liabilities		1,339,891
Net Assets
Total assets		491,030,924
Total liabilities	−	1,339,891
Net assets		$489,691,033
Net Assets by Source
Capital received from investors		463,935,174
Net investment income not yet distributed		10,348,902
Net realized capital losses		(66,321,584	)
Net unrealized capital gains		81,728,541
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$489,691,033		38,949,074			$12.57

See financial notes 13

 Schwab MarketTrack All Equity Portfolio

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$11,540,081
Interest	+	265
Total investment income		11,540,346
Expenses
Investment adviser and administrator fees		548,064
Shareholder service fees		585,349
Shareholder reports		39,890
Transfer agent fees		22,026
Professional fees		19,249
Registration fees		14,102
Portfolio accounting fees		11,650
Custodian fees		5,785
Trustees’ fees		4,461
Other expenses	+	32,268
Total expenses		1,282,844
Expense reduction by CSIM and its affiliates	−	91,400
Net expenses	−	1,191,444
Net investment income		10,348,902
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		6,555,309
Net realized gains on sales of affiliated underlying funds		1,546,446
Net realized gains on unaffiliated investments	+	1
Net realized gains		8,101,756
Net unrealized gains on affiliated underlying funds	+	23,679,148
Net realized and unrealized gains		31,780,904
Increase in net assets resulting from operations		$42,129,806

14 See financial notes

 Schwab MarketTrack All Equity Portfolio

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12			11/1/10-10/31/11
Net investment income		$10,348,902		$6,999,406
Net realized gains		8,101,756		415,209
Net unrealized gains	+	23,679,148		12,035,738
Increase in net assets from operations		42,129,806		19,450,353
Distributions to Shareholders
Distributions from net investment income		$—		($9,214,430	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,769,036		$21,287,447			5,888,921		$70,518,573
Shares reinvested			—		—			719,642		8,721,290
Shares redeemed	+		(4,177,635	)	(50,142,330	)		(8,520,403	)	(101,904,500	)
Net transactions in fund shares			(2,408,599	)	($28,854,883	)		(1,911,840	)	($22,664,637	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			41,357,673		$476,416,110			43,269,513		$488,844,824
Total increase or decrease	+		(2,408,599	)	13,274,923			(1,911,840	)	(12,428,714	)
End of period			38,949,074		$489,691,033			41,357,673		$476,416,110
Net investment income not yet distributed					$10,348,902					$—

See financial notes 15

Schwab MarketTrack Growth Portfolio™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
Investor Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		16.85			16.35			14.51			13.71			21.09			19.16
Income (loss) from investment operations:
Net investment income (loss)		0.32			0.24			0.19			0.39			0.37			0.40
Net realized and unrealized gains (losses)		1.01			0.51			1.95			1.25			(6.94	)		2.16
Total from investment operations		1.33			0.75			2.14			1.64			(6.57	)		2.56
Less distributions:
Distributions from net investment income		(0.42	)		(0.25	)		(0.30	)		(0.40	)		(0.41	)		(0.46	)
Distributions from net realized gains		—			—			—			(0.44	)		(0.40	)		(0.17	)
Total distributions		(0.42	)		(0.25	)		(0.30	)		(0.84	)		(0.81	)		(0.63	)
Net asset value at end of period		17.76			16.85			16.35			14.51			13.71			21.09
Total return (%)		8.08	1		4.55			14.86			12.95			(32.27	)		13.69
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		0.50	3		0.50			0.50			0.50			0.50			0.50
Gross operating expenses2		0.52	3		0.52			0.52			0.66			0.71			0.70
Net investment income (loss)		3.68	3		1.39			1.25			3.03			1.99			1.94
Portfolio turnover rate		7	1		17			14			23			10			4
Net assets, end of period ($ x 1,000,000)		581			562			549			507			454			686

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
P Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		16.86			16.35			14.51			13.72			21.10			19.18
Income (loss) from investment operations:
Net investment income (loss)		0.32			0.26			0.21			0.43			0.37			0.42
Net realized and unrealized gains (losses)		1.02			0.52			1.94			1.22			(6.91	)		2.16
Total from investment operations		1.34			0.78			2.15			1.65			(6.54	)		2.58
Less distributions:
Distributions from net investment income		(0.44	)		(0.27	)		(0.31	)		(0.42	)		(0.44	)		(0.49	)
Distributions from net realized gains		—			—			—			(0.44	)		(0.40	)		(0.17	)
Total distributions		(0.44	)		(0.27	)		(0.31	)		(0.86	)		(0.84	)		(0.66	)
Net asset value at end of period		17.76			16.86			16.35			14.51			13.72			21.10
Total return (%)		8.19	1		4.77			15.00			13.09			(32.14	)		13.83
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		0.35	3		0.35			0.35			0.35			0.35			0.35
Gross operating expenses2		0.38	3		0.38			0.37			0.51			0.56			0.55
Net investment income (loss)		3.67	3		1.46			1.43			3.31			2.10			2.07
Portfolio turnover rate		7	1		17			14			23			10			4
Net assets, end of period ($ x 1,000,000)		108			97			88			84			94			138

* Unaudited.

¹ Not annualized.

² The expenses incurred by the underlying funds in which the portfolio invests are not included in this ratio.

³ Annualized.

16 See financial notes

 Schwab MarketTrack Growth Portfolio

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.2%	Other Investment Companies		495,016,343		662,517,621
	3	.7%	Short-Term Investments		25,641,698		25,641,698
	99	.9%	Total Investments		520,658,041		688,159,319
	0	.1%	Other Assets and Liabilities, Net				501,218
	100	.0%	Total Net Assets				688,660,537

	Number		Value
Security	of Shares		($)
Other Investment Companies 96.2% of net assets
Equity Funds 80.3%
International 19.6%
Schwab International Index Fund (a)		8,482,461		135,125,602
Large-Cap 40.8%
Schwab S&P 500 Index Fund (a)		12,829,122		280,829,481
Small-Cap 19.9%
Schwab Small-Cap Index Fund (a)		6,505,443		136,874,529
				552,829,612
Fixed-Income Fund 14.9%
Intermediate-Term Bond 14.9%
Schwab Total Bond Market Fund (a)		10,659,147		102,647,585
Money Market Fund 1.0%
Schwab Value Advantage Money Fund, Institutional Prime Shares (a)		7,040,424		7,040,424
Total Other Investment Companies
(Cost $495,016,343)				662,517,621
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 3.7% of net assets
Time Deposits 3.7%
Citibank
0.03%, 05/01/12		4,884,048		4,884,048
Bank of America
0.03%, 05/01/12		20,757,650		20,757,650
Total Short-Term Investments
(Cost $25,641,698)				25,641,698
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $526,436,815 and the unrealized appreciation and depreciation were $161,722,504 and ($0), respectively, with a net unrealized appreciation of $161,722,504.

(a) Issuer is affiliated with the fund’s adviser.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$662,517,621		$—		$—		$662,517,621
Short-Term Investments(a)		—		25,641,698		—		25,641,698
Total		$662,517,621		$25,641,698		$—		$688,159,319

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 17

 Schwab MarketTrack Growth Portfolio

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $495,016,343)		$662,517,621
Investments in unaffiliated issuers, at value (cost $25,641,698)	+	25,641,698
Total investments, at value (cost $520,658,041)		688,159,319
Receivables:
Investments sold		450,000
Fund shares sold		592,112
Dividends		227,550
Interest		21
Prepaid expenses	+	11,254
Total assets		689,440,256
Liabilities
Payables:
Investments bought		221,135
Investment adviser and administrator fees		12,048
Shareholder service fees		13,486
Fund shares redeemed		447,388
Accrued expenses	+	85,662
Total liabilities		779,719
Net Assets
Total assets		689,440,256
Total liabilities	−	779,719
Net assets		$688,660,537
Net Assets by Source
Capital received from investors		552,358,106
Distributions in excess of net investment income		(4,028,380	)
Net realized capital losses		(27,170,467	)
Net unrealized capital gains		167,501,278
Net Asset Value (NAV) by Shares Class

			Shares
Share Class	Net Assets	÷	Outstanding	=	NAV
Investor Shares	$580,516,637		32,678,667			$17.76
P Shares	$108,143,900		6,090,704			$17.76

18 See financial notes

 Schwab MarketTrack Growth Portfolio

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$13,935,272
Interest	+	1,514
Total investment income		13,936,786
Expenses
Investment adviser and administrator fees		771,676
Shareholder service fees:
Investor Shares		697,939
P Shares		52,027
Shareholder reports		32,099
Transfer agent fees		24,880
Professional fees		21,529
Registration fees		16,064
Portfolio accounting fees		13,575
Custodian fees		7,983
Trustees’ fees		6,073
Other expenses	+	41,428
Total expenses		1,685,273
Expense reduction by CSIM and its affiliates	−	85,783
Net expenses	−	1,599,490
Net investment income		12,337,296
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		7,389,424
Net realized gains on sales of affiliated underlying funds		2,869,734
Net realized gains on unaffiliated investments	+	831
Net realized gains		10,259,989
Net unrealized gains on affiliated underlying funds	+	30,547,080
Net realized and unrealized gains		40,807,069
Increase in net assets resulting from operations		$53,144,365

See financial notes 19

 Schwab MarketTrack Growth Portfolio

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$12,337,296			$9,458,447
Net realized gains		10,259,989			3,584,842
Net unrealized gains	+	30,547,080			16,466,332
Increase in net assets from operations		53,144,365			29,509,621
Distributions to Shareholders
Distributions from net investment income
Investor Shares		(13,718,858	)		(8,214,913	)
P Shares	+	(2,646,818	)		(1,545,531	)
Total distributions from net investment income		($16,365,676	)		($9,760,444	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares Sold
Investor Shares			1,796,059		$30,830,799			4,827,264		$82,645,614
P Shares			891,852		14,956,788			1,047,316		17,774,937
Total shares sold			2,687,911		$45,787,587			5,874,580		$100,420,551
Shares Reinvested
Investor Shares			797,109		$13,048,670			462,317		$7,831,643
P Shares	+		161,786		2,646,818			91,343		1,545,531
Total shares reinvested			958,895		$15,695,488			553,660		$9,377,174
Shares Redeemed
Investor Shares			(3,233,143	)	($55,655,936	)		(5,542,830	)	($94,754,492	)
P Shares	+		(700,883	)	(12,181,324	)		(808,713	)	(13,850,276	)
Total shares redeemed			(3,934,026	)	($67,837,260	)		(6,351,543	)	($108,604,768	)
Net transactions in fund shares			(287,220	)	($6,354,185	)		76,697		$1,192,957
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			39,056,591		$658,236,033			38,979,894		$637,293,899
Total increase or decrease	+		(287,220	)	30,424,504			76,697		20,942,134
End of period			38,769,371		$688,660,537			39,056,591		$658,236,033
Distributions in excess of net investment income					($4,028,380	)				$—

20 See financial notes

Schwab MarketTrack Balanced Portfolio™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		15.41			14.96			13.54			12.74			18.13			17.04
Income (loss) from investment operations:
Net investment income (loss)		0.26			0.25			0.23			0.38			0.42			0.47
Net realized and unrealized gains (losses)		0.74			0.46			1.50			1.11			(5.06	)		1.41
Total from investment operations		1.00			0.71			1.73			1.49			(4.64	)		1.88
Less distributions:
Distributions from net investment income		(0.38	)		(0.26	)		(0.31	)		(0.44	)		(0.48	)		(0.50	)
Distributions from net realized gains		—			—			—			(0.25	)		(0.27	)		(0.29	)
Total distributions		(0.38	)		(0.26	)		(0.31	)		(0.69	)		(0.75	)		(0.79	)
Net asset value at end of period		16.03			15.41			14.96			13.54			12.74			18.13
Total return (%)		6.62	1		4.80			12.92			12.41			(26.59	)		11.38
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		0.50	3		0.50			0.50			0.50			0.50			0.50
Gross operating expenses2		0.53	3		0.52			0.52			0.66			0.72			0.72
Net investment income (loss)		3.33	3		1.64			1.59			3.09			2.57			2.65
Portfolio turnover rate		10	1		25			22			30			17			6
Net assets, end of period ($ x 1,000,000)		434			432			450			434			405			598

* Unaudited.

¹ Not annualized

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized

See financial notes 21

 Schwab MarketTrack Balanced Portfolio

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.3%	Other Investment Companies		312,194,393		417,670,002
	3	.7%	Short-Term Investments		16,050,649		16,050,649
	100	.0%	Total Investments		328,245,042		433,720,651
	0	.0%	Other Assets and Liabilities, Net				64,337
	100	.0%	Total Net Assets				433,784,988

	Number		Value
Security	of Shares		($)
Other Investment Companies 96.3% of net assets
Equity Funds 60.5%
International 14.8%
Schwab International Index Fund (a)		4,025,776		64,130,618
Large-Cap 30.7%
Schwab S&P 500 Index Fund (a)		6,075,841		133,000,157
Small-Cap 15.0%
Schwab Small-Cap Index Fund (a)		3,103,118		65,289,604
				262,420,379
Fixed-Income Fund 34.8%
Intermediate-Term Bond 34.8%
Schwab Total Bond Market Fund (a)		15,651,419		150,723,169
Money Market Fund 1.0%
Schwab Value Advantage Money Fund, Institutional Prime Shares (a)		4,526,454		4,526,454
Total Other Investment Companies
(Cost $312,194,393)				417,670,002
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 3.7% of net assets
Time Deposits 3.7%
Bank of America
0.03%, 05/01/12		13,057,593		13,057,593
Citibank
0.03%, 05/01/12		2,993,056		2,993,056
Total Short-Term Investments
(Cost $16,050,649)				16,050,649
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $336,330,471 and the unrealized appreciation and depreciation were $97,390,180 and ($0), respectively, with a net unrealized appreciation of $97,390,180.

(a) Issuer is affiliated with the fund’s adviser.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$417,670,002		$—		$—		$417,670,002
Short-Term Investments(a)		—		16,050,649		—		16,050,649
Total		$417,670,002		$16,050,649		$—		$433,720,651

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

22 See financial notes

 Schwab MarketTrack Balanced Portfolio

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $312,194,393)		$417,670,002
Investments in unaffiliated issuers, at value (cost $16,050,649)	+	16,050,649
Total investments, at value (cost $328,245,042)		433,720,651
Receivables:
Fund shares sold		368,296
Dividends		336,160
Interest		13
Prepaid expenses	+	8,087
Total assets		434,433,207
Liabilities
Payables:
Investments bought		326,802
Investment adviser and administrator fees		7,367
Shareholder service fees		9,403
Fund shares redeemed		256,332
Accrued expenses	+	48,315
Total liabilities		648,219
Net Assets
Total assets		434,433,207
Total liabilities	−	648,219
Net assets		$433,784,988
Net Assets by Source
Capital received from investors		346,777,061
Distributions in excess of net investment income		(1,289,682	)
Net realized capital losses		(17,178,000	)
Net unrealized capital gains		105,475,609
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$433,784,988		27,062,044			$16.03

See financial notes 23

 Schwab MarketTrack Balanced Portfolio

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$8,215,949
Interest	+	845
Total investment income		8,216,794
Expenses
Investment adviser and administrator fees		493,514
Shareholder service fees		528,597
Shareholder reports		19,332
Professional fees		19,107
Transfer agent fees		13,842
Registration fees		12,128
Portfolio accounting fees		11,303
Custodian fees		6,165
Trustees’ fees		4,340
Other expenses	+	23,071
Total expenses		1,131,399
Expense reduction by CSIM and its affiliates	−	58,542
Net expenses	−	1,072,857
Net investment income		7,143,937
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		3,605,512
Net realized gains on sales of affiliated underlying funds		2,910,204
Net realized gains on unaffiliated investments	+	540
Net realized gains		6,516,256
Net unrealized gains on affiliated underlying funds	+	13,952,293
Net realized and unrealized gains		20,468,549
Increase in net assets resulting from operations		$27,612,486

24 See financial notes

 Schwab MarketTrack Balanced Portfolio

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$7,143,937			$7,417,603
Net realized gains		6,516,256			4,873,465
Net unrealized gains	+	13,952,293			8,580,707
Increase in net assets from operations		27,612,486			20,871,775
Distributions to Shareholders
Distributions from net investment income		($10,347,778	)		($7,870,626	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			1,738,754		$27,340,156			4,114,207		$63,537,948
Shares reinvested			647,049		9,725,147			488,528		7,420,735
Shares redeemed	+		(3,380,439	)	(52,879,156	)		(6,613,253	)	(101,539,037	)
Net transactions in fund shares			(994,636	)	($15,813,853	)		(2,010,518	)	($30,580,354	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			28,056,680		$432,334,133			30,067,198		$449,913,338
Total increase or decrease	+		(994,636	)	1,450,855			(2,010,518	)	(17,579,205	)
End of period			27,062,044		$433,784,988			28,056,680		$432,334,133
(Distributions in excess of net investment income)/Net investment income not yet distributed					($1,289,682	)				$1,914,159

See financial notes 25

Schwab MarketTrack Conservative Portfolio™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		13.59			13.22			12.15			11.34			14.90			14.33
Income (loss) from investment operations:
Net investment income (loss)		0.20			0.25			0.24			0.37			0.43			0.49
Net realized and unrealized gains (losses)		0.47			0.37			1.08			0.91			(3.40	)		0.78
Total from investment operations		0.67			0.62			1.32			1.28			(2.97	)		1.27
Less distributions:
Distributions from net investment income		(0.24	)		(0.25	)		(0.25	)		(0.38	)		(0.46	)		(0.51	)
Distributions from net realized gains		—			—			—			(0.09	)		(0.13	)		(0.19	)
Total distributions		(0.24	)		(0.25	)		(0.25	)		(0.47	)		(0.59	)		(0.70	)
Net asset value at end of period		14.02			13.59			13.22			12.15			11.34			14.90
Total return (%)		5.01	1		4.72			10.98			11.72			(20.59	)		9.12
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses2		0.50	3		0.50			0.50			0.50			0.50			0.50
Gross operating expenses2		0.55	3		0.55			0.56			0.68			0.74			0.73
Net investment income (loss)		2.96	3		1.84			1.93			3.31			3.12			3.37
Portfolio turnover rate		16	1		30			25			25			16			4
Net assets, end of period ($ x 1,000,000)		193			198			194			181			182			252

* Unaudited.

¹ Not annualized

² The expenses incurred by underlying funds in which the fund invests are not included in this ratio.

³ Annualized

26 See financial notes

 Schwab MarketTrack Conservative Portfolio

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.3%	Other Investment Companies		148,659,841		185,323,712
	3	.7%	Short-Term Investments		7,179,222		7,179,222
	100	.0%	Total Investments		155,839,063		192,502,934
	0	.0%	Other Assets and Liabilities, Net				70,853
	100	.0%	Total Net Assets				192,573,787

	Number		Value
Security	of Shares		($)
Other Investment Companies 96.3% of net assets
Equity Funds 40.4%
International 9.8%
Schwab International Index Fund (a)		1,180,548		18,806,128
Large-Cap 20.6%
Schwab S&P 500 Index Fund (a)		1,814,853		39,727,132
Small-Cap 10.0%
Schwab Small-Cap Index Fund (a)		911,429		19,176,463
				77,709,723
Fixed-Income Fund 54.9%
Intermediate-Term Bond 54.9%
Schwab Total Bond Market Fund (a)		10,968,809		105,629,632
Money Market Fund 1.0%
Schwab Value Advantage Money Fund, Institutional Prime Shares (a)		1,984,357		1,984,357
Total Other Investment Companies
(Cost $148,659,841)				185,323,712
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 3.7% of net assets
Time Deposits 3.7%
Bank of America
0.03%, 05/01/12		5,791,398		5,791,398
Citibank
0.03%, 05/01/12		1,387,824		1,387,824
Total Short-Term Investments
(Cost $7,179,222)				7,179,222
End of Investments.

At 04/30/12 the tax basis cost of the fund’s investments was $163,427,567 and the unrealized appreciation and depreciation were $29,075,367 and ($0), respectively, with a net unrealized appreciation of $29,075,367.

(a) Issuer is affiliated with the fund’s adviser.

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$185,323,712		$—		$—		$185,323,712
Short-Term Investments(a)		—		7,179,222		—		7,179,222
Total		$185,323,712		$7,179,222		$—		$192,502,934

*	The fund had no Other Financial Instruments.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

See financial notes 27

 Schwab MarketTrack Conservative Portfolio

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments in affiliated underlying funds, at value (cost $148,659,841)		$185,323,712
Investments in unaffiliated issuers, at value (cost $7,179,222)	+	7,179,222
Total investments, at value (cost $155,839,063)		192,502,934
Receivables:
Investments sold		150,000
Dividends		237,956
Fund shares sold		109,546
Interest		6
Prepaid expenses	+	3,374
Total assets		193,003,816
Liabilities
Payables:
Investments bought		231,359
Investment adviser and administrator fees		2,850
Shareholder service fees		3,877
Fund shares redeemed		150,870
Accrued expenses	+	41,073
Total liabilities		430,029
Net Assets
Total assets		193,003,816
Total liabilities	−	430,029
Net assets		$192,573,787
Net Assets by Source
Capital received from investors		173,164,006
Distributions in excess of net investment income		(439,063	)
Net realized capital losses		(16,815,027	)
Net unrealized capital gains		36,663,871
Net Asset Value (NAV)

		Shares
Net Assets	÷	Outstanding	=	NAV
$192,573,787		13,736,966			$14.02

28 See financial notes

 Schwab MarketTrack Conservative Portfolio

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends received from affiliated underlying funds		$3,506,481
Interest	+	526
Total investment income		3,507,007
Expenses
Investment adviser and administrator fees		233,422
Shareholder service fees		248,797
Professional fees		18,858
Registration fees		11,967
Transfer agent fees		10,554
Shareholder reports		9,352
Portfolio accounting fees		8,856
Custodian fees		4,069
Trustees’ fees		3,517
Interest expense		32
Other expenses	+	7,501
Total expenses		556,925
Expense reduction by CSIM and its affiliates	−	49,454
Net expenses	−	507,471
Net investment income		2,999,536
Realized and Unrealized Gains (Losses)
Realized capital gain distributions received from affiliated underlying funds		1,160,780
Net realized gains on sales of affiliated underlying funds		1,623,036
Net realized gains on unaffiliated investments	+	76
Net realized gains		2,783,892
Net unrealized gains on affiliated underlying funds	+	4,404,900
Net realized and unrealized gains		7,188,792
Increase in net assets resulting from operations		$10,188,328

See financial notes 29

 Schwab MarketTrack Conservative Portfolio

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$2,999,536			$3,594,414
Net realized gains		2,783,892			1,473,232
Net unrealized gains	+	4,404,900			3,857,853
Increase in net assets from operations		10,188,328			8,925,499
Distributions to Shareholders
Distributions from net investment income		($3,613,819	)		($3,583,353	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares sold			2,401,126		$32,635,271			3,029,561		$40,809,530
Shares reinvested			251,074		3,383,473			250,464		3,340,890
Shares redeemed	+		(3,490,497	)	(48,075,988	)		(3,372,192	)	(45,344,064	)
Net transactions in fund shares			(838,297	)	($12,057,244	)		(92,167	)	($1,193,644	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			14,575,263		$198,056,522			14,667,430		$193,908,020
Total increase or decrease	+		(838,297	)	(5,482,735	)		(92,167	)	4,148,502
End of period			13,736,966		$192,573,787			14,575,263		$198,056,522
(Distributions in excess of net investment income)/Net investment income not yet distributed					($439,063	)				$175,220

30 See financial notes

 Schwab MarketTrack Portfolios

Financial Notes, unaudited

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 per share (“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. The hierarchy gives the highest priority to valuations based upon unadjusted quoted prices in active markets for identical assets

31

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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 funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

(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.

32 

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

(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.

33

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

Affiliated Fund Risk. The investment adviser’s authority to select and substitute underlying funds from a variety of affiliated and unaffiliated mutual funds may create a conflict of interest because the fees paid to it by some underlying funds are higher than the fees paid by other underlying funds. However, the portfolio manager is a fiduciary to the portfolio and is legally obligated to act in the portfolio’s best interests when selecting underlying funds, without taking fees into consideration.

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 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. Certain underlying funds seek to track the performance of their benchmark indices, although they 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 - bonds or large-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.

34 

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

3. Risk Factors (continued):

•  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.

•  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,

35

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (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
	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

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 April 30, 2012, 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%		9.6%			4.6%			1.3%
Large-Cap:
Schwab S&P 500 Index Fund		1.8%		2.3%			1.1%			0.3%
Small-Cap:
Schwab Small-Cap Index Fund		7.4%		8.3%			4.0%			1.2%
Fixed-Income Funds:
Intermediate-Term Bond:
Schwab Total Bond Market Fund		—%		10.5%			15.3%			10.8%
Money Market Fund:
Schwab Value Advantage Money Fund		—%		0.0%	*		0.0%	*		0.0%	*

* Less than 0.05%

36 

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Below is a summary of the funds’ transactions with their affiliated underlying funds during the period ended April 30, 2012.

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		11/01/11			11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12			to 04/30/12
Equity Funds:
International:
Schwab International Index Fund		8,806,065		796,880		(537,919	)		9,065,026		$144,405,867		($307,897	)		$5,384,670
Large-Cap:
Schwab S&P 500 Index Fund		10,805,051		340,989		(1,015,732	)		10,130,308		221,752,452		$1,124,324			4,166,405
Small-Cap:
Schwab Small-Cap Index Fund		5,814,864		517,366		(546,232	)		5,785,998		121,737,398		730,020			8,544,315
Total											$487,895,717		$1,546,447			$18,095,390

Schwab MarketTrack Growth Portfolio:
	Balance							Balance				Realized		Distributions
	of Shares							of Shares		Market		Gains (Losses)		Received*
	Held at		Gross		Gross			Held at		Value at		11/01/11		11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12		to 04/30/12
Equity Funds:
International:
Schwab International Index Fund		8,089,359		1,119,437		(726,335	)		8,482,461		$135,125,602		$114,228		$5,060,757
Large-Cap:
Schwab S&P 500 Index Fund		13,296,624		466,601		(934,103	)		12,829,122		280,829,481		1,569,991		5,247,785
Small-Cap:
Schwab Small-Cap Index Fund		6,450,906		701,388		(646,851	)		6,505,443		136,874,529		1,139,814		9,631,517
Fixed-Income Fund:
Intermediate-Term Bond:
Schwab Total Bond Market Fund		10,461,993		1,160,377		(963,223	)		10,659,147		102,647,585		45,701		1,381,813
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		25,037,593		2,831		(18,000,000	)		7,040,424		7,040,424		—		2,824
Total											$662,517,621		$2,869,734		$21,324,696

37

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

Schwab MarketTrack Balanced Portfolio:
	Balance							Balance				Realized		Distributions
	of Shares							of Shares		Market		Gains (Losses)		Received*
	Held at		Gross		Gross			Held at		Value at		11/01/11		11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12		to 04/30/12
Equity Funds:
International:
Schwab International Index Fund		3,955,647		598,949		(528,820	)		4,025,776		$64,130,618		$262,393		$2,482,753
Large-Cap:
Schwab S&P 500 Index Fund		6,549,863		404,689		(878,711	)		6,075,841		133,000,157		1,804,349		2,564,792
Small-Cap:
Schwab Small-Cap Index Fund		3,148,403		493,691		(538,976	)		3,103,118		65,289,604		763,151		4,699,494
Fixed-Income Fund:
Intermediate-Term Bond:
Schwab Total Bond Market Fund		16,055,272		1,508,657		(1,912,510	)		15,651,419		150,723,169		80,311		2,072,525
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		17,024,549		1,905		(12,500,000	)		4,526,454		4,526,454		—		1,897
Total											$417,670,002		$2,910,204		$11,821,461

Schwab MarketTrack Conservative Portfolio:
	Balance							Balance				Realized		Distributions
	of Shares							of Shares		Market		Gains (Losses)		Received*
	Held at		Gross		Gross			Held at		Value at		11/01/11		11/01/11
Underlying Funds	10/31/11		Additions		Sales			04/30/12		04/30/12		to 04/30/12		to 04/30/12
Equity Funds:
International:
Schwab International Index Fund		1,197,306		243,532		(260,290	)		1,180,548		$18,806,128		$162,727		$791,725
Large-Cap:
Schwab S&P 500 Index Fund		1,989,652		239,650		(414,449	)		1,814,853		39,727,132		1,076,961		820,490
Small-Cap:
Schwab Small-Cap Index Fund		957,292		176,055		(221,918	)		911,429		19,176,463		364,340		1,512,983
Fixed-Income Fund:
Intermediate-Term Bond:
Schwab Total Bond Market Fund		11,540,635		2,078,649		(2,650,475	)		10,968,809		105,629,632		19,008		1,541,263
Money Market Fund:
Schwab Value Advantage Money Fund, Institutional Prime Shares		7,333,553		804		(5,350,000	)		1,984,357		1,984,357		—		800
Total											$185,323,712		$1,623,036		$4,667,261

* Distributions received include distributions from net investment income and capital gains from the underlying funds.

38 

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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 April 30, 2012, 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.

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 April 30, 2012, 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		$28,255,390		$40,309,999
Schwab MarketTrack Growth Portfolio		49,874,074		71,314,995
Schwab MarketTrack Balanced Portfolio		40,713,249		67,985,000
Schwab MarketTrack Conservative Portfolio		31,506,470		47,930,000

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Schwab MarketTrack All Equity Portfolio		$6,139		$100,836
Schwab MarketTrack Growth Portfolio		3,781		9,915
Schwab MarketTrack Balanced Portfolio		1,978		5,707
Schwab MarketTrack Conservative Portfolio		3,910		10,851

39

 Schwab MarketTrack Portfolios

Financial Notes, unaudited (continued)

10. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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

* 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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

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.

40 

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

41

 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).	75	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.	75	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.	92	None

42 

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

43

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 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.

44 

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 Fund^tm

Schwab Dividend Equity Fund^tm

Schwab Large-Cap Growth Fund^tm

Schwab Small-Cap Equity Fund^tm

Schwab Hedged Equity Fund^tm

Schwab Financial Services Fund^tm

Schwab Health Care Fund^tm

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 Fund^tm

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 Fund^tm

Schwab MarketTrack All Equity Portfolio^tm

Schwab MarketTrack Growth Portfolio^tm

Schwab MarketTrack Balanced Portfolio^tm

Schwab MarketTrack Conservative Portfolio^tm

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 Fund^tm

Schwab^® Premier Income Fund

Schwab Total Bond Market Fund^tm

Schwab GNMA Fund^tm

Schwab^® Treasury Inflation Protected Securities Fund

Schwab Tax-Free Bond Fund^tm

Schwab California Tax-Free Bond Fund^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved.

Member SIPC^®

Printed on recycled paper.

MFR13559-15

Prospectus Supplement and

Semiannual Report Enclosed

Semiannual report dated April 30, 2012, enclosed.

COMMAND PERFORMANCE^TM

Laudus MarketMasters Funds^tm

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This supplement is not part of the shareholder report.

SCHWAB CAPITAL TRUST

(the “Trust”)

Laudus MarketMasters Funds

Laudus Small-Cap MarketMasters Fund^tm

Laudus International MarketMasters Fund^tm

(each a “fund”)

Supplement dated June 6, 2012 to the
Prospectus dated February 28, 2012

This supplement provides new and additional information beyond that contained in
the Prospectus and should be read in conjunction with the Prospectus.

The Prospectus is being revised to reflect the following changes.

1.  Reduction of the Net Operating Expense Limit for the Laudus MarketMasters Funds

Effective June 6, 2012, the contractual expense limitation of the investment adviser and its affiliates on the net annual operating expenses of each share class of the Laudus MarketMasters Funds will be reduced. Accordingly, the following changes are being made.

On page 1, for the Laudus Small-Cap MarketMasters Fund, the “Shareholder fees” table, the “Annual fund operating expenses” table, and the “Expenses on a $10,000 investment” table are deleted and replaced in their entirety with the following:

	Investor			Select
	Shares			Shares®
Shareholder fees (fees paid directly from your investment)
Redemption fee (as a % of the amount sold or exchanged within 30 days of purchase)		2.00			2.00
Annual fund operating expenses (expenses that you pay each year as a % of the value of your investment)
Management fees		1.17			1.17
Distribution (12b-1) fees		None			None
Other expenses1		0.41			0.34
Acquired fund fees and expenses (AFFE)2		0.01			0.01
Total annual fund operating expenses2		1.59			1.52
Less expense reduction		(0.23	)		(0.31	)
Total annual fund operating expenses (including AFFE) after expense reduction2,3		1.36			1.21

1	“Other expenses” have been restated to reflect current fees and expenses of the fund.
2	The total fund operating expenses in the fee table may differ from the expense ratios in the fund’s “Financial highlights” because the financial highlights include only the fund’s direct operating expenses and do not include acquired fund fees and expenses (AFFE), which reflect the estimated amount of fees and expenses incurred indirectly by the fund through its investments in other investment companies during its prior fiscal year.
3	The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes, and certain non-routine expenses) of the Investor Shares and Select Shares to 1.35% and 1.20%, respectively, for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the fund’s Board of Trustees. This agreement is limited to the fund’s direct operating expenses and does not apply to AFFE.

 Expenses on a $10,000 investment

	1 year		3 years		5 years		10 years
Investor Shares	$	138	$	431	$	745	$	1,635
Select Shares	$	123	$	384	$	665	$	1,466

On page 5, for the Laudus International MarketMasters Fund, the “Shareholder fees” table, the “Annual fund operating expenses” table, and the “Expenses on a $10,000 investment” table are deleted and replaced in their entirety with the following:

	Investor			Select
	Shares			Shares®
Shareholder fees (fees paid directly from your investment)
Redemption fee (as a % of the amount sold or exchanged within 30 days of purchase)		2.00			2.00
Annual fund operating expenses (expenses that you pay each year as a % of the value of your investment)
Management fees		1.27			1.27
Distribution (12b-1) fees		None			None
Other expenses		0.33			0.20
Acquired fund fees and expenses (AFFE)1		0.01			0.01
Total annual fund operating expenses1		1.61			1.48
Less expense reduction		(0.20	)		(0.22	)
Total annual fund operating expenses (including AFFE) after expense reduction1,2		1.41			1.26

1

The total fund operating expenses in the fee table may differ from the expense ratios in the fund’s “Financial highlights” because the financial highlights include only the fund’s direct operating expenses and do not include acquired fund fees and expenses (AFFE), which reflect the estimated amount of fees and expenses incurred indirectly by the fund through its investments in other investment companies during its prior fiscal year.

2

The investment adviser and its affiliates have agreed to limit the total annual fund operating expenses (excluding interest, taxes, and certain non-routine expenses) of the Investor Shares and Select Shares to 1.40% and 1.25%, respectively, for so long as the investment adviser serves as the adviser to the fund. This agreement may only be amended or terminated with the approval of the fund’s Board of Trustees. This agreement is limited to the fund’s direct operating expenses and does not apply to AFFE.

 Expenses on a $10,000 investment

	1 year		3 years		5 years		10 years
Investor Shares	$	144	$	446	$	771	$	1,691
Select Shares	$	128	$	400	$	692	$	1,523

2.  Revisions to the investment minimums language

On page 4, the last sentence of the third paragraph under “Purchase and sale of fund shares” is deleted and replaced in its entirety with the following:

These minimums may be waived for certain investors or in the fund’s sole discretion.

On page 8, the last sentence of the third paragraph under “Purchase and sale of fund shares” is deleted and replaced in its entirety with the following:

These minimums may be waived for certain investors or in the fund’s sole discretion.

On page 27, the sixth paragraph is deleted and replaced in its entirety with the following:

These minimums may be waived for certain retirement plans and plan participants, and for certain investment programs, or in a fund’s sole discretion. Investment advisers may aggregate investments across client accounts in order to reach the Select Shares initial minimum investment and minimum balance requirements.

PLEASE RETAIN THIS SUPPLEMENT FOR FUTURE REFERENCE

REG68224 - 00 (06/12) ^© 2012 All Rights Reserved

This wrapper is not part of the shareholder report.

Semiannual Report
April 30, 2012

COMMAND PERFORMANCE^TM

Laudus MarketMasters Funds^tm

Laudus Small-Cap MarketMasters Fund^tm

Laudus International MarketMasters Fund^tm

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™	28
Financial Notes	57
Trustees and Officers	67
Glossary	70

Fund investment adviser: Charles Schwab Investment Management, Inc. (CSIM).
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 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)	9.42%
Select Shares® (Ticker Symbol: SWMSX)	9.56%
Russell 2000® Index*	11.02%
Fund Category: Morningstar Small-Cap Growth	11.58%
Performance Details	pages 6-7
Laudus International MarketMasters Fundtm
Investor Shares1 (Ticker Symbol: SWOIX)	7.57%
Select Shares®1 (Ticker Symbol: SWMIX)	7.65%
MSCI EAFE Index®**	2.71%
Fund Category: Morningstar Foreign Large-Cap Growth	6.55%
Performance Details	pages 8-9

Minimum Initial Investment2
Investor Shares	$	100
Select Shares®	$	50,000

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.

Fund expenses may have been partially absorbed by CSIM and its affiliates. Without these reductions, a fund’s total return would have been lower. Performance does not reflect the deduction of taxes that a shareholder would pay on fund distributions or on the redemption of fund shares.

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.

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.

*	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 MSCI 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 detail and eligibility requirements.

2 Laudus MarketMasters Funds

From the President

Marie Chandoha is President and CEO of Charles Schwab Investment Management, Inc. and the funds covered in this report.

Dear Shareholder,

As President and CEO of Charles Schwab Investment Management, Inc., I’d like to thank you for trusting us to help you meet your investment objectives, and for reading this important report concerning the Laudus MarketMasters Funds.

For the six months ended April 30, 2012, investors became more optimistic as conditions generally improved. Economic growth was mixed across the globe, while financial markets grappled with early period concerns regarding the euro zone’s sovereign debt crisis. In an effort to restore financial market stability, the European Central Bank worked closely with the Federal Reserve (Fed) to ensure that the markets were sufficiently liquid. Backed by the support of the European Union, Greece restructured its debt by early 2012. In the U.S., the unemployment rate dropped to 8.1% by April 2012, tentative signs emerged that the housing market became healthier, and the Fed continued to support the economy through a variety of operations.

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period. U.S. stocks performed particularly well, with the S&P 500 Index returning 12.8% as investors favored the relative stability of U.S. markets. Stock markets in other countries produced modestly positive returns overall in U.S. dollar terms, beginning to recover early in 2012 in tandem with U.S. equities. U.S. bonds turned in modest performances: the Barclays U.S. Aggregate Bond Index returned 2.4%. Money market securities produced flat returns, while global bonds finished slightly negative overall in U.S. dollar terms.

 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.

	12.77%	S&P 500® Index: measures U.S. large-cap stocks
	11.02%	Russell 2000® Index: measures U.S. small-cap stocks
	2.71%	MSCI EAFE® Index: measures (in U.S. dollars) large-cap stocks in Europe, Australasia and the Far East
	2.44%	Barclays U.S. Aggregate Bond Index: measures the U.S. bond market
	0.02%	Three-Month U.S. Treasury Bills (T-bills): measures short-term U.S. Treasury obligations

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 CSIM.

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

Stocks rebounded as investor optimism rose, leading equities to outperform bonds and money market securities for the report period.

In December 2011, Mellon Capital Management Corp. (Mellon Capital) was hired as a new investment manager for the two Laudus MarketMasters Funds, and Mellon Capital began managing fund assets in January 2012. In managing the assets of the Laudus Small-Cap MarketMasters Fund, Mellon Capital seeks to track the returns of the Russell 2000 Index. For the Laudus International MarketMasters Fund, Mellon Capital seeks to track the returns of the MSCI EAFE Index.

Thank you for investing in the Laudus MarketMasters Funds. We encourage you to review your investment portfolio regularly to ensure that it meets your current financial plan. For answers to questions 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,

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™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years			Since Inception
Investor Shares (9/16/97)		9.42	%		-7.21	%		0.38	%		5.28	%	5.16%
Select Shares® (6/9/04)		9.56	%		-7.06	%		0.54	%		n/a		4.75%
Russell 2000® Index		11.02	%		-4.25	%		1.45	%		6.19	%	(9/16/97) 5.67%
													(6/9/04) 5.86%
Fund Category: Morningstar Small-Cap Growth		11.58	%		-4.17	%		2.58	%		5.95	%	(9/16/97) 6.02%
													(6/9/04) 6.33%

Fund Expense Ratios³: Investor Shares: Net 1.47%; Gross 1.52% / Select Shares: Net 1.32%; Gross 1.46%

 Investment Managers and Allocations⁴

		% of
Investment Managers	Investment Style	Net Assets
TAMRO Capital Partners LLC	Small-Cap Blend		61.9	%
Neuberger Berman Management LLC	Small-Cap Growth		25.3	%
Mellon Capital Management Corp.	Small-Cap Blend		9.2	%
Cash and other assets	—		3.6	%

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and 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 dated February 28, 2012. Includes acquired fund fees and expenses incurred indirectly by the fund through its investments in other investment companies. The annualized weighted average expense ratio of these investment companies was 0.01%. 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. Effective June 6, 2012, the contractual expense limitation was reduced. For more information, refer to the enclosed prospectus supplement dated June 6, 2012.
4	For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus.

6 Laudus MarketMasters Funds

 Laudus Small-Cap MarketMasters Fund™

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	1,290
Weighted Average Market Cap ($ x 1,000,000)	$1,923
Price/Earnings Ratio (P/E)	34.1
Price/Book Ratio (P/B)	2.4
Portfolio Turnover Rate1	7%

 Sector Weightings % of Investments

Consumer Discretionary	17.9%
Industrials	15.7%
Financials	14.8%
Health Care	14.6%
Information Technology	14.0%
Energy	7.5%
Consumer Staples	5.2%
Materials	2.7%
Utilities	0.3%
Telecommunication Services	0.3%
Other	7.0%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Colfax Corp.	1.8%
The Advisory Board Co.	1.7%
Coinstar, Inc.	1.7%
CommVault Systems, Inc.	1.6%
athenahealth, Inc.	1.6%
Westlake Chemical Corp.	1.6%
LaSalle Hotel Properties	1.6%
Waddell & Reed Financial, Inc., Class A	1.5%
UMB Financial Corp.	1.5%
Analogic Corp.	1.5%
Total	16.1%

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	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

Laudus MarketMasters Funds 7

Laudus International MarketMasters Fund™

Performance and Fund Facts as of 04/30/12

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.

 Average Annual Total Returns^1,2

Fund and Inception Date	6 Months			1 Year			5 Years			10 Years			Since Inception
Investor Shares (10/16/96)		7.57	%		-9.67	%		-0.47	%		8.18	%	8.59%
Select Shares® (4/2/04)		7.65	%		-9.55	%		-0.34	%		n/a		7.59%
MSCI EAFE Index®*		2.71	%		-12.38	%		-4.25	%		5.89	%	(10/16/96) 4.33%
													(4/2/04) 4.67%
Fund Category: Morningstar Foreign Large-Cap Growth		6.55	%		-9.12	%		-1.49	%		6.35	%	(10/16/96) 6.10%
													(4/2/04) 5.97%

Fund Expense Ratios³: Investor Shares: 1.61% / Select Shares: 1.48%

 Investment Managers and Allocations⁴

		% of
Investment Managers	Investment Style	Net Assets
American Century Investment Management, Inc.	International Small/Mid-Cap Growth		19.7	%
WHV Investment Management/Hirayama Investments, LLC	International Large-Cap Growth		10.2	%
Harris Associates L.P.	International Large-Cap Value		19.9	%
William Blair & Company, LLC	International Multi-Cap Growth		17.3	%
Mondrian Investment Partners Limited	International Small-Cap Value		21.5	%
Mellon Capital Management Corp.	International Blend		9.7	%
Cash and other assets	—		1.7	%

All total returns on this page assume dividends and distributions were reinvested. Index figures do not include trading and management costs, which would lower performance. Indices are unmanaged, and 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 fund’s performance relative to the index may be affected by fair-value pricing, see financial note 2 for more information.

*	The MSCI 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 dated February 28, 2012. Includes acquired fund fees and expenses incurred indirectly by the fund through its investments in other investment companies. The annualized weighted average expense ratio of these investment companies was 0.01%. For actual ratios during the period, refer to the financial highlights section of the financial statements. Effective June 6, 2012, the contractual expense limitation was reduced. For more information, refer to the enclosed prospectus supplement dated June 6, 2012.
4	For more information about each of the investment manager’s investment styles, refer to the fund’s prospectus.

8 Laudus MarketMasters Funds

 Laudus International MarketMasters Fund™

Performance and Fund Facts as of 04/30/12 continued

 Statistics

Number of Holdings	1,291
Weighted Average Market Cap ($ x 1,000,000)	$25,187
Price/Earnings Ratio (P/E)	20.2
Price/Book Ratio (P/B)	1.7
Portfolio Turnover Rate1	36%

 Sector Weightings % of Investments

Industrials	21.5%
Consumer Discretionary	14.5%
Financials	14.5%
Materials	12.3%
Information Technology	10.5%
Energy	7.6%
Consumer Staples	7.6%
Health Care	6.0%
Telecommunication Services	1.4%
Utilities	1.2%
Other	2.9%
Total	100.0%

 Top Equity Holdings % of Net Assets²

Croda International plc	1.1%
Rotork plc	1.0%
Nestle S.A. – Reg’d	0.9%
BNP Paribas S.A.	0.9%
SAP AG	0.8%
Diageo plc	0.8%
Credit Suisse Group AG – Reg’d	0.8%
Toyota Motor Corp.	0.8%
Christian Hansen Holding A/S	0.8%
Spectris plc	0.8%
Total	8.7%

 Country Weightings % of Investments

United Kingdom	20.6%
Japan	12.7%
Switzerland	8.4%
Germany	7.7%
France	6.7%
Canada	6.1%
Australia	4.7%
Netherlands	4.6%
Singapore	3.3%
United States	2.9%
Hong Kong	2.5%
Other Countries	19.8%
Total	100.0%

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.

1	Not annualized.
2	This list is not a recommendation of any security by the investment adviser.

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 November 1, 2011 and held through April 30, 2012.

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 11/1/11		at 4/30/12		11/1/11–4/30/12
Laudus Small-Cap MarketMasters Fundtm
Investor Shares
Actual Return		1.46%	$	1,000	$	1,094.20	$	7.60
Hypothetical 5% Return		1.46%	$	1,000	$	1,017.60	$	7.32
Select Shares
Actual Return		1.31%	$	1,000	$	1,095.60	$	6.83
Hypothetical 5% Return		1.31%	$	1,000	$	1,018.35	$	6.57
Laudus International MarketMasters Fundtm
Investor Shares
Actual Return		1.61%	$	1,000	$	1,075.70	$	8.31
Hypothetical 5% Return		1.61%	$	1,000	$	1,016.86	$	8.07
Select Shares
Actual Return		1.46%	$	1,000	$	1,076.50	$	7.54
Hypothetical 5% Return		1.46%	$	1,000	$	1,017.60	$	7.32

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

10 Laudus MarketMasters Funds

Laudus Small-Cap MarketMasters Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
Investor Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		11.99			11.52			9.40			8.78			13.74			14.20
Income (loss) from investment operations:
Net investment income (loss)		(0.05	)1		(0.09	)1		(0.08	)1		(0.05	)1		(0.04	)1		(0.08	)1
Net realized and unrealized gains (losses)		1.18			0.56			2.20			0.67			(4.59	)		1.81
Total from investment operations		1.13			0.47			2.12			0.62			(4.63	)		1.73
Less distributions:
Distributions from net investment income		—			—			—			(0.00	)2		—			—
Distributions from net realized gains		—			—			—			—			(0.33	)		(2.19	)
Total distributions		—			—			—			(0.00	)2		(0.33	)		(2.19	)
Net asset value at end of period		13.12			11.99			11.52			9.40			8.78			13.74
Total return (%)		9.42	3		4.08			22.55			7.10			(34.34	)		13.79
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.46	4		1.46			1.46			1.48	5		1.48			1.51	6
Gross operating expenses		1.58	4		1.51			1.50			1.50			1.48			1.59
Net investment income (loss)		(0.84	)4		(0.70	)		(0.72	)		(0.64	)		(0.38	)		(0.60	)
Portfolio turnover rate		7	3		95			78			129			134			83
Net assets, end of period ($ x 1,000,000)		63			62			68			64			64			99

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
Select Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		12.14			11.64			9.49			8.86			13.85			14.27
Income (loss) from investment operations:
Net investment income (loss)		(0.04	)1		(0.07	)1		(0.06	)1		(0.04	)1		(0.04	)1		(0.04	)1
Net realized and unrealized gains (losses)		1.20			0.57			2.21			0.68			(4.62	)		1.81
Total from investment operations		1.16			0.50			2.15			0.64			(4.66	)		1.77
Less distributions:
Distributions from net investment income		—			—			—			(0.01	)		—			—
Distributions from net realized gains		—			—			—			—			(0.33	)		(2.19	)
Total distributions		—			—			—			(0.01	)		(0.33	)		(2.19	)
Net asset value at end of period		13.30			12.14			11.64			9.49			8.86			13.85
Total return (%)		9.56	3		4.30			22.66			7.29			(34.28	)		14.04
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.31	4		1.31			1.32	7		1.33	5		1.37			1.36	8
Gross operating expenses		1.51	4		1.45			1.45			1.45			1.44			1.66
Net investment income (loss)		(0.63	)4		(0.54	)		(0.58	)		(0.48	)		(0.31	)		(0.29	)
Portfolio turnover rate		7	3		95			78			129			134			83
Net assets, end of period ($ x 1,000,000)		95			219			337			292			260			437

* Unaudited.

¹ Calculated based on the average shares outstanding during the period.

² Per share amount was less than $0.01.

³ Not annualized.

⁴ Annualized.

⁵ Effective February 28, 2009, the operating expense limitation was lowered. The ratio presented for period ended 10/31/09 is a blended rate.

⁶ The ratio of net operating expenses would have been 1.55% if custody credits had not been included.

⁷ The ratio of net operating expenses would have been 1.31% if certain non-routine expense had not been incurred.

⁸ The ratio of net operating expenses would have been 1.37% if custody credits had not been included.

See financial notes 11

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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				($)		($)
	92	.9%	Common Stock		115,523,540		146,382,713
	6	.7%	Other Investment Company		10,619,402		10,619,402
	0	.3%	Short-Term Investments		479,957		479,957
	99	.9%	Total Investments		126,622,899		157,482,072
	0	.1%	Other Assets and Liabilities, Net				191,193
	100	.0%	Net Assets				157,673,265

	Number		Value
Security	of Shares		($)
Common Stock 92.9% of net assets
Automobiles & Components 0.1%
American Axle & Manufacturing Holdings, Inc. *		1,028		9,961
Amerigon, Inc. *		278		3,975
Cooper Tire & Rubber Co.		817		12,214
Dana Holding Corp.		1,611		23,553
Dorman Products, Inc. *		100		4,778
Drew Industries, Inc. *		170		5,063
Fuel Systems Solutions, Inc. *		223		5,229
Modine Manufacturing Co. *		710		5,609
Standard Motor Products, Inc.		198		2,984
Superior Industries International, Inc.		233		3,987
Tenneco, Inc. *		667		20,564
Winnebago Industries, Inc. *		791		7,712
				105,629
Banks 8.6%
1st Source Corp.		167		3,789
Apollo Residential Mortgage, Inc.		357		6,480
Astoria Financial Corp.		570		5,523
Banco Latinoamericano de Comercio Exterior, S.A., Class E		540		11,259
BancorpSouth, Inc.		1,092		14,709
Bank of the Ozarks, Inc.		65,637		2,028,183
Banner Corp.		416		9,131
BBCN Bancorp, Inc. *		1,423		15,625
Berkshire Hills Bancorp, Inc.		188		4,266
BofI Holding, Inc. *		362		6,433
Boston Private Financial Holdings, Inc.		1,193		11,119
Brookline Bancorp, Inc.		662		5,945
Cardinal Financial Corp.		710		8,570
Cathay General Bancorp		834		14,362
Chemical Financial Corp.		186		4,105
Citizens & Northern Corp.		209		3,958
City Holding Co.		117		3,902
Columbia Banking System, Inc.		653		13,380
Community Bank System, Inc.		576		16,197
Community Trust Bancorp, Inc.		157		5,016
CVB Financial Corp.		989		11,443
Dime Community Bancshares		304		4,213
Eagle Bancorp, Inc. *		268		4,768
East West Bancorp, Inc.		94,654		2,155,272
F.N.B. Corp.		1,926		21,860
First Busey Corp.		809		3,754
First Commonwealth Financial Corp.		784		5,041
First Connecticut Bancorp, Inc.		511		6,740
First Financial Bancorp		834		14,020
First Financial Bankshares, Inc.		484		16,379
First Financial Corp.		124		3,720
First Midwest Bancorp, Inc.		899		9,574
FirstMerit Corp.		1,533		25,754
Flushing Financial Corp.		322		4,196
Glacier Bancorp, Inc.		147,453		2,197,050
Great Southern Bancorp, Inc.		288		6,924
Hancock Holding Co.		880		28,318
Hanmi Financial Corp. *		818		8,532
Home Bancshares, Inc.		419		12,210
IBERIABANK Corp.		41,567		2,122,827
Independent Bank Corp.		171		4,800
International Bancshares Corp.		810		15,981
Investors Bancorp, Inc. *		564		8,708
Lakeland Financial Corp.		158		4,114
MB Financial, Inc.		663		13,704
MGIC Investment Corp. *		2,739		9,477
National Penn Bancshares, Inc.		1,907		17,583
NBT Bancorp, Inc.		552		11,344
Northwest Bancshares, Inc.		1,466		18,061
OceanFirst Financial Corp.		470		6,848
Ocwen Financial Corp. *		829		12,360
Old National Bancorp		1,439		18,448
Oriental Financial Group, Inc.		942		11,134
Oritani Financial Corp.		860		12,745
PacWest Bancorp		542		12,910
Park National Corp.		92		6,187
Pinnacle Financial Partners, Inc. *		641		11,730
PrivateBancorp, Inc.		978		15,384
Prosperity Bancshares, Inc.		13,345		622,544
Provident Financial Services, Inc.		981		14,421
Radian Group, Inc.		1,794		5,597
Renasant Corp.		277		4,432
S&T Bancorp, Inc.		199		3,725
Sandy Spring Bancorp, Inc.		230		4,142
SCBT Financial Corp.		133		4,574
Signature Bank *		6,806		447,086
Simmons First National Corp., Class A		153		3,724
Southside Bancshares, Inc.		211		4,305
State Bank Financial Corp. *		630		10,868
Sterling Financial Corp. *		237		4,603
Susquehanna Bancshares, Inc.		2,590		26,858
SVB Financial Group *		578		37,044
Texas Capital Bancshares, Inc. *		18,404		694,015
TrustCo Bank Corp.		1,765		9,655

12 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Trustmark Corp.		908		23,109
UMB Financial Corp.		50,204		2,412,302
Umpqua Holdings Corp.		1,659		21,965
United Bankshares, Inc.		674		17,814
ViewPoint Financial Group		684		10,882
Webster Financial Corp.		1,023		23,253
WesBanco, Inc.		200		4,096
Westamerica Bancorp		428		19,632
Western Alliance Bancorp *		1,158		10,167
Wilshire Bancorp, Inc. *		1,173		6,287
Wintrust Financial Corp.		539		19,474
				13,532,639
Capital Goods 9.4%
A.O. Smith Corp.		543		25,847
AAON, Inc.		212		4,325
AAR Corp.		612		9,455
Accuride Corp. *		845		6,126
Actuant Corp., Class A		18,243		497,487
Acuity Brands, Inc.		435		24,173
Aegion Corp. *		602		10,986
Aerovironment, Inc. *		72,284		1,757,947
Aircastle Ltd.		931		11,312
Albany International Corp., Class A		494		11,905
Altra Holdings, Inc. *		222		4,058
Ameresco, Inc., Class A *		318		3,876
American Science & Engineering, Inc.		132		8,621
Apogee Enterprises, Inc.		303		4,654
Applied Industrial Technologies, Inc.		598		23,501
Astec Industries, Inc. *		123		3,849
AZZ, Inc.		95		4,912
Barnes Group, Inc.		804		21,226
Beacon Roofing Supply, Inc. *		650		17,348
Belden, Inc.		629		21,877
Blount International, Inc. *		806		13,033
Brady Corp., Class A		675		20,945
Briggs & Stratton Corp.		735		13,303
Cascade Corp.		77		3,624
Ceradyne, Inc.		252		6,381
Chart Industries, Inc. *		417		31,871
Chicago Bridge & Iron Co., N.V., NY Shares		32,558		1,446,226
CIRCOR International, Inc.		136		4,232
CLARCOR, Inc.		626		30,060
Colfax Corp. *		85,011		2,881,023
Comfort Systems USA, Inc.		363		3,841
Cubic Corp.		95		4,392
Curtiss-Wright Corp.		628		22,162
DigitalGlobe, Inc. *		595		7,301
Douglas Dynamics, Inc.		521		7,362
DXP Enterprises, Inc. *		129		5,595
Dycom Industries, Inc. *		604		14,128
EMCOR Group, Inc.		805		23,603
Encore Wire Corp.		156		3,976
EnerSys *		680		23,766
EnPro Industries, Inc. *		360		14,908
ESCO Technologies, Inc.		450		15,480
Esterline Technologies Corp. *		423		28,971
Federal Signal Corp. *		998		5,150
Franklin Electric Co., Inc.		28,787		1,443,668
FuelCell Energy, Inc. *		4,340		5,382
GenCorp, Inc. *		1,156		7,942
Generac Holdings, Inc. *		223		5,370
GeoEye, Inc. *		444		10,176
Gibraltar Industries, Inc. *		269		3,637
Global Power Equipment Group, Inc. *		165		4,127
Graham Corp.		193		4,261
Granite Construction, Inc.		602		16,760
Great Lakes Dredge & Dock Co.		907		6,721
Griffon Corp.		404		4,004
H&E Equipment Services, Inc. *		262		5,057
HEICO Corp.		26,648		1,074,427
Hexcel Corp. *		983		26,915
Houston Wire & Cable Co.		288		3,540
II-VI, Inc. *		798		16,287
Interline Brands, Inc. *		630		13,255
John Bean Technologies Corp.		586		9,370
Kadant, Inc. *		176		4,553
Kaman Corp.		176		6,051
Kaydon Corp.		501		12,290
Kratos Defense & Security Solutions, Inc. *		818		4,540
Layne Christensen Co. *		178		3,658
Lindsay Corp.		215		14,360
MasTec, Inc. *		904		15,721
Meritor, Inc. *		629		4,095
Miller Industries, Inc.		263		4,313
Moog, Inc., Class A *		513		21,684
Mueller Industries, Inc.		346		15,816
Mueller Water Products, Inc., Class A		1,519		5,453
MYR Group, Inc. *		221		3,695
NACCO Industries, Inc., Class A		44		4,993
National Presto Industries, Inc.		42		3,096
Orbital Sciences Corp. *		934		11,731
PMFG, Inc. *		210		2,837
Primoris Services Corp.		575		8,291
Quanex Building Products Corp.		687		12,661
Raven Industries, Inc.		148		8,911
RBC Bearings, Inc. *		163		7,641
Regal-Beloit Corp.		6,100		412,604
Robbins & Myers, Inc.		549		26,742
RSC Holdings, Inc. *		997		23,649
Rush Enterprises, Inc., Class A *		275		4,972
Sauer-Danfoss, Inc.		122		5,284
Seaboard Corp. *		2		3,981
Simpson Manufacturing Co., Inc.		565		17,532
Standex International Corp.		110		4,847
Sun Hydraulics Corp.		156		3,905
TAL International Group, Inc.		151		6,238
Taser International, Inc. *		900		4,140
Teledyne Technologies, Inc. *		502		32,439
Tennant Co.		211		9,347
Terex Corp. *		63,364		1,434,561
Textainer Group Holdings Ltd.		148		5,190
The Gorman-Rupp Co.		143		4,118
The Greenbrier Cos., Inc. *		274		4,726
The Manitowoc Co., Inc.		33,600		465,360
The Middleby Corp. *		176		17,859
Thermon Group Holdings, Inc. *		245		5,444
Titan International, Inc.		656		18,952

See financial notes 13

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Titan Machinery, Inc. *		270		9,620
Trex Co., Inc. *		12,748		407,936
TriMas Corp. *		215		4,732
Triumph Group, Inc.		6,707		421,334
Tutor Perini Corp. *		625		9,506
Twin Disc, Inc.		158		3,465
United Rentals, Inc. *		727		33,936
Universal Forest Products, Inc.		133		4,974
USG Corp. *		1,143		20,631
Wabash National Corp. *		916		7,667
Wabtec Corp.		17,148		1,333,771
Watsco, Inc.		388		27,917
Watts Water Technologies, Inc., Class A		462		17,011
Woodward, Inc.		692		28,780
Xerium Technologies, Inc. *		627		2,947
				14,788,224
Commercial & Professional Supplies 4.5%
ABM Industries, Inc.		690		16,063
Acacia Research Corp. *		398		16,318
Acco Brands Corp. *		40,563		427,940
CBIZ, Inc. *		898		5,451
Clean Harbors, Inc. *		6,611		451,135
Consolidated Graphics, Inc. *		89		3,559
Deluxe Corp.		638		15,191
Encore Capital Group, Inc. *		184		4,361
EnergySolutions, Inc. *		1,191		5,014
EnerNOC, Inc. *		684		4,111
Ennis, Inc.		287		4,523
Exponent, Inc. *		89		4,254
FTI Consulting, Inc. *		589		21,404
G&K Services, Inc., Class A		143		4,699
GP Strategies Corp. *		298		5,000
Healthcare Services Group, Inc.		1,005		21,326
Heidrick & Struggles International, Inc.		189		3,686
Herman Miller, Inc.		593		11,581
HNI Corp.		637		15,364
Huron Consulting Group, Inc. *		12,369		435,884
ICF International, Inc. *		382		9,527
InnerWorkings, Inc. *		43,698		502,964
Insperity, Inc.		419		11,426
Interface, Inc., Class A		1,022		14,472
Kelly Services, Inc., Class A		381		5,330
Kforce, Inc. *		663		9,594
Knoll, Inc.		699		10,338
Korn/Ferry International *		875		14,131
McGrath Rentcorp		152		4,472
Mine Safety Appliances Co.		375		15,922
Mistras Group, Inc. *		196		4,600
Mobile Mini, Inc. *		226		4,262
Navigant Consulting, Inc. *		878		12,222
On Assignment, Inc. *		355		6,642
Pendrell Corp. *		1,575		2,126
Portfolio Recovery Associates, Inc. *		139		9,566
Quad Graphics, Inc.		332		4,462
Resources Connection, Inc.		578		7,502
Rollins, Inc.		662		14,067
Steelcase, Inc., Class A		743		6,420
Sykes Enterprises, Inc. *		241		3,820
Team, Inc. *		369		10,933
Tetra Tech, Inc. *		608		16,234
The Advisory Board Co. *		28,722		2,618,298
The Brink’s Co.		692		17,577
The Corporate Executive Board Co.		54,460		2,253,010
The Geo Group, Inc. *		872		18,059
TrueBlue, Inc. *		715		12,341
UniFirst Corp.		132		8,020
United Stationers, Inc.		532		15,088
Viad Corp.		221		3,996
				7,124,285
Consumer Durables & Apparel 3.2%
American Greetings Corp., Class A		762		12,192
Arctic Cat, Inc. *		292		12,918
Blyth, Inc.		43		3,783
Brunswick Corp.		930		24,450
Callaway Golf Co.		1,416		8,680
Carter’s, Inc. *		636		34,535
Columbia Sportswear Co.		228		10,739
Crocs, Inc. *		979		19,776
Ethan Allen Interiors, Inc.		459		10,649
G-III Apparel Group Ltd. *		361		9,693
Harman International Industries, Inc.		42,751		2,119,595
Helen of Troy Ltd. *		487		16,850
Iconix Brand Group, Inc. *		627		9,618
iRobot Corp. *		262		6,186
JAKKS Pacific, Inc.		591		11,270
KB Home		1,344		11,666
La-Z-Boy, Inc. *		318		4,792
Leapfrog Enterprises, Inc. *		1,107		10,339
Liz Claiborne, Inc. *		757		10,144
M.D.C. Holdings, Inc.		71,065		1,997,637
Maidenform Brands, Inc. *		486		11,095
Meritage Homes Corp. *		482		13,684
Movado Group, Inc.		448		12,701
Oxford Industries, Inc.		234		11,230
Perry Ellis International, Inc. *		402		7,521
Quiksilver, Inc. *		989		3,422
Skechers U.S.A., Inc., Class A *		669		12,490
Skullcandy, Inc. *		320		5,158
Smith & Wesson Holding Corp. *		945		7,796
Standard Pacific Corp. *		1,079		5,460
Steven Madden Ltd. *		473		20,438
Sturm, Ruger & Co., Inc.		143		8,161
The Jones Group, Inc.		796		8,931
The Ryland Group, Inc.		644		14,496
The Warnaco Group, Inc. *		6,487		343,552
True Religion Apparel, Inc. *		421		11,434
Vera Bradley, Inc. *		6,225		161,726
Wolverine World Wide, Inc.		468		19,633
Zagg, Inc. *		483		6,293
				5,030,733
Consumer Services 8.5%
AFC Enterprises, Inc. *		295		5,039
American Public Education, Inc. *		164		5,694
Ameristar Casinos, Inc.		577		10,374
Ascent Capital Group, Inc., Class A *		89		4,583
Bally Technologies, Inc. *		12,600		611,730

14 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Biglari Holdings, Inc. *		11		4,470
BJ’s Restaurants, Inc. *		48,007		2,073,422
Bob Evans Farms, Inc.		412		15,755
Boyd Gaming Corp. *		838		6,444
Bravo Brio Restaurant Group, Inc. *		222		4,484
Bridgepoint Education, Inc. *		169		3,644
Buffalo Wild Wings, Inc. *		278		23,310
Caesars Entertainment Corp. *		198		2,899
Capella Education Co. *		265		8,668
Caribou Coffee Co., Inc. *		259		4,250
CEC Entertainment, Inc.		132		5,045
Churchill Downs, Inc.		78		4,630
Coinstar, Inc. *		41,424		2,601,013
Corinthian Colleges, Inc. *		1,452		5,576
Cracker Barrel Old Country Store, Inc.		347		19,959
Denny’s Corp. *		1,027		4,252
DineEquity, Inc. *		126		6,121
Domino’s Pizza, Inc.		623		23,556
Gaylord Entertainment Co. *		449		14,135
Grand Canyon Education, Inc. *		98,906		1,719,975
Hillenbrand, Inc.		654		13,695
International Speedway Corp., Class A		500		13,345
Interval Leisure Group, Inc.		313		5,409
Jack in the Box, Inc. *		629		14,291
K12, Inc. *		484		12,342
Krispy Kreme Doughnuts, Inc. *		638		4,677
LIFE TIME FITNESS, Inc. *		580		27,005
Lincoln Educational Services Corp.		751		5,512
Matthews International Corp., Class A		310		9,300
Multimedia Games Holding Co., Inc. *		389		4,419
Orient-Express Hotels Ltd., Class A *		161,214		1,723,378
P.F. Chang’s China Bistro, Inc.		375		14,884
Papa John’s International, Inc. *		324		13,051
Peet’s Coffee & Tea, Inc. *		139		10,678
Pinnacle Entertainment, Inc. *		404		4,484
Red Robin Gourmet Burgers, Inc. *		51,137		1,823,545
Regis Corp.		927		17,010
Ruby Tuesday, Inc. *		766		5,209
Scientific Games Corp., Class A *		564		5,730
Shuffle Master, Inc. *		798		14,101
Six Flags Entertainment Corp.		583		27,932
Sonic Corp. *		749		5,408
Sotheby’s		713		28,035
Steiner Leisure Ltd. *		8,292		389,392
Stewart Enterprises, Inc., Class A		708		4,475
Strayer Education, Inc.		108		10,657
Texas Roadhouse, Inc.		113,775		1,962,619
The Cheesecake Factory, Inc. *		815		25,672
Universal Technical Institute, Inc.		534		6,408
Vail Resorts, Inc.		346		14,110
				13,405,801
Diversified Financials 3.2%
Apollo Investment Corp.		2,835		20,554
Arlington Asset Investment Corp., Class A		252		5,925
Artio Global Investors, Inc.		947		3,428
BGC Partners, Inc., Class A		949		6,615
BlackRock Kelso Capital Corp.		1,294		12,487
Cash America International, Inc.		248		11,594
Cohen & Steers, Inc.		135		4,757
Compass Diversified Holdings		761		11,171
Credit Acceptance Corp. *		52		4,890
DFC Global Corp. *		729		12,743
Duff & Phelps Corp., Class A		662		10,526
Evercore Partners, Inc., Class A		390		10,308
Ezcorp, Inc., Class A *		574		15,377
Fifth Street Finance Corp.		1,407		13,817
Financial Engines, Inc. *		398		9,090
First Cash Financial Services, Inc. *		374		15,319
GFI Group, Inc.		943		3,112
Gladstone Capital Corp.		710		5,687
Gladstone Investment Corp.		774		5,743
Hercules Technology Growth Capital, Inc.		939		10,714
HFF, Inc., Class A *		301		4,918
INTL FCStone, Inc. *		177		3,806
Investment Technology Group, Inc. *		843		8,599
KBW, Inc.		618		10,531
Knight Capital Group, Inc., Class A *		952		12,509
Main Street Capital Corp.		456		11,678
Manning & Napier, Inc.		323		4,684
MarketAxess Holdings, Inc.		468		16,057
MCG Capital Corp.		1,016		4,257
Medley Capital Corp.		645		7,282
Nelnet, Inc., Class A		172		4,441
Netspend Holdings, Inc. *		723		5,517
New Mountain Finance Corp.		396		5,350
PennantPark Investment Corp.		925		9,666
PHH Corp. *		998		15,469
PICO Holdings, Inc. *		205		4,922
Piper Jaffray Cos., Inc. *		351		8,512
Prospect Capital Corp.		1,664		18,171
Safeguard Scientifics, Inc. *		419		6,855
Solar Capital Ltd.		608		12,622
Stifel Financial Corp. *		58,320		2,124,014
TICC Capital Corp.		806		7,423
Triangle Capital Corp.		472		9,539
Virtus Investment Partners, Inc. *		53		4,473
Waddell & Reed Financial, Inc., Class A		76,081		2,433,070
Walter Investment Management Corp.		227		4,592
World Acceptance Corp. *		233		15,497
				4,968,311
Energy 7.4%
Alon USA Energy, Inc.		425		3,842
Amyris, Inc. *		611		1,912
Apco Oil & Gas International, Inc.		55		2,307
Approach Resources, Inc. *		17,710		635,435
ATP Oil & Gas Corp. *		884		6,683
Atwood Oceanics, Inc. *		32,800		1,454,024
Basic Energy Services, Inc. *		520		7,488
Berry Petroleum Co., Class A		613		27,922
Bill Barrett Corp. *		690		16,546
BPZ Resources, Inc. *		1,313		5,318

See financial notes 15

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Bristow Group, Inc.		445		21,738
C&J Energy Services, Inc. *		233		4,392
Callon Petroleum Co. *		775		4,503
Carrizo Oil & Gas, Inc. *		420		11,777
Cheniere Energy, Inc. *		1,704		31,200
Clayton Williams Energy, Inc. *		52		3,824
Clean Energy Fuels Corp. *		459		8,831
Cloud Peak Energy, Inc. *		915		14,082
Comstock Resources, Inc. *		134,366		2,360,811
Contango Oil & Gas Co. *		27,861		1,511,738
Crosstex Energy, Inc.		733		10,922
CVR Energy, Inc. *		951		28,872
Dawson Geophysical Co. *		123		3,303
Dril-Quip, Inc. *		339		22,845
Endeavour International Corp. *		440		5,491
Energy Partners Ltd. *		533		8,677
Energy XXI (Bermuda) Ltd. *		13,101		493,646
Exterran Holdings, Inc. *		749		10,119
Frontline Ltd.		849		5,561
FX Energy, Inc. *		805		4,572
GeoResources, Inc. *		347		13,085
Global Geophysical Services, Inc. *		76,862		735,569
Golar LNG Ltd.		367		13,572
Goodrich Petroleum Corp. *		564		9,458
Green Plains Renewable Energy, Inc. *		581		4,642
Gulf Island Fabrication, Inc.		137		3,839
GulfMark Offshore, Inc., Class A *		286		13,777
Gulfport Energy Corp. *		631		16,538
Harvest Natural Resources, Inc. *		691		4,754
Heckmann Corp. *		1,174		4,461
Helix Energy Solutions Group, Inc. *		986		20,124
Hercules Offshore, Inc. *		1,181		5,999
Hornbeck Offshore Services, Inc. *		13,476		561,006
Houston American Energy Corp. *		320		739
Hyperdynamics Corp. *		1,255		1,172
ION Geophysical Corp. *		987		6,149
James River Coal Co. *		1,343		6,661
Key Energy Services, Inc. *		1,733		21,940
Knightsbridge Tankers Ltd.		533		6,748
Kodiak Oil & Gas Corp. *		3,462		30,639
Lufkin Industries, Inc.		5,937		456,199
Magnum Hunter Resources Corp. *		1,297		8,054
Matrix Service Co. *		655		8,941
McMoRan Exploration Co. *		1,169		10,287
Mitcham Industries, Inc. *		316		7,508
Newpark Resources, Inc. *		976		6,207
Nordic American Tanker Shipping Ltd.		851		12,357
Northern Oil & Gas, Inc. *		674		13,096
Oasis Petroleum, Inc. *		18,767		620,625
Overseas Shipholding Group, Inc.		336		3,931
OYO Geospace Corp. *		48		5,531
Parker Drilling Co. *		1,022		5,284
Patriot Coal Corp. *		1,578		9,200
Penn Virginia Corp.		909		4,654
Petroleum Development Corp. *		405		13,928
PetroQuest Energy, Inc. *		764		4,615
Pioneer Drilling Co. *		762		6,005
Precision Drilling Corp. *		142,331		1,315,138
Rentech, Inc. *		2,658		6,140
Resolute Energy Corp. *		676		7,172
Rex Energy Corp. *		792		8,324
Rosetta Resources, Inc. *		16,074		808,040
SemGroup Corp., Class A *		637		20,257
Ship Finance International Ltd.		846		11,717
Stone Energy Corp. *		671		18,822
Swift Energy Co. *		615		18,604
Targa Resources Corp.		259		12,455
Teekay Tankers Ltd., Class A		1,281		6,610
Tesco Corp. *		617		10,076
TETRA Technologies, Inc. *		724		6,306
Triangle Petroleum Corp. *		1,061		6,907
Uranium Energy Corp. *		1,212		3,575
VAALCO Energy, Inc. *		727		6,594
Venoco, Inc. *		690		7,666
W&T Offshore, Inc.		463		9,154
Western Refining, Inc.		722		13,754
Willbros Group, Inc. *		1,078		5,821
World Fuel Services Corp.		736		32,428
				11,741,235
Food & Staples Retailing 3.4%
Casey’s General Stores, Inc.		521		29,358
Harris Teeter Supermarkets, Inc.		642		24,377
PriceSmart, Inc.		6,346		523,799
Rite Aid Corp. *		5,385		7,808
Spartan Stores, Inc.		584		10,646
Susser Holdings Corp. *		282		7,527
The Andersons, Inc.		312		15,725
The Chefs’ Warehouse, Inc. *		17,500		423,150
The Fresh Market, Inc. *		42,706		2,185,266
The Pantry, Inc. *		590		7,529
United Natural Foods, Inc. *		44,111		2,174,231
Weis Markets, Inc.		99		4,415
				5,413,831
Food, Beverage & Tobacco 1.3%
B&G Foods, Inc.		714		15,879
Cal-Maine Foods, Inc.		152		5,477
Central European Distribution Corp. *		1,113		5,431
Chiquita Brands International, Inc. *		800		6,800
Darling International, Inc. *		1,618		26,503
Diamond Foods, Inc.		440		9,196
Dole Food Co., Inc. *		875		7,420
Fresh Del Monte Produce, Inc.		595		13,786
J&J Snack Foods Corp.		85		4,765
Lancaster Colony Corp.		278		18,128
Pilgrim’s Pride Corp. *		845		6,033
Sanderson Farms, Inc.		338		17,444
Smart Balance, Inc. *		827		4,879
Snyders-Lance, Inc.		733		18,970
The Boston Beer Co., Inc., Class A *		137		14,155
The Hain Celestial Group, Inc. *		529		25,022
Tootsie Roll Industries, Inc.		459		10,929
TreeHouse Foods, Inc. *		32,701		1,880,635
Universal Corp.		361		16,545
Vector Group Ltd.		797		13,828
				2,121,825

16 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Health Care Equipment & Services 11.4%
Abaxis, Inc. *		408		14,533
ABIOMED, Inc. *		597		14,525
Accretive Health, Inc. *		626		6,298
Accuray, Inc. *		991		7,631
Air Methods Corp. *		8,081		679,693
Align Technology, Inc. *		21,281		674,820
Almost Family, Inc. *		319		7,777
Amedisys, Inc. *		769		11,327
AMERIGROUP Corp. *		30,227		1,866,819
AmSurg Corp. *		525		15,099
Analogic Corp.		34,847		2,376,914
AngioDynamics, Inc. *		540		6,685
ArthroCare Corp. *		454		11,332
athenahealth, Inc. *		34,885		2,527,418
Atrion Corp.		18		4,152
Bio-Reference Laboratories, Inc. *		508		10,831
BioScrip, Inc. *		788		5,839
Cantel Medical Corp.		196		4,602
Centene Corp. *		677		26,802
Chemed Corp.		304		18,343
Computer Programs & Systems, Inc.		209		12,454
Conceptus, Inc. *		719		13,496
CONMED Corp.		474		13,552
Cyberonics, Inc. *		16,749		641,487
DexCom, Inc. *		125,887		1,232,434
Emeritus Corp. *		252		4,334
Endologix, Inc. *		998		14,950
Ensign Group, Inc.		165		4,407
Gentiva Health Services, Inc. *		688		5,697
Greatbatch, Inc. *		463		10,783
Haemonetics Corp. *		363		25,980
Hanger Orthopedic Group, Inc. *		606		14,271
Health Management Associates, Inc., Class A *		246,417		1,774,202
HealthSouth Corp. *		1,124		25,166
HealthStream, Inc. *		236		5,409
Healthways, Inc. *		898		5,990
HeartWare International, Inc. *		80		6,237
HMS Holdings Corp. *		954		22,953
ICU Medical, Inc. *		8,234		432,203
Insulet Corp. *		326		5,822
Integra LifeSciences Holdings *		303		11,281
Invacare Corp.		587		9,304
IPC The Hospitalist Co. *		11,160		428,656
Kindred Healthcare, Inc. *		372		3,586
Landauer, Inc.		74		3,901
LHC Group, Inc. *		471		8,341
Magellan Health Services, Inc. *		249		11,026
MAKO Surgical Corp. *		10,054		415,331
Masimo Corp. *		26,517		586,821
MedAssets, Inc. *		683		8,613
Medidata Solutions, Inc. *		446		11,556
Merge Healthcare, Inc. *		1,173		5,044
Meridian Bioscience, Inc.		687		14,118
Merit Medical Systems, Inc. *		791		10,457
Metropolitan Health Networks, Inc. *		514		3,845
Molina Healthcare, Inc. *		333		8,541
MWI Veterinary Supply, Inc. *		5,392		509,005
National Healthcare Corp.		93		4,241
Natus Medical, Inc. *		707		8,654
Neogen Corp. *		141		5,498
NuVasive, Inc. *		793		13,140
NxStage Medical, Inc. *		678		11,526
Omnicell, Inc. *		632		9,019
OraSure Technologies, Inc. *		921		10,564
Orthofix International N.V. *		107		4,411
Owens & Minor, Inc.		706		20,643
PharMerica Corp. *		487		5,781
Providence Service Corp. *		286		4,021
PSS World Medical, Inc. *		815		19,503
Quality Systems, Inc.		386		14,436
Quidel Corp. *		607		10,028
Rockwell Medical Technologies, Inc. *		418		3,866
Select Medical Holdings Corp. *		656		5,622
STAAR Surgical Co. *		395		4,333
STERIS Corp.		643		20,197
Sun Healthcare Group, Inc. *		1,071		7,743
Sunrise Senior Living, Inc. *		617		3,875
SXC Health Solutions Corp. *		5,300		480,074
Symmetry Medical, Inc. *		969		6,890
Team Health Holdings, Inc. *		509		10,964
Teleflex, Inc.		29,976		1,878,596
Triple-S Management Corp., Class B *		424		8,929
Universal American Corp.		375		3,442
VCA Antech, Inc. *		28,500		674,310
Volcano Corp. *		4,413		119,813
WellCare Health Plans, Inc. *		451		27,592
West Pharmaceutical Services, Inc.		288		12,931
Wright Medical Group, Inc. *		704		13,115
				18,036,450
Household & Personal Products 0.4%
Central Garden & Pet Co., Class A *		440		4,704
Elizabeth Arden, Inc. *		172		6,704
Medifast, Inc. *		424		8,149
Nu Skin Enterprises, Inc., Class A		10,972		584,808
Prestige Brands Holdings, Inc. *		579		9,837
Spectrum Brands Holdings, Inc. *		336		11,595
WD-40 Co.		99		4,463
				630,260
Insurance 0.3%
Alterra Capital Holdings Ltd.		1,229		29,410
American Equity Investment Life Holding Co.		1,010		12,383
American Safety Insurance Holdings Ltd. *		205		3,881
AMERISAFE, Inc. *		181		4,836
AmTrust Financial Services, Inc.		441		12,013
Argo Group International Holdings Ltd.		467		13,478
Citizens, Inc. *		419		4,027
CNO Financial Group, Inc. *		2,377		17,281
Delphi Financial Group, Inc., Class A		656		29,795
eHealth, Inc. *		275		4,873
Employers Holdings, Inc.		690		11,951
Enstar Group Ltd. *		43		4,049
FBL Financial Group, Inc., Class A		152		4,426

See financial notes 17

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
First American Financial Corp.		1,317		22,060
Flagstone Reinsurance Holdings S.A.		502		3,765
Greenlight Capital Re Ltd., Class A *		491		12,226
Harleysville Group, Inc.		214		12,827
Horace Mann Educators Corp.		728		12,776
Infinity Property & Casualty Corp.		74		3,952
Maiden Holdings Ltd.		628		5,212
Meadowbrook Insurance Group, Inc.		979		8,645
Montpelier Re Holdings Ltd.		803		16,478
National Financial Partners Corp. *		758		11,180
OneBeacon Insurance Group Ltd., Class A		638		9,079
Platinum Underwriters Holdings Ltd.		556		20,361
Primerica, Inc.		562		14,741
ProAssurance Corp.		408		35,941
RLI Corp.		269		18,529
Safety Insurance Group, Inc.		100		3,985
Selective Insurance Group, Inc.		861		15,059
Symetra Financial Corp.		1,224		14,884
The Navigators Group, Inc. *		89		4,227
Tower Group, Inc.		623		13,444
United Fire Group, Inc.		216		3,719
				415,493
Materials 2.7%
A. M. Castle & Co. *		579		7,753
A. Schulman, Inc.		536		13,191
AMCOL International Corp.		426		14,041
American Vanguard Corp.		536		13,400
Balchem Corp.		442		12,774
Boise, Inc.		1,320		10,085
Buckeye Technologies, Inc.		577		18,701
Calgon Carbon Corp. *		747		10,338
Century Aluminum Co. *		969		8,915
Chemtura Corp. *		824		14,024
Clearwater Paper Corp. *		378		12,463
Coeur d’Alene Mines Corp. *		1,200		25,860
Deltic Timber Corp.		66		4,031
Eagle Materials, Inc.		659		23,210
Ferro Corp. *		1,023		5,309
Flotek Industries, Inc. *		880		12,003
FutureFuel Corp.		348		3,424
General Moly, Inc. *		1,289		4,176
Georgia Gulf Corp. *		447		15,846
Globe Specialty Metals, Inc.		678		9,044
Gold Resource Corp.		176		4,773
Golden Star Resources Ltd. *		2,473		3,784
Graphic Packaging Holding Co. *		1,045		5,591
H.B. Fuller Co.		728		23,951
Haynes International, Inc.		111		6,923
Hecla Mining Co.		2,963		12,682
Horsehead Holding Corp. *		873		9,804
Innophos Holdings, Inc.		339		16,669
Innospec, Inc. *		159		4,807
Jaguar Mining, Inc. *		1,451		3,932
Kaiser Aluminum Corp.		122		6,414
KapStone Paper & Packaging Corp. *		645		11,649
Koppers Holdings, Inc.		348		13,530
Kraton Performance Polymers, Inc. *		526		13,676
Louisiana-Pacific Corp. *		1,105		10,000
LSB Industries, Inc. *		330		11,194
Materion Corp. *		153		3,781
McEwen Mining, Inc. *		2,019		7,652
Minerals Technologies, Inc.		149		9,998
Myers Industries, Inc.		598		9,885
Neenah Paper, Inc.		178		5,084
NewMarket Corp.		86		19,197
Noranda Aluminum Holding Corp.		508		5,395
Olin Corp.		771		16,160
OM Group, Inc. *		512		12,349
P.H. Glatfelter Co.		627		9,769
PolyOne Corp.		832		11,531
Quaker Chemical Corp.		100		4,340
Royal Gold, Inc.		18,400		1,140,064
RTI International Metals, Inc. *		266		6,530
Schweitzer-Mauduit International, Inc.		142		9,630
Sensient Technologies Corp.		688		25,559
Stepan Co.		50		4,543
Stillwater Mining Co. *		1,215		13,037
SunCoke Energy, Inc. *		1,128		17,168
Texas Industries, Inc.		165		5,546
Thompson Creek Metals Co., Inc. *		2,263		13,420
TPC Group, Inc. *		140		5,877
Tredegar Corp.		172		2,984
Wausau Paper Corp.		1,052		9,531
Westlake Chemical Corp.		38,309		2,449,861
Worthington Industries, Inc.		699		12,470
Zep, Inc.		264		3,762
Zoltek Cos., Inc. *		528		5,824
				4,238,914
Media 2.4%
Arbitron, Inc.		430		16,362
Belo Corp., Class A		789		5,318
Central European Media Enterprises Ltd., Class A *		775		6,130
Cinemark Holdings, Inc.		878		20,159
Digital Generation, Inc. *		921		8,547
Entercom Communications Corp., Class A *		797		4,933
Harte-Hanks, Inc.		433		3,637
Knology, Inc. *		495		9,628
Lions Gate Entertainment Corp. *		765		9,356
Live Nation Entertainment, Inc. *		1,257		11,388
Meredith Corp.		551		15,885
Morningstar, Inc.		34,235		1,976,044
National CineMedia, Inc.		340		4,859
Scholastic Corp.		454		13,870
Sinclair Broadcast Group, Inc., Class A		709		7,289
The E.W. Scripps Co., Class A *		173,445		1,588,756
The New York Times Co., Class A *		1,084		6,840
Valassis Communications, Inc. *		720		14,400
World Wrestling Entertainment, Inc., Class A		671		5,287
				3,728,688

18 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Pharmaceuticals, Biotechnology & Life Sciences 3.2%
Achillion Pharmaceuticals, Inc. *		937		6,231
Acorda Therapeutics, Inc. *		622		15,699
Affymax, Inc. *		702		9,203
Affymetrix, Inc. *		895		3,956
Akorn, Inc. *		35,678		432,774
Alkermes plc *		1,286		22,248
Alnylam Pharmaceuticals, Inc. *		1,006		11,458
AMAG Pharmaceuticals, Inc. *		267		4,181
Ardea Biosciences, Inc. *		430		13,700
Arena Pharmaceuticals, Inc. *		951		2,320
ARIAD Pharmaceuticals, Inc. *		2,032		33,122
ArQule, Inc. *		769		5,421
Auxilium Pharmaceuticals, Inc. *		772		13,834
AVANIR Pharmaceuticals, Inc., Class A *		1,614		4,923
AVEO Pharmaceuticals, Inc. *		324		3,726
Cadence Pharmaceuticals, Inc. *		1,048		3,867
Cambrex Corp. *		771		4,996
Cepheid, Inc. *		13,577		521,493
Chelsea Therapeutics International Ltd. *		1,896		4,019
Cubist Pharmaceuticals, Inc. *		13,425		567,609
Curis, Inc. *		1,172		5,614
DepoMed, Inc. *		835		5,085
Dynavax Technologies Corp. *		2,128		10,661
Emergent Biosolutions, Inc. *		676		9,505
Endocyte, Inc. *		1,348		9,625
Enzon Pharmaceuticals, Inc. *		696		4,336
eResearch Technology, Inc. *		1,130		8,927
Exact Sciences Corp. *		47,113		507,407
Exelixis, Inc. *		1,072		5,146
Fluidigm Corp. *		308		4,808
Genomic Health, Inc. *		160		4,586
Halozyme Therapeutics, Inc. *		1,180		9,546
Hi-Tech Pharmacal Co., Inc. *		157		5,117
Idenix Pharmaceuticals, Inc. *		816		7,156
ImmunoGen, Inc. *		737		9,397
Immunomedics, Inc. *		1,236		4,437
Impax Laboratories, Inc. *		631		15,542
Incyte Corp. *		1,258		28,531
InterMune, Inc. *		846		8,832
Ironwood Pharmaceuticals, Inc. *		546		7,213
Isis Pharmaceuticals, Inc. *		752		6,016
ISTA Pharmaceuticals, Inc. *		882		7,982
Jazz Pharmaceuticals plc *		168		8,573
Luminex Corp. *		628		15,725
MannKind Corp. *		1,477		3,323
MAP Pharmaceuticals, Inc. *		535		6,859
Maxygen, Inc. *		1,081		6,108
Medicis Pharmaceutical Corp., Class A		11,350		436,634
Medivation, Inc. *		365		29,521
Metabolix, Inc. *		1,587		4,301
Momenta Pharmaceuticals, Inc. *		705		11,195
Nektar Therapeutics *		841		6,408
Neurocrine Biosciences, Inc. *		976		7,252
NPS Pharmacuticals, Inc. *		1,057		7,568
Oncothyreon, Inc. *		1,086		4,659
Onyx Pharmaceuticals, Inc. *		800		36,408
Opko Health, Inc. *		837		3,976
Optimer Pharmaceuticals, Inc. *		740		10,952
Par Pharmaceutical Cos., Inc. *		537		22,737
PAREXEL International Corp. *		684		18,427
PDL BioPharma, Inc.		1,198		7,535
Pharmacyclics, Inc. *		671		18,493
Progenics Pharmaceuticals, Inc. *		448		4,923
Questcor Pharmaceuticals, Inc. *		13,097		588,055
Raptor Pharmaceutical Corp. *		1,137		6,663
Rigel Pharmaceuticals, Inc. *		997		7,707
Sagent Pharmaceuticals, Inc. *		206		3,706
Salix Pharmaceuticals Ltd. *		604		29,838
Savient Pharmaceuticals, Inc. *		1,802		4,271
Seattle Genetics, Inc. *		1,184		23,408
Sequenom, Inc. *		1,119		5,729
Spectrum Pharmaceuticals, Inc. *		952		10,120
Synta Pharmaceuticals Corp. *		1,116		4,855
The Medicines Co. *		692		15,286
Theravance, Inc. *		732		15,840
Transcept Pharmaceuticals, Inc. *		194		1,744
Trius Therapeutics, Inc. *		742		3,985
United Therapeutics Corp. *		27,493		1,202,819
Vical, Inc. *		1,240		3,869
ViroPharma, Inc. *		980		21,315
VIVUS, Inc. *		1,160		28,095
ZIOPHARM Oncology, Inc. *		1,259		5,993
				5,025,124
Real Estate 2.8%
Acadia Realty Trust		696		16,133
AG Mortgage Investment Trust, Inc.		290		5,742
Agree Realty Corp.		280		6,384
Alexander’s, Inc.		13		5,065
American Assets Trust, Inc.		198		4,655
American Campus Communities, Inc.		762		33,871
American Capital Mortgage Investment Corp.		462		10,501
Anworth Mortgage Asset Corp.		921		6,208
Apollo Commercial Real Estate Finance, Inc.		471		7,597
ARMOUR Residential REIT, Inc.		1,664		11,615
Ashford Hospitality Trust		944		8,062
Associated Estates Realty Corp.		745		12,613
BioMed Realty Trust, Inc.		2,022		40,076
Campus Crest Communities, Inc.		754		8,784
CapLease, Inc.		1,754		7,279
Capstead Mortgage Corp.		1,033		14,183
CBL & Associates Properties, Inc.		1,647		30,684
Cedar Realty Trust, Inc.		1,016		5,303
Chesapeake Lodging Trust		249		4,507
Colonial Properties Trust		907		20,290
Colony Financial, Inc.		628		10,670
Coresite Realty Corp.		441		10,985
Cousins Properties, Inc.		947		7,443
CreXus Investment Corp.		1,040		10,910
CubeSmart		1,067		13,401
CYS Investments, Inc.		1,267		17,396
DCT Industrial Trust, Inc.		2,844		16,865
DiamondRock Hospitality Co.		1,858		19,751
DuPont Fabros Technology, Inc.		889		24,136
Dynex Capital, Inc.		1,211		11,420
EastGroup Properties, Inc.		404		20,321

See financial notes 19

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Education Realty Trust, Inc.		1,165		13,130
Entertainment Properties Trust		618		29,658
Equity Lifestyle Properties, Inc.		419		29,305
Equity One, Inc.		813		16,894
Excel Trust, Inc.		347		4,161
Extra Space Storage, Inc.		1,258		38,180
FelCor Lodging Trust, Inc. *		1,063		4,486
First Industrial Realty Trust, Inc. *		851		10,501
First Potomac Realty Trust		864		10,748
Forestar Group, Inc. *		464		7,136
Franklin Street Properties Corp.		1,246		12,547
Getty Realty Corp.		550		8,701
Gladstone Commercial Corp.		236		4,010
Glimcher Realty Trust		1,394		13,787
Government Properties Income Trust		586		13,607
Hatteras Financial Corp.		924		26,916
Healthcare Realty Trust, Inc.		1,046		22,468
Hersha Hospitality Trust		1,259		7,239
Highwoods Properties, Inc.		905		31,431
Home Properties, Inc.		634		38,706
Hudson Pacific Properties, Inc.		283		4,480
Inland Real Estate Corp.		920		7,912
Invesco Mortgage Capital, Inc.		1,090		19,228
Investors Real Estate Trust		823		5,942
iStar Financial, Inc. *		1,083		7,494
Jones Lang LaSalle, Inc.		7,000		559,580
Kennedy-Wilson Holdings, Inc.		329		4,626
Kilroy Realty Corp.		769		36,489
LaSalle Hotel Properties		83,193		2,446,706
Lexington Realty Trust		1,146		10,199
LTC Properties, Inc.		485		16,141
Medical Properties Trust, Inc.		1,253		11,753
MFA Financial, Inc.		3,575		26,383
Mid-America Apartment Communities, Inc.		495		33,695
Monmouth Real Estate Investment Corp., Class A		459		4,709
National Health Investors, Inc.		197		9,746
National Retail Properties, Inc.		1,267		34,690
Newcastle Investment Corp.		846		5,981
NorthStar Realty Finance Corp.		1,614		9,200
Omega Healthcare Investors, Inc.		987		21,132
Parkway Properties, Inc.		612		6,053
Pebblebrook Hotel Trust		785		18,903
Pennsylvania Real Estate Investment Trust		728		10,257
PennyMac Mortgage Investment Trust		556		11,281
Post Properties, Inc.		678		33,019
Potlatch Corp.		346		10,830
PS Business Parks, Inc.		150		10,237
RAIT Financial Trust		1,193		5,774
Ramco-Gershenson Properties Trust		811		9,764
Redwood Trust, Inc.		913		10,664
Resource Capital Corp.		1,460		7,884
Retail Opportunity Investments Corp.		927		11,263
RLJ Lodging Trust		239		4,488
Sabra Health Care REIT, Inc.		722		12,086
Saul Centers, Inc.		205		8,202
Sovran Self Storage, Inc.		415		21,870
Starwood Property Trust, Inc.		1,301		27,152
Strategic Hotels & Resorts, Inc. *		1,356		9,234
Sun Communities, Inc.		354		15,487
Sunstone Hotel Investors, Inc. *		948		9,670
Tanger Factory Outlet Centers, Inc.		862		26,998
Tejon Ranch Co. *		159		4,748
Terreno Realty Corp.		299		4,276
Two Harbors Investment Corp.		2,170		22,698
Universal Health Realty Income Trust		106		4,287
Urstadt Biddle Properties, Class A		224		4,310
Washington Real Estate Investment Trust		714		21,099
Whitestone REIT, Class B		346		4,782
				4,389,863
Retailing 3.7%
Aeropostale, Inc. *		1,044		23,156
ANN, Inc. *		765		21,183
Asbury Automotive Group, Inc. *		518		14,463
Ascena Retail Group, Inc. *		1,276		26,133
Barnes & Noble, Inc. *		342		7,097
Bebe Stores, Inc.		766		6,281
Blue Nile, Inc. *		112		3,391
Body Central Corp. *		287		8,716
Brown Shoe Co., Inc.		764		6,960
Cabela’s, Inc. *		16,084		608,136
Charming Shoppes, Inc. *		1,261		7,440
Chico’s FAS, Inc.		120,755		1,854,797
Coldwater Creek, Inc. *		5,306		5,253
Collective Brands, Inc. *		978		20,313
Core-Mark Holding Co., Inc.		105		4,053
Cost Plus, Inc. *		530		10,266
DSW, Inc., Class A		7,300		410,698
Express, Inc. *		813		19,203
Fred’s, Inc., Class A		710		10,167
Genesco, Inc. *		345		25,875
GNC Holdings, Inc., Class A		171		6,679
Group 1 Automotive, Inc.		189		10,939
Hibbett Sports, Inc. *		8,104		483,971
Hot Topic, Inc.		623		6,105
HSN, Inc.		580		22,446
Jos. A. Bank Clothiers, Inc. *		408		19,400
Kirkland’s, Inc. *		479		7,013
Lithia Motors, Inc., Class A		438		11,752
Lumber Liquidators Holdings, Inc. *		238		6,885
Monro Muffler Brake, Inc.		458		18,897
Office Depot, Inc. *		1,755		5,335
OfficeMax, Inc. *		1,012		4,706
Penske Automotive Group, Inc.		689		18,217
PetMed Express, Inc.		563		7,584
Pier 1 Imports, Inc.		1,046		17,970
Pool Corp.		614		22,663
Rent-A-Center, Inc.		645		22,065
Rue21, Inc. *		182		5,524
Saks, Inc. *		932		10,215
Select Comfort Corp. *		608		17,559
Shutterfly, Inc. *		379		11,794
Sonic Automotive, Inc., Class A		732		12,312
Stage Stores, Inc.		586		8,948
Stein Mart, Inc. *		603		3,871
Teavana Holdings, Inc. *		23,400		488,826

20 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
The Buckle, Inc.		219		10,113
The Cato Corp., Class A		166		4,620
The Children’s Place Retail Stores, Inc. *		385		17,702
The Finish Line, Inc., Class A		661		14,714
The Men’s Wearhouse, Inc.		598		22,150
The Pep Boys - Manny, Moe & Jack		705		10,526
Tractor Supply Co.		6,300		619,983
Tuesday Morning Corp. *		1,317		5,321
Ulta Salon, Cosmetics & Fragrance, Inc.		4,600		405,628
Vitamin Shoppe, Inc. *		9,084		427,584
VOXX International Corp. *		326		4,137
Zumiez, Inc. *		232		8,505
				5,896,240
Semiconductors & Semiconductor Equipment 1.0%
Advanced Energy Industries, Inc. *		853		10,185
Amkor Technology, Inc. *		1,019		5,268
Applied Micro Circuits Corp. *		734		4,096
ATMI, Inc. *		546		11,471
AXT, Inc. *		1,100		5,599
Brooks Automation, Inc.		992		11,666
Cabot Microelectronics Corp.		357		12,274
Cavium, Inc. *		21,486		628,680
CEVA, Inc. *		392		8,659
Cirrus Logic, Inc. *		778		21,302
Cymer, Inc. *		437		22,654
Diodes, Inc. *		365		8,136
Entegris, Inc. *		1,145		10,133
Entropic Communications, Inc. *		936		3,959
FormFactor, Inc. *		849		4,754
FSI International, Inc. *		1,064		5,394
GT Advanced Technologies, Inc. *		983		6,399
Hittite Microwave Corp. *		440		23,558
Inphi Corp. *		298		3,025
Integrated Device Technology, Inc. *		1,097		7,427
Kulicke & Soffa Industries, Inc. *		903		11,829
Lattice Semiconductor Corp. *		1,055		5,760
LTX-Credence Corp. *		1,167		8,052
Micrel, Inc.		970		10,563
Microsemi Corp. *		812		17,474
Mindspeed Technologies, Inc. *		764		3,828
MIPS Technologies, Inc. *		911		5,958
MKS Instruments, Inc.		747		20,655
Monolithic Power Systems, Inc. *		591		12,246
Nanometrics, Inc. *		445		6,902
OmniVision Technologies, Inc. *		900		16,578
Photronics, Inc. *		877		5,429
Power Integrations, Inc.		409		15,493
Rambus, Inc. *		947		4,820
RF Micro Devices, Inc. *		2,375		10,284
Rubicon Technology, Inc. *		773		7,305
Rudolph Technologies, Inc. *		940		10,152
Semtech Corp. *		621		16,928
Sigma Designs, Inc. *		1,002		5,521
Silicon Image, Inc. *		1,158		6,948
Spansion, Inc., Class A *		809		9,757
Standard Microsystems Corp. *		425		11,254
STR Holdings, Inc. *		612		2,338
Tessera Technologies, Inc. *		654		10,229
TriQuint Semiconductor, Inc. *		1,424		6,949
Ultratech, Inc. *		441		14,086
Veeco Instruments, Inc. *		644		19,442
Volterra Semiconductor Corp. *		12,199		401,225
				1,492,644
Software & Services 8.0%
Accelrys, Inc. *		576		4,740
ACI Worldwide, Inc. *		370		14,748
Actuate Corp. *		877		6,227
Acxiom Corp. *		852		11,698
Advent Software, Inc. *		537		14,494
Allot Communications Ltd. *		18,100		444,174
Ancestry.com, Inc. *		231		6,168
Ariba, Inc. *		14,900		569,180
Aspen Technology, Inc. *		754		14,914
Bankrate, Inc. *		183		4,286
Blackbaud, Inc.		657		20,354
Bottomline Technologies, Inc. *		271		6,377
BroadSoft, Inc. *		242		10,360
CACI International, Inc., Class A *		332		20,295
Cardtronics, Inc. *		652		17,187
CommVault Systems, Inc. *		48,936		2,548,097
comScore, Inc. *		239		4,761
Concur Technologies, Inc. *		11,155		630,927
Constant Contact, Inc. *		187		4,520
Convergys Corp. *		920		12,300
Convio, Inc. *		400		6,400
CoreLogic, Inc. *		37,700		629,590
Cornerstone OnDemand, Inc. *		235		4,883
CoStar Group, Inc. *		364		26,532
CSG Systems International, Inc. *		799		11,506
DealerTrack Holdings, Inc. *		13,927		415,442
Dice Holdings, Inc. *		775		8,354
Digital River, Inc. *		679		12,772
Earthlink, Inc.		768		6,236
Ebix, Inc.		353		7,219
Envestnet, Inc. *		355		4,441
EPIQ Systems, Inc.		706		8,020
Euronet Worldwide, Inc. *		376		8,133
Exlservice Holdings, Inc. *		220		6,090
Fair Isaac Corp.		462		19,820
Forrester Research, Inc.		139		4,928
Global Cash Access Holdings, Inc. *		785		6,633
Heartland Payment Systems, Inc.		587		17,886
Higher One Holdings, Inc. *		570		8,989
iGATE Corp. *		257		5,001
InfoSpace, Inc. *		750		8,347
Interactive Intelligence Group, Inc. *		317		9,402
Internap Network Services Corp. *		869		6,118
InterXion Holding N.V. *		29,600		594,072
IntraLinks Holdings, Inc. *		807		3,761
j2 Global, Inc.		626		16,170
Jack Henry & Associates, Inc.		888		30,156
JDA Software Group, Inc. *		353		10,195
Kenexa Corp. *		483		15,780
Keynote Systems, Inc.		372		6,845
KIT Digital, Inc. *		838		5,682
Liquidity Services, Inc. *		165		8,799
LivePerson, Inc. *		27,233		432,460
LogMeIn, Inc. *		153		5,510

See financial notes 21

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
LoopNet, Inc. *		439		8,416
Manhattan Associates, Inc. *		142		7,121
ManTech International Corp., Class A		392		12,317
MAXIMUS, Inc.		382		16,903
Mentor Graphics Corp. *		1,019		14,725
MicroStrategy, Inc., Class A *		122		17,053
ModusLink Global Solutions, Inc. *		891		4,410
MoneyGram International, Inc. *		348		5,860
Monotype Imaging Holdings, Inc. *		481		6,825
Move, Inc. *		1,041		9,057
NetScout Systems, Inc. *		369		7,635
NetSuite, Inc. *		12,579		558,256
NIC, Inc.		407		4,554
OpenTable, Inc. *		363		16,237
Opnet Technologies, Inc.		132		3,057
Parametric Technology Corp. *		1,350		29,133
Pegasystems, Inc.		340		12,645
Progress Software Corp. *		788		18,234
PROS Holdings, Inc. *		24,357		479,589
QLIK Technologies, Inc. *		668		19,245
Quest Software, Inc. *		876		20,384
QuinStreet, Inc. *		551		5,791
Rackspace Hosting, Inc. *		8,200		476,338
RealPage, Inc. *		505		9,166
Responsys, Inc. *		367		4,690
Saba Software, Inc. *		391		3,801
Sapient Corp.		968		11,587
SeaChange International, Inc. *		44,517		365,930
ServiceSource International, Inc. *		24,562		407,238
Solarwinds, Inc. *		691		32,415
Sourcefire, Inc. *		450		22,945
SS&C Technologies Holdings, Inc. *		511		12,146
Stamps.com, Inc. *		166		4,819
Synchronoss Technologies, Inc. *		435		13,615
Syntel, Inc.		93		5,570
Take-Two Interactive Software, Inc. *		938		13,226
Tangoe, Inc. *		277		5,673
TeleTech Holdings, Inc. *		251		3,803
The Active Network, Inc. *		294		4,939
The Ultimate Software Group, Inc. *		19,242		1,484,713
TiVo, Inc. *		997		10,758
TNS, Inc. *		238		4,855
Travelzoo, Inc. *		203		5,270
Tyler Technologies, Inc. *		466		18,617
Unisys Corp. *		643		11,998
United Online, Inc.		776		3,678
ValueClick, Inc. *		1,161		24,590
VASCO Data Security International, Inc. *		6,493		50,580
Verint Systems, Inc. *		391		11,824
Virnetx Holding Corp. *		309		7,676
Vocus, Inc. *		645		8,340
Web.com Group, Inc. *		329		4,261
Websense, Inc. *		72,907		1,512,091
Wright Express Corp. *		524		33,442
XO Group, Inc. *		687		6,368
Zillow, Inc. *		198		6,904
Zix Corp. *		1,368		3,871
				12,623,163
Technology Hardware & Equipment 5.0%
3D Systems Corp. *		708		20,879
Acme Packet, Inc. *		61,507		1,726,502
ADTRAN, Inc.		781		23,836
Aeroflex Holding Corp. *		348		3,898
Anaren, Inc. *		249		4,492
Anixter International, Inc. *		400		27,432
Arris Group, Inc. *		1,232		15,930
Aruba Networks, Inc. *		1,135		23,971
Avid Technology, Inc. *		773		6,717
Badger Meter, Inc.		136		5,024
Benchmark Electronics, Inc. *		698		11,084
Black Box Corp.		134		3,030
Brightpoint, Inc. *		556		3,403
Calix, Inc. *		848		6,750
Ceragon Networks Ltd. *		117,617		1,087,957
Checkpoint Systems, Inc. *		842		9,228
Cognex Corp.		384		15,456
Coherent, Inc. *		204		10,730
Comtech Telecommunications Corp.		372		11,502
Cray, Inc. *		899		10,024
Daktronics, Inc.		790		6,431
DTS, Inc. *		346		10,795
Electro Rent Corp.		245		3,817
Electro Scientific Industries, Inc.		263		3,750
Electronics for Imaging, Inc. *		400		7,140
Emulex Corp. *		794		6,892
Extreme Networks, Inc. *		1,418		5,431
Fabrinet *		249		4,188
FARO Technologies, Inc. *		117		6,550
FEI Co. *		544		27,293
Finisar Corp. *		1,044		17,247
GSI Group, Inc. *		370		4,466
Harmonic, Inc. *		788		3,719
Imation Corp. *		928		5,382
Infinera Corp. *		804		5,757
Insight Enterprises, Inc. *		288		5,849
InterDigital, Inc.		644		17,852
Intermec, Inc. *		768		4,086
InvenSense, Inc. *		302		4,856
Ixia *		136,348		1,717,985
KEMET Corp. *		1,092		9,293
Littelfuse, Inc.		184		11,531
Loral Space & Communications, Inc.		67		4,157
Maxwell Technologies, Inc. *		474		4,508
Measurement Specialties, Inc. *		130		4,645
Mercury Computer Systems, Inc. *		573		7,564
Methode Electronics, Inc.		461		3,895
MTS Systems Corp.		124		5,948
Multi-Fineline Electronix, Inc. *		162		4,291
NETGEAR, Inc. *		57,109		2,198,697
Newport Corp. *		655		11,181
Novatel Wireless, Inc. *		1,418		4,098
Oclaro, Inc. *		1,205		3,458
OCZ Technology Group, Inc. *		1,106		6,525
Oplink Communications, Inc. *		255		4,039
OSI Systems, Inc. *		150		10,029
Park Electrochemical Corp.		140		4,039
Plantronics, Inc.		614		23,529
Plexus Corp. *		305		9,873
Power-One, Inc. *		894		3,826

22 See financial notes

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Procera Networks, Inc. *		21,583		448,063
Quantum Corp. *		1,535		3,653
RealD, Inc. *		770		9,302
Rofin-Sinar Technologies, Inc. *		393		9,904
Rogers Corp. *		112		4,288
Sanmina-SCI Corp. *		993		8,838
ScanSource, Inc. *		206		6,790
ShoreTel, Inc. *		692		3,315
Silicon Graphics International Corp. *		982		9,270
Sonus Networks, Inc. *		1,630		4,613
STEC, Inc. *		805		6,673
Stratasys, Inc. *		156		7,989
Super Micro Computer, Inc. *		549		9,690
Sycamore Networks, Inc. *		216		3,367
Synaptics, Inc. *		496		15,232
SYNNEX Corp. *		408		15,541
TTM Technologies, Inc. *		856		8,843
Universal Display Corp. *		419		18,842
ViaSat, Inc. *		510		24,633
Xyratex Ltd.		591		8,581
				7,859,884
Telecommunication Services 0.3%
AboveNet, Inc. *		332		27,613
Alaska Communications Systems Group, Inc.		1,477		3,781
Boingo Wireless, Inc. *		34,000		358,020
Cincinnati Bell, Inc. *		1,476		5,609
Cogent Communications Group, Inc. *		437		8,185
Consolidated Communications Holdings, Inc.		529		10,236
General Communication, Inc., Class A *		408		3,101
inContact, Inc. *		1,012		5,515
Iridium Communications, Inc. *		770		6,768
Leap Wireless International, Inc. *		917		5,144
Neutral Tandem, Inc. *		360		4,183
NTELOS Holdings Corp.		303		6,127
Premiere Global Services, Inc. *		473		4,233
SureWest Communications		344		7,768
USA Mobility, Inc.		547		7,067
				463,350
Transportation 1.8%
Air Transport Services Group, Inc. *		834		4,420
Alaska Air Group, Inc. *		780		26,364
Allegiant Travel Co. *		131		7,698
AMERCO		59		5,926
Arkansas Best Corp.		487		7,471
Atlas Air Worldwide Holdings, Inc. *		402		18,512
Avis Budget Group, Inc. *		1,236		16,266
Dollar Thrifty Automotive Group, Inc. *		394		31,859
Echo Global Logistics, Inc. *		27,700		471,731
Forward Air Corp.		36,335		1,227,396
Genco Shipping & Trading Ltd. *		897		4,799
Genesee & Wyoming, Inc., Class A *		529		28,518
Hawaiian Holdings, Inc. *		681		3,854
Heartland Express, Inc.		778		10,760
Hub Group, Inc., Class A *		12,509		437,815
JetBlue Airways Corp. *		2,129		10,113
Knight Transportation, Inc.		763		12,528
Old Dominion Freight Line, Inc. *		10,454		464,889
Pacer International, Inc. *		762		4,580
RailAmerica, Inc. *		517		11,984
Roadrunner Transportation Systems, Inc. *		377		6,541
SkyWest, Inc.		318		2,859
Spirit Airlines, Inc. *		270		6,485
Swift Transportation Co. *		1,381		14,487
US Airways Group, Inc. *		1,619		16,611
Werner Enterprises, Inc.		547		12,920
Zipcar, Inc. *		286		3,446
				2,870,832
Utilities 0.3%
Allete, Inc.		473		19,492
American States Water Co.		334		12,171
Atlantic Power Corp.		1,045		14,923
Avista Corp.		816		21,575
Black Hills Corp.		467		15,416
California Water Service Group		614		11,119
Central Vermont Public Service Corp.		274		9,658
CH Energy Group, Inc.		114		7,481
Chesapeake Utilities Corp.		100		4,202
Cleco Corp.		792		32,314
El Paso Electric Co.		612		18,752
IDACORP, Inc.		524		21,348
MGE Energy, Inc.		177		8,096
New Jersey Resources Corp.		569		24,603
Northwest Natural Gas Co.		399		18,234
NorthWestern Corp.		542		19,252
Ormat Technologies, Inc.		443		8,758
Otter Tail Corp.		608		13,352
Piedmont Natural Gas Co., Inc.		906		27,615
PNM Resources, Inc.		744		13,957
Portland General Electric Co.		805		20,793
South Jersey Industries, Inc.		425		20,931
Southwest Gas Corp.		635		26,683
The Empire District Electric Co.		692		14,200
The Laclede Group, Inc.		160		6,301
UIL Holdings Corp.		691		23,750
Unisource Energy Corp.		541		19,692
WGL Holdings, Inc.		614		24,627
				479,295
Total Common Stock
(Cost $115,523,540)				146,382,713
Other Investment Company 6.7% of net assets
Money Market Fund 6.7%
State Street Institutional U.S. Government Money Market Fund		10,619,402		10,619,402
Total Other Investment Company
(Cost $10,619,402)				10,619,402

See financial notes 23

 Laudus Small-Cap MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	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
0.05%, 05/24/12 (a)(b)		5,000		5,000
0.05%, 06/14/12 (a)(b)		40,000		39,997
0.06%, 05/24/12 (a)(b)		20,000		19,999
0.08%, 05/24/12 (a)(b)		10,000		10,000
0.08%, 06/14/12 (a)(b)		400,000		399,961
0.11%, 05/24/12 (a)(b)		5,000		5,000
Total Short-Term Investments
(Cost $479,957)				479,957
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $128,761,856 and the unrealized appreciation and depreciation were $31,968,922 and ($3,248,706), respectively, with a net appreciation of $28,720,216.

*	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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		71		5,785,790		85,741

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

	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)		$146,382,713		$—		$—		$146,382,713
Other Investment Company(a)		10,619,402		—		—		10,619,402
Short-Term Investments(a)		—		479,957		—		479,957
Total		$157,002,115		$479,957		$—		$157,482,072
Other Financial Instruments
Futures Contract*		$85,741		$—		$—		$85,741

*	Futures contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

There were no significant transfers between Level 1, Level 2 and Level 3 for the period ended April 30, 2012.

24 See financial notes

 Laudus Small-Cap MarketMasters Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $126,622,899)		$157,482,072
Receivables:
Investments sold		3,140,164
Fund shares sold		76,488
Dividends		33,704
Interest		79
Prepaid expenses	+	6,904
Total assets		160,739,411
Liabilities
Payables:
Investments bought		2,875,872
Investment adviser and administrator fees		31,919
Fund shares redeemed		69,657
Due to brokers for futures		63,190
Accrued expenses	+	25,508
Total liabilities		3,066,146
Net Assets
Total assets		160,739,411
Total liabilities	−	3,066,146
Net assets		$157,673,265
Net Assets by Source
Capital received from investors		193,051,288
Net investment loss		(601,957	)
Net realized capital losses		(65,841,295	)
Net unrealized capital gains		31,065,229
Net Asset Value (NAV) by Shares Class

			Shares
Share Class	Net Assets	÷	Outstanding	=	NAV
Investor Shares	$62,764,476		4,783,609			$13.12
Select Shares	$94,908,789		7,136,977			$13.30

See financial notes 25

 Laudus Small-Cap MarketMasters Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $1,121)		$554,134
Interest	+	4,462
Total investment income		558,596
Expenses
Investment adviser and administrator fees		994,843
Shareholder service fees:
Investor Shares		76,684
Select Shares		102,563
Portfolio accounting fees		33,047
Transfer agent fees		23,229
Professional fees		22,343
Registration fees		16,501
Custodian fees		15,179
Shareholder reports		13,929
Trustees’ fees		3,582
Interest expense		2
Other expenses	+	4,089
Total expenses		1,305,991
Expense reduction by CSIM and its affiliates	−	145,437
Custody credits	−	1
Net expenses	−	1,160,553
Net investment loss		(601,957	)
Realized and Unrealized Gains (Losses)
Net realized gains on investments		1,121,618
Net realized gains on futures contracts		2,717,078
Net realized gains on foreign currency transactions	+	1
Net realized gains		3,838,697
Net unrealized gains on investments		2,704,219
Net unrealized losses on futures contracts	+	(732,131	)
Net unrealized gains	+	1,972,088
Net realized and unrealized gains		5,810,785
Increase in net assets resulting from operations		$5,208,828

26 See financial notes

 Laudus Small-Cap MarketMasters Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment loss		($601,957	)		($1,841,609	)
Net realized gains		3,838,697			57,475,908
Net unrealized gains (losses)	+	1,972,088			(36,471,721	)
Increase in net assets from operations		$5,208,828			$19,162,578

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares Sold
Investor Shares			61,704		$790,703			126,703		$1,624,965
Select Shares	+		852,708		10,762,956			2,023,632		24,972,114
Total shares sold			914,412		$11,553,659			2,150,335		$26,597,079
Shares Redeemed
Investor Shares			(478,744	)	($6,031,388	)		(827,089	)	($10,514,720	)
Select Shares	+		(11,763,918	)	(134,500,935	)		(12,892,563	)	(158,472,758	)
Total shares redeemed			(12,242,662	)	($140,532,323	)		(13,719,652	)	($168,987,478	)
Net transactions in fund shares			(11,328,250	)	($128,978,664	)		(11,569,317	)	($142,390,399	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			23,248,836		$281,443,101			34,818,153		$404,670,922
Total decrease	+		(11,328,250	)	(123,769,836	)		(11,569,317	)	(123,227,821	)
End of period			11,920,586		$157,673,265			23,248,836		$281,443,101
Net investment loss					($601,957	)				$—

See financial notes 27

Laudus International MarketMasters Fund™

Financial Statements

Financial Highlights

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
Investor Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		17.45			18.36			15.04			11.78			25.96			20.73
Income (loss) from investment operations:
Net investment income (loss)		0.05			0.16			0.09			0.14			0.20			0.14
Net realized and unrealized gains (losses)		1.25			(0.85	)		3.41			3.63			(12.25	)		6.84
Total from investment operations		1.30			(0.69	)		3.50			3.77			(12.05	)		6.98
Less distributions:
Distributions from net investment income		(0.15	)		(0.22	)		(0.18	)		(0.51	)		(0.10	)		(0.16	)
Distributions from net realized gains		—			—			—			—			(2.03	)		(1.59	)
Total distributions		(0.15	)		(0.22	)		(0.18	)		(0.51	)		(2.13	)		(1.75	)
Net asset value at end of period		18.60			17.45			18.36			15.04			11.78			25.96
Total return (%)		7.57	1		(3.87	)		23.47			33.64			(49.97	)		36.01
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.61	2		1.59			1.60			1.62			1.59			1.56	3
Gross operating expenses		1.62	2		1.60			1.62			1.63			1.59			1.59
Net investment income (loss)		0.68	2		0.80			0.53			0.95			0.95			0.62
Portfolio turnover rate		36	1		78			83			96			88			71
Net assets, end of period ($ x 1,000,000)		618			665			849			931			918			2,297

	11/1/11–			11/1/10–			11/1/09–			11/1/08–			11/1/07–			11/1/06–
Select Shares	4/30/12*			10/31/11			10/31/10			10/31/09			10/31/08			10/31/07
Per-Share Data ($)
Net asset value at beginning of period		17.46			18.38			15.05			11.80			26.00			20.77
Income (loss) from investment operations:
Net investment income (loss)		0.08			0.19			0.10			0.15			0.23			0.15
Net realized and unrealized gains (losses)		1.23			(0.86	)		3.43			3.64			(12.27	)		6.86
Total from investment operations		1.31			(0.67	)		3.53			3.79			(12.04	)		7.01
Less distributions:
Distributions from net investment income		(0.18	)		(0.25	)		(0.20	)		(0.54	)		(0.13	)		(0.19	)
Distributions from net realized gains		—			—			—			—			(2.03	)		(1.59	)
Total distributions		(0.18	)		(0.25	)		(0.20	)		(0.54	)		(2.16	)		(1.78	)
Net asset value at end of period		18.59			17.46			18.38			15.05			11.80			26.00
Total return (%)		7.65	1		(3.76	)		23.68			33.82			(49.91	)		36.16
Ratios/Supplemental Data (%)
Ratios to average net assets:
Net operating expenses		1.46	2		1.45			1.48	4		1.47			1.48	4		1.44	5
Gross operating expenses		1.47	2		1.47			1.50			1.58			1.54			1.55
Net investment income (loss)		0.89	2		0.99			0.69			1.08			1.08			0.73
Portfolio turnover rate		36	1		78			83			96			88			71
Net assets, end of period ($ x 1,000,000)		1,026			961			948			630			540			1,255

* Unaudited.

¹ Not annualized.

² Annualized.

³ The ratio of net operating expenses would have been 1.59% if custody credits had not been included.

⁴ The ratio of net operating expenses would have been 1.47% if certain non-routine expenses had not been incurred.

⁵ The ratio of net operating expenses would have been 1.47% if custody credits had not been included.

28 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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				($)		($)
	96	.2%	Common Stock		1,323,491,242		1,580,605,086
	0	.3%	Preferred Stock		4,196,238		5,038,987
	2	.5%	Other Investment Company		40,954,017		40,954,017
	0	.0%	Corporate Bond		117,338		60,756
	0	.0%	Rights		5,792		106,617
	0	.1%	Short-Term Investments		2,404,785		2,404,785
	99	.1%	Total Investments		1,371,169,412		1,629,170,248
	0	.9%	Other Assets and Liabilities, Net				14,235,530
	100	.0%	Net Assets				1,643,405,778

	Number		Value
Security	of Shares		($)
Common Stock 96.2% of net assets
Australia 4.7%
Banks 0.3%
Australia & New Zealand Banking Group Ltd.		40,521		1,003,837
Bendigo and Adelaide Bank Ltd.		5,509		43,079
Commonwealth Bank of Australia		24,227		1,306,876
National Australia Bank Ltd.		33,910		886,383
Westpac Banking Corp.		46,602		1,098,233
				4,338,408
Capital Goods 0.6%
Boart Longyear Group		69,756		300,611
Leighton Holdings Ltd.		2,271		48,417
Monadelphous Group Ltd.		282,324		6,791,974
NRW Holdings Ltd.		591,592		2,497,624
				9,638,626
Commercial & Professional Supplies 0.6%
Brambles Ltd.		23,064		173,050
Campbell Brothers Ltd.		42,266		2,999,115
SAI Global Ltd.		210,930		1,150,409
Transfield Services Ltd.		2,205,350		5,200,915
				9,523,489
Consumer Services 0.2%
Aristocrat Leisure Ltd.		516,307		1,661,656
Crown Ltd.		7,066		66,722
Echo Entertainment Group Ltd. *		10,317		48,060
Flight Centre Ltd.		100,812		2,205,573
TABCORP Holdings Ltd.		10,270		30,634
Tatts Group Ltd.		19,773		53,102
				4,065,747
Diversified Financials 0.0%
ASX Ltd.		2,626		87,305
Macquarie Group Ltd.		5,434		163,783
				251,088
Energy 0.1%
Caltex Australia Ltd.		2,024		28,835
Origin Energy Ltd.		16,850		231,501
Santos Ltd.		14,656		212,614
Whitehaven Coal Ltd.		6,829		37,596
Woodside Petroleum Ltd.		9,956		360,043
WorleyParsons Ltd.		2,899		84,887
				955,476
Food & Staples Retailing 0.1%
Metcash Ltd.		11,533		47,451
Wesfarmers Ltd.		15,350		482,018
Woolworths Ltd.		18,891		509,373
				1,038,842
Food, Beverage & Tobacco 0.0%
Coca-Cola Amatil Ltd.		8,528		110,381
Treasury Wine Estates		134,333		600,191
				710,572
Health Care Equipment & Services 0.1%
Cochlear Ltd.		10,526		716,907
Ramsay Health Care Ltd.		1,970		41,058
Sonic Healthcare Ltd.		5,555		72,668
				830,633
Insurance 0.0%
AMP Ltd.		44,364		196,159
Insurance Australia Group Ltd.		31,174		114,346
QBE Insurance Group Ltd.		17,292		248,107
Suncorp Group Ltd.		20,038		168,967
				727,579
Materials 1.9%
Alumina Ltd.		36,590		43,705
Amcor Ltd.		1,107,707		8,645,548
Atlas Iron Ltd.		556,698		1,603,745
BHP Billiton Ltd.		49,327		1,830,388
BHP Billiton Ltd. ADR		140,425		10,433,577
Boral Ltd.		10,945		42,806
Fortescue Metals Group Ltd.		18,676		108,496
Iluka Resources Ltd.		124,375		2,172,635
Incitec Pivot Ltd.		24,422		82,540
Lynas Corp Ltd. *		25,698		29,671
Newcrest Mining Ltd.		11,684		318,390
Orica Ltd.		188,376		5,242,429
OZ Minerals Ltd.		4,856		46,756
Rio Tinto Ltd.		6,649		454,957
Sims Metal Management Ltd.		23,164		340,635
				31,396,278
Media 0.0%
Fairfax Media Ltd.		33,502		23,907

See financial notes 29

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
CSL Ltd.		8,053		306,662
Mesoblast Ltd. *		90,500		706,470
				1,013,132
Real Estate 0.6%
CFS Retail Property Trust		27,676		55,359
Commonwealth Property Office Fund		8,530,634		9,233,536
Dexus Property Group		72,559		70,398
Goodman Group		21,067		78,765
GPT Group		26,221		89,269
Lend Lease Group		8,133		62,642
Mirvac Group		51,235		68,844
Stockland		35,733		114,790
Westfield Group		33,609		321,348
Westfield Retail Trust		43,506		122,771
				10,217,722
Retailing 0.1%
David Jones Ltd.		671,225		1,728,291
Harvey Norman Holdings Ltd.		7,965		16,701
				1,744,992
Software & Services 0.0%
Computershare Ltd.		6,665		58,130
Telecommunication Services 0.0%
Telstra Corp., Ltd.		67,567		249,119
Transportation 0.0%
Asciano Ltd.		14,625		71,577
Qantas Airways Ltd. *		16,643		28,213
QR National Ltd.		25,611		96,645
Sydney Airport		5,582		16,872
Toll Holdings Ltd.		10,116		61,314
Transurban Group		19,579		119,551
				394,172
Utilities 0.0%
AGL Energy Ltd.		7,295		113,519
APA Group		7,825		42,372
SP AusNet		21,374		24,548
				180,439
				77,358,351
Austria 0.1%
Banks 0.0%
Erste Group Bank AG		2,837		65,419
Raiffeisen Bank International AG		733		24,390
				89,809
Capital Goods 0.1%
Andritz AG		27,063		1,417,691
Energy 0.0%
OMV AG		2,454		83,011
Insurance 0.0%
Vienna Insurance Group AG Wiener Versicherung Gruppe		576		23,455
Materials 0.0%
Voestalpine AG		1,648		53,686
Real Estate 0.0%
Immofinanz AG *		15,816		55,683
Telecommunication Services 0.0%
Telekom Austria AG		4,982		54,665
Utilities 0.0%
Verbund AG		1,021		28,613
				1,806,613
Belgium 0.2%
Banks 0.0%
KBC GROEP NV		2,415		46,820
Capital Goods 0.0%
Bekaert N.V.		584		17,345
Diversified Financials 0.0%
Groupe Bruxelles Lambert S.A.		1,210		83,975
Food & Staples Retailing 0.0%
Colruyt S.A.		1,136		46,544
Delhaize Group S.A.		1,527		74,322
				120,866
Food, Beverage & Tobacco 0.1%
Anheuser-Busch InBev N.V.		12,350		890,132
Insurance 0.0%
Ageas		33,176		60,454
Materials 0.1%
Solvay S.A.		889		108,294
Umicore S.A.		19,296		1,047,846
				1,156,140
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
UCB S.A.		1,512		70,702
Telecommunication Services 0.0%
Belgacom S.A.		2,281		64,815
Mobistar S.A.		450		17,039
				81,854
				2,528,288
Brazil 1.2%
Capital Goods 0.2%
Iochpe-Maxion S.A.		31,000		537,822
Mills Estruturas e Servicos de Engenharia S.A.		192,700		2,506,116
				3,043,938
Commercial & Professional Supplies 0.0%
Qualicorp SA *		800		6,967
Consumer Durables & Apparel 0.0%
Arezzo Industria e Comercio S.A.		6,600		103,874
Diversified Financials 0.1%
CETIP SA - Balcao Organizado de Ativos e Derivativos		108,974		1,679,074
Energy 0.1%
OGX Petroleo e Gas Participacoes S.A. *		39,900		276,934

30 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Petroleo Brasileiro S.A. - Petrobras		92,800		1,090,046
				1,366,980
Health Care Equipment & Services 0.0%
OdontoPrev S.A.		71,100		379,344
Materials 0.4%
Vale S.A. ADR		313,100		6,950,820
Media 0.0%
T4F Entretenimento S.A.		47,300		432,267
Real Estate 0.2%
BR Malls Participacoes S.A.		79,200		983,897
BR Properties S.A. *		115,500		1,433,033
				2,416,930
Retailing 0.1%
Cia. Hering		49,900		1,238,240
Software & Services 0.0%
Cielo S.A.		25,540		766,408
Transportation 0.1%
CCR S.A.		151,300		1,174,745
Utilities 0.0%
Tractebel Energia S.A.		42,000		723,815
				20,283,402
Canada 6.1%
Banks 0.1%
Canadian Western Bank		66,177		1,921,970
Capital Goods 0.1%
Finning International, Inc.		31,018		866,626
Westport Innovations, Inc. *		9,209		288,242
				1,154,868
Consumer Services 0.2%
Tim Hortons, Inc.		48,629		2,806,930
Diversified Financials 0.1%
CI Financial Corp.		51,732		1,238,510
Energy 1.3%
Africa Oil Corp. *		422,368		2,334,493
Canadian Natural Resources Ltd.		113,950		3,959,762
Legacy Oil + Gas, Inc. *		72,108		629,216
Pason Systems, Inc.		439,100		5,720,724
Petrominerales Ltd.		38,961		569,911
Peyto Exploration & Development Corp.		54,602		931,360
Precision Drilling Corp. *		111,547		1,027,563
Suncor Energy, Inc.		175,775		5,807,606
				20,980,635
Food & Staples Retailing 0.3%
Alimentation Couche-Tard, Inc., Class B		72,943		3,164,051
Metro, Inc.		21,053		1,161,501
				4,325,552
Health Care Equipment & Services 0.3%
SXC Health Solutions Corp. *		55,241		5,009,352
Insurance 0.0%
Intact Financial Corp.		12,641		816,159
Materials 1.2%
Agrium, Inc.		24,300		2,135,970
AuRico Gold, Inc. *		219,177		2,014,605
Detour Gold Corp.		63,792		1,574,377
Franco-Nevada Corp.		26,600		1,193,143
Major Drilling Group International, Inc.		109,277		1,640,510
Methanex Corp.		24,118		849,141
Potash Corp. of Saskatchewan, Inc.		250,825		10,655,046
				20,062,792
Media 0.4%
Imax Corp. *		19,862		476,092
Thomson Reuters Corp.		201,900		6,033,394
				6,509,486
Real Estate 0.6%
Brookfield Asset Management, Inc., Class A		136,998		4,518,194
Morguard REIT		130,090		2,224,244
Northern Property REIT		116,000		3,855,120
				10,597,558
Retailing 0.3%
Dollarama, Inc.		42,965		2,391,270
Dollarama, Inc.		43,000		2,393,217
				4,784,487
Transportation 1.2%
Canadian National Railway Co.		122,625		10,457,460
Canadian Pacific Railway Ltd.		116,725		9,043,853
				19,501,313
				99,709,612
Chile 0.3%
Banks 0.1%
Banco Santander Chile ADR		14,379		1,176,346
Materials 0.1%
Sociedad Quimica y Minera de Chile S.A. ADR		18,536		1,080,464
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
CFR Pharmaceuticals S.A.		2,025,897		505,743
Real Estate 0.1%
Parque Arauco S.A. *		434,291		843,783
Software & Services 0.0%
Sonda S.A.		129,065		384,455
Telecommunication Services 0.0%
ENTEL Chile S.A.		38,594		764,799
				4,755,590
China 0.7%
Automobiles & Components 0.1%
Dongfeng Motor Group Co., Ltd., Class H		438,000		856,669
Great Wall Motor Co., Ltd., Class H *		375,500		805,874
				1,662,543

See financial notes 31

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Food & Staples Retailing 0.1%
Sun Art Retail Group Ltd. *		443,500		587,217
Household & Personal Products 0.1%
Vinda International Holdings Ltd.		948,000		1,682,404
Materials 0.3%
AMVIG Holdings Ltd.		5,288,000		2,955,241
China Bluechemical Ltd., Class H *		788,000		561,617
Dongyue Group *		763,000		567,989
Nine Dragons Paper Holdings Ltd.		452,000		370,551
				4,455,398
Media 0.0%
Focus Media Holding Ltd. ADR		18,397		439,504
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
WuXi PharmaTech Cayman, Inc. ADR *		19,732		283,746
Real Estate 0.0%
Evergrande Real Estate Group Ltd.		253,000		145,244
Longfor Properties Co., Ltd. *		114,000		180,090
				325,334
Retailing 0.1%
Baoxin Auto Group Ltd. *		907,000		1,040,426
Semiconductors & Semiconductor Equipment 0.0%
Spreadtrum Communications, Inc. ADR		20,875		288,075
Technology Hardware & Equipment 0.0%
Hollysys Automation Technologies Ltd. *		26,548		263,622
				11,028,269
Colombia 0.1%
Energy 0.1%
Ecopetrol S.A.		375,107		1,213,195
Denmark 1.1%
Banks 0.0%
Danske Bank A/S *		10,154		165,012
Capital Goods 0.0%
FLSmidth & Co. A/S		4,394		309,306
Vestas Wind Systems A/S *		3,054		26,918
				336,224
Food, Beverage & Tobacco 0.0%
Carlsberg A/S, Class B		1,604		138,460
Health Care Equipment & Services 0.2%
Coloplast A/S, Class B		9,972		1,846,167
William Demant Holding A/S *		16,612		1,569,478
				3,415,645
Insurance 0.0%
Tryg A/S		368		20,547
Materials 0.8%
Christian Hansen Holding A/S		451,604		12,531,154
Novozymes A/S, B Shares		3,457		90,721
				12,621,875
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Novo Nordisk A/S, Class B		6,541		964,293
Software & Services 0.0%
SimCorp A/S		2,282		407,056
Telecommunication Services 0.0%
TDC A/S		7,940		56,915
Transportation 0.0%
AP Moller - Maersk A/S, Series A		8		59,670
AP Moller - Maersk A/S, Series B		20		156,599
DSV A/S		3,059		69,760
				286,029
				18,412,056
Egypt 0.0%
Diversified Financials 0.0%
Egyptian Financial Group-Hermes Holding *		5,548		12,279
Finland 0.5%
Automobiles & Components 0.2%
Nokian Renkaat Oyj		55,357		2,627,884
Capital Goods 0.3%
Kone Oyj, Class B		2,335		144,500
Metso Oyj		1,916		82,297
Outotec Oyj		77,166		4,155,396
Wartsila Oyj		2,514		101,874
				4,484,067
Diversified Financials 0.0%
Pohjola Bank plc, A Shares		2,071		22,288
Energy 0.0%
Neste Oil Oyj		1,922		22,744
Food & Staples Retailing 0.0%
Kesko Oyj, B Shares		1,003		26,828
Insurance 0.0%
Sampo Oyj, A Shares		6,533		173,941
Materials 0.0%
Huhtamaki Oyj		34,090		541,021
Stora Enso Oyj, R Shares		8,723		59,706
UPM-Kymmene Oyj		7,872		101,023
				701,750
Media 0.0%
Sanoma Oyj		1,221		12,768
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Orion Oyj, Class B		1,428		29,129
Technology Hardware & Equipment 0.0%
Nokia Oyj		57,419		207,955
Telecommunication Services 0.0%
Elisa Oyj		2,120		47,809

32 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Utilities 0.0%
Fortum Oyj		6,918		148,803
				8,505,966
France 6.7%
Automobiles & Components 0.0%
Cie Generale des Etablissements Michelin, Class B		2,795		208,878
Peugeot S.A.		3,449		41,422
Renault S.A.		2,997		136,336
				386,636
Banks 0.9%
BNP Paribas S.A.		352,233		14,215,922
Credit Agricole S.A.		14,982		77,123
Natixis		13,865		42,266
Societe Generale S.A.		10,107		239,276
				14,574,587
Capital Goods 0.8%
Alstom S.A.		3,091		110,549
Bouygues S.A.		2,833		77,294
Compagnie de Saint-Gobain		6,158		258,547
Eiffage S.A.		607		20,663
Legrand S.A.		3,356		113,294
Mersen S.A.		98,381		3,260,915
Nexans S.A.		69,243		3,470,391
Rexel S.A.		43,772		915,791
Safran S.A.		2,501		92,699
Schneider Electric S.A. *		7,473		460,306
Thales S.A.		1,517		52,592
Vallourec S.A.		1,696		102,136
Vinci S.A.		6,906		320,303
Zodiac Aerospace		36,004		3,962,027
				13,217,507
Commercial & Professional Supplies 0.0%
Bureau Veritas S.A.		819		72,962
Edenred		18,258		583,298
Societe BIC S.A.		431		47,476
				703,736
Consumer Durables & Apparel 0.2%
Christian Dior S.A.		19,020		2,868,053
LVMH Moet Hennessy Louis Vuitton S.A.		3,909		648,486
				3,516,539
Consumer Services 0.0%
Accor S.A.		2,211		76,458
Sodexo		8,224		655,185
				731,643
Diversified Financials 0.0%
Eurazeo		473		24,250
Wendel S.A.		493		36,927
				61,177
Energy 0.3%
Compagnie Generale de Geophysique - Veritas *		2,163		62,030
Technip S.A.		23,213		2,636,077
Total S.A.		32,604		1,565,109
				4,263,216
Food & Staples Retailing 0.0%
Carrefour S.A.		8,960		179,975
Casino Guichard Perrachon S.A. *		826		81,154
				261,129
Food, Beverage & Tobacco 0.2%
DANONE S.A.		29,695		2,090,500
Pernod Ricard S.A.		3,042		315,661
				2,406,161
Health Care Equipment & Services 0.3%
Essilor International S.A.		27,137		2,391,231
Medica S.A.		125,724		1,944,385
				4,335,616
Household & Personal Products 0.0%
L’Oreal S.A.		3,674		442,264
Insurance 0.2%
AXA S.A.		259,668		3,689,921
CNP Assurances		2,227		31,268
SCOR SE		2,591		68,500
				3,789,689
Materials 0.1%
Air Liquide S.A.		4,372		562,357
Arkema		15,389		1,364,836
Imerys S.A.		509		29,003
Lafarge S.A.		3,139		122,694
				2,078,890
Media 0.7%
Eutelsat Communications S.A.		1,976		70,357
Ipsos		97,957		3,177,407
JC Decaux S.A. *		997		28,304
Lagardere S.C.A.		1,770		53,672
Publicis Groupe S.A.		148,570		7,671,711
Societe Television Francaise 1		1,760		17,048
				11,018,499
Pharmaceuticals, Biotechnology & Life Sciences 0.7%
Boiron S.A.		81,759		2,516,609
Eurofins Scientific		27,955		3,306,413
Sanofi		66,594		5,086,570
				10,909,592
Real Estate 0.0%
Fonciere des Regions		412		31,923
Gecina S.A.		329		30,520
ICADE *		350		29,528
Klepierre		1,564		49,582
Unibail-Rodamco SE		1,410		263,836
				405,389
Retailing 0.6%
CFAO		28,468		1,226,734
PPR		46,982		7,862,417
				9,089,151
Semiconductors & Semiconductor Equipment 0.0%
STMicroelectronics N.V.		9,557		55,028
Software & Services 0.0%
AtoS		742		47,815

See financial notes 33

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Cap Gemini S.A.		2,219		86,690
Dassault Systemes S.A.		906		87,918
				222,423
Technology Hardware & Equipment 1.3%
Alcatel-Lucent *		34,792		53,504
Gemalto N.V.		31,956		2,380,543
Ingenico S.A.		217,715		11,451,926
Neopost S.A.		116,671		6,714,718
				20,600,691
Telecommunication Services 0.1%
France Telecom S.A.		28,326		388,295
Iliad S.A.		7,379		950,279
Vivendi S.A.		19,056		352,470
				1,691,044
Transportation 0.0%
Aeroports de Paris		519		43,678
Groupe Eurotunnel S.A. - Reg’d		8,080		67,982
				111,660
Utilities 0.3%
EDF S.A.		3,627		76,841
GDF Suez		18,898		435,112
Rubis		78,441		4,265,817
Suez Environnement Co.		4,195		59,175
Veolia Environnement		5,454		79,856
				4,916,801
				109,789,068
Germany 7.6%
Automobiles & Components 1.2%
Bayerische Motoren Werke AG		48,905		4,651,459
Continental AG		1,200		116,386
Daimler AG - Reg’d		213,944		11,837,855
ElringKlinger AG		124,546		3,607,822
Volkswagen AG		442		75,505
				20,289,027
Banks 0.0%
Commerzbank AG *		56,777		122,931
Capital Goods 1.5%
Bilfinger Berger SE		61,184		5,597,849
Brenntag AG		7,806		972,461
GEA Group AG		54,982		1,815,931
Gildemeister AG *		195,311		4,002,049
Hochtief AG		635		37,247
KUKA AG *		75,370		1,794,926
MAN SE		951		120,217
MTU Aero Engines Holding AG		77,133		6,499,003
Rational AG		10,622		2,716,154
Siemens AG - Reg’d		12,645		1,173,714
				24,729,551
Consumer Durables & Apparel 0.3%
Adidas AG		3,242		270,415
Gerry Weber International AG		98,988		4,204,512
Hugo Boss AG		306		34,112
				4,509,039
Diversified Financials 0.2%
Deutsche Bank AG - Reg’d		78,449		3,405,714
Deutsche Boerse AG		3,030		190,250
				3,595,964
Food & Staples Retailing 0.0%
Metro AG		1,944		62,762
Food, Beverage & Tobacco 0.0%
Suedzucker AG		994		30,269
Health Care Equipment & Services 0.0%
Celesio AG		1,275		21,987
Fresenius Medical Care AG & Co KGaA		3,256		231,215
Fresenius SE & Co KGaA		1,769		176,613
				429,815
Household & Personal Products 0.0%
Beiersdorf AG		1,511		106,037
Henkel AG & Co. KGaA		1,948		119,277
				225,314
Insurance 0.6%
Allianz SE - Reg’d		87,492		9,758,972
Hannover Rueckversicherung AG - Reg’d		904		54,708
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d		2,742		398,276
				10,211,956
Materials 1.4%
BASF SE		39,454		3,248,370
BASF SE ADR		76,750		6,311,920
HeidelbergCement AG		2,109		116,047
K&S AG - Reg’d		2,583		129,103
Lanxess AG		10,626		846,003
Linde AG		2,608		446,394
Salzgitter AG		586		30,714
Symrise AG		379,029		10,985,070
ThyssenKrupp AG		6,015		142,648
Wacker Chemie AG		235		18,949
				22,275,218
Media 0.2%
Axel Springer AG		593		27,055
GfK SE		69,181		3,676,228
Kabel Deutschland Holding AG *		1,350		85,108
				3,788,391
Pharmaceuticals, Biotechnology & Life Sciences 0.5%
Bayer AG - Reg’d		72,344		5,097,639
Merck KGaA		969		106,512
QIAGEN N.V. *		195,025		3,224,655
				8,428,806
Real Estate 0.1%
TAG Immobilien AG *		86,306		856,825
Retailing 0.5%
Delticom AG		21,872		2,125,466
Fielmann AG		56,911		5,515,709
				7,641,175
Semiconductors & Semiconductor Equipment 0.0%
Infineon Technologies AG		16,932		168,736

34 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Software & Services 1.0%
SAP AG		198,565		13,167,540
United Internet AG - Reg’d		1,612		31,901
Wirecard AG		59,921		1,111,741
XING AG *		16,136		1,203,520
				15,514,702
Telecommunication Services 0.0%
Deutsche Telekom AG - Reg’d		42,861		483,246
Transportation 0.0%
Deutsche Lufthansa AG - Reg’d		3,433		44,706
Deutsche Post AG - Reg’d		13,117		244,946
Fraport AG		551		35,828
				325,480
Utilities 0.1%
E.ON AG		27,729		627,834
RWE AG		7,495		322,188
				950,022
				124,639,229
Greece 0.0%
Banks 0.0%
National Bank of Greece S.A. *		14,336		31,986
Consumer Services 0.0%
OPAP S.A.		3,348		29,921
Food, Beverage & Tobacco 0.0%
Coca Cola Hellenic Bottling Co., S.A. *		2,748		54,563
Telecommunication Services 0.0%
Hellenic Telecommunications Organization S.A. (OTE)		3,675		11,997
				128,467
Hong Kong 2.5%
Banks 0.0%
BOC Hong Kong (Holdings) Ltd.		55,500		171,543
Hang Seng Bank Ltd.		11,500		157,485
The Bank of East Asia, Ltd.		23,200		86,323
				415,351
Capital Goods 0.0%
Hopewell Holdings Ltd.		8,500		22,781
Hutchison Whampoa Ltd.		33,000		316,141
Noble Group Ltd.		58,000		55,049
NWS Holdings Ltd.		20,000		30,049
				424,020
Consumer Durables & Apparel 0.1%
Goodbaby International Holdings Ltd.		2,853,000		880,449
Yue Yuen Industrial (Holdings) Ltd.		11,000		36,696
				917,145
Consumer Services 0.1%
Galaxy Entertainment Group Ltd. *		19,000		59,231
Melco Crown Entertainment Ltd. ADR *		74,201		1,151,600
Sands China Ltd.		36,400		142,516
Shangri-La Asia Ltd.		22,000		46,559
SJM Holdings Ltd.		25,000		54,627
Wynn Macau Ltd.		23,200		74,158
				1,528,691
Diversified Financials 0.0%
First Pacific Co., Ltd.		32,000		34,664
Hong Kong Exchanges & Clearing Ltd.		15,900		252,858
Value Partners Group Ltd.		614,000		372,913
				660,435
Energy 0.2%
CNOOC Ltd.		1,252,000		2,645,661
Food, Beverage & Tobacco 0.2%
Biostime International Holdings Ltd.		808,000		2,317,729
Insurance 0.2%
AIA Group Ltd.		1,112,400		3,936,641
Materials 0.1%
China Resources Cement Holdings Ltd.		370,000		292,196
China Shanshui Cement Group		1,521,000		1,225,603
Yingde Gases		411,500		477,943
				1,995,742
Real Estate 0.3%
Cheung Kong (Holdings) Ltd.		22,000		290,951
China Overseas Grand Oceans Group Ltd.		1,955,500		2,615,281
Hang Lung Group Ltd.		14,000		87,316
Hang Lung Properties Ltd.		37,000		136,031
Henderson Land Development Co., Ltd.		15,000		85,112
Hysan Development Co., Ltd.		10,000		45,205
Kerry Properties Ltd.		11,000		49,912
New World Development Co., Ltd.		54,000		66,941
Sino Land Co., Ltd.		44,000		75,475
Sun Hung Kai Properties Ltd.		22,000		263,513
Swire Pacific Ltd., Class A		11,000		129,668
The Link REIT		167,500		696,867
The Wharf Holdings Ltd.		24,000		142,329
Wheelock & Co., Ltd.		14,000		47,169
				4,731,770
Retailing 0.3%
Emperor Watch & Jewellery Ltd.		17,060,000		2,403,634
Giordano International Ltd.		2,400,000		2,086,667
Li & Fung Ltd.		86,000		183,390
Lifestyle International Holdings Ltd.		9,000		20,976
Sa Sa International Holdings Ltd.		646,000		399,506
				5,094,173
Semiconductors & Semiconductor Equipment 0.2%
ASM Pacific Technology Ltd.		235,000		3,174,901

See financial notes 35

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Technology Hardware & Equipment 0.4%
AAC Technologies Holdings, Inc.		1,264,000		3,711,665
China High Precision Automation Group Ltd. (a)		234,000		61,979
Foxconn International Holdings Ltd. *		32,000		15,132
Lenovo Group Ltd.		3,040,000		2,907,228
				6,696,004
Telecommunication Services 0.1%
HKT Trust & HKT Ltd. *		1,304		1,013
Hutchison Telecommunications Hong Kong Holdings Ltd.		1,614,000		717,116
PCCW Ltd.		60,000		22,279
SmarTone Telecommunications Holdings Ltd.		336,500		628,310
				1,368,718
Transportation 0.3%
Cathay Pacific Airways Ltd.		18,000		30,453
MTR Corp., Ltd.		21,500		76,253
Orient Overseas International Ltd.		3,500		23,847
Pacific Basin Shipping Ltd.		7,765,000		4,063,498
				4,194,051
Utilities 0.0%
Cheung Kong Infrastructure Holdings Ltd.		8,000		47,410
CLP Holdings Ltd.		30,000		256,821
Hong Kong & China Gas Co., Ltd.		74,000		189,026
Power Assets Holdings Ltd.		21,000		156,785
				650,042
				40,751,074
India 1.0%
Automobiles & Components 0.1%
Exide Industries Ltd.		238,955		584,283
Tata Motors Ltd.		360,838		2,159,833
				2,744,116
Banks 0.2%
HDFC Bank Ltd.		136,082		1,401,370
Indian Bank		227,750		982,295
IndusInd Bank Ltd.		38,805		245,077
LIC Housing Finance Ltd.		47,069		232,561
Yes Bank Ltd.		150,555		993,395
				3,854,698
Capital Goods 0.1%
Havells India Ltd.		106,397		1,123,082
IRB Infrastructure Developers Ltd.		136,561		444,351
				1,567,433
Diversified Financials 0.1%
Crisil Ltd.		7,230		142,277
Mahindra & Mahindra Financial Services Ltd.		90,036		1,185,681
				1,327,958
Food, Beverage & Tobacco 0.1%
McLeod Russel India Ltd.		252,858		1,341,370
Media 0.1%
Hathway Cable & Datacom Ltd. *		297,451		875,416
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Ipca Laboratories Ltd.		34,831		238,596
Lupin Ltd.		61,912		651,354
Sun Pharmaceutical Industries Ltd.		83,116		953,776
				1,843,726
Software & Services 0.2%
Tata Consultancy Services Ltd.		150,547		3,560,226
				17,114,943
Indonesia 0.6%
Banks 0.1%
PT Bank Rakyat Indonesia (Persero) Tbk		2,251,000		1,620,568
Capital Goods 0.1%
PT United Tractors Tbk		580,893		1,863,446
Food, Beverage & Tobacco 0.1%
PT Perusahaan Perkebunan London Sumatra Indonesia Tbk		5,015,500		1,590,785
Materials 0.0%
PT Semen Gresik (Persero) Tbk		355,000		467,880
Media 0.0%
Media Nusantara Citra Tbk PT		1,842,000		449,753
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
PT Kalbe Farma Tbk		1,729,500		755,078
Retailing 0.1%
PT Mitra Adiperkasa Tbk		1,970,000		1,485,277
Transportation 0.1%
PT Jasa Marga		2,693,500		1,562,963
				9,795,750
Ireland 1.7%
Banks 0.4%
The Governor & Company of the Bank of Ireland *		42,115,000		6,253,491
Capital Goods 0.6%
Cooper Industries plc		117,800		7,370,746
Grafton Group plc		171,414		749,007
Ingersoll-Rand plc		43,200		1,836,864
				9,956,617
Commercial & Professional Supplies 0.3%
Experian plc		269,544		4,257,241
Consumer Services 0.0%
Paddy Power plc		12,548		819,940
Food, Beverage & Tobacco 0.2%
Glanbia plc		472,792		3,612,100
Kerry Group plc, Class A		2,105		96,133
				3,708,233

36 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Materials 0.0%
CRH plc		11,148		226,195
Media 0.0%
WPP plc		19,544		264,645
Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Elan Corp. plc *		7,501		103,410
Elan Corp. plc ADR *		59,496		820,450
Shire plc		63,760		2,078,106
				3,001,966
				28,488,328
Israel 0.6%
Banks 0.0%
Bank Hapoalim B.M.		15,869		58,888
Bank Leumi Le-Israel B.M.		17,676		55,294
Israel Discount Bank, Class A *		11,851		15,369
Mizrahi Tefahot Bank Ltd. *		1,853		16,697
				146,248
Capital Goods 0.0%
Delek Group Ltd.		68		13,236
Elbit Systems Ltd.		353		12,878
				26,114
Energy 0.1%
Avner Oil Exploration LLP *		1,426,978		933,884
Materials 0.0%
Israel Chemicals Ltd.		6,666		76,251
The Israel Corp., Ltd.		35		22,812
				99,063
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Teva Pharmaceutical Industries Ltd.		14,498		662,952
Semiconductors & Semiconductor Equipment 0.3%
Mellanox Technologies Ltd. *		93,028		5,450,511
Software & Services 0.2%
Allot Communications Ltd. *		25,819		633,598
Check Point Software Technologies Ltd. *		31,109		1,808,366
NICE Systems Ltd. *		898		34,428
				2,476,392
Telecommunication Services 0.0%
Bezeq Israeli Telecommunication Corp., Ltd.		26,399		44,011
Cellcom Israel Ltd.		820		10,335
Partner Communications Co., Ltd.		1,283		9,589
				63,935
				9,859,099
Italy 1.7%
Automobiles & Components 0.2%
Fiat S.p.A. *		80,666		389,633
Pirelli & C. S.p.A.		187,133		2,280,156
				2,669,789
Banks 0.6%
Banca Carige S.p.A.		9,693		10,133
Banca Monte dei Paschi di Siena S.p.A.		73,168		26,028
Banco Popolare Scarl		26,443		39,323
Intesa Sanpaolo S.p.A.		6,007,083		9,105,860
Intesa Sanpaolo S.p.A. - RSP		13,982		18,687
UniCredit S.p.A.		61,962		247,143
Unione di Banche Italiane S.C.P.A.		12,169		45,230
				9,492,404
Capital Goods 0.4%
Fiat Industrial S.p.A.		473,565		5,375,956
Finmeccanica S.p.A.		6,068		26,102
Prysmian S.p.A.		32,672		532,191
				5,934,249
Consumer Durables & Apparel 0.2%
Luxottica Group S.p.A.		1,751		62,611
Salvatore Ferragamo Italia S.p.A. *		136,637		3,339,100
				3,401,711
Consumer Services 0.0%
Autogrill S.p.A.		1,717		17,097
Diversified Financials 0.2%
Banca Generali S.p.A.		274,359		3,356,409
Exor S.p.A.		961		22,375
Mediobanca S.p.A.		7,747		37,875
				3,416,659
Energy 0.1%
Eni S.p.A.		36,966		821,377
Saipem S.p.A.		4,111		203,192
Tenaris S.A.		7,371		143,478
				1,168,047
Insurance 0.0%
Assicurazioni Generali S.p.A.		17,902		244,238
Media 0.0%
Mediaset S.p.A.		10,627		25,294
Telecommunication Services 0.0%
Telecom Italia S.p.A. *		146,192		165,852
Telecom Italia S.p.A. - RSP *		90,360		84,634
				250,486
Transportation 0.0%
Atlantia S.p.A.		4,726		71,657
Utilities 0.0%
A2A S.p.A.		16,442		10,434
Enel Green Power S.p.A.		26,240		42,369
Enel S.p.A.		100,538		329,704
Snam Rete Gas S.p.A.		24,097		114,475
Terna - Rete Elettrica Nationale S.p.A.		18,083		67,174
				564,156
				27,255,787
Japan 12.5%
Automobiles & Components 2.5%
Aisin Seiki Co., Ltd.		15,300		538,753

See financial notes 37

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Bridgestone Corp.		10,100		238,984
Daihatsu Motor Co., Ltd.		24,000		453,045
Denso Corp.		7,500		242,514
EXEDY Corp.		17,600		494,647
F.C.C. Co., Ltd.		292,611		5,974,912
Fuji Heavy Industries Ltd.		9,000		67,883
Honda Motor Co., Ltd.		269,500		9,699,085
Isuzu Motors Ltd.		19,000		108,478
Keihin Corp.		87,200		1,483,017
Koito Manufacturing Co., Ltd.		2,000		30,948
Mazda Motor Corp. *		39,000		63,376
Mitsubishi Motor Corp. *		58,000		65,073
NGK Spark Plug Co., Ltd.		3,000		42,829
NHK Spring Co., Ltd.		2,200		22,963
Nifco, Inc.		280,600		7,548,084
Nissan Motors Co., Ltd.		38,000		395,087
NOK Corp.		1,600		32,913
Stanley Electric Co., Ltd.		2,200		33,703
Sumitomo Rubber Industries Ltd.		2,600		35,778
Suzuki Motor Corp.		5,300		124,743
Toyoda Gosei Co., Ltd.		1,000		20,382
Toyota Boshoku Corp.		1,000		12,313
Toyota Industries Corp.		2,700		76,264
Toyota Motor Corp.		313,700		12,854,716
Yamaha Motor Co., Ltd.		4,200		56,098
				40,716,588
Banks 0.5%
Aozora Bank Ltd.		9,000		23,083
Fukuoka Financial Group, Inc.		12,000		49,926
Hokuhoku Financial Group, Inc.		19,000		33,241
Mitsubishi UFJ Financial Group, Inc.		195,900		940,616
Mizuho Financial Group, Inc.		351,500		554,142
Resona Holdings, Inc.		29,500		125,302
Seven Bank Ltd.		8,900		21,990
Shinsei Bank Ltd.		21,000		27,099
Sumitomo Mitsui Financial Group, Inc.		189,700		6,070,169
Sumitomo Mitsui Trust Holdings, Inc.		49,000		143,548
Suruga Bank Ltd.		3,000		29,921
The Bank of Kyoto Ltd.		5,000		42,358
The Bank of Yokohama Ltd.		18,000		87,175
The Chiba Bank Ltd.		12,000		72,906
The Chugoku Bank Ltd.		3,000		37,909
The Gunma Bank Ltd.		6,000		30,443
The Hachijuni Bank Ltd.		7,000		38,096
The Hiroshima Bank Ltd.		8,000		32,501
The Iyo Bank Ltd.		4,000		33,194
The Joyo Bank Ltd.		10,000		43,654
The Nishi-Nippon City Bank Ltd.		10,000		26,449
The Shizuoka Bank Ltd.		9,000		94,182
Yamaguchi Financial Group, Inc.		4,000		34,358
				8,592,262
Capital Goods 1.3%
Amada Co., Ltd.		6,000		40,724
Asahi Glass Co., Ltd.		16,000		125,801
Chiyoda Corp.		88,000		1,059,685
Daikin Industries Ltd.		3,500		92,473
Fanuc Ltd.		26,100		4,401,777
Fuji Electric Co., Ltd.		8,000		21,427
Furukawa Electric Co., Ltd.		10,000		27,137
GS Yuasa Corp.		5,000		25,734
Hino Motors Ltd.		4,000		28,289
Hitachi Construction Machinery Co., Ltd.		1,600		34,602
IHI Corp.		20,000		48,383
ITOCHU Corp.		23,300		263,621
JGC Corp.		3,000		86,385
JS Group Corp.		4,000		78,546
JTEKT Corp.		3,300		36,168
Kajima Corp.		13,000		37,053
Kawasaki Heavy Industries Ltd.		23,000		69,039
Kinden Corp.		2,000		13,889
Komatsu Ltd.		14,500		417,310
Kubota Corp.		18,000		173,756
Kurita Water Industries Ltd.		1,700		41,657
Mabuchi Motor Co., Ltd.		400		16,734
Makita Corp.		1,700		65,074
Marubeni Corp.		26,000		180,536
Mitsubishi Corp.		21,500		465,947
Mitsubishi Electric Corp.		30,000		263,538
Mitsubishi Heavy Industries Ltd.		46,000		208,611
Mitsui & Co., Ltd.		26,500		413,813
Miura Co., Ltd.		80,400		2,082,267
Nabtesco Corp.		1,400		29,887
Nachi-Fujikoshi Corp.		331,000		1,652,287
NGK Insulators Ltd.		4,000		49,889
Nidec Corp.		1,700		152,774
Nippon Sheet Glass Co., Ltd.		14,000		18,133
Nisshinbo Holdings, Inc.		53,000		465,975
NSK Ltd.		97,000		665,545
NTN Corp.		7,000		26,480
Obayashi Corp.		10,000		42,328
Okuma Corp.		82,000		644,774
Shimizu Corp.		9,000		34,212
SMC Corp.		800		133,602
Sojitz Corp.		18,800		31,662
Sumitomo Corp.		17,400		247,275
Sumitomo Electric Industries Ltd.		11,800		159,173
Sumitomo Heavy Industries Ltd.		9,000		46,419
Taisei Corp.		15,000		38,100
The Japan Steel Works Ltd.		5,000		30,413
THK Co., Ltd.		1,800		35,996
TOTO Ltd.		5,000		36,995
Toyota Tsusho Corp.		3,200		63,458
Tsubakimoto Chain Co.		548,000		3,329,515
Ushio, Inc.		193,100		2,519,052
				21,273,920
Commercial & Professional Supplies 0.5%
Dai Nippon Printing Co., Ltd.		9,000		79,874
Meitec Corp.		120,000		2,466,140
Park24 Co., Ltd.		56,800		781,790
Secom Co., Ltd.		117,400		5,554,988
Toppan Printing Co., Ltd.		9,000		60,957
				8,943,749

38 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Consumer Durables & Apparel 0.7%
Asics Corp.		2,200		23,685
Casio Computer Co., Ltd.		3,600		23,916
Namco Bandai Holdings, Inc.		2,900		41,466
Nikon Corp.		194,000		5,749,827
Panasonic Corp.		33,900		259,899
Rinnai Corp.		500		36,427
Sankyo Co., Ltd.		800		38,572
Sega Sammy Holdings, Inc.		3,200		67,144
Sekisui Chemical Co., Ltd.		7,000		62,939
Sekisui House Ltd.		9,000		83,433
Sharp Corp.		16,000		102,355
Shimano, Inc.		9,500		624,659
Sony Corp.		15,500		250,694
Tamron Co., Ltd.		113,800		3,429,143
Yamaha Corp.		2,400		23,268
				10,817,427
Consumer Services 0.0%
Benesse Holdings, Inc.		1,000		49,652
McDonald’s Holdings Co., Ltd.		1,000		28,378
Oriental Land Co., Ltd.		800		88,697
				166,727
Diversified Financials 1.0%
Aeon Credit Service Co., Ltd.		1,200		20,919
Credit Saison Co., Ltd.		2,200		47,214
Daiwa Securities Group, Inc.		3,142,000		11,873,645
Mitsubishi UFJ Lease & Finance Co., Ltd.		870		36,147
Nomura Holdings, Inc.		56,200		230,371
ORIX Corp.		43,270		4,137,079
SBI Holdings, Inc.		336		27,039
				16,372,414
Energy 0.0%
Cosmo Oil Co., Ltd.		9,000		24,959
Idemitsu Kosan Co., Ltd.		400		36,830
Inpex Corp.		34		224,485
Japan Petroleum Exploration Co.		400		18,249
JX Holdings, Inc.		34,900		196,867
Showa Shell Sekiyu K.K.		2,800		17,621
TonenGeneral Sekiyu K.K.		5,000		46,767
				565,778
Food & Staples Retailing 0.2%
Aeon Co., Ltd.		9,000		117,495
Ain Pharmaciez, Inc.		5,800		310,125
FamilyMart Co., Ltd.		24,200		1,077,202
Lawson, Inc.		14,800		979,844
Seven & i Holdings Co., Ltd.		11,500		348,107
				2,832,773
Food, Beverage & Tobacco 0.2%
Ajinomoto Co., Inc.		10,000		129,062
Ariake Japan Co., Ltd.		127,200		2,566,442
Asahi Group Holdings Ltd.		6,100		137,355
Coca-Cola West Co., Ltd.		900		16,245
Japan Tobacco, Inc.		69		382,238
Kikkoman Corp.		3,000		35,176
Kirin Holdings Co., Ltd.		13,000		165,522
Meiji Holdings Co., Ltd.		1,000		44,291
Nippon Meat Packers, Inc.		3,000		38,322
Nisshin Seifun Group, Inc.		3,000		36,604
Nissin Food Holdings Co., Ltd.		900		33,863
Toyo Suisan Kaisha Ltd.		1,000		25,671
Yakult Honsha Co., Ltd.		1,500		55,255
Yamazaki Baking Co., Ltd.		2,000		29,576
				3,695,622
Health Care Equipment & Services 1.1%
Alfresa Holdings Corp.		600		27,708
Hogy Medical Co., Ltd.		107,900		4,974,038
M3, Inc.		420		1,952,413
Medipal Holdings Corp.		2,200		27,829
Miraca Holdings, Inc.		134,600		5,301,043
Nihon Kohden Corp.		63,900		1,863,839
Olympus Corp. *		138,300		2,171,420
Ship Healthcare Holdings, Inc.		72,200		1,706,731
Suzuken Co., Ltd.		1,100		33,272
Sysmex Corp.		1,100		44,207
Terumo Corp.		2,700		123,714
				18,226,214
Household & Personal Products 0.0%
Kao Corp.		8,200		219,722
Shiseido Co., Ltd.		5,400		94,538
Unicharm Corp.		1,700		95,101
				409,361
Insurance 0.1%
MS&AD Insurance Group Holdings, Inc.		8,800		162,238
NKSJ Holdings, Inc.		5,600		115,269
Sony Financial Holdings, Inc.		2,600		42,492
T&D Holdings, Inc.		8,700		93,782
The Dai-ichi Life Insurance Co., Ltd.		140		175,310
Tokio Marine Holdings, Inc.		11,200		286,537
				875,628
Materials 0.3%
Air Water, Inc.		2,000		25,210
Asahi Kasei Corp.		20,000		123,615
Daicel Corp.		5,000		31,694
Daido Steel Co., Ltd.		5,000		31,017
Denki Kagaku Kogyo K.K.		7,000		27,093
Hitachi Chemical Co., Ltd.		1,600		29,660
Hitachi Metals Ltd.		3,000		37,366
JFE Holdings, Inc.		7,200		134,651
JSR Corp.		2,700		53,288
Kaneka Corp.		5,000		30,899
Kansai Paint Co., Ltd.		4,000		43,053
Kobe Steel Ltd.		37,000		52,769
Kuraray Co., Ltd.		5,200		74,211
Maruichi Steel Tube Ltd.		700		15,405
Mitsubhishi Gas Chemical Co., Inc.		6,000		39,308
Mitsubishi Chemical Holdings Corp.		20,500		108,037
Mitsubishi Materials Corp.		17,000		50,703
Mitsui Chemicals, Inc.		12,000		34,669
Nippon Paper Group, Inc.		1,500		30,030
Nippon Steel Corp.		79,000		196,859
Nisshin Steel Co., Ltd.		10,000		14,035
Nitto Denko Corp.		2,500		102,600
OJI Paper Co., Ltd.		13,000		59,691

See financial notes 39

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Shin-Etsu Chemical Co., Ltd.		6,200		357,862
Showa Denko K.K.		22,000		48,953
Sumitomo Chemical Co., Ltd.		24,000		98,684
Sumitomo Metal Industries Ltd.		53,000		95,208
Sumitomo Metal Mining Co., Ltd.		8,000		104,939
Taiyo Holdings Co., Ltd.		81,200		2,153,190
Taiyo Nippon Sanso Corp.		4,000		27,635
Teijin Ltd.		14,000		47,080
Toray Industries, Inc.		23,000		176,831
Tosoh Corp.		8,000		22,117
Toyo Seikan Kaisha Ltd.		2,300		30,606
Ube Industries Ltd.		15,000		38,360
Yamato Kogyo Co., Ltd.		7,000		199,186
Zeon Corp.		106,000		923,704
				5,670,218
Media 0.3%
CyberAgent, Inc.		1,205		3,711,132
Dentsu, Inc.		2,900		89,044
Hakuhodo DY Holdings, Inc.		350		21,856
Jupiter Telecommunications Co., Ltd.		26		27,550
Nippon Television Network Corp.		5,600		867,256
Toho Co., Ltd.		1,700		30,471
				4,747,309
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Astellas Pharma, Inc.		6,900		279,834
Chugai Pharmaceutical Co., Ltd.		3,400		61,194
Daiichi Sankyo Co., Ltd.		10,500		180,320
Dainippon Sumitomo Pharma Co., Ltd.		2,400		24,036
Eisai Co., Ltd.		3,800		148,517
Hisamitsu Pharmaceutical Co., Inc.		900		40,047
Kaken Pharmaceutical Co., Ltd.		32,000		395,754
Kyowa Hakko Kirin Co., Ltd.		4,000		42,046
Mitsubishi Tanabe Pharma Corp.		3,400		47,194
Ono Pharmaceutical Co., Ltd.		1,300		73,606
Otsuka Holdings Co., Ltd.		3,800		114,523
Santen Pharmaceutical Co., Ltd.		1,100		46,034
Shionogi & Co., Ltd.		4,500		58,696
Taisho Pharmaceutical Holdings Co., Ltd.		600		48,017
Takeda Pharmaceutical Co., Ltd.		12,200		532,348
Tsumura & Co.		900		24,047
				2,116,213
Real Estate 0.2%
Aeon Mall Co., Ltd.		1,100		24,394
Daito Trust Construction Co., Ltd.		16,900		1,519,786
Daiwa House Industry Co., Ltd.		8,000		103,234
Japan Prime Realty Investment Corp.		10		28,718
Japan Real Estate Investment Corp.		8		70,871
Japan Retail Fund Investment Corp.		28		44,644
Mitsubishi Estate Co., Ltd.		19,000		335,889
Mitsui Fudosan Co., Ltd.		13,000		238,118
Nippon Building Fund, Inc.		9		85,519
Nomura Real Estate Holdings, Inc.		1,400		24,474
Nomura Real Estate Office Fund, Inc.		4		23,224
NTT Urban Development Corp.		17		13,041
Sumitomo Realty & Development Co., Ltd.		6,000		143,080
Tokyu Land Corp.		6,000		28,917
				2,683,909
Retailing 0.3%
ABC-Mart, Inc.		400		14,566
Fast Retailing Co., Ltd.		10,500		2,346,413
Isetan Mitsukoshi Holdings Ltd.		5,600		60,997
J. Front Retailing Co., Ltd.		7,000		35,967
K’s Holdings Corp.		13,400		403,116
Marui Group Co., Ltd.		3,300		26,194
Nitori Holdings Co., Ltd.		21,660		1,993,167
Rakuten, Inc.		109		121,573
Sanrio Co., Ltd.		700		30,768
Shimamura Co., Ltd.		400		45,298
Start Today Co., Ltd.		15,900		244,675
Takashimaya Co., Ltd.		4,000		30,320
United Arrows Ltd.		12,800		292,441
USS Co., Ltd.		330		33,474
Yamada Denki Co., Ltd.		1,230		79,817
				5,758,786
Semiconductors & Semiconductor Equipment 0.8%
Advantest Corp.		2,200		36,559
Dainippon Screen Manufacturing Co., Ltd.		197,000		1,778,688
Disco Corp.		38,900		2,324,366
Rohm Co., Ltd.		187,300		8,446,986
Sumco Corp. *		1,700		18,047
Tokyo Electron Ltd.		2,700		149,624
				12,754,270
Software & Services 0.2%
Dena Co., Ltd.		1,500		47,068
Gree, Inc.		49,400		1,336,104
Itochu Techno-Solutions Corp.		400		18,251
Konami Corp.		1,400		40,489
Net One Systems Co., Ltd.		68,000		927,693
Nintendo Co., Ltd.		1,500		202,476
Nomura Research Institute Ltd.		1,500		34,413
NTT Data Corp.		19		65,759
Oracle Corp., Japan		600		23,175
Otsuka Corp.		300		24,128
Square Enix Holdings Co., Ltd.		1,000		19,573
Trend Micro, Inc.		1,600		48,537
Yahoo Japan Corp.		218		65,423
				2,853,089
Technology Hardware & Equipment 1.9%
Anritsu Corp.		321,000		4,188,247
Brother Industries Ltd.		3,500		47,029
Canon, Inc.		235,700		10,683,765
Citizen Holdings Co., Ltd.		3,900		24,493

40 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
FUJIFILM Holdings Corp		7,200		152,715
Fujitsu Ltd.		28,000		136,089
Hamamatsu Photonics K.K.		1,000		39,738
Hirose Electric Co., Ltd.		500		52,356
Hitachi High-Technologies Corp.		900		22,617
Hitachi Ltd.		70,000		445,847
Horiba Ltd.		168,100		5,894,317
Hoya Corp.		6,800		155,972
Ibiden Co., Ltd.		1,800		36,749
Keyence Corp.		700		165,217
Konica Minolta Holdings, Inc.		7,000		56,792
Kyocera Corp.		2,400		233,976
Murata Manufacturing Co., Ltd.		3,200		182,879
NEC Corp. *		39,000		70,409
Nippon Electric Glass Co., Ltd.		6,000		48,478
Omron Corp.		387,500		8,232,723
Ricoh Co., Ltd.		11,000		98,539
Seiko Epson Corp.		1,900		25,347
Shimadzu Corp.		4,000		35,612
TDK Corp.		1,900		99,212
Toshiba Corp.		62,000		253,444
Yaskawa Electric Corp.		4,000		34,835
Yokogawa Electric Corp.		3,200		30,716
				31,448,113
Telecommunication Services 0.1%
KDDI Corp.		45		294,583
Nippon Telegraph & Telephone Corp.		6,800		307,670
NTT DoCoMo, Inc.		234		399,555
Softbank Corp.		13,700		408,897
				1,410,705
Transportation 0.1%
All Nippon Airways Co., Ltd.		14,000		41,089
Central Japan Railway Co.		23		190,949
East Japan Railway Co.		5,300		329,751
Kamigumi Co., Ltd.		4,000		32,148
Kawasaki Kisen Kaisha Ltd.		11,000		23,170
Keikyu Corp.		7,000		60,094
Keio Corp.		9,000		65,094
Keisei Electric Railway Co., Ltd.		5,000		38,591
Kintetsu Corp.		26,000		91,722
Mitsubishi Logistics Corp.		2,000		21,938
Mitsui O.S.K. Lines, Ltd.		17,000		65,890
Nippon Express Co., Ltd.		13,000		49,075
Nippon Yusen K.K.		198,000		585,295
Odakyu Electric Railway Co., Ltd.		10,000		92,684
Tobu Railway Co., Ltd.		15,000		76,350
Tokyu Corp.		17,000		79,608
West Japan Railway Co.		2,700		110,923
Yamato Holdings Co., Ltd.		6,000		92,511
				2,046,882
Utilities 0.1%
Chubu Electric Power Co., Inc.		10,600		173,595
Electric Power Development Co., Ltd.		1,700		47,038
Hokkaido Electric Power Co., Inc.		2,700		37,945
Hokuriku Electric Power Co.		2,500		42,787
Kyushu Electric Power Co., Inc.		6,400		84,894
Osaka Gas Co., Ltd.		28,000		113,235
Shikoku Electric Power Co., Inc.		2,700		69,740
The Chugoku Electric Power Co., Inc.		4,500		77,211
The Kansai Electric Power Co., Inc.		11,700		169,657
The Tokyo Electric Power Co., Inc. *		21,700		54,175
Toho Gas Co., Ltd.		7,000		42,237
Tohoku Electric Power Co., Inc.		6,800		71,300
Tokyo Gas Co., Ltd.		37,000		178,547
				1,162,361
				206,140,318
Luxembourg 0.7%
Energy 0.6%
Pacific Drilling SA *		42,653		423,544
Subsea 7 S.A. *		93,966		2,433,619
Tenaris S.A. ADR		161,250		6,319,388
				9,176,551
Materials 0.0%
ArcelorMittal		13,157		228,563
Media 0.0%
SES S.A.		4,494		107,678
Telecommunication Services 0.1%
Millicom International Cellular S.A. SDR		20,660		2,186,670
				11,699,462
Malaysia 0.1%
Food, Beverage & Tobacco 0.1%
Kuala Lumpur Kepong Berhad		113,400		884,416
Mexico 0.2%
Media 0.1%
Grupo Televisa S.A. ADR		66,400		1,458,808
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Genomma Lab Internacional S.A., Class B *		786,660		1,382,971
				2,841,779
Netherlands 4.5%
Capital Goods 1.5%
Aalberts Industries N.V.		103,960		1,995,146
European Aeronautic Defence & Space Co., N.V.		6,354		251,101
Koninklijke Boskalis Westminster N.V.		307,746		11,241,431
Koninklijke Philips Electronics N.V. *		528,652		10,520,417
				24,008,095
Commercial & Professional Supplies 0.0%
Randstad Holding N.V.		1,794		62,151

See financial notes 41

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Diversified Financials 0.0%
ING Groep N.V. CVA *		58,441		412,294
Energy 1.4%
Core Laboratories N.V.		43,500		5,958,630
Fugro N.V. CVA		1,037		75,808
Royal Dutch Shell plc, B Shares		152,048		5,564,127
SBM Offshore N.V.		110,564		2,012,608
Schlumberger Ltd.		126,125		9,350,907
				22,962,080
Food & Staples Retailing 0.2%
Koninklijke Ahold N.V.		318,608		4,043,907	��
Food, Beverage & Tobacco 0.5%
Heineken Holding N.V.		112,528		5,211,451
Heineken N.V.		4,024		220,067
Unilever N.V. CVA		25,061		858,447
Unilever N.V., NY Shares		47,850		1,643,648
				7,933,613
Insurance 0.0%
Aegon N.V. *		26,811		124,714
Delta Lloyd N.V.		1,535		25,888
				150,602
Materials 0.5%
Akzo Nobel N.V.		147,643		7,918,203
James Hardie Industries SE CDI		64,665		499,795
Koninklijke DSM N.V.		2,312		132,674
				8,550,672
Media 0.0%
Reed Elsevier N.V.		10,314		121,715
Wolters Kluwer N.V.		4,523		78,191
				199,906
Real Estate 0.0%
Corio N.V.		900		40,318
Semiconductors & Semiconductor Equipment 0.2%
ASM International N.V.		7,875		278,791
ASML Holding N.V.		55,609		2,829,555
				3,108,346
Software & Services 0.1%
InterXion Holding N.V. *		61,197		1,228,224
Telecommunication Services 0.0%
Koninklijke (Royal) KPN N.V.		22,892		205,522
Transportation 0.1%
Koninklijke Vopak N.V.		18,954		1,222,449
TNT Express N.V.		5,294		64,302
				1,286,751
				74,192,481
New Zealand 0.6%
Consumer Services 0.2%
Sky City Entertainment Group Ltd.		1,091,254		3,424,421
Health Care Equipment & Services 0.2%
Fisher & Paykel Healthcare Corp., Ltd.		1,252,207		2,271,979
Materials 0.0%
Fletcher Building Ltd.		10,175		51,909
Telecommunication Services 0.0%
Telecom Corp. of New Zealand Ltd.		28,860		62,048
Transportation 0.2%
Auckland International Airport Ltd.		1,610,975		3,327,734
Utilities 0.0%
Contact Energy Ltd. *		5,211		20,640
				9,158,731
Norway 1.3%
Banks 0.0%
DnB A.S.A.		15,192		163,746
Capital Goods 0.0%
Orkla A.S.A.		11,571		84,983
Commercial & Professional Supplies 0.1%
Tomra Systems A.S.A.		291,770		2,277,287
Energy 0.7%
Aker Solutions A.S.A.		98,012		1,669,169
Det Norske Oljeselskap A.S.A *		67,738		974,787
Farstad Shipping A.S.A.		83,615		2,485,161
Petroleum Geo-Services A.S.A. *		158,196		2,393,152
Seadrill Ltd.		5,108		198,047
Statoil A.S.A.		139,139		3,733,430
				11,453,746
Insurance 0.0%
Gjensidige Forsikring A.S.A.		2,999		33,789
Materials 0.1%
Norsk Hydro A.S.A.		13,961		68,077
Yara International A.S.A.		2,815		137,991
Yara International A.S.A. ADR		14,200		691,682
				897,750
Media 0.1%
Schibsted A.S.A.		52,914		2,020,119
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Algeta A.S.A. *		43,391		1,026,214
Software & Services 0.0%
Opera Software A.S.A.		66,851		431,999
Telecommunication Services 0.2%
Telenor A.S.A.		172,471		3,170,257
Transportation 0.0%
Norwegian Air Shuttle A.S.A. *		23,300		393,574
				21,953,464
Panama 0.0%
Transportation 0.0%
Copa Holdings S.A., Class A		6,560		533,394
Papua New Guinea 0.1%
Energy 0.1%
Oil Search Ltd.		193,270		1,467,185

42 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Peru 0.1%
Banks 0.1%
Credicorp Ltd.		14,098		1,845,569
Philippines 0.2%
Capital Goods 0.0%
Alliance Global Group, Inc.		2,777,500		809,394
Food, Beverage & Tobacco 0.1%
Universal Robina Corp.		719,400		1,105,309
Real Estate 0.0%
SM Prime Holdings, Inc.		1,461,600		577,453
Transportation 0.1%
International Container Terminal Services, Inc.		774,100		1,242,117
				3,734,273
Portugal 0.0%
Banks 0.0%
Banco Espirito Santo, S.A. *		10,955		9,280
Energy 0.0%
Galp Energia, SGPS, S.A., B Shares		3,469		54,613
Food & Staples Retailing 0.0%
Jeronimo Martins, SGPS, S.A.		3,303		61,814
Materials 0.0%
CIMPOR-Cimentos de Portugal, SGPS, S.A.		3,023		22,115
Telecommunication Services 0.0%
Portugal Telecom, SGPS, S.A. - Reg’d		10,082		54,253
Utilities 0.0%
EDP - Energias de Portugal S.A.		28,618		81,839
				283,914
Republic of Korea 1.7%
Automobiles & Components 0.4%
Hyundai Motor Co.		15,292		3,609,986
Mando Corp.		11,260		1,793,168
Nexen Tire Corp.		19,440		324,769
				5,727,923
Capital Goods 0.2%
Jinsung T.E.C.		95,232		881,557
Samsung Engineering Co., Ltd.		10,130		1,917,862
Samsung Heavy Industries Co., Ltd.		33,370		1,220,014
				4,019,433
Consumer Durables & Apparel 0.2%
Handsome Co., Ltd.		72,660		2,444,968
Consumer Services 0.2%
Hotel Shilla Co., Ltd.		79,910		3,727,197
Media 0.1%
Cheil Worldwide, Inc.		122,290		2,121,983
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Celltrion, Inc.		47,646		1,336,841
Semiconductors & Semiconductor Equipment 0.4%
Eugene Technology Co., Ltd.		29,316		909,533
Samsung Electronics Co., Ltd.		4,610		5,642,462
				6,551,995
Software & Services 0.1%
Daum Communications Corp.		3,425		320,350
NCSoft Corp.		5,238		1,350,957
				1,671,307
				27,601,647
Singapore 3.3%
Banks 0.1%
DBS Group Holdings Ltd.		27,000		303,327
Oversea-Chinese Banking Corp., Ltd.		40,000		288,859
United Overseas Bank Ltd.		19,000		294,793
				886,979
Capital Goods 0.2%
Cosco Corp., Ltd.		15,000		12,473
Fraser & Neave Ltd.		14,000		79,453
Keppel Corp., Ltd.		321,500		2,859,655
SembCorp Industries Ltd.		15,000		60,928
SembCorp Marine Ltd.		13,000		53,192
Singapore Technologies Engineering Ltd.		23,000		55,855
Yangzijiang Shipbuilding Holdings Ltd.		29,000		27,510
				3,149,066
Consumer Services 0.0%
Genting Singapore plc *		96,000		133,764
Diversified Financials 0.0%
Singapore Exchange Ltd.		13,000		70,089
Energy 0.2%
Ezion Holdings Ltd.		1,450,000		1,015,198
Ezra Holdings Ltd. *		2,768,000		2,248,784
				3,263,982
Food & Staples Retailing 0.0%
Olam International Ltd.		22,000		40,143
Food, Beverage & Tobacco 0.1%
First Resources Ltd.		179,000		271,155
Golden Agri-Resources Ltd.		528,000		312,545
Wilmar International Ltd.		29,000		113,543
				697,243
Health Care Equipment & Services 0.1%
Biosensors International Group Ltd. *		2,001,000		2,152,856
Media 0.0%
Singapore Press Holdings Ltd.		23,000		73,689
Real Estate 1.1%
Ascendas REIT		3,242,000		5,438,716
Capitaland Ltd.		38,000		89,820
CapitaMall Trust REIT		6,724,200		9,762,598
CapitaMalls Asia Ltd.		752,000		932,089
City Developments Ltd.		8,000		65,352

See financial notes 43

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Global Logistic Properties Ltd. *		927,000		1,538,365
Keppel Land Ltd.		11,000		28,006
UOL Group Ltd.		7,000		25,510
				17,880,456
Retailing 0.0%
Jardine Cycle & Carriage Ltd.		2,000		75,969
Telecommunication Services 0.3%
Singapore Telecommunications Ltd.		123,000		308,161
StarHub Ltd.		1,947,000		5,014,687
				5,322,848
Transportation 1.0%
ComfortDelGro Corp., Ltd.		28,000		34,566
Hutchison Port Holdings Trust		78,000		58,752
Neptune Orient Lines Ltd. *		459,000		455,943
SATS Ltd.		3,033,000		6,385,471
SIA Engineering Co., Ltd.		2,373,000		7,541,883
Singapore Airlines Ltd.		9,000		77,199
SMRT Corp., Ltd.		1,379,553		1,870,435
				16,424,249
Utilities 0.2%
Hyflux Ltd.		2,866,000		3,314,460
				53,485,793
South Africa 0.6%
Capital Goods 0.0%
Bidvest Group Ltd.		12,966		306,877
Energy 0.1%
Sasol Ltd.		50,581		2,404,850
Food & Staples Retailing 0.1%
Shoprite Holdings Ltd.		77,081		1,333,241
Food, Beverage & Tobacco 0.1%
Tiger Brands Ltd.		26,573		974,609
Health Care Equipment & Services 0.1%
Life Healthcare Group Holdings Pte Ltd.		245,973		851,020
Insurance 0.0%
Discovery Holdings Ltd		46,371		306,897
Media 0.1%
Naspers Ltd., Class N		26,345		1,589,572
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Aspen Pharmacare Holdings Ltd. *		36,769		594,338
Retailing 0.1%
Mr. Price Group Ltd.		16,606		224,896
The Foschini Group Ltd.		66,556		1,103,309
				1,328,205
				9,689,609
Spain 1.3%
Banks 0.6%
Banco Bilbao Vizcaya Argentaria S.A.		71,737		485,448
Banco de Sabadell S.A.		31,120		73,679
Banco Popular Espanol S.A.		16,518		52,823
Banco Santander S.A.		1,496,238		9,394,314
Bankia S.A. *		12,989		44,583
Bankinter S.A.		3,195		14,253
CaixaBank		11,311		38,992
				10,104,092
Capital Goods 0.0%
ACS, Actividades de Construccion y Servicios S.A.		2,123		39,050
Ferrovial S.A.		5,499		61,320
Fomento de Construcciones y Contratas S.A.		764		13,072
Zardoya Otis S.A.		2,201		26,988
				140,430
Commercial & Professional Supplies 0.2%
Prosegur, Compania de Seguridad S.A. - Reg’d		68,012		3,890,156
Energy 0.0%
Repsol YPF S.A.		12,147		233,525
Food & Staples Retailing 0.0%
Distribuidora Internacional de Alimentacion S.A. *		8,658		41,569
Food, Beverage & Tobacco 0.1%
Viscofan S.A.		16,658		754,017
Insurance 0.0%
Mapfre S.A.		11,544		33,419
Materials 0.0%
Acerinox S.A.		1,495		18,252
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Grifols S.A. *		47,386		1,193,098
Retailing 0.2%
Industria de Diseno Textil S.A.		37,562		3,385,622
Software & Services 0.0%
Amadeus IT Holding S.A., A Shares		4,698		96,177
Indra Sistemas S.A.		1,477		15,336
				111,513
Telecommunication Services 0.1%
Telefonica S.A.		63,152		922,193
Transportation 0.0%
Abertis Infraestructuras S.A.		5,818		90,117
International Consolidated Airlines Group S.A. *		13,910		40,016
				130,133
Utilities 0.0%
Acciona S.A.		381		23,465
EDP Renovaveis S.A. *		3,270		13,937
Enagas S.A.		2,685		47,172
Gas Natural SDG S.A.		5,204		72,542
Iberdrola S.A.		58,492		272,558
Red Electrica Corp. S.A.		1,623		70,660
				500,334
				21,458,353

44 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Sweden 1.4%
Banks 0.1%
Nordea Bank AB		40,231		356,061
Skandinaviska Enskilda Banken AB, A Shares		21,986		148,132
Svenska Handelsbanken AB, A Shares		7,591		245,708
Swedbank AB, A Shares		12,741		210,324
				960,225
Capital Goods 0.5%
Alfa Laval AB		5,063		100,994
Assa Abloy AB, B Shares		179,006		5,210,224
Atlas Copco AB, A Shares		10,309		245,318
Atlas Copco AB, B Shares		21,951		460,977
NIBE Industrier AB, B Shares		15,306		241,695
Sandvik AB		15,586		246,416
Scania AB, B Shares		4,798		98,047
Skanska AB, B Shares		22,597		368,006
SKF AB, B Shares		6,116		144,900
Trelleborg AB, B Shares		104,437		1,197,506
Volvo AB, B Shares		21,281		295,342
				8,609,425
Commercial & Professional Supplies 0.2%
AF AB, B Shares		167,418		3,384,541
Securitas AB, B Shares		4,695		42,997
				3,427,538
Consumer Durables & Apparel 0.0%
Electrolux AB, B Shares		3,606		80,407
Husqvarna AB, B Shares		6,685		38,490
JM AB		22,289		412,890
				531,787
Diversified Financials 0.0%
Industrivarden AB, C Shares		1,765		26,981
Investor AB, B Shares		7,103		141,629
Kinnevik Investment AB, B Shares		3,084		62,730
Ratos AB, B Shares		2,873		33,626
				264,966
Energy 0.0%
Lundin Petroleum AB *		30,292		602,970
Food, Beverage & Tobacco 0.1%
Swedish Match AB		33,708		1,373,133
Health Care Equipment & Services 0.2%
Elekta AB, B Shares		13,957		705,845
Getinge AB, B Shares		88,165		2,362,512
				3,068,357
Materials 0.0%
Boliden AB		4,101		65,948
Holmen AB, B Shares		792		21,037
SSAB AB, A Shares		2,347		23,927
Svenska Cellulosa AB, B Shares		9,015		142,912
				253,824
Media 0.0%
Modern Times Group AB, B Shares		731		35,591
Retailing 0.1%
Hennes & Mauritz AB, B Shares *		15,753		540,148
Mekonomen AB *		19,559		625,650
				1,165,798
Technology Hardware & Equipment 0.2%
Axis Communications AB		14,499		364,675
Hexagon AB, B Shares		71,705		1,452,843
Telefonaktiebolaget LM Ericsson, B Shares *		45,993		455,950
				2,273,468
Telecommunication Services 0.0%
Tele2 AB, B Shares		4,754		90,436
TeliaSonera AB		33,575		223,610
				314,046
				22,881,128
Switzerland 8.3%
Capital Goods 0.4%
ABB Ltd. - Reg’d *		168,398		3,068,697
Geberit AG - Reg’d *		16,433		3,474,522
Meyer Burger Technology AG *		3,317		54,835
Schindler Holding AG		729		94,345
Schindler Holding AG - Reg’d		323		41,251
Sulzer AG - Reg’d		360		51,847
				6,785,497
Commercial & Professional Supplies 0.7%
Adecco S.A. - Reg’d *		219,287		10,697,550
SGS S.A. - Reg’d		822		1,589,157
				12,286,707
Consumer Durables & Apparel 0.4%
Compagnie Financiere Richemont S.A., Series A		94,870		5,872,323
The Swatch Group AG - Bearer Shares		479		221,302
The Swatch Group AG - Reg’d		651		52,040
				6,145,665
Consumer Services 0.0%
Orascom Development Holding AG *		5,167		87,763
Diversified Financials 1.0%
Credit Suisse Group AG - Reg’d *		541,222		12,945,441
GAM Holding AG *		76,965		989,430
Julius Baer Group Ltd. *		3,098		118,752
Pargesa Holding S.A.		405		27,149
Partners Group Holding AG		6,884		1,310,132
UBS AG - Reg’d *		56,001		699,351
				16,090,255
Energy 1.2%
Noble Corp. *		261,200		9,941,272
Transocean Ltd.		82,280		4,144,663
Weatherford International Ltd. *		427,125		6,095,074
				20,181,009
Food, Beverage & Tobacco 1.7%
Aryzta AG *		15,522		781,882

See financial notes 45

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Barry Callebaut AG - Reg’d *		27		25,993
Lindt & Spruengli AG		15		48,897
Lindt & Spruengli AG - Reg’d		2		78,330
Nestle S.A. - Reg’d		253,287		15,523,771
Nestle S.A. - Reg’d ADR		178,812		10,932,566
				27,391,439
Health Care Equipment & Services 0.0%
Sonova Holding AG - Reg’d *		737		81,454
Straumann Holding AG - Reg’d		118		19,608
Synthes, Inc. - Reg’d		1,016		175,227
				276,289
Insurance 0.1%
Baloise Holding AG - Reg’d		712		55,140
Swiss Life Holding AG - Reg’d *		457		46,746
Swiss Re AG *		5,291		332,238
Zurich Financial Services AG *		2,270		556,156
				990,280
Materials 1.3%
Clariant AG - Reg’d *		113,432		1,444,124
Givaudan S.A. - Reg’d *		8,225		7,984,699
Glencore International plc		534,092		3,701,264
Holcim Ltd. - Reg’d *		83,301		5,195,664
Sika AG		598		1,268,464
Syngenta AG - Reg’d		6,059		2,124,748
				21,718,963
Pharmaceuticals, Biotechnology & Life Sciences 0.9%
Actelion Ltd. - Reg’d *		1,659		70,255
Lonza Group AG - Reg’d *		754		34,022
Novartis AG - Reg’d		139,242		7,688,419
Novartis AG ADR		57,725		3,184,688
Roche Holding AG		17,291		3,160,112
				14,137,496
Semiconductors & Semiconductor Equipment 0.1%
Micronas Semiconductor Holding AG - Reg’d *		94,949		1,025,511
Software & Services 0.0%
Temenos Group AG - Reg’d *		35,606		667,458
Telecommunication Services 0.0%
Swisscom AG - Reg’d		365		135,931
Transportation 0.5%
Kuehne & Nagel International AG - Reg’d		68,710		8,355,438
				136,275,701
Taiwan 0.5%
Capital Goods 0.1%
AirTac International Group		189,000		1,075,853
Hiwin Technologies Corp.		51,000		479,398
				1,555,251
Consumer Durables & Apparel 0.0%
Johnson Health Tech Co., Ltd.		277,000		744,007
Food, Beverage & Tobacco 0.1%
Standard Foods Corp.		464,000		1,436,765
Health Care Equipment & Services 0.1%
St. Shine Optical Co., Ltd.		89,000		1,026,356
Semiconductors & Semiconductor Equipment 0.1%
Radiant Opto-Electronics Corp.		610,000		2,544,855
Technology Hardware & Equipment 0.1%
Catcher Technology Co., Ltd.		162,490		1,031,684
Simplo Technology Co., Ltd.		84,000		639,582
				1,671,266
				8,978,500
Thailand 0.4%
Banks 0.1%
Kasikornbank PCL		261,800		1,383,519
Food & Staples Retailing 0.0%
CP ALL PCL *		471,000		1,167,927
Food, Beverage & Tobacco 0.1%
Thai Union Frozen Products PCL		688,400		1,628,654
Media 0.0%
BEC World PCL		183,700		307,660
Retailing 0.1%
Home Product Center PCL		2,904,800		1,322,510
Telecommunication Services 0.1%
Advanced Info Service PCL - Reg’d		270,400		1,609,210
				7,419,480
Turkey 0.2%
Banks 0.0%
Turkiye Halk Bankasi A/S		116,947		819,795
Food & Staples Retailing 0.2%
BIM Birlesik Magazalar A/S		27,382		1,142,073
Bizim Toptan Satis Magazalari A/S		124,412		1,827,915
				2,969,988
				3,789,783
United Kingdom 20.4%
Automobiles & Components 0.0%
GKN plc		23,289		77,028
Banks 1.0%
Barclays plc		178,377		631,516
HSBC Holdings plc		274,341		2,476,524
Lloyds Banking Group plc *		19,344,435		9,709,781
Royal Bank of Scotland Group plc *		266,423		105,105
Standard Chartered plc		120,916		2,955,868
				15,878,794
Capital Goods 4.0%
Ashtead Group plc		1,297,607		5,239,841
BAE Systems plc		51,611		247,332
Balfour Beatty plc		10,304		43,664
Bodycote plc		866,764		5,986,138
Bunzl plc		25,179		418,352
Cobham plc		1,138,329		4,185,605
Fenner plc		260,849		1,908,963
Interserve plc		577,625		2,680,964

46 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

		Number		Value
Security		of Shares		($)
Invensys plc			12,175		43,920
Kentz Corp., Ltd.			140,996		969,634
Meggitt plc			170,603		1,131,328
Rolls-Royce Holdings plc *			235,162		3,144,214
Rotork plc			458,646		16,433,535
Smiths Group plc			211,185		3,668,220
Spirax-Sarco Engineering plc			173,661		6,501,616
The Weir Group plc			80,610		2,231,420
Ultra Electronics Holdings plc			235,310		6,433,026
Wolseley plc			126,931		4,832,463
					66,100,235
Commercial & Professional Supplies 1.6%
Aggreko plc			62,735		2,292,959
Babcock International Group plc			269,562		3,638,298
Capita Group plc			9,196		99,041
CPP Group plc			846,461		649,083
De La Rue plc			472,730		7,489,674
G4S plc			1,531,653		6,949,117
Hays plc			806,809		1,170,803
Intertek Group plc			15,947		651,097
RPS Group plc			87,334		336,083
Serco Group plc			303,990		2,678,751
					25,954,906
Consumer Durables & Apparel 0.4%
Bellway plc			231,163		2,953,835
Burberry Group plc			38,464		927,147
Persimmon plc			67,700		690,488
The Berkeley Group Holdings plc *			94,094		1,956,526
					6,527,996
Consumer Services 0.4%
Carnival plc			2,747		89,227
Compass Group plc			29,081		304,021
Greene King plc			262,691		2,176,853
InterContinental Hotels Group plc			51,848		1,236,257
Millennium & Copthorne Hotels plc			225,567		1,778,877
Restaurant Group plc			34,672		158,099
TUI Travel plc			7,543		23,391
Whitbread plc			2,658		83,152
					5,849,877
Diversified Financials 1.1%
3i Group plc			14,557		45,142
Aberdeen Asset Management plc			1,238,532		5,700,319
Ashmore Group plc			335,098		2,081,221
ICAP plc			8,336		51,382
IG Group Holdings plc			106,519		800,387
Investec plc			8,046		46,403
Jupiter Fund Management plc			127,554		472,907
London Stock Exchange Group plc			2,236		39,478
Man Group plc			28,276		47,504
Schroders plc			360,395		8,294,788
					17,579,531
Energy 1.0%
AMEC plc			102,533		1,893,471
BG Group plc			52,161		1,230,748
BP plc			291,191		2,103,592
Essar Energy plc *			4,886		11,647
John Wood Group plc			332,022		4,216,155
Ophir Energy plc *			23,761		222,143
Petrofac Ltd.			131,233		3,705,929
Royal Dutch Shell plc, A Shares			58,393		2,082,640
Tullow Oil plc			73,456		1,832,616
					17,298,941
Food & Staples Retailing 0.4%
J. Sainsbury plc			18,294		91,450
Tesco plc			1,324,363		6,824,007
WM Morrison Supermarkets plc			32,828		149,524
					7,064,981
Food, Beverage & Tobacco 1.9%
Associated British Foods plc			5,342		105,717
British American Tobacco plc			30,259		1,551,969
British American Tobacco plc ADR			76,850		7,909,402
Diageo plc			520,821		13,136,801
Diageo plc ADR			63,625		6,433,760
Imperial Tobacco Group plc			15,447		617,732
SABMiller plc			14,695		617,608
Tate & Lyle plc			7,008		78,554
Unilever plc			19,764		675,177
	��				31,126,720
Health Care Equipment & Services 0.0%
Smith & Nephew plc			13,959		137,401
Household & Personal Products 0.0%
Reckitt Benckiser Group plc			9,446		549,883
Insurance 0.5%
Admiral Group plc			3,040		59,746
Amlin plc			158,170		847,134
Aviva plc			44,994		225,194
Hiscox Ltd.			77,808		503,221
Lancashire Holdings Ltd.			228,569		2,987,663
Legal & General Group plc			91,272		174,275
Old Mutual plc			75,509		181,288
Prudential plc			166,646		2,042,396
Resolution Ltd.			21,377		77,656
RSA Insurance Group plc			52,853		90,118
St. James’s Place plc			75,598		405,758
Standard Life plc			36,765		133,420
Willis Group Holdings plc			31,700		1,155,782
					8,883,651
Materials 3.6%
Anglo American plc			20,363		786,923
Antofagasta plc			5,913		113,866
AZ Electronic Materials S.A.			1,109,894		5,736,715
BHP Billiton plc			32,477		1,045,495
Croda International plc			515,353		18,665,436
Eurasian Natural Resources Corp.			3,862		35,205
Fresnillo plc			2,689		68,514
Johnson Matthey plc			110,677		4,156,074
Kazakhmys plc			3,210		45,059
Lonmin plc			2,431		41,262

See financial notes 47

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Randgold Resources Ltd.		1,432		127,106
Rexam plc		1,351,877		9,436,757
Rio Tinto plc		21,086		1,181,971
Rio Tinto plc ADR		161,150		9,035,680
Vedanta Resources plc		1,793		35,537
Victrex plc		314,518		7,411,601
Xstrata plc		31,973		614,057
				58,537,258
Media 0.4%
British Sky Broadcasting Group plc		17,701		194,801
ITV plc		55,400		75,279
Pearson plc		12,645		238,179
Reed Elsevier plc		259,161		2,144,570
Rightmove plc		127,271		3,184,300
UBM plc		74,772		715,569
				6,552,698
Pharmaceuticals, Biotechnology & Life Sciences 0.3%
Abcam plc		161,279		968,836
AstraZeneca plc		19,922		873,010
BTG plc *		48,112		296,800
GlaxoSmithKline plc		123,839		2,860,864
				4,999,510
Real Estate 0.2%
British Land Co., plc		12,662		100,588
Capital Shopping Centers Group plc		8,375		44,186
Derwent London plc		28,809		814,613
Hammerson plc		10,685		72,437
Land Securities Group plc		12,150		143,483
Segro plc		11,121		39,909
Shaftesbury plc		192,083		1,594,669
				2,809,885
Retailing 0.5%
Dunelm Group plc		85,895		713,115
Kingfisher plc		276,202		1,302,557
Marks & Spencer Group plc		24,746		143,422
Next plc		26,918		1,280,148
Ocado Group plc *		277,118		584,165
Signet Jewelers Ltd.		77,400		3,774,798
Sports Direct International plc *		57,209		280,646
				8,078,851
Semiconductors & Semiconductor Equipment 0.2%
ARM Holdings plc		129,155		1,092,809
Imagination Technologies Group plc *		207,033		2,309,791
				3,402,600
Software & Services 0.3%
Moneysupermarket.com Group plc		145,381		314,724
Telecity Group plc *		367,879		4,821,536
The Sage Group plc		19,846		92,206
				5,228,466
Technology Hardware & Equipment 2.1%
Diploma plc		567,731		4,227,036
Domino Printing Sciences plc		480,673		4,673,909
Halma plc		756,134		4,972,583
Laird plc		1,323,411		4,645,574
Spectris plc		408,059		12,494,084
TT Electronics plc		950,255		2,930,691
				33,943,877
Telecommunication Services 0.2%
BT Group plc		118,800		406,349
Inmarsat plc		6,807		48,573
Vodafone Group plc		772,065		2,137,044
				2,591,966
Utilities 0.3%
Centrica plc		79,104		393,583
International Power plc		22,914		155,001
National Grid plc		54,857		592,375
Pennon Group plc		49,456		590,499
Severn Trent plc		3,562		97,685
SSE plc		180,655		3,873,856
United Utilities Group plc		10,223		102,578
				5,805,577
				334,980,632
United States 0.4%
Automobiles & Components 0.0%
Autoliv, Inc.		9,420		591,011
Energy 0.1%
Golar LNG Ltd.		37,605		1,390,633
Food, Beverage & Tobacco 0.1%
Bunge Ltd.		14,600		941,700
Household & Personal Products 0.1%
Herbalife Ltd.		15,800		1,111,056
Insurance 0.1%
PartnerRe Ltd.		26,425		1,839,708
				5,874,108
Total Common Stock
(Cost $1,323,491,242)				1,580,605,086
Preferred Stock 0.3% of net assets
Brazil 0.2%
Marcopolo S.A.		546,000		2,936,023
Germany 0.1%
Bayerische Motoren Werke AG		783		48,746
Henkel AG & Co. KGaA		2,771		206,204
Hugo Boss AG		10,658		1,190,318
Porsche Automobil Holding SE		2,393		146,201
ProSiebenSat.1 Media AG		1,148		29,170
RWE AG		585		23,136
Volkswagen AG		2,209		418,735
				2,062,510

48 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
United Kingdom 0.0%
Rolls-Royce Holdings plc, C Shares (a)*		24,927,172		40,454
Total Preferred Stock
(Cost $4,196,238)				5,038,987
Other Investment Company 2.5% of net assets
Money Market Fund 2.5%
State Street Institutional U.S. Government Money Market Fund		40,954,017		40,954,017
Total Other Investment Company
(Cost $40,954,017)				40,954,017
Security	Face Amount		Value
Rate, Maturity Date	Local Currency		($)
Corporate Bond 0.0% of net assets
Brazil 0.0%
Lupatech S.A. (a)
6.50%, 04/15/18		226,000		60,756
Total Corporate Bond
(Cost $117,338)				60,756
	Number		Value
Security	of Shares		($)
Rights 0.0% of net assets
Portugal 0.0%
Banco Espirito Santo S.A. (a)*		10,955		4,756
Thailand 0.0%
Thai Union Frozen Prod S.A. (a)*		137,680		101,861
Total Rights
(Cost $5,792)				106,617
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 0.1% of net assets
U.S. Treasury Obligations 0.1%
U.S. Treasury Bills
0.08%, 06/14/12 (b)(c)		2,100,000		2,099,795
0.05%, 05/24/12 (b)(c)		305,000		304,990
Total Short-Term Investments
(Cost $2,404,785)				2,404,785
End of Investments.

At 04/30/12, the tax basis cost of the fund’s investments was $1,398,507,918 and the unrealized appreciation and depreciation were $288,246,309 and ($57,583,979), respectively, with a net unrealized appreciation of $230,662,330.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $1,291,536,537 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)	All or a portion of this security is held as collateral for open futures contracts.
(c)	The rate shown is the purchase yield.

ADR —	American Depositary Receipt
CVA —	Dutch Certificate
Reg’d —	Registered
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares)
SDR —	Swedish Depositary Receipt

In addition to the above the fund held the following at 04/30/12.

					Unrealized
			Contract		Gains /
	Number of		Value		(Losses)
	Contracts		($)		($)
Futures Contracts
ASX SPI 200 Index, Long, expires 06/21/12		2		229,073		5,176
Euro Stoxx 50 Index, Long, expires 06/15/12		28		837,267		(50,103	)
FTSE 100 Index, Long, expires 06/15/12		7		649,241		(12,484	)
Russell 2000 Index, mini, Long, expires 06/15/12		160		13,038,400		189,630
S&P 500 Index, e-mini, Long, expires 06/15/12		190		13,239,200		245,268
Topix Index, Long, expires 06/08/12		5		502,568		(16,871	)
Net unrealized gains						360,616

See financial notes 49

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) 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 Exchange Contracts
06/20/2012	Barclays Bank PLC		AUD		213,078		USD		220,880		(1,194	)
06/20/2012	State Street Bank & Trust Co.		AUD		370,000		USD		383,549		31,786
06/20/2012	State Street Bank & Trust Co.		AUD		910,000		USD		943,322		105,239
06/19/2012	Morgan Stanley & Co., Inc.		EUR		7,522,000		USD		9,958,933		28,690
06/20/2012	Standard Chartered Bank		EUR		238,203		USD		315,376		3,110
06/20/2012	Barclays Bank PLC		EUR		363,319		USD		481,028		5,995
06/20/2012	HSBC Bank USA		GBP		400,454		USD		649,703		21,969
06/20/2012	Citibank N.A.		JPY		15,292,998		USD		191,628		6,471
06/20/2012	Standard Chartered Bank		JPY		27,305,882		USD		342,155		11,961
09/19/2012	State Street Bank & Trust Co.		JPY		242,000,000		USD		3,036,018		11,094
09/19/2012	State Street Bank & Trust Co.		JPY		460,000,000		USD		5,770,944		(182,978	)
09/19/2012	State Street Bank & Trust Co.		JPY		650,000,000		USD		8,154,594		(232,503	)
06/20/2012	Credit Suisse London		USD		153,701		AUD		148,272		(1,320	)
06/20/2012	State Street Bank & Trust Co.		USD		1,430,533		AUD		1,380,000		38,712
06/20/2012	State Street Bank & Trust Co.		USD		8,707,590		AUD		8,400,000		(352,950	)
07/31/2012	State Street Bank London		USD		11,318,339		AUD		10,963,000		(100,998	)
12/19/2012	State Street Bank & Trust Co.		USD		26,764,182		CHF		24,200,000		(173,990	)
06/19/2012	Morgan Stanley & Co., Inc.		USD		9,958,933		EUR		7,522,000		116,786
06/20/2012	Credit Suisse London		USD		616,691		EUR		465,785		(2,558	)
06/20/2012	Credit Suisse London		USD		486,992		GBP		300,165		(12,685	)
07/26/2012	Deutsche Bank AG London		USD		9,018,738		GBP		5,560,000		(50,625	)
06/20/2012	Credit Suisse London		USD		445,201		JPY		35,529,501		(14,039	)
09/19/2012	State Street Bank & Trust Co.		USD		3,387,293		JPY		270,000,000		171,848
09/19/2012	State Street Bank & Trust Co.		USD		4,641,846		JPY		370,000,000		205,083
09/19/2012	State Street Bank & Trust Co.		USD		38,765,686		JPY		3,090,000,000		1,812,121
07/31/2012	State Street Bank London		USD		6,909,210		NZD		8,499,500		(34,219	)
09/19/2012	State Street Bank & Trust Co.		USD		1,531,943		SEK		10,350,000		(47,753	)
Net unrealized gains on Forward Foreign Currency Exchange Contracts											1,363,053

The following is a summary of the inputs used to value the fund’s investments as of April 30, 2012 (see financial note 2(a) for additional information):

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)		$—		$317,532,498		$—		$317,532,498
Australia(a)		—		45,962,073		—		45,962,073
Materials		10,433,577		20,962,701		—		31,396,278
Belgium(a)		—		1,638,156		—		1,638,156
Food, Beverage & Tobacco		890,132		—		—		890,132
Brazil(a)		20,283,402		—		—		20,283,402
Canada(a)		99,709,612		—		—		99,709,612
Chile(a)		4,755,590		—		—		4,755,590

50 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Quoted Prices in				Significant
	Active Markets for		Significant Other		Unobservable
	Identical Assets		Observable Inputs		Inputs
Description	(Level 1)		(Level 2)		(Level 3)		Total
China(a)		$—		$8,712,896		$—		$8,712,896
Media		439,504		—		—		439,504
Pharmaceuticals, Biotechnology & Life Sciences		283,746		—		—		283,746
Retailing		1,040,426		—		—		1,040,426
Semiconductors & Semiconductor Equipment		288,075		—		—		288,075
Technology Hardware & Equipment		263,622		—		—		263,622
Colombia(a)		1,213,195		—		—		1,213,195
Germany(a)		—		101,507,186		—		101,507,186
Materials		6,311,920		15,963,298		—		22,275,218
Real Estate		856,825		—		—		856,825
Greece(a)		—		73,904		—		73,904
Food, Beverage & Tobacco		54,563		—		—		54,563
Hong Kong(a)		—		31,157,661		—		31,157,661
Consumer Services		1,151,600		377,091		—		1,528,691
Technology Hardware & Equipment		—		6,634,025		61,979		6,696,004
Telecommunication Services		1,013		1,367,705		—		1,368,718
India(a)		—		15,271,217		—		15,271,217
Pharmaceuticals, Biotechnology & Life Sciences		238,596		1,605,130		—		1,843,726
Ireland(a)		—		15,529,745		—		15,529,745
Capital Goods		9,207,610		749,007		—		9,956,617
Pharmaceuticals, Biotechnology & Life Sciences		820,450		2,181,516		—		3,001,966
Israel(a)		—		1,932,196		—		1,932,196
Semiconductors & Semiconductor Equipment		5,450,511		—		—		5,450,511
Software & Services		2,441,964		34,428		—		2,476,392
Japan(a)		—		201,393,009		—		201,393,009
Media		27,550		4,719,759		—		4,747,309
Luxembourg(a)		—		2,522,911		—		2,522,911
Energy		6,742,932		2,433,619		—		9,176,551
Mexico(a)		2,841,779		—		—		2,841,779
Netherlands(a)		—		38,960,218		—		38,960,218
Energy		15,309,537		7,652,543		—		22,962,080
Food, Beverage & Tobacco		1,863,715		6,069,898		—		7,933,613
Semiconductors & Semiconductor Equipment		2,829,555		278,791		—		3,108,346
Software & Services		1,228,224		—		—		1,228,224
Norway(a)		—		21,055,714		—		21,055,714
Materials		691,682		206,068		—		897,750
Panama(a)		533,394		—		—		533,394
Peru(a)		1,845,569		—		—		1,845,569
Spain(a)		—		11,354,261		—		11,354,261
Banks		44,583		10,059,509		—		10,104,092

See financial notes 51

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) continued

	Quoted Prices in					Significant
	Active Markets for			Significant Other		Unobservable
	Identical Assets			Observable Inputs		Inputs
Description	(Level 1)			(Level 2)		(Level 3)		Total
Switzerland(a)		$—			$51,690,005		$—		$51,690,005
Capital Goods		3,068,697			3,716,800		—		6,785,497
Diversified Financials		12,945,441			3,144,814		—		16,090,255
Energy		19,914,915			266,094		—		20,181,009
Food, Beverage & Tobacco		10,932,566			16,458,873		—		27,391,439
Pharmaceuticals, Biotechnology & Life Sciences		3,184,688			10,952,808		—		14,137,496
Thailand(a)		—			1,383,519		—		1,383,519
Food & Staples Retailing		1,167,927			—		—		1,167,927
Food, Beverage & Tobacco		1,628,654			—		—		1,628,654
Media		307,660			—		—		307,660
Retailing		1,322,510			—		—		1,322,510
Telecommunication Services		1,609,210			—		—		1,609,210
United Kingdom(a)		—			202,399,246		—		202,399,246
Commercial & Professional Supplies		649,083			25,305,823		—		25,954,906
Food, Beverage & Tobacco		14,343,162			16,783,558		—		31,126,720
Insurance		1,215,528			7,668,123		—		8,883,651
Materials		9,035,680			49,501,578		—		58,537,258
Retailing		3,774,798			4,304,053		—		8,078,851
United States(a)		5,874,108			—		—		5,874,108
Preferred Stock(a)		—			2,062,510		—		2,062,510
Brazil		2,936,023			—		—		2,936,023
United Kingdom		—			—		40,454		40,454
Other Investment Company(a)		40,954,017			—		—		40,954,017
Rights(a)		—			—		106,617		106,617
Short-Term Investments(a)		—			2,404,785		—		2,404,785
Corporate Bond(a)		—			—		60,756		60,756
Total		$334,959,120			$1,293,941,322		$269,806		$1,629,170,248
Other Financial Instruments
Futures Contracts*		$440,074			$—		$—		$440,074
Forward Foreign Currency Exchange Contracts*		2,570,865			—		—		2,570,865
Liabilities Valuation Input
Other Financial Instruments
Futures Contracts*		($79,458	)		$—		$—		($79,458	)
Forward Foreign Currency Exchange Contracts*		(1,207,812	)		—		—		(1,207,812	)

*	Futures contracts and forward foreign currency exchange contracts are not included in Investments and are valued at unrealized appreciation or depreciation.
(a)	As categorized in Portfolio Holdings.

52 See financial notes

 Laudus International MarketMasters Fund

Portfolio Holdings (Unaudited) 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		Accrued			Realized			Unrealized								Gross		Gross		as of
	October 31,		Discounts			Gains			Gains			Gross		Gross			Transfers		Transfers		April 30,
Investments in Securities	2011		(Premiums)			(Losses)			(Losses)			Purchases		Sales			in**		out**		2012
Common Stock
Hong Kong		$82,530		$—			$—			($20,551	)		$—		$—			$—		$—		$61,979
United Kingdom		27,850		—			(496	)		(147	)		—		(27,207	)		—		—		—
Preferred Stock
United Kingdom		—		—			—			226			40,228		—			—		—		40,454
Corporate Bonds
Brazil		67,455		(157	)		—			(6,542	)		—		—			—		—		60,756
Rights
Portugal		—		—			—			(1,036	)		5,792		—			—		—		4,756
Thailand		—		—			—			101,861			—		—			—		—		101,861
Total		$177,835		($157	)		($496	)		$73,811			$46,020		($27,207	)		$—		$—		$269,806

** 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.

There were no significant transfers between Level 1 and Level 2 for the period ended April 30, 2012.

All net realized and change in unrealized gains (losses) in the table above are reflected on the accompanying statements of operations. Changes in net unrealized gains (losses) for Level 3 investment held by the fund at April 30, 2012 are $73,958.

See financial notes 53

 Laudus International MarketMasters Fund

Statement of

Assets and Liabilities

As of April 30, 2012; unaudited

Assets
Investments, at value (cost $1,371,169,412)		$1,629,170,248
Foreign currency, at value (cost $3,468,748)		3,489,008
Cash		30,084
Receivables:
Investments sold		6,242,910
Dividends		6,168,697
Fund shares sold		4,737,879
Foreign tax reclaims		839,678
Interest		8,478
Unrealized gains on forward foreign currency exchange contracts		2,570,865
Prepaid expenses	+	234,630
Total assets		1,653,492,477
Liabilities
Payables:
Investments bought		6,852,538
Investment adviser and administrator fees		172,454
Shareholder service fees		360,021
Fund shares redeemed		1,215,409
Due to brokers for futures		165,477
Foreign capital gains tax		112,988
Unrealized losses on forward foreign currency exchange contracts	+	1,207,812
Total liabilities		10,086,699
Net Assets
Total assets		1,653,492,477
Total liabilities	−	10,086,699
Net assets		$1,643,405,778
Net Assets by Source
Capital received from investors		1,793,406,495
Distributions in excess of net investment income		(5,648,621	)
Net realized capital losses		(404,085,516	)
Net unrealized capital gains		259,733,420
Net Asset Value (NAV) by Shares Class

			Shares
Share Class	Net Assets	÷	Outstanding	=	NAV
Investor Shares	$617,762,456		33,215,487			$18.60
Select Shares	$1,025,643,322		55,174,449			$18.59

54 See financial notes

 Laudus International MarketMasters Fund

Statement of

Operations

For November 1, 2011 through April 30, 2012; unaudited

Investment Income
Dividends (net of foreign withholding taxes of $1,447,941)		$18,292,877
Interest (net of foreign withholding taxes of $618)	+	9,127
Total investment income		18,302,004
Expenses
Investment adviser and administrator fees		9,999,318
Shareholder service fees:
Investor Shares		766,908
Select Shares		446,318
Custodian fees		471,291
Transfer agent fees		100,579
Portfolio accounting fees		63,600
Shareholder reports		62,366
Professional fees		46,785
Registration fees		30,888
Trustees’ fees		9,078
Interest expense		169
Other expenses	+	34,470
Total expenses		12,031,770
Expense reduction by CSIM and its affiliates	−	100,790
Custody credits	−	15
Net expenses	−	11,930,965
Net investment income		6,371,039
Realized and Unrealized Gains (Losses)
Net realized losses on investments		(12,941,368	)
Net realized gains on futures contracts		4,062,565
Net realized gains on foreign currency transactions	+	7,659,747
Net realized losses		(1,219,056	)
Net unrealized gains on investments (net of foreign capital gain tax of ($112,988))		115,572,469
Net unrealized losses on futures contracts		(2,138,949	)
Net unrealized losses on foreign currency translations	+	(2,716,086	)
Net unrealized gains	+	110,717,434
Net realized and unrealized gains		109,498,378
Increase in net assets resulting from operations		$115,869,417

See financial notes 55

 Laudus International MarketMasters Fund

Statement of

Changes in Net Assets

For the current and prior report periods
Figures for the current period are unaudited

Operations

11/1/11-4/30/12				11/1/10-10/31/11
Net investment income		$6,371,039			$16,424,222
Net realized gains (losses)		(1,219,056	)		111,994,929
Net unrealized gains (losses)	+	110,717,434			(183,591,536	)
Increase (Decrease) in net assets from operations		115,869,417			(55,172,385	)
Distributions to Shareholders
Distributions from net investment income
Investor Shares		(5,407,664	)		(9,898,208	)
Select Shares	+	(9,563,990	)		(12,886,046	)
Total distributions from net investment income		($14,971,654	)		($22,784,254	)

Transactions in Fund Shares

		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		VALUE			SHARES		VALUE
Shares Sold
Investor Shares			827,748		$14,594,400			5,069,725		$93,748,039
Select Shares	+		8,030,157		140,734,485			14,896,939		281,255,337
Total shares sold			8,857,905		$155,328,885			19,966,664		$375,003,376
Shares Reinvested
Investor Shares			313,230		$4,983,484			484,093		$9,134,831
Select Shares	+		403,057		6,404,578			489,574		9,233,362
Total shares reinvested			716,287		$11,388,062			973,667		$18,368,193
Shares Redeemed
Investor Shares			(6,039,877	)	($107,452,691	)		(13,644,152	)	($260,043,586	)
Select Shares	+		(8,268,239	)	(142,591,904	)		(11,964,535	)	(226,246,386	)
Total shares redeemed			(14,308,116	)	($250,044,595	)		(25,608,687	)	($486,289,972	)
Net transactions in fund shares			(4,733,924	)	($83,327,648	)		(4,668,356	)	($92,918,403	)
Shares Outstanding and Net Assets
		11/1/11-4/30/12					11/1/10-10/31/11
			SHARES		NET ASSETS			SHARES		NET ASSETS
Beginning of period			93,123,860		$1,625,835,663			97,792,216		$1,796,710,705
Total increase or decrease	+		(4,733,924	)	17,570,115			(4,668,356	)	(170,875,042	)
End of period			88,389,936		$1,643,405,778			93,123,860		$1,625,835,663
(Distributions in excess of net investment income)/Net investment income not yet distributed					($5,648,621	)				$2,951,994

56 See financial notes

 Laudus MarketMasters Funds

Financial Notes, unaudited

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 per share (“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 it is de-listed or its trading is halted or suspended, when a security’s primary pricing source is unable or unwilling to provide a price, or when a security’s primary trading market is closed during regular market hours. Each fund makes fair value determinations in good faith in accordance with the fund’s valuation procedures. The 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 are traded in markets that close prior to the funds valuing their holdings. By fair valuing securities whose prices may have

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Financial Notes, unaudited (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.

•  Futures and forward foreign currency exchange 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, unaudited (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 funds’ policy is to recognize transfers between Level 1, Level 2 and Level 3 as of the beginning of the fiscal year.

The levels associated with valuing the funds’ investments for the period ended April 30, 2012 are disclosed in the Portfolio Holdings.

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

Futures Contracts: Futures contracts are instruments that represent an agreement between two parties that obligates one party to buy, and the other party to sell, specific instruments at an agreed upon price on a stipulated future date. A fund must give the broker a deposit of cash and/or securities (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 Exchange 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 exchange contracts are accounted for as unrealized gains or losses until the contracts settle, at which time the gains or losses are realized.

(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.

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

(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 (“State Street”), 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 April 30, 2012, 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

60 

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Financial Notes, unaudited (continued)

2. Significant Accounting Policies (continued):

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.

Equity 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 fund’s investment managers attempt to reduce the impact of the performance of any given investment style by investing in both value and growth style stocks. But whenever value stocks fall out of favor with investors, they may underperform growth stocks, and vice versa.

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.

As with all actively managed funds, the strategies of the fund’s managers — its investment adviser and investment managers — may not achieve their desired results.

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.

As a result of the 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. If such an event occurs, the dollar value of an investment in the fund would be adversely affected.

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.

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Financial Notes, unaudited (continued)

3. Risk Factors (continued):

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.

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:

	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.

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%

Effective June 6, 2012, the expense limitation for the Investor Shares and Select Shares of Laudus Small-Cap MarketMasters Fund will be reduced to 1.35% and 1.20%, respectively, and the expense limitation for the Investor Shares and Select Shares of Laudus International MarketMasters Fund will be reduced to 1.40% and 1.25%, respectively.

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Financial Notes, unaudited (continued)

4. Affiliates and Affiliated Transactions (continued):

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 April 30, 2012.

	Laudus Small-Cap		Laudus International
	MarketMasters Fund		MarketMasters Fund
Schwab Target Funds:
Schwab Target 2010 Fund		0.8%		0.1%
Schwab Target 2015 Fund		1.0%		0.2%
Schwab Target 2020 Fund		5.8%		1.0%
Schwab Target 2025 Fund		2.9%		0.5%
Schwab Target 2030 Fund		10.5%		1.8%
Schwab Target 2035 Fund		2.6%		0.4%
Schwab Target 2040 Fund		11.5%		1.9%
Schwab Monthly Income Funds:
Schwab Monthly Income Fund - Moderate Payout		—%		0.1%
Schwab Monthly Income Fund - Enhanced Payout		—%		0.1%
Schwab Balanced Fund		7.8%		—%

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 April 30, 2012, 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.

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.

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Financial Notes, unaudited (continued)

8. Purchases and Sales/Maturities of Investment Securities:

For the period ended April 30, 2012, 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		$10,908,615		$222,436,409
Laudus International MarketMasters Fund		560,979,290		636,601,176

9. Derivatives:

The funds entered into equity index futures contracts (“futures”) during the report period. 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 April 30, 2012 and the realized/unrealized gains (losses) on futures contracts held during the period ended April 30, 2012 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 values of futures contracts held by the funds and the monthly average number of contracts were as follows:

	Contract Values		Number of Contracts
Laudus Small-Cap MarketMasters Fund		$9,101,037		119
Laudus International MarketMasters Fund		57,089,095		306

The Laudus International MarketMasters Fund also invested in forward foreign currency exchange contracts (“forwards”) during the report period. The fund invested in forwards in connection with the purchase and sale of portfolio securities to minimize the uncertainty of changes in future foreign currency exchange rates. Refer to financial note 2(b) for the fund’s accounting policy with respect to forwards and financial note 3 for disclosures concerning the risks of investing in forwards. During the period, the monthly average notional amount and the monthly average unrealized gains (losses) in forwards were $215,087,367 and $5,177,762, respectively.

As of April 30, 2012, the derivatives contracts held by the Laudus International MarketMasters Fund, categorized by primary risk exposure, were:

Asset Derivatives	Fair Value
Equity Index - Futures Contracts1		$360,616
Forward Foreign Currency Exchange Contracts2		2,570,865
Total		$2,931,481
Liability Derivatives	Fair Value
Forward Foreign Currency Exchange Contracts3		$1,207,812

1	Includes cumulative unrealized gains of futures contracts as reported in the Schedule of Portfolio Holdings. Only current day’s variation margin is reported within the Statement of Assets and Liabilities.
2	Statement of Assets and Liabilities location: Unrealized gains on forward foreign currency exchange contracts.
3	Statement of Assets and Liabilities location: Unrealized losses on forward foreign currency exchange contracts.

During the period ending April 30, 2012, the derivatives held by the Laudus International MarketMasters Fund, categorized by primary risk exposure, were:

	Equity Index			Forward Foreign Currency
	Futures Contracts			Exchange Contracts
Realized Gain (Losses)1		$4,062,565			$7,378,355
Change in Unrealized Gains (Losses)2		(2,138,949	)		(2,780,566	)

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.

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 Laudus MarketMasters Funds

Financial Notes, unaudited (continued)

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
	(11/1/11-4/30/12)		(11/1/10-10/31/11)
Laudus Small-Cap MarketMasters Fund		$272		$3,545
Laudus International MarketMasters Fund		4,190		32,578

11. Federal Income Taxes:

Capital loss carryforwards may be used to offset future realized capital gains, for federal income tax purposes. As of 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

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. The funds have adopted the noted provisions of the Act for the period ending April 30, 2012.

65

 Laudus MarketMasters Funds

Financial Notes, unaudited (continued)

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.

66 

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 92 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.	75	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).	75	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).	75	Director, TOUSA (1998 – present) Director, Mission West Properties (1998 – present) Director, Globalstar, Inc. (2009 – present) Director, Aviat Networks (2001 – present) Director, Ditech Networks Corporation (1997 – Jan. 2012) 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.	75	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).	75	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).	75	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)

67

 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).	75	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.	75	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.	92	None

68 

 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 and Chief Executive Officer (Dec. 2010 – present) and Chief Investment Officer (Dec. 2010 – Oct. 2011), Schwab Funds, Laudus Funds and Schwab ETFs; 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.; Treasurer and Chief Financial Officer, Laudus Funds (June 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., (Sept. 2011 – present); Senior Vice President, Chief Counsel, Charles Schwab Investment Management Inc. (Sept. 2011 – present); Vice President, Charles Schwab & Co., Inc., (March 2004 – Sept. 2011) and Charles Schwab Investment Management, Inc. (Jan 2011 – Sept. 2011); Secretary, Schwab Funds (April 2011 – present); Vice President and Assistant Clerk, Laudus Funds (April 2011 – present); Secretary (May 2011 – present) and Chief Legal Officer (Nov. 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 (Nov. 2005 – present) and Assistant Secretary (June 2007 – present), Schwab Funds; Vice President and Assistant Secretary, 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.

69

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 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.

70 

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 Funds^tm

Laudus Growth Investors

Laudus Growth Investors U.S. Large Cap Growth Fund

Laudus MarketMasters Funds^tm

Laudus International MarketMasters Fund^tm

Laudus Small-Cap MarketMasters Fund^tm

Laudus Mondrian Funds^tm

Laudus Mondrian Emerging Markets Fund

Laudus Mondrian Global Equity Fund

Laudus Mondrian International Fixed Income Fund

Laudus Mondrian Institutional Funds^tm

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.

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.

^© 2012 Charles Schwab & Co., Inc. All rights reserved. Member SIPC^®. Printed on recycled paper. MFR13563-15

COMMAND PERFORMANCE^TM

Item 2: Code of Ethics.

Not applicable to this semi-annual report.

Item 3: Audit Committee Financial Expert.

Not applicable to this semi-annual report.

Item 4: Principal Accountant Fees and Services.

Not applicable to this semi-annual report.

Item 5: Audit Committee of Listed Registrants.

Not applicable.

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 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 S&P 500 Index Fund, Schwab Small-Cap Index Fund, Schwab Total Stock Market Index Fund and Schwab International Index Fund are filed under this Item.

 Schwab S&P 500 Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.6%	Common Stock		9,105,724,184		12,224,127,212
	1	.3%	Short-Term Investments		161,349,372		161,349,372
	99	.9%	Total Investments		9,267,073,556		12,385,476,584
	0	.2%	Collateral Invested for Securities on Loan		19,347,114		19,347,114
	(0	.1)%	Other Assets and Liabilities, Net				(1,499,570	)
	100	.0%	Net Assets				12,403,324,128

	Number		Value
Security	of Shares		($)
Common Stock 98.6% of net assets
Automobiles & Components 0.7%
BorgWarner, Inc. *		102,800		8,125,312
Ford Motor Co.		3,682,797		41,541,950
Harley-Davidson, Inc.		231,470		12,112,825
Johnson Controls, Inc.		649,059		20,750,416
The Goodyear Tire & Rubber Co. *		233,336		2,562,030
				85,092,533
Banks 2.9%
BB&T Corp.		692,113		22,175,301
Comerica, Inc.		188,270		6,028,405
Fifth Third Bancorp		904,029		12,864,333
First Horizon National Corp.		238,860		2,192,735
Hudson City Bancorp, Inc.		481,992		3,402,864
Huntington Bancshares, Inc.		821,893		5,498,464
KeyCorp		941,198		7,567,232
M&T Bank Corp.		121,098		10,447,124
People’s United Financial, Inc.		343,300		4,236,322
PNC Financial Services Group, Inc.		506,278		33,576,357
Regions Financial Corp.		1,354,945		9,132,329
SunTrust Banks, Inc.		501,716		12,181,664
U.S. Bancorp		1,872,428		60,236,009
Wells Fargo & Co.		5,093,509		170,276,006
Zions Bancorp		174,698		3,562,092
				363,377,237
Capital Goods 8.1%
3M Co.		667,919		59,685,242
Caterpillar, Inc.		625,062		64,237,622
Cooper Industries plc		154,700		9,679,579
Cummins, Inc.		182,562		21,146,157
Danaher Corp.		544,974		29,548,490
Deere & Co.		395,286		32,555,755
Dover Corp.		174,270		10,919,758
Eaton Corp.		338,678		16,317,506
Emerson Electric Co.		713,815		37,503,840
Fastenal Co.		283,398		13,268,694
Flowserve Corp.		50,100		5,757,993
Fluor Corp.		160,582		9,273,611
General Dynamics Corp.		338,960		22,879,800
General Electric Co.		10,258,352		200,858,532
Goodrich Corp.		119,596		15,004,514
Honeywell International, Inc.		744,229		45,144,931
Illinois Tool Works, Inc.		466,036		26,741,146
Ingersoll-Rand plc		300,000		12,756,000
Jacobs Engineering Group, Inc. *		119,534		5,239,175
Joy Global, Inc.		100,000		7,077,000
L-3 Communications Holdings, Inc.		105,783		7,779,282
Lockheed Martin Corp.		257,891		23,349,451
Masco Corp.		347,388		4,578,574
Northrop Grumman Corp.		242,467		15,343,312
PACCAR, Inc.		343,250		14,746,020
Pall Corp.		107,030		6,380,058
Parker Hannifin Corp.		155,336		13,621,414
Precision Castparts Corp.		139,327		24,573,103
Quanta Services, Inc. *		231,900		5,129,628
Raytheon Co.		331,388		17,941,346
Rockwell Automation, Inc.		132,521		10,249,174
Rockwell Collins, Inc.		147,405		8,238,466
Roper Industries, Inc.		97,200		9,904,680
Snap-on, Inc.		58,282		3,644,956
Stanley Black & Decker, Inc.		157,781		11,543,258
Textron, Inc.		259,904		6,923,843
The Boeing Co.		715,754		54,969,907
Tyco International Ltd.		454,200		25,494,246
United Technologies Corp.		888,535		72,539,997
W.W. Grainger, Inc.		57,927		12,038,389
Xylem, Inc.		173,800		4,845,544
				999,429,993
Commercial & Professional Supplies 0.5%
Avery Dennison Corp.		103,076		3,296,370
Cintas Corp.		111,376		4,362,598
Equifax, Inc.		119,661		5,482,867
Iron Mountain, Inc.		190,400		5,782,448
Pitney Bowes, Inc.		196,591		3,367,604
R.R. Donnelley & Sons Co. (b)		194,869		2,437,811
Republic Services, Inc.		299,934		8,209,194
Robert Half International, Inc.		123,342		3,675,592
Stericycle, Inc. *		80,700		6,988,620
The Dun & Bradstreet Corp.		46,500		3,616,770
Waste Management, Inc.		454,916		15,558,127
				62,778,001

See financial notes 1

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Consumer Durables & Apparel 1.1%
Coach, Inc.		278,728		20,391,741
D.R. Horton, Inc.		260,616		4,261,072
Fossil, Inc. *		50,000		6,533,500
Harman International Industries, Inc.		64,756		3,210,602
Hasbro, Inc.		107,917		3,964,871
Leggett & Platt, Inc.		157,894		3,437,352
Lennar Corp., Class A		151,118		4,192,013
Mattel, Inc.		321,294		10,795,478
Newell Rubbermaid, Inc.		276,450		5,031,390
NIKE, Inc., Class B		354,362		39,642,477
PulteGroup, Inc. *		328,586		3,233,286
Ralph Lauren Corp.		61,126		10,530,176
VF Corp.		83,891		12,755,627
Whirlpool Corp.		76,122		4,873,330
				132,852,915
Consumer Services 2.1%
Apollo Group, Inc., Class A *		109,790		3,866,804
Carnival Corp.		433,221		14,075,350
Chipotle Mexican Grill, Inc. *		30,000		12,424,500
Darden Restaurants, Inc.		128,248		6,422,660
DeVry, Inc.		57,700		1,855,055
H&R Block, Inc.		286,205		4,207,213
International Game Technology		280,660		4,372,683
Marriott International, Inc., Class A		267,172		10,443,753
McDonald’s Corp.		983,838		95,875,013
Starbucks Corp.		724,662		41,581,106
Starwood Hotels & Resorts Worldwide, Inc.		192,168		11,376,346
Wyndham Worldwide Corp.		148,464		7,473,678
Wynn Resorts Ltd.		74,700		9,964,980
Yum! Brands, Inc.		444,985		32,363,759
				256,302,900
Diversified Financials 5.9%
American Express Co.		975,741		58,749,366
Ameriprise Financial, Inc.		215,714		11,693,856
Bank of America Corp.		10,433,211		84,613,341
BlackRock, Inc.		99,400		19,043,052
Capital One Financial Corp.		528,974		29,347,478
Citigroup, Inc.		2,828,847		93,465,105
CME Group, Inc.		63,537		16,889,405
Discover Financial Services		524,873		17,793,195
E*TRADE Financial Corp. *		243,719		2,590,733
Federated Investors, Inc., Class B (b)		76,906		1,698,084
Franklin Resources, Inc.		139,335		17,487,936
IntercontinentalExchange, Inc. *		67,958		9,041,132
Invesco Ltd.		436,147		10,833,891
JPMorgan Chase & Co.		3,687,331		158,481,486
Legg Mason, Inc.		143,998		3,754,028
Leucadia National Corp.		177,151		4,403,974
Moody’s Corp.		188,529		7,720,263
Morgan Stanley		1,462,254		25,267,749
Northern Trust Corp.		225,818		10,746,679
NYSE Euronext		245,500		6,321,625
SLM Corp.		494,418		7,332,219
State Street Corp.		466,026		21,539,722
T. Rowe Price Group, Inc.		243,179		15,348,243
The Bank of New York Mellon Corp.		1,163,073		27,506,676
The Charles Schwab Corp. (a)		1,085,681		15,525,238
The Goldman Sachs Group, Inc.		484,569		55,798,120
The NASDAQ OMX Group, Inc. *		119,900		2,945,943
				735,938,539
Energy 11.1%
Alpha Natural Resources, Inc. *		196,430		3,168,416
Anadarko Petroleum Corp.		478,509		35,031,644
Apache Corp.		369,206		35,421,624
Baker Hughes, Inc.		419,963		18,524,568
Cabot Oil & Gas Corp.		199,600		7,013,944
Cameron International Corp. *		234,100		11,997,625
Chesapeake Energy Corp.		635,866		11,725,369
Chevron Corp.		1,909,634		203,490,599
ConocoPhillips		1,242,590		89,006,721
CONSOL Energy, Inc.		212,018		7,047,478
Denbury Resources, Inc. *		377,200		7,181,888
Devon Energy Corp.		387,858		27,091,881
Diamond Offshore Drilling, Inc.		65,300		4,476,315
El Paso Corp.		733,471		21,762,085
EOG Resources, Inc.		267,306		29,352,872
EQT Corp.		140,100		6,979,782
Exxon Mobil Corp.		4,560,241		393,731,208
FMC Technologies, Inc. *		230,000		10,810,000
Halliburton Co.		912,468		31,224,655
Helmerich & Payne, Inc.		118,300		6,079,437
Hess Corp.		293,240		15,289,534
Marathon Oil Corp.		670,652		19,676,929
Marathon Petroleum Corp.		335,326		13,952,915
Murphy Oil Corp.		184,892		10,163,513
Nabors Industries Ltd. *		287,890		4,793,369
National Oilwell Varco, Inc.		415,524		31,480,098
Newfield Exploration Co. *		120,000		4,308,000
Noble Corp. *		258,800		9,849,928
Noble Energy, Inc.		167,684		16,654,375
Occidental Petroleum Corp.		786,450		71,739,969
Peabody Energy Corp.		261,564		8,137,256
Pioneer Natural Resources Co.		119,800		13,875,236
QEP Resources, Inc.		162,691		5,012,510
Range Resources Corp.		150,900		10,058,994
Rowan Cos., Inc. *		126,263		4,359,861
Schlumberger Ltd.		1,293,715		95,916,030
Southwestern Energy Co. *		326,100		10,298,238
Spectra Energy Corp.		617,509		18,982,227
Sunoco, Inc.		109,001		5,372,659
Tesoro Corp. *		164,807		3,831,763
The Williams Cos., Inc.		568,398		19,342,584
Valero Energy Corp.		549,440		13,571,168
WPX Energy, Inc. *		182,099		3,199,479
				1,370,984,746
Food & Staples Retailing 2.2%
Costco Wholesale Corp.		420,492		37,074,780
CVS Caremark Corp.		1,258,851		56,169,931

2 See financial notes

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Safeway, Inc.		275,696		5,604,900
Sysco Corp.		563,357		16,281,017
The Kroger Co.		562,047		13,078,834
Wal-Mart Stores, Inc.		1,687,102		99,387,179
Walgreen Co.		838,911		29,412,220
Whole Foods Market, Inc.		155,816		12,943,635
				269,952,496
Food, Beverage & Tobacco 6.3%
Altria Group, Inc.		1,982,091		63,843,151
Archer-Daniels-Midland Co.		633,199		19,521,525
Beam, Inc.		161,179		9,151,744
Brown-Forman Corp., Class B		94,128		8,127,953
Campbell Soup Co.		168,411		5,697,344
Coca-Cola Enterprises, Inc.		295,862		8,911,363
ConAgra Foods, Inc.		401,749		10,373,159
Constellation Brands, Inc., Class A *		175,065		3,781,404
Dean Foods Co. *		154,970		1,903,032
Dr Pepper Snapple Group, Inc.		203,200		8,245,856
General Mills, Inc.		634,980		24,694,372
H.J. Heinz Co.		303,643		16,187,208
Hormel Foods Corp.		119,300		3,466,858
Kellogg Co.		234,434		11,855,327
Kraft Foods, Inc., Class A		1,715,154		68,383,190
Lorillard, Inc.		129,697		17,546,707
McCormick & Co., Inc. - Non Voting Shares		132,602		7,413,778
Mead Johnson Nutrition Co.		205,300		17,565,468
Molson Coors Brewing Co., Class B		147,030		6,113,507
PepsiCo, Inc.		1,517,163		100,132,758
Philip Morris International, Inc.		1,665,946		149,118,827
Reynolds American, Inc.		327,596		13,375,745
Sara Lee Corp.		573,042		12,629,846
The Coca-Cola Co.		2,186,128		166,845,289
The Hershey Co.		145,128		9,725,027
The JM Smucker Co.		106,275		8,462,678
Tyson Foods, Inc., Class A		277,090		5,056,893
				778,130,009
Health Care Equipment & Services 3.8%
Aetna, Inc.		347,780		15,316,231
AmerisourceBergen Corp.		247,246		9,200,024
Baxter International, Inc.		538,489		29,837,675
Becton, Dickinson & Co.		202,390		15,877,496
Boston Scientific Corp. *		1,434,274		8,978,555
C.R. Bard, Inc.		84,773		8,389,136
Cardinal Health, Inc.		330,733		13,980,084
CareFusion Corp. *		207,066		5,365,080
Cerner Corp. *		137,400		11,141,766
Cigna Corp.		274,508		12,690,505
Coventry Health Care, Inc.		138,985		4,168,160
Covidien plc		462,400		25,538,352
DaVita, Inc. *		90,400		8,007,632
DENTSPLY International, Inc.		132,400		5,436,344
Edwards Lifesciences Corp. *		115,800		9,607,926
Express Scripts Holding Co. *		766,895		42,785,072
Humana, Inc.		159,403		12,860,634
Intuitive Surgical, Inc. *		37,800		21,855,960
Laboratory Corp. of America Holdings *		89,691		7,882,942
McKesson Corp.		234,575		21,442,501
Medtronic, Inc.		1,007,839		38,499,450
Patterson Cos., Inc.		103,047		3,512,872
Quest Diagnostics, Inc.		148,280		8,554,273
St. Jude Medical, Inc.		319,387		12,366,665
Stryker Corp.		317,640		17,333,615
Tenet Healthcare Corp. *		451,617		2,343,892
UnitedHealth Group, Inc.		1,011,410		56,790,671
Varian Medical Systems, Inc. *		110,706		7,020,975
WellPoint, Inc.		321,329		21,792,533
Zimmer Holdings, Inc.		177,223		11,152,643
				469,729,664
Household & Personal Products 2.2%
Avon Products, Inc.		423,620		9,150,192
Colgate-Palmolive Co.		459,397		45,452,739
Kimberly-Clark Corp.		387,795		30,430,274
The Clorox Co.		127,857		8,962,776
The Estee Lauder Cos., Inc., Class A		215,852		14,105,928
The Procter & Gamble Co.		2,664,990		169,599,963
				277,701,872
Insurance 3.5%
ACE Ltd.		321,700		24,439,549
Aflac, Inc.		445,773		20,077,616
American International Group, Inc. *		509,577		17,340,905
Aon plc		311,450		16,133,110
Assurant, Inc.		89,346		3,604,218
Berkshire Hathaway, Inc., Class B *		1,703,130		137,016,808
Cincinnati Financial Corp.		155,203		5,528,331
Genworth Financial, Inc., Class A *		496,064		2,981,345
Hartford Financial Services Group, Inc.		413,495		8,497,322
Lincoln National Corp.		294,671		7,299,001
Loews Corp.		286,616		11,788,516
Marsh & McLennan Cos., Inc.		541,179		18,102,438
MetLife, Inc.		1,009,977		36,389,471
Principal Financial Group, Inc.		307,867		8,518,680
Prudential Financial, Inc.		451,431		27,329,633
The Allstate Corp.		502,110		16,735,326
The Chubb Corp.		267,893		19,574,941
The Progressive Corp.		590,520		12,578,076
The Travelers Cos., Inc.		377,260		24,265,363
Torchmark Corp.		95,511		4,652,341
Unum Group		276,440		6,562,686
XL Group plc		312,199		6,715,400
	��			436,131,076
Materials 3.4%
Air Products & Chemicals, Inc.		203,601		17,405,849
Airgas, Inc.		62,700		5,745,828
Alcoa, Inc.		996,064		9,691,703
Allegheny Technologies, Inc.		101,170		4,344,240

See financial notes 3

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ball Corp.		152,738		6,378,339
Bemis Co., Inc.		88,735		2,874,127
CF Industries Holdings, Inc.		66,225		12,785,398
Cliffs Natural Resources, Inc.		136,800		8,517,168
E.I. du Pont de Nemours & Co.		894,804		47,836,222
Eastman Chemical Co.		130,816		7,060,140
Ecolab, Inc.		284,528		18,121,588
FMC Corp.		67,100		7,411,195
Freeport-McMoran Copper & Gold, Inc.		927,140		35,509,462
International Flavors & Fragrances, Inc.		71,843		4,325,667
International Paper Co.		419,089		13,959,855
MeadWestvaco Corp.		155,750		4,955,965
Monsanto Co.		521,800		39,750,724
Newmont Mining Corp.		490,946		23,393,577
Nucor Corp.		312,900		12,268,809
Owens-Illinois, Inc. *		157,500		3,661,875
PPG Industries, Inc.		153,048		16,106,772
Praxair, Inc.		287,779		33,296,030
Sealed Air Corp.		183,368		3,516,998
Sigma-Aldrich Corp.		116,454		8,256,589
The Dow Chemical Co.		1,137,735		38,546,462
The Mosaic Co.		283,200		14,958,624
The Sherwin-Williams Co.		88,636		10,661,138
Titanium Metals Corp.		82,800		1,222,956
United States Steel Corp. (b)		134,613		3,813,586
Vulcan Materials Co.		123,471		5,285,793
				421,662,679
Media 3.1%
Cablevision Systems Corp., Class A		220,000		3,260,400
CBS Corp., Class B - Non Voting Shares		633,936		21,141,766
Comcast Corp., Class A		2,601,964		78,917,568
DIRECTV, Class A *		649,102		31,981,256
Discovery Communications, Inc., Class A *		255,000		13,877,100
Gannett Co., Inc.		207,114		2,862,315
News Corp., Class A		2,065,801		40,489,700
Omnicom Group, Inc.		257,747		13,224,999
Scripps Networks Interactive, Class A		91,193		4,579,712
The Interpublic Group of Cos., Inc.		454,565		5,368,413
The McGraw-Hill Cos., Inc.		266,867		13,121,850
The Walt Disney Co.		1,735,183		74,803,739
The Washington Post Co., Class B (b)		5,369		2,030,395
Time Warner Cable, Inc.		311,201		25,036,120
Time Warner, Inc.		930,674		34,863,048
Viacom Inc., Class B		534,353		24,788,636
				390,347,017
Pharmaceuticals, Biotechnology & Life Sciences 7.4%
Abbott Laboratories		1,529,086		94,895,077
Agilent Technologies, Inc.		333,666		14,074,032
Allergan, Inc.		289,758		27,816,768
Amgen, Inc.		760,959		54,111,794
Biogen Idec, Inc. *		231,991		31,089,114
Bristol-Myers Squibb Co.		1,634,364		54,538,727
Celgene Corp. *		421,213		30,714,852
Eli Lilly & Co.		977,123		40,443,121
Forest Laboratories, Inc. *		277,864		9,678,003
Gilead Sciences, Inc. *		722,875		37,596,729
Hospira, Inc. *		157,282		5,523,744
Johnson & Johnson		2,656,025		172,880,667
Life Technologies Corp. *		173,435		8,040,447
Merck & Co., Inc.		2,940,314		115,377,921
Mylan, Inc. *		404,751		8,787,144
PerkinElmer, Inc.		105,660		2,916,216
Perrigo Co.		95,800		10,049,420
Pfizer, Inc.		7,293,833		167,247,591
Thermo Fisher Scientific, Inc.		353,637		19,679,899
Waters Corp. *		92,152		7,750,905
Watson Pharmaceuticals, Inc. *		125,746		9,476,219
				922,688,390
Real Estate 2.1%
American Tower Corp.		377,000		24,723,660
Apartment Investment & Management Co., Class A		127,314		3,456,575
AvalonBay Communities, Inc.		90,399		13,144,015
Boston Properties, Inc.		139,976		15,152,402
CBRE Group, Inc., Class A *		307,440		5,782,946
Equity Residential		288,222		17,708,360
HCP, Inc.		398,000		16,497,100
Health Care REIT, Inc.		201,900		11,439,654
Host Hotels & Resorts, Inc.		669,511		11,140,663
Kimco Realty Corp.		378,159		7,340,066
Plum Creek Timber Co., Inc.		158,777		6,674,985
ProLogis, Inc.		461,289		16,504,921
Public Storage		143,278		20,526,006
Simon Property Group, Inc.		293,953		45,739,087
Ventas, Inc.		289,700		17,031,463
Vornado Realty Trust REIT		178,456		15,318,663
Weyerhaeuser Co.		510,240		10,388,486
				258,569,052
Retailing 4.1%
Abercrombie & Fitch Co., Class A		78,745		3,950,637
Amazon.com, Inc. *		350,580		81,299,502
AutoNation, Inc. (b)*		40,833		1,412,005
AutoZone, Inc. *		27,098		10,735,144
Bed Bath & Beyond, Inc. *		226,869		15,969,309
Best Buy Co., Inc.		296,557		6,545,013
Big Lots, Inc. *		72,567		2,658,855
CarMax, Inc. *		207,800		6,414,786
Dollar Tree, Inc. *		110,000		11,182,600
Expedia, Inc.		95,113		4,054,667
Family Dollar Stores, Inc.		108,430		7,324,446
GameStop Corp., Class A (b)		146,800		3,341,168
Genuine Parts Co.		142,838		9,253,046
J.C. Penney Co., Inc.		153,021		5,517,937
Kohl’s Corp.		243,310		12,197,130
Limited Brands, Inc.		227,535		11,308,489
Lowe’s Cos., Inc.		1,218,488		38,345,817
Macy’s, Inc.		399,926		16,404,965

4 See financial notes

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Netflix, Inc. *		58,300		4,672,162
Nordstrom, Inc.		151,296		8,451,395
O’Reilly Automotive, Inc. *		121,200		12,781,752
Priceline.com, Inc. *		47,538		36,167,861
Ross Stores, Inc.		230,000		14,165,700
Sears Holdings Corp. (b)*		44,826		2,410,742
Staples, Inc.		653,469		10,063,423
Target Corp.		642,708		37,238,502
The Gap, Inc.		325,062		9,264,267
The Home Depot, Inc.		1,491,550		77,247,374
The TJX Cos., Inc.		744,006		31,032,490
Tiffany & Co.		116,328		7,963,815
TripAdvisor, Inc. *		95,113		3,567,689
Urban Outfitters, Inc. *		111,100		3,217,456
				506,160,144
Semiconductors & Semiconductor Equipment 2.3%
Advanced Micro Devices, Inc. *		559,039		4,114,527
Altera Corp.		304,846		10,843,372
Analog Devices, Inc.		296,254		11,547,981
Applied Materials, Inc.		1,262,472		15,137,039
Broadcom Corp., Class A *		470,818		17,231,939
First Solar, Inc. (b)*		47,800		879,520
Intel Corp.		4,830,405		137,183,502
KLA-Tencor Corp.		160,681		8,379,514
Linear Technology Corp.		214,968		7,031,603
LSI Corp. *		573,376		4,609,943
Microchip Technology, Inc.		178,623		6,312,537
Micron Technology, Inc. *		940,775		6,199,707
Novellus Systems, Inc. *		66,111		3,090,689
NVIDIA Corp. *		601,582		7,820,566
Teradyne, Inc. *		168,449		2,899,008
Texas Instruments, Inc.		1,098,954		35,100,591
Xilinx, Inc.		269,163		9,792,150
				288,174,188
Software & Services 9.5%
Accenture plc, Class A		621,200		40,346,940
Adobe Systems, Inc. *		495,676		16,634,887
Akamai Technologies, Inc. *		169,341		5,520,517
Autodesk, Inc. *		214,381		8,440,180
Automatic Data Processing, Inc.		470,873		26,189,956
BMC Software, Inc. *		162,339		6,698,107
CA, Inc.		370,925		9,799,839
Citrix Systems, Inc. *		176,408		15,102,289
Cognizant Technology Solutions Corp., Class A *		289,448		21,222,327
Computer Sciences Corp.		144,040		4,041,762
eBay, Inc. *		1,126,469		46,241,552
Electronic Arts, Inc. *		305,892		4,704,619
Fidelity National Information Services, Inc.		232,234		7,819,319
Fiserv, Inc. *		132,652		9,324,109
Google, Inc., Class A *		245,375		148,508,311
International Business Machines Corp.		1,121,090		232,155,317
Intuit, Inc.		284,809		16,510,378
MasterCard, Inc., Class A		104,000		47,036,080
Microsoft Corp.		7,225,431		231,358,301
Oracle Corp.		3,786,586		111,287,762
Paychex, Inc.		305,065		9,450,914
Red Hat, Inc. *		180,900		10,783,449
SAIC, Inc.		252,000		3,064,320
Salesforce.com, Inc. *		130,527		20,326,970
Symantec Corp. *		692,550		11,440,926
Teradata Corp. *		161,371		11,260,468
Total System Services, Inc.		177,100		4,165,392
VeriSign, Inc.		149,825		6,159,306
Visa, Inc., Class A		483,700		59,485,426
Western Union Co.		630,625		11,590,887
Yahoo!, Inc. *		1,162,255		18,061,443
				1,174,732,053
Technology Hardware & Equipment 8.2%
Amphenol Corp., Class A		161,800		9,407,052
Apple, Inc. *		902,140		527,066,274
Cisco Systems, Inc.		5,241,228		105,610,744
Corning, Inc.		1,500,787		21,536,293
Dell, Inc. *		1,453,085		23,787,001
EMC Corp. *		2,000,645		56,438,196
F5 Networks, Inc. *		74,000		9,910,820
FLIR Systems, Inc.		149,700		3,362,262
Harris Corp.		129,300		5,888,322
Hewlett-Packard Co.		1,896,808		46,964,966
Jabil Circuit, Inc.		170,686		4,002,587
JDS Uniphase Corp. *		191,981		2,332,569
Juniper Networks, Inc. *		491,565		10,534,238
Lexmark International, Inc., Class A		83,508		2,513,591
Molex, Inc.		126,666		3,494,715
Motorola Mobility Holdings, Inc. *		255,681		9,925,536
Motorola Solutions, Inc.		282,922		14,437,509
NetApp, Inc. *		345,174		13,403,106
QUALCOMM, Inc.		1,633,165		104,261,254
SanDisk Corp. *		229,524		8,494,683
TE Connectivity Ltd.		416,600		15,189,236
Western Digital Corp. *		223,300		8,666,273
Xerox Corp.		1,284,866		9,996,258
				1,017,223,485
Telecommunication Services 2.9%
AT&T, Inc.		5,731,136		188,611,686
CenturyLink, Inc.		613,843		23,669,786
Crown Castle International Corp. *		240,000		13,586,400
Frontier Communications Corp. (b)		937,945		3,789,298
MetroPCS Communications, Inc. *		243,900		1,780,470
Sprint Nextel Corp. *		2,882,208		7,147,876
Verizon Communications, Inc.		2,738,878		110,595,893
Windstream Corp.		565,074		6,351,432
				355,532,841
Transportation 1.8%
C.H. Robinson Worldwide, Inc.		155,995		9,319,141
CSX Corp.		1,013,291		22,606,522

See financial notes 5

 Schwab S&P 500 Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Expeditors International of Washington, Inc.		199,300		7,972,000
FedEx Corp.		302,968		26,733,896
Norfolk Southern Corp.		325,292		23,723,546
Ryder System, Inc.		60,702		2,957,401
Southwest Airlines Co.		753,336		6,237,622
Union Pacific Corp.		464,175		52,191,837
United Parcel Service, Inc., Class B		923,318		72,148,069
				223,890,034
Utilities 3.4%
AGL Resources, Inc.		108,840		4,291,561
Ameren Corp.		230,420		7,555,472
American Electric Power Co., Inc.		469,202		18,223,806
CenterPoint Energy, Inc.		399,066		8,065,124
CMS Energy Corp.		237,984		5,471,252
Consolidated Edison, Inc.		295,865		17,589,174
Dominion Resources, Inc.		551,564		28,786,125
DTE Energy Co.		161,012		9,077,857
Duke Energy Corp.		1,280,498		27,441,072
Edison International		308,293		13,567,975
Entergy Corp.		173,453		11,371,579
Exelon Corp.		816,293		31,843,590
FirstEnergy Corp.		397,794		18,624,715
Integrys Energy Group, Inc.		71,494		3,906,432
NextEra Energy, Inc.		400,638		25,781,055
NiSource, Inc.		302,662		7,460,618
Northeast Utilities		298,700		10,983,199	��
NRG Energy, Inc. *		240,000		4,080,000
ONEOK, Inc.		100,200		8,606,178
Pepco Holdings, Inc.		205,700		3,891,844
PG&E Corp.		394,806		17,442,529
Pinnacle West Capital Corp.		104,861		5,070,029
PPL Corp.		573,970		15,698,080
Progress Energy, Inc.		280,959		14,952,638
Public Service Enterprise Group, Inc.		485,170		15,113,046
SCANA Corp.		113,900		5,253,068
Sempra Energy		240,269		15,555,015
TECO Energy, Inc.		194,819		3,510,638
The AES Corp. *		623,349		7,804,329
The Southern Co.		831,725		38,209,447
Wisconsin Energy Corp.		218,600		8,053,224
Xcel Energy, Inc.		497,586		13,464,677
				426,745,348
Total Common Stock
(Cost $9,105,724,184)				12,224,127,212
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 1.3% of net assets
Time Deposit 1.2%
Bank of America
0.03%, 05/01/12		148,350,643		148,350,643
U.S. Treasury Obligation 0.1%
U.S. Treasury Bill
0.08%, 06/14/12 (c)(d)		13,000,000		12,998,729
Total Short-Term Investments
(Cost $161,349,372)				161,349,372
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.2% of net assets
Wells Fargo Advantage Government Money Market Fund		19,347,114		19,347,114
Total Collateral Invested for Securities on Loan
(Cost $19,347,114)				19,347,114
End of Collateral Invested for Securities on Loan.

At 04/30/12, tax basis cost of the fund’s investments was $9,311,633,508 and the unrealized appreciation and depreciation were $4,273,809,673 and ($1,199,966,597), respectively, with a net unrealized appreciation of $3,073,843,076.

*	Non-income producing security.
(a)	Issuer is affiliated with the fund’s adviser.
(b)	All or a portion of this security is on loan.
(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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		2,300		160,264,000		3,785,225

6 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.3%	Common Stock		1,314,574,537		1,615,955,126
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.7%	Short-Term Investments		27,907,579		27,907,579
	100	.0%	Total Investments		1,342,482,116		1,643,862,705
	5	.4%	Collateral Invested for Securities on Loan		88,178,306		88,178,306
	(5	.4)%	Other Assets and Liabilities, Net				(88,461,247	)
	100	.0%	Net Assets				1,643,579,764

	Number		Value
Security	of Shares		($)
Common Stock 98.3% of net assets
Automobiles & Components 0.8%
American Axle & Manufacturing Holdings, Inc. *		89,400		866,286
Amerigon, Inc. *		39,700		567,710
Cooper Tire & Rubber Co.		83,223		1,244,184
Dana Holding Corp.		196,200		2,868,444
Dorman Products, Inc. *		14,500		692,810
Drew Industries, Inc. *		25,600		762,368
Exide Technologies *		103,700		298,656
Fuel Systems Solutions, Inc. *		22,300		522,935
Modine Manufacturing Co. *		62,300		492,170
Motorcar Parts of America, Inc. *		16,200		122,472
Shiloh Industries, Inc.		7,200		66,168
Spartan Motors, Inc.		44,700		194,445
Standard Motor Products, Inc.		26,400		397,848
Stoneridge, Inc. *		35,400		305,148
Superior Industries International, Inc.		31,400		537,254
Tenneco, Inc. *		81,000		2,497,230
Tower International, Inc. *		8,800		93,632
Winnebago Industries, Inc. *		39,000		380,250
				12,910,010
Banks 7.5%
1st Source Corp.		22,921		520,077
1st United Bancorp, Inc. *		36,500		221,190
Alliance Financial Corp.		6,400		195,264
Ameris Bancorp *		31,800		394,320
Ames National Corp.		11,100		245,088
Apollo Residential Mortgage, Inc.		31,600		573,540
Arrow Financial Corp.		13,600		325,584
Astoria Financial Corp.		116,500		1,128,885
BancFirst Corp.		10,416		434,347
Banco Latinoamericano de Comercio Exterior, S.A., Class E		37,300		777,705
BancorpSouth, Inc.		124,300		1,674,321
Bank Mutual Corp.		61,600		240,240
Bank of Kentucky Financial Corp.		7,700		194,117
Bank of Marin Bancorp		7,100		263,197
Bank of the Ozarks, Inc.		37,600		1,161,840
BankFinancial Corp.		28,200		187,812
Banner Corp.		22,100		485,095
BBCN Bancorp, Inc. *		99,600		1,093,608
Beneficial Mutual Bancorp, Inc. *		44,503		385,841
Berkshire Hills Bancorp, Inc.		27,800		630,782
BofI Holding, Inc. *		11,900		211,463
Boston Private Financial Holdings, Inc.		103,100		960,892
Bridge Bancorp, Inc.		9,000		175,320
Bridge Capital Holdings *		12,200		186,538
Brookline Bancorp, Inc.		102,522		920,648
Bryn Mawr Bank Corp.		14,500		311,605
Camden National Corp.		10,300		334,956
Cape Bancorp, Inc. *		15,400		125,356
Capital Bank Corp. *		22,400		51,520
Capital City Bank Group, Inc.		15,300		127,755
Cardinal Financial Corp.		38,800		468,316
Cascade Bancorp (c)*		3,871		22,026
Cathay General Bancorp		105,322		1,813,645
Center Bancorp, Inc.		16,200		171,234
Centerstate Banks, Inc.		40,200		323,208
Central Pacific Financial Corp. *		20,600		292,932
Century Bancorp, Inc., Class A		3,200		87,904
Charter Financial Corp.		3,029		27,261
Chemical Financial Corp.		36,803		812,242
Citizens & Northern Corp.		16,300		308,722
City Holding Co.		20,400		680,340
Clifton Savings Bancorp, Inc.		11,400		116,508
CNB Financial Corp.		16,500		271,260
CoBiz Financial, Inc.		43,600		272,500
Columbia Banking System, Inc.		52,900		1,083,921
Community Bank System, Inc.		52,200		1,467,864
Community Trust Bancorp, Inc.		18,600		594,270
CVB Financial Corp.		119,619		1,383,992
Dime Community Bancshares		41,700		577,962
Doral Financial Corp. *		96,500		176,595
Eagle Bancorp, Inc. *		22,400		398,496
Encore Bancshares, Inc. *		11,301		231,784
Enterprise Bancorp, Inc.		3,090		49,718
Enterprise Financial Services Corp.		21,300		257,517
ESB Financial Corp.		16,700		224,281
ESSA Bancorp, Inc.		15,200		148,200
F.N.B. Corp.		182,237		2,068,390
Federal Agricultural Mortgage Corp., Class C		13,200		301,752
Financial Institutions, Inc.		18,500		313,020
First Bancorp		20,200		202,404
First Bancorp, Inc.		9,496		137,787
First Busey Corp.		103,200		478,848

18 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
First Commonwealth Financial Corp.		140,556		903,775
First Community Bancshares, Inc.		21,300		285,207
First Connecticut Bancorp, Inc.		23,900		315,241
First Defiance Financial Corp.		13,000		223,340
First Financial Bancorp		77,989		1,310,995
First Financial Bankshares, Inc. (c)		42,131		1,425,713
First Financial Corp.		14,900		447,000
First Financial Holdings, Inc.		22,100		255,034
First Interstate BancSystem, Inc.		21,100		297,299
First Merchants Corp.		34,400		424,152
First Midwest Bancorp, Inc.		99,863		1,063,541
First PacTrust Bancorp, Inc.		13,600		149,464
FirstMerit Corp.		146,300		2,457,840
Flagstar Bancorp, Inc. *		336,700		293,064
Flushing Financial Corp.		42,000		547,260
Fox Chase Bancorp, Inc.		19,500		248,040
Franklin Financial Corp. *		18,600		267,468
German American Bancorp, Inc.		16,900		321,776
Glacier Bancorp, Inc.		96,311		1,435,034
Great Southern Bancorp, Inc.		13,600		326,944
Hampton Roads Bankshares, Inc. (c)*		15,500		48,980
Hancock Holding Co.		102,249		3,290,373
Hanmi Financial Corp. *		42,100		439,103
Heartland Financial USA, Inc.		17,800		329,656
Heritage Commerce Corp. *		27,900		188,046
Heritage Financial Corp.		21,000		275,100
Home Bancshares, Inc.		29,990		873,909
Home Federal Bancorp, Inc.		22,200		217,338
Home Loan Servicing Solutions Ltd.		8,000		110,880
HomeStreet, Inc. *		1,200		41,904
Hudson Valley Holding Corp.		20,900		383,097
IBERIABANK Corp.		39,600		2,022,372
Independent Bank Corp.		28,700		805,609
International Bancshares Corp.		71,000		1,400,830
Investors Bancorp, Inc. *		62,000		957,280
Kearny Financial Corp.		17,800		172,660
Lakeland Bancorp, Inc.		30,450		278,313
Lakeland Financial Corp.		21,700		565,068
MainSource Financial Group, Inc.		27,000		315,630
MB Financial, Inc.		72,924		1,507,339
Merchants Bancshares, Inc.		6,446		173,268
Meridian Interstate Bancorp, Inc. *		11,800		158,120
Metro Bancorp, Inc. *		18,600		215,202
MGIC Investment Corp. *		251,400		869,844
MidSouth Bancorp, Inc.		10,200		143,820
National Bankshares		9,300		276,303
National Penn Bancshares, Inc.		165,778		1,528,473
NBT Bancorp, Inc.		46,085		947,047
Northfield Bancorp, Inc. (c)		22,800		318,288
Northwest Bancshares, Inc.		142,109		1,750,783
OceanFirst Financial Corp.		19,600		285,572
Ocwen Financial Corp. *		127,400		1,899,534
Old National Bancorp		126,883		1,626,640
OmniAmerican Bancorp, Inc. *		15,900		318,795
Oriental Financial Group, Inc.		60,600		716,292
Oritani Financial Corp.		68,450		1,014,429
Orrstown Financial Services, Inc.		9,400		72,662
Pacific Capital Bancorp *		5,500		250,525
Pacific Continental Corp.		24,700		219,583
PacWest Bancorp		40,516		965,091
Park National Corp. (c)		17,253		1,160,264
Park Sterling Corp. *		42,900		202,059
Penns Woods Bancorp, Inc.		5,100		201,144
Peoples Bancorp, Inc.		14,100		259,299
Pinnacle Financial Partners, Inc. *		45,732		836,896
PrivateBancorp, Inc.		80,376		1,264,314
Prosperity Bancshares, Inc.		62,800		2,929,620
Provident Financial Services, Inc.		80,951		1,189,980
Provident New York Bancorp		50,900		429,596
Radian Group, Inc. (c)		202,100		630,552
Renasant Corp.		33,600		537,600
Republic Bancorp, Inc., Class A		13,300		312,949
Rockville Financial, Inc.		39,500		462,545
Roma Financial Corp.		10,100		95,344
S&T Bancorp, Inc.		37,581		703,516
S.Y. Bancorp, Inc.		16,100		373,520
Sandy Spring Bancorp, Inc.		32,300		581,723
SCBT Financial Corp.		18,700		643,093
Seacoast Banking Corp. of Florida *		97,100		157,302
Sierra Bancorp		15,900		145,644
Signature Bank *		61,709		4,053,664
Simmons First National Corp., Class A		23,200		564,688
Southside Bancshares, Inc.		23,100		471,240
Southwest Bancorp, Inc. *		26,000		236,340
State Bank Financial Corp. *		42,300		729,675
StellarOne Corp.		30,800		385,308
Sterling Bancorp		41,400		393,714
Sterling Financial Corp. *		35,900		697,178
Suffolk Bancorp *		13,000		154,440
Sun Bancorp, Inc. *		50,400		145,656
Susquehanna Bancshares, Inc.		246,208		2,553,177
SVB Financial Group *		57,400		3,678,766
Taylor Capital Group, Inc. (c)*		20,300		282,576
Territorial Bancorp, Inc.		16,000		347,520
Texas Capital Bancshares, Inc. *		49,900		1,881,729
The Bancorp, Inc. *		39,200		402,584
The First of Long Island Corp.		10,200		280,806
Tompkins Financial Corp.		12,200		461,770
TowneBank (c)		32,600		424,452
TriCo Bancshares		18,800		309,072
TrustCo Bank Corp.		124,602		681,573
Trustmark Corp.		85,677		2,180,480
UMB Financial Corp.		42,900		2,061,345
Umpqua Holdings Corp.		153,595		2,033,598
Union First Market Bankshares Corp.		27,100		378,316
United Bankshares, Inc. (c)		67,222		1,776,677
United Community Banks, Inc. *		55,700		524,137
United Financial Bancorp, Inc.		21,600		346,464
Univest Corp. of Pennsylvania		22,500		362,250
ViewPoint Financial Group		46,700		742,997
Virginia Commerce Bancorp, Inc. *		31,400		245,862
Walker & Dunlop, Inc. *		14,400		187,920
Washington Banking Co.		20,500		285,770
Washington Trust Bancorp, Inc.		19,100		452,097
Webster Financial Corp.		96,500		2,193,445
WesBanco, Inc.		30,998		634,839
West Bancorp		20,800		199,680
West Coast Bancorp *		25,800		504,132

See financial notes 19

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Westamerica Bancorp		38,700		1,775,169
Western Alliance Bancorp *		92,900		815,662
Westfield Financial, Inc.		37,600		280,872
Wilshire Bancorp, Inc. *		82,400		441,664
Wintrust Financial Corp.		46,855		1,692,871
WSFS Financial Corp.		8,600		343,226
				123,988,111
Capital Goods 9.2%
A.O. Smith Corp.		50,895		2,422,602
A123 Systems, Inc. (c)*		114,900		117,198
AAON, Inc.		25,150		513,060
AAR Corp.		53,197		821,894
Accuride Corp. *		54,200		392,950
Aceto Corp.		35,700		321,300
Active Power, Inc. *		30,000		26,550
Actuant Corp., Class A		91,848		2,504,695
Acuity Brands, Inc.		58,100		3,228,617
Aegion Corp. *		52,900		965,425
Aerovironment, Inc. *		22,600		549,632
Aircastle Ltd.		73,200		889,380
Alamo Group, Inc.		8,900		299,752
Albany International Corp., Class A		37,000		891,700
Altra Holdings, Inc. *		36,000		658,080
Ameresco, Inc., Class A *		23,700		288,903
American Railcar Industries, Inc. *		13,000		350,740
American Science & Engineering, Inc.		12,200		796,782
American Superconductor Corp. (c)*		59,800		246,974
American Woodmark Corp.		12,600		226,170
Ampco-Pittsburgh Corp.		11,400		211,812
Apogee Enterprises, Inc.		37,600		577,536
Applied Industrial Technologies, Inc.		56,766		2,230,904
Argan, Inc.		10,500		153,090
Astec Industries, Inc. *		26,695		835,287
Astronics Corp. *		13,800		438,150
AZZ, Inc.		16,800		868,728
Barnes Group, Inc.		72,940		1,925,616
Beacon Roofing Supply, Inc. *		61,582		1,643,624
Belden, Inc.		63,500		2,208,530
Blount International, Inc. *		65,162		1,053,670
Brady Corp., Class A		63,629		1,974,408
Briggs & Stratton Corp.		67,593		1,223,433
Builders FirstSource, Inc. *		60,900		253,953
CAI International, Inc. *		16,200		334,692
Capstone Turbine Corp. (c)*		329,500		359,155
Cascade Corp.		12,300		578,961
Ceradyne, Inc.		33,312		843,460
Chart Industries, Inc. *		39,300		3,003,699
CIRCOR International, Inc.		23,100		718,872
CLARCOR, Inc.		67,600		3,246,152
Coleman Cable, Inc. *		11,200		95,200
Colfax Corp. *		69,100		2,341,799
Columbus McKinnon Corp. *		25,800		382,614
Comfort Systems USA, Inc.		50,800		537,464
Commercial Vehicle Group, Inc. *		42,700		454,328
Cubic Corp.		21,115		976,146
Curtiss-Wright Corp.		62,200		2,195,038
DigitalGlobe, Inc. *		47,200		579,144
Douglas Dynamics, Inc.		25,000		353,250
Ducommun, Inc. *		14,100		166,380
DXP Enterprises, Inc. *		11,600		503,092
Dycom Industries, Inc. *		47,200		1,104,008
Dynamic Materials Corp.		17,900		327,212
EMCOR Group, Inc.		89,500		2,624,140
Encore Wire Corp.		24,841		633,197
Energy Recovery, Inc. *		61,300		128,730
EnerSys *		63,578		2,222,051
EnPro Industries, Inc. *		27,700		1,147,057
ESCO Technologies, Inc.		35,669		1,227,014
Essex Rental Corp. *		22,900		89,997
Esterline Technologies Corp. *		40,800		2,794,392
Federal Signal Corp. *		83,200		429,312
Flow International Corp. *		63,400		260,574
Franklin Electric Co., Inc.		31,118		1,560,568
FreightCar America, Inc.		16,000		345,600
FuelCell Energy, Inc. *		215,500		267,220
Furmanite Corp. *		49,500		309,870
GenCorp, Inc. (c)*		78,600		539,982
Generac Holdings, Inc. *		33,400		804,272
GeoEye, Inc. *		29,700		680,724
Gibraltar Industries, Inc. *		40,700		550,264
Global Power Equipment Group, Inc. *		21,100		527,711
Graham Corp.		13,200		291,456
Granite Construction, Inc.		51,800		1,442,112
Great Lakes Dredge & Dock Co.		78,800		583,908
Griffon Corp.		63,821		632,466
H&E Equipment Services, Inc. *		38,300		739,190
HEICO Corp.		69,945		2,820,182
Hexcel Corp. *		131,383		3,597,266
Houston Wire & Cable Co.		23,800		292,502
Hurco Cos., Inc. *		8,600		226,438
II-VI, Inc. *		69,300		1,414,413
Insteel Industries, Inc.		23,600		268,332
Interline Brands, Inc. *		44,634		939,099
John Bean Technologies Corp.		38,400		614,016
Kadant, Inc. *		16,500		426,855
Kaman Corp.		35,149		1,208,423
Kaydon Corp.		43,635		1,070,367
Kratos Defense & Security Solutions, Inc. *		44,400		246,420
L.B. Foster Co., Class A		12,700		340,487
Lawson Products, Inc.		4,700		68,432
Layne Christensen Co. *		26,311		540,691
Lindsay Corp.		16,800		1,122,072
Lmi Aerospace, Inc. *		12,300		224,967
LSI Industries, Inc.		26,100		178,785
Lydall, Inc. *		23,000		242,650
MasTec, Inc. *		75,873		1,319,431
Meritor, Inc. *		126,500		823,515
Met-Pro Corp.		19,600		195,216
Michael Baker Corp. *		11,200		252,336
Miller Industries, Inc.		15,800		259,120
Moog, Inc., Class A *		60,800		2,570,016
Mueller Industries, Inc.		50,724		2,318,594
Mueller Water Products, Inc., Class A		208,300		747,797
MYR Group, Inc. *		27,000		451,440
NACCO Industries, Inc., Class A		7,777		882,456
National Presto Industries, Inc. (c)		6,400		471,808

20 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
NCI Building Systems, Inc. *		26,400		316,536
NN, Inc. *		22,500		177,975
Northwest Pipe Co. *		12,500		260,125
Omega Flex, Inc. *		1,502		20,202
Orbital Sciences Corp. *		78,236		982,644
Orion Marine Group, Inc. *		36,200		250,504
Pike Electric Corp. *		21,800		179,196
PMFG, Inc. *		27,700		374,227
Powell Industries, Inc. *		11,800		384,798
PowerSecure International, Inc. *		25,200		130,788
Preformed Line Products Co.		3,300		190,509
Primoris Services Corp.		35,800		516,236
Proto Labs, Inc. *		6,600		244,860
Quanex Building Products Corp.		50,804		936,318
Raven Industries, Inc.		24,200		1,457,082
RBC Bearings, Inc. *		29,400		1,378,272
Robbins & Myers, Inc.		52,800		2,571,888
RSC Holdings, Inc. *		90,700		2,151,404
Rush Enterprises, Inc., Class A *		43,387		784,437
Satcon Technology Corp. *		70,900		29,778
Sauer-Danfoss, Inc.		15,500		671,305
Seaboard Corp. *		500		995,210
SeaCube Container Leasing Ltd.		14,800		274,540
Simpson Manufacturing Co., Inc.		55,694		1,728,185
Standex International Corp.		16,700		735,802
Sterling Construction Co., Inc. *		22,000		215,380
Sun Hydraulics Corp.		26,850		672,055
TAL International Group, Inc.		29,400		1,214,514
Taser International, Inc. *		76,200		350,520
Tecumseh Products Co., Class A *		24,800		94,736
Teledyne Technologies, Inc. *		49,300		3,185,766
Tennant Co.		25,600		1,134,080
Textainer Group Holdings Ltd. (c)		15,200		533,064
The Gorman-Rupp Co.		20,425		588,240
The Greenbrier Cos., Inc. *		26,400		455,400
The KEYW Holding Corp. *		24,700		232,180
The Middleby Corp. *		25,052		2,542,026
Thermon Group Holdings, Inc. *		13,400		297,748
Titan International, Inc. (c)		56,400		1,629,396
Titan Machinery, Inc. *		20,600		733,978
Trex Co., Inc. *		20,800		665,600
TriMas Corp. *		34,200		752,742
Triumph Group, Inc.		50,500		3,172,410
Tutor Perini Corp. *		41,230		627,108
Twin Disc, Inc. (c)		11,300		247,809
United Rentals, Inc. (c)*		83,800		3,911,784
UniTek Global Services, Inc. *		22,200		72,150
Universal Forest Products, Inc.		26,162		978,459
USG Corp. (c)*		95,700		1,727,385
Vicor Corp.		26,200		182,614
Wabash National Corp. *		91,700		767,529
Watsco, Inc.		37,700		2,712,515
Watts Water Technologies, Inc., Class A		40,307		1,484,104
Woodward, Inc.		82,500		3,431,175
Xerium Technologies, Inc. *		14,700		69,090
				150,602,122
Commercial & Professional Supplies 3.9%
A.T. Cross Co., Class A *		12,800		146,944
ABM Industries, Inc.		71,009		1,653,090
Acacia Research Corp. *		57,400		2,353,400
Acco Brands Corp. *		149,100		1,573,005
American Reprographics Co. *		49,600		270,816
Barrett Business Services, Inc.		10,200		201,960
Casella Waste Systems, Inc., Class A *		33,900		204,417
CBIZ, Inc. *		52,800		320,496
CDI Corp.		17,000		301,580
Cenveo, Inc. *		73,800		211,068
Clean Harbors, Inc. *		62,800		4,285,472
Consolidated Graphics, Inc. *		11,400		455,886
Courier Corp.		13,800		141,726
CRA International, Inc. *		14,500		296,525
Deluxe Corp.		68,846		1,639,223
Dolan Co. *		40,700		326,007
Encore Capital Group, Inc. *		21,600		511,920
EnergySolutions, Inc. *		106,900		450,049
EnerNOC, Inc. *		31,100		186,911
Ennis, Inc.		34,900		550,024
Exponent, Inc. *		17,900		855,620
Franklin Covey Co. *		17,900		166,291
FTI Consulting, Inc. *		56,300		2,045,942
Fuel Tech, Inc. *		24,400		112,972
G&K Services, Inc., Class A		25,030		822,486
GP Strategies Corp. *		19,900		333,922
Healthcare Services Group, Inc.		88,925		1,886,988
Heidrick & Struggles International, Inc.		24,100		469,950
Heritage-Crystal Clean, Inc. *		6,300		133,245
Herman Miller, Inc.		76,700		1,497,951
Hill International, Inc. *		33,600		119,616
HNI Corp.		59,900		1,444,788
Hudson Highland Group, Inc. *		43,900		238,816
Huron Consulting Group, Inc. *		29,700		1,046,628
ICF International, Inc. *		26,300		655,922
InnerWorkings, Inc. *		34,500		397,095
Insperity, Inc.		30,710		837,462
Interface, Inc., Class A		70,600		999,696
Intersections, Inc.		12,300		147,969
Kelly Services, Inc., Class A		35,723		499,765
Kforce, Inc. *		38,800		561,436
Kimball International, Inc., Class B		42,000		286,860
Knoll, Inc.		64,103		948,083
Korn/Ferry International *		62,961		1,016,820
McGrath Rentcorp		32,598		959,033
Metalico, Inc. *		53,700		173,988
Mine Safety Appliances Co.		36,389		1,545,077
Mistras Group, Inc. *		19,700		462,359
Mobile Mini, Inc. *		49,268		929,194
Multi-Color Corp.		15,300		326,196
Navigant Consulting, Inc. *		69,048		961,148
NL Industries, Inc.		8,900		125,223
Odyssey Marine Exploration, Inc. (c)*		97,500		296,400
On Assignment, Inc. *		49,500		926,145
Pendrell Corp. *		202,500		273,375
Portfolio Recovery Associates, Inc. *		22,943		1,578,937
Quad Graphics, Inc. (c)		33,800		454,272
Resources Connection, Inc.		62,050		805,409
Rollins, Inc.		85,100		1,808,375
RPX Corp. *		12,800		221,184

See financial notes 21

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Schawk, Inc.		17,700		238,419
Standard Parking Corp. *		21,200		404,072
Steelcase, Inc., Class A		106,542		920,523
Swisher Hygiene, Inc. (c)*		113,300		254,925
Sykes Enterprises, Inc. *		51,293		812,994
Team, Inc. *		26,100		773,343
Tetra Tech, Inc. *		83,500		2,229,450
The Advisory Board Co. *		22,376		2,039,796
The Brink’s Co.		62,500		1,587,500
The Corporate Executive Board Co.		46,200		1,911,294
The Geo Group, Inc. *		86,900		1,799,699
TMS International Corp., Class A *		17,200		207,776
TRC Cos., Inc. *		23,700		155,946
TrueBlue, Inc. *		54,576		941,982
UniFirst Corp.		18,935		1,150,491
United Stationers, Inc.		56,834		1,611,812
US Ecology, Inc.		24,500		531,160
Viad Corp.		27,296		493,512
VSE Corp.		5,500		121,000
				63,638,851
Consumer Durables & Apparel 3.0%
American Greetings Corp., Class A (c)		54,111		865,776
Arctic Cat, Inc. *		16,300		721,112
Beazer Homes USA, Inc. *		102,100		316,510
Black Diamond, Inc. *		25,100		249,243
Blyth, Inc.		7,000		615,790
Brunswick Corp.		119,400		3,139,026
Callaway Golf Co.		86,269		528,829
Carter’s, Inc. *		65,814		3,573,700
Cavco Industries, Inc. *		9,100		469,560
Cherokee, Inc.		11,400		147,972
Columbia Sportswear Co.		16,300		767,730
Crocs, Inc. *		121,100		2,446,220
CSS Industries, Inc.		10,900		208,735
Delta Apparel, Inc. *		9,500		135,945
Ethan Allen Interiors, Inc.		32,379		751,193
Furniture Brands International, Inc. *		56,200		88,796
G-III Apparel Group Ltd. *		22,100		593,385
Helen of Troy Ltd. *		41,300		1,428,980
Hovnanian Enterprises, Inc., Class A *		102,200		204,400
Iconix Brand Group, Inc. *		97,700		1,498,718
iRobot Corp. *		31,800		750,798
JAKKS Pacific, Inc.		36,400		694,148
Johnson Outdoors, Inc., Class A *		6,500		120,055
K-Swiss, Inc., Class A *		35,100		129,168
KB Home (c)		103,100		894,908
Kenneth Cole Productions, Inc., Class A *		10,100		160,893
La-Z-Boy, Inc. *		69,500		1,047,365
Leapfrog Enterprises, Inc. *		55,500		518,370
Libbey, Inc. *		26,600		379,582
Lifetime Brands, Inc.		12,400		144,460
Liz Claiborne, Inc. *		126,700		1,697,780
M.D.C. Holdings, Inc.		50,200		1,411,122
M/I Homes, Inc. *		25,100		333,830
Maidenform Brands, Inc. *		31,300		714,579
Marine Products Corp.		13,700		81,789
Meritage Homes Corp. *		37,485		1,064,199
Movado Group, Inc.		23,200		657,720
Oxford Industries, Inc.		17,200		825,428
Perry Ellis International, Inc. *		16,800		314,328
Quiksilver, Inc. *		173,800		601,348
R. G. Barry Corp.		11,500		146,510
Sealy Corp. (c)*		66,200		136,372
Skechers U.S.A., Inc., Class A *		50,178		936,824
Skullcandy, Inc. (c)*		12,900		207,948
Skyline Corp.		9,200		50,508
Smith & Wesson Holding Corp. *		80,700		665,775
Standard Pacific Corp. *		142,300		720,038
Steinway Musical Instruments, Inc. *		8,800		221,848
Steven Madden Ltd. *		50,700		2,190,747
Sturm, Ruger & Co., Inc.		25,300		1,443,871
Summer Infant, Inc. *		17,900		95,765
The Jones Group, Inc.		112,600		1,263,372
The Ryland Group, Inc.		59,400		1,337,094
The Warnaco Group, Inc. *		54,600		2,891,616
True Religion Apparel, Inc. *		34,500		937,020
Unifi, Inc. *		18,700		207,944
Universal Electronics, Inc. *		20,100		340,092
Vera Bradley, Inc. (c)*		26,500		688,470
Wolverine World Wide, Inc.		66,436		2,786,990
Zagg, Inc. (c)*		29,700		386,991
				48,949,285
Consumer Services 4.1%
AFC Enterprises, Inc. *		33,200		567,056
Ambassadors Group, Inc.		23,700		127,743
American Public Education, Inc. *		24,000		833,280
Ameristar Casinos, Inc.		43,175		776,287
Archipelago Learning, Inc. *		17,500		193,725
Ascent Capital Group, Inc., Class A *		19,300		993,950
Benihana, Inc.		17,800		245,462
Biglari Holdings, Inc. *		1,600		650,128
BJ’s Restaurants, Inc. *		32,200		1,390,718
Bob Evans Farms, Inc.		40,546		1,550,479
Boyd Gaming Corp. *		73,400		564,446
Bravo Brio Restaurant Group, Inc. *		25,800		521,160
Bridgepoint Education, Inc. (c)*		23,900		515,284
Buffalo Wild Wings, Inc. *		24,500		2,054,325
Caesars Entertainment Corp. (c)*		40,400		591,456
Cambium Learning Group, Inc. *		22,100		50,167
Capella Education Co. *		19,400		634,574
Caribou Coffee Co., Inc. *		17,300		283,893
Carrols Restaurant Group, Inc. *		16,900		254,852
CEC Entertainment, Inc.		26,538		1,014,282
Churchill Downs, Inc.		16,861		1,000,869
Coinstar, Inc. *		42,000		2,637,180
Corinthian Colleges, Inc. *		104,400		400,896
Cracker Barrel Old Country Store, Inc.		30,753		1,768,913
Denny’s Corp. *		132,500		548,550
DineEquity, Inc. *		20,700		1,005,606
Domino’s Pizza, Inc.		78,079		2,952,167

22 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Einstein Noah Restaurant Group, Inc.		8,000		113,200
Gaylord Entertainment Co. *		47,735		1,502,698
Grand Canyon Education, Inc. *		38,400		667,776
Hillenbrand, Inc.		84,000		1,758,960
International Speedway Corp., Class A		39,400		1,051,586
Interval Leisure Group, Inc.		53,900		931,392
Isle of Capri Casinos, Inc. *		27,300		170,625
Jack in the Box, Inc. *		58,588		1,331,119
Jamba, Inc. *		88,300		164,238
K12, Inc. (c)*		34,800		887,400
Krispy Kreme Doughnuts, Inc. *		78,300		573,939
LIFE TIME FITNESS, Inc. *		56,777		2,643,537
Lincoln Educational Services Corp.		30,200		221,668
Luby’s, Inc. *		25,200		154,224
Mac-Gray Corp.		15,900		236,910
Matthews International Corp., Class A		39,484		1,184,520
Monarch Casino & Resort, Inc. *		11,900		115,192
Morgans Hotel Group *		29,500		146,320
Multimedia Games Holding Co., Inc. *		36,000		408,960
National American University Holdings, Inc.		11,900		62,237
Orient-Express Hotels Ltd., Class A *		127,600		1,364,044
P.F. Chang’s China Bistro, Inc.		28,242		1,120,925
Papa John’s International, Inc. *		24,855		1,001,159
Peet’s Coffee & Tea, Inc. *		17,200		1,321,304
Pinnacle Entertainment, Inc. *		82,985		921,134
Red Lion Hotels Corp. *		19,700		164,298
Red Robin Gourmet Burgers, Inc. *		17,400		620,484
Regis Corp.		77,349		1,419,354
Ruby Tuesday, Inc. *		87,200		592,960
Ruth’s Hospitality Group, Inc. *		47,100		325,932
School Specialty, Inc. *		21,600		70,632
Scientific Games Corp., Class A *		77,900		791,464
Shuffle Master, Inc. *		72,400		1,279,308
Six Flags Entertainment Corp.		55,800		2,673,378
Sonic Corp. *		82,829		598,025
Sotheby’s		90,600		3,562,392
Speedway Motorsports, Inc.		15,784		269,275
Steiner Leisure Ltd. *		20,109		944,319
Stewart Enterprises, Inc., Class A		105,500		666,760
Strayer Education, Inc. (c)		16,400		1,618,352
Texas Roadhouse, Inc.		84,296		1,454,106
The Cheesecake Factory, Inc. *		77,500		2,441,250
The Marcus Corp.		27,300		341,523
Town Sports International Holdings, Inc. *		27,400		351,268
Universal Technical Institute, Inc.		28,600		343,200
Vail Resorts, Inc.		49,471		2,017,427
				66,728,222
Diversified Financials 2.8%
Apollo Investment Corp.		262,400		1,902,400
Arlington Asset Investment Corp., Class A		10,600		249,206
Artio Global Investors, Inc.		41,900		151,678
BGC Partners, Inc., Class A		101,200		705,364
BlackRock Kelso Capital Corp.		97,800		943,770
Calamos Asset Management, Inc., Class A		25,400		328,168
California First National Bancorp		2,000		31,800
Capital Southwest Corp.		3,900		373,308
Cash America International, Inc.		39,370		1,840,547
CIFC Corp. *		15,900		95,082
Cohen & Steers, Inc.		23,828		839,699
Compass Diversified Holdings (c)		54,100		794,188
Cowen Group, Inc., Class A *		89,600		225,792
Credit Acceptance Corp. *		8,900		836,867
DFC Global Corp. *		58,200		1,017,336
Diamond Hill Investment Group		3,400		258,026
Duff & Phelps Corp., Class A		40,700		647,130
Edelman Financial Group, Inc.		27,100		239,293
Epoch Holding Corp.		19,800		534,600
Evercore Partners, Inc., Class A		28,100		742,683
Ezcorp, Inc., Class A *		62,900		1,685,091
FBR & Co. *		67,700		179,405
Fidus Investment Corp.		7,200		97,632
Fifth Street Finance Corp.		110,500		1,085,110
Financial Engines, Inc. *		51,300		1,171,692
First Cash Financial Services, Inc. *		41,900		1,716,224
FX Alliance, Inc. *		8,000		138,800
FXCM, Inc., Class A		23,200		268,656
Gain Capital Holdings, Inc.		10,000		51,300
GAMCO Investors, Inc., Class A		9,700		437,082
GFI Group, Inc.		92,868		306,464
Gladstone Capital Corp.		28,200		225,882
Gladstone Investment Corp.		29,600		219,632
Gleacher & Co., Inc. *		105,500		109,720
Golub Capital BDC, Inc.		13,700		203,582
Harris & Harris Group, Inc. *		41,500		167,245
Hercules Technology Growth Capital, Inc.		65,600		748,496
HFF, Inc., Class A *		38,900		635,626
ICG Group, Inc. *		49,700		471,156
Imperial Holdings, Inc. *		27,100		103,793
INTL FCStone, Inc. *		17,800		382,700
Investment Technology Group, Inc. *		55,265		563,703
JMP Group, Inc.		20,300		150,423
KBW, Inc.		44,000		749,760
Knight Capital Group, Inc., Class A *		134,400		1,766,016
Kohlberg Capital Corp.		25,600		157,952
Ladenburg Thalmann Financial Services, Inc. *		142,600		235,290
Main Street Capital Corp. (c)		30,700		786,227
Manning & Napier, Inc.		16,800		243,600
MarketAxess Holdings, Inc.		38,460		1,319,563
Marlin Business Services, Inc.		11,600		170,288
MCG Capital Corp.		103,200		432,408
Medallion Financial Corp.		19,700		215,321
Medley Capital Corp.		14,900		168,221
MVC Capital, Inc.		32,100		423,720
Nelnet, Inc., Class A		34,400		888,208
Netspend Holdings, Inc. *		34,300		261,709
New Mountain Finance Corp.		9,700		131,047
NewStar Financial, Inc. *		36,500		433,255
NGP Capital Resources Co.		29,000		176,610

See financial notes 23

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Nicholas Financial, Inc.		13,000		171,990
Oppenheimer Holdings, Inc., Class A		13,800		235,428
PennantPark Investment Corp.		73,600		769,120
PHH Corp. *		75,363		1,168,127
PICO Holdings, Inc. *		30,400		729,904
Piper Jaffray Cos., Inc. *		21,139		512,621
Prospect Capital Corp. (c)		163,100		1,781,052
Pzena Investment Management, Inc., Class A		11,700		68,913
Safeguard Scientifics, Inc. *		27,700		453,172
Solar Capital Ltd.		48,900		1,015,164
Solar Senior Capital Ltd		10,400		168,584
Stifel Financial Corp. *		72,100		2,625,882
SWS Group, Inc.		39,000		219,960
The First Marblehead Corp. *		73,900		78,334
THL Credit, Inc.		12,400		156,240
TICC Capital Corp.		50,100		461,421
Triangle Capital Corp.		36,300		733,623
Virtus Investment Partners, Inc. *		8,800		742,720
Walter Investment Management Corp.		34,600		699,958
Westwood Holdings Group, Inc.		8,400		308,952
World Acceptance Corp. *		20,200		1,343,502
				46,880,213
Energy 6.4%
Abraxas Petroleum Corp. (c)*		110,200		328,396
Alon USA Energy, Inc.		15,200		137,408
Amyris, Inc. (c)*		23,600		73,868
Apco Oil & Gas International, Inc. (c)		12,200		511,790
Approach Resources, Inc. *		34,900		1,252,212
ATP Oil & Gas Corp. (c)*		59,600		450,576
Basic Energy Services, Inc. *		32,300		465,120
Berry Petroleum Co., Class A		69,000		3,142,950
Bill Barrett Corp. *		63,200		1,515,536
Bonanza Creek Energy, Inc. *		13,400		294,398
BPZ Resources, Inc. (c)*		145,300		588,465
Bristow Group, Inc.		48,687		2,378,360
C&J Energy Services, Inc. (c)*		16,000		301,600
Cal Dive International, Inc. *		127,800		494,586
Callon Petroleum Co. *		52,400		304,444
CAMAC Energy, Inc. (c)*		78,600		61,308
Carrizo Oil & Gas, Inc. *		52,200		1,463,688
Ceres, Inc. *		7,700		103,796
Cheniere Energy, Inc. *		205,800		3,768,198
Clayton Williams Energy, Inc. *		7,900		580,966
Clean Energy Fuels Corp. (c)*		66,400		1,277,536
Cloud Peak Energy, Inc. *		81,600		1,255,824
Comstock Resources, Inc. *		63,800		1,120,966
Contango Oil & Gas Co. *		16,300		884,438
Crimson Exploration, Inc. *		29,200		159,140
Crosstex Energy, Inc.		54,400		810,560
CVR Energy, Inc. (c)*		117,600		3,570,336
Dawson Geophysical Co. *		10,600		284,610
Delek US Holdings, Inc.		19,000		309,700
DHT Holdings, Inc.		86,300		69,040
Dril-Quip, Inc. *		46,000		3,099,940
Endeavour International Corp. *		49,700		620,256
Energy Partners Ltd. *		38,800		631,664
Energy XXI (Bermuda) Ltd. *		100,900		3,801,912
Evolution Petroleum Corp. *		21,500		190,060
Exterran Holdings, Inc. *		85,600		1,156,456
Frontline Ltd. (c)		69,000		451,950
FX Energy, Inc. *		70,100		398,168
Gastar Exploration Ltd. *		77,800		218,618
Geokinetics, Inc. (c)*		17,800		31,506
GeoResources, Inc. *		26,900		1,014,399
Gevo, Inc. (c)*		8,000		77,520
Global Geophysical Services, Inc. *		24,300		232,551
GMX Resources, Inc. (c)*		80,300		110,011
Golar LNG Ltd. (c)		53,400		1,974,732
Goodrich Petroleum Corp. (c)*		34,700		581,919
Green Plains Renewable Energy, Inc. *		27,800		222,122
Gulf Island Fabrication, Inc.		19,200		537,984
GulfMark Offshore, Inc., Class A *		31,800		1,531,806
Gulfport Energy Corp. *		60,700		1,590,947
Hallador Energy Co.		6,000		48,420
Harvest Natural Resources, Inc. (c)*		45,500		313,040
Heckmann Corp. (c)*		156,500		594,700
Helix Energy Solutions Group, Inc. *		142,000		2,898,220
Hercules Offshore, Inc. *		177,400		901,192
Hornbeck Offshore Services, Inc. *		41,445		1,725,355
Houston American Energy Corp. (c)*		22,100		51,051
Hyperdynamics Corp. (c)*		208,400		194,541
ION Geophysical Corp. *		176,000		1,096,480
Isramco, Inc. *		600		55,674
James River Coal Co. (c)*		47,600		236,096
Key Energy Services, Inc. *		167,100		2,115,486
KiOR, Inc., Class A (c)*		14,500		142,100
Knightsbridge Tankers Ltd.		29,400		372,204
Kodiak Oil & Gas Corp. *		343,000		3,035,550
L&L Energy, Inc. (c)*		29,900		67,275
Lufkin Industries, Inc.		44,890		3,449,348
Magnum Hunter Resources Corp. (c)*		149,200		926,532
Matador Resources Co. *		18,500		214,230
Matrix Service Co. *		35,400		483,210
McMoRan Exploration Co. (c)*		131,600		1,158,080
Miller Energy Resources, Inc. (c)*		41,600		225,888
Mitcham Industries, Inc. *		16,100		382,536
Natural Gas Services Group *		16,400		213,856
Newpark Resources, Inc. *		121,110		770,260
Nordic American Tanker Shipping Ltd. (c)		71,000		1,030,920
Northern Oil & Gas, Inc. *		84,600		1,643,778
Oasis Petroleum, Inc. *		79,700		2,635,679
Overseas Shipholding Group, Inc. (c)		41,400		484,380
OYO Geospace Corp. *		5,800		668,276
Panhandle Oil & Gas, Inc., Class A		9,400		258,970
Parker Drilling Co. *		156,265		807,890
Patriot Coal Corp. *		122,300		713,009
Penn Virginia Corp.		61,178		313,231
Petroleum Development Corp. *		31,503		1,083,388
PetroQuest Energy, Inc. *		84,900		512,796
PHI, Inc. - Non Voting Shares *		17,500		466,025
Pioneer Drilling Co. *		82,500		650,100

24 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Renewable Energy Group, Inc. (c)*		9,600		87,072
Rentech, Inc. *		298,500		689,535
Resolute Energy Corp. *		61,800		655,698
REX American Resources Corp. *		8,200		227,468
Rex Energy Corp. *		55,900		587,509
RigNet, Inc. *		7,800		133,224
Rosetta Resources, Inc. *		71,000		3,569,170
Sanchez Energy Corp. *		13,400		324,816
Scorpio Tankers, Inc. *		40,100		271,477
SemGroup Corp., Class A *		55,600		1,768,080
Ship Finance International Ltd. (c)		60,300		835,155
Solazyme, Inc. (c)*		14,700		161,700
Stone Energy Corp. *		65,668		1,841,988
Swift Energy Co. *		56,801		1,718,230
Syntroleum Corp. *		118,300		111,202
Targa Resources Corp.		22,000		1,057,980
Teekay Tankers Ltd., Class A		70,600		364,296
Tesco Corp. *		40,400		659,732
TETRA Technologies, Inc. *		102,874		896,033
Triangle Petroleum Corp. *		57,500		374,325
Union Drilling, Inc. *		20,300		113,071
Ur-Energy, Inc. (c)*		138,900		151,401
Uranerz Energy Corp. (c)*		86,500		151,375
Uranium Energy Corp. (c)*		100,800		297,360
Uranium Resources, Inc. *		40,000		35,052
USEC, Inc. (c)*		155,423		130,804
VAALCO Energy, Inc. *		68,500		621,295
Vantage Drilling Co. *		234,000		369,720
Venoco, Inc. *		44,100		489,951
Voyager Oil & Gas, Inc. *		62,900		159,766
W&T Offshore, Inc.		46,700		923,259
Warren Resources, Inc. *		95,700		295,713
Western Refining, Inc.		70,722		1,347,254
Westmoreland Coal Co. *		13,300		134,197
Willbros Group, Inc. *		69,500		375,300
World Fuel Services Corp.		94,800		4,176,888
Zion Oil & Gas, Inc. (c)*		40,700		100,936
				105,582,134
Food & Staples Retailing 1.1%
Arden Group, Inc., Class A		1,300		114,985
Casey’s General Stores, Inc.		51,200		2,885,120
Harris Teeter Supermarkets, Inc.		65,800		2,498,426
Ingles Markets, Inc., Class A		16,831		292,691
Nash Finch Co.		16,200		406,620
PriceSmart, Inc.		23,800		1,964,452
Rite Aid Corp. *		789,400		1,144,630
Roundy’s, Inc. *		25,800		319,404
Spartan Stores, Inc.		30,300		552,369
Susser Holdings Corp. *		12,300		328,287
The Andersons, Inc.		24,900		1,254,960
The Chefs’ Warehouse, Inc. *		13,900		336,102
The Fresh Market, Inc. *		37,700		1,929,109
The Pantry, Inc. *		30,800		393,008
United Natural Foods, Inc. *		64,782		3,193,105
Village Super Market, Inc., Class A		8,400		231,840
Weis Markets, Inc.		14,700		655,620
				18,500,728
Food, Beverage & Tobacco 1.7%
Alico, Inc.		4,700		106,878
Alliance One International, Inc. *		116,600		412,764
B&G Foods, Inc.		64,200		1,427,808
Cal-Maine Foods, Inc.		19,000		684,570
Calavo Growers, Inc.		15,900		456,012
Central European Distribution Corp. (c)*		97,400		475,312
Chiquita Brands International, Inc. *		60,802		516,817
Coca-Cola Bottling Co. Consolidated		6,100		391,315
Craft Brewers Alliance, Inc. *		13,900		107,030
Darling International, Inc. *		156,700		2,566,746
Diamond Foods, Inc. (c)		29,500		616,550
Dole Food Co., Inc. (c)*		48,100		407,888
Farmer Brothers Co. *		9,100		82,810
Fresh Del Monte Produce, Inc.		48,900		1,133,013
Griffin Land & Nurseries, Inc.		1,900		45,752
Imperial Sugar Co.		16,400		66,420
J&J Snack Foods Corp.		19,100		1,070,746
Lancaster Colony Corp.		25,100		1,636,771
Lifeway Foods, Inc. *		6,100		50,874
Limoneira Co. (c)		8,500		142,885
MGP Ingredients, Inc.		16,100		74,865
National Beverage Corp. *		15,001		222,915
Omega Protein Corp. *		25,900		185,444
Pilgrim’s Pride Corp. *		81,849		584,402
Primo Water Corp. (c)*		49,700		74,550
Sanderson Farms, Inc.		29,700		1,532,817
Seneca Foods Corp., Class A *		12,400		288,796
Smart Balance, Inc. *		79,700		470,230
Snyders-Lance, Inc.		63,300		1,638,204
Star Scientific, Inc. (c)*		143,400		509,070
The Boston Beer Co., Inc., Class A (c)*		11,000		1,136,520
The Hain Celestial Group, Inc. *		47,931		2,267,136
Tootsie Roll Industries, Inc.		32,851		782,182
TreeHouse Foods, Inc. *		47,600		2,737,476
Universal Corp.		31,045		1,422,793
Vector Group Ltd. (c)		64,441		1,118,051
				27,444,412
Health Care Equipment & Services 6.0%
Abaxis, Inc. *		30,200		1,075,724
ABIOMED, Inc. *		42,400		1,031,592
Accretive Health, Inc. (c)*		53,600		539,216
Accuray, Inc. *		91,600		705,320
Air Methods Corp. *		15,200		1,278,472
Align Technology, Inc. *		82,100		2,603,391
Alliance HealthCare Services, Inc. *		5,000		6,850
Almost Family, Inc. *		11,000		268,180
Alphatec Holdings, Inc. *		72,200		157,396
Amedisys, Inc. *		39,400		580,362
AMN Healthcare Services, Inc. *		53,000		355,630
AmSurg Corp. *		41,900		1,205,044
Analogic Corp.		16,854		1,149,611
AngioDynamics, Inc. *		33,500		414,730
Antares Pharma, Inc. *		117,500		370,125

See financial notes 25

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
ArthroCare Corp. *		36,600		913,536
Assisted Living Concepts, Inc., Class A		26,200		469,242
athenahealth, Inc. *		46,700		3,383,415
AtriCure, Inc. *		18,800		154,160
Atrion Corp.		2,100		484,344
Bacterin International Holdings, Inc. (c)*		29,900		61,295
Bio-Reference Laboratories, Inc. *		32,900		701,428
Biolase Technology, Inc. (c)*		41,204		107,130
BioScrip, Inc. *		54,500		403,845
Cantel Medical Corp.		26,550		623,394
Capital Senior Living Corp. *		36,900		357,561
CardioNet, Inc. *		32,600		91,932
Cardiovascular Systems, Inc. *		19,400		191,284
Centene Corp. *		66,892		2,648,254
Cerus Corp. (c)*		72,600		286,044
Chemed Corp.		26,500		1,599,010
Chindex International, Inc. *		15,200		148,504
Computer Programs & Systems, Inc.		14,800		881,932
Conceptus, Inc. *		41,800		784,586
CONMED Corp.		37,900		1,083,561
CorVel Corp. *		8,300		360,967
Cross Country Healthcare, Inc. *		37,200		171,492
CryoLife, Inc. *		37,400		197,846
Cyberonics, Inc. *		38,000		1,455,400
Cynosure, Inc., Class A *		12,900		266,643
Delcath Systems, Inc. (c)*		64,400		180,964
DexCom, Inc. *		89,800		879,142
Dynavox, Inc., Class A *		18,600		45,756
Emeritus Corp. *		40,900		703,480
Endologix, Inc. *		65,500		981,190
Ensign Group, Inc.		21,800		582,278
Epocrates, Inc. *		8,400		68,376
Exactech, Inc. *		11,400		176,700
ExamWorks Group, Inc. *		36,200		421,368
Five Star Quality Care, Inc. *		56,200		192,766
Gentiva Health Services, Inc. *		40,996		339,447
Greatbatch, Inc. *		31,200		726,648
Greenway Medical Technologies *		10,300		158,620
Haemonetics Corp. *		34,400		2,462,008
Hanger Orthopedic Group, Inc. *		44,900		1,057,395
Hansen Medical, Inc. (c)*		62,800		198,448
HealthSouth Corp. *		127,400		2,852,486
HealthStream, Inc. *		24,300		556,956
Healthways, Inc. *		45,500		303,485
HeartWare International, Inc. *		16,100		1,255,156
HMS Holdings Corp. *		113,700		2,735,622
ICU Medical, Inc. *		16,300		855,587
Insulet Corp. *		61,600		1,100,176
Integra LifeSciences Holdings *		26,048		969,767
Invacare Corp.		38,411		608,814
IPC The Hospitalist Co. *		21,900		841,179
IRIS International, Inc. *		23,800		311,304
Kensey Nash Corp.		11,400		324,102
Kindred Healthcare, Inc. *		69,575		670,703
Landauer, Inc.		12,600		664,272
LHC Group, Inc. *		21,100		373,681
Magellan Health Services, Inc. *		37,800		1,673,784
MAKO Surgical Corp. (c)*		42,800		1,768,068
Masimo Corp. *		70,400		1,557,952
MedAssets, Inc. *		63,800		804,518
Medical Action Industries, Inc. *		21,900		120,888
Medidata Solutions, Inc. *		28,200		730,662
Merge Healthcare, Inc. *		69,500		298,850
Meridian Bioscience, Inc.		54,950		1,129,223
Merit Medical Systems, Inc. *		56,100		741,642
Metropolitan Health Networks, Inc. *		56,700		424,116
MModal, Inc. *		48,500		618,860
Molina Healthcare, Inc. *		37,600		964,440
MWI Veterinary Supply, Inc. *		16,800		1,585,920
National Healthcare Corp.		13,688		624,173
National Research Corp.		2,400		116,016
Natus Medical, Inc. *		38,900		476,136
Navidea Biopharmaceuticals, Inc. (c)*		126,800		395,616
Neogen Corp. *		31,050		1,210,640
NuVasive, Inc. *		56,700		939,519
NxStage Medical, Inc. *		59,800		1,016,600
Omnicell, Inc. *		44,400		633,588
OraSure Technologies, Inc. *		62,500		716,875
Orthofix International N.V. *		24,200		997,524
Owens & Minor, Inc.		85,500		2,500,020
Palomar Medical Technologies, Inc. *		25,500		221,850
PharMerica Corp. *		39,300		466,491
Providence Service Corp. *		17,400		244,644
PSS World Medical, Inc. *		74,266		1,777,185
Quality Systems, Inc.		51,900		1,941,060
Quidel Corp. *		38,200		631,064
RadNet, Inc. *		40,800		126,072
Rockwell Medical Technologies, Inc. *		21,500		198,875
RTI Biologics, Inc. *		73,900		258,650
Select Medical Holdings Corp. *		59,900		513,343
Skilled Healthcare Group, Inc., Class A *		25,900		198,653
Solta Medical, Inc. *		81,200		263,900
STAAR Surgical Co. *		47,600		522,172
STERIS Corp.		79,300		2,490,813
Sun Healthcare Group, Inc. *		33,600		242,928
Sunrise Senior Living, Inc. *		76,900		482,932
SurModics, Inc. *		20,400		301,716
Symmetry Medical, Inc. *		48,700		346,257
Synergetics U.S.A., Inc. *		29,800		194,296
Team Health Holdings, Inc. *		35,700		768,978
The Spectranetics Corp. *		44,700		468,903
Tornier N.V. *		14,100		334,734
Triple-S Management Corp., Class B *		26,500		558,090
U.S. Physical Therapy, Inc.		15,800		385,204
Unilife Corp. (c)*		86,400		369,792
Universal American Corp.		43,202		396,594
Uroplasty, Inc. *		27,700		84,208
Vanguard Health Systems, Inc. *		40,900		363,192
Vascular Solutions, Inc. *		22,700		257,645
Volcano Corp. *		69,800		1,895,070
WellCare Health Plans, Inc. *		57,100		3,493,378
West Pharmaceutical Services, Inc.		44,865		2,014,439
Wright Medical Group, Inc. *		52,300		974,349
Young Innovations, Inc.		7,600		258,400

26 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Zeltiq Aesthetics, Inc. (c)*		9,800		60,956
				99,318,787
Household & Personal Products 0.7%
Central Garden & Pet Co., Class A *		63,400		677,746
Elizabeth Arden, Inc. *		32,698		1,274,568
Harbinger Group, Inc. *		12,100		62,436
Inter Parfums, Inc.		21,600		340,200
Medifast, Inc. *		18,500		355,570
Nature’s Sunshine Products, Inc. *		15,000		232,200
Nu Skin Enterprises, Inc., Class A		73,422		3,913,393
Nutraceutical International Corp. *		12,300		188,559
Oil-Dri Corp. of America		3,487		73,785
Prestige Brands Holdings, Inc. *		67,400		1,145,126
Revlon, Inc., Class A *		14,502		247,694
Schiff Nutrition International, Inc. *		16,300		268,135
Spectrum Brands Holdings, Inc. *		22,346		771,160
Synutra International, Inc. (c)*		23,200		133,400
The Female Health Co. (c)		24,700		148,447
USANA Health Sciences, Inc. (c)*		9,100		379,470
WD-40 Co.		21,400		964,712
				11,176,601
Insurance 2.6%
Alterra Capital Holdings Ltd.		121,500		2,907,495
American Equity Investment Life Holding Co.		79,664		976,681
American Safety Insurance Holdings Ltd. *		14,000		265,020
AMERISAFE, Inc. *		24,600		657,312
AmTrust Financial Services, Inc.		32,305		879,988
Argo Group International Holdings Ltd.		36,738		1,060,259
Baldwin & Lyons, Inc., Class B		11,200		243,824
Citizens, Inc. *		50,800		488,188
CNO Financial Group, Inc. *		297,000		2,159,190
Crawford & Co., Class B		34,500		164,565
Delphi Financial Group, Inc., Class A		64,680		2,937,766
Donegal Group, Inc., Class A		10,400		141,648
eHealth, Inc. *		28,600		506,792
EMC Insurance Group, Inc.		6,200		122,574
Employers Holdings, Inc.		44,900		777,668
Enstar Group Ltd. *		9,194		865,799
FBL Financial Group, Inc., Class A		17,168		499,932
First American Financial Corp.		140,900		2,360,075
Flagstone Reinsurance Holdings S.A.		70,229		526,717
Fortegra Financial Corp. *		8,200		68,060
Global Indemnity plc *		18,155		326,972
Greenlight Capital Re Ltd., Class A *		37,589		935,966
Hallmark Financial Services, Inc. *		16,200		121,824
Harleysville Group, Inc.		16,363		980,798
Hilltop Holdings, Inc. *		53,339		422,978
Horace Mann Educators Corp.		53,378		936,784
Independence Holding Co.		4,048		43,030
Infinity Property & Casualty Corp.		16,592		886,179
Kansas City Life Insurance Co.		5,700		185,478
Maiden Holdings Ltd.		67,700		561,910
Meadowbrook Insurance Group, Inc.		71,400		630,462
Montpelier Re Holdings Ltd.		83,500		1,713,420
National Financial Partners Corp. *		54,100		797,975
National Interstate Corp.		3,094		74,256
National Western Life Insurance Co., Class A		2,994		407,364
OneBeacon Insurance Group Ltd., Class A		29,700		422,631
Platinum Underwriters Holdings Ltd.		49,900		1,827,338
Presidential Life Corp.		29,000		335,820
Primerica, Inc.		45,500		1,193,465
ProAssurance Corp.		41,000		3,611,690
RLI Corp.		24,455		1,684,460
Safety Insurance Group, Inc.		16,870		672,269
Seabright Holdings, Inc.		26,800		240,932
Selective Insurance Group, Inc.		72,314		1,264,772
State Auto Financial Corp.		19,600		280,868
Stewart Information Services Corp.		24,400		359,168
Symetra Financial Corp.		90,500		1,100,480
The Navigators Group, Inc. *		15,585		740,287
The Phoenix Cos., Inc. *		155,800		327,180
Tower Group, Inc.		49,365		1,065,297
United Fire Group, Inc.		28,800		495,936
Universal Insurance Holdings, Inc.		25,100		103,914
				43,361,456
Materials 4.5%
A. M. Castle & Co. *		22,400		299,936
A. Schulman, Inc.		41,309		1,016,615
AEP Industries, Inc. *		5,800		202,246
AMCOL International Corp.		32,652		1,076,210
American Vanguard Corp.		29,900		747,500
Balchem Corp.		38,700		1,118,430
Boise, Inc.		121,800		930,552
Buckeye Technologies, Inc.		53,400		1,730,694
Calgon Carbon Corp. *		75,600		1,046,304
Century Aluminum Co. *		69,100		635,720
Chase Corp.		8,600		127,710
Chemtura Corp. *		129,000		2,195,580
Clearwater Paper Corp. *		30,900		1,018,773
Coeur d’Alene Mines Corp. *		119,950		2,584,923
Deltic Timber Corp.		14,504		885,904
Eagle Materials, Inc.		59,590		2,098,760
Ferro Corp. *		115,900		601,521
Flotek Industries, Inc. *		66,900		912,516
FutureFuel Corp.		25,000		246,000
General Moly, Inc. (c)*		90,300		292,572
Georgia Gulf Corp. *		45,500		1,612,975
Globe Specialty Metals, Inc.		84,400		1,125,896
Gold Resource Corp. (c)		38,000		1,030,560
Golden Minerals Co. (c)*		37,400		279,378
Golden Star Resources Ltd. *		346,300		529,839
Graphic Packaging Holding Co. *		211,815		1,133,210
GSE Holding, Inc. *		10,800		136,620
H.B. Fuller Co.		66,216		2,178,506
Handy & Harman Ltd. *		7,800		112,866
Hawkins, Inc.		11,600		402,868
Haynes International, Inc.		16,325		1,018,190

See financial notes 27

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Headwaters, Inc. *		81,500		353,710
Hecla Mining Co.		374,000		1,600,720
Horsehead Holding Corp. *		58,500		656,955
Innophos Holdings, Inc.		29,100		1,430,847
Innospec, Inc. *		31,800		961,314
Jaguar Mining, Inc. (c)*		113,000		306,230
Kaiser Aluminum Corp.		21,850		1,148,655
KapStone Paper & Packaging Corp. *		52,300		944,538
KMG Chemicals, Inc.		9,600		165,504
Koppers Holdings, Inc.		27,600		1,073,088
Kraton Performance Polymers, Inc. *		42,700		1,110,200
Landec Corp. *		35,300		227,332
Louisiana-Pacific Corp. *		177,000		1,601,850
LSB Industries, Inc. *		24,600		834,432
Materion Corp. *		27,300		674,583
McEwen Mining, Inc. (c)*		141,200		535,148
Metals USA Holdings Corp. *		15,500		233,740
Midway Gold Corp. (c)*		114,900		165,456
Minerals Technologies, Inc.		24,461		1,641,333
Myers Industries, Inc.		40,400		667,812
Neenah Paper, Inc.		21,300		608,328
NewMarket Corp.		12,100		2,700,962
Noranda Aluminum Holding Corp.		30,400		322,848
Olin Corp.		106,700		2,236,432
Olympic Steel, Inc.		12,200		257,786
OM Group, Inc. *		41,500		1,000,980
Omnova Solutions, Inc. *		60,600		475,104
P.H. Glatfelter Co.		58,700		914,546
Paramount Gold & Silver Corp. (c)*		156,900		382,836
PolyOne Corp.		125,075		1,733,540
Quaker Chemical Corp.		17,200		746,480
Revett Minerals, Inc. *		33,600		133,392
RTI International Metals, Inc. *		40,466		993,440
Schweitzer-Mauduit International, Inc.		21,600		1,464,912
Senomyx, Inc. *		53,000		116,070
Sensient Technologies Corp.		67,025		2,489,979
Spartech Corp. *		41,300		201,544
Stepan Co.		10,900		990,374
Stillwater Mining Co. *		154,600		1,658,858
SunCoke Energy, Inc. *		94,700		1,441,334
Texas Industries, Inc. (c)		30,551		1,026,819
Thompson Creek Metals Co., Inc. *		204,600		1,213,278
TPC Group, Inc. *		17,800		747,244
Tredegar Corp.		32,000		555,200
U.S. Energy Corp. *		32,700		85,674
United States Lime & Minerals, Inc. *		3,500		167,895
Universal Stainless & Alloy Products, Inc. *		9,500		440,800
US Silica Holdings, Inc. (c)*		15,800		286,296
Verso Paper Corp. *		5,000		8,250
Vista Gold Corp. (c)*		95,200		287,504
Wausau Paper Corp.		65,900		597,054
Worthington Industries, Inc.		76,960		1,372,966
Zep, Inc.		29,400		418,950
Zoltek Cos., Inc. *		37,200		410,316
				74,150,812
Media 1.2%
AH Belo Corp., Class A		25,000		110,250
Arbitron, Inc.		36,356		1,383,346
Belo Corp., Class A		124,000		835,760
Central European Media Enterprises Ltd., Class A (c)*		49,100		388,381
Cinemark Holdings, Inc.		124,500		2,858,520
Crown Media Holdings, Inc., Class A (c)*		46,700		70,517
Cumulus Media, Inc., Class A (c)*		50,500		183,315
Digital Domain Media Group, Inc. (c)*		4,900		41,650
Digital Generation, Inc. *		36,700		340,576
Entercom Communications Corp., Class A *		32,400		200,556
Entravision Communications Corp., Class A		67,300		105,661
Fisher Communications, Inc. *		11,800		386,922
Global Sources Ltd. *		15,300		94,248
Gray Television, Inc. *		66,400		119,520
Harte-Hanks, Inc.		61,316		515,054
Journal Communications, Inc., Class A *		57,900		242,601
Knology, Inc. *		40,200		781,890
LIN TV Corp., Class A *		39,700		156,815
Lions Gate Entertainment Corp. (c)*		60,400		738,692
Live Nation Entertainment, Inc. *		189,000		1,712,340
Martha Stewart Living Omnimedia, Inc., Class A		36,500		130,305
MDC Partners, Inc., Class A		33,600		346,752
Meredith Corp. (c)		48,700		1,404,021
National CineMedia, Inc.		73,900		1,056,031
Nexstar Broadcasting Group, Inc., Class A *		14,700		113,925
Outdoor Channel Hldgs, Inc.		19,200		142,080
ReachLocal, Inc. *		13,400		101,304
Rentrak Corp. *		12,700		240,284
Saga Communications, Inc., Class A *		4,800		180,768
Scholastic Corp.		35,569		1,086,633
Sinclair Broadcast Group, Inc., Class A		67,600		694,928
The E.W. Scripps Co., Class A *		44,100		403,956
The McClatchy Co., Class A *		77,300		210,256
The New York Times Co., Class A *		183,700		1,159,147
Valassis Communications, Inc. *		59,600		1,192,000
Value Line, Inc.		4,100		49,897
World Wrestling Entertainment, Inc., Class A (c)		36,500		287,620
				20,066,521
Pharmaceuticals, Biotechnology & Life Sciences 6.2%
Achillion Pharmaceuticals, Inc. *		63,500		422,275
Acorda Therapeutics, Inc. *		52,900		1,335,196
Acura Pharmaceuticals, Inc. (c)*		16,100		52,003
Aegerion Pharmaceuticals, Inc. *		12,200		151,890
Affymax, Inc. *		47,400		621,414
Affymetrix, Inc. *		94,400		417,248

28 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Akorn, Inc. *		75,100		910,963
Albany Molecular Research, Inc. *		29,500		94,105
Alimera Sciences, Inc. (c)*		24,500		75,705
Alkermes plc *		127,742		2,209,937
Allos Therapeutics, Inc. *		105,500		192,010
Alnylam Pharmaceuticals, Inc. *		59,900		682,261
AMAG Pharmaceuticals, Inc. *		28,300		443,178
Amicus Therapeutics, Inc. *		28,200		137,616
Ampio Pharmaceuticals, Inc. (c)*		26,600		82,194
Anacor Pharmaceuticals, Inc. *		14,600		81,030
Anthera Pharmaceuticals, Inc. *		28,200		43,992
Ardea Biosciences, Inc. *		30,700		978,102
Arena Pharmaceuticals, Inc. (c)*		225,800		550,952
ARIAD Pharmaceuticals, Inc. *		214,600		3,497,980
ArQule, Inc. *		83,300		587,265
Array BioPharma, Inc. *		107,200		374,128
Astex Pharmaceuticals *		75,500		132,880
Auxilium Pharmaceuticals, Inc. *		64,100		1,148,672
AVANIR Pharmaceuticals, Inc., Class A (c)*		177,300		540,765
AVEO Pharmaceuticals, Inc. *		42,000		483,000
AVI BioPharma, Inc. *		181,400		151,342
BG Medicine, Inc. (c)*		11,800		78,234
BioCryst Pharmaceuticals, Inc. (c)*		38,700		140,094
BioMimetic Therapeutics, Inc. *		25,700		68,619
Biosante Pharmaceuticals, Inc. (c)*		146,800		80,740
Biospecifics Technologies Corp. *		6,600		97,350
Biotime, Inc. (c)*		33,100		125,449
Cadence Pharmaceuticals, Inc. *		66,300		244,647
Cambrex Corp. *		39,400		255,312
Cell Therapeutics, Inc. (c)*		303,300		336,663
Celldex Therapeutics, Inc. *		76,500		348,840
Cempra, Inc. *		1,200		8,400
Cepheid, Inc. *		88,800		3,410,808
Chelsea Therapeutics International Ltd. (c)*		71,700		152,004
ChemoCentryx, Inc. *		5,000		86,000
Cleveland Biolabs, Inc. (c)*		38,000		73,720
Clovis Oncology, Inc. (c)*		16,800		301,224
Codexis, Inc. *		32,900		119,098
Columbia Laboratories, Inc. *		98,300		71,749
Complete Genomics, Inc. (c)*		42,100		113,670
Corcept Therapeutics, Inc. *		55,000		205,700
Cornerstone Therapeutics, Inc. *		10,800		63,720
Cubist Pharmaceuticals, Inc. *		84,232		3,561,329
Curis, Inc. (c)*		102,300		490,017
Cytori Therapeutics, Inc. (c)*		64,900		153,813
DepoMed, Inc. *		71,900		437,871
Durect Corp. *		108,100		75,670
DUSA Pharmaceuticals, Inc. *		32,700		191,622
Dyax Corp. *		132,200		215,486
Dynavax Technologies Corp. *		203,900		1,021,539
Emergent Biosolutions, Inc. *		32,600		458,356
Endocyte, Inc. *		23,100		164,934
Enzo Biochem, Inc. *		51,300		140,562
Enzon Pharmaceuticals, Inc. *		50,400		313,992
eResearch Technology, Inc. *		65,700		519,030
Exact Sciences Corp. *		75,200		809,904
Exelixis, Inc. *		197,572		948,346
Fluidigm Corp. *		8,600		134,246
Furiex Pharmaceuticals, Inc. *		13,200		189,684
Genomic Health, Inc. *		22,800		653,448
Geron Corp. *		172,800		290,304
GTx, Inc. *		29,300		91,709
Halozyme Therapeutics, Inc. *		118,400		957,856
Harvard Bioscience, Inc. *		30,800		122,892
Hi-Tech Pharmacal Co., Inc. *		13,900		453,001
Horizon Pharma, Inc. (c)*		13,600		57,120
Idenix Pharmaceuticals, Inc. *		80,200		703,354
ImmunoGen, Inc. *		100,600		1,282,650
Immunomedics, Inc. *		88,100		316,279
Impax Laboratories, Inc. *		87,400		2,152,662
Incyte Corp. (c)*		118,463		2,686,741
Infinity Pharmaceuticals, Inc. *		25,600		345,600
Insmed, Inc. *		33,300		96,237
InterMune, Inc. *		72,400		755,856
Ironwood Pharmaceuticals, Inc. *		71,700		947,157
Isis Pharmaceuticals, Inc. *		133,400		1,067,200
ISTA Pharmaceuticals, Inc. *		42,900		388,245
Jazz Pharmaceuticals plc *		29,600		1,510,488
K-V Pharmaceutical Co., Class A		69,000		79,350
Keryx Biopharmaceuticals, Inc. (c)*		92,500		146,150
Lannett Co., Inc. *		21,700		85,498
Lexicon Pharmaceuticals, Inc. *		246,800		399,816
Ligand Pharmaceuticals, Inc., Class B *		26,300		355,313
Luminex Corp. *		50,600		1,267,024
MannKind Corp. (c)*		127,000		285,750
MAP Pharmaceuticals, Inc. *		29,300		375,626
Maxygen, Inc. *		40,500		228,825
Medicis Pharmaceutical Corp., Class A		82,649		3,179,507
Medivation, Inc. *		42,000		3,396,960
MEDTOX Scientific, Inc. *		10,100		223,210
Metabolix, Inc. (c)*		45,600		123,576
Momenta Pharmaceuticals, Inc. *		61,744		980,495
Nabi Biopharmaceuticals *		57,300		95,691
Nektar Therapeutics (c)*		152,771		1,164,115
Neurocrine Biosciences, Inc. *		77,000		572,110
NewLink Genetics Corp. *		9,300		108,252
Novavax, Inc. (c)*		128,700		175,032
NPS Pharmacuticals, Inc. *		115,200		824,832
Nymox Pharmaceutical Corp. (c)*		26,000		211,900
Obagi Medical Products, Inc. *		24,800		325,376
OncoGenex Pharmaceutical, Inc. *		19,500		253,500
Oncothyreon, Inc. (c)*		76,700		329,043
Onyx Pharmaceuticals, Inc. *		84,900		3,863,799
Opko Health, Inc. (c)*		145,900		693,025
Optimer Pharmaceuticals, Inc. (c)*		62,100		919,080
Orexigen Therapeutics, Inc. *		60,700		212,450
Osiris Therapeutics, Inc. (c)*		22,300		118,413
Pacific Biosciences of California, Inc. *		45,400		122,580
Pacira Pharmaceuticals, Inc. (c)*		9,600		107,616
Pain Therapeutics, Inc. *		49,400		200,070
Par Pharmaceutical Cos., Inc. *		48,480		2,052,643
PAREXEL International Corp. *		78,818		2,123,357
PDL BioPharma, Inc.		187,100		1,176,859
Peregrine Pharmaceuticals, Inc. (c)*		106,500		50,055
Pernix Therapeutics Holdings *		7,300		62,780
Pharmacyclics, Inc. *		61,500		1,694,940
PharmAthene, Inc. (c)*		47,800		77,436
POZEN, Inc. *		35,400		235,764

See financial notes 29

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Progenics Pharmaceuticals, Inc. *		39,300		431,907
Questcor Pharmaceuticals, Inc. *		71,100		3,192,390
Raptor Pharmaceutical Corp. (c)*		63,000		369,180
Rigel Pharmaceuticals, Inc. *		91,900		710,387
Sagent Pharmaceuticals, Inc. *		8,900		160,111
Salix Pharmaceuticals Ltd. *		78,200		3,863,080
Sangamo BioSciences, Inc. (c)*		70,100		325,965
Santarus, Inc. *		71,400		454,818
Savient Pharmaceuticals, Inc. (c)*		95,200		225,624
SciClone Pharmaceuticals, Inc. *		46,300		277,337
Seattle Genetics, Inc. (c)*		129,198		2,554,244
Sequenom, Inc. (c)*		152,200		779,264
SIGA Technologies, Inc. (c)*		46,100		152,130
Spectrum Pharmaceuticals, Inc. (c)*		76,400		812,132
Sucampo Pharmaceuticals, Inc., Class A *		17,000		141,440
Sunesis Pharmaceuticals, Inc. (c)*		38,100		104,775
Synta Pharmaceuticals Corp. *		31,200		135,720
Targacept, Inc. *		47,400		225,150
The Medicines Co. *		72,208		1,595,075
Theravance, Inc. *		92,338		1,998,194
Transcept Pharmaceuticals, Inc. (c)*		6,900		62,031
Trius Therapeutics, Inc. *		10,300		55,311
Vanda Pharmaceuticals, Inc. *		37,600		166,568
Verastem, Inc. *		6,000		62,280
Vical, Inc. *		113,400		353,808
ViroPharma, Inc. *		94,774		2,061,334
VIVUS, Inc. *		131,100		3,175,242
XenoPort, Inc. *		47,400		216,618
Zalicus, Inc. *		99,600		104,580
ZIOPHARM Oncology, Inc. (c)*		89,200		424,592
Zogenix, Inc. (c)*		28,300		51,789
				101,626,238
Real Estate 9.6%
Acadia Realty Trust		56,736		1,315,140
AG Mortgage Investment Trust, Inc.		12,600		249,480
Agree Realty Corp.		15,200		346,560
Alexander’s, Inc.		2,900		1,129,927
American Assets Trust, Inc.		43,200		1,015,632
American Campus Communities, Inc.		99,300		4,413,885
American Capital Mortgage Investment Corp.		23,700		538,701
Anworth Mortgage Asset Corp.		178,300		1,201,742
Apollo Commercial Real Estate Finance, Inc.		27,500		443,575
ARMOUR Residential REIT, Inc.		237,700		1,659,146
Ashford Hospitality Trust		69,900		596,946
Associated Estates Realty Corp.		55,500		939,615
AV Homes, Inc. *		12,000		149,640
BioMed Realty Trust, Inc.		209,800		4,158,236
Campus Crest Communities, Inc.		41,000		477,650
CapLease, Inc.		91,200		378,480
Capstead Mortgage Corp.		120,900		1,659,957
CBL & Associates Properties, Inc.		198,700		3,701,781
Cedar Realty Trust, Inc.		75,100		392,022
Chatham Lodging Trust		18,500		240,500
Chesapeake Lodging Trust		43,100		780,110
Colonial Properties Trust		117,600		2,630,712
Colony Financial, Inc.		44,100		749,259
Consolidated-Tomoka Land Co.		5,600		164,640
Coresite Realty Corp.		26,600		662,606
Cousins Properties, Inc.		122,173		960,280
CreXus Investment Corp.		76,600		803,534
CubeSmart		163,200		2,049,792
CYS Investments, Inc.		149,600		2,054,008
DCT Industrial Trust, Inc.		329,100		1,951,563
DiamondRock Hospitality Co.		224,217		2,383,427
DuPont Fabros Technology, Inc.		78,800		2,139,420
Dynex Capital, Inc.		72,600		684,618
EastGroup Properties, Inc.		36,190		1,820,357
Education Realty Trust, Inc.		122,400		1,379,448
Entertainment Properties Trust		62,500		2,999,375
Equity Lifestyle Properties, Inc.		44,459		3,109,462
Equity One, Inc.		71,837		1,492,773
Excel Trust, Inc.		41,500		497,585
Extra Space Storage, Inc.		138,358		4,199,165
FelCor Lodging Trust, Inc. *		170,200		718,244
First Industrial Realty Trust, Inc. *		116,000		1,431,440
First Potomac Realty Trust		67,000		833,480
Forestar Group, Inc. *		47,400		729,012
Franklin Street Properties Corp.		94,565		952,270
Getty Realty Corp. (c)		34,542		546,454
Gladstone Commercial Corp.		14,700		249,753
Glimcher Realty Trust		186,600		1,845,474
Government Properties Income Trust		47,400		1,100,628
Hatteras Financial Corp.		127,700		3,719,901
Healthcare Realty Trust, Inc.		104,281		2,239,956
Hersha Hospitality Trust		188,500		1,083,875
Highwoods Properties, Inc.		96,600		3,354,918
Home Properties, Inc.		64,365		3,929,483
Hudson Pacific Properties, Inc.		29,500		466,985
Inland Real Estate Corp.		103,236		887,830
Invesco Mortgage Capital, Inc.		154,600		2,727,144
Investors Real Estate Trust		113,000		815,860
iStar Financial, Inc. *		123,900		857,388
Kennedy-Wilson Holdings, Inc.		36,100		507,566
Kilroy Realty Corp.		93,000		4,412,850
Kite Realty Group Trust		74,600		381,206
LaSalle Hotel Properties		113,926		3,350,564
Lexington Realty Trust (c)		160,384		1,427,418
LTC Properties, Inc.		40,667		1,353,398
Medical Properties Trust, Inc.		178,900		1,678,082
MFA Financial, Inc.		476,900		3,519,522
Mid-America Apartment Communities, Inc.		54,800		3,730,236
Mission West Properties, Inc.		23,700		208,086
Monmouth Real Estate Investment Corp., Class A		52,100		534,546
MPG Office Trust, Inc. (c)*		65,700		138,627
National Health Investors, Inc.		32,668		1,616,086
National Retail Properties, Inc.		141,200		3,866,056
Newcastle Investment Corp.		140,900		996,163
NorthStar Realty Finance Corp.		151,700		864,690
Omega Healthcare Investors, Inc.		136,100		2,913,901
One Liberty Properties, Inc.		14,900		281,759
Parkway Properties, Inc.		29,400		290,766
Pebblebrook Hotel Trust		68,200		1,642,256

30 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Pennsylvania Real Estate Investment Trust		74,512		1,049,874
PennyMac Mortgage Investment Trust		40,200		815,658
Post Properties, Inc.		72,267		3,519,403
Potlatch Corp.		53,803		1,684,034
PS Business Parks, Inc.		24,938		1,702,018
RAIT Financial Trust		66,800		323,312
Ramco-Gershenson Properties Trust		51,600		621,264
Redwood Trust, Inc.		105,200		1,228,736
Resource Capital Corp.		111,300		601,020
Retail Opportunity Investments Corp.		66,600		809,190
RLJ Lodging Trust		36,900		692,982
Sabra Health Care REIT, Inc.		51,866		868,237
Saul Centers, Inc.		9,800		392,098
Sovran Self Storage, Inc.		37,126		1,956,540
STAG Industrial, Inc.		21,300		296,496
Starwood Property Trust, Inc.		152,100		3,174,327
Strategic Hotels & Resorts, Inc. *		252,400		1,718,844
Summit Hotel Properties, Inc.		36,500		305,140
Sun Communities, Inc.		35,200		1,540,000
Sunstone Hotel Investors, Inc. *		158,310		1,614,762
Tanger Factory Outlet Centers, Inc.		115,100		3,604,932
Tejon Ranch Co. *		19,092		570,087
Terreno Realty Corp.		17,900		255,970
Two Harbors Investment Corp.		287,100		3,003,066
UMH Properties, Inc.		15,400		181,566
Universal Health Realty Income Trust		15,900		642,996
Urstadt Biddle Properties, Class A		30,900		594,516
Washington Real Estate Investment Trust		88,300		2,609,265
Whitestone REIT, Class B		10,100		139,582
Winthrop Realty Trust		38,400		409,728
				157,650,265
Retailing 4.5%
1-800-FLOWERS.COM, Inc., Class A *		34,800		103,704
Aeropostale, Inc. *		108,100		2,397,658
America’s Car-Mart, Inc. *		11,500		528,310
ANN, Inc. *		69,700		1,929,993
Asbury Automotive Group, Inc. *		39,100		1,091,672
Ascena Retail Group, Inc. *		168,600		3,452,928
Barnes & Noble, Inc. (c)*		38,900		807,175
Bebe Stores, Inc.		51,449		421,882
Big 5 Sporting Goods Corp.		29,400		246,078
Blue Nile, Inc. (c)*		15,900		481,452
Body Central Corp. *		15,700		476,809
Brown Shoe Co., Inc.		56,175		511,754
Build-A-Bear Workshop, Inc. *		21,300		96,063
Cabela’s, Inc. *		57,936		2,190,560
Casual Male Retail Group, Inc. *		56,400		177,096
Charming Shoppes, Inc. *		155,700		918,630
Christopher & Banks Corp.		47,900		89,573
Citi Trends, Inc. *		20,100		223,914
Coldwater Creek, Inc. *		97,500		96,525
Collective Brands, Inc. *		82,500		1,713,525
Conn’s, Inc. *		19,400		317,190
Core-Mark Holding Co., Inc.		15,300		590,580
Cost Plus, Inc. *		25,400		491,998
Destination Maternity Corp.		14,400		285,696
Express, Inc. *		74,000		1,747,880
Francesca’s Holdings Corp. *		13,400		420,090
Fred’s, Inc., Class A		49,600		710,272
Geeknet, Inc. *		5,900		85,845
Genesco, Inc. *		31,744		2,380,800
GNC Holdings, Inc., Class A		30,600		1,195,236
Gordmans Stores, Inc. *		7,100		150,804
Group 1 Automotive, Inc.		30,300		1,753,764
Haverty Furniture Cos, Inc.		25,200		302,400
hhgregg, Inc. (c)*		27,700		289,742
Hibbett Sports, Inc. *		36,675		2,190,231
Hot Topic, Inc.		54,900		538,020
HSN, Inc.		53,500		2,070,450
Jos. A. Bank Clothiers, Inc. *		37,018		1,760,206
Kirkland’s, Inc. *		22,400		327,936
Lithia Motors, Inc., Class A		29,600		794,168
Lumber Liquidators Holdings, Inc. *		31,000		896,830
MarineMax, Inc. *		31,100		331,526
Mattress Firm Holding Corp. (c)*		7,600		304,304
Monro Muffler Brake, Inc.		40,850		1,685,471
New York & Co, Inc. *		36,400		143,780
Nutrisystem, Inc.		36,148		418,594
Office Depot, Inc. *		371,800		1,130,272
OfficeMax, Inc. *		115,200		535,680
Orbitz Worldwide, Inc. *		28,000		102,200
Overstock.com, Inc. (c)*		15,500		93,465
Pacific Sunwear of California, Inc. (c)*		63,500		93,345
Penske Automotive Group, Inc.		59,816		1,581,535
PetMed Express, Inc.		25,300		340,791
Pier 1 Imports, Inc.		131,400		2,257,452
Pool Corp.		64,477		2,379,846
Rent-A-Center, Inc.		78,305		2,678,814
Rue21, Inc. *		20,100		610,035
Saks, Inc. *		154,500		1,693,320
Select Comfort Corp. *		74,500		2,151,560
Shoe Carnival, Inc. *		18,450		358,668
Shutterfly, Inc. *		42,200		1,313,264
Sonic Automotive, Inc., Class A		53,900		906,598
Stage Stores, Inc.		41,627		635,644
Stein Mart, Inc. *		36,800		236,256
Systemax, Inc. *		14,500		248,965
Teavana Holdings, Inc. (c)*		9,600		200,544
The Bon-Ton Stores, Inc. (c)		16,500		102,300
The Buckle, Inc. (c)		36,064		1,665,436
The Cato Corp., Class A		37,004		1,029,821
The Children’s Place Retail Stores, Inc. *		34,913		1,605,300
The Finish Line, Inc., Class A		69,419		1,545,267
The Men’s Wearhouse, Inc.		69,100		2,559,464
The Pep Boys - Manny, Moe & Jack		70,500		1,052,565
The Talbots, Inc. (c)*		93,600		277,056
Tuesday Morning Corp. *		57,700		233,108
US Auto Parts Network, Inc. *		24,800		89,776
ValueVision Media, Inc., Class A *		54,800		88,776
Vitamin Shoppe, Inc. *		33,200		1,562,724
VOXX International Corp. *		24,200		307,098

See financial notes 31

 Schwab Small-Cap Index Fund

��

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
West Marine, Inc. *		19,800		231,858
Wet Seal, Inc., Class A *		121,200		398,748
Weyco Group, Inc.		4,600		112,194
Winmark Corp.		3,000		172,020
Zale Corp. *		43,000		117,820
Zumiez, Inc. *		28,400		1,041,144
				73,879,843
Semiconductors & Semiconductor Equipment 3.2%
Advanced Energy Industries, Inc. *		57,600		687,744
Alpha & Omega Semiconductor Ltd. *		19,700		194,833
Amkor Technology, Inc. *		128,918		666,506
Amtech Systems, Inc. *		12,800		89,344
ANADIGICS, Inc. *		90,300		199,563
Applied Micro Circuits Corp. *		84,865		473,547
ATMI, Inc. *		42,354		889,857
Axcelis Technologies, Inc. *		142,100		193,256
AXT, Inc. *		42,800		217,852
Brooks Automation, Inc.		88,631		1,042,301
Cabot Microelectronics Corp.		31,500		1,082,970
Cavium, Inc. *		64,900		1,898,974
CEVA, Inc. *		30,900		682,581
Cirrus Logic, Inc. *		88,700		2,428,606
Cohu, Inc.		32,200		353,556
Cymer, Inc. *		40,865		2,118,442
Diodes, Inc. *		47,281		1,053,893
DSP Group, Inc. *		31,400		205,356
Entegris, Inc. *		180,000		1,593,000
Entropic Communications, Inc. *		119,200		504,216
Exar Corp. *		49,000		388,080
FormFactor, Inc. *		68,473		383,449
FSI International, Inc. *		51,800		262,626
GSI Technology, Inc. *		27,000		114,210
GT Advanced Technologies, Inc. *		168,600		1,097,586
Hittite Microwave Corp. *		42,909		2,297,348
Inphi Corp. *		27,500		279,125
Integrated Device Technology, Inc. *		198,500		1,343,845
Integrated Silicon Solutions, Inc. *		35,900		381,258
Intermolecular, Inc. *		11,000		73,370
IXYS Corp. *		32,400		403,704
Kopin Corp. *		86,500		308,805
Kulicke & Soffa Industries, Inc. *		96,400		1,262,840
Lattice Semiconductor Corp. *		157,800		861,588
LTX-Credence Corp. *		66,300		457,470
MaxLinear, Inc., Class A *		21,400		103,790
Micrel, Inc.		67,505		735,129
Microsemi Corp. *		115,919		2,494,577
Mindspeed Technologies, Inc. *		44,900		224,949
MIPS Technologies, Inc. *		65,300		427,062
MKS Instruments, Inc.		69,999		1,935,472
Monolithic Power Systems, Inc. *		40,100		830,872
MoSys, Inc. *		43,700		157,320
Nanometrics, Inc. *		27,000		418,770
NVE Corp. *		6,400		324,352
OmniVision Technologies, Inc. *		77,673		1,430,737
PDF Solutions, Inc. *		31,400		276,948
Pericom Semiconductor Corp. *		33,500		263,310
Photronics, Inc. *		78,700		487,153
PLX Technology, Inc. *		59,600		237,208
Power Integrations, Inc.		38,662		1,464,517
Rambus, Inc. *		131,500		669,335
RF Micro Devices, Inc. *		369,900		1,601,667
Rubicon Technology, Inc. (c)*		23,500		222,075
Rudolph Technologies, Inc. *		42,400		457,920
Semtech Corp. *		87,529		2,386,040
Sigma Designs, Inc. *		43,000		236,930
Silicon Image, Inc. *		106,500		639,000
Spansion, Inc., Class A *		67,400		812,844
Standard Microsystems Corp. *		30,792		815,372
STR Holdings, Inc. *		40,500		154,710
Supertex, Inc. *		14,800		302,956
Tessera Technologies, Inc. *		68,490		1,071,184
TriQuint Semiconductor, Inc. *		220,000		1,073,600
Ultra Clean Holdings, Inc. *		30,500		208,925
Ultratech, Inc. *		33,700		1,076,378
Veeco Instruments, Inc. (c)*		54,600		1,648,374
Volterra Semiconductor Corp. *		32,900		1,082,081
				52,763,258
Software & Services 8.0%
Accelrys, Inc. *		74,200		610,666
ACI Worldwide, Inc. *		54,415		2,168,982
Actuate Corp. *		48,100		341,510
Acxiom Corp. *		108,676		1,492,121
Advent Software, Inc. *		43,928		1,185,617
American Software, Inc., Class A		30,400		251,712
Ancestry.com, Inc. (c)*		42,400		1,132,080
Angie’s List, Inc. (c)*		13,600		189,720
Aspen Technology, Inc. *		113,300		2,241,074
AVG Technologies NV *		10,800		149,580
Bankrate, Inc. *		30,800		721,336
Bazaarvoice, Inc. (c)*		14,600		289,226
Blackbaud, Inc.		59,569		1,845,448
Bottomline Technologies, Inc. *		48,100		1,131,793
Brightcove, Inc. *		7,700		144,375
BroadSoft, Inc. *		30,200		1,292,862
CACI International, Inc., Class A *		35,400		2,164,002
Callidus Software, Inc. *		40,200		318,384
Carbonite, Inc. (c)*		9,600		76,704
Cardtronics, Inc. *		57,700		1,520,972
Cass Information Systems, Inc.		12,400		507,780
CIBER, Inc. *		85,700		356,512
CommVault Systems, Inc. *		59,100		3,077,337
Computer Task Group, Inc. *		20,200		291,284
comScore, Inc. *		42,500		846,600
Concur Technologies, Inc. *		59,900		3,387,944
Constant Contact, Inc. *		39,500		954,715
Convergys Corp. *		140,900		1,883,833
Convio, Inc. *		16,200		259,200
Cornerstone OnDemand, Inc. (c)*		15,300		317,934
CoStar Group, Inc. *		33,883		2,469,732
CSG Systems International, Inc. *		46,400		668,160
DealerTrack Holdings, Inc. *		55,036		1,641,724
Deltek, Inc. *		29,700		310,068
Demand Media, Inc. (c)*		10,600		88,086
Dice Holdings, Inc. *		64,900		699,622
Digimarc Corp. *		8,400		219,660
Digital River, Inc. *		49,800		936,738
Dynamics Research Corp. *		12,000		86,280
Earthlink, Inc.		147,381		1,196,734

32 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ebix, Inc. (c)		38,600		789,370
Ellie Mae, Inc. *		11,300		146,448
Envestnet, Inc. *		25,600		320,256
EPAM Systems, Inc. *		4,900		101,136
EPIQ Systems, Inc.		42,100		478,256
ePlus, Inc. *		5,200		154,232
Euronet Worldwide, Inc. *		68,636		1,484,597
Exlservice Holdings, Inc. *		22,800		631,104
Fair Isaac Corp.		47,800		2,050,620
FalconStor Software, Inc. *		41,100		135,219
Forrester Research, Inc.		19,717		698,968
Global Cash Access Holdings, Inc. *		86,400		730,080
Glu Mobile, Inc. (c)*		63,500		288,925
Guidance Software, Inc. *		18,600		176,514
Guidewire Software, Inc. *		11,900		323,918
Heartland Payment Systems, Inc.		51,600		1,572,252
Higher One Holdings, Inc. (c)*		41,000		646,570
iGATE Corp. *		41,440		806,422
Imperva, Inc. *		7,300		253,821
InfoSpace, Inc. *		52,800		587,664
Interactive Intelligence Group, Inc. *		19,100		566,506
Internap Network Services Corp. *		70,000		492,800
IntraLinks Holdings, Inc. *		42,800		199,448
j2 Global, Inc.		61,628		1,591,851
Jack Henry & Associates, Inc.		115,800		3,932,568
JDA Software Group, Inc. *		56,669		1,636,601
Jive Software, Inc. *		20,700		492,867
Kenexa Corp. *		35,400		1,156,518
Keynote Systems, Inc.		18,700		344,080
KIT Digital, Inc. (c)*		51,500		349,170
Limelight Networks, Inc. *		90,900		249,066
Lionbridge Technologies, Inc. *		82,500		226,875
Liquidity Services, Inc. *		25,200		1,343,916
LivePerson, Inc. *		70,600		1,121,128
LogMeIn, Inc. *		27,300		983,073
LoopNet, Inc. *		24,100		461,997
Manhattan Associates, Inc. *		27,347		1,371,452
ManTech International Corp., Class A		31,200		980,304
Marchex, Inc., Class B		28,600		99,528
MAXIMUS, Inc.		46,448		2,055,324
Mentor Graphics Corp. *		128,967		1,863,573
MicroStrategy, Inc., Class A *		10,662		1,490,334
ModusLink Global Solutions, Inc. *		58,700		290,565
MoneyGram International, Inc. *		14,000		235,760
Monotype Imaging Holdings, Inc. *		47,900		679,701
Motricity, Inc. (c)*		49,600		51,088
Move, Inc. *		53,100		461,970
NCI, Inc., Class A *		8,900		44,144
NetScout Systems, Inc. *		50,000		1,034,500
NetSuite, Inc. *		38,300		1,699,754
NIC, Inc.		85,700		958,983
OpenTable, Inc. (c)*		31,500		1,408,995
Openwave Systems, Inc. *		114,100		294,378
Opnet Technologies, Inc.		19,300		446,988
Parametric Technology Corp. *		159,800		3,448,484
Pegasystems, Inc.		22,300		829,337
Perficient, Inc. *		32,400		389,124
PRGX Global, Inc. *		26,200		165,584
Progress Software Corp. *		89,820		2,078,435
PROS Holdings, Inc. *		28,800		567,072
QAD, Inc., Class A *		8,800		108,680
QLIK Technologies, Inc. *		99,600		2,869,476
Quepasa Corp. (c)*		11,800		44,840
Quest Software, Inc. *		75,600		1,759,212
QuinStreet, Inc. *		36,900		387,819
RealNetworks, Inc.		28,257		270,420
RealPage, Inc. *		40,600		736,890
Responsys, Inc. *		12,700		162,306
Rosetta Stone, Inc. *		14,700		153,762
Saba Software, Inc. *		37,900		368,388
Sapient Corp.		146,363		1,751,965
SciQuest, Inc. *		16,500		245,025
SeaChange International, Inc. *		35,400		290,988
ServiceSource International, Inc. *		13,400		222,172
Smith Micro Software, Inc. *		48,000		96,480
Solarwinds, Inc. *		76,300		3,579,233
Sourcefire, Inc. *		38,100		1,942,719
SPS Commerce, Inc. *		11,300		314,366
Srs Labs, Inc. *		16,200		154,386
SS&C Technologies Holdings, Inc. *		33,800		803,426
Stamps.com, Inc. *		16,100		467,383
Support.com, Inc. *		64,900		235,587
Synchronoss Technologies, Inc. *		35,400		1,108,020
Syntel, Inc.		20,600		1,233,734
Take-Two Interactive Software, Inc. *		98,504		1,388,906
Tangoe, Inc. *		13,700		280,576
TechTarget, Inc. *		19,600		145,824
TeleCommunication Systems, Inc., Class A *		62,100		119,853
TeleNav, Inc. *		22,100		149,617
TeleTech Holdings, Inc. *		34,000		515,100
The Active Network, Inc. *		16,500		277,200
The Hackett Group, Inc. *		40,800		232,968
The Ultimate Software Group, Inc. *		34,600		2,669,736
TiVo, Inc. *		159,703		1,723,195
TNS, Inc. *		34,100		695,640
Travelzoo, Inc. (c)*		7,400		192,104
Tyler Technologies, Inc. *		39,600		1,582,020
Unisys Corp. *		57,650		1,075,749
United Online, Inc.		118,687		562,576
ValueClick, Inc. *		105,400		2,232,372
VASCO Data Security International, Inc. *		36,200		281,998
Verint Systems, Inc. *		28,400		858,816
Virnetx Holding Corp. (c)*		54,500		1,353,780
Virtusa Corp. *		20,300		306,327
Vocus, Inc. *		23,600		305,148
Wave Systems Corp., Class A (c)*		111,000		158,730
Web.com Group, Inc. *		38,900		503,755
Websense, Inc. *		53,504		1,109,673
Wright Express Corp. *		51,776		3,304,344
XO Group, Inc. *		39,800		368,946
Zillow, Inc. *		5,500		191,785
Zix Corp. *		88,900		251,587
				132,083,922

See financial notes 33

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

			��
	Number		Value
Security	of Shares		($)
Technology Hardware & Equipment 5.0%
3D Systems Corp. (c)*		56,100		1,654,389
ADTRAN, Inc.		86,900		2,652,188
Aeroflex Holding Corp. *		26,600		297,920
Agilysys, Inc. *		24,000		210,240
Anaren, Inc. *		20,200		364,408
Anixter International, Inc. *		38,800		2,660,904
Arris Group, Inc. *		165,760		2,143,277
Aruba Networks, Inc. *		120,400		2,542,848
Aviat Networks, Inc. *		81,200		207,060
Avid Technology, Inc. *		39,705		345,036
Badger Meter, Inc.		20,203		746,299
Bel Fuse, Inc., Class B		14,100		250,839
Benchmark Electronics, Inc. *		81,294		1,290,949
Black Box Corp.		24,092		544,720
Brightpoint, Inc. *		91,295		558,725
Calix, Inc. *		49,100		390,836
Checkpoint Systems, Inc. *		53,744		589,034
Cognex Corp.		55,509		2,234,237
Coherent, Inc. *		31,451		1,654,323
Communications Systems, Inc.		8,900		115,789
Comtech Telecommunications Corp.		27,100		837,932
Cray, Inc. *		48,500		540,775
CTS Corp.		46,000		493,580
Daktronics, Inc.		46,400		377,696
DDi Corp.		20,200		262,196
Digi International, Inc. *		33,900		314,592
Dot Hill Systems Corp. *		75,700		94,625
DTS, Inc. *		23,300		726,960
Echelon Corp. *		47,000		204,920
Electro Rent Corp.		25,200		392,616
Electro Scientific Industries, Inc.		30,200		430,652
Electronics for Imaging, Inc. *		62,509		1,115,786
eMagin Corp. *		25,000		77,750
Emcore Corp. (c)*		29,700		134,244
Emulex Corp. *		117,590		1,020,681
Extreme Networks, Inc. *		123,300		472,239
Fabrinet *		27,300		459,186
FARO Technologies, Inc. *		21,900		1,225,962
FEI Co. *		51,800		2,598,806
Finisar Corp. *		120,500		1,990,660
Globecomm Systems, Inc. *		30,000		425,400
GSI Group, Inc. *		34,600		417,622
Harmonic, Inc. *		153,800		725,936
Identive Group, Inc. *		51,800		106,708
Imation Corp. *		40,200		233,160
Immersion Corp. *		38,200		208,190
Infinera Corp. *		140,000		1,002,400
Insight Enterprises, Inc. *		58,500		1,188,135
InterDigital, Inc.		60,800		1,685,376
Intermec, Inc. *		79,640		423,685
Intevac, Inc. *		30,600		246,636
InvenSense, Inc. (c)*		13,400		215,472
Ixia *		51,764		652,226
KEMET Corp. *		59,100		502,941
KVH Industries, Inc. *		19,900		198,602
LeCroy Corp. *		22,000		227,480
Littelfuse, Inc.		30,400		1,905,168
Loral Space & Communications, Inc.		14,600		905,930
Maxwell Technologies, Inc. *		37,400		355,674
Measurement Specialties, Inc. *		20,000		714,600
Mercury Computer Systems, Inc. *		40,400		533,280
Meru Networks, Inc. (c)*		14,400		40,896
Methode Electronics, Inc.		49,500		418,275
Microvision, Inc. (c)*		20,000		37,200
MTS Systems Corp.		20,875		1,001,374
Multi-Fineline Electronix, Inc. *		12,100		320,529
NeoPhotonics Corp. *		11,600		54,868
NETGEAR, Inc. *		49,000		1,886,500
Newport Corp. *		50,200		856,914
Novatel Wireless, Inc. *		42,900		123,981
NumereX Corp., Class A *		12,800		121,344
Oclaro, Inc. (c)*		67,600		194,012
OCZ Technology Group, Inc. (c)*		88,200		520,380
Oplink Communications, Inc. *		26,200		415,008
Opnext, Inc. *		45,000		53,550
OSI Systems, Inc. *		25,500		1,704,930
Park Electrochemical Corp.		27,800		802,030
PC Connection, Inc.		12,500		100,250
Plantronics, Inc.		57,993		2,222,292
Plexus Corp. *		47,662		1,542,819
Power-One, Inc. *		91,200		390,336
Powerwave Technologies, Inc. (c)*		51,720		58,444
Procera Networks, Inc. *		22,700		471,252
Pulse Electronics Corp.		55,700		114,185
Quantum Corp. *		301,900		718,522
Radisys Corp. *		26,000		165,100
RealD, Inc. (c)*		53,000		640,240
Richardson Electronics Ltd.		18,900		238,329
Rimage Corp.		12,700		115,443
Rofin-Sinar Technologies, Inc. *		38,136		961,027
Rogers Corp. *		21,367		818,142
Sanmina-SCI Corp. *		107,800		959,420
ScanSource, Inc. *		36,178		1,192,427
ShoreTel, Inc. *		63,200		302,728
Silicon Graphics International Corp. (c)*		41,500		391,760
Sonus Networks, Inc. *		282,658		799,922
STEC, Inc. *		49,000		406,210
Stratasys, Inc. *		28,300		1,449,243
Super Micro Computer, Inc. *		36,000		635,400
Sycamore Networks, Inc. *		26,811		417,983
Symmetricom, Inc. *		58,000		322,480
Synaptics, Inc. *		43,100		1,323,601
SYNNEX Corp. *		33,700		1,283,633
TTM Technologies, Inc. *		69,600		718,968
Ubiquiti Networks, Inc. (c)*		11,600		383,032
Universal Display Corp. (c)*		51,500		2,315,955
ViaSat, Inc. *		49,419		2,386,938
Viasystems Group, Inc. *		3,800		84,702
Vishay Precision Group, Inc. *		16,500		238,920
Westell Technologies, Inc., Class A *		71,100		162,108
X-Rite, Inc. *		35,300		195,562
Xyratex Ltd.		37,900		550,308
Zygo Corp. *		21,300		421,527
				82,151,499
Telecommunication Services 0.8%
8x8, Inc. *		83,200		343,616

34 See financial notes

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
AboveNet, Inc. *		31,100		2,586,587
Alaska Communications Systems Group, Inc. (c)		60,500		154,880
Atlantic Tele-Network, Inc.		12,600		429,156
Boingo Wireless, Inc. *		7,700		81,081
Cbeyond, Inc. *		37,400		240,482
Cincinnati Bell, Inc. *		266,245		1,011,731
Cogent Communications Group, Inc. *		61,600		1,153,768
Consolidated Communications Holdings, Inc.		35,000		677,250
Fairpoint Communications, Inc. (c)*		28,900		133,807
General Communication, Inc., Class A *		55,500		421,800
HickoryTech Corp.		17,900		177,747
IDT Corp., Class B		18,600		156,612
inContact, Inc. *		41,100		223,995
Iridium Communications, Inc. *		58,400		513,336
Leap Wireless International, Inc. *		81,800		458,898
Lumos Networks Corp.		20,100		181,704
Neutral Tandem, Inc. *		42,100		489,202
NTELOS Holdings Corp.		20,150		407,433
ORBCOMM, Inc. *		46,400		151,264
Premiere Global Services, Inc. *		70,000		626,500
Shenandoah Telecommunications Co.		31,800		354,570
SureWest Communications		18,800		424,504
Towerstream Corp. (c)*		56,700		260,253
USA Mobility, Inc.		29,600		382,432
Vonage Holdings Corp. *		185,700		378,828
				12,421,436
Transportation 2.3%
Air Transport Services Group, Inc. *		72,100		382,130
Alaska Air Group, Inc. *		96,000		3,244,800
Allegiant Travel Co. *		19,800		1,163,448
AMERCO		11,504		1,155,462
Arkansas Best Corp.		34,072		522,664
Atlas Air Worldwide Holdings, Inc. *		35,200		1,620,960
Avis Budget Group, Inc. *		140,600		1,850,296
Baltic Trading Ltd.		21,800		101,370
Celadon Group, Inc.		26,900		420,447
Covenant Transport Group, Inc., Class A *		15,000		49,650
Dollar Thrifty Automotive Group, Inc. *		38,700		3,129,282
Eagle Bulk Shipping, Inc. (c)*		83,800		137,432
Echo Global Logistics, Inc. *		15,100		257,153
Excel Maritime Carriers Ltd. (c)*		61,200		114,444
Forward Air Corp.		39,382		1,330,324
Genco Shipping & Trading Ltd. (c)*		48,200		257,870
Genesee & Wyoming, Inc., Class A *		53,100		2,862,621
Hawaiian Holdings, Inc. *		67,500		382,050
Heartland Express, Inc.		67,500		933,525
Hub Group, Inc., Class A *		49,292		1,725,220
International Shipholding Corp.		7,300		154,468
JetBlue Airways Corp. *		330,100		1,567,975
Knight Transportation, Inc.		81,700		1,341,514
Marten Transport Ltd.		20,800		438,256
Old Dominion Freight Line, Inc. *		63,583		2,827,536
Pacer International, Inc. *		46,900		281,869
Park-Ohio Holdings Corp. *		11,200		241,808
Patriot Transportation Holding, Inc. *		6,200		136,214
Quality Distribution, Inc. *		22,600		252,442
RailAmerica, Inc. *		28,600		662,948
Republic Airways Holdings, Inc. *		64,600		328,814
Roadrunner Transportation Systems, Inc. *		12,200		211,670
Saia, Inc. *		21,300		400,014
SkyWest, Inc.		70,812		636,600
Spirit Airlines, Inc. *		20,900		502,018
Swift Transportation Co. *		106,100		1,112,989
Ultrapetrol Bahamas Ltd. (c)*		28,600		54,626
Universal Truckload Services, Inc.		7,300		113,880
US Airways Group, Inc. *		217,000		2,226,420
Werner Enterprises, Inc.		58,743		1,387,510
Wesco Aircraft Holdings, Inc. *		28,100		443,699
Zipcar, Inc. (c)*		13,700		165,085
				37,129,503
Utilities 3.2%
Allete, Inc.		45,290		1,866,401
American States Water Co.		25,000		911,000
Artesian Resources Corp., Class A		8,700		166,083
Atlantic Power Corp.		150,000		2,142,000
Avista Corp.		77,212		2,041,485
Black Hills Corp.		59,298		1,957,427
Cadiz, Inc. *		16,200		136,566
California Water Service Group		55,974		1,013,689
Central Vermont Public Service Corp.		17,900		630,975
CH Energy Group, Inc.		20,797		1,364,699
Chesapeake Utilities Corp.		12,800		537,856
Cleco Corp.		81,700		3,333,360
Connecticut Water Service, Inc.		11,500		319,125
Consolidated Water Co., Ltd.		19,500		139,815
Dynegy, Inc. *		137,900		56,539
El Paso Electric Co.		56,416		1,728,586
Genie Energy Ltd., Class B		18,600		154,752
IDACORP, Inc.		66,400		2,705,136
MGE Energy, Inc.		30,960		1,416,110
Middlesex Water Co.		20,900		387,904
New Jersey Resources Corp.		55,400		2,395,496
Northwest Natural Gas Co.		35,695		1,631,262
NorthWestern Corp.		48,612		1,726,698
Ormat Technologies, Inc.		24,000		474,480
Otter Tail Corp.		48,309		1,060,866
Piedmont Natural Gas Co., Inc.		96,200		2,932,176
PNM Resources, Inc.		116,100		2,178,036
Portland General Electric Co.		100,900		2,606,247
SJW Corp.		20,700		498,870
South Jersey Industries, Inc.		40,160		1,977,880
Southwest Gas Corp.		61,396		2,579,860
The Empire District Electric Co.		56,000		1,149,120
The Laclede Group, Inc.		29,977		1,180,494
The York Water Co.		17,000		296,990
UIL Holdings Corp.		67,710		2,327,193
Unisource Energy Corp.		49,117		1,787,859
Unitil Corp.		14,600		386,316

See financial notes 35

 Schwab Small-Cap Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
WGL Holdings, Inc.		68,600		2,751,546
				52,950,897
Total Common Stock
(Cost $1,314,574,537)				1,615,955,126
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 Investments 1.7% of net assets
Time Deposit 1.5%
Bank of America
0.03%, 05/01/12		24,957,845		24,957,845
U.S. Treasury Obligations 0.2%
U.S. Treasury Bills
0.04%, 06/14/12 (d)(e)		450,000		449,978
0.08%, 06/14/12 (d)(e)		2,500,000		2,499,756
				2,949,734
Total Short-Term Investments
(Cost $27,907,579)				27,907,579
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 5.4% of net assets
Wells Fargo Advantage Government Money Market Fund		88,178,306		88,178,306
Total Collateral Invested for Securities on Loan
(Cost $88,178,306)				88,178,306
End of Collateral Invested for Securities on Loan.

At 04/30/12 tax basis cost of the fund’s investments was $1,347,303,690 and the unrealized appreciation and depreciation were $412,189,439 and ($115,630,424), respectively, with a net unrealized appreciation of $296,559,015.

*	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 $0 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		330		26,891,700		456,803

36 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		1,474,801,458		1,987,650,809
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.0%	Short-Term Investments		19,537,730		19,537,730
	99	.8%	Total Investments		1,494,339,188		2,007,188,539
	0	.6%	Collateral Invested for Securities on Loan		12,025,131		12,025,131
	(0	.4)%	Other Assets and Liabilities, Net				(8,755,558	)
	100	.0%	Net Assets				2,010,458,112

	Number		Value
Security	of Shares		($)
Common Stock 98.8% of net assets
Automobiles & Components 0.8%
American Axle & Manufacturing Holdings, Inc. *		8,300		80,427
BorgWarner, Inc. *		13,800		1,090,752
Cooper Tire & Rubber Co.		8,900		133,055
Dana Holding Corp.		19,500		285,090
Dorman Products, Inc. *		1,500		71,670
Drew Industries, Inc. *		2,400		71,472
Exide Technologies *		15,500		44,640
Federal-Mogul Corp. *		9,200		118,956
Ford Motor Co.		490,236		5,529,862
General Motors Co. *		74,000		1,702,000
Gentex Corp.		18,000		395,460
Harley-Davidson, Inc.		28,500		1,491,405
Johnson Controls, Inc.		88,500		2,829,345
Lear Corp.		14,000		581,000
Modine Manufacturing Co. *		8,000		63,200
Standard Motor Products, Inc.		7,500		113,025
Stoneridge, Inc. *		8,200		70,684
Strattec Security Corp.		1,500		32,700
Tenneco, Inc. *		7,480		230,608
Tesla Motors, Inc. (d)*		7,500		248,475
The Goodyear Tire & Rubber Co. *		29,000		318,420
Thor Industries, Inc.		7,500		253,725
TRW Automotive Holdings Corp. *		12,800		585,088
Visteon Corp. *		8,000		401,360
Winnebago Industries, Inc. *		5,100		49,725
				16,792,144
Banks 3.3%
1st Source Corp.		5,528		125,430
Ameris Bancorp *		1,848		22,915
Arrow Financial Corp.		1,180		28,249
Associated Banc-Corp.		21,500		286,595
Astoria Financial Corp.		11,300		109,497
BancFirst Corp.		2,300		95,910
BancorpSouth, Inc.		7,612		102,534
BancTrust Financial Group, Inc. *		2,100		4,431
Bank Mutual Corp.		6,168		24,055
Bank of Hawaii Corp.		6,500		317,785
Bank of the Ozarks, Inc.		5,600		173,040
BankUnited, Inc.		6,000		147,600
Banner Corp.		3,171		69,603
BB&T Corp.		89,458		2,866,234
BBCN Bancorp, Inc. *		7,000		76,860
Beneficial Mutual Bancorp, Inc. *		7,500		65,025
Berkshire Bancorp, Inc. *		3,600		25,740
Berkshire Hills Bancorp, Inc.		1,400		31,766
BOK Financial Corp.		7,540		430,006
Boston Private Financial Holdings, Inc.		12,129		113,042
Brookline Bancorp, Inc.		8,405		75,477
Bryn Mawr Bank Corp.		3,400		73,066
Camco Financial Corp. *		700		1,687
Camden National Corp.		700		22,764
Capital City Bank Group, Inc.		4,375		36,531
CapitalSource, Inc.		32,900		212,205
Capitol Federal Financial, Inc.		18,963		223,953
Cathay General Bancorp		9,200		158,424
Central Pacific Financial Corp. *		5,169		73,503
Century Bancorp, Inc., Class A		800		21,976
Chemical Financial Corp.		5,383		118,803
CIT Group, Inc. *		25,000		946,250
Citizens South Banking Corp.		1,050		5,250
City Holding Co.		4,800		160,080
City National Corp.		6,100		324,886
Columbia Banking System, Inc.		4,951		101,446
Comerica, Inc.		26,159		837,611
Commerce Bancshares, Inc.		17,861		716,226
Community Bank System, Inc.		4,400		123,728
Community Trust Bancorp, Inc.		2,487		79,460
Cullen/Frost Bankers, Inc.		8,300		489,368
CVB Financial Corp.		10,311		119,298
Dime Community Bancshares		6,875		95,288
East West Bancorp, Inc.		19,600		446,292
F.N.B. Corp.		15,661		177,752
Fifth Third Bancorp		116,714		1,660,840
First BanCorp Puerto Rico *		479		2,041
First Busey Corp.		14,300		66,352
First Citizens BancShares, Inc., Class A		900		155,970
First Commonwealth Financial Corp.		13,504		86,831
First Financial Bancorp		10,339		173,799
First Financial Bankshares, Inc. (d)		6,000		203,040
First Financial Corp.		2,600		78,000
First Financial Holdings, Inc.		3,900		45,006
First Horizon National Corp.		32,816		301,251
First M&F Corp.		2,000		8,720
First Merchants Corp.		9,041		111,476

See financial notes 37

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
First Midwest Bancorp, Inc.		9,125		97,181
First Niagara Financial Group, Inc.		37,165		332,255
First Republic Bank *		11,000		363,330
First United Corp. (d)*		2,200		18,150
FirstMerit Corp.		13,406		225,221
Flagstar Bancorp, Inc. *		54,100		47,089
Flushing Financial Corp.		6,800		88,604
Fulton Financial Corp.		28,262		296,468
Glacier Bancorp, Inc.		7,697		114,685
Great Southern Bancorp, Inc.		3,400		81,736
Hancock Holding Co.		9,144		294,254
Hawthorn Bancshares, Inc.		843		6,318
Heritage Financial Corp.		3,735		48,929
Home Bancshares, Inc.		3,300		96,162
Hudson City Bancorp, Inc.		59,231		418,171
Huntington Bancshares, Inc.		114,599		766,667
IBERIABANK Corp.		3,875		197,896
Independent Bank Corp.		3,000		84,210
Independent Bank Corp., Michigan (d)*		431		1,651
Indiana Community Bancorp		800		18,224
International Bancshares Corp.		7,784		153,578
Investors Bancorp, Inc. *		9,600		148,224
Kearny Financial Corp.		6,500		63,050
KeyCorp		121,290		975,172
Lakeland Financial Corp.		3,700		96,348
M&T Bank Corp.		15,949		1,375,920
MainSource Financial Group, Inc.		3,235		37,817
MB Financial, Inc.		8,133		168,109
Merchants Bancshares, Inc.		1,450		38,976
MGIC Investment Corp. *		21,800		75,428
MutualFirst Financial, Inc.		2,000		20,220
National Penn Bancshares, Inc.		13,175		121,473
NBT Bancorp, Inc.		4,400		90,420
New York Community Bancorp, Inc.		58,085		783,567
North Valley Bancorp *		300		3,774
Northrim BanCorp, Inc.		4,281		93,925
Northwest Bancshares, Inc.		11,250		138,600
OceanFirst Financial Corp.		5,050		73,579
Ocwen Financial Corp. *		12,420		185,182
Old National Bancorp		15,244		195,428
Oriental Financial Group, Inc.		8,163		96,487
Oritani Financial Corp.		13,200		195,624
Pacific Capital Bancorp *		3,117		141,979
PacWest Bancorp		6,000		142,920
Park National Corp. (d)		2,845		191,326
People’s United Financial, Inc.		44,187		545,268
Peoples Financial Corp.		3,000		29,880
Pinnacle Financial Partners, Inc. *		6,475		118,492
PNC Financial Services Group, Inc.		68,532		4,545,042
Popular, Inc. *		125,200		222,856
Premier Financial Bancorp, Inc. *		245		1,906
PrivateBancorp, Inc.		8,000		125,840
Prosperity Bancshares, Inc.		6,400		298,560
Provident Financial Holdings, Inc.		2,750		29,673
Provident Financial Services, Inc.		5,217		76,690
Radian Group, Inc. (d)		24,500		76,440
Regions Financial Corp.		180,462		1,216,314
Renasant Corp.		4,125		66,000
Republic Bancorp, Inc., Class A		6,521		153,439
Roma Financial Corp.		4,000		37,760
S&T Bancorp, Inc.		4,400		82,368
S.Y. Bancorp, Inc.		1,470		34,104
Sandy Spring Bancorp, Inc.		5,900		106,259
SCBT Financial Corp.		3,000		103,170
Seacoast Banking Corp. of Florida *		1,980		3,208
Shore Bancshares, Inc.		1,250		8,000
Signature Bank *		6,000		394,140
Simmons First National Corp., Class A		4,000		97,360
Southwest Bancorp, Inc. *		3,300		29,997
StellarOne Corp.		6,000		75,060
Sterling Bancorp		1,918		18,240
Sterling Financial Corp. *		5,000		97,100
Suffolk Bancorp *		2,400		28,512
Sun Bancorp, Inc. *		6,218		17,970
SunTrust Banks, Inc.		68,342		1,659,344
Susquehanna Bancshares, Inc.		23,468		243,363
SVB Financial Group *		5,200		333,268
Synovus Financial Corp.		87,200		183,120
TCF Financial Corp.		19,100		219,077
Texas Capital Bancshares, Inc. *		4,000		150,840
TF Financial Corp.		735		18,375
TFS Financial Corp. *		19,500		191,685
The First of Long Island Corp.		4,000		110,120
Timberland Bancorp, Inc. *		2,000		10,180
Tompkins Financial Corp.		4,024		152,308
Tree.com, Inc. *		1,044		8,352
TriCo Bancshares		1,900		31,236
TrustCo Bank Corp.		10,357		56,653
Trustmark Corp.		8,300		211,235
U.S. Bancorp		247,031		7,946,987
UMB Financial Corp.		3,574		171,731
Umpqua Holdings Corp.		12,343		163,421
Union First Market Bankshares Corp.		7,050		98,418
United Bankshares, Inc.		7,400		195,582
United Community Banks, Inc. *		8,378		78,837
Valley National Bancorp		24,326		306,508
Washington Federal, Inc.		14,942		262,083
Washington Trust Bancorp, Inc.		2,500		59,175
Webster Financial Corp.		8,663		196,910
Wells Fargo & Co.		642,306		21,472,290
WesBanco, Inc.		4,456		91,259
West Coast Bancorp *		3,916		76,519
Westamerica Bancorp		5,200		238,524
Western Alliance Bancorp *		9,500		83,410
Wintrust Financial Corp.		5,800		209,554
WSFS Financial Corp.		2,000		79,820
Zions Bancorp		22,725		463,363
				67,268,489
Capital Goods 8.1%
3M Co.		83,000		7,416,880
A.O. Smith Corp.		4,950		235,620
AAON, Inc.		9,169		187,048
AAR Corp.		5,000		77,250
Aceto Corp.		5,000		45,000
Actuant Corp., Class A		8,680		236,704
Acuity Brands, Inc.		5,200		288,964

38 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
AECOM Technology Corp. *		14,000		308,980
Aegion Corp. *		4,300		78,475
Aerosonic Corp. *		300		1,032
AGCO Corp. *		12,762		594,326
Aircastle Ltd.		5,500		66,825
Alamo Group, Inc.		2,500		84,200
Albany International Corp., Class A		3,918		94,424
Alliant Techsystems, Inc.		4,437		236,492
American Science & Engineering, Inc.		500		32,655
American Superconductor Corp. (d)*		5,200		21,476
American Woodmark Corp.		4,000		71,800
AMETEK, Inc.		21,950		1,104,743
Ampco-Pittsburgh Corp.		2,800		52,024
Apogee Enterprises, Inc.		1,200		18,432
Applied Industrial Technologies, Inc.		6,525		256,432
Armstrong World Industries, Inc.		3,500		154,140
Astronics Corp. *		3,438		109,157
Barnes Group, Inc.		6,600		174,240
BE Aerospace, Inc. *		13,200		620,796
Beacon Roofing Supply, Inc. *		5,000		133,450
Belden, Inc.		6,900		239,982
Blount International, Inc. *		4,200		67,914
Brady Corp., Class A		6,400		198,592
Breeze-Eastern Corp. *		500		4,063
Briggs & Stratton Corp.		6,500		117,650
Carlisle Cos., Inc.		9,200		506,552
Cascade Corp.		4,400		207,108
Caterpillar, Inc.		75,400		7,748,858
Ceradyne, Inc.		2,500		63,300
Chart Industries, Inc. *		3,000		229,290
CIRCOR International, Inc.		3,750		116,700
CLARCOR, Inc.		6,400		307,328
Coleman Cable, Inc. *		1,500		12,750
Columbus McKinnon Corp. *		2,400		35,592
Cooper Industries plc		22,000		1,376,540
Crane Co.		8,000		353,040
Cubic Corp.		2,000		92,460
Cummins, Inc.		22,400		2,594,592
Curtiss-Wright Corp.		6,600		232,914
Danaher Corp.		72,000		3,903,840
Deere & Co.		54,000		4,447,440
DigitalGlobe, Inc. *		3,500		42,945
Donaldson Co., Inc.		18,000		623,880
Dover Corp.		23,700		1,485,042
Ducommun, Inc. *		3,200		37,760
Dycom Industries, Inc. *		5,300		123,967
Eaton Corp.		41,800		2,013,924
EMCOR Group, Inc.		7,800		228,696
Emerson Electric Co.		94,000		4,938,760
EnerSys *		7,500		262,125
EnPro Industries, Inc. *		3,000		124,230
ESCO Technologies, Inc.		2,800		96,320
Esterline Technologies Corp. *		2,400		164,376
Exelis, Inc.		23,400		269,802
Fastenal Co.		38,400		1,797,888
Federal Signal Corp. *		5,300		27,348
Flow International Corp. *		900		3,699
Flowserve Corp.		6,900		793,017
Fluor Corp.		23,200		1,339,800
Fortune Brands Home & Security, Inc. *		19,000		432,060
Foster Wheeler AG *		22,000		506,000
Franklin Electric Co., Inc.		1,300		65,195
FreightCar America, Inc.		2,500		54,000
FuelCell Energy, Inc. *		1,200		1,488
Furmanite Corp. *		1,400		8,764
Gardner Denver, Inc.		6,400		416,896
GATX Corp.		10,000		428,700
GenCorp, Inc. *		2,500		17,175
General Cable Corp. *		6,700		197,248
General Dynamics Corp.		38,400		2,592,000
General Electric Co.		1,362,666		26,681,000
GeoEye, Inc. *		6,000		137,520
Gibraltar Industries, Inc. *		2,500		33,800
Goodrich Corp.		16,404		2,058,046
Graco, Inc.		7,012		373,810
GrafTech International Ltd. *		16,600		194,884
Granite Construction, Inc.		4,850		135,024
Griffon Corp.		5,500		54,505
Hardinge, Inc.		4,800		54,144
Harsco Corp.		9,200		205,160
HEICO Corp., Class A		4,464		143,867
Hexcel Corp. *		13,000		355,940
Honeywell International, Inc.		91,562		5,554,151
Hubbell, Inc., Class B		6,800		545,632
Huntington Ingalls Industries, Inc. *		5,172		204,035
IDEX Corp.		10,225		442,845
II-VI, Inc. *		7,600		155,116
Illinois Tool Works, Inc.		54,700		3,138,686
Ingersoll-Rand plc		41,000		1,743,320
Integrated Electrical Services, Inc. *		5,105		22,564
Interline Brands, Inc. *		4,000		84,160
ITT Corp.		11,700		262,782
Jacobs Engineering Group, Inc. *		16,600		727,578
John Bean Technologies Corp.		4,983		79,678
Joy Global, Inc.		16,350		1,157,089
Kadant, Inc. *		3,001		77,636
Kaman Corp.		3,000		103,140
Kaydon Corp.		3,300		80,949
KBR, Inc.		19,000		643,340
Kennametal, Inc.		10,000		422,300
Kratos Defense & Security Solutions, Inc. *		3,180		17,649
L-3 Communications Holdings, Inc.		15,100		1,110,454
Lawson Products, Inc.		3,000		43,680
Lennox International, Inc.		4,771		207,061
Lincoln Electric Holdings, Inc.		11,800		578,318
Lockheed Martin Corp.		36,052		3,264,148
Lydall, Inc. *		5,500		58,025
Magnetek, Inc. *		1,650		31,515
Masco Corp.		46,300		610,234
MasTec, Inc. *		5,350		93,037
Meritor, Inc. *		9,900		64,449
Michael Baker Corp. *		3,000		67,590
Moog, Inc., Class A *		5,787		244,616
MSC Industrial Direct Co., Inc., Class A		4,300		316,953
Mueller Industries, Inc.		4,200		191,982
Mueller Water Products, Inc., Class A		16,139		57,939

See financial notes 39

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
NACCO Industries, Inc., Class A		1,300		147,511
Navistar International Corp. *		9,500		322,525
NCI Building Systems, Inc. *		580		6,954
NN, Inc. *		1,800		14,238
Nordson Corp.		8,000		431,200
Northrop Grumman Corp.		34,032		2,153,545
Omega Flex, Inc. *		700		9,415
Orbital Sciences Corp. *		7,600		95,456
Oshkosh Corp. *		11,000		251,130
Owens Corning *		14,000		480,900
PACCAR, Inc.		44,725		1,921,386
Pall Corp.		15,900		947,799
Parker Hannifin Corp.		19,500		1,709,955
Pentair, Inc.		12,500		541,750
Powell Industries, Inc. *		4,000		130,440
Precision Castparts Corp.		18,502		3,263,198
Quanex Building Products Corp.		5,625		103,669
Quanta Services, Inc. *		27,371		605,447
Raven Industries, Inc.		2,800		168,588
Raytheon Co.		44,900		2,430,886
RBC Bearings, Inc. *		3,000		140,640
Regal-Beloit Corp.		4,500		304,380
Robbins & Myers, Inc.		6,970		339,509
Rockwell Automation, Inc.		18,700		1,446,258
Rockwell Collins, Inc.		20,100		1,123,389
Roper Industries, Inc.		12,500		1,273,750
Sauer-Danfoss, Inc.		3,800		164,578
Seaboard Corp. *		200		398,084
Simpson Manufacturing Co., Inc.		6,200		192,386
Snap-on, Inc.		7,000		437,780
Spirit AeroSystems Holdings, Inc., Class A *		14,500		362,500
SPX Corp.		8,610		661,076
Standex International Corp.		3,000		132,180
Stanley Black & Decker, Inc.		21,652		1,584,060
Taser International, Inc. *		1,700		7,820
Tecumseh Products Co., Class A *		3,200		12,224
Teledyne Technologies, Inc. *		9,657		624,035
Tennant Co.		4,200		186,060
Terex Corp. *		14,400		326,016
Textainer Group Holdings Ltd. (d)		2,500		87,675
Textron, Inc.		35,100		935,064
The Babcock & Wilcox Co. *		15,500		381,300
The Boeing Co.		86,300		6,627,840
The Gorman-Rupp Co.		5,613		161,654
The Greenbrier Cos., Inc. *		4,100		70,725
The Manitowoc Co., Inc.		14,600		202,210
The Middleby Corp. *		5,000		507,350
The Shaw Group, Inc. *		11,500		348,105
The Timken Co.		9,600		542,496
The Toro Co.		4,100		292,986
Thomas & Betts Corp. *		7,300		524,943
Titan International, Inc.		4,125		119,171
TransDigm Group, Inc. *		6,600		832,392
Trinity Industries, Inc.		13,650		404,040
Triumph Group, Inc.		5,400		339,228
Tutor Perini Corp. *		5,000		76,050
Tyco International Ltd.		60,733		3,408,943
United Rentals, Inc. (d)*		8,900		415,452
United Technologies Corp.		102,068		8,332,832
Universal Forest Products, Inc.		2,500		93,500
URS Corp.		10,700		442,017
USG Corp. *		7,400		133,570
Valmont Industries, Inc.		2,700		334,611
Vicor Corp.		4,200		29,274
W.W. Grainger, Inc.		7,600		1,579,432
Wabash National Corp. *		8,000		66,960
WABCO Holdings, Inc. *		8,133		512,623
Wabtec Corp.		5,828		453,302
Watsco, Inc.		3,400		244,630
Watts Water Technologies, Inc., Class A		4,000		147,280
WESCO International, Inc. *		4,800		318,672
Woodward, Inc.		8,000		332,720
Xylem, Inc.		23,400		652,392
				162,885,682
Commercial & Professional Supplies 0.9%
A.T. Cross Co., Class A *		2,900		33,292
ABM Industries, Inc.		4,900		114,072
Acacia Research Corp. *		3,000		123,000
American Reprographics Co. *		7,000		38,220
AMREP Corp. *		2,500		19,425
Asset Acceptance Capital Corp. *		2,500		13,300
ASTA Funding, Inc.		6,000		50,880
Avery Dennison Corp.		12,700		406,146
Casella Waste Systems, Inc., Class A *		6,500		39,195
CDI Corp.		3,700		65,638
Cenveo, Inc. *		7,300		20,878
Cintas Corp.		15,350		601,259
Clean Harbors, Inc. *		5,000		341,200
CompX International, Inc.		2,000		26,860
Consolidated Graphics, Inc. *		3,900		155,961
Copart, Inc. *		17,618		465,291
Corrections Corp. of America *		14,484		418,443
Covanta Holding Corp.		14,700		235,935
CRA International, Inc. *		2,500		51,125
Deluxe Corp.		6,800		161,908
Encore Capital Group, Inc. *		2,000		47,400
EnergySolutions, Inc. *		10,500		44,205
Ennis, Inc.		4,500		70,920
Equifax, Inc.		15,595		714,563
Exponent, Inc. *		6,000		286,800
FTI Consulting, Inc. *		5,700		207,138
G&K Services, Inc., Class A		4,100		134,726
GP Strategies Corp. *		1,500		25,170
Healthcare Services Group, Inc.		12,656		268,560
Heidrick & Struggles International, Inc.		3,100		60,450
Herman Miller, Inc.		8,700		169,911
HNI Corp.		4,000		96,480
Hudson Highland Group, Inc. *		3,220		17,517
Huron Consulting Group, Inc. *		3,000		105,720
IHS, Inc., Class A *		6,600		667,062
Insperity, Inc.		2,800		76,356
Interface, Inc., Class A		5,800		82,128
Iron Mountain, Inc.		23,180		703,977
KAR Auction Services, Inc. *		6,000		110,400
Kelly Services, Inc., Class A		5,700		79,743
Kforce, Inc. *		4,905		70,975
Kimball International, Inc., Class B		9,100		62,153
Knoll, Inc.		7,000		103,530

40 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Korn/Ferry International *		6,600		106,590
Manpower, Inc.		9,991		425,617
Mastech Holdings, Inc. *		540		3,113
McGrath Rentcorp		4,600		135,332
Mine Safety Appliances Co.		4,700		199,562
Mobile Mini, Inc. *		1,200		22,632
Multi-Color Corp.		4,625		98,605
Navigant Consulting, Inc. *		5,000		69,600
Nielsen Holdings N.V. *		10,000		292,200
NL Industries, Inc.		7,800		109,746
On Assignment, Inc. *		4,700		87,937
Pitney Bowes, Inc.		25,000		428,250
Portfolio Recovery Associates, Inc. *		2,000		137,640
Quad Graphics, Inc. (d)		2,500		33,600
R.R. Donnelley & Sons Co. (d)		23,500		293,985
Republic Services, Inc.		39,645		1,085,084
Resources Connection, Inc.		3,700		48,026
Robert Half International, Inc.		17,000		506,600
Rollins, Inc.		15,018		319,132
Steelcase, Inc., Class A		11,500		99,360
Stericycle, Inc. *		9,400		814,040
Sykes Enterprises, Inc. *		4,026		63,812
Tetra Tech, Inc. *		12,031		321,228
The Advisory Board Co. *		1,000		91,160
The Brink’s Co.		5,600		142,240
The Corporate Executive Board Co.		3,700		153,069
The Dun & Bradstreet Corp.		5,640		438,679
The Geo Group, Inc. *		17,380		359,940
The Standard Register Co. (d)		4,100		3,567
Towers Watson & Co., Class A		6,600		431,640
TRC Cos., Inc. *		3,350		22,043
TrueBlue, Inc. *		6,000		103,560
UniFirst Corp.		1,500		91,140
United Stationers, Inc.		5,800		164,488
Verisk Analytics, Inc., Class A *		16,000		783,200
Viad Corp.		3,625		65,540
Virco Mfg. Corp.		1,170		2,106
Waste Connections, Inc.		13,712		441,938
Waste Management, Inc.		54,100		1,850,220
				18,434,133
Consumer Durables & Apparel 1.5%
American Greetings Corp., Class A (d)		8,500		136,000
Blyth, Inc.		2,700		237,519
Brookfield Residential Properties, Inc. *		2,350		27,307
Brunswick Corp.		9,900		260,271
Callaway Golf Co.		8,100		49,653
Carter’s, Inc. *		8,000		434,400
Cavco Industries, Inc. *		410		21,156
Coach, Inc.		36,008		2,634,345
Columbia Sportswear Co.		4,350		204,885
Crocs, Inc. *		15,000		303,000
CSS Industries, Inc.		3,400		65,110
D.R. Horton, Inc.		35,104		573,950
Deckers Outdoor Corp. *		7,500		382,575
DGSE Cos., Inc. (a)(d)*		700		4,161
Ethan Allen Interiors, Inc.		4,200		97,440
Flexsteel Industries, Inc.		600		12,006
Foamex International, Inc. (a)(c)*		2,278		—
Fossil, Inc. *		6,762		883,591
Furniture Brands International, Inc. *		4,700		7,426
Garmin Ltd.		16,000		754,080
Hanesbrands, Inc. *		11,047		311,746
Harman International Industries, Inc.		8,800		436,304
Hasbro, Inc.		14,500		532,730
Helen of Troy Ltd. *		5,000		173,000
Hovnanian Enterprises, Inc., Class A *		3,700		7,400
Iconix Brand Group, Inc. *		15,200		233,168
iRobot Corp. *		3,000		70,830
JAKKS Pacific, Inc.		3,000		57,210
Jarden Corp.		9,359		392,423
K-Swiss, Inc., Class A *		2,400		8,832
KB Home (d)		7,800		67,704
Kenneth Cole Productions, Inc., Class A *		3,100		49,383
Kid Brands, Inc. *		3,000		7,050
La-Z-Boy, Inc. *		4,500		67,815
Leggett & Platt, Inc.		19,200		417,984
Lennar Corp., Class A		15,190		421,371
Liz Claiborne, Inc. *		11,600		155,440
M.D.C. Holdings, Inc.		4,403		123,768
M/I Homes, Inc. *		1,800		23,940
Maidenform Brands, Inc. *		5,000		114,150
Marine Products Corp.		405		2,418
Mattel, Inc.		44,800		1,505,280
Meritage Homes Corp. *		1,000		28,390
Mohawk Industries, Inc. *		6,819		457,009
Movado Group, Inc.		6,300		178,605
Nautilus, Inc. *		4,125		10,684
Newell Rubbermaid, Inc.		35,900		653,380
NIKE, Inc., Class B		48,500		5,425,695
NVR, Inc. *		600		470,364
Oxford Industries, Inc.		2,500		119,975
Perry Ellis International, Inc. *		5,500		102,905
Polaris Industries, Inc.		8,200		651,408
PulteGroup, Inc. *		42,876		421,900
PVH Corp.		8,600		763,680
Quiksilver, Inc. *		17,000		58,820
Ralph Lauren Corp.		8,000		1,378,160
Skechers U.S.A., Inc., Class A *		6,500		121,355
Skyline Corp.		2,600		14,274
Standard Pacific Corp. *		9,300		47,058
Stanley Furniture Co., Inc. *		6,875		30,938
Steven Madden Ltd. *		6,075		262,501
Sturm, Ruger & Co., Inc.		6,000		342,420
Superior Uniform Group, Inc.		1,600		18,800
Tandy Brands Accessories, Inc. *		1,000		1,690
Tempur-Pedic International, Inc. *		8,000		470,720
The Jones Group, Inc.		12,156		136,390
The Ryland Group, Inc.		6,700		150,817
The Warnaco Group, Inc. *		5,500		291,280
Toll Brothers, Inc. *		19,200		487,680
True Religion Apparel, Inc. *		3,000		81,480
Tupperware Brands Corp.		7,800		485,862
Under Armour, Inc., Class A *		2,000		195,860
Universal Electronics, Inc. *		5,200		87,984

See financial notes 41

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Vera Bradley, Inc. (d)*		3,000		77,940
VF Corp.		12,500		1,900,625
Whirlpool Corp.		9,849		630,533
Wolverine World Wide, Inc.		7,800		327,210
				29,153,213
Consumer Services 2.4%
Ambassadors Group, Inc.		3,400		18,326
American Public Education, Inc. *		2,500		86,800
Ameristar Casinos, Inc.		6,400		115,072
Apollo Group, Inc., Class A *		14,550		512,451
Ascent Capital Group, Inc., Class A *		3,116		160,474
Bally Technologies, Inc. *		5,000		242,750
Biglari Holdings, Inc. *		179		72,733
BJ’s Restaurants, Inc. *		3,000		129,570
Bob Evans Farms, Inc.		4,200		160,608
Boyd Gaming Corp. *		7,800		59,982
Brinker International, Inc.		12,350		388,654
Buffalo Wild Wings, Inc. *		3,000		251,550
Career Education Corp. *		8,614		61,418
Carnival Corp.		50,000		1,624,500
CEC Entertainment, Inc.		2,025		77,396
Chipotle Mexican Grill, Inc. *		3,800		1,573,770
Choice Hotels International, Inc.		6,800		255,816
Churchill Downs, Inc.		2,900		172,144
Coinstar, Inc. *		5,000		313,950
Corinthian Colleges, Inc. *		9,200		35,328
Cracker Barrel Old Country Store, Inc.		3,446		198,214
Darden Restaurants, Inc.		16,300		816,304
DeVry, Inc.		7,800		250,770
DineEquity, Inc. *		3,000		145,740
Domino’s Pizza, Inc.		8,100		306,261
Dover Downs Gaming & Entertainment, Inc.		5,899		15,927
Dover Motorsports, Inc. *		1,400		2,030
Education Management Corp. *		3,700		45,880
Gaylord Entertainment Co. *		4,625		145,595
H&R Block, Inc.		36,200		532,140
Hillenbrand, Inc.		8,800		184,272
Hyatt Hotels Corp., Class A *		5,000		215,150
International Game Technology		38,100		593,598
International Speedway Corp., Class A		3,245		86,609
Interval Leisure Group, Inc.		6,269		108,328
Isle of Capri Casinos, Inc. *		7,400		46,250
ITT Educational Services, Inc. (d)*		6,000		396,120
Jack in the Box, Inc. *		8,400		190,848
Krispy Kreme Doughnuts, Inc. *		2,100		15,393
Lakes Entertainment, Inc. *		6,800		15,980
Las Vegas Sands Corp.		53,500		2,968,715
Learning Tree International, Inc. *		1,400		7,994
LIFE TIME FITNESS, Inc. *		5,500		256,080
Luby’s, Inc. *		2,400		14,688
Marriott International, Inc., Class A		40,808		1,595,185
Marriott Vacations Worldwide Corp. *		4,080		120,482
Matthews International Corp., Class A		2,900		87,000
McDonald’s Corp.		132,709		12,932,492
MGM Resorts International *		37,500		503,250
Monarch Casino & Resort, Inc. *		8,000		77,440
MTR Gaming Group, Inc. *		5,800		29,522
Multimedia Games Holding Co., Inc. *		5,500		62,480
Orient-Express Hotels Ltd., Class A *		8,600		91,934
P.F. Chang’s China Bistro, Inc.		3,800		150,822
Panera Bread Co., Class A *		3,800		600,096
Papa John’s International, Inc. *		3,400		136,952
Peet’s Coffee & Tea, Inc. *		1,800		138,276
Penn National Gaming, Inc. *		9,800		440,804
Pinnacle Entertainment, Inc. *		6,800		75,480
Regis Corp.		6,900		126,615
Royal Caribbean Cruises Ltd.		19,500		533,715
Ruby Tuesday, Inc. *		5,600		38,080
School Specialty, Inc. *		2,600		8,502
Scientific Games Corp., Class A *		9,500		96,520
Service Corp. International		30,100		348,558
Shuffle Master, Inc. *		2,812		49,688
Six Flags Entertainment Corp.		6,000		287,460
Sonic Corp. *		7,968		57,529
Sotheby’s		8,438		331,782
Speedway Motorsports, Inc.		4,800		81,888
Starbucks Corp.		95,900		5,502,742
Starwood Hotels & Resorts Worldwide, Inc.		24,230		1,434,416
Steiner Leisure Ltd. *		3,000		140,880
Stewart Enterprises, Inc., Class A		10,000		63,200
Strayer Education, Inc. (d)		1,000		98,680
Texas Roadhouse, Inc.		5,900		101,775
The Cheesecake Factory, Inc. *		5,887		185,441
The Wendy’s Co.		50,775		247,274
Vail Resorts, Inc.		3,800		154,964
Weight Watchers International, Inc. (d)		6,700		508,932
WMS Industries, Inc. *		8,250		202,208
Wyndham Worldwide Corp.		21,744		1,094,593
Wynn Resorts Ltd.		11,000		1,467,400
Yum! Brands, Inc.		60,500		4,400,165
				48,477,400
Diversified Financials 5.1%
Affiliated Managers Group, Inc. *		6,800		772,616
American Express Co.		132,650		7,986,856
Ameriprise Financial, Inc.		30,530		1,655,031
Bank of America Corp.		1,301,956		10,558,863
BGC Partners, Inc., Class A		28,300		197,251
BlackRock, Inc.		13,100		2,509,698
Calamos Asset Management, Inc., Class A		5,000		64,600
Capital One Financial Corp.		61,710		3,423,671
Cash America International, Inc.		6,500		303,875
CBOE Holdings, Inc.		3,000		79,320
Citigroup, Inc.		374,528		12,374,405
CME Group, Inc.		8,330		2,214,281
Cohen & Steers, Inc.		5,400		190,296
CompuCredit Holdings Corp. *		7,277		40,096
Cowen Group, Inc., Class A *		11,889		29,960
Credit Acceptance Corp. *		2,400		225,672
DFC Global Corp. *		9,750		170,430

42 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Discover Financial Services		69,150		2,344,185
E*TRADE Financial Corp. *		32,433		344,763
Eaton Vance Corp.		14,600		383,980
Evercore Partners, Inc., Class A		6,500		171,795
Ezcorp, Inc., Class A *		8,500		227,715
FBR & Co. *		4,000		10,600
Federated Investors, Inc., Class B (d)		9,950		219,696
Financial Engines, Inc. *		3,500		79,940
First Cash Financial Services, Inc. *		3,000		122,880
Franklin Resources, Inc.		18,900		2,372,139
GAMCO Investors, Inc., Class A		3,200		144,192
GFI Group, Inc.		9,900		32,670
Greenhill & Co., Inc.		2,500		97,125
ICG Group, Inc. *		350		3,318
Interactive Brokers Group, Inc., Class A		3,400		51,578
IntercontinentalExchange, Inc. *		9,400		1,250,576
INTL FCStone, Inc. *		737		15,846
Invesco Ltd.		48,000		1,192,320
Investment Technology Group, Inc. *		4,750		48,450
Janus Capital Group, Inc.		19,200		145,536
Jefferies Group, Inc.		18,200		289,926
JPMorgan Chase & Co.		489,944		21,057,793
Knight Capital Group, Inc., Class A *		9,700		127,458
Legg Mason, Inc.		19,050		496,633
Leucadia National Corp.		24,908		619,213
LPL Investment Holdings, Inc. *		3,000		107,670
MarketAxess Holdings, Inc.		4,000		137,240
MicroFinancial, Inc.		1,900		12,920
Moody’s Corp.		26,600		1,089,270
Morgan Stanley		181,200		3,131,136
MSCI, Inc., Class A *		16,000		585,440
Nelnet, Inc., Class A		5,363		138,473
NewStar Financial, Inc. *		4,000		47,480
Northern Trust Corp.		28,500		1,356,315
NYSE Euronext		34,600		890,950
Penson Worldwide, Inc. (d)*		8,000		3,896
PHH Corp. *		7,186		111,383
Piper Jaffray Cos., Inc. *		3,950		95,788
Raymond James Financial, Inc.		14,350		525,497
Resource America, Inc., Class A		4,000		27,960
SEI Investments Co.		19,400		391,686
SLM Corp.		64,300		953,569
State Street Corp.		63,983		2,957,294
Stifel Financial Corp. *		4,500		163,890
SWS Group, Inc.		8,211		46,310
T. Rowe Price Group, Inc.		32,400		2,044,926
TD Ameritrade Holding Corp.		38,800		729,052
The Bank of New York Mellon Corp.		156,734		3,706,759
The Charles Schwab Corp. (b)		131,526		1,880,822
The First Marblehead Corp. *		7,500		7,950
The Goldman Sachs Group, Inc.		54,400		6,264,160
The NASDAQ OMX Group, Inc. *		17,100		420,147
Virtus Investment Partners, Inc. *		475		40,090
Waddell & Reed Financial, Inc., Class A		10,250		327,795
Walter Investment Management Corp.		5,325		107,725
Westwood Holdings Group, Inc.		4,285		157,602
World Acceptance Corp. *		5,000		332,550
				103,440,993
Energy 10.4%
Abraxas Petroleum Corp. (d)*		8,500		25,330
Adams Resources & Energy, Inc.		1,400		85,022
Alon USA Energy, Inc.		8,700		78,648
Alpha Natural Resources, Inc. *		29,330		473,093
Anadarko Petroleum Corp.		65,160		4,770,364
Apache Corp.		49,072		4,707,968
Apco Oil & Gas International, Inc. (d)		1,800		75,510
Approach Resources, Inc. *		4,000		143,520
Arch Coal, Inc.		26,500		258,640
ATP Oil & Gas Corp. (d)*		6,600		49,896
Atwood Oceanics, Inc. *		10,800		478,764
Baker Hughes, Inc.		58,750		2,591,463
Basic Energy Services, Inc. *		6,000		86,400
Berry Petroleum Co., Class A		10,000		455,500
Bill Barrett Corp. *		6,700		160,666
Bristow Group, Inc.		6,800		332,180
C&J Energy Services, Inc. (d)*		5,500		103,675
Cabot Oil & Gas Corp.		26,400		927,696
Cal Dive International, Inc. *		9,000		34,830
Callon Petroleum Co. *		12,000		69,720
Cameron International Corp. *		32,047		1,642,409
CARBO Ceramics, Inc. (d)		2,700		227,043
Carrizo Oil & Gas, Inc. *		3,000		84,120
Chesapeake Energy Corp.		85,500		1,576,620
Chevron Corp.		258,539		27,549,916
Cimarex Energy Co.		11,008		760,763
Clayton Williams Energy, Inc. *		2,500		183,850
Clean Energy Fuels Corp. (d)*		4,000		76,960
Cloud Peak Energy, Inc. *		6,500		100,035
Cobalt International Energy, Inc. *		9,500		254,220
Comstock Resources, Inc. *		4,500		79,065
Concho Resources, Inc. *		13,100		1,404,058
ConocoPhillips		160,723		11,512,588
CONSOL Energy, Inc.		29,100		967,284
Contango Oil & Gas Co. *		2,000		108,520
Continental Resources, Inc. *		10,000		892,500
CREDO Petroleum Corp. *		6,700		68,407
Crosstex Energy, Inc.		6,200		92,380
CVR Energy, Inc. *		9,900		300,564
Delek US Holdings, Inc.		7,000		114,100
Denbury Resources, Inc. *		48,725		927,724
Devon Energy Corp.		49,560		3,461,766
Diamond Offshore Drilling, Inc.		8,200		562,110
Dresser-Rand Group, Inc. *		9,000		438,120
Dril-Quip, Inc. *		6,100		411,079
El Paso Corp.		100,587		2,984,416
Energen Corp.		8,200		429,516
ENGlobal Corp. *		4,000		8,000
EOG Resources, Inc.		34,400		3,777,464
EQT Corp.		19,300		961,526
EXCO Resources, Inc. (d)		22,000		161,480
Exterran Holdings, Inc. *		10,720		144,827
Exxon Mobil Corp.		619,034		53,447,396

See financial notes 43

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
FMC Technologies, Inc. *		32,364		1,521,108
Forest Oil Corp. *		12,450		165,834
Geomet, Inc. *		4,000		2,080
Goodrich Petroleum Corp. *		3,500		58,695
Gulf Island Fabrication, Inc.		2,800		78,456
GulfMark Offshore, Inc., Class A *		4,100		197,497
Gulfport Energy Corp. *		5,000		131,050
Halliburton Co.		118,200		4,044,804
Harvest Natural Resources, Inc. *		6,000		41,280
Helix Energy Solutions Group, Inc. *		11,564		236,021
Helmerich & Payne, Inc.		12,600		647,514
Hercules Offshore, Inc. *		12,900		65,532
Hess Corp.		41,700		2,174,238
HollyFrontier Corp.		29,854		920,100
Hornbeck Offshore Services, Inc. *		5,000		208,150
Houston American Energy Corp. (d)*		4,000		9,240
ION Geophysical Corp. *		13,900		86,597
James River Coal Co. (d)*		5,500		27,280
Key Energy Services, Inc. *		22,300		282,318
Kinder Morgan, Inc. (d)		19,000		682,100
Kodiak Oil & Gas Corp. *		31,500		278,775
Lufkin Industries, Inc.		7,000		537,880
Magnum Hunter Resources Corp. (d)*		15,839		98,360
Marathon Oil Corp.		91,808		2,693,647
Marathon Petroleum Corp.		46,404		1,930,870
Matrix Service Co. *		8,000		109,200
McDermott International, Inc. *		28,000		316,400
McMoRan Exploration Co. (d)*		22,500		198,000
Murphy Oil Corp.		24,500		1,346,765
Nabors Industries Ltd. *		37,634		626,606
National Oilwell Varco, Inc.		55,122		4,176,043
Natural Gas Services Group *		7,500		97,800
Newfield Exploration Co. *		17,100		613,890
Newpark Resources, Inc. *		11,500		73,140
Noble Corp. *		32,500		1,236,950
Noble Energy, Inc.		22,218		2,206,692
Occidental Petroleum Corp.		104,820		9,561,680
Oceaneering International, Inc.		13,400		691,842
Oil States International, Inc. *		6,600		525,228
Overseas Shipholding Group, Inc. (d)		3,700		43,290
OYO Geospace Corp. *		500		57,610
Panhandle Oil & Gas, Inc., Class A		2,000		55,100
Parker Drilling Co. *		18,300		94,611
Patriot Coal Corp. *		9,700		56,551
Patterson-UTI Energy, Inc.		18,200		294,294
Peabody Energy Corp.		34,700		1,079,517
Penn Virginia Corp.		5,000		25,600
Petroleum Development Corp. *		4,000		137,560
PetroQuest Energy, Inc. *		7,200		43,488
PHI, Inc. - Non Voting Shares *		4,000		106,520
Pioneer Drilling Co. *		9,200		72,496
Pioneer Natural Resources Co.		16,133		1,868,524
Plains Exploration & Production Co. *		18,765		766,550
QEP Resources, Inc.		22,200		683,982
Quicksilver Resources, Inc. (d)*		14,900		70,030
Range Resources Corp.		20,600		1,373,196
Resolute Energy Corp. *		5,000		53,050
REX American Resources Corp. *		4,875		135,233
Rex Energy Corp. *		8,000		84,080
Rosetta Resources, Inc. *		6,600		331,782
Rowan Cos., Inc. *		8,700		300,411
RPC, Inc. (d)		25,818		266,958
SandRidge Energy, Inc. *		49,331		394,155
Schlumberger Ltd.		173,260		12,845,496
SEACOR Holdings, Inc. *		4,250		394,952
SemGroup Corp., Class A *		6,000		190,800
Ship Finance International Ltd. (d)		6,100		84,485
SM Energy Co.		7,400		489,214
Southwestern Energy Co. *		45,000		1,421,100
Spectra Energy Corp.		83,678		2,572,262
Stone Energy Corp. *		7,383		207,093
Sunoco, Inc.		17,000		837,930
Superior Energy Services, Inc. *		20,499		551,833
Swift Energy Co. *		5,500		166,375
Targa Resources Corp.		4,000		192,360
Teekay Corp.		6,000		216,600
Tesoro Corp. *		17,600		409,200
TETRA Technologies, Inc. *		8,300		72,293
The Williams Cos., Inc.		76,360		2,598,531
Tidewater, Inc.		7,700		423,731
Ultra Petroleum Corp. *		13,000		256,880
Union Drilling, Inc. *		2,500		13,925
Unit Corp. *		7,400		312,650
USEC, Inc. (d)*		14,300		12,035
VAALCO Energy, Inc. *		9,000		81,630
Valero Energy Corp.		70,980		1,753,206
Verenium Corp. (d)*		91		393
W&T Offshore, Inc.		7,500		148,275
Warren Resources, Inc. *		12,000		37,080
Weatherford International Ltd. *		94,500		1,348,515
Western Refining, Inc.		5,600		106,680
Westmoreland Coal Co. *		6,500		65,585
Whiting Petroleum Corp. *		15,600		892,320
World Fuel Services Corp.		8,200		361,292
WPX Energy, Inc. *		24,453		429,639
				208,408,321
Food & Staples Retailing 1.9%
Arden Group, Inc., Class A		600		53,070
Casey’s General Stores, Inc.		5,100		287,385
Costco Wholesale Corp.		56,600		4,990,422
CVS Caremark Corp.		171,140		7,636,267
Harris Teeter Supermarkets, Inc.		6,100		231,617
Ingles Markets, Inc., Class A		300		5,217
Nash Finch Co.		1,700		42,670
PriceSmart, Inc.		3,500		288,890
Rite Aid Corp. *		75,000		108,750
Safeway, Inc.		44,900		912,817
Spartan Stores, Inc.		500		9,115
SUPERVALU, Inc. (d)		24,332		144,532
Sysco Corp.		74,136		2,142,530
The Andersons, Inc.		1,000		50,400
The Fresh Market, Inc. *		4,000		204,680
The Kroger Co.		71,800		1,670,786
The Pantry, Inc. *		1,000		12,760
United Natural Foods, Inc. *		5,600		276,024
Wal-Mart Stores, Inc.		225,100		13,260,641
Walgreen Co.		115,400		4,045,924

44 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number			Value
Security	of Shares			($)
Weis Markets, Inc.		1,700			75,820
Whole Foods Market, Inc.		19,400			1,611,558
					38,061,875
Food, Beverage & Tobacco 5.5%
Alico, Inc.		500			11,370
Alliance One International, Inc. *		16,800			59,472
Altria Group, Inc.		264,800			8,529,208
Archer-Daniels-Midland Co.		71,458			2,203,050
B&G Foods, Inc.		6,000			133,440
Beam, Inc.		19,000			1,078,820
Bridgford Foods Corp. *		300			2,738
Brown-Forman Corp., Class B		12,390			1,069,876
Bunge Ltd.		18,000			1,161,000
Campbell Soup Co.		26,400			893,112
Chiquita Brands International, Inc. *		6,200			52,700
Coca-Cola Bottling Co. Consolidated		3,400			218,110
Coca-Cola Enterprises, Inc.		41,000			1,234,920
ConAgra Foods, Inc.		54,293			1,401,845
Constellation Brands, Inc., Class A *		24,100			520,560
Corn Products International, Inc.		11,800			673,308
Darling International, Inc. *		15,500			253,890
Dean Foods Co. *		27,113			332,948
Diamond Foods, Inc. (d)		3,000			62,700
Dole Food Co., Inc. *		6,000			50,880
Dr Pepper Snapple Group, Inc.		31,500			1,278,270
Flowers Foods, Inc.		17,737			380,459
Fresh Del Monte Produce, Inc.		4,200			97,314
General Mills, Inc.		75,100			2,920,639
Green Mountain Coffee Roasters, Inc. *		15,150			738,562
Griffin Land & Nurseries, Inc.		300	��		7,224
H.J. Heinz Co.		39,900			2,127,069
Hormel Foods Corp.		23,000			668,380
J&J Snack Foods Corp.		5,693			319,150
John B. Sanfilippo & Son, Inc. *		5,000			72,300
Kellogg Co.		29,400			1,486,758
Kraft Foods, Inc., Class A		228,013			9,090,878
Lancaster Colony Corp.		3,400			221,714
Lorillard, Inc.		18,048			2,441,714
McCormick & Co., Inc. - Non Voting Shares		20,300			1,134,973
Mead Johnson Nutrition Co.		24,500			2,096,220
Molson Coors Brewing Co., Class B		23,000			956,340
Monster Beverage Corp. *		20,000			1,299,200
National Beverage Corp. *		4,500			66,870
PepsiCo, Inc.		200,858			13,256,628
Philip Morris International, Inc.		223,300			19,987,583
Pilgrim’s Pride Corp. *		10,866			77,583
Post Holdings, Inc. *		3,350			99,662
Primo Water Corp. (d)*		1,000			1,500
Ralcorp Holdings, Inc. *		6,700			487,827
Reynolds American, Inc.		42,328			1,728,252
Rocky Mountain Chocolate Factory, Inc.		3,427			32,454
Sanderson Farms, Inc.		1,750			90,318
Sara Lee Corp.		72,378			1,595,211
Smithfield Foods, Inc. *		19,800			415,008
Snyders-Lance, Inc.		2,900			75,052
The Boston Beer Co., Inc., Class A (d)*		2,500			258,300
The Coca-Cola Co.		268,700			20,507,184
The Hain Celestial Group, Inc. *		4,406			208,404
The Hershey Co.		19,400			1,299,994
The JM Smucker Co.		15,246			1,214,039
Tootsie Roll Industries, Inc.		2,852			67,906
TreeHouse Foods, Inc. *		3,722			214,052
Tyson Foods, Inc., Class A		36,340			663,205
Universal Corp.		4,800			219,984
Vector Group Ltd.		4,762			82,621
					109,930,748
Health Care Equipment & Services 4.2%
ABIOMED, Inc. *		3,800			92,454
Accretive Health, Inc. (d)*		6,700			67,402
Aetna, Inc.		49,200			2,166,768
Air Methods Corp. *		1,500			126,165
Alere, Inc. *		12,441			297,215
Align Technology, Inc. *		8,700			275,877
Alliance HealthCare Services, Inc. *		1,800			2,466
Allscripts Healthcare Solutions, Inc. *		23,460			259,937
Amedisys, Inc. *		3,334			49,110
AMERIGROUP Corp. *		7,300			450,848
AmerisourceBergen Corp.		33,796			1,257,549
AMN Healthcare Services, Inc. *		7,110			47,708
AmSurg Corp. *		4,300			123,668
Analogic Corp.		1,400			95,494
ArthroCare Corp. *		3,000			74,880
Assisted Living Concepts, Inc., Class A		4,000			71,640
athenahealth, Inc. *		4,000			289,800
Baxter International, Inc.		74,418			4,123,501
Becton, Dickinson & Co.		26,300			2,063,235
BioScrip, Inc. *		2,172			16,095
Boston Scientific Corp. *		190,568			1,192,956
Brookdale Senior Living, Inc. *		11,300			214,813
C.R. Bard, Inc.		11,300			1,118,248
Cantel Medical Corp.		5,356			125,759
Cardinal Health, Inc.		45,260			1,913,140
CareFusion Corp. *		30,080			779,373
Catalyst Health Solutions, Inc. *		5,900			509,583
Centene Corp. *		7,000			277,130
Cerner Corp. *		19,800			1,605,582
Chemed Corp.		3,900			235,326
Chindex International, Inc. *		3,300			32,241
Cigna Corp.		37,400			1,729,002
Community Health Systems, Inc. *		12,100			294,514
CONMED Corp.		4,200			120,078
CorVel Corp. *		2,850			123,947
Coventry Health Care, Inc.		23,937			717,871
Covidien plc		63,500			3,507,105
Cross Country Healthcare, Inc. *		7,100			32,731
CryoLife, Inc. *		4,250			22,483
Cyberonics, Inc. *		4,200			160,860
DaVita, Inc. *		14,250			1,262,265
DENTSPLY International, Inc.		18,100			743,186

See financial notes 45

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
DexCom, Inc. *		8,600		84,194
Edwards Lifesciences Corp. *		13,800		1,144,986
Emeritus Corp. *		3,400		58,480
Ensign Group, Inc.		3,000		80,130
Express Scripts Holding Co. *		103,763		5,788,938
Five Star Quality Care, Inc. *		3,635		12,468
Gen-Probe, Inc. *		6,400		521,920
Gentiva Health Services, Inc. *		3,250		26,910
Greatbatch, Inc. *		4,100		95,489
Haemonetics Corp. *		3,700		264,809
Hanger Orthopedic Group, Inc. *		5,400		127,170
HCA Holdings, Inc.		26,500		713,380
Health Management Associates, Inc., Class A *		32,700		235,440
Health Net, Inc. *		11,100		395,271
HealthSouth Corp. *		20,000		447,800
HealthStream, Inc. *		1,500		34,380
Healthways, Inc. *		3,100		20,677
Henry Schein, Inc. *		12,600		966,924
Hill-Rom Holdings, Inc.		7,800		253,110
HMS Holdings Corp. *		10,000		240,600
Hologic, Inc. *		32,512		621,629
Humana, Inc.		20,900		1,686,212
ICU Medical, Inc. *		3,550		186,339
IDEXX Laboratories, Inc. *		8,000		703,440
Insulet Corp. *		4,500		80,370
Integra LifeSciences Holdings *		3,100		115,413
Intuitive Surgical, Inc. *		5,050		2,919,910
Invacare Corp.		4,000		63,400
IPC The Hospitalist Co. *		2,000		76,820
Kindred Healthcare, Inc. *		6,508		62,737
Laboratory Corp. of America Holdings *		12,800		1,124,992
Landauer, Inc.		1,100		57,992
LCA-Vision, Inc. *		2,500		18,500
LeMaitre Vascular, Inc.		2,000		10,800
LifePoint Hospitals, Inc. *		6,707		261,707
Lincare Holdings, Inc.		12,650		308,660
Magellan Health Services, Inc. *		3,007		133,150
MAKO Surgical Corp. (d)*		5,000		206,550
Masimo Corp. *		8,500		188,105
McKesson Corp.		32,500		2,970,825
MedAssets, Inc. *		6,000		75,660
MedCath Corp.		4,500		35,505
Medical Action Industries, Inc. *		6,250		34,500
MEDNAX, Inc. *		6,000		421,440
Medtronic, Inc.		136,874		5,228,587
Meridian Bioscience, Inc.		11,250		231,187
Merit Medical Systems, Inc. *		2,777		36,712
Molina Healthcare, Inc. *		3,750		96,188
MWI Veterinary Supply, Inc. *		3,000		283,200
National Healthcare Corp.		2,100		95,760
Neogen Corp. *		7,405		288,721
NuVasive, Inc. *		10,000		165,700
NxStage Medical, Inc. *		6,000		102,000
Omnicare, Inc.		15,000		522,600
Omnicell, Inc. *		3,000		42,810
OraSure Technologies, Inc. *		1,500		17,205
Orthofix International N.V. *		1,000		41,220
Owens & Minor, Inc.		7,500		219,300
Patterson Cos., Inc.		13,100		446,579
PDI, Inc. *		2,900		23,519
PharMerica Corp. *		3,413		40,512
Providence Service Corp. *		3,000		42,180
PSS World Medical, Inc. *		5,800		138,794
Quality Systems, Inc.		4,000		149,600
Quest Diagnostics, Inc.		19,820		1,143,416
ResMed, Inc. *		18,000		612,180
RTI Biologics, Inc. *		1,700		5,950
Sirona Dental Systems, Inc. *		7,000		353,570
St. Jude Medical, Inc.		42,300		1,637,856
STERIS Corp.		6,100		191,601
Stryker Corp.		37,100		2,024,547
Sunrise Senior Living, Inc. *		6,400		40,192
Symmetry Medical, Inc. *		3,000		21,330
Teleflex, Inc.		4,300		269,481
Tenet Healthcare Corp. *		55,650		288,823
The Cooper Cos., Inc.		5,781		509,711
Thoratec Corp. *		8,636		300,619
U.S. Physical Therapy, Inc.		3,500		85,330
UnitedHealth Group, Inc.		139,080		7,809,342
Universal American Corp.		4,000		36,720
Universal Health Services, Inc., Class B		12,000		512,520
Utah Medical Products, Inc.		2,500		79,175
Varian Medical Systems, Inc. *		14,900		944,958
VCA Antech, Inc. *		9,900		234,234
Volcano Corp. *		7,500		203,625
WellCare Health Plans, Inc. *		6,200		379,316
WellPoint, Inc.		47,023		3,189,100
West Pharmaceutical Services, Inc.		4,600		206,540
Wright Medical Group, Inc. *		4,200		78,246
Young Innovations, Inc.		2,000		68,000
Zimmer Holdings, Inc.		23,300		1,466,269
				83,452,762
Household & Personal Products 2.0%
Avon Products, Inc.		53,500		1,155,600
Central Garden & Pet Co., Class A *		6,200		66,278
Church & Dwight Co., Inc.		15,900		807,720
Colgate-Palmolive Co.		58,800		5,817,672
Elizabeth Arden, Inc. *		3,500		136,430
Energizer Holdings, Inc. *		9,333		665,723
Harbinger Group, Inc. *		8,000		41,280
Herbalife Ltd.		15,600		1,096,992
Inter Parfums, Inc.		4,013		63,205
Kimberly-Clark Corp.		49,139		3,855,937
Medifast, Inc. *		3,500		67,270
Nu Skin Enterprises, Inc., Class A		6,500		346,450
Nutraceutical International Corp. *		5,000		76,650
Oil-Dri Corp. of America		500		10,580
Orchids Paper Products Co.		2,500		45,000
Prestige Brands Holdings, Inc. *		6,500		110,435
Revlon, Inc., Class A *		3,500		59,780
Schiff Nutrition International, Inc. *		3,500		57,575
Spectrum Brands Holdings, Inc. *		2,000		69,020
The Clorox Co.		17,700		1,240,770
The Estee Lauder Cos., Inc., Class A		32,000		2,091,200
The Female Health Co.		3,500		21,035
The Procter & Gamble Co.		352,215		22,414,963
USANA Health Sciences, Inc. (d)*		3,500		145,950

46 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
WD-40 Co.		1,600		72,128
				40,535,643
Insurance 3.7%
21st Century Holding Co. *		1,500		6,615
ACE Ltd.		44,000		3,342,680
Aflac, Inc.		60,600		2,729,424
Alleghany Corp. *		2,040		699,516
Allied World Assurance Co. Holdings AG		4,900		352,604
American Equity Investment Life Holding Co.		6,400		78,464
American Financial Group, Inc.		10,750		418,390
American International Group, Inc. *		25,596		871,032
American National Insurance Co.		1,300		91,260
American Safety Insurance Holdings Ltd. *		3,000		56,790
AmTrust Financial Services, Inc.		7,500		204,300
Aon plc		35,996		1,864,593
Arch Capital Group Ltd. *		20,700		813,096
Argo Group International Holdings Ltd.		4,556		131,486
Arthur J. Gallagher & Co.		15,800		593,448
Aspen Insurance Holdings Ltd.		9,000		254,880
Assurant, Inc.		13,500		544,590
Assured Guaranty Ltd.		20,500		290,690
Axis Capital Holdings Ltd.		16,700		568,134
Baldwin & Lyons, Inc., Class B		750		16,328
Berkshire Hathaway, Inc., Class B *		246,274		19,812,743
Brown & Brown, Inc.		14,000		377,580
Cincinnati Financial Corp.		19,450		692,809
Citizens, Inc. *		5,000		48,050
CNA Financial Corp.		16,900		517,478
CNO Financial Group, Inc. *		25,000		181,750
Crawford & Co., Class B		1,600		7,632
Delphi Financial Group, Inc., Class A		6,772		307,584
Eastern Insurance Holdings, Inc.		2,500		38,250
EMC Insurance Group, Inc.		1,200		23,724
Employers Holdings, Inc.		4,200		72,744
Endurance Specialty Holdings Ltd.		5,000		200,900
Erie Indemnity Co., Class A		5,500		422,950
Everest Re Group Ltd.		5,900		584,690
FBL Financial Group, Inc., Class A		2,090		60,861
Fidelity National Financial, Inc., Class A		27,727		534,299
First American Financial Corp.		16,800		281,400
Flagstone Reinsurance Holdings S.A.		7,500		56,250
Genworth Financial, Inc., Class A *		62,500		375,625
Greenlight Capital Re Ltd., Class A *		3,000		74,700
Harleysville Group, Inc.		1,800		107,892
Hartford Financial Services Group, Inc.		53,400		1,097,370
HCC Insurance Holdings, Inc.		13,950		445,842
Hilltop Holdings, Inc. *		3,726		29,547
Horace Mann Educators Corp.		4,300		75,465
Independence Holding Co.		2,970		31,571
Infinity Property & Casualty Corp.		2,500		133,525
Kemper Corp.		5,600		167,944
Lincoln National Corp.		38,426		951,812
Loews Corp.		44,645		1,836,249
Markel Corp. *		1,200		528,336
Marsh & McLennan Cos., Inc.		69,500		2,324,775
MBIA, Inc. (d)*		25,250		254,520
Mercury General Corp.		5,400		244,026
MetLife, Inc.		106,500		3,837,195
Montpelier Re Holdings Ltd.		8,100		166,212
National Financial Partners Corp. *		2,500		36,875
National Western Life Insurance Co., Class A		300		40,818
Old Republic International Corp.		30,322		301,704
OneBeacon Insurance Group Ltd., Class A		8,200		116,686
PartnerRe Ltd.		8,900		619,618
Platinum Underwriters Holdings Ltd.		4,500		164,790
Presidential Life Corp.		1,000		11,580
Primerica, Inc.		7,500		196,725
Principal Financial Group, Inc.		36,900		1,021,023
ProAssurance Corp.		3,670		323,290
Protective Life Corp.		10,500		307,230
Prudential Financial, Inc.		63,000		3,814,020
Reinsurance Group of America, Inc.		10,100		587,214
RenaissanceRe Holdings Ltd.		5,800		452,748
RLI Corp.		2,800		192,864
Safety Insurance Group, Inc.		1,000		39,850
Selective Insurance Group, Inc.		5,400		94,446
StanCorp Financial Group, Inc.		5,000		191,900
State Auto Financial Corp.		3,800		54,454
Stewart Information Services Corp.		1,400		20,608
Symetra Financial Corp.		11,500		139,840
The Allstate Corp.		60,874		2,028,931
The Chubb Corp.		37,094		2,710,459
The Hanover Insurance Group, Inc.		4,900		197,764
The Navigators Group, Inc. *		1,500		71,250
The Phoenix Cos., Inc. *		9,500		19,950
The Progressive Corp.		78,700		1,676,310
The Travelers Cos., Inc.		55,050		3,540,816
Torchmark Corp.		15,900		774,489
Tower Group, Inc.		4,000		86,320
United Fire Group, Inc.		5,000		86,100
Unum Group		38,914		923,818
Validus Holdings Ltd.		10,920		354,900
W. R. Berkley Corp.		22,950		864,297
White Mountains Insurance Group Ltd.		600		313,800
XL Group plc		40,200		864,702
				74,074,809
Materials 3.9%
A. M. Castle & Co. *		4,000		53,560
A. Schulman, Inc.		5,300		130,433
AbitibiBowater, Inc. *		8,500		112,625
AEP Industries, Inc. *		1,900		66,253
Air Products & Chemicals, Inc.		25,700		2,197,093
Airgas, Inc.		7,500		687,300
AK Steel Holding Corp.		11,527		85,530

See financial notes 47

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Albemarle Corp.		11,000		718,300
Alcoa, Inc.		131,664		1,281,091
Allegheny Technologies, Inc.		11,292		484,879
Allied Nevada Gold Corp. *		7,000		205,030
AMCOL International Corp.		3,000		98,880
AptarGroup, Inc.		6,900		376,119
Ashland, Inc.		11,523		759,020
Balchem Corp.		3,000		86,700
Ball Corp.		21,400		893,664
Bemis Co., Inc.		13,400		434,026
Boise, Inc.		13,500		103,140
Buckeye Technologies, Inc.		7,700		249,557
Cabot Corp.		13,200		569,316
Calgon Carbon Corp. *		7,000		96,880
Carpenter Technology Corp.		5,000		278,300
Celanese Corp., Series A		21,500		1,041,890
Century Aluminum Co. *		7,100		65,320
CF Industries Holdings, Inc.		8,900		1,718,234
Chase Corp.		200		2,970
Chemtura Corp. *		11,500		195,730
Clearwater Paper Corp. *		1,572		51,829
Cliffs Natural Resources, Inc.		16,300		1,014,838
Coeur d’Alene Mines Corp. *		11,500		247,825
Commercial Metals Co.		15,000		221,700
Compass Minerals International, Inc.		5,000		382,600
Crown Holdings, Inc. *		19,900		735,902
Cytec Industries, Inc.		6,600		419,562
Deltic Timber Corp.		3,700		225,996
Domtar Corp.		5,250		459,270
E.I. du Pont de Nemours & Co.		120,695		6,452,355
Eagle Materials, Inc.		4,143		145,916
Eastman Chemical Co.		16,200		874,314
Ecolab, Inc.		37,604		2,394,999
Ferro Corp. *		8,200		42,558
FMC Corp.		9,200		1,016,140
Freeport-McMoran Copper & Gold, Inc.		122,244		4,681,945
Globe Specialty Metals, Inc.		6,500		86,710
Graphic Packaging Holding Co. *		4,000		21,400
Greif, Inc., Class A		7,400		396,936
H.B. Fuller Co.		6,500		213,850
Hawkins, Inc.		1,900		65,987
Haynes International, Inc.		2,500		155,925
Headwaters, Inc. *		12,000		52,080
Hecla Mining Co.		28,500		121,980
Horsehead Holding Corp. *		4,000		44,920
Huntsman Corp.		24,500		346,920
Innophos Holdings, Inc.		6,500		319,605
International Flavors & Fragrances, Inc.		9,900		596,079
International Paper Co.		50,304		1,675,626
Intrepid Potash, Inc. *		6,500		161,525
Koppers Holdings, Inc.		2,500		97,200
Kraton Performance Polymers, Inc. *		3,500		91,000
Kronos Worldwide, Inc. (d)		12,120		287,729
Landec Corp. *		6,500		41,860
Louisiana-Pacific Corp. *		17,300		156,565
LSB Industries, Inc. *		3,000		101,760
LyondellBasell Industries N.V., Class A		43,500		1,817,430
Martin Marietta Materials, Inc.		4,200		348,096
Materion Corp. *		4,000		98,840
MeadWestvaco Corp.		22,974		731,033
Minerals Technologies, Inc.		3,100		208,010
Mod-Pac Corp. *		500		3,455
Molycorp, Inc. (d)*		3,500		94,710
Monsanto Co.		69,290		5,278,512
Myers Industries, Inc.		8,080		133,562
Neenah Paper, Inc.		4,231		120,837
NewMarket Corp.		2,000		446,440
Newmont Mining Corp.		59,251		2,823,310
Nucor Corp.		36,500		1,431,165
Olin Corp.		10,320		216,307
OM Group, Inc. *		4,400		106,128
Omnova Solutions, Inc. *		6,400		50,176
Owens-Illinois, Inc. *		20,200		469,650
P.H. Glatfelter Co.		7,000		109,060
Packaging Corp. of America		14,000		408,660
Penford Corp. *		6,200		51,460
PolyOne Corp.		15,200		210,672
PPG Industries, Inc.		20,400		2,146,896
Praxair, Inc.		38,900		4,500,730
Reliance Steel & Aluminum Co.		8,500		475,065
Rock-Tenn Co., Class A		7,713		480,751
Rockwood Holdings, Inc. *		5,900		326,506
Royal Gold, Inc.		5,200		322,192
RPM International, Inc.		15,600		414,492
RTI International Metals, Inc. *		4,500		110,475
Schnitzer Steel Industries, Inc., Class A		1,650		65,786
Schweitzer-Mauduit International, Inc.		3,300		223,806
Sealed Air Corp.		18,500		354,830
Sensient Technologies Corp.		4,800		178,320
Sigma-Aldrich Corp.		13,600		964,240
Silgan Holdings, Inc.		11,600		508,892
Solutia, Inc.		14,000		396,760
Sonoco Products Co.		13,500		447,255
Southern Copper Corp.		26,177		860,700
Spartech Corp. *		8,200		40,016
Steel Dynamics, Inc.		26,000		332,020
Stepan Co.		1,200		109,032
Stillwater Mining Co. *		14,733		158,085
SunCoke Energy, Inc. *		9,017		137,239
Texas Industries, Inc. (d)		4,000		134,440
The Dow Chemical Co.		150,766		5,107,952
The Mosaic Co.		36,500		1,927,930
The Scotts Miracle-Gro Co., Class A		5,600		293,440
The Sherwin-Williams Co.		13,000		1,563,640
The Valspar Corp.		10,400		531,960
Titanium Metals Corp.		16,307		240,854
Tredegar Corp.		5,100		88,485
United States Steel Corp. (d)		14,900		422,117
Valhi, Inc.		6,100		329,705
Vulcan Materials Co.		19,592		838,734
W.R. Grace & Co. *		7,000		417,270
Walter Energy, Inc.		7,600		503,956
Wausau Paper Corp.		8,700		78,822
Westlake Chemical Corp.		2,100		134,295
Worthington Industries, Inc.		7,200		128,448

48 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Zep, Inc.		6,600		94,050
				78,942,945
Media 3.1%
AH Belo Corp., Class A		7,880		34,751
AMC Networks, Inc., Class A *		7,400		314,500
Arbitron, Inc.		2,120		80,666
Belo Corp., Class A		9,400		63,356
Cablevision Systems Corp., Class A		29,600		438,672
Carmike Cinemas, Inc. *		2,500		33,325
CBS Corp., Class B - Non Voting Shares		80,106		2,671,535
Charter Communications, Inc., Class A *		4,500		272,115
Cinemark Holdings, Inc.		12,500		287,000
Clear Channel Outdoor Holdings, Inc., Class A *		20,700		156,699
Comcast Corp., Class A		277,004		8,401,531
Comcast Corp., Special Class A		64,200		1,915,086
Crown Media Holdings, Inc., Class A (d)*		6,000		9,060
Cumulus Media, Inc., Class A *		4,351		15,794
Digital Generation, Inc. *		3,000		27,840
DIRECTV, Class A *		96,126		4,736,128
Discovery Communications, Inc., Class A *		36,561		1,989,650
DISH Network Corp., Class A		25,700		821,629
DreamWorks Animation SKG, Inc., Class A *		8,200		147,682
Entercom Communications Corp., Class A *		3,000		18,570
Gannett Co., Inc.		27,000		373,140
Harte-Hanks, Inc.		8,100		68,040
John Wiley & Sons, Inc., Class A		6,300		284,697
Journal Communications, Inc., Class A *		11,500		48,185
Lamar Advertising Co., Class A *		9,200		292,744
Liberty Global, Inc., Series A *		33,575		1,672,371
Liberty Media Corp. - Liberty Capital, Class A *		15,095		1,319,907
Live Nation Entertainment, Inc. *		19,957		180,810
Martha Stewart Living Omnimedia, Inc., Class A		3,900		13,923
Media General, Inc., Class A (d)*		5,000		17,850
Meredith Corp. (d)		3,800		109,554
Morningstar, Inc.		3,200		184,704
National CineMedia, Inc.		4,500		64,305
News Corp., Class A		295,450		5,790,820
Omnicom Group, Inc.		36,600		1,877,946
Regal Entertainment Group, Class A		12,100		164,681
Salem Communications Corp., Class A		900		4,824
Scholastic Corp.		2,200		67,210
Scripps Networks Interactive, Class A		12,000		602,640
Sinclair Broadcast Group, Inc., Class A		7,300		75,044
Sirius XM Radio, Inc. *		499,800		1,129,548
The E.W. Scripps Co., Class A *		7,000		64,120
The Interpublic Group of Cos., Inc.		55,937		660,616
The Madison Square Garden, Inc., Class A *		7,275		261,682
The McGraw-Hill Cos., Inc.		39,600		1,947,132
The New York Times Co., Class A *		13,200		83,292
The Walt Disney Co.		218,193		9,406,300
The Washington Post Co., Class B (d)		600		226,902
Time Warner Cable, Inc.		42,711		3,436,100
Time Warner, Inc.		132,850		4,976,561
Valassis Communications, Inc. *		5,700		114,000
Viacom Inc., Class B		68,106		3,159,437
Virgin Media, Inc.		35,000		859,600
World Wrestling Entertainment, Inc., Class A		4,900		38,612
				62,012,886
Pharmaceuticals, Biotechnology & Life Sciences 7.2%
Abbott Laboratories		201,305		12,492,988
Acorda Therapeutics, Inc. *		5,000		126,200
Acura Pharmaceuticals, Inc. (d)*		4,500		14,535
Affymax, Inc. *		2,900		38,019
Affymetrix, Inc. *		17,400		76,908
Agilent Technologies, Inc.		44,817		1,890,381
Akorn, Inc. *		8,000		97,040
Albany Molecular Research, Inc. *		8,600		27,434
Alexion Pharmaceuticals, Inc. *		24,400		2,203,808
Alkermes plc *		11,500		198,950
Allergan, Inc.		40,468		3,884,928
Allos Therapeutics, Inc. *		11,000		20,020
Alnylam Pharmaceuticals, Inc. *		7,400		84,286
AMAG Pharmaceuticals, Inc. *		3,000		46,980
Amgen, Inc.		115,268		8,196,708
Amicus Therapeutics, Inc. *		500		2,440
Amylin Pharmaceuticals, Inc. *		18,400		476,744
Arena Pharmaceuticals, Inc. (d)*		6,300		15,372
ARIAD Pharmaceuticals, Inc. *		19,500		317,850
ArQule, Inc. *		8,800		62,040
Astex Pharmaceuticals *		5,900		10,384
Auxilium Pharmaceuticals, Inc. *		5,000		89,600
AVEO Pharmaceuticals, Inc. *		5,000		57,500
Bio-Rad Laboratories, Inc., Class A *		3,000		323,970
BioCryst Pharmaceuticals, Inc. (d)*		4,900		17,738
Biogen Idec, Inc. *		31,125		4,171,061
BioMarin Pharmaceuticals, Inc. *		15,800		548,260
Bristol-Myers Squibb Co.		221,450		7,389,787
Bruker Corp. *		14,600		219,438
Cambrex Corp. *		16,400		106,272
Celgene Corp. *		58,445		4,261,809
Cepheid, Inc. *		8,500		326,485
Charles River Laboratories International, Inc. *		7,416		263,491
Codexis, Inc. *		1,870		6,769
Covance, Inc. *		8,800		411,488
Cubist Pharmaceuticals, Inc. *		8,900		376,292
Dendreon Corp. (d)*		16,900		196,885
DepoMed, Inc. *		4,000		24,360
Durect Corp. *		14,500		10,150
Dyax Corp. *		7,000		11,410

See financial notes 49

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Eli Lilly & Co.		126,900		5,252,391
Emergent Biosolutions, Inc. *		6,000		84,360
Endo Pharmaceuticals Holdings, Inc. *		16,000		562,240
Enzo Biochem, Inc. *		9,281		25,430
Enzon Pharmaceuticals, Inc. *		10,900		67,907
eResearch Technology, Inc. *		9,125		72,088
Exelixis, Inc. *		14,800		71,040
Ford Acquisition Co. (a)(c)*		8,700		—
Forest Laboratories, Inc. *		36,300		1,264,329
Furiex Pharmaceuticals, Inc. *		1,000		14,370
Genomic Health, Inc. *		5,000		143,300
Geron Corp. *		11,500		19,320
Gilead Sciences, Inc. *		99,640		5,182,276
GTx, Inc. *		3,000		9,390
Halozyme Therapeutics, Inc. *		12,000		97,080
Harvard Bioscience, Inc. *		6,500		25,935
Hi-Tech Pharmacal Co., Inc. *		3,000		97,770
Hospira, Inc. *		21,070		739,978
Human Genome Sciences, Inc. *		29,100		428,061
Idenix Pharmaceuticals, Inc. *		9,000		78,930
Illumina, Inc. *		15,200		676,856
ImmunoGen, Inc. *		10,000		127,500
Impax Laboratories, Inc. *		8,500		209,355
Incyte Corp. (d)*		15,100		342,468
InterMune, Inc. *		12,600		131,544
Ironwood Pharmaceuticals, Inc. *		6,000		79,260
Isis Pharmaceuticals, Inc. *		10,300		82,400
Jazz Pharmaceuticals plc *		5,000		255,150
Johnson & Johnson		353,170		22,987,835
Lexicon Pharmaceuticals, Inc. *		42,400		68,688
Life Technologies Corp. *		23,362		1,083,062
Ligand Pharmaceuticals, Inc., Class B *		448		6,053
Luminex Corp. *		7,800		195,312
MannKind Corp. (d)*		7,000		15,750
MAP Pharmaceuticals, Inc. *		4,000		51,280
Maxygen, Inc. *		10,000		56,500
Medicis Pharmaceutical Corp., Class A		7,900		303,913
Medivation, Inc. *		5,000		404,400
Merck & Co., Inc.		396,670		15,565,331
Mettler-Toledo International, Inc. *		4,800		860,736
Momenta Pharmaceuticals, Inc. *		7,000		111,160
Mylan, Inc. *		55,900		1,213,589
Myrexis, Inc. *		7,200		21,744
Myriad Genetics, Inc. *		14,800		384,948
Nabi Biopharmaceuticals *		10,300		17,201
Nektar Therapeutics *		13,300		101,346
Neurocrine Biosciences, Inc. *		10,900		80,987
NPS Pharmacuticals, Inc. *		7,500		53,700
Obagi Medical Products, Inc. *		3,000		39,360
Onyx Pharmaceuticals, Inc. *		7,500		341,325
Opko Health, Inc. (d)*		19,000		90,250
Pain Therapeutics, Inc. *		7,400		29,970
Par Pharmaceutical Cos., Inc. *		8,900		376,826
PAREXEL International Corp. *		7,800		210,132
PDL BioPharma, Inc.		16,000		100,640
PerkinElmer, Inc.		14,477		399,565
Perrigo Co.		13,300		1,395,170
Pfizer, Inc.		992,801		22,764,927
Pharmacyclics, Inc. *		7,500		206,700
POZEN, Inc. *		4,800		31,968
Questcor Pharmaceuticals, Inc. *		8,000		359,200
Regeneron Pharmaceuticals, Inc. *		9,200		1,244,392
Salix Pharmaceuticals Ltd. *		7,000		345,800
Sangamo BioSciences, Inc. (d)*		4,700		21,855
Savient Pharmaceuticals, Inc. (d)*		6,800		16,116
Seattle Genetics, Inc. (d)*		11,500		227,355
Sequenom, Inc. (d)*		15,000		76,800
Spectrum Pharmaceuticals, Inc. (d)*		6,500		69,095
Sucampo Pharmaceuticals, Inc., Class A *		6,500		54,080
Synta Pharmaceuticals Corp. *		8,500		36,975
Techne Corp.		3,800		254,372
The Medicines Co. *		8,300		183,347
Theravance, Inc. *		9,700		209,908
Thermo Fisher Scientific, Inc.		49,602		2,760,351
United Therapeutics Corp. *		6,000		262,500
Vertex Pharmaceuticals, Inc. *		28,144		1,082,981
Vical, Inc. *		6,600		20,592
ViroPharma, Inc. *		13,000		282,750
VIVUS, Inc. *		11,500		278,530
Warner Chilcott plc, Class A *		21,500		467,625
Waters Corp. *		11,700		984,087
Watson Pharmaceuticals, Inc. *		15,732		1,185,564
XenoPort, Inc. *		2,500		11,425
Zalicus, Inc. *		10,500		11,025
				145,254,601
Real Estate 3.4%
Acadia Realty Trust		6,000		139,080
Alexander’s, Inc.		700		272,741
Alexandria Real Estate Equities, Inc.		7,500		561,900
American Assets Trust, Inc.		3,000		70,530
American Campus Communities, Inc.		7,500		333,375
American Capital Agency Corp.		34,200		1,068,408
American Realty Investors, Inc. *		1,537		4,642
American Tower Corp.		51,800		3,397,044
Annaly Capital Management, Inc.		123,600		2,017,152
Anworth Mortgage Asset Corp.		24,200		163,108
Apartment Investment & Management Co., Class A		16,711		453,704
ARMOUR Residential REIT, Inc.		20,500		143,090
Ashford Hospitality Trust		9,000		76,860
Associated Estates Realty Corp.		5,000		84,650
AV Homes, Inc. *		4,500		56,115
AvalonBay Communities, Inc.		12,192		1,772,717
BioMed Realty Trust, Inc.		20,000		396,400
Boston Properties, Inc.		18,700		2,024,275
Brandywine Realty Trust		14,863		176,275
BRE Properties, Inc.		11,000		577,500
Brookfield Office Properties, Inc.		35,200		639,232
Camden Property Trust		10,800		730,836
Capstead Mortgage Corp.		9,240		126,865
CBL & Associates Properties, Inc.		19,485		363,006
CBRE Group, Inc., Class A *		36,500		686,565
Chimera Investment Corp.		131,400		379,746
Colonial Properties Trust		10,067		225,199
CommonWealth REIT		11,850		222,187

50 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Consolidated-Tomoka Land Co.		1,100		32,340
Corporate Office Properties Trust		9,000		211,950
Cousins Properties, Inc.		9,145		71,880
CreXus Investment Corp.		9,000		94,410
CubeSmart		14,500		182,120
CYS Investments, Inc.		13,500		185,355
DCT Industrial Trust, Inc.		29,300		173,749
DDR Corp.		30,784		455,603
DiamondRock Hospitality Co.		19,786		210,325
Digital Realty Trust, Inc.		14,000		1,051,260
Douglas Emmett, Inc.		17,000		395,080
Duke Realty Corp.		30,290		448,898
DuPont Fabros Technology, Inc.		7,500		203,625
EastGroup Properties, Inc.		3,900		196,170
Education Realty Trust, Inc.		9,000		101,430
Entertainment Properties Trust		5,200		249,548
Equity Lifestyle Properties, Inc.		6,000		419,640
Equity One, Inc.		12,100		251,438
Equity Residential		37,500		2,304,000
Essex Property Trust, Inc.		4,200		663,474
Extra Space Storage, Inc.		11,000		333,850
Federal Realty Investment Trust		8,200		825,412
FelCor Lodging Trust, Inc. *		12,200		51,484
First Industrial Realty Trust, Inc. *		15,900		196,206
First Potomac Realty Trust		6,000		74,640
Forest City Enterprises, Inc., Class A *		15,400		245,630
Forestar Group, Inc. *		2,933		45,110
Franklin Street Properties Corp.		14,000		140,980
General Growth Properties, Inc.		48,409		861,680
Getty Realty Corp.		2,000		31,640
Glimcher Realty Trust		16,300		161,207
Government Properties Income Trust		6,000		139,320
Gramercy Capital Corp. *		17,528		45,047
Hatteras Financial Corp.		12,000		349,560
HCP, Inc.		53,048		2,198,840
Health Care REIT, Inc.		27,200		1,541,152
Healthcare Realty Trust, Inc.		10,900		234,132
Hersha Hospitality Trust		13,500		77,625
Highwoods Properties, Inc.		8,600		298,678
Home Properties, Inc.		5,500		335,775
Hospitality Properties Trust		16,100		444,038
Host Hotels & Resorts, Inc.		91,263		1,518,616
Howard Hughes Corp. *		3,500		234,885
Inland Real Estate Corp.		8,500		73,100
Invesco Mortgage Capital, Inc.		18,000		317,520
Investors Real Estate Trust		8,000		57,760
iStar Financial, Inc. *		9,390		64,979
Jones Lang LaSalle, Inc.		5,300		423,682
Kilroy Realty Corp.		9,800		465,010
Kimco Realty Corp.		52,595		1,020,869
LaSalle Hotel Properties		11,600		341,156
Lexington Realty Trust (d)		14,367		127,866
Liberty Property Trust		14,800		539,460
LTC Properties, Inc.		2,800		93,184
Mack-Cali Realty Corp.		11,400		327,408
Maui Land & Pineapple Co., Inc. *		800		3,160
Medical Properties Trust, Inc.		16,800		157,584
MFA Financial, Inc.		45,500		335,790
Mid-America Apartment Communities, Inc.		5,500		374,385
Mission West Properties, Inc.		6,500		57,070
MPG Office Trust, Inc. *		18,500		39,035
National Health Investors, Inc.		6,100		301,767
National Retail Properties, Inc.		12,320		337,322
New Century Financial Corp. (a)(c)*		3,600		—
Omega Healthcare Investors, Inc.		12,284		263,000
Parkway Properties, Inc.		3,500		34,615
Pebblebrook Hotel Trust		8,000		192,640
Pennsylvania Real Estate Investment Trust		8,500		119,765
PennyMac Mortgage Investment Trust		6,000		121,740
Piedmont Office Realty Trust, Inc., Class A		23,000		408,020
Plum Creek Timber Co., Inc.		20,547		863,796
PMC Commercial Trust		4,500		37,845
Post Properties, Inc.		8,200		399,340
Potlatch Corp.		5,753		180,069
ProLogis, Inc.		60,034		2,148,016
PS Business Parks, Inc.		3,000		204,750
Public Storage		18,190		2,605,899
RAIT Financial Trust		10,199		49,363
Ramco-Gershenson Properties Trust		4,900		58,996
Rayonier, Inc. REIT		17,082		774,669
Realty Income Corp.		16,600		653,044
Redwood Trust, Inc.		8,500		99,280
Regency Centers Corp.		11,700		526,032
RLJ Lodging Trust		8,000		150,240
Rouse Properties, Inc. *		1,815		24,394
Sabra Health Care REIT, Inc.		8,000		133,920
Saul Centers, Inc.		5,100		204,051
Senior Housing Properties Trust		20,450		451,536
Simon Property Group, Inc.		37,783		5,879,035
SL Green Realty Corp.		11,250		927,450
Sovran Self Storage, Inc.		3,800		200,260
Starwood Property Trust, Inc.		11,300		235,831
Strategic Hotels & Resorts, Inc. *		15,000		102,150
Sun Communities, Inc.		3,000		131,250
Sunstone Hotel Investors, Inc. *		13,000		132,600
Tanger Factory Outlet Centers, Inc.		12,200		382,104
Taubman Centers, Inc.		7,100		547,978
Tejon Ranch Co. *		3,674		109,706
The Macerich Co.		16,805		1,034,684
The St. Joe Co. *		12,900		230,007
Two Harbors Investment Corp.		26,200		274,052
UDR, Inc.		27,361		720,415
UMH Properties, Inc.		5,100		60,129
Universal Health Realty Income Trust		3,900		157,716
Urstadt Biddle Properties, Class A		4,500		86,580
Urstadt Biddle Properties, Inc.		500		9,685
Ventas, Inc.		36,250		2,131,137
Vornado Realty Trust REIT		23,641		2,029,343
Washington Real Estate Investment Trust		8,100		239,355
Weingarten Realty Investors		14,475		384,456
Weyerhaeuser Co.		69,592		1,416,893
Winthrop Realty Trust		10,000		106,700
				69,143,647

See financial notes 51

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Retailing 4.3%
Aaron’s, Inc.		9,375		254,719
Abercrombie & Fitch Co., Class A		11,800		592,006
Advance Auto Parts, Inc.		9,540		875,772
Aeropostale, Inc. *		9,900		219,582
Amazon.com, Inc. *		45,400		10,528,260
America’s Car-Mart, Inc. *		3,750		172,275
American Eagle Outfitters, Inc.		24,150		434,941
ANN, Inc. *		9,825		272,054
Asbury Automotive Group, Inc. *		4,100		114,472
Ascena Retail Group, Inc. *		17,636		361,185
AutoNation, Inc. *		6,600		228,228
AutoZone, Inc. *		3,800		1,505,408
Barnes & Noble, Inc. (d)*		7,400		153,550
Bed Bath & Beyond, Inc. *		30,700		2,160,973
Best Buy Co., Inc.		39,225		865,696
Big Lots, Inc. *		11,100		406,704
Brown Shoe Co., Inc.		6,675		60,809
Cabela’s, Inc. *		6,500		245,765
CarMax, Inc. *		30,546		942,955
Charming Shoppes, Inc. *		10,200		60,180
Chico’s FAS, Inc.		22,800		350,208
Christopher & Banks Corp.		2,900		5,423
Coldwater Creek, Inc. *		8,502		8,417
Collective Brands, Inc. *		5,906		122,668
Destination Maternity Corp.		5,000		99,200
Dick’s Sporting Goods, Inc.		11,000		556,600
Dillard’s, Inc., Class A		5,500		355,080
Dollar General Corp. *		15,000		711,900
Dollar Tree, Inc. *		14,975		1,522,358
DSW, Inc., Class A		7,980		448,955
Duckwall-ALCO Stores, Inc. *		1,800		14,418
Expedia, Inc.		15,672		668,097
Family Dollar Stores, Inc.		15,700		1,060,535
Foot Locker, Inc.		20,100		614,859
GameStop Corp., Class A (d)		17,548		399,392
Geeknet, Inc. *		452		6,577
Genesco, Inc. *		4,300		322,500
Genuine Parts Co.		20,500		1,327,990
Group 1 Automotive, Inc.		4,400		254,672
Guess?, Inc.		7,900		231,312
Hibbett Sports, Inc. *		3,543		211,588
HSN, Inc.		6,269		242,610
J.C. Penney Co., Inc.		27,400		988,044
Kirkland’s, Inc. *		6,000		87,840
Kohl’s Corp.		33,300		1,669,329
Liberty Interactive Corp., Class A *		75,309		1,418,822
Limited Brands, Inc.		33,520		1,665,944
Lithia Motors, Inc., Class A		700		18,781
LKQ Corp. *		18,000		602,100
Lowe’s Cos., Inc.		170,000		5,349,900
Macy’s, Inc.		54,452		2,233,621
MarineMax, Inc. *		800		8,528
Monro Muffler Brake, Inc.		2,362		97,456
Netflix, Inc. *		7,100		568,994
Nordstrom, Inc.		20,600		1,150,716
O’Reilly Automotive, Inc. *		17,899		1,887,629
Office Depot, Inc. *		26,000		79,040
OfficeMax, Inc. *		9,400		43,710
Pacific Sunwear of California, Inc. (d)*		7,475		10,988
Penske Automotive Group, Inc.		5,000		132,200
PetSmart, Inc.		14,100		821,466
Pier 1 Imports, Inc.		13,500		231,930
Pool Corp.		5,662		208,984
Priceline.com, Inc. *		6,383		4,856,314
RadioShack Corp. (d)		13,700		70,966
Rent-A-Center, Inc.		7,750		265,128
Ross Stores, Inc.		29,800		1,835,382
Saks, Inc. *		14,800		162,208
Sally Beauty Holdings, Inc. *		18,950		504,070
Sears Holdings Corp. (d)*		6,385		343,385
Shoe Carnival, Inc. *		6,300		122,472
Signet Jewelers Ltd.		12,500		609,625
Sonic Automotive, Inc., Class A		4,400		74,008
Stage Stores, Inc.		5,700		87,039
Staples, Inc.		90,300		1,390,620
Stein Mart, Inc. *		6,800		43,656
Systemax, Inc. *		2,500		42,925
Target Corp.		78,300		4,536,702
The Buckle, Inc. (d)		5,875		271,308
The Cato Corp., Class A		7,300		203,159
The Children’s Place Retail Stores, Inc. *		1,800		82,764
The Finish Line, Inc., Class A		5,061		112,658
The Gap, Inc.		48,900		1,393,650
The Home Depot, Inc.		199,070		10,309,835
The Men’s Wearhouse, Inc.		6,600		244,464
The Pep Boys - Manny, Moe & Jack		5,000		74,650
The Talbots, Inc. (d)*		5,700		16,872
The TJX Cos., Inc.		96,800		4,037,528
Tiffany & Co.		17,500		1,198,050
Tractor Supply Co.		8,000		787,280
Trans World Entertainment Corp. *		1,500		3,345
TripAdvisor, Inc. *		15,672		587,857
Tuesday Morning Corp. *		2,500		10,100
Ulta Salon, Cosmetics & Fragrance, Inc.		7,000		617,260
Urban Outfitters, Inc. *		15,800		457,568
Vitamin Shoppe, Inc. *		3,000		141,210
VOXX International Corp. *		1,600		20,304
West Marine, Inc. *		5,500		64,405
Wet Seal, Inc., Class A *		11,500		37,835
Williams-Sonoma, Inc.		12,200		472,018
Winmark Corp.		1,200		68,808
Zale Corp. *		10,520		28,825
Zumiez, Inc. *		3,000		109,980
				85,563,148
Semiconductors & Semiconductor Equipment 2.5%
Advanced Energy Industries, Inc. *		6,900		82,386
Advanced Micro Devices, Inc. *		71,700		527,712
Altera Corp.		39,900		1,419,243
Amkor Technology, Inc. *		14,400		74,448
Amtech Systems, Inc. *		3,500		24,430
ANADIGICS, Inc. *		8,150		18,012
Analog Devices, Inc.		38,200		1,489,036
Applied Materials, Inc.		170,398		2,043,072
Applied Micro Circuits Corp. *		7,000		39,060
Atmel Corp. *		56,400		500,268
ATMI, Inc. *		4,400		92,444

52 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
AXT, Inc. *		3,500		17,815
Broadcom Corp., Class A *		60,200		2,203,320
Brooks Automation, Inc.		8,085		95,080
Cabot Microelectronics Corp.		2,160		74,261
Cavium, Inc. *		7,000		204,820
CEVA, Inc. *		3,433		75,835
Cirrus Logic, Inc. *		9,800		268,324
Cohu, Inc.		4,600		50,508
Cree, Inc. *		15,000		463,500
Cymer, Inc. *		4,200		217,728
Cypress Semiconductor Corp. *		19,500		302,250
Diodes, Inc. *		6,412		142,923
DSP Group, Inc. *		6,300		41,202
Entegris, Inc. *		14,299		126,546
Entropic Communications, Inc. *		8,000		33,840
Exar Corp. *		9,834		77,885
Fairchild Semiconductor International, Inc. *		14,600		206,882
First Solar, Inc. (d)*		6,900		126,960
FormFactor, Inc. *		8,500		47,600
GSI Technology, Inc. *		8,500		35,955
GT Advanced Technologies, Inc. *		14,000		91,140
Hittite Microwave Corp. *		4,500		240,930
Integrated Device Technology, Inc. *		16,120		109,132
Integrated Silicon Solutions, Inc. *		6,038		64,124
Intel Corp.		656,232		18,636,989
International Rectifier Corp. *		8,600		187,738
Intersil Corp., Class A		15,364		157,788
IXYS Corp. *		6,900		85,974
KLA-Tencor Corp.		22,500		1,173,375
Kopin Corp. *		2,500		8,925
Kulicke & Soffa Industries, Inc. *		10,400		136,240
Lam Research Corp. *		15,600		649,740
Lattice Semiconductor Corp. *		12,100		66,066
Linear Technology Corp.		28,000		915,880
LSI Corp. *		73,387		590,032
Marvell Technology Group Ltd. *		65,400		981,654
Maxim Integrated Products, Inc.		38,000		1,124,040
MEMC Electronic Materials, Inc. *		27,300		98,007
Micrel, Inc.		6,800		74,052
Microchip Technology, Inc. (d)		24,975		882,617
Micron Technology, Inc. *		127,699		841,536
Microsemi Corp. *		10,652		229,231
MIPS Technologies, Inc. *		7,100		46,434
MKS Instruments, Inc.		6,300		174,195
Monolithic Power Systems, Inc. *		6,500		134,680
MoSys, Inc. *		1,200		4,320
Nanometrics, Inc. *		3,300		51,183
Novellus Systems, Inc. *		11,171		522,244
NVIDIA Corp. *		76,000		988,000
OmniVision Technologies, Inc. *		7,800		143,676
ON Semiconductor Corp. *		54,665		451,533
Pericom Semiconductor Corp. *		6,600		51,876
Photronics, Inc. *		12,900		79,851
PLX Technology, Inc. *		1,300		5,174
PMC-Sierra, Inc. *		27,300		193,011
Power Integrations, Inc.		3,000		113,640
Rambus, Inc. *		13,700		69,733
RF Micro Devices, Inc. *		30,020		129,987
Rudolph Technologies, Inc. *		4,318		46,634
Semtech Corp. *		8,000		218,080
Silicon Image, Inc. *		9,000		54,000
Silicon Laboratories, Inc. *		5,000		177,450
Skyworks Solutions, Inc. *		22,689		615,779
Spansion, Inc., Class A *		4,000		48,240
Standard Microsystems Corp. *		3,600		95,328
SunPower Corp. (d)*		13,300		74,613
Supertex, Inc. *		4,900		100,303
Teradyne, Inc. *		24,559		422,660
Tessera Technologies, Inc. *		6,000		93,840
Texas Instruments, Inc.		147,397		4,707,860
TriQuint Semiconductor, Inc. *		19,310		94,233
Ultratech, Inc. *		4,800		153,312
Veeco Instruments, Inc. (d)*		5,500		166,045
Volterra Semiconductor Corp. *		3,000		98,670
Xilinx, Inc.		34,600		1,258,748
				50,053,887
Software & Services 9.2%
Accelrys, Inc. *		13,264		109,163
Accenture plc, Class A		88,500		5,748,075
ACI Worldwide, Inc. *		5,200		207,272
Activision Blizzard, Inc.		69,732		897,451
Actuate Corp. *		8,862		62,920
Acxiom Corp. *		13,300		182,609
Adobe Systems, Inc. *		62,210		2,087,768
Advent Software, Inc. *		8,200		221,318
Akamai Technologies, Inc. *		22,138		721,699
Alliance Data Systems Corp. *		6,600		848,034
Ancestry.com, Inc. (d)*		3,000		80,100
ANSYS, Inc. *		10,786		723,417
AOL, Inc. *		14,122		353,615
Ariba, Inc. *		11,570		441,974
Aspen Technology, Inc. *		11,500		227,470
Autodesk, Inc. *		27,300		1,074,801
Automatic Data Processing, Inc.		62,600		3,481,812
Blackbaud, Inc.		6,000		185,880
BMC Software, Inc. *		29,000		1,196,540
Bottomline Technologies, Inc. *		5,000		117,650
Broadridge Financial Solutions, Inc.		15,025		348,730
CA, Inc.		50,508		1,334,421
CACI International, Inc., Class A *		4,100		250,633
Cadence Design Systems, Inc. *		33,100		386,277
Cardtronics, Inc. *		5,000		131,800
CIBER, Inc. *		7,300		30,368
Citrix Systems, Inc. *		25,000		2,140,250
Cognizant Technology Solutions Corp., Class A *		38,200		2,800,824
CommVault Systems, Inc. *		5,000		260,350
Computer Sciences Corp.		18,238		511,758
Compuware Corp. *		27,900		243,288
Concur Technologies, Inc. *		3,000		169,680
Constant Contact, Inc. *		3,000		72,510
Convergys Corp. *		13,500		180,495
CoreLogic, Inc. *		13,800		230,460
CoStar Group, Inc. *		3,800		276,982
CSG Systems International, Inc. *		5,400		77,760
DealerTrack Holdings, Inc. *		6,100		181,963
Deltek, Inc. *		3,000		31,320	��
Digimarc Corp. *		2,142		56,013
Digital River, Inc. *		5,100		95,931

See financial notes 53

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
DST Systems, Inc.		8,100		453,438
Dynamics Research Corp. *		1,200		8,628
Earthlink, Inc.		17,050		138,446
EasyLink Services International Corp., Class A *		17,500		103,250
eBay, Inc. *		139,848		5,740,761
Ebix, Inc. (d)		3,000		61,350
Edgewater Technology, Inc. *		767		3,068
Electronic Arts, Inc. *		40,400		621,352
EPIQ Systems, Inc.		3,825		43,452
Equinix, Inc. *		6,065		995,873
Euronet Worldwide, Inc. *		5,500		118,965
Exlservice Holdings, Inc. *		8,000		221,440
FactSet Research Systems, Inc.		5,250		550,515
Fair Isaac Corp.		7,744		332,218
FalconStor Software, Inc. *		1,200		3,948
Fidelity National Information Services, Inc.		38,506		1,296,497
Fiserv, Inc. *		18,300		1,286,307
FleetCor Technologies, Inc. *		4,000		158,200
Forrester Research, Inc.		4,100		145,345
Fortinet, Inc. *		16,000		417,920
Gartner, Inc. *		10,300		451,140
Genpact Ltd. *		15,000		250,200
Global Cash Access Holdings, Inc. *		21,600		182,520
Global Payments, Inc.		9,240		429,013
Google, Inc., Class A *		32,765		19,830,361
GSE Systems, Inc. *		2,424		6,981
Heartland Payment Systems, Inc.		4,500		137,115
IAC/InterActiveCorp		15,672		754,607
iGATE Corp. *		9,600		186,816
Informatica Corp. *		12,200		561,444
Information Services Group, Inc. (d)*		7,500		10,275
InfoSpace, Inc. *		6,872		76,485
Interactive Intelligence Group, Inc. *		7,500		222,450
Internap Network Services Corp. *		9,500		66,880
International Business Machines Corp.		145,710		30,173,627
IntraLinks Holdings, Inc. *		3,000		13,980
Intuit, Inc.		36,430		2,111,847
j2 Global, Inc.		6,000		154,980
Jack Henry & Associates, Inc.		9,300		315,828
JDA Software Group, Inc. *		4,500		129,960
Lender Processing Services, Inc.		11,157		296,218
LinkedIn Corp., Class A *		3,000		325,350
Lionbridge Technologies, Inc. *		12,400		34,100
Liquidity Services, Inc. *		6,000		319,980
LogMeIn, Inc. *		3,000		108,030
LookSmart Ltd. *		480		437
Manhattan Associates, Inc. *		4,300		215,645
ManTech International Corp., Class A		5,000		157,100
MasterCard, Inc., Class A		13,100		5,924,737
Mattersight Corp. *		190		1,797
MAXIMUS, Inc.		8,400		371,700
Mentor Graphics Corp. *		11,200		161,840
MICROS Systems, Inc. *		18,000		1,022,940
Microsoft Corp.		962,750		30,827,255
MicroStrategy, Inc., Class A *		856		119,652
ModusLink Global Solutions, Inc. *		10,450		51,728
MoneyGram International, Inc. *		1,937		32,619
Monotype Imaging Holdings, Inc. *		4,500		63,855
Monster Worldwide, Inc. *		14,300		123,409
Move, Inc. *		8,630		75,081
NetScout Systems, Inc. *		7,300		151,037
NetSuite, Inc. *		3,500		155,330
NeuStar, Inc., Class A *		9,300		338,055
NIC, Inc.		8,000		89,520
Nuance Communications, Inc. *		28,474		695,905
OpenTable, Inc. (d)*		2,500		111,825
Openwave Systems, Inc. *		7,771		20,049
Opnet Technologies, Inc.		5,100		118,116
Oracle Corp.		501,749		14,746,403
Parametric Technology Corp. *		15,680		338,374
Paychex, Inc.		41,900		1,298,062
PRGX Global, Inc. *		2,000		12,640
Progress Software Corp. *		9,300		215,202
Quest Software, Inc. *		7,700		179,179
Rackspace Hosting, Inc. *		12,500		726,125
RealNetworks, Inc.		4,725		45,218
RealPage, Inc. *		2,500		45,375
Red Hat, Inc. *		25,600		1,526,016
Reis, Inc. *		1,400		12,166
Rovi Corp. *		12,812		366,423
Saba Software, Inc. *		4,549		44,216
SAIC, Inc.		44,000		535,040
Salesforce.com, Inc. *		15,800		2,460,534
Sapient Corp.		12,100		144,837
SeaChange International, Inc. *		6,350		52,197
Solarwinds, Inc. *		15,000		703,650
Solera Holdings, Inc.		8,000		359,520
SS&C Technologies Holdings, Inc. *		4,500		106,965
StarTek, Inc. *		3,900		7,137
Support.com, Inc. *		11,600		42,108
Symantec Corp. *		93,673		1,547,478
Synopsys, Inc. *		18,684		560,707
Syntel, Inc.		2,500		149,725
Take-Two Interactive Software, Inc. *		9,000		126,900
TeleCommunication Systems, Inc., Class A *		10,800		20,844
TeleTech Holdings, Inc. *		5,000		75,750
Teradata Corp. *		23,800		1,660,764
The Hackett Group, Inc. *		7,200		41,112
The Ultimate Software Group, Inc. *		3,000		231,480
THQ, Inc. (d)*		11,925		8,078
TIBCO Software, Inc. *		21,000		690,900
TiVo, Inc. *		13,000		140,270
TNS, Inc. *		3,000		61,200
Total System Services, Inc.		28,204		663,358
Tyler Technologies, Inc. *		4,000		159,800
Unisys Corp. *		4,000		74,640
United Online, Inc.		12,150		57,591
ValueClick, Inc. *		8,500		180,030
VeriFone Systems, Inc. *		11,600		552,624
VeriSign, Inc.		20,875		858,171
Virnetx Holding Corp. (d)*		5,500		136,620
Virtusa Corp. *		3,000		45,270
Visa, Inc., Class A		66,300		8,153,574

54 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
VistaPrint N.V. (d)*		4,500		167,805
VMware, Inc., Class A *		12,400		1,385,328
Web.com Group, Inc. *		223		2,888
WebMD Health Corp. *		7,074		160,934
Websense, Inc. *		7,500		155,550
Western Union Co.		81,932		1,505,910
Wright Express Corp. *		4,500		287,190
Yahoo!, Inc. *		150,144		2,333,238
				185,625,289
Technology Hardware & Equipment 7.6%
3D Systems Corp. (d)*		6,800		200,532
Acme Packet, Inc. *		7,000		196,490
ADTRAN, Inc.		7,000		213,640
Agilysys, Inc. *		4,860		42,574
Amphenol Corp., Class A		21,600		1,255,824
Anaren, Inc. *		5,300		95,612
Anixter International, Inc. *		3,300		226,314
Apple, Inc. *		119,700		69,933,528
Arris Group, Inc. *		12,775		165,181
Arrow Electronics, Inc. *		14,000		588,700
Aruba Networks, Inc. *		13,700		289,344
Aviat Networks, Inc. *		10,677		27,226
Avid Technology, Inc. *		3,756		32,640
Avnet, Inc. *		17,788		641,791
AVX Corp.		14,000		177,800
Badger Meter, Inc.		4,000		147,760
Benchmark Electronics, Inc. *		7,830		124,340
Black Box Corp.		1,700		38,437
Brightpoint, Inc. *		7,454		45,619
Brocade Communications Systems, Inc. *		56,535		313,204
Checkpoint Systems, Inc. *		4,600		50,416
Ciena Corp. *		12,970		192,215
Cisco Systems, Inc.		694,509		13,994,356
Cognex Corp.		4,900		197,225
Coherent, Inc. *		2,800		147,280
Comtech Telecommunications Corp.		2,175		67,251
Comverse Technology, Inc. *		25,500		164,475
Corning, Inc.		201,307		2,888,755
CTS Corp.		8,800		94,424
Daktronics, Inc.		8,700		70,818
DDi Corp.		5,501		71,403
Dell, Inc. *		206,400		3,378,768
Diebold, Inc.		7,300		287,985
Digi International, Inc. *		6,000		55,680
Dolby Laboratories, Inc., Class A *		8,800		345,224
DTS, Inc. *		2,000		62,400
Echelon Corp. *		7,200		31,392
EchoStar Corp., Class A *		7,540		219,037
Electro Rent Corp.		5,100		79,458
Electro Scientific Industries, Inc.		4,800		68,448
Electronics for Imaging, Inc. *		6,400		114,240
EMC Corp. *		262,686		7,410,372
Emulex Corp. *		8,900		77,252
Extreme Networks, Inc. *		19,500		74,685
F5 Networks, Inc. *		9,700		1,299,121
FARO Technologies, Inc. *		3,000		167,940
FEI Co. *		4,500		225,765
Finisar Corp. *		12,000		198,240
FLIR Systems, Inc.		18,600		417,756
Frequency Electronics, Inc. *		500		3,825
Gerber Scientific, Inc. (a)(c)*		8,900		—
Harmonic, Inc. *		9,842		46,454
Harris Corp.		17,000		774,180
Hewlett-Packard Co.		261,636		6,478,107
Hutchinson Technology, Inc. (d)*		6,000		12,360
I.D. Systems, Inc. *		5,500		33,330
Identive Group, Inc. *		1,200		2,472
Imation Corp. *		5,500		31,900
Immersion Corp. *		4,300		23,435
Infinera Corp. *		10,500		75,180
Ingram Micro, Inc., Class A *		19,900		387,254
Insight Enterprises, Inc. *		4,650		94,442
Intellicheck Mobilisa, Inc. *		500		790
InterDigital, Inc.		4,500		124,740
Intermec, Inc. *		5,600		29,792
IPG Photonics Corp. *		2,900		140,360
Itron, Inc. *		4,500		183,600
Ixia *		8,200		103,320
Jabil Circuit, Inc.		25,400		595,630
JDS Uniphase Corp. *		29,553		359,069
Juniper Networks, Inc. *		63,565		1,362,198
LeCroy Corp. *		5,400		55,836
Lexmark International, Inc., Class A		10,900		328,090
LightPath Technologies, Inc., Class A *		75		95
Littelfuse, Inc.		2,000		125,340
Loral Space & Communications, Inc.		1,500		93,075
Maxwell Technologies, Inc. *		4,500		42,795
Measurement Specialties, Inc. *		3,200		114,336
Mercury Computer Systems, Inc. *		3,600		47,520
Methode Electronics, Inc.		6,600		55,770
MOCON, Inc.		600		10,698
Molex, Inc.		19,125		527,659
Motorola Mobility Holdings, Inc. *		35,556		1,380,284
Motorola Solutions, Inc.		38,779		1,978,892
MTS Systems Corp.		3,781		181,375
Multi-Fineline Electronix, Inc. *		2,500		66,225
National Instruments Corp.		11,512		313,126
NCR Corp. *		23,800		559,300
NetApp, Inc. *		47,500		1,844,425
NETGEAR, Inc. *		6,000		231,000
Network Equipment Technologies, Inc. *		8,500		8,330
Newport Corp. *		4,200		71,694
Oplink Communications, Inc. *		4,157		65,847
OSI Systems, Inc. *		3,700		247,382
Park Electrochemical Corp.		3,600		103,860
PC Connection, Inc.		7,000		56,140
PC-Tel, Inc.		8,900		60,787
Performance Technologies, Inc. *		1,600		3,584
Plantronics, Inc.		6,000		229,920
Plexus Corp. *		3,700		119,769
Polycom, Inc. *		22,400		297,248
Power-One, Inc. *		9,500		40,660
Presstek, Inc. *		5,100		4,054
Pulse Electronics Corp.		11,500		23,575
QLogic Corp. *		17,044		294,009
QUALCOMM, Inc.		216,600		13,827,744

See financial notes 55

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Radisys Corp. *		7,200		45,720
Research Frontiers, Inc. *		2,800		9,240
Richardson Electronics Ltd.		4,800		60,528
Riverbed Technology, Inc. *		18,500		365,005
Rofin-Sinar Technologies, Inc. *		3,800		95,760
Rogers Corp. *		2,500		95,725
SanDisk Corp. *		31,000		1,147,310
Sanmina-SCI Corp. *		8,500		75,650
ScanSource, Inc. *		3,200		105,472
Seagate Technology plc		57,066		1,755,350
Sonus Networks, Inc. *		19,400		54,902
STEC, Inc. *		3,500		29,015
Stratasys, Inc. *		2,700		138,267
Sycamore Networks, Inc. *		2,790		43,496
Symmetricom, Inc. *		11,950		66,442
Synaptics, Inc. *		5,250		161,228
SYNNEX Corp. *		3,000		114,270
TE Connectivity Ltd.		55,200		2,012,592
Tech Data Corp. *		5,300		285,087
Tellabs, Inc.		38,064		143,501
TESSCO Technologies, Inc.		4,025		80,500
TransAct Technologies, Inc. *		1,500		12,840
Trimble Navigation Ltd. *		14,792		800,839
TTM Technologies, Inc. *		7,900		81,607
Universal Display Corp. (d)*		3,000		134,910
UTStarcom Holdings Corp. *		36,000		47,160
ViaSat, Inc. *		5,500		265,650
Vishay Intertechnology, Inc. *		36,688		411,639
Vishay Precision Group, Inc. *		5,620		81,378
Western Digital Corp. *		28,200		1,094,442
Xerox Corp.		174,056		1,354,156
Xybernaut Corp. (a)(c)*		1,400		—
Zebra Technologies Corp., Class A *		6,375		247,286
Zygo Corp. *		7,000		138,530
				153,037,316
Telecommunication Services 2.5%
AboveNet, Inc. *		3,000		249,510
Alaska Communications Systems Group, Inc. (d)		5,000		12,800
AT&T, Inc.		766,056		25,210,903
Atlantic Tele-Network, Inc.		3,250		110,695
CenturyLink, Inc.		76,778		2,960,560
Cincinnati Bell, Inc. *		22,268		84,618
Clearwire Corp., Class A *		40,600		59,479
Cogent Communications Group, Inc. *		9,900		185,427
Consolidated Communications Holdings, Inc.		5,622		108,786
Crown Castle International Corp. *		30,776		1,742,229
Frontier Communications Corp. (d)		122,868		496,387
General Communication, Inc., Class A *		10,500		79,800
HickoryTech Corp.		4,600		45,678
Leap Wireless International, Inc. *		7,700		43,197
Level 3 Communications, Inc. *		20,706		477,480
Lumos Networks Corp.		1,500		13,560
MetroPCS Communications, Inc. *		40,000		292,000
NII Holdings, Inc. *		22,900		320,486
NTELOS Holdings Corp.		4,500		90,990
Premiere Global Services, Inc. *		8,100		72,495
SBA Communications Corp., Class A *		12,800		687,872
Shenandoah Telecommunications Co.		2,500		27,875
Sprint Nextel Corp. *		379,330		940,738
SureWest Communications		5,500		124,190
Telephone & Data Systems, Inc.		11,522		279,869
tw telecom, Inc. *		20,000		435,600
United States Cellular Corp. *		9,100		356,902
USA Mobility, Inc.		5,500		71,060
Verizon Communications, Inc.		364,072		14,701,227
Warwick Valley Telephone Co.		1,100		15,004
Windstream Corp.		73,569		826,916
				51,124,333
Transportation 1.8%
Alaska Air Group, Inc. *		8,800		297,440
Alexander & Baldwin, Inc.		6,400		327,424
AMERCO		3,900		391,716
Arkansas Best Corp.		1,100		16,874
Atlas Air Worldwide Holdings, Inc. *		3,000		138,150
Avis Budget Group, Inc. *		3,000		39,480
C.H. Robinson Worldwide, Inc.		21,000		1,254,540
Con-way, Inc.		5,500		178,750
Covenant Transport Group, Inc., Class A *		3,000		9,930
CSX Corp.		137,100		3,058,701
Delta Air Lines, Inc. *		109,100		1,195,736
Dollar Thrifty Automotive Group, Inc. *		3,500		283,010
Expeditors International of Washington, Inc.		27,200		1,088,000
FedEx Corp.		38,563		3,402,799
Forward Air Corp.		2,600		87,828
Genco Shipping & Trading Ltd. (d)*		5,500		29,425
Genesee & Wyoming, Inc., Class A *		6,000		323,460
Heartland Express, Inc.		8,941		123,654
Hertz Global Holdings, Inc. *		37,000		570,170
Hub Group, Inc., Class A *		4,400		154,000
J.B. Hunt Transport Services, Inc.		13,000		719,290
JetBlue Airways Corp. *		30,962		147,070
Kansas City Southern		13,550		1,043,621
Kirby Corp. *		8,600		570,782
Knight Transportation, Inc.		9,050		148,601
Landstar System, Inc.		11,200		599,984
MAIR Holdings, Inc. (a)(c)*		1,100		1,793
Norfolk Southern Corp.		44,000		3,208,920
Old Dominion Freight Line, Inc. *		6,075		270,155
Pacer International, Inc. *		2,800		16,828
Park-Ohio Holdings Corp. *		2,600		56,134
Republic Airways Holdings, Inc. *		7,500		38,175
Ryder System, Inc.		6,400		311,808
Saia, Inc. *		6,100		114,558
SkyWest, Inc.		7,000		62,930
Southwest Airlines Co.		99,715		825,640
Swift Transportation Co. *		8,000		83,920
Union Pacific Corp.		62,000		6,971,280

56 See financial notes

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
United Continental Holdings, Inc. *		41,900		918,448
United Parcel Service, Inc., Class B		87,380		6,827,873
US Airways Group, Inc. *		17,400		178,524
UTI Worldwide, Inc.		11,300		188,371
Werner Enterprises, Inc.		5,832		137,752
				36,413,544
Utilities 3.5%
AGL Resources, Inc.		14,829		584,707
Allete, Inc.		5,233		215,652
Alliant Energy Corp.		14,800		669,552
Ameren Corp.		31,100		1,019,769
American Electric Power Co., Inc.		63,520		2,467,117
American States Water Co.		2,000		72,880
American Water Works Co., Inc.		22,200		760,128
Aqua America, Inc.		15,094		342,785
Atmos Energy Corp.		12,200		397,476
Avista Corp.		7,800		206,232
Black Hills Corp.		3,900		128,739
California Water Service Group		6,000		108,660
Calpine Corp. *		48,400		907,500
CenterPoint Energy, Inc.		51,500		1,040,815
Central Vermont Public Service Corp.		6,200		218,550
CH Energy Group, Inc.		1,900		124,678
Chesapeake Utilities Corp.		647		27,187
Cleco Corp.		6,400		261,120
CMS Energy Corp.		29,900		687,401
Consolidated Edison, Inc.		37,400		2,223,430
Dominion Resources, Inc.		74,580		3,892,330
DTE Energy Co.		20,301		1,144,570
Duke Energy Corp.		168,556		3,612,155
Edison International		37,710		1,659,617
El Paso Electric Co.		5,300		162,392
Entergy Corp.		21,700		1,422,652
Exelon Corp.		108,469		4,231,376
FirstEnergy Corp.		54,656		2,558,994
GenOn Energy, Inc. *		86,304		183,828
Great Plains Energy, Inc.		17,341		354,103
Hawaiian Electric Industries, Inc.		10,700		283,978
IDACORP, Inc.		10,200		415,548
Integrys Energy Group, Inc.		10,540		575,906
ITC Holdings Corp.		5,000		387,300
MDU Resources Group, Inc.		22,425		514,429
MGE Energy, Inc.		2,000		91,480
Middlesex Water Co.		3,000		55,680
National Fuel Gas Co.		8,800		416,416
New Jersey Resources Corp.		6,225		269,169
NextEra Energy, Inc.		53,900		3,468,465
NiSource, Inc.		36,864		908,698
Northeast Utilities		41,143		1,512,828
Northwest Natural Gas Co.		5,700		260,490
NorthWestern Corp.		7,100		252,192
NRG Energy, Inc. *		30,600		520,200
NV Energy, Inc.		27,976		465,800
OGE Energy Corp.		12,500		674,500
ONEOK, Inc.		12,900		1,107,981
Ormat Technologies, Inc.		2,800		55,356
Otter Tail Corp.		4,100		90,036
Pepco Holdings, Inc.		29,300		554,356
PG&E Corp.		54,000		2,385,720
Piedmont Natural Gas Co., Inc.		9,300		283,464
Pinnacle West Capital Corp.		17,800		860,630
PNM Resources, Inc.		8,500		159,460
Portland General Electric Co.		8,200		211,806
PPL Corp.		73,200		2,002,020
Progress Energy, Inc.		37,959		2,020,178
Public Service Enterprise Group, Inc.		63,300		1,971,795
Questar Corp.		22,200		438,450
SCANA Corp.		15,405		710,479
Sempra Energy		29,675		1,921,159
South Jersey Industries, Inc.		2,500		123,125
Southwest Gas Corp.		11,600		487,432
TECO Energy, Inc.		26,700		481,134
The AES Corp. *		96,396		1,206,878
The Empire District Electric Co.		6,500		133,380
The Laclede Group, Inc.		3,300		129,954
The Southern Co.		110,100		5,057,994
UGI Corp.		13,700		399,766
UIL Holdings Corp.		6,166		211,925
Unisource Energy Corp.		3,800		138,320
Unitil Corp.		3,600		95,256
Vectren Corp.		8,766		258,159
Westar Energy, Inc.		11,700		335,673
WGL Holdings, Inc.		6,000		240,660
Wisconsin Energy Corp.		28,300		1,042,572
Xcel Energy, Inc.		62,395		1,688,409
				69,563,001
Total Common Stock
(Cost $1,474,801,458)				1,987,650,809
Rights 0.0% of net assets
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Indevus Pharmaceuticals, Inc. (a)(c)*		1,800		—
Total Rights
(Cost $—)				—
Warrants 0.0% of net assets
Magnum Hunter Resources Corp. (a)(c)*		33		—
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 1.0% of net assets
Time Deposit 0.9%
Bank of America
0.03%, 05/01/12		17,987,881		17,987,881

See financial notes 57

 Schwab Total Stock Market Index Fund

Portfolio Holdings (Unaudited) continued

	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
U.S. Treasury Obligation 0.1%
U.S. Treasury Bill
0.08%, 06/14/12 (e)(f)		1,550,000		1,549,849
Total Short-Term Investments
(Cost $19,537,730)				19,537,730
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.6% of net assets
Wells Fargo Advantage Government Money Market Fund		12,025,131		12,025,131
Total Collateral Invested for Securities on Loan
(Cost $12,025,131)				12,025,131
End of collateral invested for securities on loan.

At 04/30/12 tax basis cost of the fund’s investments was $1,505,644,571 and the unrealized appreciation and depreciation were $667,599,688 and ($166,055,720), respectively, with a net unrealized appreciation of $501,543,968.

*	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 $1,793 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contracts
Russell 2000 Index, mini, Long, expires 06/15/12		100		8,149,000		135,825
S&P 500 Index, e-mini, Long, expires 06/15/12		150		10,452,000		246,863
Net unrealized gains						382,688

58 See financial notes

 Schwab International Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.7%	Common Stock		1,163,863,477		1,371,693,600
	0	.6%	Preferred Stock		5,995,172		7,789,713
	0	.8%	Other Investment Company		11,327,697		11,287,500
	0	.1%	Short-Term Investment		1,570,310		1,570,310
	99	.2%	Total Investments		1,182,756,656		1,392,341,123
	3	.1%	Collateral Invested for Securities on Loan		43,878,380		43,878,380
	(2	.3)%	Other Assets and Liabilities, Net				(33,022,145	)
	100	.0%	Total Net Assets				1,403,197,358

	Number		Value
Security	of Shares		($)
Common Stock 97.7% of net assets
Australia 8.6%
Banks 2.7%
Australia & New Zealand Banking Group Ltd.		356,001		8,819,305
Bendigo and Adelaide Bank Ltd.		50,130		392,002
Commonwealth Bank of Australia		212,688		11,473,020
National Australia Bank Ltd.		297,767		7,783,418
Westpac Banking Corp.		410,573		9,675,653
				38,143,398
Capital Goods 0.0%
Leighton Holdings Ltd.		20,663		440,523
Commercial & Professional Supplies 0.2%
Brambles Ltd.		201,968		1,515,372
Campbell Brothers Ltd.		9,211		653,595
				2,168,967
Consumer Services 0.1%
Crown Ltd.		54,264		512,400
Echo Entertainment Group Ltd. *		93,881		437,326
TABCORP Holdings Ltd.		93,458		278,774
Tatts Group Ltd.		179,936		483,234
				1,711,734
Diversified Financials 0.2%
ASX Ltd.		23,898		794,520
Macquarie Group Ltd.		46,040		1,387,669
				2,182,189
Energy 0.6%
Caltex Australia Ltd.		18,421		262,439
Origin Energy Ltd.		145,318		1,996,515
Santos Ltd.		128,649		1,866,308
Woodside Petroleum Ltd.		86,590		3,131,390
WorleyParsons Ltd.		26,381		772,470
				8,029,122
Food & Staples Retailing 0.7%
Metcash Ltd.		104,953		431,814
Wesfarmers Ltd.		137,241		4,309,619
Woolworths Ltd.		166,004		4,476,094
				9,217,527
Food, Beverage & Tobacco 0.1%
Coca-Cola Amatil Ltd.		77,601		1,004,418
Health Care Equipment & Services 0.1%
Cochlear Ltd.		7,752		527,975
Ramsay Health Care Ltd.		17,923		373,541
Sonic Healthcare Ltd.		50,551		661,291
				1,562,807
Insurance 0.4%
AMP Ltd.		383,659		1,696,378
Insurance Australia Group Ltd.		283,686		1,040,560
QBE Insurance Group Ltd.		149,094		2,139,208
Suncorp Group Ltd.		177,722		1,498,611
				6,374,757
Materials 2.2%
Alumina Ltd.		332,968		397,716
Amcor Ltd.		167,504		1,307,353
BHP Billiton Ltd.		435,626		16,164,868
Boral Ltd.		99,599		389,528
Fortescue Metals Group Ltd.		169,952		987,313
Iluka Resources Ltd.		57,132		998,006
Incitec Pivot Ltd.		222,242		751,116
James Hardie Industries SE CDI		59,672		461,205
Lynas Corp Ltd. (b)*		233,856		270,010
Newcrest Mining Ltd.		104,385		2,844,499
Orica Ltd.		49,664		1,382,129
OZ Minerals Ltd.		44,193		425,515
Rio Tinto Ltd.		59,460		4,068,545
Sims Metal Management Ltd.		22,423		329,738
				30,777,541
Media 0.0%
Fairfax Media Ltd. (b)		304,880		217,564
Pharmaceuticals, Biotechnology & Life Sciences 0.2%
CSL Ltd.		71,617		2,727,211
Real Estate 0.6%
CFS Retail Property Trust		251,853		503,774
Dexus Property Group		660,290		640,629
Goodman Group		191,710		716,766
GPT Group		238,616		812,367
Lend Lease Group		74,007		570,013
Mirvac Group		466,243		626,486
Stockland		314,715		1,011,001
Westfield Group		299,311		2,861,817
Westfield Retail Trust		403,643		1,139,051
				8,881,904

See financial notes 59

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Retailing 0.0%
Harvey Norman Holdings Ltd.		72,477		151,971
Software & Services 0.0%
Computershare Ltd.		60,657		529,031
Telecommunication Services 0.2%
Telstra Corp., Ltd.		594,255		2,191,010
Transportation 0.2%
Asciano Ltd.		133,090		651,367
Qantas Airways Ltd. *		151,449		256,735
QR National Ltd.		233,058		879,457
Toll Holdings Ltd.		92,053		557,946
Transurban Group		178,171		1,087,924
				3,433,429
Utilities 0.1%
AGL Energy Ltd.		62,946		979,521
APA Group (b)		70,000		379,043
SP AusNet		194,506		223,388
				1,581,952
				121,327,055
Austria 0.2%
Banks 0.1%
Erste Group Bank AG		25,821		595,411
Raiffeisen Bank International AG (b)		6,669		221,904
				817,315
Energy 0.1%
OMV AG		22,073		746,658
Insurance 0.0%
Vienna Insurance Group AG Wiener Versicherung Gruppe		5,240		213,379
Materials 0.0%
Voestalpine AG		14,994		488,450
Real Estate 0.0%
Immofinanz Immobil *		128,236		451,481
Telecommunication Services 0.0%
Telekom Austria AG		45,336		497,452
Utilities 0.0%
Verbund AG		9,608		269,255
				3,483,990
Belgium 1.0%
Banks 0.0%
KBC GROEP NV		21,978		426,089
Capital Goods 0.0%
Bekaert N.V.		5,320		158,007
Diversified Financials 0.1%
Groupe Bruxelles Lambert S.A. (b)		10,830		751,612
Food & Staples Retailing 0.1%
Colruyt S.A.		10,334		423,404
Delhaize Group S.A.		13,897		676,387
				1,099,791
Food, Beverage & Tobacco 0.6%
Anheuser-Busch InBev N.V. (b)		109,149		7,866,967
Insurance 0.0%
Ageas (b)		301,904		550,139
Materials 0.1%
Solvay S.A.		8,090		985,491
Umicore S.A.		15,555		844,695
				1,830,186
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
UCB S.A. (b)		13,761		643,468
Telecommunication Services 0.1%
Belgacom S.A. (b)		19,684		559,324
Mobistar S.A.		4,094		155,020
				714,344
				14,040,603
Denmark 1.2%
Banks 0.1%
Danske Bank A/S *		88,996		1,446,268
Capital Goods 0.0%
Vestas Wind Systems A/S (b)*		27,796		244,996
Food, Beverage & Tobacco 0.1%
Carlsberg A/S, Class B		14,596		1,259,952
Health Care Equipment & Services 0.1%
Coloplast A/S, Class B		3,107		575,215
William Demant Holding A/S *		3,185		300,914
				876,129
Insurance 0.0%
Tryg A/S		3,346		186,819
Materials 0.1%
Novozymes A/S, B Shares		31,461		825,622
Pharmaceuticals, Biotechnology & Life Sciences 0.6%
Novo Nordisk A/S, Class B		57,578		8,488,319
Telecommunication Services 0.0%
TDC A/S		50,657		363,117
Transportation 0.2%
AP Moller - Maersk A/S, Series A		75		559,411
AP Moller - Maersk A/S, Series B		180		1,409,389
DSV A/S		27,836		634,794
				2,603,594
				16,294,816
Finland 0.8%
Automobiles & Components 0.1%
Nokian Renkaat Oyj		15,028		713,403
Capital Goods 0.2%
Kone Oyj, Class B		21,246		1,314,790
Metso Oyj		17,438		749,009
Wartsila Oyj		22,877		927,037
				2,990,836
Diversified Financials 0.0%
Pohjola Bank plc, A Shares		18,850		202,864
Energy 0.0%
Neste Oil Oyj		17,493		207,000
Food & Staples Retailing 0.0%
Kesko Oyj, B Shares		9,130		244,204

60 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Insurance 0.1%
Sampo Oyj, A Shares		57,318		1,526,093
Materials 0.1%
Stora Enso Oyj, R Shares		79,383		543,345
UPM-Kymmene Oyj		71,633		919,280
				1,462,625
Media 0.0%
Sanoma Oyj (b)		11,108		116,157
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Orion Oyj, Class B		12,992		265,021
Technology Hardware & Equipment 0.2%
Nokia Oyj		511,003		1,850,701
Telecommunication Services 0.0%
Elisa Oyj		19,292		435,064
Utilities 0.1%
Fortum Oyj		58,639		1,261,297
				11,275,265
France 8.8%
Automobiles & Components 0.2%
Cie Generale des Etablissements Michelin, Class B		24,474		1,829,008
Peugeot S.A.		20,759		249,315
Renault S.A.		26,229		1,193,177
				3,271,500
Banks 0.6%
BNP Paribas S.A.		130,512		5,267,390
Credit Agricole S.A.		136,340		701,837
Natixis		112,136		341,837
Societe Generale S.A.		90,012		2,130,966
				8,442,030
Capital Goods 1.2%
Alstom S.A.		28,306		1,012,355
Bouygues S.A. (b)		25,779		703,343
Compagnie de Saint-Gobain		54,808		2,301,140
Eiffage S.A.		5,526		188,115
European Aeronautic Defence & Space Co., N.V.		55,946		2,210,910
Legrand S.A.		30,536		1,030,857
Safran S.A.		22,762		843,671
Schneider Electric S.A. *		66,283		4,082,758
Thales S.A.		13,802		478,491
Vallourec S.A.		15,564		937,291
Vinci S.A.		61,586		2,856,385
				16,645,316
Commercial & Professional Supplies 0.1%
Bureau Veritas S.A.		7,455		664,143
Edenred		21,577		689,332
Societe BIC S.A.		3,926		432,462
				1,785,937
Consumer Durables & Apparel 0.5%
Christian Dior S.A.		7,169		1,081,024
LVMH Moet Hennessy Louis Vuitton S.A.		34,297		5,689,724
				6,770,748
Consumer Services 0.1%
Accor S.A.		20,125		695,936
Sodexo		12,865		1,024,922
				1,720,858
Diversified Financials 0.0%
Eurazeo		4,308		220,862
Wendel S.A.		4,484		335,869
				556,731
Energy 1.1%
Compagnie Generale de Geophysique - Veritas *		19,684		564,493
Technip S.A.		13,539		1,537,494
Total S.A.		287,862		13,818,413
				15,920,400
Food & Staples Retailing 0.2%
Carrefour S.A.		78,792		1,582,655
Casino Guichard Perrachon S.A. *		7,517		738,538
				2,321,193
Food, Beverage & Tobacco 0.6%
DANONE S.A.		78,735		5,542,870
Pernod Ricard S.A.		26,749		2,775,679
				8,318,549
Health Care Equipment & Services 0.2%
Essilor International S.A.		27,437		2,417,666
Household & Personal Products 0.3%
L’Oreal S.A.		32,802		3,948,592
Insurance 0.3%
AXA S.A.		235,294		3,343,563
CNP Assurances		18,752		263,287
SCOR SE		23,576		623,295
				4,230,145
Materials 0.6%
Air Liquide S.A.		38,441		4,944,552
ArcelorMittal		117,144		2,035,020
Arkema		7,552		669,780
Imerys S.A.		4,634		264,043
Lafarge S.A.		26,328		1,029,078
				8,942,473
Media 0.3%
Eutelsat Communications S.A.		13,516		481,250
JC Decaux S.A. *		9,072		257,548
Lagardere S.C.A.		16,104		488,325
Publicis Groupe S.A.		19,628		1,013,531
SES S.A.		40,893		979,817
Societe Television Francaise 1 (b)		16,016		155,133
				3,375,604
Pharmaceuticals, Biotechnology & Life Sciences 0.8%
Sanofi		154,320		11,787,240
Real Estate 0.3%
Fonciere des Regions		3,749		290,485
Gecina S.A.		2,992		277,554
ICADE *		3,182		268,454
Klepierre		14,233		451,216
Unibail-Rodamco SE		12,543		2,347,017
				3,634,726

See financial notes 61

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Retailing 0.1%
PPR		10,384		1,737,758
Semiconductors & Semiconductor Equipment 0.0%
STMicroelectronics N.V.		86,971		500,765
Software & Services 0.2%
AtoS		6,751		435,039
Cap Gemini S.A.		20,192		788,848
Dassault Systemes S.A.		8,246		800,188
				2,024,075
Technology Hardware & Equipment 0.1%
Alcatel-Lucent *		316,604		486,882
Neopost S.A.		4,494		258,641
				745,523
Telecommunication Services 0.5%
France Telecom S.A.		250,672		3,436,228
Iliad S.A.		2,612		336,377
Vivendi S.A.		170,157		3,147,317
				6,919,922
Transportation 0.1%
Aeroports de Paris		4,726		397,731
Groupe Eurotunnel S.A. - Reg’d		73,526		618,620
				1,016,351
Utilities 0.4%
EDF S.A.		33,008		699,306
GDF Suez		167,596		3,858,770
Suez Environnement Co.		38,178		538,543
Veolia Environnement		49,629		726,652
				5,823,271
				122,857,373
Germany 7.8%
Automobiles & Components 0.9%
Bayerische Motoren Werke AG		44,804		4,261,404
Continental AG (b)		11,151		1,081,517
Daimler AG - Reg’d		122,572		6,782,099
Volkswagen AG		4,026		687,743
				12,812,763
Banks 0.1%
Commerzbank AG *		488,413		1,057,492
Capital Goods 0.9%
Brenntag AG		4,568		569,075
GEA Group AG		23,827		786,952
Hochtief AG		5,779		338,979
MAN SE		8,737		1,104,456
Siemens AG - Reg’d		111,626		10,361,169
				13,160,631
Consumer Durables & Apparel 0.2%
Adidas AG		28,548		2,381,185
Diversified Financials 0.5%
Deutsche Bank AG - Reg’d		126,082		5,473,609
Deutsche Boerse AG		26,608		1,670,687
				7,144,296
Food & Staples Retailing 0.0%
Metro AG		17,029		549,780
Food, Beverage & Tobacco 0.0%
Suedzucker AG		9,044		275,408
Health Care Equipment & Services 0.3%
Celesio AG		11,605		200,129
Fresenius Medical Care AG & Co KGaA		28,651		2,034,560
Fresenius SE & Co KGaA		15,517		1,549,181
				3,783,870
Household & Personal Products 0.1%
Beiersdorf AG		13,999		982,404
Henkel AG & Co. KGaA		17,072		1,045,328
				2,027,732
Insurance 0.8%
Allianz SE - Reg’d		61,483		6,857,894
Hannover Rueckversicherung AG - Reg’d		8,228		497,937
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d (b)		24,420		3,547,012
				10,902,843
Materials 1.4%
BASF SE (b)		124,582		10,257,223
HeidelbergCement AG		19,188		1,055,812
K&S AG - Reg’d		22,781		1,138,635
Lanxess AG		11,353		903,885
Linde AG		23,300		3,988,102
Salzgitter AG		5,330		279,364
ThyssenKrupp AG		50,861		1,206,184
Wacker Chemie AG (b)		2,134		172,072
				19,001,277
Media 0.1%
Axel Springer AG (b)		5,400		246,375
Kabel Deutschland Holding AG *		12,281		774,231
				1,020,606
Pharmaceuticals, Biotechnology & Life Sciences 0.7%
Bayer AG - Reg’d (b)		111,979		7,890,476
Merck KGaA		8,818		969,273
QIAGEN N.V. *		31,809		525,948
				9,385,697
Semiconductors & Semiconductor Equipment 0.1%
Infineon Technologies AG		148,287		1,477,759
Software & Services 0.6%
SAP AG		124,580		8,261,335
United Internet AG - Reg’d		14,668		290,275
				8,551,610
Telecommunication Services 0.3%
Deutsche Telekom AG - Reg’d		380,195		4,286,593
Transportation 0.2%
Deutsche Lufthansa AG - Reg’d		31,243		406,858
Deutsche Post AG - Reg’d		115,480		2,156,466
Fraport AG		5,014		326,035
				2,889,359
Utilities 0.6%
E.ON AG (b)		244,203		5,529,192
RWE AG		66,777		2,870,543
				8,399,735
				109,108,636

62 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Greece 0.1%
Banks 0.0%
National Bank of Greece S.A. *		130,460		291,076
Consumer Services 0.0%
OPAP S.A.		30,470		272,308
Food, Beverage & Tobacco 0.1%
Coca Cola Hellenic Bottling Co., S.A. *		25,006		496,507
Telecommunication Services 0.0%
Hellenic Telecommunications Organization S.A. (OTE)		33,441		109,170
				1,169,061
Hong Kong 2.9%
Banks 0.3%
BOC Hong Kong (Holdings) Ltd.		496,000		1,533,068
Hang Seng Bank Ltd.		103,136		1,412,382
The Bank of East Asia, Ltd.		210,600		783,601
Wing Hang Bank Ltd.		24,500		259,744
				3,988,795
Capital Goods 0.2%
Hopewell Holdings Ltd.		78,000		209,049
Hutchison Whampoa Ltd.		287,370		2,753,016
NWS Holdings Ltd.		184,000		276,450
				3,238,515
Consumer Durables & Apparel 0.0%
Yue Yuen Industrial (Holdings) Ltd.		101,000		336,939
Consumer Services 0.3%
Galaxy Entertainment Group Ltd. (b)*		170,000		529,964
Sands China Ltd.		329,600		1,290,478
Shangri-La Asia Ltd.		192,000		406,335
SJM Holdings Ltd.		226,000		493,830
Wynn Macau Ltd.		212,000		677,646
				3,398,253
Diversified Financials 0.2%
First Pacific Co., Ltd.		290,000		314,144
Hong Kong Exchanges & Clearing Ltd.		139,818		2,223,525
				2,537,669
Insurance 0.3%
AIA Group Ltd.		1,150,400		4,071,118
Real Estate 1.0%
Cheung Kong (Holdings) Ltd.		188,656		2,494,986
Hang Lung Group Ltd.		120,000		748,421
Hang Lung Properties Ltd.		336,000		1,235,312
Henderson Land Development Co., Ltd.		124,000		703,592
Hysan Development Co., Ltd.		87,000		393,280
Kerry Properties Ltd.		98,000		444,668
New World Development Co., Ltd.		490,000		607,424
Sino Land Co., Ltd.		396,000		679,278
Sun Hung Kai Properties Ltd.		192,604		2,306,990
Swire Pacific Ltd., Class A		95,090		1,120,924
The Link REIT		307,000		1,277,243
The Wharf Holdings Ltd.		206,100		1,222,247
Wheelock & Co., Ltd.		124,000		417,781
				13,652,146
Retailing 0.1%
Li & Fung Ltd.		774,000		1,650,510
Lifestyle International Holdings Ltd.		80,500		187,622
				1,838,132
Semiconductors & Semiconductor Equipment 0.0%
ASM Pacific Technology Ltd.		27,000		364,776
Technology Hardware & Equipment 0.0%
Foxconn International Holdings Ltd. *		294,000		139,025
Telecommunication Services 0.0%
HKT Trust & HKT Ltd. *		23,738		18,449
PCCW Ltd.		546,000		202,743
				221,192
Transportation 0.1%
Cathay Pacific Airways Ltd.		141,000		238,547
MTR Corp., Ltd.		195,500		693,367
Orient Overseas International Ltd.		30,000		204,405
				1,136,319
Utilities 0.4%
Cheung Kong Infrastructure Holdings Ltd.		64,000		379,284
CLP Holdings Ltd.		262,580		2,247,865
Hong Kong & China Gas Co., Ltd.		646,392		1,651,145
Power Assets Holdings Ltd.		189,500		1,414,799
				5,693,093
				40,615,972
Ireland 0.3%
Food, Beverage & Tobacco 0.1%
Kerry Group plc, Class A		19,160		875,014
Materials 0.1%
CRH plc		97,761		1,983,589
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Elan Corp. plc *		68,254		940,961
Transportation 0.0%
Ryanair Holdings plc *		25,968		146,647
				3,946,211
Israel 0.6%
Banks 0.1%
Bank Hapoalim B.M.		144,407		535,883
Bank Leumi Le-Israel B.M.		160,854		503,180
Israel Discount Bank, Class A *		107,851		139,865
Mizrahi Tefahot Bank Ltd. *		16,863		151,949
				1,330,877
Capital Goods 0.0%
Delek Group Ltd.		620		120,684
Elbit Systems Ltd.		3,214		117,252
				237,936
Materials 0.1%
Israel Chemicals Ltd.		57,844		661,668

See financial notes 63

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
The Israel Corp., Ltd.		316		205,962
				867,630
Pharmaceuticals, Biotechnology & Life Sciences 0.4%
Teva Pharmaceutical Industries Ltd.		128,323		5,867,842
Software & Services 0.0%
NICE Systems Ltd. *		8,174		313,373
Telecommunication Services 0.0%
Bezeq Israeli Telecommunication Corp., Ltd.		240,228		400,491
Cellcom Israel Ltd.		7,466		94,100
				494,591
				9,112,249
Italy 2.1%
Automobiles & Components 0.1%
Fiat S.p.A. *		108,720		525,140
Pirelli & C. S.p.A.		32,458		395,490
				920,630
Banks 0.4%
Banca Carige S.p.A.		88,206		92,209
Banca Monte dei Paschi di Siena S.p.A. (b)		665,860		236,868
Banco Popolare Scarl (b)		240,636		357,845
Intesa Sanpaolo S.p.A.		1,374,858		2,084,084
Intesa Sanpaolo S.p.A. - RSP		127,239		170,058
UniCredit S.p.A.		484,099		1,930,885
Unione di Banche Italiane S.C.P.A.		110,740		411,599
				5,283,548
Capital Goods 0.1%
Fiat Industrial S.p.A.		100,960		1,146,108
Finmeccanica S.p.A.		55,222		237,547
Prysmian S.p.A.		27,788		452,635
				1,836,290
Consumer Durables & Apparel 0.0%
Luxottica Group S.p.A.		15,932		569,686
Consumer Services 0.0%
Autogrill S.p.A.		15,620		155,532
Diversified Financials 0.0%
Exor S.p.A.		8,747		203,655
Mediobanca S.p.A.		70,501		344,682
				548,337
Energy 0.7%
Eni S.p.A.		327,921		7,286,342
Saipem S.p.A.		35,929		1,775,844
Tenaris S.A.		64,434		1,254,216
				10,316,402
Insurance 0.2%
Assicurazioni Generali S.p.A.		159,328		2,173,720
Media 0.0%
Mediaset S.p.A.		96,708		230,178
Telecommunication Services 0.2%
Telecom Italia S.p.A. *		1,281,520		1,453,864
Telecom Italia S.p.A. - RSP *		822,271		770,162
				2,224,026
Transportation 0.0%
Atlantia S.p.A.		45,553		690,691
Utilities 0.4%
A2A S.p.A.		149,621		94,946
Enel Green Power S.p.A.		238,789		385,568
Enel S.p.A.		898,169		2,945,451
Snam Rete Gas S.p.A.		219,282		1,041,717
Terna - Rete Elettrica Nationale S.p.A.		164,559		611,299
				5,078,981
				30,028,021
Japan 21.0%
Automobiles & Components 2.8%
Aisin Seiki Co., Ltd.		26,100		919,050
Bridgestone Corp.		88,757		2,100,148
Daihatsu Motor Co., Ltd.		26,000		490,799
Denso Corp.		66,300		2,143,828
Fuji Heavy Industries Ltd.		80,000		603,401
Honda Motor Co., Ltd.		221,539		7,973,008
Isuzu Motors Ltd.		162,000		924,922
Koito Manufacturing Co., Ltd.		13,000		201,161
Mazda Motor Corp. *		206,000		334,757
Mitsubishi Motor Corp. *		529,000		593,511
NGK Spark Plug Co., Ltd.		21,000		299,803
NHK Spring Co., Ltd.		20,000		208,757
Nissan Motors Co., Ltd.		338,396		3,518,312
NOK Corp.		14,200		292,102
Stanley Electric Co., Ltd.		19,800		303,329
Sumitomo Rubber Industries Ltd.		23,400		322,005
Suzuki Motor Corp.		45,900		1,080,322
Toyoda Gosei Co., Ltd.		8,800		179,360
Toyota Industries Corp.		24,500		692,024
Toyota Motor Corp.		374,003		15,325,796
Yamaha Motor Co., Ltd.		38,200		510,221
				39,016,616
Banks 2.0%
Aozora Bank Ltd.		79,000		202,618
Fukuoka Financial Group, Inc.		106,000		441,011
Hokuhoku Financial Group, Inc.		171,000		299,167
Mitsubishi UFJ Financial Group, Inc.		1,725,609		8,285,528
Mizuho Financial Group, Inc.		3,090,634		4,872,406
Resona Holdings, Inc.		257,400		1,093,310
Seven Bank Ltd.		81,200		200,625
Shinsei Bank Ltd.		188,000		242,603
Sumitomo Mitsui Financial Group, Inc.		182,246		5,831,650
Sumitomo Mitsui Trust Holdings, Inc.		425,000		1,245,055
Suruga Bank Ltd.		25,000		249,346
The Bank of Kyoto Ltd.		44,000		372,755
The Bank of Yokohama Ltd.		167,000		808,788
The Chiba Bank Ltd.		104,000		631,854
The Chugoku Bank Ltd.		24,000		303,270
The Gunma Bank Ltd.		52,000		263,837
The Hachijuni Bank Ltd.		57,000		310,211
The Hiroshima Bank Ltd.		68,000		276,255
The Iyo Bank Ltd.		33,000		273,854
The Joyo Bank Ltd.		89,000		388,523

64 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
The Nishi-Nippon City Bank Ltd.		92,000		243,332
The Shizuoka Bank Ltd.		79,000		826,712
Yamaguchi Financial Group, Inc.		28,000		240,505
				27,903,215
Capital Goods 3.2%
Amada Co., Ltd.		49,000		332,578
Asahi Glass Co., Ltd.		138,000		1,085,033
Chiyoda Corp.		21,000		252,879
Daikin Industries Ltd.		32,000		845,464
Fanuc Corp.		25,900		4,368,047
Fuji Electric Co., Ltd.		76,000		203,556
Furukawa Electric Co., Ltd.		90,000		244,234
GS Yuasa Corp.		48,000		247,047
Hino Motors Ltd.		35,000		247,525
Hitachi Construction Machinery Co., Ltd.		14,600		315,742
IHI Corp.		180,000		435,448
ITOCHU Corp.		204,000		2,308,099
JGC Corp.		28,000		806,262
JS Group Corp.		36,300		712,802
JTEKT Corp.		30,300		332,086
Kajima Corp.		115,000		327,776
Kawasaki Heavy Industries Ltd.		194,000		582,330
Kinden Corp.		18,000		125,005
Komatsu Ltd.		128,309		3,692,729
Kubota Corp.		156,000		1,505,887
Kurita Water Industries Ltd.		15,400		377,362
Mabuchi Motor Co., Ltd.		3,300		138,054
Makita Corp.		15,300		585,663
Marubeni Corp.		224,000		1,555,390
Mitsubishi Corp.		190,300		4,124,172
Mitsubishi Electric Corp.		260,000		2,283,993
Mitsubishi Heavy Industries Ltd.		414,000		1,877,500
Mitsui & Co., Ltd.		236,200		3,688,404
Nabtesco Corp.		13,000		277,520
NGK Insulators Ltd.		35,000		436,532
Nidec Corp.		14,600		1,312,057
Nippon Sheet Glass Co., Ltd. (b)		123,000		159,311
NSK Ltd.		60,000		411,678
NTN Corp.		65,000		245,886
Obayashi Corp.		89,000		376,723
Shimizu Corp.		81,000		307,913
SMC Corp.		7,400		1,235,823
Sojitz Corp.		170,800		287,649
Sumitomo Corp.		153,600		2,182,839
Sumitomo Electric Industries Ltd.		102,900		1,388,043
Sumitomo Heavy Industries Ltd.		75,000		386,823
Taisei Corp.		140,000		355,601
The Japan Steel Works Ltd.		43,000		261,554
THK Co., Ltd.		16,400		327,964
TOTO Ltd.		40,000		295,958
Toyota Tsusho Corp.		29,000		575,091
Ushio, Inc.		14,300		186,548
				44,612,580
Commercial & Professional Supplies 0.2%
Dai Nippon Printing Co., Ltd.		76,000		674,492
Secom Co., Ltd.		28,600		1,353,259
Toppan Printing Co., Ltd.		76,000		514,751
				2,542,502
Consumer Durables & Apparel 0.8%
Asics Corp.		20,000		215,320
Casio Computer Co., Ltd. (b)		32,000		212,586
Namco Bandai Holdings, Inc.		26,700		381,775
Nikon Corp.		46,000		1,363,361
Panasonic Corp.		297,312		2,279,387
Rinnai Corp.		4,400		320,556
Sankyo Co., Ltd.		7,300		351,972
Sega Sammy Holdings, Inc.		29,100		610,590
Sekisui Chemical Co., Ltd.		59,000		530,481
Sekisui House Ltd.		79,000		732,360
Sharp Corp.		136,785		875,040
Shimano, Inc.		10,200		670,687
Sony Corp.		135,400		2,189,932
Yamaha Corp.		22,000		213,287
				10,947,334
Consumer Services 0.1%
Benesse Holdings, Inc.		9,200		456,795
McDonald’s Holdings Co., Ltd.		9,000		255,404
Oriental Land Co., Ltd.		6,800		753,925
				1,466,124
Diversified Financials 0.4%
Aeon Credit Service Co., Ltd. (b)		10,700		186,526
Credit Saison Co., Ltd.		20,200		433,513
Daiwa Securities Group, Inc.		227,000		857,835
Mitsubishi UFJ Lease & Finance Co., Ltd.		7,950		330,306
Nomura Holdings, Inc.		495,500		2,031,115
ORIX Corp.		14,290		1,366,278
SBI Holdings, Inc.		3,059		246,166
				5,451,739
Energy 0.3%
Cosmo Oil Co., Ltd.		81,000		224,631
Idemitsu Kosan Co., Ltd.		3,000		276,229
Inpex Corp.		299		1,974,150
Japan Petroleum Exploration Co.		3,900		177,925
JX Holdings, Inc.		306,000		1,726,112
Showa Shell Sekiyu K.K.		25,700		161,733
TonenGeneral Sekiyu K.K.		39,000		364,784
				4,905,564
Food & Staples Retailing 0.4%
Aeon Co., Ltd.		81,900		1,069,204
FamilyMart Co., Ltd.		8,700		387,259
Lawson, Inc.		8,200		542,887
Seven & i Holdings Co., Ltd.		101,503		3,072,513
				5,071,863
Food, Beverage & Tobacco 0.7%
Ajinomoto Co., Inc.		88,000		1,135,749
Asahi Group Holdings Ltd.		52,800		1,188,909
Coca-Cola West Co., Ltd.		8,300		149,817
Japan Tobacco, Inc.		607		3,362,588
Kikkoman Corp.		22,000		257,954
Kirin Holdings Co., Ltd.		112,000		1,426,034
Meiji Holdings Co., Ltd.		9,400		416,337
Nippon Meat Packers, Inc.		23,000		293,798
Nisshin Seifun Group, Inc.		25,500		311,132
Nissin Food Holdings Co., Ltd.		8,000		301,007
Toyo Suisan Kaisha Ltd.		12,000		308,055
Yakult Honsha Co., Ltd. (b)		13,200		486,246

See financial notes 65

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Yamazaki Baking Co., Ltd.		16,000		236,608
				9,874,234
Health Care Equipment & Services 0.2%
Alfresa Holdings Corp.		5,300		244,753
Medipal Holdings Corp.		20,000		252,992
Miraca Holdings, Inc.		7,600		299,316
Suzuken Co., Ltd.		10,000		302,470
Sysmex Corp.		9,800		393,845
Terumo Corp.		22,500		1,030,949
				2,524,325
Household & Personal Products 0.3%
Kao Corp.		70,619		1,892,260
Shiseido Co., Ltd.		49,000		857,847
Unicharm Corp.		15,500		867,092
				3,617,199
Insurance 0.5%
MS&AD Insurance Group Holdings, Inc.		76,262		1,405,975
NKSJ Holdings, Inc.		49,500		1,018,894
Sony Financial Holdings, Inc.		23,700		387,335
T&D Holdings, Inc.		79,000		851,587
The Dai-ichi Life Insurance Co., Ltd.		1,229		1,538,973
Tokio Marine Holdings, Inc.		97,499		2,494,377
				7,697,141
Materials 1.5%
Air Water, Inc.		20,000		252,105
Asahi Kasei Corp.		172,000		1,063,088
Daicel Corp.		40,000		253,551
Daido Steel Co., Ltd.		39,000		241,929
Denki Kagaku Kogyo K.K.		66,000		255,450
Hitachi Chemical Co., Ltd.		14,200		263,233
Hitachi Metals Ltd.		22,000		274,013
JFE Holdings, Inc.		62,900		1,176,323
JSR Corp.		24,400		481,564
Kaneka Corp.		38,000		234,836
Kansai Paint Co., Ltd.		30,000		322,894
Kobe Steel Ltd.		340,000		484,906
Kuraray Co., Ltd.		47,000		670,756
Maruichi Steel Tube Ltd.		6,400		140,842
Mitsubhishi Gas Chemical Co., Inc.		53,000		347,223
Mitsubishi Chemical Holdings Corp.		185,000		974,965
Mitsubishi Materials Corp.		153,000		456,328
Mitsui Chemicals, Inc.		112,000		323,578
Nippon Paper Group, Inc.		13,500		270,269
Nippon Steel Corp.		697,000		1,736,845
Nisshin Steel Co., Ltd.		95,000		133,336
Nitto Denko Corp.		22,500		923,400
OJI Paper Co., Ltd.		116,000		532,626
Shin-Etsu Chemical Co., Ltd.		55,260		3,189,591
Showa Denko K.K.		204,000		453,923
Sumitomo Chemical Co., Ltd.		215,000		884,046
Sumitomo Metal Industries Ltd.		459,000		824,535
Sumitomo Metal Mining Co., Ltd.		71,000		931,331
Taiyo Nippon Sanso Corp.		36,000		248,716
Teijin Ltd.		128,000		430,449
Toray Industries, Inc.		200,000		1,537,662
Tosoh Corp.		70,000		193,523
Toyo Seikan Kaisha Ltd.		20,700		275,453
Ube Industries Ltd.		138,000		352,916
Yamato Kogyo Co., Ltd.		5,700		162,194
				21,298,399
Media 0.1%
Dentsu, Inc.		24,700		758,413
Hakuhodo DY Holdings, Inc.		3,180		198,577
Jupiter Telecommunications Co., Ltd.		237		251,130
Toho Co., Ltd.		15,500		277,821
				1,485,941
Pharmaceuticals, Biotechnology & Life Sciences 1.1%
Astellas Pharma, Inc.		60,670		2,460,508
Chugai Pharmaceutical Co., Ltd.		30,500		548,944
Daiichi Sankyo Co., Ltd.		90,600		1,555,907
Dainippon Sumitomo Pharma Co., Ltd.		21,800		218,323
Eisai Co., Ltd.		34,400		1,344,467
Hisamitsu Pharmaceutical Co., Inc.		8,400		373,772
Kyowa Hakko Kirin Co., Ltd.		36,000		378,411
Mitsubishi Tanabe Pharma Corp.		31,000		430,295
Ono Pharmaceutical Co., Ltd.		11,300		639,811
Otsuka Holdings Co., Ltd.		34,300		1,033,721
Santen Pharmaceutical Co., Ltd.		10,100		422,674
Shionogi & Co., Ltd.		41,000		534,787
Taisho Pharmaceutical Holdings Co., Ltd.		5,000		400,145
Takeda Pharmaceutical Co., Ltd.		107,200		4,677,682
Tsumura & Co.		8,200		219,099
				15,238,546
Real Estate 0.8%
Aeon Mall Co., Ltd.		9,900		219,543
Daito Trust Construction Co., Ltd.		9,900		890,288
Daiwa House Industry Co., Ltd.		65,000		838,777
Japan Prime Realty Investment Corp.		93		267,078
Japan Real Estate Investment Corp.		63		558,108
Japan Retail Fund Investment Corp.		256		408,174
Mitsubishi Estate Co., Ltd.		170,502		3,014,193
Mitsui Fudosan Co., Ltd.		113,777		2,084,030
Nippon Building Fund, Inc.		75		712,662
Nomura Real Estate Holdings, Inc.		13,000		227,255
Nomura Real Estate Office Fund, Inc.		37		214,825
Sumitomo Realty & Development Co., Ltd.		49,000		1,168,490
Tokyu Land Corp.		58,000		279,535
				10,882,958
Retailing 0.4%
ABC-Mart, Inc.		3,600		131,097
Fast Retailing Co., Ltd.		7,200		1,608,969
Isetan Mitsukoshi Holdings Ltd.		51,200		557,685
J. Front Retailing Co., Ltd.		66,000		339,120
Marui Group Co., Ltd.		30,000		238,124
Nitori Holdings Co., Ltd.		5,100		469,305
Rakuten, Inc.		1,000		1,115,347
Sanrio Co., Ltd.		6,100		268,124
Shimamura Co., Ltd.		3,000		339,738
Takashimaya Co., Ltd.		36,000		272,881

66 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
USS Co., Ltd.		2,990		303,297
Yamada Denki Co., Ltd.		11,210		727,437
				6,371,124
Semiconductors & Semiconductor Equipment 0.2%
Advantest Corp.		20,400		339,003
Rohm Co., Ltd.		13,200		595,303
Sumco Corp. *		15,800		167,727
Tokyo Electron Ltd.		23,400		1,296,735
				2,398,768
Software & Services 0.4%
Dena Co., Ltd.		13,300		417,339
Gree, Inc. (b)		13,000		351,606
Itochu Techno-Solutions Corp.		3,800		173,383
Konami Corp.		12,700		367,293
Nintendo Co., Ltd.		13,539		1,827,547
Nomura Research Institute Ltd.		13,800		316,598
NTT Data Corp.		172		595,296
Oracle Corp., Japan		5,200		200,850
Otsuka Corp.		2,200		176,937
Square Enix Holdings Co., Ltd.		8,700		170,284
Trend Micro, Inc.		14,500		439,870
Yahoo Japan Corp.		1,984		595,410
				5,632,413
Technology Hardware & Equipment 2.1%
Brother Industries Ltd.		32,200		432,663
Canon, Inc.		153,895		6,975,723
Citizen Holdings Co., Ltd.		36,000		226,088
FUJIFILM Holdings Corp		63,211		1,340,730
Fujitsu Ltd.		254,000		1,234,524
Hamamatsu Photonics K.K.		9,100		361,621
Hirose Electric Co., Ltd.		4,400		460,731
Hitachi High-Technologies Corp.		8,400		211,089
Hitachi Ltd.		611,079		3,892,111
Hoya Corp.		59,407		1,362,625
Ibiden Co., Ltd.		16,500		336,863
Keyence Corp.		6,100		1,439,751
Konica Minolta Holdings, Inc.		65,500		531,411
Kyocera Corp.		20,900		2,037,541
Murata Manufacturing Co., Ltd.		27,474		1,570,129
NEC Corp. *		355,000		640,902
Nippon Electric Glass Co., Ltd.		54,000		436,307
Omron Corp.		27,700		588,507
Ricoh Co., Ltd.		89,000		797,271
Seiko Epson Corp.		17,700		236,127
Shimadzu Corp.		32,000		284,895
TDK Corp.		16,800		877,245
Toshiba Corp.		549,178		2,244,930
Yaskawa Electric Corp.		29,000		252,556
Yokogawa Electric Corp.		29,300		281,241
				29,053,581
Telecommunication Services 0.9%
KDDI Corp.		392		2,566,146
Nippon Telegraph & Telephone Corp.		59,178		2,677,545
NTT DoCoMo, Inc.		2,061		3,519,158
Softbank Corp.		119,700		3,572,622
				12,335,471
Transportation 0.9%
All Nippon Airways Co., Ltd.		114,000		334,581
Central Japan Railway Co.		205		1,701,936
East Japan Railway Co.		45,860		2,853,278
Kamigumi Co., Ltd.		34,000		273,258
Kawasaki Kisen Kaisha Ltd. (b)		99,000		208,529
Keikyu Corp.		64,000		549,433
Keio Corp.		79,000		571,384
Keisei Electric Railway Co., Ltd.		38,000		293,294
Kintetsu Corp. (b)		222,000		783,164
Mitsubishi Logistics Corp.		16,000		175,508
Mitsui O.S.K. Lines, Ltd.		156,000		604,642
Nippon Express Co., Ltd.		116,000		437,900
Nippon Yusen K.K.		209,000		617,811
Odakyu Electric Railway Co., Ltd.		85,000		787,812
Tobu Railway Co., Ltd.		139,000		707,508
Tokyu Corp.		155,000		725,836
West Japan Railway Co.		23,100		949,005
Yamato Holdings Co., Ltd.		54,000		832,598
				13,407,477
Utilities 0.7%
Chubu Electric Power Co., Inc.		93,200		1,526,329
Electric Power Development Co., Ltd.		15,900		439,947
Hokkaido Electric Power Co., Inc.		25,000		351,343
Hokuriku Electric Power Co.		23,000		393,640
Kyushu Electric Power Co., Inc.		55,000		729,555
Osaka Gas Co., Ltd.		256,000		1,035,291
Shikoku Electric Power Co., Inc.		24,900		643,162
The Chugoku Electric Power Co., Inc.		40,500		694,900
The Kansai Electric Power Co., Inc.		102,500		1,486,307
The Tokyo Electric Power Co., Inc. *		193,990		484,300
Toho Gas Co., Ltd.		56,000		337,897
Tohoku Electric Power Co., Inc.		61,500		644,846
Tokyo Gas Co., Ltd.		331,201		1,598,244
				10,365,761
				294,100,875
Netherlands 2.3%
Capital Goods 0.2%
Koninklijke Boskalis Westminster N.V.		9,644		352,279
Koninklijke Philips Electronics N.V. *		135,978		2,706,024
				3,058,303
Commercial & Professional Supplies 0.0%
Randstad Holding N.V.		16,328		565,663
Diversified Financials 0.3%
ING Groep N.V. CVA *		518,676		3,659,195
Energy 0.1%
Fugro N.V. CVA		9,440		690,095
SBM Offshore N.V.		23,355		425,134
				1,115,229
Food & Staples Retailing 0.2%
Koninklijke Ahold N.V.		158,541		2,012,269
Food, Beverage & Tobacco 0.7%
Heineken Holding N.V.		15,080		698,392
Heineken N.V.		35,368		1,934,229

See financial notes 67

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Unilever N.V. CVA		220,395		7,549,476
				10,182,097
Insurance 0.1%
Aegon N.V. *		234,517		1,090,876
Delta Lloyd N.V.		14,000		236,114
				1,326,990
Materials 0.2%
Akzo Nobel N.V. (b)		31,611		1,695,321
Koninklijke DSM N.V.		21,042		1,207,494
				2,902,815
Media 0.1%
Reed Elsevier N.V.		93,858		1,107,613
Wolters Kluwer N.V.		41,162		711,584
				1,819,197
Real Estate 0.0%
Corio N.V.		8,186		366,711
Semiconductors & Semiconductor Equipment 0.2%
ASML Holding N.V.		58,064		2,954,473
Telecommunication Services 0.1%
Koninklijke (Royal) KPN N.V.		201,610		1,810,030
Transportation 0.1%
Koninklijke Vopak N.V.		9,594		618,770
TNT Express N.V.		48,178		585,185
				1,203,955
				32,976,927
New Zealand 0.1%
Consumer Services 0.0%
Sky City Entertainment Group Ltd.		78,727		247,050
Materials 0.0%
Fletcher Building Ltd.		92,592		472,369
Telecommunication Services 0.1%
Telecom Corp. of New Zealand Ltd.		262,628		564,636
Transportation 0.0%
Auckland International Airport Ltd.		126,326		260,947
Utilities 0.0%
Contact Energy Ltd. *		47,421		187,829
				1,732,831
Norway 1.0%
Banks 0.1%
DnB A.S.A. (b)		133,336		1,437,149
Capital Goods 0.1%
Orkla A.S.A.		105,200		772,643
Energy 0.5%
Aker Solutions A.S.A.		22,400		381,478
Seadrill Ltd.		44,800		1,736,986
Statoil A.S.A.		151,111		4,054,667
Subsea 7 S.A. *		38,400		994,519
				7,167,650
Insurance 0.0%
Gjensidige Forsikring A.S.A.		27,290		307,467
Materials 0.2%
Norsk Hydro A.S.A.		127,000		619,279
Yara International A.S.A.		25,600		1,254,914
				1,874,193
Telecommunication Services 0.1%
Telenor A.S.A.		96,838		1,780,017
				13,339,119
Portugal 0.2%
Energy 0.1%
Galp Energia, SGPS, S.A., B Shares		38,642		608,351
Food & Staples Retailing 0.0%
Jeronimo Martins, SGPS, S.A.		30,054		562,444
Materials 0.0%
CIMPOR-Cimentos de Portugal, SGPS, S.A.		27,508		201,232
Telecommunication Services 0.0%
Portugal Telecom, SGPS, S.A. - Reg’d		91,748		493,707
Utilities 0.1%
EDP - Energias de Portugal S.A.		260,423		744,733
EDP Renovaveis S.A. *		29,756		126,820
				871,553
				2,737,287
Singapore 1.8%
Banks 0.6%
DBS Group Holdings Ltd.		246,246		2,766,411
Oversea-Chinese Banking Corp., Ltd.		346,552		2,502,620
United Overseas Bank Ltd.		171,233		2,656,747
				7,925,778
Capital Goods 0.3%
Fraser & Neave Ltd.		125,000		709,399
Keppel Corp., Ltd.		194,800		1,732,693
Noble Group Ltd.		526,000		499,234
SembCorp Industries Ltd.		134,000		544,295
SembCorp Marine Ltd.		114,000		466,453
Singapore Technologies Engineering Ltd.		208,000		505,121
Yangzijiang Shipbuilding Holdings Ltd.		262,000		248,540
				4,705,735
Consumer Services 0.1%
Genting Singapore plc *		836,000		1,164,858
Diversified Financials 0.1%
Singapore Exchange Ltd.		117,000		630,804
Food & Staples Retailing 0.0%
Olam International Ltd.		200,000		364,940
Food, Beverage & Tobacco 0.1%
Golden Agri-Resources Ltd.		911,000		539,258
Wilmar International Ltd.		262,000		1,025,806
				1,565,064

68 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Media 0.1%
Singapore Press Holdings Ltd.		209,000		669,609
Real Estate 0.2%
Ascendas REIT		242,000		405,974
Capitaland Ltd.		350,000		827,287
CapitaMall Trust REIT		296,000		429,751
CapitaMalls Asia Ltd.		186,000		230,543
City Developments Ltd.		68,000		555,493
Global Logistic Properties Ltd. *		251,000		416,537
Keppel Land Ltd.		102,000		259,693
UOL Group Ltd.		63,000		229,594
				3,354,872
Retailing 0.0%
Jardine Cycle & Carriage Ltd.		15,000		569,767
Telecommunication Services 0.2%
Singapore Telecommunications Ltd.		1,115,237		2,805,346
StarHub Ltd.		82,000		211,199
				3,016,545
Transportation 0.1%
ComfortDelGro Corp., Ltd.		257,000		317,263
Hutchison Port Holdings Trust		713,000		537,053
Singapore Airlines Ltd.		74,000		638,299
				1,492,615
				25,460,587
Spain 2.5%
Banks 0.9%
Banco Bilbao Vizcaya Argentaria S.A.		625,431		4,232,320
Banco de Sabadell S.A. (b)		151,733		359,241
Banco Popular Espanol S.A. (b)		133,736		427,676
Banco Santander S.A.		1,151,685		7,230,996
Bankia S.A. (b)*		118,206		405,725
Bankinter S.A. (b)		29,071		129,688
CaixaBank (b)		102,935		354,843
				13,140,489
Capital Goods 0.1%
ACS, Actividades de Construccion y Servicios S.A. (b)		19,321		355,390
Ferrovial S.A.		50,044		558,049
Fomento de Construcciones y Contratas S.A.		6,948		118,876
Zardoya Otis S.A.		20,026		245,554
				1,277,869
Energy 0.2%
Repsol YPF S.A.		108,282		2,081,715
Food & Staples Retailing 0.0%
Distribuidora Internacional de Alimentacion S.A. *		78,792		378,300
Insurance 0.0%
Mapfre S.A.		105,052		304,116
Materials 0.0%
Acerinox S.A.		13,607		166,118
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Grifols S.A. *		18,897		475,794
Retailing 0.2%
Industria de Diseno Textil S.A.		29,769		2,683,206
Software & Services 0.1%
Amadeus IT Holding S.A., A Shares		42,751		875,194
Indra Sistemas S.A.		13,438		139,532
				1,014,726
Telecommunication Services 0.6%
Telefonica S.A.		560,486		8,184,638
Transportation 0.1%
Abertis Infraestructuras S.A.		52,942		820,037
International Consolidated Airlines Group S.A. *		126,584		364,156
				1,184,193
Utilities 0.3%
Acciona S.A.		3,469		213,651
Enagas S.A.		24,432		429,234
Gas Natural SDG S.A.		47,360		660,185
Iberdrola S.A.		521,737		2,431,162
Red Electrica Corp. S.A.		14,766		642,861
				4,377,093
				35,268,257
Sweden 3.1%
Banks 0.6%
Nordea Bank AB		355,299		3,144,540
Skandinaviska Enskilda Banken AB, A Shares		192,466		1,296,754
Svenska Handelsbanken AB, A Shares		66,840		2,163,500
Swedbank AB, A Shares		110,454		1,823,332
				8,428,126
Capital Goods 0.9%
Alfa Laval AB		46,070		918,977
Assa Abloy AB, B Shares		42,869		1,247,763
Atlas Copco AB, A Shares		90,253		2,147,705
Atlas Copco AB, B Shares		53,246		1,118,179
Sandvik AB		133,452		2,109,889
Scania AB, B Shares		43,664		892,274
Skanska AB, B Shares		54,571		888,722
SKF AB, B Shares		53,410		1,265,384
Volvo AB, B Shares		189,501		2,629,937
				13,218,830
Commercial & Professional Supplies 0.0%
Securitas AB, B Shares		42,726		391,287
Consumer Durables & Apparel 0.1%
Electrolux AB, B Shares		32,815		731,709
Husqvarna AB, B Shares		60,834		350,265
				1,081,974
Diversified Financials 0.2%
Industrivarden AB, C Shares		16,064		245,567
Investor AB, B Shares		62,151		1,239,247
Kinnevik Investment AB, B Shares		28,060		570,752
Ratos AB, B Shares		26,143		305,986
				2,361,552

See financial notes 69

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Energy 0.0%
Lundin Petroleum AB *		30,365		604,423
Food, Beverage & Tobacco 0.1%
Swedish Match AB		29,064		1,183,954
Health Care Equipment & Services 0.1%
Getinge AB, B Shares		27,310		731,812
Materials 0.2%
Boliden AB		37,321		600,153
Holmen AB, B Shares		7,206		191,404
SSAB AB, A Shares		21,354		217,700
Svenska Cellulosa AB, B Shares		78,834		1,249,734
				2,258,991
Media 0.0%
Modern Times Group AB, B Shares		6,648		323,677
Retailing 0.3%
Hennes & Mauritz AB, B Shares *		137,750		4,723,256
Technology Hardware & Equipment 0.3%
Hexagon AB, B Shares		34,580		700,639
Telefonaktiebolaget LM Ericsson, B Shares *		404,543		4,010,419
				4,711,058
Telecommunication Services 0.3%
Millicom International Cellular S.A. SDR		10,418		1,102,649
Tele2 AB, B Shares		43,259		822,921
TeliaSonera AB		295,422		1,967,516
				3,893,086
				43,912,026
Switzerland 8.4%
Capital Goods 0.6%
ABB Ltd. - Reg’d *		296,031		5,394,538
Geberit AG - Reg’d *		5,342		1,129,490
Schindler Holding AG		6,633		858,425
Schindler Holding AG - Reg’d		2,938		375,216
Sulzer AG - Reg’d		3,272		471,232
				8,228,901
Commercial & Professional Supplies 0.1%
Adecco S.A. - Reg’d *		18,078		881,905
SGS S.A. - Reg’d		726		1,403,562
				2,285,467
Consumer Durables & Apparel 0.5%
Compagnie Financiere Richemont S.A., Series A		70,647		4,372,953
The Swatch Group AG - Bearer Shares		4,208		1,944,129
The Swatch Group AG - Reg’d		5,924		473,555
				6,790,637
Diversified Financials 0.8%
Credit Suisse Group AG - Reg’d *		154,492		3,695,280
GAM Holding AG *		26,785		344,337
Julius Baer Group Ltd. *		28,195		1,080,759
Pargesa Holding S.A.		3,688		247,223
Partners Group Holding AG		1,822		346,755
UBS AG - Reg’d *		492,059		6,144,926
				11,859,280
Energy 0.2%
Transocean Ltd.		47,198		2,365,631
Food, Beverage & Tobacco 2.1%
Aryzta AG *		11,530		580,795
Barry Callebaut AG - Reg’d *		247		237,787
Lindt & Spruengli AG		122		397,693
Lindt & Spruengli AG - Reg’d		14		548,314
Nestle S.A. - Reg’d		446,989		27,395,622
				29,160,211
Health Care Equipment & Services 0.2%
Sonova Holding AG - Reg’d *		6,704		740,929
Straumann Holding AG - Reg’d		1,070		177,798
Synthes, Inc. - Reg’d		8,762		1,511,163
				2,429,890
Insurance 0.6%
Baloise Holding AG - Reg’d		6,481		501,915
Swiss Life Holding AG - Reg’d *		4,159		425,414
Swiss Re AG *		47,111		2,958,243
Zurich Financial Services AG *		19,872		4,868,695
				8,754,267
Materials 0.6%
Givaudan S.A. - Reg’d *		1,134		1,100,869
Holcim Ltd. - Reg’d *		33,473		2,087,784
Sika AG		279		591,808
Syngenta AG - Reg’d		12,800		4,488,658
				8,269,119
Pharmaceuticals, Biotechnology & Life Sciences 2.5%
Actelion Ltd. - Reg’d *		15,099		639,411
Lonza Group AG - Reg’d *		6,860		309,533
Novartis AG - Reg’d		316,679		17,485,822
Roche Holding AG		95,297		17,416,527
				35,851,293
Telecommunication Services 0.1%
Swisscom AG - Reg’d		3,130		1,165,655
Transportation 0.1%
Kuehne & Nagel International AG - Reg’d		7,368		895,981
				118,056,332
United Kingdom 22.9%
Automobiles & Components 0.0%
GKN plc		211,927		700,942
Banks 2.8%
Barclays plc		1,563,453		5,535,162
HSBC Holdings plc		2,424,143		21,883,160
Lloyds Banking Group plc *		5,626,694		2,824,273
Royal Bank of Scotland Group plc *		2,424,448		956,455
Standard Chartered plc		322,141		7,874,942
				39,073,992
Capital Goods 0.8%
BAE Systems plc		439,121		2,104,370
Balfour Beatty plc		93,770		397,362
Bunzl plc		45,083		749,060

70 See financial notes

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Cobham plc		150,684		554,061
Invensys plc		110,792		399,672
Meggitt plc		106,056		703,294
Rolls-Royce Holdings plc *		255,467		3,415,701
Smiths Group plc		53,553		930,199
The Weir Group plc		28,836		798,229
Wolseley plc		38,877		1,480,109
				11,532,057
Commercial & Professional Supplies 0.5%
Aggreko plc		36,295		1,326,579
Babcock International Group plc		48,999		661,343
Capita Group plc		83,687		901,312
Experian plc		136,944		2,162,926
G4S plc		192,487		873,314
Intertek Group plc		21,852		892,192
Serco Group plc		67,334		593,345
				7,411,011
Consumer Durables & Apparel 0.1%
Burberry Group plc		59,816		1,441,822
Consumer Services 0.4%
Carnival plc		24,999		812,011
Compass Group plc		258,865		2,706,249
InterContinental Hotels Group plc		39,611		944,479
TUI Travel plc		68,649		212,886
Whitbread plc		24,188		756,685
				5,432,310
Diversified Financials 0.2%
3i Group plc		132,467		410,784
ICAP plc		75,860		467,586
Investec plc		73,220		422,278
London Stock Exchange Group plc		20,346		359,223
Man Group plc		257,314		432,289
Schroders plc		15,420		354,904
				2,447,064
Energy 4.6%
AMEC plc		45,327		837,051
BG Group plc		459,872		10,850,760
BP plc		2,572,053		18,580,763
Essar Energy plc *		44,464		105,992
Petrofac Ltd.		35,391		999,417
Royal Dutch Shell plc, A Shares		493,817		17,612,441
Royal Dutch Shell plc, B Shares		360,605		13,196,175
Tullow Oil plc		123,342		3,077,196
				65,259,795
Food & Staples Retailing 0.6%
J. Sainsbury plc		166,478		832,212
Tesco plc		1,080,820		5,569,110
WM Morrison Supermarkets plc		298,735		1,360,665
				7,761,987
Food, Beverage & Tobacco 2.9%
Associated British Foods plc		46,459		919,416
British American Tobacco plc		266,775		13,682,756
Diageo plc		338,960		8,549,674
Imperial Tobacco Group plc		136,631		5,463,930
SABMiller plc		129,195		5,429,867
Tate & Lyle plc		63,775		714,869
Unilever plc		173,177		5,916,068
				40,676,580
Health Care Equipment & Services 0.1%
Smith & Nephew plc		121,818		1,199,075
Household & Personal Products 0.3%
Reckitt Benckiser Group plc		83,848		4,881,074
Insurance 0.9%
Admiral Group plc		27,667		543,748
Aviva plc		390,663		1,955,264
Legal & General Group plc		801,173		1,529,761
Old Mutual plc		645,319		1,549,330
Prudential plc		347,651		4,260,775
Resolution Ltd.		186,246		676,576
RSA Insurance Group plc		480,961		820,076
Standard Life plc		317,684		1,152,875
				12,488,405
Materials 2.8%
Anglo American plc		179,033		6,918,685
Antofagasta plc		52,809		1,016,936
BHP Billiton plc		286,240		9,214,594
Eurasian Natural Resources Corp.		35,143		320,353
Fresnillo plc		24,967		636,139
Glencore International plc (b)		113,353		785,538
Johnson Matthey plc		29,293		1,099,993
Kazakhmys plc		29,214		410,082
Lonmin plc		22,122		375,481
Randgold Resources Ltd.		12,484		1,108,095
Rexam plc		119,663		835,306
Rio Tinto plc		185,805		10,415,253
Vedanta Resources plc		16,318		323,419
Xstrata plc		279,801		5,373,718
				38,833,592
Media 0.6%
British Sky Broadcasting Group plc		154,910		1,704,802
ITV plc		504,142		685,039
Pearson plc		111,151		2,093,616
Reed Elsevier plc		165,989		1,373,567
WPP plc		172,097		2,330,359
				8,187,383
Pharmaceuticals, Biotechnology & Life Sciences 1.9%
AstraZeneca plc		176,485		7,733,819
GlaxoSmithKline plc		683,760		15,795,870
Shire plc		76,749		2,501,451
				26,031,140
Real Estate 0.3%
British Land Co., plc		115,224		915,348
Capital Shopping Centers Group plc		76,214		402,101
Hammerson plc		97,236		659,194
Land Securities Group plc		105,823		1,249,697
Segro plc		101,202		363,179
				3,589,519
Retailing 0.3%
Kingfisher plc		322,595		1,521,344
Marks & Spencer Group plc		216,320		1,253,741
Next plc		23,533		1,119,166
				3,894,251

See financial notes 71

 Schwab International Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Semiconductors & Semiconductor Equipment 0.1%
ARM Holdings plc		184,035		1,557,160
Software & Services 0.1%
The Sage Group plc		180,600		839,081
Telecommunication Services 1.6%
BT Group plc		1,060,708		3,628,095
Inmarsat plc		61,946		442,029
Vodafone Group plc		6,809,854		18,849,399
				22,919,523
Utilities 1.0%
Centrica plc		705,667		3,511,056
International Power plc		208,519		1,410,515
National Grid plc		482,181		5,206,845
Severn Trent plc		32,415		888,954
SSE plc		127,849		2,741,516
United Utilities Group plc		93,029		933,458
				14,692,344
				320,850,107
Total Common Stock
(Cost $1,163,863,477)				1,371,693,600
Preferred Stock 0.6% of net assets
Germany 0.6%
Automobiles & Components 0.4%
Bayerische Motoren Werke AG		7,122		443,388
Porsche Automobil Holding SE		20,894		1,276,524
Volkswagen AG		19,734		3,740,747
				5,460,659
Household & Personal Products 0.2%
Henkel AG & Co. KGaA		24,311		1,809,104
Media 0.0%
ProSiebenSat.1 Media AG		10,450		265,526
Utilities 0.0%
RWE AG		5,322		210,477
				7,745,766
United Kingdom 0.0%
Capital Goods 0.0%
Rolls-Royce Holdings plc, C Shares (a)*		27,079,502		43,947
Total Preferred Stock
(Cost $5,995,172)				7,789,713
Other Investment Company 0.8% of net assets
United States 0.8%
iShares MSCI EAFE Index Fund		210,000		11,287,500
Total Other Investment Company
(Cost $11,327,697)				11,287,500
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Bank of America
0.03%, 05/01/12		1,570,310		1,570,310
Total Short-Term Investment
(Cost $1,570,310)				1,570,310
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 3.1% of net assets
Wells Fargo Advantage Government Money Market Fund		43,878,380		43,878,380
Total Collateral Invested for Securities on Loan
(Cost $43,878,380)				43,878,380
End of collateral invested for securities on loan.

At 04/30/12, the tax basis cost of the fund’s investments was $1,188,832,336 and the unrealized appreciation and depreciation were $366,863,082 and ($163,354,295), respectively, with a net unrealized appreciation of $203,508,787.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $1,355,878,319 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)	All or a portion of this security is on loan.

CDI —	CHESS Depositary Interest
CVA —	Dutch Certificate
Reg’d —	Registered
REIT —	Real Estate Investment Trust
RSP —	Risparmio (Convertible Savings Shares)
SDR —	Swedish Depositary Receipt

72 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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%	Common Stock		1,581,799,924		1,826,786,531
	0	.3%	Other Investment Company		5,974,881		5,974,881
	0	.1%	Short-Term Investments		1,924,823		1,924,823
	99	.7%	Total Investments		1,589,699,628		1,834,686,235
	0	.9%	Collateral Invested for Securities on Loan		16,972,883		16,972,883
	(0	.6)%	Other Assets and Liabilities, Net				(11,229,236	)
	100	.0%	Net Assets				1,840,429,882

	Number		Value
Security	of Shares		($)
Common Stock 99.3% of net assets
Automobiles & Components 1.3%
Autoliv, Inc.		12,300		771,702
BorgWarner, Inc. *		6,750		533,520
Cooper Tire & Rubber Co.		15,400		230,230
Dana Holding Corp.		38,500		562,870
Exide Technologies *		95,600		275,328
Ford Motor Co.		680,374		7,674,619
General Motors Co. *		148,400		3,413,200
Gentex Corp.		9,600		210,912
Harley-Davidson, Inc.		23,660		1,238,128
Johnson Controls, Inc.		98,810		3,158,956
Lear Corp.		24,100		1,000,150
Tenneco, Inc. *		11,660		359,478
The Goodyear Tire & Rubber Co. *		123,390		1,354,822
TRW Automotive Holdings Corp. *		32,350		1,478,718
Visteon Corp. *		14,000		702,380
				22,965,013
Banks 4.0%
Associated Banc-Corp.		39,760		530,001
Astoria Financial Corp.		36,355		352,280
BancorpSouth, Inc.		22,445		302,334
Bank of Hawaii Corp.		7,020		343,208
BB&T Corp.		134,975		4,324,599
CapitalSource, Inc.		91,400		589,530
CIT Group, Inc. *		24,900		942,465
City National Corp.		8,420		448,449
Comerica, Inc.		43,600		1,396,072
Commerce Bancshares, Inc.		10,849		435,045
Cullen/Frost Bankers, Inc.		7,400		436,304
East West Bancorp, Inc.		12,300		280,071
F.N.B. Corp.		19,900		225,865
Fifth Third Bancorp		189,890		2,702,135
First Horizon National Corp.		60,266		553,242
First Niagara Financial Group, Inc.		39,700		354,918
First Republic Bank *		9,400		310,482
FirstMerit Corp.		20,325		341,460
Fulton Financial Corp.		35,980		377,430
Hudson City Bancorp, Inc.		158,690		1,120,351
Huntington Bancshares, Inc.		188,027		1,257,901
KeyCorp		246,190		1,979,368
M&T Bank Corp.		20,086		1,732,819
MGIC Investment Corp. *		50,700		175,422
New York Community Bancorp, Inc.		90,065		1,214,977
People’s United Financial, Inc.		58,352		720,064
PNC Financial Services Group, Inc.		82,545		5,474,384
Popular, Inc. *		431,180		767,500
Regions Financial Corp.		503,925		3,396,454
SunTrust Banks, Inc.		163,660		3,973,665
Susquehanna Bancshares, Inc.		31,100		322,507
SVB Financial Group *		3,800		243,542
Synovus Financial Corp.		289,710		608,391
TCF Financial Corp.		40,065		459,546
Trustmark Corp.		10,600		269,770
U.S. Bancorp		275,100		8,849,967
Valley National Bancorp		22,044		277,754
Washington Federal, Inc.		18,250		320,105
Webster Financial Corp.		13,425		305,150
Wells Fargo & Co.		723,425		24,184,098
Zions Bancorp		53,235		1,085,462
				73,985,087
Capital Goods 8.5%
3M Co.		71,075		6,351,262
Acuity Brands, Inc.		3,720		206,720
AECOM Technology Corp. *		24,200		534,094
AerCap Holdings N.V. *		21,400		247,812
AGCO Corp. *		15,440		719,041
Alliant Techsystems, Inc.		9,120		486,096
AMETEK, Inc.		7,765		390,812
Armstrong World Industries, Inc.		4,900		215,796
BE Aerospace, Inc. *		7,600		357,428
Briggs & Stratton Corp.		14,235		257,654
Carlisle Cos., Inc.		6,850		377,161
Caterpillar, Inc.		50,545		5,194,510
Cooper Industries plc		15,470		967,958
Crane Co.		8,295		366,058
Cummins, Inc.		11,784		1,364,941
Curtiss-Wright Corp.		6,200		218,798
Danaher Corp.		39,100		2,120,002
Deere & Co.		36,886		3,037,931
Donaldson Co., Inc.		7,000		242,620
Dover Corp.		19,875		1,245,368
Eaton Corp.		39,020		1,879,984
EMCOR Group, Inc.		18,440		540,661

See financial notes 1

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Emerson Electric Co.		85,150		4,473,781
EnerSys *		7,500		262,125
Esterline Technologies Corp. *		4,100		280,809
Exelis, Inc.		82,355		949,553
Fastenal Co.		8,640		404,525
Flowserve Corp.		4,425		508,565
Fluor Corp.		25,540		1,474,935
Fortune Brands Home & Security, Inc. *		16,000		363,840
Foster Wheeler AG *		21,570		496,110
Gardner Denver, Inc.		3,500		227,990
GATX Corp.		7,835		335,886
General Cable Corp. *		17,000		500,480
General Dynamics Corp.		55,725		3,761,437
General Electric Co.		2,033,625		39,818,377
Goodrich Corp.		7,955		998,034
GrafTech International Ltd. *		18,800		220,712
Granite Construction, Inc.		8,200		228,288
Harsco Corp.		22,435		500,301
Honeywell International, Inc.		79,240		4,806,698
Hubbell, Inc., Class B		5,130		411,631
Huntington Ingalls Industries, Inc. *		17,315		683,077
IDEX Corp.		6,900		298,839
Illinois Tool Works, Inc.		54,270		3,114,013
Ingersoll-Rand plc		42,942		1,825,894
ITT Corp.		56,327		1,265,104
Jacobs Engineering Group, Inc. *		23,540		1,031,758
Joy Global, Inc.		5,700		403,389
KBR, Inc.		20,300		687,358
Kennametal, Inc.		6,840		288,853
L-3 Communications Holdings, Inc.		26,835		1,973,446
Lennox International, Inc.		7,835		340,039
Lincoln Electric Holdings, Inc.		6,700		328,367
Lockheed Martin Corp.		54,935		4,973,815
Masco Corp.		107,250		1,413,555
Meritor, Inc. *		42,935		279,507
Moog, Inc., Class A *		5,900		249,393
Mueller Industries, Inc.		4,800		219,408
Navistar International Corp. *		25,700		872,515
Northrop Grumman Corp.		68,995		4,366,004
Oshkosh Corp. *		25,220		575,773
Owens Corning *		28,750		987,563
PACCAR, Inc.		46,442		1,995,148
Pall Corp.		6,140		366,005
Parker Hannifin Corp.		15,917		1,395,762
Pentair, Inc.		12,550		543,917
Precision Castparts Corp.		7,416		1,307,960
Quanta Services, Inc. *		27,800		614,936
Raytheon Co.		65,410		3,541,297
Regal-Beloit Corp.		4,100		277,324
Rockwell Automation, Inc.		10,150		785,001
Rockwell Collins, Inc.		12,630		705,891
Roper Industries, Inc.		5,000		509,500
Snap-on, Inc.		6,730		420,894
Spirit AeroSystems Holdings, Inc., Class A *		16,500		412,500
SPX Corp.		7,835		601,571
Stanley Black & Decker, Inc.		15,303		1,119,567
Teledyne Technologies, Inc. *		3,900		252,018
Terex Corp. *		29,625		670,710
Textron, Inc.		51,220		1,364,501
The Babcock & Wilcox Co. *		13,400		329,640
The Boeing Co.		86,740		6,661,632
The Manitowoc Co., Inc.		20,300		281,155
The Shaw Group, Inc. *		20,240		612,665
The Timken Co.		10,565		597,028
Thomas & Betts Corp. *		5,000		359,550
TransDigm Group, Inc. *		3,400		428,808
Trinity Industries, Inc.		12,325		364,820
Triumph Group, Inc.		3,700		232,434
Tutor Perini Corp. *		20,200		307,242
Tyco International Ltd.		65,465		3,674,550
United Rentals, Inc. (c)*		12,000		560,160
United Technologies Corp.		97,815		7,985,617
URS Corp.		21,693		896,138
USG Corp. (c)*		21,625		390,331
W.W. Grainger, Inc.		4,135		859,336
WESCO International, Inc. *		6,100		404,979
Xylem, Inc.		21,455		598,165
				156,953,206
Commercial & Professional Supplies 0.8%
ABM Industries, Inc.		11,300		263,064
Avery Dennison Corp.		27,550		881,049
Cintas Corp.		15,450		605,177
Copart, Inc. *		9,000		237,690
Corrections Corp. of America *		14,290		412,838
Covanta Holding Corp.		15,315		245,806
Deluxe Corp.		10,645		253,457
Equifax, Inc.		9,130		418,337
FTI Consulting, Inc. *		6,400		232,576
HNI Corp.		9,320		224,798
Iron Mountain, Inc.		15,455		469,368
Kelly Services, Inc., Class A		17,840		249,582
Manpower, Inc.		28,790		1,226,454
Nielsen Holdings N.V. *		12,700		371,094
Pitney Bowes, Inc. (c)		63,905		1,094,693
Quad Graphics, Inc. (c)		17,200		231,168
R.R. Donnelley & Sons Co. (c)		102,640		1,284,026
Republic Services, Inc.		50,824		1,391,053
Robert Half International, Inc.		14,910		444,318
Steelcase, Inc., Class A		29,300		253,152
Stericycle, Inc. *		3,100		268,460
The Brink’s Co.		10,920		277,368
The Dun & Bradstreet Corp.		3,500		272,230
United Stationers, Inc.		14,350		406,966
Waste Connections, Inc.		6,900		222,387
Waste Management, Inc.		80,455		2,751,561
				14,988,672
Consumer Durables & Apparel 1.0%
Brunswick Corp.		12,270		322,578
Carter’s, Inc. *		4,500		244,350
Coach, Inc.		7,475		546,871
D.R. Horton, Inc.		66,090		1,080,571
Fossil, Inc. *		2,200		287,474
Garmin Ltd.		13,070		615,989
Hanesbrands, Inc. *		16,400		462,808
Harman International Industries, Inc.		6,420		318,304

2 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Hasbro, Inc.		17,365		637,990
Jarden Corp.		13,777		577,670
KB Home (c)		30,260		262,657
Leggett & Platt, Inc.		27,720		603,464
Lennar Corp., Class A		22,000		610,280
Mattel, Inc.		35,035		1,177,176
Mohawk Industries, Inc. *		14,935		1,000,944
Newell Rubbermaid, Inc.		53,850		980,070
NIKE, Inc., Class B		17,428		1,949,670
NVR, Inc. *		903		707,898
Polaris Industries, Inc.		3,800		301,872
PulteGroup, Inc. *		57,452		565,328
PVH Corp.		4,300		381,840
Ralph Lauren Corp.		2,720		468,574
The Jones Group, Inc.		36,775		412,616
The Warnaco Group, Inc. *		4,700		248,912
Toll Brothers, Inc. *		17,995		457,073
Tupperware Brands Corp.		5,000		311,450
VF Corp.		9,145		1,390,497
Whirlpool Corp.		22,855		1,463,177
				18,388,103
Consumer Services 1.3%
Apollo Group, Inc., Class A *		15,650		551,193
Boyd Gaming Corp. *		30,225		232,430
Brinker International, Inc.		13,955		439,164
Career Education Corp. *		33,035		235,540
Carnival Corp.		46,745		1,518,745
Chipotle Mexican Grill, Inc. *		600		248,490
Darden Restaurants, Inc.		16,745		838,590
Domino’s Pizza, Inc.		10,700		404,567
H&R Block, Inc.		45,465		668,335
Hyatt Hotels Corp., Class A *		5,300		228,059
International Game Technology		42,655		664,565
Jack in the Box, Inc. *		11,540		262,189
Las Vegas Sands Corp.		8,870		492,196
Marriott International, Inc., Class A		31,389		1,226,996
McDonald’s Corp.		72,880		7,102,156
MGM Resorts International *		73,415		985,229
Penn National Gaming, Inc. *		11,740		528,065
Regis Corp.		14,775		271,121
Royal Caribbean Cruises Ltd.		32,505		889,662
Service Corp. International		32,600		377,508
Starbucks Corp.		24,490		1,405,236
Starwood Hotels & Resorts Worldwide, Inc.		17,270		1,022,384
The Wendy’s Co.		71,600		348,692
Wyndham Worldwide Corp.		14,540		731,944
Wynn Resorts Ltd.		6,000		800,400
Yum! Brands, Inc.		26,330		1,914,981
				24,388,437
Diversified Financials 9.5%
Affiliated Managers Group, Inc. *		3,300		374,946
American Express Co.		120,725		7,268,852
Ameriprise Financial, Inc.		30,000		1,626,300
Bank of America Corp.		5,306,960		43,039,446
BlackRock, Inc.		9,300		1,781,694
Capital One Financial Corp.		94,410		5,237,867
Citigroup, Inc.		959,133		31,689,754
CME Group, Inc.		7,820		2,078,712
Discover Financial Services		55,722		1,888,976
E*TRADE Financial Corp. *		74,697		794,029
Eaton Vance Corp.		9,400		247,220
Federated Investors, Inc., Class B (c)		22,630		499,670
Franklin Resources, Inc.		12,340		1,548,793
Interactive Brokers Group, Inc., Class A		21,900		332,223
IntercontinentalExchange, Inc. *		3,000		399,120
Invesco Ltd.		25,800		640,872
Jefferies Group, Inc.		15,500		246,915
JPMorgan Chase & Co.		828,442		35,606,437
Knight Capital Group, Inc., Class A *		20,200		265,428
Legg Mason, Inc.		32,320		842,582
Leucadia National Corp.		14,900		370,414
Moody’s Corp.		12,670		518,837
Morgan Stanley		348,135		6,015,773
MSCI, Inc., Class A *		10,100		369,559
Northern Trust Corp.		34,660		1,649,469
NYSE Euronext		44,620		1,148,965
PHH Corp. *		49,390		765,545
Raymond James Financial, Inc.		13,435		491,990
SEI Investments Co.		11,400		230,166
SLM Corp.		75,835		1,124,633
State Street Corp.		67,536		3,121,514
T. Rowe Price Group, Inc.		15,145		955,877
TD Ameritrade Holding Corp.		38,970		732,246
The Bank of New York Mellon Corp.		224,752		5,315,385
The Charles Schwab Corp. (b)		141,215		2,019,375
The Goldman Sachs Group, Inc.		109,211		12,575,647
The NASDAQ OMX Group, Inc. *		29,330		720,638
Waddell & Reed Financial, Inc., Class A		7,200		230,256
				174,766,125
Energy 11.4%
Alpha Natural Resources, Inc. *		27,572		444,736
Anadarko Petroleum Corp.		43,215		3,163,770
Apache Corp.		34,420		3,302,255
Arch Coal, Inc.		36,100		352,336
Atwood Oceanics, Inc. *		4,800		212,784
Baker Hughes, Inc.		49,649		2,190,017
Bill Barrett Corp. *		7,700		184,646
Bristow Group, Inc.		5,600		273,560
Cabot Oil & Gas Corp.		8,200		288,148
Cameron International Corp. *		17,680		906,100
Chesapeake Energy Corp.		106,920		1,971,605
Chevron Corp.		312,805		33,332,501
Cimarex Energy Co.		5,645		390,126
Concho Resources, Inc. *		3,000		321,540
ConocoPhillips		320,510		22,958,131
CONSOL Energy, Inc.		20,235		672,611
CVR Energy, Inc. *		10,200		309,672
Denbury Resources, Inc. *		32,500		618,800
Devon Energy Corp.		49,340		3,446,399
Diamond Offshore Drilling, Inc.		16,020		1,098,171
Dresser-Rand Group, Inc. *		6,000		292,080

See financial notes 3

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
El Paso Corp.		47,320		1,403,984
Energen Corp.		8,310		435,278
EOG Resources, Inc.		15,950		1,751,470
EQT Corp.		11,180		556,988
EXCO Resources, Inc. (c)		31,200		229,008
Exterran Holdings, Inc. *		34,100		460,691
Exxon Mobil Corp.		647,284		55,886,501
FMC Technologies, Inc. *		10,580		497,260
Forest Oil Corp. *		29,150		388,278
Halliburton Co.		81,965		2,804,842
Helix Energy Solutions Group, Inc. *		21,100		430,651
Helmerich & Payne, Inc.		7,895		405,724
Hess Corp.		64,950		3,386,493
HollyFrontier Corp.		13,002		400,722
Key Energy Services, Inc. *		16,200		205,092
Kinder Morgan, Inc. (c)		8,000		287,200
Marathon Oil Corp.		222,890		6,539,593
Marathon Petroleum Corp.		110,095		4,581,053
McDermott International, Inc. *		42,810		483,753
Murphy Oil Corp.		37,375		2,054,504
Nabors Industries Ltd. *		59,400		989,010
National Oilwell Varco, Inc.		29,823		2,259,390
Newfield Exploration Co. *		21,300		764,670
Noble Corp. *		31,520		1,199,651
Noble Energy, Inc.		12,835		1,274,772
Occidental Petroleum Corp.		68,570		6,254,955
Oceaneering International, Inc.		6,600		340,758
Oil States International, Inc. *		5,100		405,858
Overseas Shipholding Group, Inc. (c)		38,220		447,174
Patterson-UTI Energy, Inc.		25,800		417,186
Peabody Energy Corp.		28,645		891,146
Pioneer Natural Resources Co.		5,550		642,801
Plains Exploration & Production Co. *		14,900		608,665
QEP Resources, Inc.		16,550		509,906
Range Resources Corp.		5,500		366,630
Rowan Cos., Inc. *		14,900		514,497
SandRidge Energy, Inc. *		38,800		310,012
Schlumberger Ltd.		86,200		6,390,868
SEACOR Holdings, Inc. *		4,100		381,013
SemGroup Corp., Class A *		8,900		283,020
Ship Finance International Ltd. (c)		17,118		237,084
SM Energy Co.		3,200		211,552
Southwestern Energy Co. *		20,540		648,653
Spectra Energy Corp.		74,060		2,276,604
Sunoco, Inc.		64,580		3,183,148
Superior Energy Services, Inc. *		12,900		347,268
Targa Resources Corp.		6,300		302,967
Teekay Corp.		14,240		514,064
Tesoro Corp. *		58,560		1,361,520
The Williams Cos., Inc.		73,475		2,500,354
Tidewater, Inc.		6,720		369,802
Ultra Petroleum Corp. *		11,700		231,192
Unit Corp. *		8,210		346,873
USEC, Inc. (c)*		196,400		165,290
Valero Energy Corp.		277,525		6,854,868
Weatherford International Ltd. *		133,890		1,910,610
Western Refining, Inc.		18,750		357,188
Whiting Petroleum Corp. *		7,800		446,160
World Fuel Services Corp.		17,900		788,674
WPX Energy, Inc. *		64,958		1,141,312
				209,366,238
Food & Staples Retailing 3.4%
Casey’s General Stores, Inc.		6,112		344,411
Costco Wholesale Corp.		56,915		5,018,196
CVS Caremark Corp.		185,335		8,269,648
Harris Teeter Supermarkets, Inc.		5,835		221,555
Nash Finch Co.		9,530		239,203
Rite Aid Corp. *		811,000		1,175,950
Safeway, Inc. (c)		143,840		2,924,267
SUPERVALU, Inc. (c)		405,420		2,408,195
Sysco Corp.		111,040		3,209,056
The Kroger Co.		210,920		4,908,108
The Pantry, Inc. *		25,520		325,635
United Natural Foods, Inc. *		6,400		315,456
Wal-Mart Stores, Inc.		460,025		27,100,073
Walgreen Co.		159,770		5,601,536
Whole Foods Market, Inc.		9,800		814,086
				62,875,375
Food, Beverage & Tobacco 5.1%
Altria Group, Inc.		387,380		12,477,510
Archer-Daniels-Midland Co.		153,505		4,732,559
Brown-Forman Corp., Class B		5,700		492,195
Bunge Ltd.		46,375		2,991,187
Campbell Soup Co.		30,130		1,019,298
Central European Distribution Corp. (c)*		57,600		281,088
Chiquita Brands International, Inc. *		25,700		218,450
Coca-Cola Enterprises, Inc.		96,095		2,894,381
ConAgra Foods, Inc.		71,505		1,846,259
Constellation Brands, Inc., Class A *		28,505		615,708
Corn Products International, Inc.		8,100		462,186
Cosan Ltd., Class A		23,200		321,088
Dean Foods Co. *		139,890		1,717,849
Dole Food Co., Inc. (c)*		25,300		214,544
Dr Pepper Snapple Group, Inc.		20,600		835,948
Flowers Foods, Inc.		18,050		387,173
Fresh Del Monte Produce, Inc.		10,440		241,895
General Mills, Inc.		74,110		2,882,138
H.J. Heinz Co.		38,275		2,040,440
Hormel Foods Corp.		20,020		581,781
Kellogg Co.		32,180		1,627,343
Kraft Foods, Inc., Class A		231,092		9,213,638
Lorillard, Inc.		15,018		2,031,785
McCormick & Co., Inc. - Non Voting Shares		9,840		550,154
Mead Johnson Nutrition Co.		7,500		641,700
Molson Coors Brewing Co., Class B		22,680		943,034
PepsiCo, Inc.		160,208		10,573,728
Philip Morris International, Inc.		98,520		8,818,525
Ralcorp Holdings, Inc. *		7,400		538,794
Reynolds American, Inc.		56,850		2,321,185
Sara Lee Corp.		77,850		1,715,814
Smithfield Foods, Inc. *		48,706		1,020,878

4 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
The Coca-Cola Co.		168,665		12,872,513
The Hershey Co.		11,650		780,667
The JM Smucker Co.		13,025		1,037,181
Tyson Foods, Inc., Class A		83,480		1,523,510
Universal Corp.		6,720		307,978
				93,772,104
Health Care Equipment & Services 4.2%
Aetna, Inc.		61,260		2,697,890
Alere, Inc. *		14,000		334,460
AMERIGROUP Corp. *		6,600		407,616
AmerisourceBergen Corp.		98,040		3,648,068
Baxter International, Inc.		46,860		2,596,513
Becton, Dickinson & Co.		22,355		1,753,750
Boston Scientific Corp. *		363,665		2,276,543
Brookdale Senior Living, Inc. *		14,400		273,744
C.R. Bard, Inc.		5,300		524,488
Cardinal Health, Inc.		125,220		5,293,049
CareFusion Corp. *		33,310		863,062
Catalyst Health Solutions, Inc. *		3,500		302,295
Centene Corp. *		6,300		249,417
Cerner Corp. *		5,510		446,806
Cigna Corp.		40,309		1,863,485
Community Health Systems, Inc. *		47,750		1,162,235
Coventry Health Care, Inc.		41,850		1,255,082
Covidien plc		40,570		2,240,681
DaVita, Inc. *		10,080		892,886
DENTSPLY International, Inc.		9,435		387,401
Edwards Lifesciences Corp. *		3,800		315,286
Express Scripts Holding Co. *		45,140		2,518,361
HCA Holdings, Inc.		60,800		1,636,736
Health Management Associates, Inc., Class A *		58,095		418,284
Health Net, Inc. *		31,670		1,127,769
Henry Schein, Inc. *		10,030		769,702
Hill-Rom Holdings, Inc.		8,200		266,090
Hologic, Inc. *		21,400		409,168
Humana, Inc.		32,540		2,625,327
Intuitive Surgical, Inc. *		700		404,740
Kindred Healthcare, Inc. *		39,700		382,708
Laboratory Corp. of America Holdings *		9,230		811,225
LifePoint Hospitals, Inc. *		12,530		488,921
Lincare Holdings, Inc.		9,902		241,609
Magellan Health Services, Inc. *		6,400		283,392
McKesson Corp.		69,700		6,371,277
MEDNAX, Inc. *		3,800		266,912
Medtronic, Inc.		116,665		4,456,603
Omnicare, Inc.		20,010		697,148
Owens & Minor, Inc.		15,502		453,279
Patterson Cos., Inc.		11,175		380,956
Quest Diagnostics, Inc.		18,455		1,064,669
St. Jude Medical, Inc.		25,260		978,067
STERIS Corp.		7,400		232,434
Stryker Corp.		20,645		1,126,598
Teleflex, Inc.		6,220		389,807
Tenet Healthcare Corp. *		161,075		835,979
UnitedHealth Group, Inc.		137,775		7,736,066
Universal American Corp.		24,200		222,156
Universal Health Services, Inc., Class B		10,950		467,675
Varian Medical Systems, Inc. *		5,920		375,446
VCA Antech, Inc. *		11,200		264,992
WellCare Health Plans, Inc. *		6,500		397,670
WellPoint, Inc.		120,870		8,197,403
Zimmer Holdings, Inc.		12,440		782,849
				77,866,775
Household & Personal Products 1.7%
Avon Products, Inc.		78,825		1,702,620
Church & Dwight Co., Inc.		7,900		401,320
Colgate-Palmolive Co.		33,930		3,357,034
Energizer Holdings, Inc. *		8,520		607,732
Herbalife Ltd.		4,500		316,440
Kimberly-Clark Corp.		52,620		4,129,091
The Clorox Co.		13,620		954,762
The Estee Lauder Cos., Inc., Class A		9,020		589,457
The Procter & Gamble Co.		294,195		18,722,570
				30,781,026
Insurance 5.8%
ACE Ltd.		50,400		3,828,888
Aflac, Inc.		62,640		2,821,306
Alleghany Corp. *		818		280,492
Allied World Assurance Co. Holdings AG		6,940		499,402
Alterra Capital Holdings Ltd.		18,600		445,098
American Financial Group, Inc.		10,740		418,001
American International Group, Inc. *		88,280		3,004,168
Aon plc		32,536		1,685,365
Arch Capital Group Ltd. *		21,875		859,250
Arthur J. Gallagher & Co.		12,440		467,246
Aspen Insurance Holdings Ltd.		18,025		510,468
Assurant, Inc.		24,655		994,583
Assured Guaranty Ltd.		20,500		290,690
Axis Capital Holdings Ltd.		28,350		964,467
Berkshire Hathaway, Inc., Class A *		101		12,200,800
Berkshire Hathaway, Inc., Class B *		151,411		12,181,015
Brown & Brown, Inc.		12,400		334,428
Cincinnati Financial Corp.		32,780		1,167,624
CNO Financial Group, Inc. *		118,800		863,676
Delphi Financial Group, Inc., Class A		5,500		249,810
Endurance Specialty Holdings Ltd.		12,330		495,419
Erie Indemnity Co., Class A		4,325		332,593
Everest Re Group Ltd.		11,725		1,161,947
Fidelity National Financial, Inc., Class A		56,525		1,089,237
First American Financial Corp.		26,400		442,200
Genworth Financial, Inc., Class A *		213,700		1,284,337
Hartford Financial Services Group, Inc.		213,810		4,393,795
HCC Insurance Holdings, Inc.		17,635		563,615

See financial notes 5

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Kemper Corp.		15,450		463,345
Lincoln National Corp.		83,380		2,065,323
Loews Corp.		81,082		3,334,903
Markel Corp. *		1,313		578,088
Marsh & McLennan Cos., Inc.		62,550		2,092,297
MBIA, Inc. (c)*		23,310		234,965
Mercury General Corp.		6,030		272,496
MetLife, Inc.		145,005		5,224,530
Montpelier Re Holdings Ltd.		14,580		299,182
Old Republic International Corp.		62,960		626,452
PartnerRe Ltd.		18,230		1,269,173
Platinum Underwriters Holdings Ltd.		8,400		307,608
Primerica, Inc.		11,700		306,891
Principal Financial Group, Inc.		64,985		1,798,135
ProAssurance Corp.		3,400		299,506
Protective Life Corp.		21,865		639,770
Prudential Financial, Inc.		88,240		5,342,050
Reinsurance Group of America, Inc.		14,000		813,960
RenaissanceRe Holdings Ltd.		7,925		618,625
Selective Insurance Group, Inc.		13,300		232,617
StanCorp Financial Group, Inc.		10,425		400,112
Symetra Financial Corp.		32,000		389,120
The Allstate Corp.		149,755		4,991,334
The Chubb Corp.		49,175		3,593,217
The Hanover Insurance Group, Inc.		9,930		400,775
The Progressive Corp.		110,845		2,360,998
The Travelers Cos., Inc.		115,195		7,409,342
Torchmark Corp.		16,510		804,202
Unum Group		69,425		1,648,149
Validus Holdings Ltd.		16,100		523,250
W. R. Berkley Corp.		20,560		774,290
White Mountains Insurance Group Ltd.		1,429		747,367
Willis Group Holdings plc		20,445		745,425
XL Group plc		82,785		1,780,705
				107,218,122
Materials 3.8%
AbitibiBowater, Inc. *		35,500		470,375
Air Products & Chemicals, Inc.		22,075		1,887,192
Airgas, Inc.		4,900		449,036
AK Steel Holding Corp. (c)		57,445		426,242
Albemarle Corp.		5,600		365,680
Alcoa, Inc.		352,705		3,431,820
Allegheny Technologies, Inc.		14,411		618,808
AptarGroup, Inc.		5,900		321,609
Ashland, Inc.		16,935		1,115,508
Ball Corp.		17,680		738,317
Bemis Co., Inc.		18,155		588,040
Cabot Corp.		8,530		367,899
Celanese Corp., Series A		12,600		610,596
CF Industries Holdings, Inc.		3,471		670,111
Chemtura Corp. *		22,300		379,546
Cliffs Natural Resources, Inc.		10,300		641,278
Coeur d’Alene Mines Corp. *		7,900		170,245
Commercial Metals Co.		45,045		665,765
Crown Holdings, Inc. *		21,120		781,018
Cytec Industries, Inc.		6,120		389,048
Domtar Corp.		7,191		629,069
E.I. du Pont de Nemours & Co.		104,845		5,605,014
Eastman Chemical Co.		15,620		843,011
Ecolab, Inc.		14,991		954,777
FMC Corp.		4,040		446,218
Freeport-McMoran Copper & Gold, Inc.		103,270		3,955,241
Greif, Inc.		1,500		81,675
Greif, Inc., Class A		4,012		215,204
Huntsman Corp.		46,415		657,236
International Flavors & Fragrances, Inc.		7,235		435,619
International Paper Co.		83,495		2,781,218
LyondellBasell Industries N.V., Class A		68,300		2,853,574
Martin Marietta Materials, Inc.		4,710		390,365
MeadWestvaco Corp.		33,440		1,064,061
Monsanto Co.		32,895		2,505,941
Newmont Mining Corp.		39,810		1,896,946
Nucor Corp.		63,880		2,504,735
Olin Corp.		12,955		271,537
OM Group, Inc. *		8,300		200,196
Owens-Illinois, Inc. *		46,645		1,084,496
Packaging Corp. of America		14,145		412,893
PolyOne Corp.		17,100		237,006
PPG Industries, Inc.		21,600		2,273,184
Praxair, Inc.		21,270		2,460,939
Reliance Steel & Aluminum Co.		12,720		710,921
Rock-Tenn Co., Class A		4,372		272,507
Rockwood Holdings, Inc. *		8,700		481,458
RPM International, Inc.		20,865		554,383
Sealed Air Corp.		32,775		628,624
Sensient Technologies Corp.		6,300		234,045
Sigma-Aldrich Corp.		6,730		477,157
Silgan Holdings, Inc.		5,540		243,040
Solutia, Inc.		10,100		286,234
Sonoco Products Co.		17,455		578,284
Southern Copper Corp.		35,222		1,158,099
Steel Dynamics, Inc.		43,950		561,241
The Dow Chemical Co.		208,800		7,074,144
The Mosaic Co.		23,310		1,231,234
The Scotts Miracle-Gro Co., Class A		8,020		420,248
The Sherwin-Williams Co.		9,945		1,196,185
The Valspar Corp.		9,350		478,253
United States Steel Corp. (c)		54,395		1,541,010
Vulcan Materials Co.		19,223		822,937
W.R. Grace & Co. *		5,100		304,011
Walter Energy, Inc.		3,600		238,716
Worthington Industries, Inc.		15,865		283,032
				69,624,051
Media 3.1%
Cablevision Systems Corp., Class A		54,465		807,171
CBS Corp., Class B - Non Voting Shares		82,490		2,751,041
Charter Communications, Inc., Class A *		24,500		1,481,515
Cinemark Holdings, Inc.		15,200		348,992
Comcast Corp., Class A		230,540		6,992,278

6 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Comcast Corp., Special Class A		68,920		2,055,884
Dex One Corp. (c)*		161,300		156,138
DIRECTV, Class A *		63,040		3,105,981
Discovery Communications, Inc., Class A *		7,667		417,238
Discovery Communications, Inc., Class C *		7,407		368,054
DISH Network Corp., Class A		25,870		827,064
Gannett Co., Inc.		83,830		1,158,531
John Wiley & Sons, Inc., Class A		4,900		221,431
Lamar Advertising Co., Class A *		11,120		353,838
Liberty Global, Inc., Series A *		20,410		1,016,622
Liberty Global, Inc., Series C *		17,470		837,337
Liberty Media Corp. - Liberty Capital, Class A *		2,965		259,260
Live Nation Entertainment, Inc. *		44,114		399,673
News Corp., Class A		169,620		3,324,552
News Corp., Class B		62,690		1,243,770
Omnicom Group, Inc.		33,804		1,734,483
Regal Entertainment Group, Class A		41,085		559,167
Scripps Networks Interactive, Class A		5,300		266,166
The Interpublic Group of Cos., Inc.		66,305		783,062
The McGraw-Hill Cos., Inc.		29,780		1,464,283
The New York Times Co., Class A *		56,100		353,991
The Walt Disney Co.		173,650		7,486,051
The Washington Post Co., Class B (c)		1,063		401,995
Time Warner Cable, Inc.		39,509		3,178,499
Time Warner, Inc.		219,788		8,233,258
Valassis Communications, Inc. *		9,600		192,000
Viacom Inc., Class B		51,100		2,370,529
Virgin Media, Inc.		43,610		1,071,062
				56,220,916
Pharmaceuticals, Biotechnology & Life Sciences 5.9%
Abbott Laboratories		153,690		9,538,001
Agilent Technologies, Inc.		18,405		776,323
Allergan, Inc.		9,630		924,480
Amgen, Inc.		77,455		5,507,825
Biogen Idec, Inc. *		11,450		1,534,415
Bristol-Myers Squibb Co.		222,850		7,436,504
Celgene Corp. *		12,600		918,792
Charles River Laboratories International, Inc. *		6,420		228,103
Covance, Inc. *		6,620		309,551
Eli Lilly & Co.		177,355		7,340,723
Endo Pharmaceuticals Holdings, Inc. *		10,500		368,970
Forest Laboratories, Inc. *		35,255		1,227,932
Gilead Sciences, Inc. *		40,660		2,114,727
Hospira, Inc. *		20,250		711,180
Johnson & Johnson		306,695		19,962,778
Life Technologies Corp. *		15,919		738,005
Merck & Co., Inc.		360,657		14,152,181
Mettler-Toledo International, Inc. *		1,600		286,912
Mylan, Inc. *		28,875		626,876
PerkinElmer, Inc.		11,800		325,680
Perrigo Co.		2,400		251,760
Pfizer, Inc.		1,237,299		28,371,266
Thermo Fisher Scientific, Inc.		44,345		2,467,799
Warner Chilcott plc, Class A *		42,100		915,675
Waters Corp. *		3,800		319,618
Watson Pharmaceuticals, Inc. *		8,765		660,530
				108,016,606
Real Estate 2.4%
Alexandria Real Estate Equities, Inc.		5,264		394,379
American Capital Agency Corp.		7,800		243,672
American Tower Corp.		10,865		712,527
Annaly Capital Management, Inc.		135,585		2,212,747
Apartment Investment & Management Co., Class A		24,754		672,071
AvalonBay Communities, Inc.		6,199		901,335
BioMed Realty Trust, Inc.		16,800		332,976
Boston Properties, Inc.		13,090		1,416,992
Brandywine Realty Trust		35,825		424,884
BRE Properties, Inc.		5,920		310,800
Camden Property Trust		6,120		414,140
CBL & Associates Properties, Inc.		23,836		444,065
CBRE Group, Inc., Class A *		30,030		564,864
Chimera Investment Corp.		157,800		456,042
Colonial Properties Trust		14,925		333,872
CommonWealth REIT		29,162		546,787
Corporate Office Properties Trust		11,000		259,050
DCT Industrial Trust, Inc.		39,900		236,607
DDR Corp.		37,452		554,290
DiamondRock Hospitality Co.		24,000		255,120
Digital Realty Trust, Inc.		4,500		337,905
Duke Realty Corp.		45,375		672,457
Entertainment Properties Trust		5,500		263,945
Equity Residential		25,845		1,587,917
Essex Property Trust, Inc.		2,200		347,534
Federal Realty Investment Trust		4,170		419,752
General Growth Properties, Inc.		50,000		890,000
Hatteras Financial Corp.		8,600		250,518
HCP, Inc.		32,465		1,345,674
Health Care REIT, Inc.		11,330		641,958
Highwoods Properties, Inc.		9,235		320,732
Home Properties, Inc.		4,300		262,515
Hospitality Properties Trust		27,255		751,693
Host Hotels & Resorts, Inc.		82,978		1,380,754
iStar Financial, Inc. *		69,970		484,192
Jones Lang LaSalle, Inc.		4,100		327,754
Kilroy Realty Corp.		5,100		241,995
Kimco Realty Corp.		48,960		950,314
Lexington Realty Trust		32,900		292,810
Liberty Property Trust		17,450		636,052
Mack-Cali Realty Corp.		16,650		478,188
MFA Financial, Inc.		53,200		392,616
National Retail Properties, Inc.		8,600		235,468
Piedmont Office Realty Trust, Inc., Class A		32,400		574,776
Plum Creek Timber Co., Inc.		19,095		802,754
Potlatch Corp.		12,600		394,380
ProLogis, Inc.		40,505		1,449,269
Public Storage		6,830		978,466

See financial notes 7

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Rayonier, Inc. REIT		11,002		498,941
Realty Income Corp.		8,240		324,162
Redwood Trust, Inc.		26,425		308,644
Regency Centers Corp.		9,220		414,531
Senior Housing Properties Trust		14,240		314,419
Simon Property Group, Inc.		14,676		2,283,586
SL Green Realty Corp.		7,507		618,877
Taubman Centers, Inc.		3,200		246,976
The Macerich Co.		11,902		732,806
UDR, Inc.		18,087		476,231
Ventas, Inc.		12,278		721,824
Vornado Realty Trust REIT		19,628		1,684,868
Washington Real Estate Investment Trust		7,700		227,535
Weingarten Realty Investors		17,035		452,450
Weyerhaeuser Co.		218,557		4,449,820
				43,155,278
Retailing 3.9%
Abercrombie & Fitch Co., Class A		11,810		592,508
Advance Auto Parts, Inc.		5,745		527,391
Aeropostale, Inc. *		14,500		321,610
Amazon.com, Inc. *		9,450		2,191,455
American Eagle Outfitters, Inc.		35,735		643,587
ANN, Inc. *		9,830		272,193
Asbury Automotive Group, Inc. *		9,645		269,288
Ascena Retail Group, Inc. *		12,800		262,144
AutoNation, Inc. *		27,215		941,095
AutoZone, Inc. *		1,923		761,816
Barnes & Noble, Inc. (c)*		26,240		544,480
Bed Bath & Beyond, Inc. *		20,565		1,447,570
Best Buy Co., Inc.		142,600		3,147,182
Big Lots, Inc. *		11,065		405,422
Cabela’s, Inc. *		6,400		241,984
CarMax, Inc. *		25,640		791,507
Collective Brands, Inc. *		19,240		399,615
Core-Mark Holding Co., Inc.		7,000		270,200
Dick’s Sporting Goods, Inc.		8,300		419,980
Dillard’s, Inc., Class A		6,475		418,026
Dollar General Corp. *		11,800		560,028
Dollar Tree, Inc. *		6,917		703,182
Expedia, Inc.		14,665		625,169
Family Dollar Stores, Inc.		12,275		829,176
Foot Locker, Inc.		19,995		611,647
GameStop Corp., Class A (c)		45,790		1,042,180
Genuine Parts Co.		21,300		1,379,814
Group 1 Automotive, Inc.		6,835		395,610
Guess?, Inc.		8,000		234,240
HSN, Inc.		7,500		290,250
J.C. Penney Co., Inc.		47,900		1,727,274
Kohl’s Corp.		37,895		1,899,676
Liberty Interactive Corp., Class A *		79,420		1,496,273
Limited Brands, Inc.		37,120		1,844,864
LKQ Corp. *		9,200		307,740
Lowe’s Cos., Inc.		197,455		6,213,909
Macy’s, Inc.		69,320		2,843,506
Nordstrom, Inc.		21,755		1,215,234
O’Reilly Automotive, Inc. *		7,930		836,298
Office Depot, Inc. *		333,350		1,013,384
OfficeMax, Inc. *		89,755		417,361
Penske Automotive Group, Inc.		13,595		359,452
PetSmart, Inc.		8,740		509,192
Priceline.com, Inc. *		647		492,251
RadioShack Corp. (c)		57,680		298,782
Rent-A-Center, Inc.		12,570		430,020
Ross Stores, Inc.		12,190		750,782
Saks, Inc. (c)*		51,535		564,824
Sears Holdings Corp. (c)*		31,221		1,679,065
Signet Jewelers Ltd.		10,800		526,716
Sonic Automotive, Inc., Class A		18,660		313,861
Staples, Inc.		160,450		2,470,930
Target Corp.		114,695		6,645,428
The Gap, Inc.		65,075		1,854,638
The Home Depot, Inc.		194,996		10,098,843
The Men’s Wearhouse, Inc.		6,200		229,648
The TJX Cos., Inc.		53,960		2,250,672
Tiffany & Co.		8,735		597,998
Tractor Supply Co.		3,000		295,230
Urban Outfitters, Inc. *		9,300		269,328
Williams-Sonoma, Inc.		10,745		415,724
				72,409,252
Semiconductors & Semiconductor Equipment 1.7%
Advanced Micro Devices, Inc. *		88,030		647,901
Altera Corp.		10,550		375,263
Amkor Technology, Inc. *		50,180		259,431
Analog Devices, Inc.		23,065		899,074
Applied Materials, Inc.		155,125		1,859,949
Atmel Corp. *		24,100		213,767
Avago Technologies Ltd.		8,800		303,424
Broadcom Corp., Class A *		18,645		682,407
Cree, Inc. (c)*		8,700		268,830
First Solar, Inc. (c)*		12,500		230,000
Intel Corp.		514,310		14,606,404
Intersil Corp., Class A		20,000		205,400
KLA-Tencor Corp.		10,680		556,962
Lam Research Corp. *		6,600		274,890
Linear Technology Corp.		14,755		482,636
LSI Corp. *		39,640		318,706
Marvell Technology Group Ltd. *		57,030		856,020
Maxim Integrated Products, Inc.		27,300		807,534
MEMC Electronic Materials, Inc. *		124,200		445,878
Microchip Technology, Inc.		18,780		663,685
Micron Technology, Inc. *		208,275		1,372,532
Novellus Systems, Inc. *		5,800		271,150
NVIDIA Corp. *		41,237		536,081
NXP Semiconductor N.V. *		12,600		325,710
ON Semiconductor Corp. *		40,700		336,182
Teradyne, Inc. *		14,300		246,103
Texas Instruments, Inc.		96,170		3,071,670
Xilinx, Inc.		18,320		666,481
				31,784,070
Software & Services 4.7%
Accenture plc, Class A		40,095		2,604,170
Activision Blizzard, Inc.		45,000		579,150
Adobe Systems, Inc. *		31,340		1,051,770
Akamai Technologies, Inc. *		9,100		296,660

8 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Alliance Data Systems Corp. *		2,780		357,202
Amdocs Ltd. *		20,800		665,600
ANSYS, Inc. *		3,600		241,452
AOL, Inc. *		58,680		1,469,347
Autodesk, Inc. *		10,500		413,385
Automatic Data Processing, Inc.		41,280		2,295,994
BMC Software, Inc. *		12,240		505,022
Broadridge Financial Solutions, Inc.		12,787		296,786
CA, Inc.		29,005		766,312
CACI International, Inc., Class A *		5,300		323,989
Check Point Software Technologies Ltd. *		7,300		424,349
Citrix Systems, Inc. *		5,670		485,409
Cognizant Technology Solutions Corp., Class A *		9,600		703,872
Computer Sciences Corp.		60,545		1,698,893
Compuware Corp. *		24,200		211,024
Convergys Corp. *		27,765		371,218
CoreLogic, Inc. *		72,700		1,214,090
DST Systems, Inc.		5,300		296,694
eBay, Inc. *		76,675		3,147,509
Electronic Arts, Inc. *		26,150		402,187
Equinix, Inc. *		2,100		344,820
Fidelity National Information Services, Inc.		39,023		1,313,905
Fiserv, Inc. *		13,650		959,459
Global Payments, Inc.		4,700		218,221
Google, Inc., Class A *		9,888		5,984,514
IAC/InterActiveCorp		8,562		412,260
International Business Machines Corp.		79,495		16,461,825
Intuit, Inc.		12,555		727,813
Lender Processing Services, Inc.		14,400		382,320
MasterCard, Inc., Class A		2,568		1,161,429
Microsoft Corp.		588,115		18,831,442
Monster Worldwide, Inc. *		32,700		282,201
Nuance Communications, Inc. *		8,500		207,740
Oracle Corp.		257,360		7,563,811
Paychex, Inc.		37,960		1,176,001
SAIC, Inc.		95,400		1,160,064
Symantec Corp. *		77,445		1,279,391
Synopsys, Inc. *		11,300		339,113
Teradata Corp. *		5,200		362,856
Total System Services, Inc.		26,470		622,574
Unisys Corp. *		23,900		445,974
Visa, Inc., Class A		20,200		2,484,196
Western Union Co.		41,610		764,792
Yahoo!, Inc. *		137,505		2,136,828
				86,445,633
Technology Hardware & Equipment 4.2%
Amphenol Corp., Class A		8,300		482,562
Anixter International, Inc. *		6,220		426,568
Apple, Inc. *		18,330		10,709,119
Arrow Electronics, Inc. *		37,995		1,597,690
Avnet, Inc. *		41,180		1,485,774
Benchmark Electronics, Inc. *		17,640		280,123
Brightpoint, Inc. *		29,100		178,092
Brocade Communications Systems, Inc. *		62,600		346,804
Cisco Systems, Inc.		485,465		9,782,120
Corning, Inc.		192,160		2,757,496
Dell, Inc. *		318,610		5,215,646
Diebold, Inc.		9,230		364,124
EMC Corp. *		122,510		3,456,007
Flextronics International Ltd. *		307,400		2,047,284
FLIR Systems, Inc.		11,200		251,552
Harris Corp.		15,725		716,116
Hewlett-Packard Co.		500,975		12,404,141
Ingram Micro, Inc., Class A *		94,455		1,838,094
Insight Enterprises, Inc. *		16,300		331,053
Itron, Inc. *		6,500		265,200
Jabil Circuit, Inc.		32,795		769,043
Juniper Networks, Inc. *		19,170		410,813
Lexmark International, Inc., Class A		15,745		473,924
Molex, Inc.		8,530		235,343
Molex, Inc., Class A		9,530		218,237
Motorola Mobility Holdings, Inc. *		18,915		734,280
Motorola Solutions, Inc.		62,445		3,186,568
NCR Corp. *		21,045		494,557
NetApp, Inc. *		17,030		661,275
QUALCOMM, Inc.		71,685		4,576,370
SanDisk Corp. *		18,665		690,792
Sanmina-SCI Corp. *		48,682		433,270
Seagate Technology plc		48,935		1,505,241
TE Connectivity Ltd.		53,215		1,940,219
Tech Data Corp. *		31,640		1,701,916
Tellabs, Inc.		66,160		249,423
Trimble Navigation Ltd. *		5,100		276,114
Vishay Intertechnology, Inc. *		31,840		357,245
Western Digital Corp. *		33,000		1,280,730
Xerox Corp.		284,526		2,213,612
				77,344,537
Telecommunication Services 4.4%
AT&T, Inc.		1,222,285		40,225,399
CenturyLink, Inc.		48,555		1,872,281
Cincinnati Bell, Inc. *		65,400		248,520
Crown Castle International Corp. *		10,580		598,934
Frontier Communications Corp. (c)		309,598		1,250,776
Level 3 Communications, Inc. *		20,500		472,730
MetroPCS Communications, Inc. *		47,100		343,830
NII Holdings, Inc. *		52,370		732,918
Sprint Nextel Corp. *		2,020,100		5,009,848
Telephone & Data Systems, Inc.		31,527		765,791
tw telecom, Inc. *		12,600		274,428
Verizon Communications, Inc.		676,730		27,326,357
Windstream Corp.		113,700		1,277,988
				80,399,800
Transportation 1.9%
Alaska Air Group, Inc. *		25,850		873,730
Alexander & Baldwin, Inc.		6,120		313,099
Atlas Air Worldwide Holdings, Inc. *		5,400		248,670
Avis Budget Group, Inc. *		65,390		860,532

See financial notes 9

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
C.H. Robinson Worldwide, Inc.		12,180		727,633
Con-way, Inc.		13,030		423,475
CSX Corp.		114,510		2,554,718
Delta Air Lines, Inc. *		246,200		2,698,352
Dollar Thrifty Automotive Group, Inc. *		4,800		388,128
DryShips, Inc. (c)*		100,200		316,632
Expeditors International of Washington, Inc.		13,025		521,000
FedEx Corp.		44,562		3,932,151
Hertz Global Holdings, Inc. *		120,900		1,863,069
J.B. Hunt Transport Services, Inc.		6,045		334,470
JetBlue Airways Corp. *		90,890		431,728
Kansas City Southern		7,090		546,072
Kirby Corp. *		4,000		265,480
Norfolk Southern Corp.		39,850		2,906,261
Republic Airways Holdings, Inc. *		52,200		265,698
Ryder System, Inc.		14,220		692,798
Seaspan Corp. (c)		13,100		218,901
SkyWest, Inc.		32,000		287,680
Southwest Airlines Co.		89,675		742,509
Union Pacific Corp.		37,256		4,189,065
United Continental Holdings, Inc. *		96,843		2,122,799
United Parcel Service, Inc., Class B		71,560		5,591,698
UTI Worldwide, Inc.		18,000		300,060
Werner Enterprises, Inc.		10,740		253,679
YRC Worldwide, Inc. (c)*		34,451		250,803
				35,120,890
Utilities 5.3%
AGL Resources, Inc.		11,214		442,168
Allete, Inc.		5,400		222,534
Alliant Energy Corp.		18,775		849,381
Ameren Corp.		70,590		2,314,646
American Electric Power Co., Inc.		100,545		3,905,168
American Water Works Co., Inc.		20,900		715,616
Aqua America, Inc.		13,500		306,585
Atmos Energy Corp.		24,360		793,649
Avista Corp.		11,500		304,060
Black Hills Corp.		8,125		268,206
Calpine Corp. *		69,850		1,309,687
CenterPoint Energy, Inc.		82,770		1,672,782
Cleco Corp.		7,300		297,840
CMS Energy Corp.		42,010		965,810
Consolidated Edison, Inc.		54,425		3,235,566
Dominion Resources, Inc.		86,610		4,520,176
DTE Energy Co.		38,365		2,163,019
Duke Energy Corp.		255,945		5,484,901
Dynegy, Inc. (c)*		344,600		141,286
Edison International		68,290		3,005,443
Entergy Corp.		44,217		2,898,867
Exelon Corp.		145,937		5,693,002
FirstEnergy Corp.		76,134		3,564,594
GenOn Energy, Inc. *		442,102		941,677
Great Plains Energy, Inc.		32,470		663,037
Hawaiian Electric Industries, Inc.		19,770		524,696
IDACORP, Inc.		7,640		311,254
Integrys Energy Group, Inc.		19,435		1,061,928
ITC Holdings Corp.		3,400		263,364
MDU Resources Group, Inc.		34,880		800,147
National Fuel Gas Co.		10,545		498,989
New Jersey Resources Corp.		6,780		293,167
NextEra Energy, Inc.		67,280		4,329,468
NiSource, Inc.		62,935		1,551,348
Northeast Utilities		28,615		1,052,174
NorthWestern Corp.		7,000		248,640
NRG Energy, Inc. *		119,660		2,034,220
NV Energy, Inc.		44,100		734,265
OGE Energy Corp.		13,565		731,967
ONEOK, Inc.		16,710		1,435,222
Pepco Holdings, Inc.		71,365		1,350,226
PG&E Corp.		82,015		3,623,423
Piedmont Natural Gas Co., Inc.		10,550		321,564
Pinnacle West Capital Corp.		21,385		1,033,965
PNM Resources, Inc.		19,895		373,230
Portland General Electric Co.		16,045		414,442
PPL Corp.		83,955		2,296,169
Progress Energy, Inc.		55,765		2,967,813
Public Service Enterprise Group, Inc.		106,280		3,310,622
Questar Corp.		29,750		587,563
SCANA Corp.		25,785		1,189,204
Sempra Energy		38,515		2,493,461
Southwest Gas Corp.		7,825		328,807
TECO Energy, Inc.		42,425		764,499
The AES Corp. *		214,740		2,688,545
The Southern Co.		122,370		5,621,678
UGI Corp.		24,420		712,576
UIL Holdings Corp.		6,800		233,716
Unisource Energy Corp.		7,400		269,360
Vectren Corp.		16,465		484,894
Westar Energy, Inc.		21,270		610,236
WGL Holdings, Inc.		9,545		382,850
Wisconsin Energy Corp.		25,640		944,578
Xcel Energy, Inc.		88,590		2,397,245
				97,951,215
Total Common Stock
(Cost $1,581,799,924)				1,826,786,531
Other Investment Company 0.3% of net assets
Money Market Fund 0.3%
State Street Institutional U.S. Government Money Market Fund		5,974,881		5,974,881
Total Other Investment Company
(Cost $5,974,881)				5,974,881
Security	Face Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investments 0.1% of net assets
U.S. Treasury Obligations 0.1%
U.S. Treasury Bills
0.07%, 06/14/12 (a)(d)		925,000		924,915

10 See financial notes

 Schwab Fundamental US Large Company Index Fund

Portfolio Holdings (Unaudited) continued

Security	Face Amount		Value
Rate, Maturity Date	($)		($)
0.08%, 06/14/12 (a)(d)		1,000,000		999,908
Total Short-Term Investments
(Cost $1,924,823)				1,924,823
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.9% of net assets
State Street Institutional U.S. Government Money Market Fund		16,972,883		16,972,883
Total Collateral Invested for Securities on Loan
(Cost $16,972,883)				16,972,883
End of Collateral Invested for Securities on Loan.

At 04/30/12 tax basis cost of the fund’s investments was $1,616,669,731 and the unrealized appreciation and depreciation were $274,812,884 and ($56,796,380), respectively, with a net unrealized appreciation of $218,016,504.

*	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)	The rate shown is the purchase yield.

REIT — Real Estate Investment Trust

In addition to the above, the fund held the following at 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
S&P 500 Index, e-mini, Long, expires 06/15/12		130		9,058,400		177,848

See financial notes 11

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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		553,941,661		631,381,904
	0	.0%	Warrants		—		—
	0	.7%	Other Investment Company		4,712,628		4,712,628
	0	.1%	Short-Term Investment		799,922		799,922
	99	.7%	Total Investments		559,454,211		636,894,454
	5	.0%	Collateral Invested for Securities on Loan		31,624,888		31,624,888
	(4	.7)%	Other Assets and Liabilities, Net				(29,765,750	)
	100	.0%	Net Assets				638,753,592

	Number		Value
Security	of Shares		($)
Common Stock 98.9% of net assets
Automobiles & Components 1.0%
American Axle & Manufacturing Holdings, Inc. *		59,700		578,493
Delphi Automotive plc *		21,700		665,973
Dorman Products, Inc. *		5,200		248,456
Drew Industries, Inc. *		10,395		309,563
Federal-Mogul Corp. *		54,700		707,271
Fuel Systems Solutions, Inc. *		13,600		318,920
Modine Manufacturing Co. *		73,255		578,714
Motorcar Parts of America, Inc. *		15,100		114,156
Spartan Motors, Inc.		42,000		182,700
Standard Motor Products, Inc.		15,300		230,571
Stoneridge, Inc. *		32,600		281,012
Superior Industries International, Inc.		27,260		466,419
Thor Industries, Inc.		34,300		1,160,369
Tower International, Inc. *		10,300		109,592
Winnebago Industries, Inc. *		29,865		291,184
				6,243,393
Banks 8.7%
1st Source Corp.		13,740		311,761
1st United Bancorp, Inc. *		16,000		96,960
Alliance Financial Corp.		4,300		131,193
Ameris Bancorp *		16,534		205,022
Ames National Corp. (b)		4,300		94,944
Arrow Financial Corp.		8,575		205,286
BancFirst Corp.		4,175		174,098
Banco Latinoamericano de Comercio Exterior, S.A., Class E		22,600		471,210
Bank Mutual Corp.		37,060		144,534
Bank of Marin Bancorp		3,200		118,624
Bank of the Ozarks, Inc.		8,300		256,470
BankFinancial Corp.		17,000		113,220
BankUnited, Inc.		25,100		617,460
Banner Corp.		15,737		345,427
BBCN Bancorp, Inc. *		23,479		257,799
Beneficial Mutual Bancorp, Inc. *		13,250		114,878
Berkshire Hills Bancorp, Inc.		12,250		277,953
BOK Financial Corp.		12,900		735,687
Boston Private Financial Holdings, Inc.		46,840		436,549
Bridge Bancorp, Inc.		5,100		99,348
Brookline Bancorp, Inc.		61,810		555,054
Bryn Mawr Bank Corp.		7,400		159,026
Camden National Corp.		4,700		152,844
Capitol Federal Financial, Inc.		81,686		964,712
Cardinal Financial Corp.		13,000		156,910
Cathay General Bancorp		56,400		971,208
Centerstate Banks, Inc.		19,900		159,996
Central Pacific Financial Corp. *		24,600		349,812
Chemical Financial Corp.		25,130		554,619
Citizens & Northern Corp.		7,700		145,838
Citizens Republic Bancorp, Inc. *		66,550		1,122,698
City Holding Co. (b)		12,890		429,881
CNB Financial Corp.		7,600		124,944
CoBiz Financial, Inc.		33,600		210,000
Columbia Banking System, Inc.		20,035		410,517
Community Bank System, Inc.		21,370		600,924
Community Trust Bancorp, Inc.		12,895		411,995
CVB Financial Corp.		71,980		832,809
Dime Community Bancshares		28,150		390,159
Doral Financial Corp. *		221,600		405,528
Eagle Bancorp, Inc. *		7,600		135,204
Enterprise Financial Services Corp.		13,200		159,588
ESB Financial Corp.		7,100		95,353
ESSA Bancorp, Inc.		9,500		92,625
Federal Agricultural Mortgage Corp., Class C		7,500		171,450
Financial Institutions, Inc.		7,405		125,293
First Bancorp		15,000		150,300
First BanCorp Puerto Rico *		28,872		122,995
First Busey Corp.		60,815		282,182
First Citizens BancShares, Inc., Class A		3,800		658,540
First Commonwealth Financial Corp.		131,290		844,195
First Community Bancshares, Inc.		17,975		240,685
First Defiance Financial Corp.		7,100		121,978
First Financial Bancorp		38,290		643,655
First Financial Bankshares, Inc. (b)		15,800		534,672
First Financial Corp.		7,300		219,000
First Financial Holdings, Inc.		20,245		233,627
First Interstate BancSystem, Inc.		18,200		256,438
First Merchants Corp.		25,165		310,284
First Midwest Bancorp, Inc.		81,095		863,662
Flagstar Bancorp, Inc. *		497,600		433,111
Flushing Financial Corp.		27,355		356,436
German American Bancorp, Inc.		7,300		138,992
Glacier Bancorp, Inc.		60,280		898,172
Great Southern Bancorp, Inc.		9,700		233,188
Hancock Holding Co.		26,000		836,680
Hanmi Financial Corp. *		31,321		326,678

12 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

		Number		Value
Security		of Shares		($)
Heartland Financial USA, Inc.			7,550		139,826
Heritage Financial Corp.			10,100		132,310
Home Bancshares, Inc.			8,340		243,028
Hudson Valley Holding Corp.			14,730		270,001
IBERIABANK Corp.			14,850		758,389
Independent Bank Corp.			13,795		387,226
International Bancshares Corp.			51,100		1,008,203
Investors Bancorp, Inc. *			21,465		331,420
Lakeland Bancorp, Inc.			18,141		165,809
Lakeland Financial Corp.			10,000		260,400
MainSource Financial Group, Inc.			17,700		206,913
MB Financial, Inc.			45,645		943,482
Metro Bancorp, Inc. *			15,600		180,492
National Bankshares (b)			3,800		112,898
National Penn Bancshares, Inc.			99,923		921,290
NBT Bancorp, Inc.			29,155		599,135
Northfield Bancorp, Inc. (b)			7,200		100,512
Northwest Bancshares, Inc.			70,692		870,925
OceanFirst Financial Corp.			11,600		169,012
Ocwen Financial Corp. *			48,345		720,824
Old National Bancorp			81,525		1,045,150
OmniAmerican Bancorp, Inc. *			7,000		140,350
Oriental Financial Group, Inc.			40,535		479,124
Oritani Financial Corp.			20,300		300,846
Pacific Continental Corp.			16,000		142,240
PacWest Bancorp			28,980		690,304
Park National Corp. (b)			15,110		1,016,147
Park Sterling Corp. *			20,700		97,497
Penns Woods Bancorp, Inc.			2,500		98,600
Peoples Bancorp, Inc.			7,675		141,143
Pinnacle Financial Partners, Inc. *			24,800		453,840
PrivateBancorp, Inc.			42,415		667,188
Prosperity Bancshares, Inc.			17,100		797,715
Provident Financial Services, Inc.			53,890		792,183
Provident New York Bancorp			29,685		250,541
Radian Group, Inc. (b)			139,900		436,488
Renasant Corp.			24,800		396,800
Republic Bancorp, Inc., Class A			11,900		280,007
Rockville Financial, Inc.			10,800		126,468
S&T Bancorp, Inc.			25,990		486,533
S.Y. Bancorp, Inc.			9,215		213,788
Sandy Spring Bancorp, Inc.			19,395		349,304
SCBT Financial Corp.			9,000		309,510
Seacoast Banking Corp. of Florida *			59,090		95,726
Signature Bank *			13,580		892,070
Simmons First National Corp., Class A			12,900		313,986
Southside Bancshares, Inc.			12,502		255,048
Southwest Bancorp, Inc. *			28,800		261,792
StellarOne Corp.			20,642		258,231
Sterling Bancorp			26,795		254,820
Sterling Financial Corp. *			18,125		351,987
Suffolk Bancorp *			16,115		191,446
Sun Bancorp, Inc. *	��		49,000		141,610
Territorial Bancorp, Inc.			5,600		121,632
Texas Capital Bancshares, Inc. *			13,620		513,610
TFS Financial Corp. *			40,080		393,986
The Bancorp, Inc. *			20,200		207,454
The First of Long Island Corp.			3,900		107,367
Tompkins Financial Corp.			5,731		216,918
TowneBank (b)			23,600		307,272
TriCo Bancshares			10,100		166,044
TrustCo Bank Corp.			94,510		516,970
UMB Financial Corp.			17,301		831,313
Umpqua Holdings Corp.			48,200		638,168
Union First Market Bankshares Corp.			17,600		245,696
United Bankshares, Inc. (b)			34,895		922,275
United Community Banks, Inc. *			26,579		250,108
United Financial Bancorp, Inc.			8,500		136,340
Univest Corp. of Pennsylvania			13,900		223,790
ViewPoint Financial Group			13,800		219,558
Virginia Commerce Bancorp, Inc. *			24,700		193,401
Walker & Dunlop, Inc. *			10,300		134,415
Washington Banking Co.			9,200		128,248
Washington Trust Bancorp, Inc.			8,285		196,106
WesBanco, Inc.			24,390		499,507
West Bancorp			11,000		105,600
West Coast Bancorp *			12,065		235,750
Westamerica Bancorp			17,370		796,762
Western Alliance Bancorp *			55,065		483,471
Westfield Financial, Inc.			24,227		180,976
Wilshire Bancorp, Inc. *			53,800		288,368
Wintrust Financial Corp.			26,540		958,890
WSFS Financial Corp.			6,535		260,812
					55,534,264
Capital Goods 9.9%
A.O. Smith Corp.			22,100		1,051,960
A123 Systems, Inc. (b)*			98,900		100,878
AAON, Inc.			8,120		165,648
AAR Corp.			36,280		560,526
Accuride Corp. *			55,100		399,475
Aceto Corp.			21,900		197,100
Actuant Corp., Class A			29,700		809,919
Aegion Corp. *			32,715		597,049
Aerovironment, Inc. *			6,700		162,944
Air Lease Corp. *			16,500		388,080
Aircastle Ltd.			78,600		954,990
Alamo Group, Inc.			7,300		245,864
Albany International Corp., Class A			24,100		580,810
Altra Holdings, Inc. *			18,800		343,664
Ameresco, Inc., Class A *			9,300		113,367
American Railcar Industries, Inc. *			5,350		144,343
American Science & Engineering, Inc.			3,500		228,585
American Superconductor Corp. (b)*			41,300		170,569
American Woodmark Corp.			9,195		165,050
Ampco-Pittsburgh Corp.			9,660		179,483
Apogee Enterprises, Inc.			33,595		516,019
Applied Industrial Technologies, Inc.			26,220		1,030,446
Astec Industries, Inc. *			15,750		492,817
Astronics Corp. *			2,700		85,725
AZZ, Inc.			5,600		289,576
Barnes Group, Inc.			25,865		682,836
Beacon Roofing Supply, Inc. *			39,780		1,061,728
Belden, Inc.			24,240		843,067
Blount International, Inc. *			14,905		241,014
Brady Corp., Class A			35,500		1,101,565
Broadwind Energy, Inc. *			141,700		48,178
Builders FirstSource, Inc. *			37,055		154,519
CAI International, Inc. *			6,100		126,026
Cascade Corp.			6,055		285,009

See financial notes 13

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ceradyne, Inc.		25,630		648,952
Chart Industries, Inc. *		8,710		665,705
China Yuchai International Ltd.		33,000		467,610
CIRCOR International, Inc.		11,690		363,793
CLARCOR, Inc.		16,325		783,926
CNH Global N.V. *		24,800		1,135,096
Coleman Cable, Inc. *		14,000		119,000
Colfax Corp. *		6,600		223,674
Columbus McKinnon Corp. *		20,660		306,388
Comfort Systems USA, Inc.		39,200		414,736
Commercial Vehicle Group, Inc. *		22,260		236,846
Cubic Corp.		8,190		378,624
DigitalGlobe, Inc. *		28,500		349,695
Douglas Dynamics, Inc.		15,900		224,667
Ducommun, Inc. *		15,600		184,080
DXP Enterprises, Inc. *		5,700		247,209
Dycom Industries, Inc. *		32,670		764,151
Dynamic Materials Corp.		6,500		118,820
Encore Wire Corp.		16,440		419,056
EnPro Industries, Inc. *		16,570		686,164
ESCO Technologies, Inc.		12,600		433,440
Federal Signal Corp. *		98,300		507,228
Flow International Corp. *		29,300		120,423
Franklin Electric Co., Inc.		7,480		375,122
FreightCar America, Inc.		11,535		249,156
Furmanite Corp. *		21,900		137,094
Fushi Copperweld, Inc. (b)*		26,500		180,730
GenCorp, Inc. *		62,800		431,436
Generac Holdings, Inc. *		16,300		392,504
GeoEye, Inc. *		22,000		504,240
Gibraltar Industries, Inc. *		28,355		383,360
Global Power Equipment Group, Inc. *		12,800		320,128
Graco, Inc.		18,540		988,367
Great Lakes Dredge & Dock Co.		47,400		351,234
Griffon Corp.		59,208		586,751
H&E Equipment Services, Inc. *		39,420		760,806
HEICO Corp.		3,710		149,587
HEICO Corp., Class A		7,083		228,269
Hexcel Corp. *		38,285		1,048,243
Houston Wire & Cable Co.		15,000		184,350
Hurco Cos., Inc. *		5,600		147,448
II-VI, Inc. *		16,530		337,377
Insteel Industries, Inc.		15,700		178,509
Interline Brands, Inc. *		37,360		786,054
Jinpan International Ltd.		10,700		92,448
John Bean Technologies Corp.		22,940		366,811
Kadant, Inc. *		11,000		284,570
Kaman Corp.		17,180		590,648
Kaydon Corp.		17,335		425,228
Kratos Defense & Security Solutions, Inc. *		28,756		159,596
L.B. Foster Co., Class A		10,780		289,012
Layne Christensen Co. *		27,300		561,015
Lindsay Corp.		3,600		240,444
Lmi Aerospace, Inc. *		6,200		113,398
LSI Industries, Inc.		21,002		143,864
Lydall, Inc. *		19,200		202,560
Manitex International, Inc. *		16,100		153,433
MasTec, Inc. *		39,810		692,296
Met-Pro Corp.		10,600		105,576
MFC Industrial Ltd.		45,100		337,348
Michael Baker Corp. *		11,800		265,854
Miller Industries, Inc.		9,800		160,720
MSC Industrial Direct Co., Inc., Class A		13,600		1,002,456
Mueller Water Products, Inc., Class A		294,200		1,056,178
MYR Group, Inc. *		17,000		284,240
NACCO Industries, Inc., Class A		10,740		1,218,668
National Presto Industries, Inc. (b)		5,145		379,289
NCI Building Systems, Inc. *		49,251		590,519
NN, Inc. *		14,800		117,068
Nordson Corp.		11,850		638,715
Northwest Pipe Co. *		11,100		230,991
Orbital Sciences Corp. *		52,355		657,579
Orion Marine Group, Inc. *		36,240		250,781
Pike Electric Corp. *		19,320		158,810
Polypore International, Inc. (b)*		14,900		556,515
Powell Industries, Inc. *		8,570		279,468
Preformed Line Products Co.		1,500		86,595
Primoris Services Corp.		7,200		103,824
Quanex Building Products Corp.		30,150		555,664
Raven Industries, Inc.		5,265		317,006
RBC Bearings, Inc. *		7,800		365,664
Robbins & Myers, Inc.		9,517		463,573
Rush Enterprises, Inc., Class A *		28,560		516,365
Sauer-Danfoss, Inc.		5,040		218,282
Seaboard Corp. *		300		597,126
SeaCube Container Leasing Ltd.		10,900		202,195
Sensata Technologies Holding N.V. *		23,800		755,888
Simpson Manufacturing Co., Inc.		18,785		582,899
Standex International Corp.		12,250		539,735
Sterling Construction Co., Inc. *		22,300		218,317
Sun Hydraulics Corp.		4,150		103,875
TAL International Group, Inc.		10,890		449,866
Taser International, Inc. *		24,000		110,400
Tecumseh Products Co., Class A *		21,030		80,335
Tennant Co.		8,980		397,814
Textainer Group Holdings Ltd.		6,650		233,215
The Gorman-Rupp Co.		8,400		241,920
The Greenbrier Cos., Inc. *		18,220		314,295
The KEYW Holding Corp. (b)*		14,600		137,240
The Middleby Corp. *		5,808		589,338
The Toro Co.		14,510		1,036,885
Thermon Group Holdings, Inc. *		7,200		159,984
Titan International, Inc.		14,875		429,739
Titan Machinery, Inc. *		10,100		359,863
Trex Co., Inc. *		6,300		201,600
TriMas Corp. *		23,650		520,536
Twin Disc, Inc. (b)		4,900		107,457
Universal Forest Products, Inc.		19,570		731,918
Valmont Industries, Inc.		7,650		948,064
Vicor Corp.		14,161		98,702
Wabash National Corp. *		24,845		207,953
WABCO Holdings, Inc. *		18,600		1,172,358
Wabtec Corp.		12,560		976,917
Watsco, Inc.		15,745		1,132,853
Watts Water Technologies, Inc., Class A		18,855		694,241
Woodward, Inc.		15,200		632,168
Xerium Technologies, Inc. *		24,900		117,030
				63,354,674

14 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Commercial & Professional Supplies 4.3%
Acacia Research Corp. *		3,300		135,300
Acco Brands Corp. *		65,745		693,610
American Reprographics Co. *		40,750		222,495
Barrett Business Services, Inc.		5,800		114,840
Casella Waste Systems, Inc., Class A *		33,300		200,799
CBIZ, Inc. *		61,795		375,096
CDI Corp.		14,560		258,294
Cenveo, Inc. (b)*		109,808		314,051
Clean Harbors, Inc. *		15,330		1,046,119
Consolidated Graphics, Inc. *		14,820		592,652
Courier Corp.		16,355		167,966
CRA International, Inc. *		10,945		223,825
Dolan Co. *		31,600		253,116
Encore Capital Group, Inc. *		10,355		245,414
EnergySolutions, Inc. *		181,300		763,273
EnerNOC, Inc. *		13,200		79,332
Ennis, Inc.		29,040		457,670
Exponent, Inc. *		4,400		210,320
G&K Services, Inc., Class A		16,390		538,575
GP Strategies Corp. *		10,200		171,156
Healthcare Services Group, Inc.		25,155		533,789
Heidrick & Struggles International, Inc.		16,670		325,065
Herman Miller, Inc.		41,110		802,878
Hill International, Inc. *		27,900		99,324
Hudson Highland Group, Inc. *		34,185		185,966
Huron Consulting Group, Inc. *		12,500		440,500
ICF International, Inc. *		13,100		326,714
IHS, Inc., Class A *		4,510		455,826
InnerWorkings, Inc. *		13,900		159,989
Insperity, Inc.		20,860		568,852
Interface, Inc., Class A		35,985		509,548
Intersections, Inc.		11,000		132,330
KAR Auction Services, Inc. *		30,700		564,880
Kforce, Inc. *		35,500		513,685
Kimball International, Inc., Class B		26,925		183,898
Knoll, Inc.		36,700		542,793
Korn/Ferry International *		37,830		610,954
McGrath Rentcorp		15,725		462,630
Metalico, Inc. *		51,700		167,508
Mine Safety Appliances Co.		17,525		744,111
Mistras Group, Inc. *		7,000		164,290
Mobile Mini, Inc. *		28,225		532,323
Multi-Color Corp.		7,000		149,240
Navigant Consulting, Inc. *		48,225		671,292
On Assignment, Inc. *		21,400		400,394
Portfolio Recovery Associates, Inc. *		5,345		367,843
Resources Connection, Inc.		35,560		461,569
Rollins, Inc.		18,122		385,093
Schawk, Inc.		12,660		170,530
Standard Parking Corp. *		14,300		272,558
Sykes Enterprises, Inc. *		35,355		560,377
Team, Inc. *		10,100		299,263
Tetra Tech, Inc. *		38,195		1,019,806
The Advisory Board Co. *		2,530		230,635
The Corporate Executive Board Co.		15,670		648,268
The Geo Group, Inc. *		59,980		1,242,186
TMS International Corp., Class A *		17,000		205,360
Towers Watson��& Co., Class A		17,315		1,132,401
TrueBlue, Inc. *		41,430		715,082
UniFirst Corp.		8,605		522,840
US Ecology, Inc.		8,500		184,280
Verisk Analytics, Inc., Class A *		23,900		1,169,905
Viad Corp.		22,865		413,399
VSE Corp.		6,000		132,000
				27,446,077
Consumer Durables & Apparel 3.9%
American Apparel, Inc. *		118,100		116,329
American Greetings Corp., Class A (b)		70,400		1,126,400
Arctic Cat, Inc. *		4,600		203,504
Beazer Homes USA, Inc. *		277,600		860,560
Blyth, Inc.		6,672		586,936
Callaway Golf Co.		98,355		602,916
Cavco Industries, Inc. *		2,600		134,160
Cherokee, Inc.		13,700		177,826
Columbia Sportswear Co.		8,880		418,248
Crocs, Inc. *		27,460		554,692
CSS Industries, Inc.		8,575		164,211
Deckers Outdoor Corp. *		10,250		522,853
Delta Apparel, Inc. *		8,200		117,342
Ethan Allen Interiors, Inc.		22,865		530,468
Furniture Brands International, Inc. *		174,700		276,026
G-III Apparel Group Ltd. *		17,600		472,560
Helen of Troy Ltd. *		15,630		540,798
Hovnanian Enterprises, Inc., Class A *		326,800		653,600
Iconix Brand Group, Inc. *		38,730		594,118
JAKKS Pacific, Inc.		37,725		719,416
K-Swiss, Inc., Class A *		74,130		272,798
Kenneth Cole Productions, Inc., Class A *		7,140		113,740
La-Z-Boy, Inc. *		39,120		589,538
Leapfrog Enterprises, Inc. *		22,935		214,213
Libbey, Inc. *		23,900		341,053
Lifetime Brands, Inc.		8,500		99,025
Liz Claiborne, Inc. *		116,500		1,561,100
Lululemon Athletica, Inc. *		5,200		385,528
M.D.C. Holdings, Inc.		39,900		1,121,589
M/I Homes, Inc. *		23,400		311,220
Maidenform Brands, Inc. *		15,900		362,997
Meritage Homes Corp. *		38,500		1,093,015
Movado Group, Inc.		10,120		286,902
Oxford Industries, Inc.		8,030		385,360
Perry Ellis International, Inc. *		20,700		387,297
Quiksilver, Inc. *		203,100		702,726
Sealy Corp. (b)*		74,370		153,202
Skechers U.S.A., Inc., Class A *		67,245		1,255,464
Skyline Corp.		19,285		105,875
Smith & Wesson Holding Corp. *		39,700		327,525
SodaStream International Ltd. (b)*		2,700		92,745
Standard Pacific Corp. *		75,100		380,006
Steinway Musical Instruments, Inc. *		5,600		141,176
Steven Madden Ltd. *		8,748		378,001
Sturm, Ruger & Co., Inc.		3,400		194,038
Tempur-Pedic International, Inc. *		8,815		518,675
The Ryland Group, Inc.		59,500		1,339,345
True Religion Apparel, Inc. *		11,500		312,340
Under Armour, Inc., Class A *		4,115		402,982

See financial notes 15

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Unifi, Inc. *		25,600		284,672
Universal Electronics, Inc. *		11,700		197,964
Vera Bradley, Inc. (b)*		2,800		72,744
Wolverine World Wide, Inc.		22,690		951,845
				24,709,663
Consumer Services 5.6%
AFC Enterprises, Inc. *		6,400		109,312
Ambassadors Group, Inc.		20,400		109,956
American Public Education, Inc. *		3,400		118,048
Ameristar Casinos, Inc.		49,975		898,550
Arcos Dorados Holdings, Inc.		37,300		666,551
Ascent Capital Group, Inc., Class A *		8,000		412,000
Bally Technologies, Inc. *		18,975		921,236
Benihana, Inc.		15,000		206,850
Biglari Holdings, Inc. *		1,048		425,834
BJ’s Restaurants, Inc. *		6,200		267,778
Bob Evans Farms, Inc.		28,155		1,076,647
Bravo Brio Restaurant Group, Inc. *		7,600		153,520
Bridgepoint Education, Inc. (b)*		5,300		114,268
Buffalo Wild Wings, Inc. *		3,100		259,935
Capella Education Co. *		5,640		184,484
Caribou Coffee Co., Inc. *		7,900		129,639
Carrols Restaurant Group, Inc. *		16,700		251,836
CEC Entertainment, Inc.		16,880		645,154
ChinaCast Education Corp. (b)(c)(d)*		30,300		32,118
Choice Hotels International, Inc.		9,640		362,657
Churchill Downs, Inc.		5,995		355,863
Coinstar, Inc. (b)*		13,725		861,793
Corinthian Colleges, Inc. *		207,685		797,510
Cracker Barrel Old Country Store, Inc.		19,120		1,099,782
Denny’s Corp. *		97,000		401,580
DeVry, Inc.		31,600		1,015,940
DineEquity, Inc. *		12,530		608,707
Dunkin’ Brands Group, Inc.		12,100		391,677
Education Management Corp. (b)*		38,800		481,120
Gaylord Entertainment Co. *		32,980		1,038,210
Grand Canyon Education, Inc. *		10,700		186,073
Hillenbrand, Inc.		36,300		760,122
International Speedway Corp., Class A		23,050		615,205
Interval Leisure Group, Inc.		25,532		441,193
Isle of Capri Casinos, Inc. *		28,015		175,094
ITT Educational Services, Inc. (b)*		16,035		1,058,631
K12, Inc. *		10,300		262,650
Krispy Kreme Doughnuts, Inc. *		23,335		171,046
LIFE TIME FITNESS, Inc. *		19,685		916,534
Lincoln Educational Services Corp.		38,260		280,828
Matthews International Corp., Class A		18,715		561,450
Morgans Hotel Group *		34,000		168,640
Multimedia Games Holding Co., Inc. *		17,580		199,709
Orient-Express Hotels Ltd., Class A *		53,190		568,601
P.F. Chang’s China Bistro, Inc.		14,955		593,564
Panera Bread Co., Class A *		5,775		911,988
Papa John’s International, Inc. *		12,110		487,791
Peet’s Coffee & Tea, Inc. *		3,400		261,188
Pinnacle Entertainment, Inc. *		69,775		774,503
Red Lion Hotels Corp. *		12,300		102,582
Red Robin Gourmet Burgers, Inc. *		11,480		409,377
Ruby Tuesday, Inc. *		99,350		675,580
Ruth’s Hospitality Group, Inc. *		33,200		229,744
School Specialty, Inc. *		90,500		295,935
Scientific Games Corp., Class A *		64,570		656,031
Shuffle Master, Inc. *		15,600		275,652
Six Flags Entertainment Corp.		20,900		1,001,319
Sonic Corp. *		67,680		488,650
Sotheby’s		23,320		916,942
Speedway Motorsports, Inc.		11,915		203,270
Steiner Leisure Ltd. *		7,660		359,714
Stewart Enterprises, Inc., Class A		76,540		483,733
Strayer Education, Inc. (b)		6,400		631,552
Texas Roadhouse, Inc.		27,410		472,823
The Cheesecake Factory, Inc. *		36,335		1,144,552
The Marcus Corp.		21,930		274,344
Town Sports International Holdings, Inc. *		11,900		152,558
Universal Technical Institute, Inc.		13,180		158,160
Vail Resorts, Inc.		25,060		1,021,947
Weight Watchers International, Inc. (b)		9,192		698,224
WMS Industries, Inc. *		41,512		1,017,459
				35,463,513
Diversified Financials 2.2%
Artio Global Investors, Inc.		33,000		119,460
BGC Partners, Inc., Class A		32,180		224,295
Calamos Asset Management, Inc., Class A		34,615		447,226
Cash America International, Inc.		17,505		818,359
CBOE Holdings, Inc.		20,900		552,596
Cohen & Steers, Inc. (b)		4,840		170,562
Cowen Group, Inc., Class A *		72,539		182,798
Credit Acceptance Corp. *		1,875		176,306
DFC Global Corp. *		26,837		469,111
Diamond Hill Investment Group		1,300		98,657
Duff & Phelps Corp., Class A		11,400		181,260
Edelman Financial Group, Inc.		17,500		154,525
Evercore Partners, Inc., Class A		6,800		179,724
Ezcorp, Inc., Class A *		16,200		433,998
FBR & Co. *		40,800		108,120
Financial Engines, Inc. *		5,300		121,052
First Cash Financial Services, Inc. *		8,490		347,750
FXCM, Inc., Class A (b)		19,300		223,494
Gain Capital Holdings, Inc.		17,400		89,262
GAMCO Investors, Inc., Class A		2,735		123,239
GFI Group, Inc.		89,320		294,756
Gleacher & Co., Inc. *		82,700		86,008
Green Dot Corp., Class A (b)*		4,800		126,672
Greenhill & Co., Inc.		11,935		463,675
HFF, Inc., Class A *		9,300		151,962
ICG Group, Inc. *		14,100		133,668
INTL FCStone, Inc. *		7,574		162,841
Investment Technology Group, Inc. *		83,255		849,201
Janus Capital Group, Inc.		81,600		618,528
KBW, Inc.		20,800		354,432
LPL Investment Holdings, Inc. *		22,700		814,703
MarketAxess Holdings, Inc.		4,400		150,964

16 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Nelnet, Inc., Class A		17,240		445,137
Netspend Holdings, Inc. *		11,500		87,745
NewStar Financial, Inc. *		25,100		297,937
Nicholas Financial, Inc.		7,300		96,579
Oppenheimer Holdings, Inc., Class A		13,000		221,780
PICO Holdings, Inc. *		13,295		319,213
Piper Jaffray Cos., Inc. *		24,105		584,546
Safeguard Scientifics, Inc. *		7,500		122,700
Stifel Financial Corp. *		26,460		963,673
SWS Group, Inc.		68,220		384,761
Walter Investment Management Corp.		15,938		322,426
Westwood Holdings Group, Inc.		3,500		128,730
World Acceptance Corp. (b)*		10,760		715,647
				14,120,078
Energy 5.7%
Adams Resources & Energy, Inc.		3,000		182,190
Alon USA Energy, Inc.		45,400		410,416
Amyris, Inc. (b)*		20,700		64,791
Approach Resources, Inc. *		6,100		218,868
ATP Oil & Gas Corp. (b)*		58,885		445,171
Basic Energy Services, Inc. *		34,885		502,344
Berry Petroleum Co., Class A		19,120		870,916
BPZ Resources, Inc. (b)*		38,800		157,140
Cal Dive International, Inc. *		256,443		992,435
Callon Petroleum Co. *		25,700		149,317
CARBO Ceramics, Inc. (b)		4,380		368,314
Carrizo Oil & Gas, Inc. *		13,905		389,896
Clayton Williams Energy, Inc. *		2,685		197,455
Clean Energy Fuels Corp. (b)*		8,900		171,236
Cloud Peak Energy, Inc. *		63,500		977,265
Cobalt International Energy, Inc. *		10,100		270,276
Comstock Resources, Inc. *		60,955		1,070,979
Contango Oil & Gas Co. *		4,460		242,000
Continental Resources, Inc. *		4,300		383,775
Core Laboratories N.V. (b)		5,690		779,416
Crimson Exploration, Inc. *		32,900		179,305
Crosstex Energy, Inc.		63,900		952,110
Dawson Geophysical Co. *		6,300		169,155
Delek US Holdings, Inc.		27,000		440,100
DHT Holdings, Inc. (b)		233,500		186,800
Dril-Quip, Inc. *		8,585		578,543
Endeavour International Corp. *		17,000		212,160
Energy Partners Ltd. *		27,500		447,700
Energy XXI (Bermuda) Ltd. *		15,500		584,040
Gastar Exploration Ltd. *		44,100		123,921
GeoResources, Inc. *		3,900		147,069
Global Geophysical Services, Inc. *		13,700		131,109
GMX Resources, Inc. (b)*		86,100		117,957
Goodrich Petroleum Corp. (b)*		12,700		212,979
Gran Tierra Energy, Inc. *		99,800		643,710
Green Plains Renewable Energy, Inc. *		18,900		151,011
Gulf Island Fabrication, Inc.		9,200		257,784
GulfMark Offshore, Inc., Class A *		16,205		780,595
Gulfport Energy Corp. *		6,500		170,365
Harvest Natural Resources, Inc. *		21,150		145,512
Heckmann Corp. (b)*		25,800		98,040
Hercules Offshore, Inc. *		213,600		1,085,088
Hornbeck Offshore Services, Inc. *		20,080		835,930
InterOil Corp. (b)*		8,700		525,828
ION Geophysical Corp. *		75,305		469,150
James River Coal Co. (b)*		71,700		355,632
Knightsbridge Tankers Ltd. (b)		28,990		367,013
Kodiak Oil & Gas Corp. *		14,200		125,670
L&L Energy, Inc. (b)*		41,300		92,925
Lone Pine Resources, Inc. *		46,800		278,928
Lufkin Industries, Inc.		7,010		538,648
Matrix Service Co. *		23,000		313,950
McMoRan Exploration Co. (b)*		56,760		499,488
Miller Energy Resources, Inc. (b)*		23,600		128,148
Mitcham Industries, Inc. *		4,600		109,296
Natural Gas Services Group *		9,600		125,184
Newpark Resources, Inc. *		66,040		420,014
Nordic American Tanker Shipping Ltd. (b)		58,085		843,394
Northern Oil & Gas, Inc. *		8,900		172,927
Oasis Petroleum, Inc. *		7,600		251,332
Ocean Rig UDW, Inc. *		19,200		334,656
Oilsands Quest, Inc. (c)(d)*		329,900		29,526
OYO Geospace Corp. *		900		103,698
Parker Drilling Co. *		133,210		688,696
Patriot Coal Corp. *		120,600		703,098
Penn Virginia Corp.		185,100		947,712
Petroleum Development Corp. *		19,355		665,619
PetroQuest Energy, Inc. *		61,485		371,369
PHI, Inc. - Non Voting Shares *		8,585		228,619
Pioneer Drilling Co. *		55,000		433,400
Quicksilver Resources, Inc. (b)*		71,100		334,170
Resolute Energy Corp. (b)*		15,400		163,394
REX American Resources Corp. *		6,300		174,762
Rex Energy Corp. *		12,400		130,324
Rosetta Resources, Inc. *		12,810		643,959
RPC, Inc. (b)		31,095		321,522
Scorpio Tankers, Inc. *		24,400		165,188
Stone Energy Corp. *		34,000		953,700
Swift Energy Co. *		35,705		1,080,076
Teekay Tankers Ltd., Class A (b)		105,100		542,316
Tesco Corp. *		27,000		440,910
TETRA Technologies, Inc. *		104,860		913,331
TransAtlantic Petroleum Ltd. (b)*		72,700		84,332
Tsakos Energy Navigation Ltd.		46,630		296,101
Union Drilling, Inc. *		20,100		111,957
VAALCO Energy, Inc. *		30,340		275,184
Vantage Drilling Co. *		236,000		372,880
Venoco, Inc. *		15,000		166,650
W&T Offshore, Inc.		18,200		359,814
Warren Resources, Inc. *		37,300		115,257
Westmoreland Coal Co. *		12,900		130,161
Willbros Group, Inc. *		120,400		650,160
				36,045,251
Food & Staples Retailing 0.7%
Ingles Markets, Inc., Class A		17,500		304,325
PriceSmart, Inc.		8,040		663,622
Spartan Stores, Inc.		34,300		625,289
Susser Holdings Corp. *		23,900		637,891
The Andersons, Inc.		22,125		1,115,100
The Fresh Market, Inc. *		8,000		409,360
Village Super Market, Inc., Class A		5,002		138,055

See financial notes 17

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

		Number		Value
Security		of Shares		($)
Weis Markets, Inc.			11,500		512,900
					4,406,542
Food, Beverage & Tobacco 2.0%
Adecoagro SA *			25,800		230,136
Alliance One International, Inc. *			92,630		327,910
B&G Foods, Inc.			23,200		515,968
Cal-Maine Foods, Inc.			12,200		439,566
Calavo Growers, Inc.	��		6,600		189,288
Coca-Cola Bottling Co. Consolidated			5,800		372,070
Darling International, Inc. *			35,620		583,456
Diamond Foods, Inc. (b)			13,600		284,240
Green Mountain Coffee Roasters, Inc. *			9,980		486,525
Imperial Sugar Co. (b)			75,100		304,155
J&J Snack Foods Corp.			6,435		360,746
Lancaster Colony Corp.			9,465		617,213
Monster Beverage Corp. *			14,710		955,561
National Beverage Corp. *			10,900		161,974
Omega Protein Corp. *			20,500		146,780
Pilgrim’s Pride Corp. *			118,900		848,946
Sanderson Farms, Inc.			17,600		908,336
Seneca Foods Corp., Class A *			11,400		265,506
Smart Balance, Inc. *			33,400		197,060
Snyders-Lance, Inc.			32,360		837,477
The Boston Beer Co., Inc., Class A (b)*			2,000		206,640
The Hain Celestial Group, Inc. *			19,670		930,391
Tootsie Roll Industries, Inc. (b)			13,137		312,786
TreeHouse Foods, Inc. *			19,685		1,132,084
Vector Group Ltd. (b)			31,631		548,798
Zhongpin, Inc. (b)*			27,100		255,824
					12,419,436
Health Care Equipment & Services 5.7%
Abaxis, Inc. *			5,600		199,472
Accretive Health, Inc. (b)*			4,100		41,246
Accuray, Inc. *			18,362		141,387
Air Methods Corp. *			4,000		336,440
Align Technology, Inc. *			13,200		418,572
Allscripts Healthcare Solutions, Inc. *			42,800		474,224
Almost Family, Inc. *			8,700		212,106
Amedisys, Inc. *			81,870		1,205,945
AMN Healthcare Services, Inc. *			56,145		376,733
AmSurg Corp. *			33,225		955,551
Analogic Corp.			5,365		365,947
AngioDynamics, Inc. *			21,000		259,980
ArthroCare Corp. *			11,800		294,528
Assisted Living Concepts, Inc., Class A			15,640		280,112
athenahealth, Inc. *			2,100		152,145
Atrion Corp.			700		161,448
Bio-Reference Laboratories, Inc. *			11,500		245,180
BioScrip, Inc. *			61,000		452,010
Cantel Medical Corp.			6,350		149,098
Capital Senior Living Corp. *			10,500		101,745
Chemed Corp.			10,995		663,438
Chindex International, Inc. *			10,700		104,539
Computer Programs & Systems, Inc.			3,600		214,524
Conceptus, Inc. *			7,400		138,898
CONMED Corp.			21,095		603,106
CorVel Corp. *			3,701		160,957
Cross Country Healthcare, Inc. *			47,365		218,353
CryoLife, Inc. *			19,400		102,626
Cyberonics, Inc. *			3,900		149,370
Emeritus Corp. *			23,400		402,480
Ensign Group, Inc.			4,220		112,716
Exactech, Inc. *			6,800		105,400
ExamWorks Group, Inc. *			12,200		142,008
Five Star Quality Care, Inc. *			109,500		375,585
Gen-Probe, Inc. *			11,915		971,668
Gentiva Health Services, Inc. *			111,725		925,083
Greatbatch, Inc. *			18,620		433,660
Haemonetics Corp. *			10,400		744,328
Hanger Orthopedic Group, Inc. *			19,700		463,935
HealthSouth Corp. *			55,300		1,238,167
Healthways, Inc. *			77,060		513,990
HMS Holdings Corp. *			8,800		211,728
ICU Medical, Inc. *			4,450		233,581
IDEXX Laboratories, Inc. *			11,000		967,230
Integra LifeSciences Holdings *			14,020		521,965
Invacare Corp.			41,865		663,560
IPC The Hospitalist Co. *			5,800		222,778
Kensey Nash Corp.			4,900		139,307
Landauer, Inc.			4,850		255,692
LCA-Vision, Inc. *			13,330		98,642
LHC Group, Inc. *			16,060		284,423
Masimo Corp. *			23,900		528,907
MedAssets, Inc. *			21,300		268,593
Medical Action Industries, Inc. *			18,800		103,776
Meridian Bioscience, Inc.			11,525		236,839
Merit Medical Systems, Inc. *			19,275		254,816
Metropolitan Health Networks, Inc. *			18,133		135,635
Molina Healthcare, Inc. *			32,957		845,347
MWI Veterinary Supply, Inc. *			5,000		472,000
National Healthcare Corp.			7,950		362,520
Natus Medical, Inc. *			19,500		238,680
Neogen Corp. *			4,900		191,051
NuVasive, Inc. *			19,000		314,830
Omnicell, Inc. *			14,300		204,061
Orthofix International N.V. *			10,460		431,161
PharMerica Corp. *			70,440		836,123
Providence Service Corp. *			18,800		264,328
PSS World Medical, Inc. *			42,670		1,021,093
Quality Systems, Inc.			8,860		331,364
Quidel Corp. *			10,000		165,200
RadNet, Inc. *			30,200		93,318
ResMed, Inc. *			32,340		1,099,883
RTI Biologics, Inc. *			33,200		116,200
Select Medical Holdings Corp. *			53,600		459,352
Sirona Dental Systems, Inc. *			17,790		898,573
Skilled Healthcare Group, Inc., Class A *			43,360		332,571
Sun Healthcare Group, Inc. *			110,000		795,300
Sunrise Senior Living, Inc. (b)*			105,600		663,168
SurModics, Inc. *			11,360		168,014
Symmetry Medical, Inc. *			33,370		237,261
Syneron Medical Ltd. *			14,800		154,956
Team Health Holdings, Inc. *			15,400		331,716
The Cooper Cos., Inc.			14,100		1,243,197
Thoratec Corp. *			13,300		462,973

18 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Triple-S Management Corp., Class B *		26,800		564,408
U.S. Physical Therapy, Inc.		8,100		197,478
Vanguard Health Systems, Inc. *		57,300		508,824
Volcano Corp. *		8,500		230,775
West Pharmaceutical Services, Inc.		20,840		935,716
Wright Medical Group, Inc. *		26,840		500,029
Young Innovations, Inc.		3,100		105,400
				36,513,042
Household & Personal Products 0.8%
American Oriental Bioengineering, Inc. (b)(c)(d)*		74,500		34,195
Central Garden & Pet Co. *		19,100		202,078
Central Garden & Pet Co., Class A *		54,330		580,788
Elizabeth Arden, Inc. *		16,670		649,797
Inter Parfums, Inc.		6,550		103,162
Medifast, Inc. (b)*		6,500		124,930
Nu Skin Enterprises, Inc., Class A		15,710		837,343
Nutraceutical International Corp. *		8,900		136,437
Prestige Brands Holdings, Inc. *		25,810		438,512
Revlon, Inc., Class A *		14,400		245,952
Schiff Nutrition International, Inc. *		13,500		222,075
Spectrum Brands Holdings, Inc. *		30,700		1,059,457
USANA Health Sciences, Inc. (b)*		4,230		176,391
WD-40 Co.		7,915		356,808
				5,167,925
Insurance 2.7%
American Equity Investment Life Holding Co.		75,015		919,684
American National Insurance Co.		12,000		842,400
American Safety Insurance Holdings Ltd. *		11,600		219,588
AMERISAFE, Inc. *		15,300		408,816
AmTrust Financial Services, Inc.		12,080		329,059
Argo Group International Holdings Ltd.		32,959		951,197
Baldwin & Lyons, Inc., Class B		5,400		117,558
Citizens, Inc. *		17,080		164,139
CNA Financial Corp.		23,700		725,694
Crawford & Co., Class A		21,400		80,036
Crawford & Co., Class B		26,700		127,359
Donegal Group, Inc., Class A		6,000		81,720
eHealth, Inc. *		10,000		177,200
Employers Holdings, Inc.		30,900		535,188
Enstar Group Ltd. *		3,510		330,537
FBL Financial Group, Inc., Class A		15,600		454,272
Flagstone Reinsurance Holdings S.A.		53,300		399,750
Global Indemnity plc *		12,870		231,789
Greenlight Capital Re Ltd., Class A *		17,800		443,220
Hallmark Financial Services, Inc. *		13,500		101,520
Harleysville Group, Inc.		8,535		511,588
Hilltop Holdings, Inc. *		34,970		277,312
Horace Mann Educators Corp.		47,690		836,959
Infinity Property & Casualty Corp.		12,365		660,415
Kansas City Life Insurance Co.		5,277		171,714
Maiden Holdings Ltd.		67,600		561,080
Meadowbrook Insurance Group, Inc.		43,400		383,222
National Financial Partners Corp. *		44,985		663,529
National Western Life Insurance Co., Class A		2,300		312,938
OneBeacon Insurance Group Ltd., Class A		30,600		435,438
Presidential Life Corp.		19,545		226,331
RLI Corp.		15,600		1,074,528
Safety Insurance Group, Inc.		11,305		450,504
Seabright Holdings, Inc.		26,800		240,932
State Auto Financial Corp.		14,130		202,483
Stewart Information Services Corp.		33,600		494,592
The Navigators Group, Inc. *		12,965		615,837
The Phoenix Cos., Inc. *		169,900		356,790
Tower Group, Inc.		34,100		735,878
United Fire Group, Inc.		19,860		341,989
Universal Insurance Holdings, Inc.		41,600		172,224
				17,367,009
Materials 5.8%
A. M. Castle & Co. *		30,678		410,778
A. Schulman, Inc.		30,933		761,261
AEP Industries, Inc. *		7,340		255,946
Allied Nevada Gold Corp. *		7,000		205,030
AMCOL International Corp.		15,320		504,947
American Vanguard Corp.		7,500		187,500
Balchem Corp.		6,700		193,630
Boise, Inc.		120,900		923,676
Buckeye Technologies, Inc.		18,880		611,901
Calgon Carbon Corp. *		24,500		339,080
Carpenter Technology Corp.		22,200		1,235,652
Century Aluminum Co. *		110,700		1,018,440
China Gerui Advanced Materials Group Ltd. *		26,200		74,670
Clearwater Paper Corp. *		23,460		773,476
Compass Minerals International, Inc.		14,930		1,142,444
Deltic Timber Corp.		2,700		164,916
Eagle Materials, Inc.		23,070		812,525
Ferro Corp. *		188,730		979,509
Flotek Industries, Inc. *		8,000		109,120
Georgia Gulf Corp. *		33,724		1,195,516
Globe Specialty Metals, Inc.		21,600		288,144
Graphic Packaging Holding Co. *		120,500		644,675
Gulf Resources, Inc. (b)*		49,700		108,346
H.B. Fuller Co.		29,080		956,732
Hawkins, Inc.		4,900		170,177
Haynes International, Inc.		4,776		297,879
Headwaters, Inc. *		169,880		737,279
Hecla Mining Co.		133,245		570,289
Horsehead Holding Corp. *		36,300		407,649
Innophos Holdings, Inc.		8,850		435,154
Innospec, Inc. *		11,680		353,086
Intrepid Potash, Inc. *		17,800		442,330
Kaiser Aluminum Corp. (b)		12,280		645,560
KapStone Paper & Packaging Corp. *		18,900		341,334
Koppers Holdings, Inc.		16,460		639,965
Kraton Performance Polymers, Inc. *		26,300		683,800
Kronos Worldwide, Inc.		8,300		197,042
Landec Corp. *		26,800		172,592
Louisiana-Pacific Corp. *		127,300		1,152,065
LSB Industries, Inc. *		6,820		231,334

See financial notes 19

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Material Sciences Corp. *		11,300		86,332
Materion Corp. *		19,560		483,328
Mercer International, Inc. *		62,000		425,320
Metals USA Holdings Corp. *		23,300		351,364
Minerals Technologies, Inc.		12,010		805,871
Molycorp, Inc. (b)*		6,100		165,066
Myers Industries, Inc.		24,205		400,109
Neenah Paper, Inc.		12,565		358,856
NewMarket Corp.		5,095		1,137,306
Noranda Aluminum Holding Corp.		25,600		271,872
Olympic Steel, Inc.		15,500		327,515
Omnova Solutions, Inc. *		67,780		531,395
P.H. Glatfelter Co.		50,145		781,259
Quaker Chemical Corp.		7,600		329,840
Royal Gold, Inc.		8,250		511,170
RTI International Metals, Inc. *		27,880		684,454
Schnitzer Steel Industries, Inc., Class A		22,310		889,500
Schweitzer-Mauduit International, Inc.		8,086		548,393
Spartech Corp. *		34,565		168,677
Stepan Co.		7,165		651,012
Stillwater Mining Co. *		41,970		450,338
SunCoke Energy, Inc. *		61,800		940,596
Texas Industries, Inc. (b)		18,185		611,198
Titanium Metals Corp.		38,250		564,952
TPC Group, Inc. *		22,100		927,758
Tredegar Corp.		16,375		284,106
Universal Stainless & Alloy Products, Inc. *		5,700		264,480
Wausau Paper Corp.		60,010		543,691
Westlake Chemical Corp.		8,300		530,785
Yongye International, Inc. (b)*		49,800		159,858
Zep, Inc.		15,500		220,875
Zoltek Cos., Inc. *		17,500		193,025
				36,975,750
Media 2.2%
AH Belo Corp., Class A		18,900		83,349
AMC Networks, Inc., Class A *		12,700		539,750
Arbitron, Inc.		9,360		356,148
Belo Corp., Class A		117,600		792,624
Carmike Cinemas, Inc. *		14,075		187,620
Central European Media Enterprises Ltd., Class A (b)*		135,000		1,067,850
Clear Channel Outdoor Holdings, Inc., Class A *		52,400		396,668
CTC Media, Inc.		23,700		256,671
Cumulus Media, Inc., Class A (b)*		46,500		168,795
Digital Generation, Inc. *		37,200		345,216
DreamWorks Animation SKG, Inc., Class A (b)*		54,700		985,147
Entercom Communications Corp., Class A *		61,400		380,066
Fisher Communications, Inc. *		4,900		160,671
Gray Television, Inc. *		48,000		86,400
Harte-Hanks, Inc.		65,035		546,294
Journal Communications, Inc., Class A *		44,915		188,194
Knology, Inc. *		18,200		353,990
LIN TV Corp., Class A *		49,633		196,050
Lions Gate Entertainment Corp. (b)*		59,600		728,908
LodgeNet Interactive Corp. (b)*		37,850		87,055
Media General, Inc., Class A (b)*		38,570		137,695
Meredith Corp. (b)		31,800		916,794
Morningstar, Inc.		4,635		267,532
National CineMedia, Inc.		30,900		441,561
Nexstar Broadcasting Group, Inc., Class A *		11,600		89,900
Scholastic Corp.		32,400		989,820
Sinclair Broadcast Group, Inc., Class A		22,719		233,551
Sirius XM Radio, Inc. *		261,500		590,990
SuperMedia, Inc. (b)*		65,200		112,144
The E.W. Scripps Co., Class A *		52,300		479,068
The Madison Square Garden, Inc., Class A *		29,400		1,057,518
The McClatchy Co., Class A (b)*		215,100		585,072
World Wrestling Entertainment, Inc., Class A (b)		39,800		313,624
				14,122,735
Pharmaceuticals, Biotechnology & Life Sciences 2.5%
Affymetrix, Inc. *		75,390		333,224
Albany Molecular Research, Inc. *		45,900		146,421
Alexion Pharmaceuticals, Inc. *		5,800		523,856
Alkermes plc *		12,500		216,250
Alnylam Pharmaceuticals, Inc. *		6,900		78,591
AMAG Pharmaceuticals, Inc. *		7,200		112,752
Amylin Pharmaceuticals, Inc. *		20,900		541,519
Bio-Rad Laboratories, Inc., Class A *		10,400		1,123,096
BioMarin Pharmaceuticals, Inc. *		11,300		392,110
Bruker Corp. *		19,685		295,865
Cambrex Corp. *		114,529		742,148
Cepheid, Inc. *		2,800		107,548
Cubist Pharmaceuticals, Inc. *		14,140		597,839
Dendreon Corp. (b)*		19,600		228,340
Emergent Biosolutions, Inc. *		15,300		215,118
Enzon Pharmaceuticals, Inc. *		29,900		186,277
eResearch Technology, Inc. *		25,700		203,030
Hi-Tech Pharmacal Co., Inc. *		2,900		94,511
Human Genome Sciences, Inc. (b)*		31,800		467,778
Illumina, Inc. (b)*		19,260		857,648
Impax Laboratories, Inc. *		26,500		652,695
InterMune, Inc. *		7,200		75,168
Isis Pharmaceuticals, Inc. *		14,600		116,800
Luminex Corp. *		6,800		170,272
Medicis Pharmaceutical Corp., Class A		17,725		681,881
Momenta Pharmaceuticals, Inc. *		7,000		111,160
Myriad Genetics, Inc. *		17,140		445,811
Obagi Medical Products, Inc. *		8,100		106,272
Onyx Pharmaceuticals, Inc. *		9,400		427,794
Pacific Biosciences of California, Inc. (b)*		29,700		80,190
Par Pharmaceutical Cos., Inc. *		18,870		798,956
PAREXEL International Corp. *		30,720		827,597
PDL BioPharma, Inc.		160,350		1,008,601
QLT, Inc. *		25,100		167,166
Questcor Pharmaceuticals, Inc. *		3,500		157,150
Regeneron Pharmaceuticals, Inc. *		3,200		432,832
Salix Pharmaceuticals Ltd. *		5,295		261,573

20 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Sinovac Biotech Ltd. *		44,300		95,688
Synageva BioPharma Corp. *		2,400		91,152
Techne Corp.		7,865		526,483
The Medicines Co. *		9,320		205,879
United Therapeutics Corp. *		11,720		512,750
Vertex Pharmaceuticals, Inc. *		7,000		269,360
ViroPharma, Inc. *		22,460		488,505
				16,175,656
Real Estate 7.7%
Acadia Realty Trust		21,874		507,039
Agree Realty Corp.		6,400		145,920
Alexander’s, Inc.		420		163,645
Altisource Portfolio Solutions S.A. *		3,700		221,371
American Assets Trust, Inc.		4,900		115,199
American Campus Communities, Inc.		24,360		1,082,802
Anworth Mortgage Asset Corp.		159,155		1,072,705
Apollo Commercial Real Estate Finance, Inc.		13,300		214,529
Ashford Hospitality Trust		120,485		1,028,942
Associated Estates Realty Corp.		19,300		326,749
AV Homes, Inc. *		17,745		221,280
Campus Crest Communities, Inc.		12,200		142,130
CapLease, Inc.		67,600		280,540
Capstead Mortgage Corp.		86,550		1,188,331
Cedar Realty Trust, Inc.		103,145		538,417
Chesapeake Lodging Trust		8,900		161,090
Colony Financial, Inc.		6,900		117,231
Coresite Realty Corp.		5,800		144,478
Cousins Properties, Inc.		108,283		851,104
CreXus Investment Corp.		11,300		118,537
CubeSmart		59,675		749,518
CYS Investments, Inc.		28,500		391,305
Douglas Emmett, Inc.		53,600		1,245,664
DuPont Fabros Technology, Inc.		18,200		494,130
Dynex Capital, Inc.		15,400		145,222
EastGroup Properties, Inc.		14,150		711,745
Education Realty Trust, Inc.		33,300		375,291
Equity Lifestyle Properties, Inc.		7,470		522,452
Equity One, Inc.		32,900		683,662
Extra Space Storage, Inc.		34,865		1,058,153
FelCor Lodging Trust, Inc. *		178,550		753,481
First Industrial Realty Trust, Inc. *		61,100		753,974
First Potomac Realty Trust		41,000		510,040
Forest City Enterprises, Inc., Class A *		67,900		1,083,005
Forestar Group, Inc. *		22,060		339,283
Franklin Street Properties Corp.		70,520		710,136
Getty Realty Corp.		17,060		269,889
Gladstone Commercial Corp.		8,900		151,211
Glimcher Realty Trust		61,925		612,438
Government Properties Income Trust		12,800		297,216
Gramercy Capital Corp. *		68,000		174,760
Healthcare Realty Trust, Inc.		50,500		1,084,740
Hersha Hospitality Trust		105,540		606,855
HomeBanc Corp. (b)(c)(d)*		6,875		—
Howard Hughes Corp. *		20,100		1,348,911
Hudson Pacific Properties, Inc.		9,300		147,219
Inland Real Estate Corp.		82,730		711,478
Invesco Mortgage Capital, Inc.		36,200		638,568
Investors Real Estate Trust		81,225		586,445
Kennedy-Wilson Holdings, Inc.		7,900		111,074
Kite Realty Group Trust		68,080		347,889
LaSalle Hotel Properties		41,140		1,209,927
LTC Properties, Inc.		11,630		387,046
Medical Properties Trust, Inc.		65,600		615,328
Mid-America Apartment Communities, Inc.		16,845		1,146,639
Mission West Properties, Inc.		26,700		234,426
Monmouth Real Estate Investment Corp., Class A		17,800		182,628
MPG Office Trust, Inc. *		96,620		203,868
National Health Investors, Inc.		7,835		387,597
New York Mortgage Trust, Inc. (b)		12,500		85,875
Newcastle Investment Corp.		155,500		1,099,385
NorthStar Realty Finance Corp.		199,432		1,136,762
Omega Healthcare Investors, Inc.		48,190		1,031,748
One Liberty Properties, Inc.		10,703		202,394
Parkway Properties, Inc.		34,720		343,381
Pebblebrook Hotel Trust		15,100		363,608
Pennsylvania Real Estate Investment Trust		79,500		1,120,155
PennyMac Mortgage Investment Trust		14,400		292,176
Post Properties, Inc.		22,520		1,096,724
PS Business Parks, Inc.		8,950		610,838
RAIT Financial Trust (b)		195,920		948,253
Ramco-Gershenson Properties Trust		43,070		518,563
Resource Capital Corp.		90,000		486,000
Retail Opportunity Investments Corp.		15,400		187,110
RLJ Lodging Trust		45,300		850,734
Rouse Properties, Inc. (b)*		8,400		112,896
Sabra Health Care REIT, Inc.		66,933		1,120,458
Saul Centers, Inc.		8,505		340,285
Sovran Self Storage, Inc.		15,870		836,349
Starwood Property Trust, Inc.		41,800		872,366
Strategic Hotels & Resorts, Inc. *		97,455		663,669
Summit Hotel Properties, Inc.		16,800		140,448
Sun Communities, Inc.		12,555		549,281
Sunstone Hotel Investors, Inc. *		121,300		1,237,260
Tanger Factory Outlet Centers, Inc.		25,380		794,902
The St. Joe Co. *		33,670		600,336
Two Harbors Investment Corp.		18,400		192,464
UMH Properties, Inc.		9,900		116,721
Universal Health Realty Income Trust		4,000		161,760
Urstadt Biddle Properties, Class A		12,195		234,632
Winthrop Realty Trust		16,800		179,256
				49,152,041
Retailing 4.9%
1-800-FLOWERS.COM, Inc., Class A *		45,247		134,836
America’s Car-Mart, Inc. *		3,900		179,166
Bebe Stores, Inc.		28,890		236,898
Big 5 Sporting Goods Corp.		37,440		313,373
Blue Nile, Inc. (b)*		4,200		127,176
Brown Shoe Co., Inc.		85,642		780,199
Build-A-Bear Workshop, Inc. *		49,750		224,372
Casual Male Retail Group, Inc. *		50,300		157,942
Charming Shoppes, Inc. *		201,300		1,187,670

See financial notes 21

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Chico’s FAS, Inc.		74,300		1,141,248
Christopher & Banks Corp.		67,040		125,365
Citi Trends, Inc. *		21,600		240,624
Coldwater Creek, Inc. *		252,960		250,430
Conn’s, Inc. *		29,589		483,780
Cost Plus, Inc. *		23,900		462,943
Destination Maternity Corp.		14,900		295,616
DSW, Inc., Class A		11,668		656,442
Express, Inc. *		37,800		892,836
Fred’s, Inc., Class A		47,270		676,906
Genesco, Inc. *		14,600		1,095,000
GNC Holdings, Inc., Class A		29,300		1,144,458
Gordmans Stores, Inc. *		6,400		135,936
Haverty Furniture Cos, Inc.		22,000		264,000
hhgregg, Inc. (b)*		25,400		265,684
Hibbett Sports, Inc. *		7,785		464,920
Hot Topic, Inc.		45,700		447,860
Jos. A. Bank Clothiers, Inc. *		12,585		598,417
Kirkland’s, Inc. *		10,222		149,650
Lithia Motors, Inc., Class A		28,535		765,594
Lumber Liquidators Holdings, Inc. *		9,800		283,514
MarineMax, Inc. *		30,700		327,262
Monro Muffler Brake, Inc.		7,640		315,226
Netflix, Inc. *		8,200		657,148
New York & Co, Inc. *		47,200		186,440
Nutrisystem, Inc.		35,830		414,911
Orbitz Worldwide, Inc. *		64,700		236,155
Overstock.com, Inc. (b)*		31,860		192,116
Pacific Sunwear of California, Inc. *		149,130		219,221
PetMed Express, Inc. (b)		9,400		126,618
Pier 1 Imports, Inc.		27,985		480,782
Pool Corp.		24,680		910,939
Rue21, Inc. *		7,400		224,590
Sally Beauty Holdings, Inc. *		44,465		1,182,769
Select Comfort Corp. *		10,770		311,038
Shoe Carnival, Inc. *		17,100		332,424
Shutterfly, Inc. *		8,900		276,968
Stage Stores, Inc.		48,755		744,489
Stein Mart, Inc. *		46,615		299,268
Systemax, Inc. *		9,445		162,171
The Bon-Ton Stores, Inc. (b)		58,711		364,008
The Buckle, Inc. (b)		15,122		698,334
The Cato Corp., Class A		20,195		562,027
The Children’s Place Retail Stores, Inc. *		22,360		1,028,113
The Finish Line, Inc., Class A		27,052		602,178
The Pep Boys - Manny, Moe & Jack		58,515		873,629
The Talbots, Inc. (b)*		236,580		700,277
TravelCenters of America L.L.C. *		150,900		950,670
TripAdvisor, Inc. *		22,000		825,220
Tuesday Morning Corp. *		68,230		275,649
Ulta Salon, Cosmetics & Fragrance, Inc.		6,600		581,988
ValueVision Media, Inc., Class A *		98,020		158,792
Vitamin Shoppe, Inc. *		9,700		456,579
VOXX International Corp. *		24,620		312,428
West Marine, Inc. *		18,280		214,059
Wet Seal, Inc., Class A *		104,960		345,318
Zale Corp. *		186,800		511,832
Zumiez, Inc. *		7,180		263,219
				31,507,710
Semiconductors & Semiconductor Equipment 3.7%
Advanced Energy Industries, Inc. *		29,220		348,887
Alpha & Omega Semiconductor Ltd. *		14,200		140,438
ANADIGICS, Inc. *		58,000		128,180
Applied Micro Circuits Corp. *		27,540		153,673
ATMI, Inc. *		18,415		386,899
Axcelis Technologies, Inc. *		108,560		147,642
Brooks Automation, Inc.		31,490		370,322
Cabot Microelectronics Corp.		12,830		441,095
Canadian Solar, Inc. (b)*		103,000		355,350
Cavium, Inc. *		4,100		119,966
CEVA, Inc. *		3,700		81,733
ChipMOS TECHNOLOGIES Bermuda Ltd. *		20,300		272,020
Cirrus Logic, Inc. *		13,535		370,588
Cohu, Inc.		18,710		205,436
Cymer, Inc. *		13,620		706,061
Cypress Semiconductor Corp. *		38,305		593,727
Diodes, Inc. *		16,497		367,718
DSP Group, Inc. *		33,340		218,044
Entegris, Inc. *		58,645		519,008
Entropic Communications, Inc. *		24,700		104,481
Exar Corp. *		20,115		159,311
Fairchild Semiconductor International, Inc. *		75,500		1,069,835
FormFactor, Inc. *		51,165		286,524
Freescale Semiconductor Holdings I Ltd. *		33,500		415,735
GT Advanced Technologies, Inc. *		57,800		376,278
Hittite Microwave Corp. *		4,955		265,291
Integrated Device Technology, Inc. *		95,480		646,400
International Rectifier Corp. *		44,700		975,801
IXYS Corp. *		12,100		150,766
Kopin Corp. *		31,400		112,098
Kulicke & Soffa Industries, Inc. *		31,980		418,938
Lattice Semiconductor Corp. *		37,700		205,842
LTX-Credence Corp. *		20,900		144,210
Magnachip Semiconductor Corp. *		29,900		352,222
Micrel, Inc.		19,850		216,167
Microsemi Corp. *		29,545		635,808
MKS Instruments, Inc.		26,750		739,637
Monolithic Power Systems, Inc. *		11,700		242,424
Nanometrics, Inc. *		5,200		80,652
OmniVision Technologies, Inc. *		40,380		743,800
Pericom Semiconductor Corp. *		21,200		166,632
Photronics, Inc. *		75,725		468,738
PMC-Sierra, Inc. *		116,425		823,125
Power Integrations, Inc.		6,360		240,917
Rambus, Inc. *		35,900		182,731
RF Micro Devices, Inc. *		167,845		726,769
Rudolph Technologies, Inc. *		15,100		163,080
Semtech Corp. *		14,905		406,310
Sigma Designs, Inc. *		51,050		281,285
Silicon Image, Inc. *		37,060		222,360
Silicon Laboratories, Inc. *		8,590		304,859
Skyworks Solutions, Inc. *		40,700		1,104,598
Spansion, Inc., Class A *		71,700		864,702
Standard Microsystems Corp. *		13,590		359,863
STR Holdings, Inc. *		39,100		149,362
SunPower Corp. (b)*		73,469		412,161

22 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Supertex, Inc. *		7,700		157,619
Tessera Technologies, Inc. *		35,390		553,500
TriQuint Semiconductor, Inc. *		107,360		523,917
Ultra Clean Holdings, Inc. *		19,400		132,890
Veeco Instruments, Inc. (b)*		24,960		753,542
Volterra Semiconductor Corp. *		3,700		121,693
				23,389,660
Software & Services 7.2%
ACI Worldwide, Inc. *		9,157		364,998
Actuate Corp. *		19,000		134,900
Acxiom Corp. *		69,615		955,814
Advent Software, Inc. *		9,820		265,042
American Software, Inc., Class A		14,400		119,232
Ancestry.com, Inc. (b)*		11,300		301,710
Ariba, Inc. *		10,245		391,359
AsiaInfo-Linkage, Inc. (b)*		31,200		393,120
Aspen Technology, Inc. *		6,900		136,482
Bankrate, Inc. *		6,800		159,256
Blackbaud, Inc.		10,200		315,996
Booz Allen Hamilton Holding Corp.		19,800		338,580
Bottomline Technologies, Inc. *		5,200		122,356
Cadence Design Systems, Inc. *		70,400		821,568
Cardtronics, Inc. *		11,200		295,232
Cass Information Systems, Inc.		2,910		119,165
CIBER, Inc. *		111,570		464,131
CommVault Systems, Inc. *		4,000		208,280
Computer Task Group, Inc. *		7,700		111,034
comScore, Inc. *		6,000		119,520
Concur Technologies, Inc. *		7,100		401,576
CoStar Group, Inc. *		4,940		360,077
CSG Systems International, Inc. *		28,345		408,168
DealerTrack Holdings, Inc. *		8,995		268,321
Dice Holdings, Inc. *		17,200		185,416
Digital River, Inc. *		31,750		597,217
Dynamics Research Corp. *		11,500		82,685
Earthlink, Inc.		126,375		1,026,165
Ebix, Inc. (b)		5,900		120,655
EPIQ Systems, Inc.		21,370		242,763
ePlus, Inc. *		4,800		142,368
Euronet Worldwide, Inc. *		39,395		852,114
Exlservice Holdings, Inc. *		6,100		168,848
FactSet Research Systems, Inc.		9,165		961,042
Fair Isaac Corp.		14,905		639,424
FleetCor Technologies, Inc. *		7,800		308,490
Forrester Research, Inc.		7,025		249,036
Fortinet, Inc. *		5,800		151,496
Gartner, Inc. *		18,900		827,820
Genpact Ltd. *		63,450		1,058,346
Global Cash Access Holdings, Inc. *		54,735		462,511
Heartland Payment Systems, Inc.		21,165		644,898
iGATE Corp. *		6,300		122,598
Informatica Corp. *		6,255		287,855
InfoSpace, Inc. *		16,400		182,532
Internap Network Services Corp. *		26,400		185,856
InterXion Holding N.V. *		9,000		180,630
IntraLinks Holdings, Inc. *		31,800		148,188
j2 Global, Inc.		15,185		392,229
Jack Henry & Associates, Inc.		27,980		950,201
JDA Software Group, Inc. *		22,285		643,591
Kenexa Corp. *		5,700		186,219
KIT Digital, Inc. (b)*		11,900		80,682
Limelight Networks, Inc. *		29,700		81,378
Lionbridge Technologies, Inc. *		72,100		198,275
Liquidity Services, Inc. *		2,700		143,991
Manhattan Associates, Inc. *		5,595		280,589
ManTech International Corp., Class A		25,000		785,500
MAXIMUS, Inc.		11,090		490,733
Mentor Graphics Corp. *		51,420		743,019
MercadoLibre, Inc.		1,700		164,458
MICROS Systems, Inc. *		17,640		1,002,481
MicroStrategy, Inc., Class A *		1,828		255,518
ModusLink Global Solutions, Inc. *		69,475		343,901
MoneyGram International, Inc. *		5,700		95,988
Monotype Imaging Holdings, Inc. *		9,500		134,805
Move, Inc. *		14,375		125,063
NCI, Inc., Class A *		16,100		79,856
Net 1 UEPS Technologies, Inc. *		36,560		321,728
NetScout Systems, Inc. *		13,000		268,970
NeuStar, Inc., Class A *		20,275		736,996
NIC, Inc.		12,200		136,518
Openwave Systems, Inc. *		102,135		263,508
Opnet Technologies, Inc.		3,700		85,692
Parametric Technology Corp. *		32,540		702,213
Perficient, Inc. *		14,600		175,346
PRGX Global, Inc. *		22,200		140,304
Progress Software Corp. *		27,325		632,300
QLIK Technologies, Inc. *		4,900		141,169
Quest Software, Inc. *		33,180		772,099
QuinStreet, Inc. *		20,000		210,200
Rackspace Hosting, Inc. *		11,420		663,388
RealNetworks, Inc.		24,436		233,853
Red Hat, Inc. *		15,600		929,916
Rosetta Stone, Inc. (b)*		14,300		149,578
Rovi Corp. *		31,769		908,593
Salesforce.com, Inc. *		6,221		968,796
Sapient Corp.		31,080		372,028
SeaChange International, Inc. *		25,000		205,500
SINA Corp. *		10,780		630,738
Smith Micro Software, Inc. *		60,400		121,404
Sohu.com, Inc. (b)*		11,100		572,427
Solarwinds, Inc. *		2,400		112,584
Solera Holdings, Inc.		10,860		488,048
SS&C Technologies Holdings, Inc. *		12,500		297,125
Synchronoss Technologies, Inc. *		4,700		147,110
Syntel, Inc.		4,855		290,766
Take-Two Interactive Software, Inc. *		52,455		739,615
TeleCommunication Systems, Inc., Class A *		73,500		141,855
TeleTech Holdings, Inc. *		41,710		631,906
The Hackett Group, Inc. *		23,800		135,898
The Ultimate Software Group, Inc. *		1,500		115,740
THQ, Inc. *		758,710		513,950
TIBCO Software, Inc. *		27,030		889,287
TiVo, Inc. *		13,100		141,349
TNS, Inc. *		22,095		450,738
Tyler Technologies, Inc. *		5,280		210,936
United Online, Inc.		134,527		637,658
ValueClick, Inc. *		27,280		577,790
VASCO Data Security International, Inc. *		10,400		81,016
VeriFone Systems, Inc. *		11,135		530,471

See financial notes 23

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Verint Systems, Inc. *		8,500		257,040
VeriSign, Inc.		23,300		957,863
Virtusa Corp. *		8,500		128,265
VistaPrint N.V. (b)*		10,120		377,375
VMware, Inc., Class A *		6,900		770,868
WebMD Health Corp. *		20,284		461,461
Websense, Inc. *		11,690		242,451
Wright Express Corp. *		10,500		670,110
XO Group, Inc. *		16,700		154,809
Yandex N.V. *		6,100		144,692
				46,225,387
Technology Hardware & Equipment 5.9%
3D Systems Corp. (b)*		4,900		144,501
Acme Packet, Inc. *		8,100		227,367
ADTRAN, Inc.		19,245		587,357
Aeroflex Holding Corp. *		12,100		135,520
Agilysys, Inc. *		27,522		241,093
Anaren, Inc. *		9,000		162,360
Arris Group, Inc. *		93,105		1,203,848
Aruba Networks, Inc. *		5,400		114,048
Aviat Networks, Inc. *		83,960		214,098
Avid Technology, Inc. *		43,925		381,708
AVX Corp.		47,600		604,520
Badger Meter, Inc.		6,900		254,886
Bel Fuse, Inc., Class B		8,400		149,436
Black Box Corp.		24,040		543,544
Calix, Inc. *		17,400		138,504
Checkpoint Systems, Inc. *		58,080		636,557
Ciena Corp. *		22,560		334,339
Cognex Corp.		9,165		368,891
Coherent, Inc. *		9,540		501,804
Comtech Telecommunications Corp.		22,370		691,680
Comverse Technology, Inc. *		105,200		678,540
Cray, Inc. *		21,100		235,265
CTS Corp.		33,495		359,401
Daktronics, Inc.		33,065		269,149
Datalink Corp. *		10,400		105,872
Digi International, Inc. *		17,700		164,256
Dolby Laboratories, Inc., Class A *		16,800		659,064
DTS, Inc. *		4,300		134,160
EchoStar Corp., Class A *		35,200		1,022,560
Electro Rent Corp.		12,905		201,060
Electro Scientific Industries, Inc.		17,435		248,623
Electronics for Imaging, Inc. *		28,902		515,901
Emcore Corp. (b)*		24,024		108,588
Emulex Corp. *		52,965		459,736
Extreme Networks, Inc. *		55,465		212,431
F5 Networks, Inc. *		7,540		1,009,832
Fabrinet *		11,800		198,476
FARO Technologies, Inc. *		3,100		173,538
FEI Co. *		12,820		643,179
Finisar Corp. *		29,030		479,576
Gerber Scientific, Inc. (b)(c)(d)*		19,700		—
Globecomm Systems, Inc. *		10,200		144,636
GSI Group, Inc. *		20,500		247,435
Harmonic, Inc. *		63,800		301,136
Hutchinson Technology, Inc. (b)*		58,500		120,510
Imation Corp. *		61,585		357,193
Infinera Corp. *		34,500		247,020
InterDigital, Inc.		11,100		307,692
Intermec, Inc. *		67,835		360,882
Intevac, Inc. *		22,300		179,738
IPG Photonics Corp. *		4,500		217,800
Ixia *		6,600		83,160
JDS Uniphase Corp. *		72,800		884,520
KEMET Corp. *		61,000		519,110
Littelfuse, Inc.		7,045		441,510
Loral Space & Communications, Inc.		5,650		350,583
Measurement Specialties, Inc. *		6,800		242,964
Mercury Computer Systems, Inc. *		10,700		141,240
Methode Electronics, Inc.		36,130		305,299
MTS Systems Corp.		6,080		291,658
Multi-Fineline Electronix, Inc. *		7,520		199,205
Nam Tai Electronics, Inc.		25,740		128,185
National Instruments Corp.		24,242		659,382
NETGEAR, Inc. *		15,050		579,425
Newport Corp. *		20,330		347,033
Novatel Wireless, Inc. *		59,900		173,111
Oclaro, Inc. *		42,600		122,262
Oplink Communications, Inc. *		9,200		145,728
Opnext, Inc. *		142,900		170,051
Orbotech Ltd. *		21,000		229,320
OSI Systems, Inc. *		6,590		440,607
Park Electrochemical Corp.		13,710		395,534
PC Connection, Inc.		23,100		185,262
Plantronics, Inc.		16,410		628,831
Plexus Corp. *		29,580		957,505
Polycom, Inc. *		51,540		683,936
Power-One, Inc. *		95,400		408,312
Powerwave Technologies, Inc. (b)*		185,824		209,981
Pulse Electronics Corp.		37,710		77,306
QLogic Corp. *		47,380		817,305
Quantum Corp. *		147,900		352,002
Radisys Corp. *		23,200		147,320
RADWARE Ltd. *		3,400		130,832
RealD, Inc. (b)*		8,200		99,056
Richardson Electronics Ltd.		14,700		185,367
Rimage Corp.		10,400		94,536
Riverbed Technology, Inc. *		13,100		258,463
Rofin-Sinar Technologies, Inc. *		19,110		481,572
Rogers Corp. *		8,920		341,547
ScanSource, Inc. *		26,340		868,166
Silicon Graphics International Corp. *		15,660		147,830
Smart Technologies, Inc. *		38,100		96,393
Sonus Networks, Inc. *		92,670		262,256
STEC, Inc. *		30,100		249,529
Stratasys, Inc. *		3,800		194,598
Super Micro Computer, Inc. *		14,000		247,100
Sycamore Networks, Inc. *		12,700		197,993
Symmetricom, Inc. *		30,700		170,692
Synaptics, Inc. *		8,805		270,402
SYNNEX Corp. *		22,000		837,980
TESSCO Technologies, Inc.		7,100		142,000
TTM Technologies, Inc. *		45,500		470,015
UTStarcom Holdings Corp. *		114,500		149,995
ViaSat, Inc. *		15,615		754,205
Vishay Precision Group, Inc. *		10,900		157,832
Westell Technologies, Inc., Class A *		50,833		115,899
Xyratex Ltd.		34,625		502,755
Zebra Technologies Corp., Class A *		23,620		916,220
Zygo Corp. *		5,200		102,908
				37,763,098

24 See financial notes

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Telecommunication Services 1.4%
AboveNet, Inc. *		9,300		773,481
Alaska Communications Systems Group, Inc. (b)		175,840		450,150
Atlantic Tele-Network, Inc.		7,500		255,450
Cbeyond, Inc. *		34,060		219,006
Clearwire Corp., Class A (b)*		116,200		170,233
Cogent Communications Group, Inc. *		11,300		211,649
Consolidated Communications Holdings, Inc. (b)		27,100		524,385
Fairpoint Communications, Inc. (b)*		45,800		212,054
General Communication, Inc., Class A *		40,860		310,536
HickoryTech Corp.		12,000		119,160
IDT Corp., Class B		62,000		522,040
Iridium Communications, Inc. *		40,500		355,995
Leap Wireless International, Inc. *		96,000		538,560
Neutral Tandem, Inc. *		22,000		255,640
NTELOS Holdings Corp.		22,620		457,376
Premiere Global Services, Inc. *		50,500		451,975
Primus Telecommunications Group, Inc. *		7,200		125,280
SBA Communications Corp., Class A *		15,405		827,865
Shenandoah Telecommunications Co.		21,800		243,070
SureWest Communications		9,970		225,123
United States Cellular Corp. *		18,600		729,492
USA Mobility, Inc.		50,105		647,357
Vonage Holdings Corp. *		75,600		154,224
				8,780,101
Transportation 2.8%
Aegean Marine Petroleum Network, Inc.		64,100		458,315
Air Transport Services Group, Inc. *		90,230		478,219
Allegiant Travel Co. *		5,280		310,253
AMERCO		9,000		903,960
Arkansas Best Corp.		44,340		680,176
Baltic Trading Ltd. (b)		30,200		140,430
Celadon Group, Inc.		20,880		326,354
Copa Holdings S.A., Class A		12,300		1,000,113
Costamare, Inc.		9,900		139,590
Diana Shipping, Inc. *		96,635		759,551
Eagle Bulk Shipping, Inc. (b)*		175,760		288,246
Echo Global Logistics, Inc. *		4,900		83,447
Excel Maritime Carriers Ltd. (b)*		152,824		285,781
Forward Air Corp.		10,425		352,157
Genco Shipping & Trading Ltd. (b)*		165,645		886,201
Genesee & Wyoming, Inc., Class A *		12,465		671,988
Hawaiian Holdings, Inc. *		119,640		677,162
Heartland Express, Inc.		50,465		697,931
Hub Group, Inc., Class A *		23,010		805,350
International Shipholding Corp.		8,900		188,324
Knight Transportation, Inc.		26,325		432,256
Landstar System, Inc.		17,670		946,582
Marten Transport Ltd.		15,600		328,692
Navios Maritime Holdings, Inc.		121,800		465,276
Old Dominion Freight Line, Inc. *		25,250		1,122,867
Pacer International, Inc. *		85,460		513,615
Park-Ohio Holdings Corp. *		16,400		354,076
Quality Distribution, Inc. *		19,400		216,698
RailAmerica, Inc. *		10,900		252,662
Roadrunner Transportation Systems, Inc. *		12,900		223,815
Safe Bulkers, Inc.		26,100		178,785
Saia, Inc. *		20,800		390,624
Spirit Airlines, Inc. *		5,600		134,512
Star Bulk Carriers Corp. (b)		125,900		125,900
Swift Transportation Co. *		67,100		703,879
US Airways Group, Inc. *		147,400		1,512,324
Wesco Aircraft Holdings, Inc. *		7,500		118,425
				18,154,536
Utilities 1.6%
American States Water Co.		13,015		474,267
California Water Service Group		30,680		555,615
Central Vermont Public Service Corp.		8,645		304,736
CH Energy Group, Inc.		13,405		879,636
Chesapeake Utilities Corp.		6,850		287,837
Connecticut Water Service, Inc.		5,000		138,750
Consolidated Water Co., Ltd.		13,100		93,927
El Paso Electric Co.		31,890		977,110
MGE Energy, Inc.		16,700		763,858
Middlesex Water Co.		10,900		202,304
Northwest Natural Gas Co.		24,505		1,119,878
Ormat Technologies, Inc. (b)		12,200		241,194
Otter Tail Corp.		47,680		1,047,053
SJW Corp.		10,020		241,482
South Jersey Industries, Inc.		17,440		858,920
The Empire District Electric Co.		46,110		946,177
The Laclede Group, Inc.		22,440		883,687
The York Water Co.		6,200		108,314
Unitil Corp.		8,300		219,618
				10,344,363
Total Common Stock
(Cost $553,941,661)				631,381,904
Warrants 0.0% of net assets
Energy 0.0%
Magnum Hunter Resources Corp. (c)(d)*		1,535		—
Total Warrants
(Cost $—)				—
Other Investment Company 0.7% of net assets
Money Fund 0.7%
State Street Institutional U.S. Government Money Market Fund		4,712,628		4,712,628
Total Other Investment Company
(Cost $4,712,628)				4,712,628

See financial notes 25

 Schwab Fundamental US Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	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
0.08%, 06/14/12 (a)(e)		800,000		799,922
Total Short-Term Investment
(Cost $799,922)				799,922
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 5.0% of net assets
State Street Institutional U.S. Government Money Market Fund		31,624,888		31,624,888
Total Collateral Invested for Securities on Loan
(Cost $31,624,888)				31,624,888
End of Collateral Invested for Securities on Loan

At 04/30/12 tax basis cost of the fund’s investments was $564,706,890 and the unrealized appreciation and depreciation were $119,668,780 and ($47,481,216), respectively, with a net unrealized appreciation of $72,187,564.

*	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 $95,839 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 04/30/12.

			Contract		Unrealized
	Number of		Value		Gains
	Contracts		($)		($)
Futures Contract
Russell 2000 Index, mini, Long, expires 06/15/12		75		6,111,750		74,309

26 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.9%	Common Stock		398,182,531		383,771,434
	0	.4%	Preferred Stock		1,394,128		1,845,479
	0	.0%	Warrants		—		149
	0	.9%	Other Investment Company		3,391,695		3,493,750
	0	.1%	Short-Term Investment		211,429		211,429
	99	.3%	Total Investments		403,179,783		389,322,241
	3	.9%	Collateral Invested for Securities on Loan		15,290,058		15,290,058
	(3	.2)%	Other Assets and Liabilities, Net				(12,657,441	)
	100	.0%	Total Net Assets				391,954,858

	Number		Value
Security	of Shares		($)
Common Stock 97.9% of net assets
Australia 5.1%
Banks 1.8%
Australia & New Zealand Banking Group Ltd.		61,735		1,529,377
Bendigo and Adelaide Bank Ltd.		10,357		80,989
Commonwealth Bank of Australia		33,021		1,781,250
National Australia Bank Ltd.		68,998		1,803,559
Westpac Banking Corp.		69,899		1,647,255
				6,842,430
Capital Goods 0.0%
CSR Ltd.		39,868		72,100
Leighton Holdings Ltd.		3,956		84,339
				156,439
Commercial & Professional Supplies 0.1%
Brambles Ltd.		25,279		189,669
Downer EDI Ltd. *		18,744		69,973
				259,642
Consumer Services 0.1%
Crown Ltd.		9,094		85,872
TABCORP Holdings Ltd.		71,681		213,816
Tatts Group Ltd.		48,276		129,650
				429,338
Diversified Financials 0.1%
ASX Ltd.		2,354		78,262
BGP Holdings plc (a)(b)		453,854		—
Macquarie Group Ltd.		15,455		465,821
				544,083
Energy 0.3%
Caltex Australia Ltd.		7,993		113,874
Oil Search Ltd.		9,957		75,587
Origin Energy Ltd.		17,624		242,135
Santos Ltd.		13,713		198,934
Woodside Petroleum Ltd.		8,493		307,136
WorleyParsons Ltd.		3,217		94,198
				1,031,864
Food & Staples Retailing 0.4%
Metcash Ltd.		33,176		136,498
Wesfarmers Ltd.		23,438		735,996
Wesfarmers Ltd., Price Protected Shares		3,385		110,055
Woolworths Ltd.		28,268		762,212
				1,744,761
Food, Beverage & Tobacco 0.1%
Coca-Cola Amatil Ltd.		9,182		118,846
Goodman Fielder Ltd.		109,621		74,972
				193,818
Health Care Equipment & Services 0.0%
Sonic Healthcare Ltd.		7,679		100,454
Insurance 0.5%
AMP Ltd.		73,762		326,145
Insurance Australia Group Ltd.		64,018		234,818
QBE Insurance Group Ltd.		47,804		685,894
Suncorp Group Ltd.		60,824		512,888
				1,759,745
Materials 0.9%
Amcor Ltd.		27,876		217,570
BHP Billiton Ltd.		51,148		1,897,960
BlueScope Steel Ltd. *		443,171		180,771
Boral Ltd.		24,318		95,107
Incitec Pivot Ltd.		33,521		113,292
Newcrest Mining Ltd.		3,244		88,399
OneSteel Ltd.		118,082		158,209
Orica Ltd.		6,373		177,358
OZ Minerals Ltd.		6,899		66,428
Rio Tinto Ltd.		8,494		581,201
Sims Metal Management Ltd.		7,162		105,320
				3,681,615
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
CSL Ltd.		4,955		188,689
Real Estate 0.4%
CFS Retail Property Trust		40,143		80,297
Dexus Property Group		119,418		115,862
Goodman Group		27,344		102,234
GPT Group		44,932		152,971
Lend Lease Group		21,249		163,663
Mirvac Group		103,995		139,737
Stockland		75,441		242,349
Westfield Group		63,920		611,161
				1,608,274
Software & Services 0.0%
Computershare Ltd.		8,235		71,823

See financial notes 27

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Telecommunication Services 0.1%
Telstra Corp., Ltd.		150,781		555,928
Transportation 0.2%
Asciano Ltd.		23,082		112,967
Qantas Airways Ltd. *		80,365		136,234
Sydney Airport		33,962		102,654
Toll Holdings Ltd.		20,799		126,066
Transurban Group		17,685		107,986
				585,907
Utilities 0.0%
AGL Energy Ltd.		8,982		139,771
				19,894,581
Austria 0.4%
Banks 0.1%
Erste Group Bank AG		19,672		453,620
Raiffeisen Bank International AG		3,395		112,965
				566,585
Capital Goods 0.0%
Wienerberger AG		7,874		92,002
Energy 0.1%
OMV AG		9,475		320,509
Insurance 0.0%
Vienna Insurance Group AG Wiener Versicherung Gruppe		1,689		68,778
Materials 0.1%
Voestalpine AG		9,871		321,561
Real Estate 0.0%
Immofinanz Immobil *		48,682		171,395
Telecommunication Services 0.1%
Telekom Austria AG		20,470		224,608
				1,765,438
Belgium 0.8%
Banks 0.1%
Dexia S.A. (c)*		289,483		73,082
KBC GROEP NV		14,972		290,263
				363,345
Capital Goods 0.0%
Bekaert N.V.		2,340		69,499
Diversified Financials 0.0%
Groupe Bruxelles Lambert S.A.		2,563		177,875
Food & Staples Retailing 0.1%
Colruyt S.A.		1,805		73,954
Delhaize Group S.A.		8,345		406,164
				480,118
Food, Beverage & Tobacco 0.2%
Anheuser-Busch InBev N.V.		10,766		775,965
Insurance 0.1%
Ageas (c)		261,858		477,166
Materials 0.1%
Solvay S.A.		1,401		170,664
Umicore S.A.		3,333		180,995
				351,659
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
UCB S.A. (c)		3,911		182,879
Retailing 0.0%
S.A. D’Ieteren N.V.		1,500		66,227
Telecommunication Services 0.1%
Belgacom S.A. (c)		8,320		236,414
				3,181,147
Canada 6.6%
Automobiles & Components 0.1%
Magna International, Inc.		7,718		338,222
Banks 1.6%
Bank of Montreal (c)		15,813		939,160
Bank of Nova Scotia		22,648		1,256,375
Canadian Imperial Bank of Commerce		9,077		684,829
National Bank of Canada		3,430		267,706
Royal Bank of Canada		30,344		1,753,646
The Toronto-Dominion Bank		16,459		1,391,063
				6,292,779
Capital Goods 0.1%
Bombardier, Inc., Class A		9,900		42,292
Bombardier, Inc., Class B		46,868		198,318
Finning International, Inc.		3,380		94,435
SNC-Lavalin Group, Inc.		2,800		105,271
Superior Plus Corp.		9,000		67,693
				508,009
Consumer Services 0.0%
Tim Hortons, Inc.		1,300		75,038
Diversified Financials 0.1%
CI Financial Corp.		5,300		126,887
IGM Financial, Inc.		2,820		132,314
Onex Corp.		6,161		244,669
				503,870
Energy 1.8%
ARC Resources Ltd.		6,000		123,541
Baytex Energy Corp.		1,500		79,278
Bonavista Energy Corp.		4,100		73,961
Cameco Corp.		5,300		117,283
Canadian Natural Resources Ltd.		16,900		587,142
Canadian Oil Sands Ltd.		15,700		346,946
Cenovus Energy, Inc.		12,709		461,221
Crescent Point Energy Corp.		3,200		139,811
Enbridge, Inc.		10,438		437,343
Encana Corp.		48,709		1,020,184
Enerplus Corp.		7,900		146,188
Husky Energy, Inc.		8,967		233,922
Imperial Oil Ltd.		5,023		233,849
Nexen, Inc.		14,626		282,644
Pembina Pipeline Corp.		7,165		216,723
Pengrowth Energy Corp. (c)		17,000		152,817
Penn West Petroleum Ltd.		17,100		293,064
Precision Drilling Corp. *		9,200		84,750
Suncor Energy, Inc.		25,545		843,785
Talisman Energy, Inc.		28,581		373,808
TransCanada Corp.		14,535		639,461
Vermilion Energy, Inc.		1,500		72,734
				6,960,455

28 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Food & Staples Retailing 0.3%
Alimentation Couche-Tard, Inc., Class B		4,137		179,451
Empire Co., Ltd, Class A		1,833		107,881
George Weston Ltd.		2,905		185,648
Loblaw Cos., Ltd.		4,864		164,210
Metro, Inc.		2,840		156,684
Shoppers Drug Mart Corp.		4,759		205,034
				998,908
Food, Beverage & Tobacco 0.1%
Saputo, Inc.		2,100		98,150
Viterra, Inc.		11,700		188,436
				286,586
Insurance 0.9%
Fairfax Financial Holdings Ltd.		562		230,404
Great-West Lifeco, Inc.		9,420		238,396
Industrial Alliance Insurance & Financial Services, Inc.		3,600		114,795
Intact Financial Corp.		2,123		137,070
Manulife Financial Corp.		84,448		1,154,925
Power Corp. of Canada		21,815		603,979
Power Financial Corp.		10,814		324,031
Sun Life Financial, Inc.		28,690		703,418
				3,507,018
Materials 0.6%
Agnico-eagle Mines Ltd.		2,000		79,891
Agrium, Inc.		2,112		186,047
Barrick Gold Corp.		11,116		449,659
First Quantum Minerals Ltd.		4,200		87,244
Goldcorp, Inc.		7,210		276,109
Kinross Gold Corp.		19,353		173,380
Methanex Corp.		2,200		77,457
Potash Corp. of Saskatchewan, Inc.		5,542		235,627
Sherritt International Corp.		14,000		80,073
Sino-Forest Corp. (a)(b)*		20,000		—
Teck Resources Ltd., Class B		11,414		425,895
Yamana Gold, Inc.		7,076		103,792
				2,175,174
Media 0.2%
Quebecor, Inc., Class B		2,092		82,232
Shaw Communications, Inc., Class B		8,277		170,592
Thomson Reuters Corp.		11,407		340,876
				593,700
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Valeant Pharmaceuticals International, Inc. *		2,800		155,752
Real Estate 0.2%
Brookfield Asset Management, Inc., Class A		15,955		526,531
Brookfield Properties Corp.		8,591		155,583
H&R REIT		3,200		79,040
RioCan REIT		3,672		100,884
				862,038
Retailing 0.0%
Canadian Tire Corp., Ltd., Class A		2,619		183,172
Software & Services 0.0%
CGI Group, Inc., Class A *		4,117		92,396
Technology Hardware & Equipment 0.1%
Celestica, Inc. *		11,112		99,551
Research In Motion Ltd. *		31,206		446,364
				545,915
Telecommunication Services 0.2%
BCE, Inc.		7,153		289,784
Rogers Communications, Inc., Class B		3,004		112,120
Telus Corp.		2,378		142,774
Telus Corp. - Non Voting Shares		1,431		83,975
				628,653
Transportation 0.2%
Canadian National Railway Co.		5,923		505,450
Canadian Pacific Railway Ltd.		2,632		203,691
				709,141
Utilities 0.1%
ATCO Ltd., Class I		1,533		113,440
Canadian Utilities Ltd., Class A		1,480		104,260
Emera, Inc.		2,400		84,936
Fortis, Inc.		4,100		142,194
TransAlta Corp.		7,469		123,847
				568,677
				25,985,503
China 0.0%
Food, Beverage & Tobacco 0.0%
Chaoda Modern Agriculture (Holdings) Ltd. (a)(b)*		171,320		18,217
Cyprus 0.0%
Banks 0.0%
Bank of Cyprus Public Co., Ltd.		210,340		125,376
Marfin Popular Bank Public Co., Ltd. *		195,515		52,316
				177,692
Denmark 0.7%
Banks 0.2%
Danske Bank A/S *		42,842		696,222
Jyske Bank A/S - Reg’d *		2,286		71,631
				767,853
Capital Goods 0.1%
FLSmidth & Co. A/S		1,020		71,801
Vestas Wind Systems A/S (c)*		17,424		153,576
				225,377
Food, Beverage & Tobacco 0.1%
Carlsberg A/S, Class B		3,196		275,884
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Novo Nordisk A/S, Class B		2,900		427,527
Transportation 0.2%
AP Moller - Maersk A/S, Series A		29		216,306
AP Moller - Maersk A/S, Series B		74		579,415

See financial notes 29

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
DSV A/S		3,712		84,651
				880,372
				2,577,013
Finland 1.0%
Automobiles & Components 0.0%
Nokian Renkaat Oyj		2,008		95,323
Capital Goods 0.2%
Kone Oyj, B Shares		2,041		126,306
Metso Oyj		4,546		195,263
Wartsila Oyj		5,310		215,175
YIT Oyj		4,508		96,879
				633,623
Diversified Financials 0.0%
Pohjola Bank plc, A Shares		8,410		90,509
Energy 0.1%
Neste Oil Oyj		11,133		131,740
Food & Staples Retailing 0.0%
Kesko Oyj, B Shares		4,029		107,765
Insurance 0.1%
Sampo Oyj, A Shares		18,544		493,734
Materials 0.2%
Outokumpu Oyj *		68,046		110,704
Rautaruukki Oyj (c)		9,779		92,213
Stora Enso Oyj, R Shares		31,892		218,288
UPM-Kymmene Oyj		29,730		381,530
				802,735
Technology Hardware & Equipment 0.3%
Nokia Oyj		341,944		1,238,420
Telecommunication Services 0.0%
Elisa Oyj		5,253		118,463
Utilities 0.1%
Fortum Oyj		13,699		294,659
				4,006,971
France 10.7%
Automobiles & Components 0.5%
Cie Generale des Etablissements Michelin, Class B		5,616		419,699
Faurecia		3,146		67,602
Peugeot S.A.		49,624		595,984
Renault S.A.		16,160		735,131
Valeo S.A.		3,565		175,320
				1,993,736
Banks 1.3%
BNP Paribas S.A.		65,138		2,628,932
Credit Agricole S.A.		139,618		718,712
Natixis		50,506		153,963
Societe Generale S.A.		63,652		1,506,913
				5,008,520
Capital Goods 1.4%
Alstom S.A.		11,038		394,771
Bouygues S.A. (c)		20,787		567,144
Compagnie de Saint-Gobain		27,905		1,171,604
Eiffage S.A.		6,226		211,944
European Aeronautic Defence & Space Co., N.V.		8,371		330,811
Legrand S.A.		5,699		192,391
Nexans S.A.		2,045		102,493
Rexel S.A.		2,878		60,213
Safran S.A.		5,187		192,256
Schneider Electric S.A. *		13,718		844,972
Thales S.A.		3,355		116,312
Vallourec S.A.		4,647		279,850
Vinci S.A.		22,382		1,038,087
Zodiac Aerospace		736		80,992
				5,583,840
Consumer Durables & Apparel 0.3%
Christian Dior S.A.		1,821		274,591
LVMH Moet Hennessy Louis Vuitton S.A.		4,680		776,392
				1,050,983
Consumer Services 0.1%
Accor S.A.		9,036		312,471
Sodexo		3,084		245,694
				558,165
Diversified Financials 0.0%
Eurazeo		1,644		84,285
Wendel S.A.		976		73,106
				157,391
Energy 1.4%
Compagnie Generale de Geophysique - Veritas *		5,034		144,364
Technip S.A.		2,006		227,802
Total S.A.		107,601		5,165,236
				5,537,402
Food & Staples Retailing 0.4%
Carrefour S.A.		61,881		1,242,972
Casino Guichard Perrachon S.A. *		2,498		245,426
Rallye S.A.		2,097		70,030
				1,558,428
Food, Beverage & Tobacco 0.3%
DANONE S.A.		11,800		830,709
Pernod Ricard S.A.		4,062		421,504
				1,252,213
Health Care Equipment & Services 0.1%
Essilor International S.A.		2,294		202,140
Household & Personal Products 0.1%
L’Oreal S.A.		4,335		521,832
Insurance 0.7%
AXA S.A.		178,354		2,534,437
CNP Assurances		9,291		130,450
SCOR SE		8,136		215,097
				2,879,984
Materials 0.4%
Air Liquide S.A.		5,513		709,121
Arkema		1,506		133,566
Eramet		597		79,638
Imerys S.A.		1,158		65,982
Lafarge S.A.		14,241		556,636
				1,544,943

30 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Media 0.2%
Eutelsat Communications S.A.		1,916		68,221
Lagardere S.C.A.		8,750		265,328
Metropole Television S.A.		4,621		71,000
PagesJaunes Groupe (c)		19,749		56,700
Publicis Groupe S.A.		2,727		140,814
SES S.A.		6,996		167,627
Societe Television Francaise 1 (c)		7,789		75,445
Technicolor - Reg’d *		34,090		72,174
				917,309
Pharmaceuticals, Biotechnology & Life Sciences 0.8%
Sanofi		41,647		3,181,073
Real Estate 0.2%
Fonciere des Regions		1,147		88,873
ICADE *		818		69,012
Klepierre		2,489		78,907
Unibail-Rodamco SE		1,973		369,183
				605,975
Retailing 0.1%
PPR		2,728		456,530
Semiconductors & Semiconductor Equipment 0.1%
STMicroelectronics N.V.		32,998		189,997
Software & Services 0.1%
AtoS		1,375		88,606
Cap Gemini S.A.		6,070		237,139
				325,745
Technology Hardware & Equipment 0.1%
Alcatel-Lucent *		124,057		190,778
Neopost S.A.		1,250		71,941
				262,719
Telecommunication Services 1.0%
France Telecom S.A.		170,895		2,342,640
Vivendi S.A.		81,356		1,504,805
				3,847,445
Transportation 0.1%
Air France-KLM (c)*		43,715		210,075
Groupe Eurotunnel S.A. - Reg’d		8,320		70,001
				280,076
Utilities 1.0%
EDF S.A.		16,613		351,962
GDF Suez		95,524		2,199,367
Suez Environnement Co.		21,836		308,021
Veolia Environnement		76,524		1,120,440
				3,979,790
				41,896,236
Germany 8.4%
Automobiles & Components 1.0%
Bayerische Motoren Werke AG		9,750		927,343
Continental AG (c)		2,600		252,170
Daimler AG - Reg’d		46,465		2,570,981
Volkswagen AG		1,108		189,274
				3,939,768
Banks 0.1%
Commerzbank AG *		201,461		436,195
Capital Goods 0.8%
Bilfinger Berger SE		1,300		118,940
Brenntag AG		1,349		168,057
GEA Group AG		3,675		121,377
Hochtief AG		3,483		204,303
MAN SE		1,909		241,319
Siemens AG - Reg’d		24,021		2,229,638
				3,083,634
Consumer Durables & Apparel 0.1%
Adidas AG		3,771		314,539
Consumer Services 0.1%
TUI AG *		38,911		284,561
Diversified Financials 0.7%
Deutsche Bank AG - Reg’d		51,587		2,239,551
Deutsche Boerse AG		4,578		287,448
				2,526,999
Food & Staples Retailing 0.1%
Metro AG		14,294		461,481
Health Care Equipment & Services 0.2%
Celesio AG		23,662		408,052
Fresenius Medical Care AG & Co KGaA		3,331		236,540
Fresenius SE & Co KGaA		3,124		311,893
				956,485
Household & Personal Products 0.1%
Beiersdorf AG		1,265		88,774
Henkel AG & Co. KGaA		2,362		144,626
				233,400
Insurance 1.2%
Allianz SE - Reg’d		26,736		2,982,168
Hannover Rueckversicherung AG - Reg’d		2,953		178,708
Muenchener Rueckversicherungs-Gesellschaft AG - Reg’d (c)		11,069		1,607,775
				4,768,651
Materials 1.2%
Aurubis AG		2,339		130,182
BASF SE (c)		26,551		2,186,026
HeidelbergCement AG		9,068		498,963
K&S AG - Reg’d		3,917		195,779
Lanxess AG		2,080		165,602
Linde AG		2,525		432,187
Salzgitter AG		3,003		157,398
Symrise AG		2,366		68,572
ThyssenKrupp AG		28,974		687,127
				4,521,836
Pharmaceuticals, Biotechnology & Life Sciences 0.4%
Bayer AG - Reg’d (c)		20,390		1,436,759
Merck KGaA		1,185		130,255
				1,567,014
Retailing 0.0%
Douglas Holding AG		1,590		73,057
Semiconductors & Semiconductor Equipment 0.0%
Infineon Technologies AG		13,687		136,398
Software & Services 0.1%
SAP AG		8,473		561,874

See financial notes 31

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Technology Hardware & Equipment 0.0%
Wincor Nixdorf AG		1,235		47,917
Telecommunication Services 0.7%
Deutsche Telekom AG - Reg’d		237,705		2,680,058
Freenet AG		5,009		87,115
				2,767,173
Transportation 0.3%
Deutsche Lufthansa AG - Reg’d		23,316		303,630
Deutsche Post AG - Reg’d		55,764		1,041,333
				1,344,963
Utilities 1.3%
E.ON AG (c)		133,419		3,020,845
RWE AG		43,204		1,857,210
				4,878,055
				32,904,000
Greece 0.3%
Banks 0.2%
Alpha Bank A.E. *		133,077		186,734
EFG Eurobank Ergasias *		71,924		57,281
National Bank of Greece S.A. *		136,333		304,179
Piraeus Bank S.A. *		137,842		47,397
				595,591
Consumer Services 0.1%
OPAP S.A.		29,453		263,219
Food, Beverage & Tobacco 0.0%
Coca Cola Hellenic Bottling Co., S.A. *		5,165		102,554
Telecommunication Services 0.0%
Hellenic Telecommunications Organization S.A. (OTE)		34,169		111,547
Utilities 0.0%
Public Power Corp. S.A.		21,969		73,890
				1,146,801
Hong Kong 1.8%
Banks 0.2%
BOC Hong Kong (Holdings) Ltd.		94,500		292,087
Hang Seng Bank Ltd.		18,400		251,976
The Bank of East Asia, Ltd.		43,270		160,999
				705,062
Capital Goods 0.3%
Hutchison Whampoa Ltd.		92,000		881,364
Jardine Matheson Holdings Ltd.		4,800		237,428
Jardine Strategic Holdings Ltd.		4,000		128,396
				1,247,188
Consumer Durables & Apparel 0.0%
Yue Yuen Industrial (Holdings) Ltd.		21,500		71,725
Diversified Financials 0.1%
First Pacific Co., Ltd.		68,000		73,661
Hong Kong Exchanges & Clearing Ltd.		5,200		82,696
				156,357
Food, Beverage & Tobacco 0.0%
China Ocean Resources Co., Ltd.		18,257		68,512
Insurance 0.1%
AIA Group Ltd.		96,400		341,147
Real Estate 0.7%
Cheung Kong (Holdings) Ltd.		34,000		449,652
Hang Lung Group Ltd.		16,000		99,789
Hang Lung Properties Ltd.		32,000		117,649
Henderson Land Development Co., Ltd.		26,569		150,756
Hongkong Land Holdings Ltd.		47,000		290,978
Kerry Properties Ltd.		17,500		79,405
New World Development Co., Ltd.		126,000		156,195
Sino Land Co., Ltd.		56,000		96,059
Sun Hung Kai Properties Ltd.		37,600		450,369
Swire Pacific Ltd., Class A		29,000		341,853
The Link REIT		42,000		174,737
The Wharf Holdings Ltd.		33,000		195,702
Wheelock & Co., Ltd.		26,000		87,599
				2,690,743
Retailing 0.1%
Belle International Holdings Ltd.		48,000		93,659
Esprit Holdings Ltd.		100,884		206,269
GOME Electrical Appliances Holdings Ltd. (c)		240,000		43,305
Li & Fung Ltd.		86,000		183,390
				526,623
Technology Hardware & Equipment 0.0%
Kingboard Chemical Holdings Ltd.		24,500		68,443
Telecommunication Services 0.0%
HKT Trust & HKT Ltd. *		14,499		11,269
PCCW Ltd.		359,000		133,305
				144,574
Transportation 0.1%
Cathay Pacific Airways Ltd.		60,800		102,863
MTR Corp., Ltd.		29,000		102,852
Orient Overseas International Ltd.		18,500		126,050
Pacific Basin Shipping Ltd.		144,000		75,357
				407,122
Utilities 0.2%
CLP Holdings Ltd.		42,000		359,549
Hong Kong & China Gas Co., Ltd.		54,640		139,572
Power Assets Holdings Ltd.		26,500		197,848
				696,969
				7,124,465
Ireland 0.2%
Banks 0.1%
Irish Bank Resolution Corp., Ltd. (a)(b)*		9,106		—
The Governor & Company of the Bank of Ireland *		2,028,377		301,333
				301,333
Capital Goods 0.1%
DCC		4,530		114,531

32 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Food, Beverage & Tobacco 0.0%
Kerry Group plc, Class A		2,130		97,274
Materials 0.0%
Smurfit Kappa Group plc		11,784		99,276
Transportation 0.0%
Ryanair Holdings plc *		14,358		81,083
				693,497
Israel 0.4%
Banks 0.1%
Bank Hapoalim B.M.		46,342		171,971
Bank Leumi Le-Israel B.M.		71,290		223,008
				394,979
Materials 0.0%
Israel Chemicals Ltd.		12,423		142,105
Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Teva Pharmaceutical Industries Ltd.		13,493		616,996
Telecommunication Services 0.1%
Bezeq Israeli Telecommunication Corp., Ltd.		116,195		193,712
Cellcom Israel Ltd.		5,092		64,178
				257,890
				1,411,970
Italy 4.2%
Automobiles & Components 0.1%
Fiat S.p.A. *		114,358		552,372
Banks 1.1%
Banca Monte dei Paschi di Siena S.p.A. (c)		537,859		191,334
Banca Popolare dell’Emilia Romagna Scrl *		20,051		123,192
Banca Popolare di Milano Scarl		242,158		119,227
Banca Popolare di Sondrio Scarl		10,243		69,015
Banco Popolare Scarl (c)		207,371		308,377
Intesa Sanpaolo S.p.A.		964,978		1,462,766
UniCredit S.p.A.		417,755		1,666,264
Unione di Banche Italiane S.C.P.A.		80,647		299,749
				4,239,924
Capital Goods 0.2%
Fiat Industrial S.p.A.		30,558		346,898
Finmeccanica S.p.A.		69,471		298,841
Prysmian S.p.A.		6,598		107,474
				753,213
Consumer Durables & Apparel 0.0%
Luxottica Group S.p.A.		1,974		70,585
Diversified Financials 0.1%
Exor S.p.A.		5,042		117,392
Mediobanca S.p.A.		24,460		119,586
				236,978
Energy 0.9%
Eni S.p.A.		151,965		3,376,633
Saipem S.p.A.		4,871		240,756
Tenaris S.A.		9,783		190,428
				3,807,817
Insurance 0.4%
Assicurazioni Generali S.p.A.		101,463		1,384,265
Fondiaria-Sai S.p.A. (c)*		70,884		87,269
Unipol Gruppo Finanziario S.p.A (c)*		2,350		70,787
				1,542,321
Materials 0.1%
Buzzi Unicem S.p.A. *		5,900		60,072
Italcementi S.p.A.		11,355		71,394
Italcementi S.p.A. - RSP		22,279		67,694
				199,160
Media 0.1%
Mediaset S.p.A.		95,129		226,420
Telecommunication Services 0.5%
Telecom Italia S.p.A. *		1,355,408		1,537,688
Telecom Italia S.p.A. - RSP *		599,698		561,694
				2,099,382
Transportation 0.1%
Atlantia S.p.A.		14,979		227,117
Utilities 0.6%
A2A S.p.A.		128,626		81,623
Enel Green Power S.p.A.		49,708		80,263
Enel S.p.A.		594,513		1,949,643
Snam Rete Gas S.p.A.		37,990		180,474
Terna - Rete Elettrica Nationale S.p.A.		42,444		157,670
				2,449,673
				16,404,962
Japan 17.7%
Automobiles & Components 2.2%
Aisin Seiki Co., Ltd.		6,000		211,276
Bridgestone Corp.		18,200		430,644
Daihatsu Motor Co., Ltd.		7,000		132,138
Denso Corp.		12,400		400,957
Fuji Heavy Industries Ltd.		24,000		181,020
Honda Motor Co., Ltd.		44,200		1,590,722
Isuzu Motors Ltd.		30,000		171,282
Mazda Motor Corp. *		154,000		250,255
Mitsubishi Motor Corp. *		171,000		191,853
Nissan Motors Co., Ltd.		93,000		966,924
NOK Corp.		4,000		82,282
Suzuki Motor Corp.		15,600		367,169
The Yokohama Rubber Co., Ltd.		10,000		73,100
Toyota Industries Corp.		4,900		138,405
Toyota Motor Corp.		83,100		3,405,250
Yamaha Motor Co., Ltd.		10,900		145,587
				8,738,864
Banks 1.8%
Fukuoka Financial Group, Inc.		36,000		149,777
Hokuhoku Financial Group, Inc.		46,000		80,478
Mitsubishi UFJ Financial Group, Inc.		499,934		2,400,438
Mizuho Financial Group, Inc.		834,616		1,315,778
Resona Holdings, Inc.		52,058		221,117
Shinsei Bank Ltd.		97,000		125,173
Sumitomo Mitsui Financial Group, Inc.		49,910		1,597,059
Sumitomo Mitsui Trust Holdings, Inc.		53,150		155,705
The Bank of Kyoto Ltd.		8,000		67,774

See financial notes 33

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
The Bank of Yokohama Ltd.		34,000		164,663
The Chiba Bank Ltd.		20,000		121,510
The Chugoku Bank Ltd.		6,000		75,818
The Gunma Bank Ltd.		14,000		71,033
The Hachijuni Bank Ltd.		14,000		76,192
The Joyo Bank Ltd.		18,000		78,578
The Shizuoka Bank Ltd.		13,000		136,041
Yamaguchi Financial Group, Inc.		8,000		68,716
				6,905,850
Capital Goods 2.3%
Amada Co., Ltd.		10,000		67,873
Asahi Glass Co., Ltd.		35,000		275,190
Daikin Industries Ltd.		6,100		161,167
Fanuc Corp.		1,300		219,246
Fuji Electric Co., Ltd.		29,000		77,673
Fujikura Ltd.		28,000		87,059
Furukawa Electric Co., Ltd.		35,000		94,980
Hanwa Co., Ltd.		23,000		96,490
IHI Corp.		50,000		120,958
ITOCHU Corp.		44,000		497,825
JGC Corp.		3,000		86,385
JS Group Corp.		8,000		157,091
JTEKT Corp.		15,600		170,975
Kajima Corp.		49,000		139,661
Kawasaki Heavy Industries Ltd.		47,000		141,080
Kinden Corp.		10,000		69,447
Komatsu Ltd.		16,900		486,382
Kubota Corp.		14,000		135,144
Makita Corp.		2,300		88,041
Marubeni Corp.		60,000		416,622
Mitsubishi Corp.		42,600		923,225
Mitsubishi Electric Corp.		53,000		465,583
Mitsubishi Heavy Industries Ltd.		127,000		575,948
Mitsui & Co., Ltd.		49,200		768,287
Mitsui Engineering & Shipbuilding Co., Ltd.		42,000		61,753
NGK Insulators Ltd.		6,000		74,834
Nidec Corp.		1,400		125,814
Nippon Sheet Glass Co., Ltd. (c)		77,000		99,731
NSK Ltd.		14,000		96,058
NTN Corp.		20,000		75,657
Obayashi Corp.		31,000		131,218
Shimizu Corp.		37,000		140,651
SMC Corp.		700		116,902
Sojitz Corp.		193,800		326,384
Sumitomo Corp.		39,900		567,027
Sumitomo Electric Industries Ltd.		24,600		331,835
Sumitomo Heavy Industries Ltd.		17,000		87,680
Taisei Corp.		55,000		139,701
Toyota Tsusho Corp.		12,500		247,884
				8,945,461
Commercial & Professional Supplies 0.2%
Dai Nippon Printing Co., Ltd.		28,000		248,497
Secom Co., Ltd.		4,100		193,999
Toppan Printing Co., Ltd.		31,000		209,964
				652,460
Consumer Durables & Apparel 0.9%
Casio Computer Co., Ltd.		10,500		69,755
Haseko Corp. *		93,000		67,012
Namco Bandai Holdings, Inc.		5,400		77,213
Nikon Corp.		5,000		148,191
Panasonic Corp.		146,350		1,122,014
Sankyo Co., Ltd.		1,400		67,501
Sega Sammy Holdings, Inc.		5,200		109,109
Sekisui Chemical Co., Ltd.		15,000		134,868
Sekisui House Ltd.		23,000		213,219
Sharp Corp.		64,000		409,420
Sony Corp.		59,800		967,193
Sumitomo Forestry Co., Ltd.		8,500		73,970
Toyobo Co., Ltd.		50,000		68,073
Yamaha Corp.		8,200		79,498
				3,607,036
Consumer Services 0.0%
Benesse Holdings, Inc.		1,800		89,373
Oriental Land Co., Ltd.		600		66,523
				155,896
Diversified Financials 0.3%
Credit Saison Co., Ltd.		7,600		163,104
Daiwa Securities Group, Inc.		61,000		230,520
Nomura Holdings, Inc.		115,800		474,678
ORIX Corp.		3,880		370,970
SBI Holdings, Inc.		980		78,863
				1,318,135
Energy 0.6%
Cosmo Oil Co., Ltd.		85,000		235,723
Idemitsu Kosan Co., Ltd.		2,100		193,360
Inpex Corp.		71		468,778
JX Holdings, Inc.		186,000		1,049,205
Showa Shell Sekiyu K.K.		13,000		81,811
TonenGeneral Sekiyu K.K.		18,000		168,362
				2,197,239
Food & Staples Retailing 0.4%
Aeon Co., Ltd.		38,200		498,701
FamilyMart Co., Ltd.		1,700		75,671
Lawson, Inc.		1,700		112,550
Seven & i Holdings Co., Ltd.		26,400		799,132
Uny Co., Ltd.		11,400		132,478
				1,618,532
Food, Beverage & Tobacco 0.4%
Ajinomoto Co., Inc.		17,000		219,406
Asahi Group Holdings Ltd.		10,000		225,172
Japan Tobacco, Inc.		74		409,937
Kirin Holdings Co., Ltd.		31,000		394,706
Meiji Holdings Co., Ltd.		3,400		150,590
Nippon Meat Packers, Inc.		9,000		114,964
Nisshin Seifun Group, Inc.		7,000		85,409
Nissin Food Holdings Co., Ltd.		2,100		79,014
Yakult Honsha Co., Ltd.		2,600		95,776
				1,774,974
Health Care Equipment & Services 0.2%
Alfresa Holdings Corp.		3,400		157,011
Medipal Holdings Corp.		15,800		199,864
Olympus Corp. *		7,500		117,756
Suzuken Co., Ltd.		3,100		93,766
Terumo Corp.		1,900		87,058
Toho Holdings Co., Ltd.		4,500		87,466
				742,921

34 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Household & Personal Products 0.1%
Kao Corp.		14,000		375,134
Shiseido Co., Ltd.		8,000		140,057
				515,191
Insurance 0.5%
MS&AD Insurance Group Holdings, Inc.		26,190		482,842
NKSJ Holdings, Inc.		22,000		452,841
T&D Holdings, Inc.		19,450		209,663
The Dai-ichi Life Insurance Co., Ltd.		402		503,391
Tokio Marine Holdings, Inc.		17,700		452,830
				2,101,567
Materials 1.5%
Asahi Kasei Corp.		44,000		271,953
Daicel Corp.		10,000		63,388
Denki Kagaku Kogyo K.K.		20,000		77,409
DIC Corp.		48,000		99,727
Dowa Holdings Co., Ltd.		12,000		76,485
JFE Holdings, Inc.		30,300		566,655
JSR Corp.		4,000		78,945
Kobe Steel Ltd.		162,000		231,043
Kuraray Co., Ltd.		9,500		135,578
Mitsubhishi Gas Chemical Co., Inc.		13,000		85,168
Mitsubishi Chemical Holdings Corp.		62,500		329,380
Mitsubishi Materials Corp.		52,000		155,092
Mitsui Chemicals, Inc.		51,000		147,344
Mitsui Mining & Smelting Co., Ltd.		28,000		70,209
Nippon Paper Group, Inc.		7,743		155,014
Nippon Steel Corp.		250,000		622,972
Nisshin Steel Co., Ltd.		48,000		67,370
Nitto Denko Corp.		3,500		143,640
OJI Paper Co., Ltd.		38,000		174,481
Shin-Etsu Chemical Co., Ltd.		7,700		444,442
Showa Denko K.K.		52,000		115,706
Sumitomo Chemical Co., Ltd.		61,000		250,822
Sumitomo Metal Industries Ltd.		159,000		285,623
Sumitomo Metal Mining Co., Ltd.		17,000		222,995
Taiheiyo Cement Corp.		44,000		105,009
Taiyo Nippon Sanso Corp.		12,000		82,905
Teijin Ltd.		39,000		131,152
Toray Industries, Inc.		31,000		238,338
Tosoh Corp.		32,000		88,468
Toyo Seikan Kaisha Ltd.		8,500		113,109
Ube Industries Ltd.		31,000		79,278
				5,709,700
Media 0.1%
Dentsu, Inc.		4,501		138,203
Hakuhodo DY Holdings, Inc.		1,500		93,669
				231,872
Pharmaceuticals, Biotechnology & Life Sciences 0.6%
Astellas Pharma, Inc.		8,900		360,945
Chugai Pharmaceutical Co., Ltd.		4,500		80,992
Daiichi Sankyo Co., Ltd.		16,400		281,643
Eisai Co., Ltd.		5,400		211,050
Ono Pharmaceutical Co., Ltd.		1,900		107,579
Otsuka Holdings Co., Ltd.		9,200		277,266
Shionogi & Co., Ltd.		6,000		78,261
Takeda Pharmaceutical Co., Ltd.		17,700		772,341
				2,170,077
Real Estate 0.4%
Daito Trust Construction Co., Ltd.		2,000		179,856
Daiwa House Industry Co., Ltd.		18,000		232,277
Mitsubishi Estate Co., Ltd.		18,000		318,210
Mitsui Fudosan Co., Ltd.		22,000		402,970
Sumitomo Realty & Development Co., Ltd.		10,500		250,391
Tokyu Land Corp.		18,000		86,752
				1,470,456
Retailing 0.2%
Edion Corp.		10,400		65,152
Fast Retailing Co., Ltd.		500		111,734
Isetan Mitsukoshi Holdings Ltd.		13,500		147,046
J. Front Retailing Co., Ltd.		22,000		113,040
Marui Group Co., Ltd.		10,300		81,756
Takashimaya Co., Ltd.		14,000		106,120
Yamada Denki Co., Ltd.		4,080		264,759
				889,607
Semiconductors & Semiconductor Equipment 0.1%
Rohm Co., Ltd.		4,100		184,905
Tokyo Electron Ltd.		2,900		160,706
				345,611
Software & Services 0.2%
Nintendo Co., Ltd.		4,230		570,982
Nomura Research Institute Ltd.		3,700		84,885
NTT Data Corp.		39		134,980
				790,847
Technology Hardware & Equipment 1.8%
Brother Industries Ltd.		8,800		118,243
Canon, Inc.		32,000		1,450,490
FUJIFILM Holdings Corp		17,800		377,545
Fujitsu Ltd.		99,000		481,173
Hitachi Ltd.		186,000		1,184,679
Hoya Corp.		10,100		231,665
Ibiden Co., Ltd.		3,600		73,497
Keyence Corp.		473		111,640
Konica Minolta Holdings, Inc.		18,900		153,338
Kyocera Corp.		5,000		487,450
Murata Manufacturing Co., Ltd.		4,600		262,888
NEC Corp. *		274,000		494,668
Nippon Electric Glass Co., Ltd.		14,000		113,117
Omron Corp.		6,400		135,973
Ricoh Co., Ltd.		39,000		349,366
Seiko Epson Corp.		10,200		136,073
TDK Corp.		3,300		172,316
Toshiba Corp.		154,000		629,521
				6,963,642
Telecommunication Services 0.9%
KDDI Corp.		134		877,203
Nippon Telegraph & Telephone Corp.		27,404		1,239,911
NTT DoCoMo, Inc.		584		997,180
Softbank Corp.		16,100		480,528
				3,594,822
Transportation 0.9%
All Nippon Airways Co., Ltd.		26,000		76,308
Central Japan Railway Co.		59		489,826
East Japan Railway Co.		10,818		673,065
Hankyu Hanshin Holdings, Inc.		47,000		219,285

See financial notes 35

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Kawasaki Kisen Kaisha Ltd. (c)		67,000		141,126
Keio Corp.		11,100		80,283
Kintetsu Corp. (c)		42,000		148,166
Mitsui O.S.K. Lines, Ltd.		64,000		248,058
Nagoya Railroad Co., Ltd.		25,000		66,964
Nippon Express Co., Ltd.		52,000		196,300
Nippon Yusen K.K.		102,000		301,516
Odakyu Electric Railway Co., Ltd.		10,000		92,684
Seino Holdings Co., Ltd.		10,000		69,271
Tobu Railway Co., Ltd.		26,000		132,339
Tokyu Corp.		37,000		173,264
West Japan Railway Co.		6,333		260,175
Yamato Holdings Co., Ltd.		13,000		200,440
				3,569,070
Utilities 1.1%
Chubu Electric Power Co., Inc.		33,800		553,540
Electric Power Development Co., Ltd.		8,600		237,959
Hokkaido Electric Power Co., Inc.		9,800		137,727
Hokuriku Electric Power Co.		7,400		126,649
Kyushu Electric Power Co., Inc.		26,000		344,881
Osaka Gas Co., Ltd.		61,000		246,690
Shikoku Electric Power Co., Inc.		5,200		134,315
The Chugoku Electric Power Co., Inc.		13,300		228,202
The Kansai Electric Power Co., Inc.		43,100		624,974
The Tokyo Electric Power Co., Inc. *		376,300		939,441
Toho Gas Co., Ltd.		14,000		84,474
Tohoku Electric Power Co., Inc.		31,400		329,238
Tokyo Gas Co., Ltd.		68,000		328,141
				4,316,231
				69,326,061
Netherlands 2.9%
Capital Goods 0.3%
Imtech N.V.		2,798		79,122
Koninklijke BAM Groep N.V.		22,224		79,115
Koninklijke Boskalis Westminster N.V.		2,222		81,166
Koninklijke Philips Electronics N.V. *		45,676		908,973
				1,148,376
Commercial & Professional Supplies 0.1%
Randstad Holding N.V.		4,433		153,576
USG People N.V.		7,066		66,848
				220,424
Diversified Financials 0.5%
ING Groep N.V. CVA *		274,709		1,938,038
SNS Reaal N.V. *		57,447		113,539
				2,051,577
Energy 0.1%
Fugro N.V. CVA		1,560		114,041
SBM Offshore N.V.		5,942		108,163
				222,204
Food & Staples Retailing 0.1%
Koninklijke Ahold N.V.		41,738		529,756
Food, Beverage & Tobacco 0.5%
CSM N.V.		4,205		59,357
Heineken Holding N.V.		3,873		179,368
Heineken N.V.		5,654		309,210
Nutreco N.V.		1,255		91,210
Unilever N.V. CVA		32,588		1,116,279
				1,755,424
Insurance 0.3%
Aegon N.V. *		188,387		876,298
Delta Lloyd N.V.		11,300		190,578
				1,066,876
Materials 0.6%
Akzo Nobel N.V. (c)		9,001		482,730
APERAM		6,491		109,952
ArcelorMittal		84,178		1,462,336
Koninklijke DSM N.V.		5,965		342,301
				2,397,319
Media 0.1%
Reed Elsevier N.V.		10,988		129,669
Wolters Kluwer N.V.		11,349		196,194
				325,863
Real Estate 0.0%
Corio N.V.		2,592		116,115
Semiconductors & Semiconductor Equipment 0.0%
ASML Holding N.V.		3,440		175,038
Telecommunication Services 0.2%
Koninklijke (Royal) KPN N.V.		90,806		815,245
Transportation 0.1%
TNT Express N.V.		11,546		140,241
TNT N.V.		52,089		226,667
				366,908
				11,191,125
New Zealand 0.1%
Materials 0.0%
Fletcher Building Ltd.		21,644		110,419
Telecommunication Services 0.1%
Telecom Corp. of New Zealand Ltd.		122,193		262,709
				373,128
Norway 1.0%
Banks 0.1%
DnB A.S.A. (c)		38,427		414,182
Capital Goods 0.1%
Orkla A.S.A. (c)		40,014		293,883
Energy 0.5%
Aker Solutions A.S.A.		6,950		118,360
Frontline Ltd. (c)		19,284		127,983
Petroleum Geo-Services A.S.A. *		5,554		84,020
Seadrill Ltd.		4,800		186,106
Statoil A.S.A.		48,923		1,312,720
				1,829,189
Food, Beverage & Tobacco 0.0%
Marine Harvest		173,702		89,149
Insurance 0.1%
Gjensidige Forsikring A.S.A.		6,592		74,270

36 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Storebrand A.S.A. *		24,377		109,586
				183,856
Materials 0.1%
Norsk Hydro A.S.A.		45,910		223,867
Norske Skogindustrier A.S.A. (c)*		88,762		88,731
Yara International A.S.A.		4,150		203,433
				516,031
Retailing 0.0%
Statoil Fuel & Retail A.S.A. (c)		12,249		109,762
Telecommunication Services 0.1%
Telenor A.S.A.		21,184		389,392
				3,825,444
Portugal 0.4%
Banks 0.1%
Banco Comercial Portugues S.A. - Reg’d (c)*		867,322		121,743
Banco Espirito Santo, S.A. (c)*		106,161		89,932
				211,675
Energy 0.0%
Galp Energia, SGPS, S.A., B Shares		5,265		82,888
Telecommunication Services 0.2%
Portugal Telecom, SGPS, S.A. - Reg’d		109,481		589,131
Transportation 0.0%
Brisa Auto-Estradas de Portugal S.A.		30,836		108,035
Utilities 0.1%
EDP - Energias de Portugal S.A.		164,522		470,484
				1,462,213
Republic of Korea 4.1%
Automobiles & Components 0.5%
Hankook Tire Co., Ltd.		1,921		81,039
Hyundai Mobis		915		247,385
Hyundai Motor Co.		5,017		1,184,364
Kia Motors Corp.		4,380		321,400
				1,834,188
Banks 0.4%
Hana Financial Group, Inc.		8,610		293,524
Industrial Bank of Korea		7,230		79,390
KB Financial Group, Inc.		11,429		386,678
Korea Exchange Bank		17,700		133,858
Shinhan Financial Group Co., Ltd.		17,440		605,279
Woori Finance Holdings Co., Ltd.		22,010		230,279
				1,729,008
Capital Goods 0.7%
CJ Corp.		954		65,759
Daelim Industrial Co., Ltd.		1,105		101,716
Daewoo Shipbuilding & Marine Engineering Co., Ltd.		2,082		57,916
Doosan Corp.		1,503		182,617
Doosan Heavy Industries & Construction Co., Ltd.		1,424		66,760
GS Engineering & Construction Corp.		1,109		82,218
Hyundai Development Co.		3,274		68,534
Hyundai Engineering & Construction Co., Ltd.		1,296		81,352
Hyundai Heavy Industries Co., Ltd.		1,440		357,840
Hyundai Mipo Dockyard Co., Ltd.		628		67,697
LG Corp.		7,151		361,937
LG International Corp.		1,830		74,612
LS Corp.		1,886		125,656
Samsung C&T Corp.		4,080		276,011
Samsung Heavy Industries Co., Ltd.		4,860		177,683
SK Holdings Co., Ltd.		5,149		548,186
STX Corp.		9,410		102,520
STX Offshore & Shipbuilding Co., Ltd.		5,240		58,749
				2,857,763
Consumer Durables & Apparel 0.1%
LG Electronics, Inc.		7,960		491,123
Consumer Services 0.0%
Kangwon Land, Inc.		3,171		67,885
Diversified Financials 0.0%
Samsung Securities Co., Ltd. *		1,434		63,057
Energy 0.2%
GS Holdings		3,730		194,685
S-Oil Corp.		2,553		218,872
SK Innovation Co., Ltd.		2,431		336,031
				749,588
Food, Beverage & Tobacco 0.0%
KT&G Corp.		1,675		115,014
Insurance 0.2%
Dongbu Insurance Co., Ltd.		2,469		98,327
Hyundai Marine & Fire Insurance Co., Ltd. (HDMF)		2,380		60,837
Korea Life Insurance Co Ltd. *		11,277		67,971
Samsung Fire & Marine Insurance Co., Ltd.		1,216		232,057
Samsung Life Insurance Co., Ltd.		1,808		159,607
				618,799
Materials 0.5%
Cheil Industries, Inc.		955		81,439
Dongkuk Steel Mill Co., Ltd.		3,960		61,227
Hanwha Corp.		9,270		236,217
Honam Petrochemical Corp.		246		58,782
Hyosung Corp.		2,300		117,064
Hyundai Steel Co.		1,056		91,362
Korea Kumho Petrochemical Co., Ltd.		490		45,727
Korea Zinc Co., Ltd.		172		55,410
LG Chem Ltd.		653		163,225
OCI Co., Ltd.		334		62,792
POSCO		3,208		1,062,741
				2,035,986
Retailing 0.1%
Hyundai Department Store Co., Ltd.		472		66,379
Lotte Shopping Co., Ltd.		270		83,688
Shinsegae Co., Ltd.		682		149,408
				299,475
Semiconductors & Semiconductor Equipment 0.9%
Hynix Semiconductor, Inc. *		8,160		201,123

See financial notes 37

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Samsung Electronics Co., Ltd.		2,684		3,285,112
				3,486,235
Software & Services 0.1%
SK C&C Co., Ltd.		2,697		222,302
Technology Hardware & Equipment 0.1%
LG Display Co., Ltd. *		12,840		283,448
Samsung Electro-Mechanics Co., Ltd.		940		90,425
Samsung SDI Co., Ltd.		798		114,346
				488,219
Telecommunication Services 0.2%
KT Corp.		11,060		286,809
LG Uplus Corp.		12,263		60,552
SK Telecom Co., Ltd.		2,213		264,999
				612,360
Transportation 0.0%
Korean Air Lines Co., Ltd. *		1,800		70,531
Utilities 0.1%
Korea Electric Power Corp. *		18,660		357,973
Korea Gas Corp.		2,340		91,095
				449,068
				16,190,601
Singapore 0.9%
Banks 0.3%
DBS Group Holdings Ltd.		41,056		461,237
Oversea-Chinese Banking Corp., Ltd.		47,897		345,887
United Overseas Bank Ltd.		26,952		418,171
				1,225,295
Capital Goods 0.2%
Fraser & Neave Ltd.		27,000		153,230
Keppel Corp., Ltd.		23,300		207,247
Noble Group Ltd.		228,879		217,232
SembCorp Industries Ltd.		20,000		81,238
Singapore Technologies Engineering Ltd.		36,100		87,668
				746,615
Food, Beverage & Tobacco 0.1%
Golden Agri-Resources Ltd.		175,000		103,590
Wilmar International Ltd.		46,166		180,753
				284,343
Media 0.0%
Singapore Press Holdings Ltd.		39,000		124,951
Real Estate 0.1%
Capitaland Ltd.		73,000		172,549
City Developments Ltd.		11,000		89,859
				262,408
Retailing 0.0%
Jardine Cycle & Carriage Ltd.		3,000		113,953
Telecommunication Services 0.1%
Singapore Telecommunications Ltd.		190,486		479,162
Transportation 0.1%
ComfortDelGro Corp., Ltd.		68,000		83,945
Singapore Airlines Ltd.		28,270		243,848
				327,793
				3,564,520
Spain 3.7%
Banks 1.7%
Banco Bilbao Vizcaya Argentaria S.A.		272,011		1,840,711
Banco de Sabadell S.A. (c)		111,209		263,297
Banco Popular Espanol S.A. (c)		93,485		298,957
Banco Santander S.A.		609,942		3,829,596
Bankinter S.A.		17,175		76,619
CaixaBank (c)		46,524		160,380
				6,469,560
Capital Goods 0.2%
ACS, Actividades de Construccion y Servicios S.A. (c)		14,106		259,465
Ferrovial S.A.		19,208		214,192
Fomento de Construcciones y Contratas S.A.		5,671		97,027
Gamesa Corp. Tecnologica S.A. (c)		32,225		87,790
Obrascon Huarte Lain S.A.		2,528		64,002
				722,476
Energy 0.3%
Repsol YPF S.A.		70,953		1,364,067
Food & Staples Retailing 0.0%
Distribuidora Internacional de Alimentacion S.A. *		27,812		133,532
Insurance 0.0%
Mapfre S.A.		43,659		126,389
Materials 0.0%
Acerinox S.A.		10,077		123,023
Retailing 0.1%
Industria de Diseno Textil S.A.		2,674		241,019
Software & Services 0.0%
Amadeus IT Holding S.A., A Shares		4,535		92,840
Indra Sistemas S.A.		7,969		82,745
				175,585
Telecommunication Services 1.0%
Telefonica S.A.		254,588		3,717,686
Transportation 0.0%
Abertis Infraestructuras S.A.		10,288		159,354
Utilities 0.4%
Acciona S.A.		1,589		97,864
Enagas S.A.		4,396		77,231
Endesa S.A.		7,528		134,990
Gas Natural SDG S.A.		16,567		230,939
Iberdrola S.A.		184,064		857,692
				1,398,716
				14,631,407
Sweden 2.1%
Banks 0.6%
Nordea Bank AB		98,530		872,030

38 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Skandinaviska Enskilda Banken AB, A Shares		67,805		456,841
Svenska Handelsbanken AB, A Shares		17,163		555,538
Swedbank AB, A Shares		21,427		353,709
				2,238,118
Capital Goods 0.7%
Alfa Laval AB		4,508		89,923
Assa Abloy AB, B Shares		5,043		146,784
Atlas Copco AB, A Shares		7,433		176,879
Atlas Copco AB, B Shares		4,610		96,811
NCC AB, B Shares		4,780		93,944
Sandvik AB		23,444		370,652
Scania AB, A Shares		1,700		33,489
Scania AB, B Shares		9,377		191,619
Skanska AB, B Shares		18,325		298,434
SKF AB, B Shares		8,320		197,117
Trelleborg AB, B Shares		6,852		78,567
Volvo AB, A Shares		18,498		256,288
Volvo AB, B Shares		39,257		544,817
				2,575,324
Commercial & Professional Supplies 0.0%
Securitas AB, B Shares		14,558		133,323
Consumer Durables & Apparel 0.1%
Electrolux AB, B Shares		11,151		248,645
Husqvarna AB, B Shares		13,374		77,004
				325,649
Diversified Financials 0.0%
Industrivarden AB, A Shares		6,886		110,656
Industrivarden AB, C Shares		5,169		79,017
				189,673
Food, Beverage & Tobacco 0.0%
Swedish Match AB		2,144		87,338
Health Care Equipment & Services 0.0%
Getinge AB, B Shares		3,028		81,140
Materials 0.2%
Boliden AB		8,440		135,722
Holmen AB, B Shares		2,465		65,475
SSAB AB, A Shares		13,085		133,399
SSAB AB, B Shares		8,242		72,811
Svenska Cellulosa AB, B Shares		21,420		339,565
				746,972
Retailing 0.1%
Hennes & Mauritz AB, B Shares *		8,152		279,521
Technology Hardware & Equipment 0.2%
Telefonaktiebolaget LM Ericsson, B Shares *		89,911		891,329
Telecommunication Services 0.2%
Tele2 AB, B Shares		12,691		241,422
TeliaSonera AB		63,850		425,242
				666,664
				8,215,051
Switzerland 4.7%
Capital Goods 0.3%
ABB Ltd. - Reg’d *		38,597		703,349
Geberit AG - Reg’d *		508		107,409
Schindler Holding AG		516		66,779
Schindler Holding AG - Reg’d		347		44,316
Sulzer AG - Reg’d		634		91,308
				1,013,161
Commercial & Professional Supplies 0.1%
Adecco S.A. - Reg’d *		5,511		268,845
SGS S.A. - Reg’d		79		152,729
				421,574
Consumer Durables & Apparel 0.1%
Compagnie Financiere Richemont S.A., Series A		5,329		329,858
The Swatch Group AG - Bearer Shares		296		136,754
The Swatch Group AG - Reg’d		832		66,509
				533,121
Diversified Financials 0.7%
Credit Suisse Group AG - Reg’d *		61,704		1,475,893
GAM Holding AG *		6,905		88,768
Julius Baer Group Ltd. *		3,272		125,421
UBS AG - Reg’d *		98,438		1,229,312
				2,919,394
Energy 0.2%
Transocean Ltd.		12,884		645,764
Food, Beverage & Tobacco 0.9%
Aryzta AG *		1,352		68,103
Lindt & Spruengli AG		19		61,936
Lindt & Spruengli AG - Reg’d		2		78,331
Nestle S.A. - Reg’d		57,324		3,513,345
				3,721,715
Health Care Equipment & Services 0.0%
Synthes, Inc. - Reg’d		465		80,198
Insurance 0.8%
Baloise Holding AG - Reg’d		2,620		202,903
Helvetia Holding AG - Reg’d		289		103,658
Swiss Life Holding AG - Reg’d *		2,704		276,586
Swiss Re AG *		14,759		926,763
Zurich Financial Services AG *		6,410		1,570,467
				3,080,377
Materials 0.3%
Clariant AG - Reg’d *		9,321		118,668
Givaudan S.A. - Reg’d *		148		143,676
Holcim Ltd. - Reg’d *		8,776		547,378
Syngenta AG - Reg’d		1,227		430,280
				1,240,002
Pharmaceuticals, Biotechnology & Life Sciences 1.2%
Lonza Group AG - Reg’d *		1,830		82,572
Novartis AG - Reg’d		44,961		2,482,577
Roche Holding AG		10,824		1,978,200
				4,543,349
Telecommunication Services 0.1%
Swisscom AG - Reg’d		568		211,531
Transportation 0.0%
Kuehne & Nagel International AG - Reg’d		913		111,025
				18,521,211

See financial notes 39

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
United Kingdom 19.7%
Automobiles & Components 0.0%
GKN plc		41,798		138,246
Banks 2.9%
Barclays plc		681,942		2,414,310
Bradford & Bingley plc (a)(b)*		87,225		—
HSBC Holdings plc		674,213		6,086,238
Lloyds Banking Group plc *		2,439,675		1,224,575
Royal Bank of Scotland Group plc *		1,326,846		523,446
Standard Chartered plc		48,872		1,194,707
				11,443,276
Capital Goods 0.7%
BAE Systems plc		149,521		716,539
Balfour Beatty plc		38,399		162,721
Bunzl plc		8,368		139,035
Carillion plc		19,734		93,471
Cobham plc		30,384		111,721
Cookson Group plc		7,474		88,044
IMI plc		5,946		95,516
Invensys plc		21,418		77,263
Meggitt plc		14,670		97,282
Rolls-Royce Holdings plc *		27,849		372,353
SIG plc		33,272		56,897
Smiths Group plc		9,628		167,236
The Weir Group plc		2,089		57,827
Travis Perkins plc		6,905		117,805
Wolseley plc		9,948		378,736
				2,732,446
Commercial & Professional Supplies 0.3%
Aggreko plc		1,902		69,518
Babcock International Group plc		6,294		84,950
Capita Group plc		9,374		100,958
De La Rue plc		5,210		82,544
Experian plc		11,631		183,703
G4S plc		41,040		186,199
Hays plc		69,914		101,456
Rentokil Initial plc		78,363		110,220
Serco Group plc		10,330		91,028
				1,010,576
Consumer Durables & Apparel 0.1%
Barratt Developments plc *		60,198		130,655
Burberry Group plc		3,378		81,424
Persimmon plc		11,879		121,157
Taylor Wimpey plc		165,121		134,679
				467,915
Consumer Services 0.4%
Carnival plc		7,937		257,808
Compass Group plc		41,347		432,253
Greene King plc		9,414		78,011
InterContinental Hotels Group plc		3,398		81,021
Ladbrokes plc		34,102		99,314
Mitchells & Butlers plc *		27,136		116,221
Thomas Cook Group plc		155,554		56,829
TUI Travel plc		57,598		178,616
Whitbread plc		3,892		121,755
William Hill plc		23,821		108,810
				1,530,638
Diversified Financials 0.3%
3i Group plc		33,253		103,118
Close Brothers Group plc		6,032		72,208
Henderson Group plc		36,983		72,763
ICAP plc		21,255		131,011
Intermediate Capital Group plc		15,650		65,242
Investec plc		19,765		113,990
Man Group plc		141,992		238,547
Provident Financial plc		4,202		78,835
Schroders plc		2,860		65,825
Schroders plc - Non Voting Shares		2,570		46,957
				988,496
Energy 4.5%
AMEC plc		5,543		102,362
BG Group plc		43,857		1,034,813
BP plc		972,291		7,023,926
John Wood Group plc		6,860		87,111
Royal Dutch Shell plc, A Shares		149,322		5,325,708
Royal Dutch Shell plc, B Shares		111,423		4,077,474
Tullow Oil plc		4,318		107,727
				17,759,121
Food & Staples Retailing 0.8%
J. Sainsbury plc		119,820		598,972
Tesco plc		371,905		1,916,304
WM Morrison Supermarkets plc		98,935		450,625
				2,965,901
Food, Beverage & Tobacco 1.4%
Associated British Foods plc		9,626		190,497
British American Tobacco plc		30,876		1,583,615
Diageo plc		37,211		938,582
Imperial Tobacco Group plc		19,545		781,613
Premier Foods plc *		465,290		122,785
SABMiller plc		16,540		695,151
Tate & Lyle plc		12,828		143,792
Unilever plc		24,022		820,639
				5,276,674
Health Care Equipment & Services 0.0%
Smith & Nephew plc		14,556		143,277
Household & Personal Products 0.2%
Reckitt Benckiser Group plc		11,304		658,044
Insurance 1.1%
Admiral Group plc		4,175		82,053
Amlin plc		22,000		117,829
Aviva plc		256,604		1,284,300
Catlin Group Ltd.		15,868		108,714
Hiscox Ltd.		13,880		89,768
Lancashire Holdings Ltd.		5,543		72,453
Legal & General Group plc		282,728		539,841
Old Mutual plc		212,792		510,887
Prudential plc		80,963		992,274
RSA Insurance Group plc		191,373		326,306
Standard Life plc		95,160		345,336
				4,469,761
Materials 1.7%
Anglo American plc		29,989		1,158,917
Antofagasta plc		6,613		127,346
BHP Billiton plc		31,539		1,015,299
CRH plc		32,104		650,753
Eurasian Natural Resources Corp.		8,525		77,711

40 See financial notes

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Glencore International plc (c)		57,344		397,395
Johnson Matthey plc		5,585		209,724
Kazakhmys plc		5,684		79,787
Lonmin plc		5,761		97,783
Mondi plc		15,248		141,782
Rexam plc		30,800		214,999
Rio Tinto plc		24,968		1,399,575
Smith Ds plc		24,873		67,754
Vedanta Resources plc		6,238		123,636
Xstrata plc		47,332		909,035
				6,671,496
Media 0.4%
British Sky Broadcasting Group plc		22,066		242,839
Informa plc		14,422		97,064
ITV plc		70,994		96,468
Pearson plc		19,598		369,144
Reed Elsevier plc		17,701		146,477
UBM plc		11,593		110,945
WPP plc		32,624		441,760
				1,504,697
Pharmaceuticals, Biotechnology & Life Sciences 1.3%
AstraZeneca plc		43,970		1,926,827
GlaxoSmithKline plc		128,327		2,964,544
Shire plc		2,802		91,324
				4,982,695
Real Estate 0.2%
British Land Co., plc		27,127		215,499
Capital Shopping Centers Group plc		16,555		87,343
Hammerson plc		20,629		139,851
Land Securities Group plc		29,989		354,149
Segro plc		30,182		108,313
				905,155
Retailing 0.4%
Debenhams plc		59,222		79,410
Dixons Retail plc *		440,565		127,408
Home Retail Group plc		142,359		246,276
Inchcape plc		23,495		139,586
Kesa Electricals plc		92,148		81,500
Kingfisher plc		83,271		392,703
Marks & Spencer Group plc		74,933		434,294
Next plc		3,695		175,724
				1,676,901
Software & Services 0.1%
Logica plc		102,792		130,072
The Sage Group plc		23,820		110,670
				240,742
Telecommunication Services 1.8%
BT Group plc		362,563		1,240,127
Cable & Wireless Communications plc		280,554		150,148
Cable & Wireless Worldwide plc		224,041		129,040
Inmarsat plc		10,674		76,167
Vodafone Group plc		2,037,800		5,640,548
				7,236,030
Transportation 0.1%
easyJet plc		10,191		82,049
FirstGroup plc		40,846		129,149
International Consolidated Airlines Group S.A. *		57,166		163,719
National Express Group plc		25,732		90,516
Stagecoach Group plc		16,085		64,757
				530,190
Utilities 1.0%
Centrica plc		186,331		927,093
Drax Group plc		22,373		197,139
International Power plc		17,662		119,474
National Grid plc		114,989		1,241,712
Pennon Group plc		8,433		100,689
Severn Trent plc		7,323		200,827
SSE plc		40,159		861,145
United Utilities Group plc		30,080		301,824
				3,949,903
				77,282,180
Total Common Stock
(Cost $398,182,531)				383,771,434
Preferred Stock 0.4% of net assets
Germany 0.4%
Automobiles & Components 0.3%
Porsche Automobil Holding SE		2,688		164,224
Volkswagen AG		6,530		1,237,817
				1,402,041
Household & Personal Products 0.1%
Henkel AG & Co. KGaA		3,247		241,625
Media 0.0%
ProSiebenSat.1 Media AG		2,742		69,672
				1,713,338
Italy 0.0%
Diversified Financials 0.0%
EXOR S.p.A.		3,375		68,549
Insurance 0.0%
Unipol Gruppo Finanziario S.p.A. *		3,940		58,801
				127,350
United Kingdom 0.0%
Capital Goods 0.0%
Rolls-Royce Holdings plc, C Shares (a)*		2,951,994		4,791
Total Preferred Stock
(Cost $1,394,128)				1,845,479

See financial notes 41

 Schwab Fundamental International Large Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Warrants 0.0% of net assets
Spain 0.0%
Promotora de Informaciones S.A. (b)*		3,766		149
Total Warrants
(Cost $—)				149
Other Investment Company 0.9% of net assets
United States 0.9%
iShares MSCI EAFE Index Fund		65,000		3,493,750
Total Other Investment Company
(Cost $3,391,695)				3,493,750
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Bank of America
0.03%, 05/01/12		211,429		211,429
Total Short-Term Investment
(Cost $211,429)				211,429
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 3.9% of net assets
Wells Fargo Advantage Government Money Market Fund		15,290,058		15,290,058
Total Collateral Invested for Securities on Loan
(Cost $15,290,058)				15,290,058
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $430,328,900 unrealized appreciation and depreciation were $19,757,605 and ($60,764,264), respectively, with a net unrealized depreciation of ($41,006,659).

At 04/30/12, the values of certain foreign securities held by the fund aggregating $355,614,487 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 $18,366 or 0.0% of net assets.
(c)	All or a portion of this security is on loan.

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

42 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.0%	Common Stock		94,785,736		96,511,949
	0	.3%	Preferred Stock		166,261		289,693
	0	.0%	Rights		—		—
	0	.0%	Warrants		—		—
	1	.0%	Other Investment Company		942,530		955,680
	0	.3%	Short-Term Investment		303,187		303,187
	99	.6%	Total Investments		96,197,714		98,060,509
	1	.7%	Collateral Invested for Securities on Loan		1,721,428		1,721,428
	(1	.3)%	Other Assets and Liabilities, Net				(1,360,328	)
	100	.0%	Total Net Assets				98,421,609

	Number		Value
Security	of Shares		($)
Common Stock 98.0% of net assets
Australia 5.2%
Automobiles & Components 0.0%
Fleetwood Corp. Ltd.		2,358		32,048
Banks 0.2%
Bank of Queensland Ltd.		18,980		146,612
Capital Goods 0.6%
Ausdrill Ltd.		8,001		33,908
Boart Longyear Group		18,919		81,531
Bradken Ltd.		5,784		44,404
Cardno Ltd.		4,532		32,968
Emeco Holdings Ltd.		36,265		39,072
GWA International Ltd.		19,457		39,723
Macmahon Holdings Ltd.		48,748		35,296
Monadelphous Group Ltd.		2,165		52,084
Seven Network Ltd.		4,915		51,533
UGL Ltd.		11,364		154,027
				564,546
Commercial & Professional Supplies 0.4%
Cabcharge Australia Ltd.		5,737		38,124
Campbell Brothers Ltd.		1,426		101,186
Seek Ltd.		5,594		41,371
Spotless Group Ltd.		29,760		79,381
Transfield Services Ltd.		35,792		84,409
Transpacific Industries Group Ltd. *		92,763		81,219
				425,690
Consumer Durables & Apparel 0.2%
Billabong International Ltd.		37,204		101,495
G.U.D. Holdings Ltd.		5,090		44,781
				146,276
Consumer Services 0.3%
Ardent Leisure Group		29,066		37,728
Aristocrat Leisure Ltd.		31,048		99,923
Echo Entertainment Group Ltd. *		17,955		83,640
Flight Centre Ltd.		2,900		63,447
Invocare Ltd.		2,901		25,328
Navitas Ltd.		7,869		32,181
				342,247
Diversified Financials 0.3%
Challenger Ltd.		24,593		101,385
IOOF Holdings Ltd.		8,407		54,252
Perpetual Ltd.		3,603		95,047
Platinum Asset Management Ltd.		6,123		27,888
				278,572
Energy 0.2%
AWE Ltd.		28,532		51,476
Beach Energy Ltd.		37,489		54,324
Energy Resources of Australia Ltd. *		21,907		36,455
New Hope Corp., Ltd.		6,620		33,599
Paladin Energy Ltd. *		16,566		27,150
Whitehaven Coal Ltd.		4,218		23,221
				226,225
Food, Beverage & Tobacco 0.2%
Elders Ltd. *		125,731		31,238
GrainCorp Ltd.		7,746		74,163
Treasury Wine Estates		19,702		88,027
				193,428
Health Care Equipment & Services 0.5%
Ansell Ltd.		4,063		62,550
Cochlear Ltd.		1,315		89,562
Primary Health Care Ltd.		35,531		104,355
Ramsay Health Care Ltd.		4,570		95,245
Sigma Pharmaceuticals Ltd.		192,900		132,781
				484,493
Materials 0.6%
Adelaide Brighton Ltd.		26,106		82,491
Alumina Ltd.		71,908		85,891
Fortescue Metals Group Ltd.		6,716		39,016
Gunns Ltd. (a)(b)*		124,356		20,732
Iluka Resources Ltd.		3,987		69,647
James Hardie Industries SE CDI		10,168		78,588
Kagara Ltd. (a)*		83,968		10,499
Mirabela Nickel Ltd *		24,415		12,329
Mount Gibson Iron Ltd.		22,416		25,602
Nufarm Ltd.		17,333		88,219
PanAust Ltd. *		9,533		31,953
Sally Malay Mining		19,469		21,806
				566,773
Media 0.2%
APN News & Media Ltd.		36,709		32,054
Fairfax Media Ltd.		101,230		72,239
Seven West Media Ltd.		5,588		17,183

See financial notes 43

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ten Network Holdings Ltd.		74,991		62,924
				184,400
Real Estate 0.5%
Abacus Property Group		15,183		32,893
Australand Property Group		27,968		78,403
BWP Trust		17,880		34,714
Centro Retail Australia *		17,904		34,512
Charter Hall Retail REIT		16,748		57,577
Commonwealth Property Office Fund		104,128		112,708
FKP Property Group		72,112		37,885
Investa Office Fund		32,955		93,542
Westfield Retail Trust		10,516		29,675
				511,909
Retailing 0.5%
David Jones Ltd.		44,298		114,060
Harvey Norman Holdings Ltd.		61,588		129,138
JB Hi-Fi Ltd.		4,999		50,159
Myer Holdings Ltd		49,136		119,786
Pacific Brands Ltd.		133,417		85,113
Premier Investments Ltd.		6,757		37,632
				535,888
Software & Services 0.0%
Iress Market Technology Ltd.		3,910		27,335
Transportation 0.1%
Virgin Australia Holdings Ltd. *		176,214		73,022
Virgin Australia International Holdings (a)(b)*		176,214		918
				73,940
Utilities 0.4%
APA Group		26,831		145,287
Envestra Ltd.		59,611		48,708
SP AusNet		103,132		118,446
Spark Infrastructure Group		36,607		55,206
				367,647
				5,108,029
Austria 0.8%
Capital Goods 0.3%
Andritz AG		2,902		152,021
Strabag SE - BR		3,156		84,478
				236,499
Energy 0.0%
Schoeller-Bleckmann Oilfield Equipment AG		356		31,772
Materials 0.1%
Mayr-Melnhof Karton AG (c)		576		58,718
RHI AG		3,010		79,384
				138,102
Real Estate 0.2%
Atrium European Real Estate Ltd.		9,448		46,065
CA Immobilien Anlagen AG *		7,681		87,062
Conwert Immobilien Invest SE		5,918		70,572
				203,699
Transportation 0.1%
Oesterreichische Post AG		3,499		124,112
Utilities 0.1%
Verbund AG		3,938		110,359
				844,543
Belgium 1.0%
Capital Goods 0.0%
Compagnie d’Enterprises CFE		531		30,634
Diversified Financials 0.2%
Ackermans & van Haaren N.V.		1,168		100,173
Gimv N.V.		804		39,383
Sofina S.A. *		1,085		87,119
				226,675
Energy 0.0%
Euronav S.A. *		4,206		39,275
Health Care Equipment & Services 0.1%
Agfa Gevaert N.V. *		36,638		80,184
Materials 0.2%
Nyrstar *		12,077		99,216
Tessenderlo Chemie N.V.		2,807		88,988
				188,204
Real Estate 0.2%
Befimmo S.C.A.		1,174		71,410
Cofinimmo		860		103,819
Warehouses De Pauw S.C.A.		482		25,031
				200,260
Technology Hardware & Equipment 0.1%
Barco N.V.		708		47,002
EVS Broadcast Equipment S.A.		514		25,764
				72,766
Telecommunication Services 0.2%
Mobistar S.A.		2,048		77,548
Telenet Group Holding N.V. *		2,827		121,383
				198,931
				1,036,929
Canada 9.6%
Automobiles & Components 0.1%
Linamar Corp.		4,133		81,710
Martinrea International, Inc. *		6,878		64,683
				146,393
Banks 0.3%
Canadian Western Bank		2,321		67,409
Genworth MI Canada, Inc.		3,700		76,895
Home Capital Group, Inc.		1,100		53,516
Laurentian Bank of Canada		1,963		87,494
				285,314
Capital Goods 0.4%
Aecon Group, Inc.		4,800		64,917
CAE, Inc.		9,799		107,131
Russel Metals, Inc.		4,903		134,555
Toromont Industries Ltd.		4,516		101,214
				407,817
Commercial & Professional Supplies 0.3%
Progressive Waste Solutions Ltd.		7,000		151,855

44 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ritchie Bros. Auctioneers, Inc.		2,400		50,777
Stantec, Inc.		2,100		68,601
Transcontinental, Inc., Class A		5,637		65,965
				337,198
Consumer Durables & Apparel 0.2%
Dorel Industries, Inc., Class B		2,910		88,050
Gildan Activewear, Inc.		3,702		106,617
				194,667
Consumer Services 0.1%
Great Canadian Gaming Corp. *		4,800		39,844
Transat A.T., Inc., Class A *		3,500		19,575
				59,419
Diversified Financials 0.5%
AGF Management Ltd., Class B		7,672		106,011
Canaccord Financial, Inc.		5,600		44,217
Davis & Henderson Corp.		4,500		86,278
Dundee Corp., Class A *		3,687		91,331
GMP Capital, Inc.		7,900		49,183
TMX Group, Inc.		2,826		129,020
				506,040
Energy 2.5%
Advantage Oil & Gas Ltd. *		35,000		109,835
AltaGas Ltd.		4,900		158,580
Athabasca Oil Sands Corp. *		5,700		66,933
Birchcliff Energy Ltd. *		2,800		19,189
Bonterra Energy Corp.		500		25,130
Calfrac Well Services Ltd.		800		21,947
Celtic Exploration Ltd. *		1,500		21,987
Crew Energy, Inc. *		2,600		18,424
Denison Mines Corp. *		15,400		28,217
Ensign Energy Services, Inc.		7,792		112,638
Fairborne Energy Ltd. *		16,962		31,422
Flint Energy Services Ltd. *		2,328		58,704
Gibson Energy, Inc. *		4,300		98,549
Keyera Corp.		3,400		139,015
Legacy Oil + Gas, Inc. *		4,000		34,904
MEG Energy Corp. *		2,500		108,848
Mullen Group Ltd.		6,100		132,146
NAL Energy Corp.		14,800		113,564
Niko Resources Ltd.		1,200		50,558
Nuvista Energy Ltd. *		10,600		33,693
Pacific Rubiales Energy Corp.		3,200		91,803
Pason Systems, Inc.		1,700		22,148
PetroBakken Energy Ltd., Class A (c)		5,000		72,379
Petrobank Energy & Resources Ltd. *		8,100		116,107
Petrominerales Ltd.		2,800		40,958
Peyto Exploration & Development Corp.		5,100		86,992
Progress Energy Resources Corp.		12,600		138,647
Savanna Energy Services Corp.		4,800		37,123
ShawCor Ltd., Class A		1,922		62,163
Tourmaline Oil Corp. *		2,400		57,847
Trican Well Service Ltd.		3,841		55,563
Trilogy Energy Corp.		1,400		38,718
Trinidad Drilling Ltd.		12,651		81,962
Uranium One, Inc. *		14,800		42,999
Veresen, Inc.		9,300		142,063
				2,471,755
Food & Staples Retailing 0.2%
The Jean Coutu Group (PJC), Inc., Class A		5,200		74,485
The North West Co., Inc.		3,700		83,300
				157,785
Food, Beverage & Tobacco 0.2%
Cott Corp. *		11,600		75,505
Maple Leaf Foods, Inc.		7,814		102,120
				177,625
Health Care Equipment & Services 0.2%
CML Healthcare, Inc.		8,562		92,654
SXC Health Solutions Corp. *		800		72,545
				165,199
Materials 1.8%
AuRico Gold, Inc. *		3,278		30,130
Canfor Corp. *		7,898		86,507
Capstone Mining Corp. *		8,000		23,890
Cascades, Inc.		6,445		27,663
CCL Industries, Inc., Class B		1,627		62,356
Centerra Gold, Inc.		2,480		32,109
Detour Gold Corp. *		1,000		24,680
Dundee Precious Metals, Inc. *		2,500		19,461
Eastern Platinum Ltd. *		69,000		26,542
Eldorado Gold Corp.		9,200		130,384
Franco-Nevada Corp.		1,897		85,090
Golden Star Resources Ltd. *		15,600		24,004
Harry Winston Diamond Corp. *		3,545		50,599
HudBay Minerals, Inc.		10,196		107,343
IAMGOLD Corp.		8,765		108,692
Imperial Metals Corp. *		1,600		24,781
Inmet Mining Corp.		2,296		126,299
Ivanhoe Mines Ltd. *		1,500		17,508
Lake Shore Gold Corp. *		20,800		20,214
Lundin Mining Corp. *		26,209		127,351
Major Drilling Group International, Inc.		1,700		25,521
New Gold, Inc. *		6,900		62,864
Norbord, Inc. *		2,995		34,533
OceanaGold Corp. *		14,900		34,390
Osisko Mining Corp. *		4,400		45,298
PAN American Silver Corp.		2,600		50,560
SEMAFO, Inc.		4,500		22,868
Silver Standard Resources, Inc. *		2,000		28,891
Silver Wheaton Corp.		2,574		78,587
Silvercorp Metals., Inc.		3,200		22,060
Tahoe Resources., Inc. *		1,200		22,582
Taseko Mines Ltd. *		6,700		23,196
Thompson Creek Metals Co., Inc. *		12,817		76,421
West Fraser Timber Co., Ltd.		1,923		84,543
				1,767,917
Media 0.6%
Astral Media, Inc., Class A		2,452		121,179
Cineplex, Inc.		2,700		82,215
Cogeco Cable, Inc.		1,353		67,112
Corus Entertainment, Inc., Class B		3,983		98,219
Groupe Aeroplan, Inc.		11,400		146,561
Torstar Corp, Class B		2,706		28,105
				543,391
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Nordion, Inc.		2,500		22,827

See financial notes 45

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Real Estate 1.1%
Allied Properties Real Estate Investment Trust		1,600		44,412
Artis Real Estate Investment Trust		2,700		46,027
Boardwalk Real Estate Investment Trust		1,470		87,514
Calloway Real Estate Investment Trust		4,370		121,565
Canadian Apartment Properties Real Estate Investment Trust		3,275		77,014
Canadian Real Estate Investment Trust		2,332		91,335
Chartwell Seniors Housing Real Estate Investment Trust		8,908		84,044
Cominar Real Estate Investment Trust		3,192		77,873
Dundee Real Estate Investment Trust		1,826		68,171
Extendicare Real Estate Investment Trust		10,477		85,907
First Capital Realty, Inc.		2,779		51,706
FirstService Corp. *		1,600		43,731
InnVest Real Estate Investment Trust		12,523		64,526
Morguard REIT		2,600		44,454
Primaris Retail Real Estate Investment Trust		3,492		81,905
				1,070,184
Retailing 0.3%
Dollarama, Inc.		1,700		94,616
Reitmans (Canada) Ltd., Class A		4,425		68,087
RONA, Inc.		14,400		154,517
				317,220
Software & Services 0.1%
MacDonald, Dettwiler & Associates Ltd.		1,432		65,029
Open Text Corp. *		1,223		68,563
				133,592
Technology Hardware & Equipment 0.0%
Sierra Wireless, Inc. *		3,500		23,809
Telecommunication Services 0.2%
Bell Aliant, Inc.		1,400		37,074
Manitoba Telecom Services, Inc.		3,600		124,999
				162,073
Transportation 0.1%
TransForce, Inc.		6,700		121,202
Utilities 0.4%
Atlantic Power Corp. *		4,300		61,376
Capital Power Corp.		3,700		87,720
Just Energy Group, Inc.		10,100		132,813
Northland Power, Inc.		3,900		69,681
				351,590
				9,423,017
Denmark 1.1%
Banks 0.1%
Sydbank A/S *		6,145		106,873
Capital Goods 0.2%
NKT Holding A/S		1,621		79,103
Rockwool International A/S, B Shares		544		51,908
Solar A/S, B Shares		569		30,690
				161,701
Consumer Durables & Apparel 0.0%
Pandora A/S (c)		3,537		37,369
Food, Beverage & Tobacco 0.0%
East Asiatic Co., Ltd. A/S		1,067		29,367
Health Care Equipment & Services 0.2%
Coloplast A/S, Class B		498		92,197
GN Store Nord A/S		7,247		81,302
William Demant Holding A/S *		335		31,651
				205,150
Insurance 0.2%
Topdanmark A/S *		704		120,785
Tryg A/S		1,960		109,434
				230,219
Materials 0.1%
Novozymes A/S, B Shares		5,176		135,832
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
H. Lundbeck A/S		3,442		69,008
Software & Services 0.1%
SimCorp A/S		272		48,518
Transportation 0.1%
D/S Norden A/S		1,532		43,480
				1,067,517
Finland 1.6%
Capital Goods 0.6%
Cargotec Corp., B Shares		2,855		98,306
Cramo Oyj		2,406		36,893
Konecranes Oyj		4,426		134,836
Outotec Oyj		2,401		129,294
Ramirent Oyj		5,264		49,683
Uponor Oyj		7,118		93,154
				542,166
Consumer Durables & Apparel 0.1%
Amer Sports Oyj, A Shares		8,444		120,140
Health Care Equipment & Services 0.0%
Oriola-KD Oyj, B Shares		8,602		20,769
Materials 0.4%
Huhtamaki Oyj		7,992		126,836
Kemira Oyj		7,048		89,439
Metsa Board Oyj, B Shares *		36,581		100,648
Tikkurila Oyj		1,806		36,689
				353,612
Media 0.1%
Sanoma Oyj (c)		7,268		76,002
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Orion Oyj, Class B		6,574		134,101
Real Estate 0.1%
Citycon Oyj		10,914		36,155
Sponda Oyj		20,462		82,209
				118,364
Retailing 0.1%
Stockmann Oyj Abp, B Shares		2,569		57,490
Software & Services 0.1%
Tieto Oyj		6,972		122,779
				1,545,423

46 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
France 3.9%
Automobiles & Components 0.1%
Plastic Omnium S.A.		2,285		59,771
Societe Fonciere Financiere et de Participations (FFP)		692		27,003
				86,774
Capital Goods 0.1%
Faiveley Transport		346		19,122
Manitou BF *		1,239		27,189
Mersen S.A.		1,688		55,950
Saft Groupe S.A.		1,730		47,768
				150,029
Commercial & Professional Supplies 0.7%
Assystem		1,323		27,992
Bureau Veritas S.A.		1,453		129,443
Derichebourg S.A.		25,932		76,822
Edenred		3,824		122,167
Societe BIC S.A.		1,577		173,712
Teleperformance		4,953		132,723
				662,859
Consumer Durables & Apparel 0.4%
Beneteau		2,290		24,753
Hermes International		328		115,929
Nexity S.A.		4,298		122,396
SEB S.A.		1,304		103,993
				367,071
Consumer Services 0.1%
Club Mediterranee S.A. *		3,126		59,948
Euro Disney S.C.A. - Reg’d *		6,211		33,419
				93,367
Energy 0.2%
Bourbon S.A.		3,882		113,705
Etablissements Maurel et Prom		3,747		62,403
				176,108
Food, Beverage & Tobacco 0.1%
Remy Cointreau S.A.		605		67,470
Vilmorin & Cie		262		28,278
				95,748
Health Care Equipment & Services 0.2%
bioMerieux		729		59,742
Medica S.A.		3,315		51,268
Orpea		1,571		52,701
				163,711
Insurance 0.1%
Euler Hermes S.A.		1,016		72,004
Materials 0.1%
Ciments Francais S.A.		782		50,134
SA des Ciments Vicat		1,154		66,312
Sequana		9,052		42,221
				158,667
Media 0.3%
Havas S.A.		25,602		144,911
Ipsos		1,511		49,012
JC Decaux S.A. *		2,436		69,156
Societe d’Edition de Canal +		5,491		31,126
				294,205
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Ipsen S.A.		1,239		33,025
Virbac S.A.		194		32,629
				65,654
Real Estate 0.3%
Gecina S.A.		1,588		147,312
Mercialys		1,939		38,758
Societe de la Tour Eiffel		646		33,658
Societe Immobilliere de Location pour l’Industrie et le Commerce		710		74,923
				294,651
Retailing 0.1%
CFAO		2,041		87,950
Semiconductors & Semiconductor Equipment 0.0%
Silicon-On-Insulator Technologies *		6,116		25,918
Software & Services 0.4%
Alten		1,191		34,651
Altran Technologies S.A. *		11,507		67,753
Dassault Systemes S.A.		1,180		114,507
Groupe Steria S.C.A.		3,155		62,473
UbiSoft Entertainment S.A. *		14,334		98,812
				378,196
Technology Hardware & Equipment 0.2%
Bull *		9,830		36,553
Gemalto N.V.		2,328		173,423
Ingenico S.A.		733		38,556
				248,532
Telecommunication Services 0.1%
Iliad S.A.		512		65,936
Transportation 0.2%
Aeroports de Paris		1,674		140,880
Bollore		260		56,355
				197,235
Utilities 0.1%
Rubis		1,663		90,438
Sechilienne-Sidec		2,678		40,884
				131,322
				3,815,937
Germany 3.9%
Automobiles & Components 0.2%
ElringKlinger AG		1,258		36,441
Leoni AG		2,296		117,994
				154,435
Banks 0.1%
Aareal Bank AG *		4,601		88,866
comdirect bank AG		2,083		23,825
				112,691
Capital Goods 1.1%
Bauer AG		1,730		42,714
BayWa AG		2,294		83,709
Deutz AG *		9,206		65,338
Duerr AG		389		24,586

See financial notes 47

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Gildemeister AG *		4,685		95,999
Heidelberger Druckmaschinen AG (c)*		64,334		112,474
Indus Holding AG		816		25,433
Kloeckner & Co., SE		5,970		81,253
Krones AG		1,007		55,802
KUKA AG *		2,007		47,796
MTU Aero Engines Holding AG		1,956		164,807
Nordex AG *		9,388		41,762
Pfeiffer Vacuum Technology AG		412		50,020
Rheinmetall AG		1,086		61,027
SGL Carbon SE *		2,061		94,198
Vossloh AG		679		66,258
				1,113,176
Consumer Durables & Apparel 0.1%
Gerry Weber International AG		968		41,116
Puma SE		220		77,202
				118,318
Food, Beverage & Tobacco 0.1%
Suedzucker AG		4,260		129,726
Health Care Equipment & Services 0.1%
Rhoen-klinikum AG		4,591		129,197
Materials 0.2%
Fuchs Petrolub AG		1,194		66,624
H&R AG		1,953		39,298
Wacker Chemie AG (c)		1,284		103,533
				209,455
Media 0.4%
Axel Springer AG (c)		3,268		149,103
GfK SE		512		27,207
Kabel Deutschland Holding AG *		2,587		163,092
Sky Deutschland AG *		11,138		28,520
				367,922
Pharmaceuticals, Biotechnology & Life Sciences 0.3%
QIAGEN N.V. *		9,158		151,424
Stada Arzneimittel AG		4,414		146,541
				297,965
Real Estate 0.4%
Alstria Office REIT-AG		3,358		35,800
Deutsche Euroshop AG		2,551		92,838
Deutsche Wohnen AG		3,956		58,202
DIC Asset AG		4,428		41,267
Gagfah S.A. *		10,629		95,331
IVG Immobilien AG *		21,893		50,710
				374,148
Retailing 0.2%
Fielmann AG		448		43,419
Praktiker AG		53,536		119,934
				163,353
Semiconductors & Semiconductor Equipment 0.2%
Aixtron SE		3,448		62,999
Kontron AG		4,540		32,884
Q-Cells SE (c)*		135,467		24,419
SMA Solar Technology AG		620		25,989
Solarworld AG (c)		18,150		38,276
				184,567
Software & Services 0.2%
Bechtle AG		1,333		60,043
Software AG		2,019		70,574
United Internet AG - Reg’d		3,064		60,635
				191,252
Technology Hardware & Equipment 0.1%
Jenoptik AG *		4,031		33,200
Transportation 0.2%
Fraport AG		2,233		145,200
Hamburger Hafen und Logistik AG		1,552		51,481
Sixt AG		1,279		26,571
				223,252
				3,802,657
Greece 0.3%
Banks 0.0%
TT Hellenic Postbank S.A. *		24,275		12,862
Diversified Financials 0.1%
Hellenic Exchanges S.A.		7,722		26,786
Marfin Investment Group S.A. *		75,562		29,604
				56,390
Energy 0.1%
Hellenic Petroleum S.A.		4,094		30,091
Motor Oil (Hellas) Corinth Refineries S.A.		10,268		84,255
				114,346
Materials 0.1%
Mytilineos Holdings S.A. *		16,793		57,355
Titan Cement Co.		2,776		53,863
				111,218
				294,816
Hong Kong 5.6%
Automobiles & Components 0.1%
Geely Automobile Holdings Ltd.		90,000		33,292
Minth Group Ltd.		32,000		40,418
Xinyi Glass Holdings Co., Ltd.		94,000		60,435
				134,145
Banks 0.2%
Dah Sing Banking Group Ltd.		27,000		27,903
Dah Sing Financial Group		13,750		49,123
Wing Hang Bank Ltd.		11,000		116,620
				193,646
Capital Goods 0.4%
China High Speed Transmission Equipment Group Co., Ltd.		114,000		54,738
China Rongsheng Heavy Industries Group Holdings Ltd.		81,000		20,101
Haitian International Holdings Ltd.		23,000		26,462
Hopewell Holdings Ltd.		32,000		85,764
Johnson Electric Holdings Ltd.		102,500		64,178
Lonking Holdings Ltd.		60,000		21,666
NWS Holdings Ltd.		46,000		69,112
Shun Tak Holdings Ltd.		147,000		60,656
Singamas Container Holdings Ltd.		82,000		24,435
				427,112

48 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Consumer Durables & Apparel 0.4%
Anta Sports Products Ltd.		35,000		34,536
Bosideng International Holdings Ltd.		142,000		40,802
China Dongxiang Group Co.		345,000		46,442
Li Ning Co., Ltd.		48,500		44,507
Ports Design Ltd. (a)(b)		21,000		30,856
Skyworth Digital Holdings Ltd.		130,000		52,926
Techtronic Industries Co., Ltd.		86,000		103,223
Texwinca Holdings Ltd.		50,000		61,103
				414,395
Consumer Services 0.5%
Cafe De Coral Holdings Ltd.		16,000		43,831
China Travel International Investment Hong Kong Ltd.		154,000		30,847
Galaxy Entertainment Group Ltd. *		11,000		34,292
Sands China Ltd.		25,600		100,231
Shangri-La Asia Ltd.		48,000		101,583
SJM Holdings Ltd.		52,000		113,625
Wynn Macau Ltd.		17,200		54,979
				479,388
Diversified Financials 0.0%
Value Partners Group Ltd.		37,000		22,472
Energy 0.1%
Hidili Industry International Development Ltd.		57,000		19,432
Mongolia Energy Co., Ltd. *		419,000		34,928
				54,360
Food, Beverage & Tobacco 0.5%
China Green (Holdings) Ltd.		74,000		21,535
China Mengniu Dairy Co., Ltd.		37,000		113,908
China Yurun Food Group Ltd.		64,000		81,276
Global Bio-chem Technology Group Co., Ltd.		184,000		36,098
Tingyi (Cayman Islands) Holding Corp.		44,000		116,908
Want Want China Holdings Ltd.		111,000		135,489
				505,214
Household & Personal Products 0.2%
Hengan International Group Co., Ltd.		14,000		147,933
Materials 0.5%
China Shanshui Cement Group		68,000		54,794
China Zhongwang Holdings Ltd.		177,600		72,864
CST Mining Group Ltd. *		1,624,000		25,223
Fosun International		156,000		92,535
Fufeng Group Ltd.		53,000		21,406
Fushan International Energy Group Ltd.		134,000		46,699
Huabao International Holdings Ltd. (a)		40,000		14,568
Lee & Man Paper Manufacturing Ltd.		93,000		43,387
Nine Dragons Paper Holdings Ltd.		57,000		46,729
Samling Global Ltd.		360,000		34,119
				452,324
Media 0.1%
Television Broadcasts Ltd.		15,000		109,890
Real Estate 1.3%
Agile Property Holdings Ltd.		70,000		91,076
C C Land Holdings Ltd.		95,000		20,027
Champion Real Estate Investment Trust		168,000		73,217
Country Garden Holdings Co. *		164,000		70,728
Evergrande Real Estate Group Ltd.		124,000		71,187
Glorious Property Holdings Ltd *		197,000		29,959
Great Eagle Holdings Ltd.		36,000		105,730
Greentown China Holdings Ltd.		69,500		48,204
Hopson Development Holdings Ltd.		69,000		41,406
Hysan Development Co., Ltd.		33,000		149,175
K Wah International Holdings Ltd.		57,000		23,976
Kaisa Group Holdings., Ltd. *		154,000		32,339
Kowloon Development Co., Ltd.		33,000		34,559
KWG Property Holding Ltd.		62,500		40,929
Lai Sun Development Co., Ltd. *		1,756,000		27,263
Longfor Properties Co., Ltd. *		17,500		27,645
Midland Holdings Ltd.		52,000		26,076
New World China Land Ltd.		180,400		55,381
Renhe Commercial Holdings (c)		414,000		23,844
Shimao Property Holdings Ltd.		83,500		109,683
Shui On Land Ltd.		207,900		86,796
Soho China Ltd.		116,500		90,310
				1,279,510
Retailing 0.1%
Giordano International Ltd.		63,000		54,775
Lifestyle International Holdings Ltd.		13,500		31,465
Luk Fook Holdings International Ltd.		9,000		25,562
Parkson Retail Group Ltd.		27,500		30,538
				142,340
Semiconductors & Semiconductor Equipment 0.3%
ASM Pacific Technology Ltd.		5,400		72,955
GCL-Poly Energy Holdings Ltd. (c)		166,000		42,572
Semiconductor Manufacturing International Corp. *		2,594,000		128,495
				244,022
Software & Services 0.2%
Alibaba.com Ltd. *		15,500		26,573
Tencent Holdings Ltd.		4,600		143,905
				170,478
Technology Hardware & Equipment 0.5%
AAC Technologies Holdings, Inc.		16,000		46,983
BYD Electronic International Co., Ltd. *		80,000		23,961
Digital China Holdings Ltd.		53,700		101,427
Foxconn International Holdings Ltd. *		174,000		82,280
Ju Teng International Holdings Ltd.		92,000		19,171
Kingboard Laminates Holding Ltd.		79,500		36,972
TPV Technology Ltd.		180,000		41,110
VTech Holdings Ltd.		13,000		145,448
				497,352
Telecommunication Services 0.1%
Hutchison Telecommunications Hong Kong Holdings Ltd.		84,000		37,322
SmarTone Telecommunications Holdings Ltd.		13,000		24,273
				61,595
Transportation 0.0%
Hopewell Highway Infrastructure Ltd.		49,900		26,007
Utilities 0.1%
China Gas Holdings Ltd.		104,000		51,508
ENN Energy Holdings Ltd.		20,000		69,877
				121,385
				5,483,568

See financial notes 49

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Ireland 0.4%
Capital Goods 0.1%
Grafton Group plc		10,194		44,543
Kingspan Group plc		9,560		100,130
				144,673
Consumer Services 0.1%
Paddy Power plc		747		48,812
Food, Beverage & Tobacco 0.2%
C&C Group plc		21,861		109,644
Glanbia plc		7,008		53,247
				162,891
Health Care Equipment & Services 0.0%
United Drug plc		8,117		24,921
Pharmaceuticals, Biotechnology & Life Sciences 0.0%
Elan Corp. plc *		2,226		30,688
				411,985
Israel 1.1%
Banks 0.3%
First International Bank of Israel Ltd. *		2,911		33,062
Israel Discount Bank, Class A *		108,002		140,062
Mizrahi Tefahot Bank Ltd. *		8,995		81,052
				254,176
Capital Goods 0.1%
Clal Industries Ltd.		8,839		32,524
Elbit Systems Ltd.		1,769		64,536
				97,060
Energy 0.2%
Oil Refineries Ltd. *		202,738		117,986
Paz Oil Co., Ltd.		345		47,012
				164,998
Food & Staples Retailing 0.0%
Shufersal Ltd.		12,921		45,460
Food, Beverage & Tobacco 0.1%
Osem Investments Ltd.		1,786		27,236
Strauss Group Ltd. *		3,085		37,296
				64,532
Insurance 0.1%
Clal Insurance Enterprise Holdings Ltd. *		3,027		47,411
Harel Insurance Investments & Finances Service Ltd.		982		37,447
Migdal Insurance & Financial Holdings Ltd. *		23,964		35,242
				120,100
Real Estate 0.1%
Azrieli Group		1,704		41,810
Gazit-Globe Ltd.		4,828		51,585
				93,395
Software & Services 0.1%
NICE Systems Ltd. *		1,889		72,420
Telecommunication Services 0.1%
Partner Communications Co., Ltd.		19,198		143,489
				1,055,630
Italy 2.7%
Automobiles & Components 0.2%
Brembo S.p.A.		2,675		30,340
Piaggio & C. S.p.A.		17,176		51,926
Pirelli & C. S.p.A.		12,099		147,422
				229,688
Banks 0.2%
Banca Carige S.p.A.		82,476		86,219
Banca Piccolo Credito Valtellinese Scarl *		14,468		21,697
Credito Emiliano S.p.A.		12,096		49,522
				157,438
Capital Goods 0.4%
Astaldi S.p.A.		5,676		43,974
C.I.R. S.p.A. - Compagnie Industriali Riunite		53,010		72,395
Danieli S.p.A. - Officine Meccaniche Danieli & C.		1,126		31,960
Danieli S.p.A. - Officine Meccaniche Danieli & C. - RSP		2,943		43,611
Impregilo S.p.A.		33,075		130,703
Interpump Group S.p.A.		4,455		39,781
Maire Tecnimont S.p.A.		39,196		34,310
Trevi Finanziaria S.p.A.		4,236		23,871
				420,605
Consumer Durables & Apparel 0.3%
De’Longhi S.p.A.		2,378		33,525
Delclima *		10,796		6,332
Geox S.p.A.		9,024		29,088
Indesit Co., S.p.A.		10,659		62,005
Safilo Group S.p.A. *		10,182		66,813
Tod’s S.p.A.		436		50,237
				248,000
Consumer Services 0.2%
Autogrill S.p.A.		13,012		129,563
Lottomatica S.p.A. *		5,038		93,204
				222,767
Diversified Financials 0.0%
Azimut Holding S.p.A.		3,783		37,165
Energy 0.2%
ERG S.p.A.		12,271		92,476
Saras S.p.A. *		99,508		125,716
				218,192
Food & Staples Retailing 0.0%
Marr S.p.A.		3,249		35,181
Food, Beverage & Tobacco 0.2%
Davide Campari-Milano S.p.A		9,551		67,526
Parmalat S.p.A.		35,199		79,616
				147,142
Health Care Equipment & Services 0.1%
Sorin S.p.A. *		23,497		44,112

50 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Insurance 0.2%
Mediolanum S.p.A		21,142		86,691
Milano Assicurazioni S.p.A. *		192,714		64,213
Societa Cattolica di Assicurazioni S.c.r.l.		1,128		21,181
				172,085
Materials 0.0%
Italmobiliare S.p.A.		2,335		31,181
Media 0.1%
Gruppo Editoriale L’Espresso S.p.A.		25,113		33,928
Mondadori (Arnoldo) Editore S.p.A.		22,888		33,815
				67,743
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Recordati S.p.A.		6,853		47,714
Real Estate 0.1%
Beni Stabili S.p.A.		125,785		69,869
Prelios S.p.A *		293,390		61,830
				131,699
Transportation 0.1%
Alitalia S.p.A. (a)(b)*		14,782		—
Ansaldo STS S.p.A.		5,431		47,997
Autostrada Torino-Milano S.p.A.		6,684		36,210
Societa Iniziative Autostradali e Servizi S.p.A.		6,327		39,642
				123,849
Utilities 0.3%
ACEA S.p.A.		6,740		38,988
Edison S.p.A. *		83,036		94,577
Hera S.p.A.		57,256		86,094
Iren S.p.A.		98,078		64,896
				284,555
				2,619,116
Japan 32.0%
Automobiles & Components 2.2%
Akebono Brake Industry Co., Ltd.		9,900		49,819
Calsonic Kansei Corp.		11,000		61,883
EXEDY Corp.		2,000		56,210
F.C.C. Co., Ltd.		1,300		26,545
Futaba Industrial Co., Ltd.		12,100		64,591
Keihin Corp.		3,300		56,123
Koito Manufacturing Co., Ltd.		6,000		92,844
KYB Co., Ltd.		9,000		51,048
Musashi Seimitsu Industry Co., Ltd.		2,400		56,186
NGK Spark Plug Co., Ltd.		8,000		114,211
NHK Spring Co., Ltd.		14,000		146,130
Nifco, Inc.		2,400		64,560
Nissan Shatai Co., Ltd.		6,000		63,328
Nissin Kogyo Co., Ltd.		4,500		73,144
Press Kogyo Co., Ltd.		7,000		41,602
Riken Corp.		6,000		25,311
Sanden Corp.		16,000		52,768
Showa Corp.		6,400		55,863
Stanley Electric Co., Ltd.		8,400		128,685
Sumitomo Rubber Industries Ltd.		10,400		143,113
T RAD Co., Ltd.		7,000		27,369
Tachi-S Co., Ltd.		2,500		47,794
Takata Corp.		3,500		85,818
Tokai Rika Co., Ltd.		3,800		70,783
Tokai Rubber Industries Ltd.		3,500		41,406
Toyo Tire & Rubber Co., Ltd.		17,000		46,345
Toyoda Gosei Co., Ltd.		5,800		118,215
Toyota Boshoku Corp.		10,400		128,051
TS Tech Co., Ltd.		3,700		72,692
Unipres Corp.		1,600		50,283
Yorozu Corp.		1,600		32,225
				2,144,945
Banks 1.9%
Aozora Bank Ltd.		22,000		56,425
Bank of The Ryukyus Ltd.		1,900		24,484
Kiyo Holdings, Inc.		28,000		40,146
Sapporo Hokuyo Holdings, Inc.		25,500		89,075
Senshu Ikeda Holdings, Inc.		47,000		62,557
Suruga Bank Ltd.		11,000		109,712
The 77 Bank Ltd.		28,000		111,652
The Awa Bank Ltd.		10,000		59,034
The Bank of Iwate Ltd.		600		26,213
The Bank of Nagoya Ltd.		9,000		28,959
The Daishi Bank Ltd.		12,000		37,394
The Eighteenth Bank Ltd.		8,000		22,540
The Higo Bank Ltd.		11,000		61,357
The Hiroshima Bank Ltd.		28,000		113,752
The Hokkoku Bank Ltd.		19,000		67,382
The Hyakugo Bank Ltd.		11,000		45,675
The Hyakujushi Bank Ltd.		11,000		46,759
The Iyo Bank Ltd.		17,000		141,076
The Juroku Bank Ltd.		14,000		44,065
The Kagoshima Bank Ltd.		10,000		60,210
The Keiyo Bank Ltd.		12,000		55,828
The Musashino Bank Ltd.		2,200		71,680
The Nanto Bank Ltd.		11,000		49,168
The Nishi-Nippon City Bank Ltd.		51,000		134,891
The Ogaki Kyoritsu Bank Ltd.		11,000		37,638
The San-in Godo Bank Ltd.		14,000		100,659
The Shiga Bank Ltd.		13,000		74,275
The Toho Bank Ltd.		9,000		28,948
The Tokyo Tomin Bank Ltd.		2,100		23,972
The Yamagata Bank Ltd.		6,000		27,598
Tomony Holdings, Inc.		6,000		27,432
				1,880,556
Capital Goods 6.2%
Aica Kogyo Co., Ltd.		3,500		51,285
Aida Engineering Ltd.		4,000		22,496
Amano Corp.		4,700		42,049
Asahi Diamond Industrial Co., Ltd.		2,000		22,119
Central Glass Co., Ltd.		16,000		65,581
Chiyoda Corp.		9,000		108,377
CKD Corp.		4,400		32,568
Comsys Holdings Corp.		9,900		99,796
Daifuku Co., Ltd.		11,500		61,445
Daihen Corp.		8,000		26,826
Daiichi Jitsugyo Co., Ltd.		5,000		25,598
Ebara Corp.		36,000		145,646
Fujitec Co., Ltd.		6,000		37,411
Furukawa Co., Ltd. *		48,000		45,475
Futaba Corp.		2,500		38,953
Glory Ltd.		3,900		83,873
GS Yuasa Corp.		17,000		87,496
Hino Motors Ltd.		20,000		141,443
Hitachi Cable Ltd. *		27,000		63,132

See financial notes 51

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Hitachi Construction Machinery Co., Ltd.		7,200		155,708
Hitachi Koki Co., Ltd.		4,500		40,105
Hitachi Zosen Corp.		76,000		102,328
Hoshizaki Electric Co., Ltd.		3,600		86,325
Inaba Denki Sangyo Co., Ltd.		1,000		29,529
Inabata & Co., Ltd.		5,200		34,175
Iseki & Co., Ltd.		20,000		47,580
Iwatani Corp.		17,000		59,759
JFE Shoji Trade Corp.		14,000		69,472
Kamei Corp.		5,000		70,780
Kanamoto Co., Ltd.		3,000		33,071
Kandenko Co., Ltd.		13,000		57,193
Kanematsu Corp. *		120,000		143,306
Keihan Electric Railway Co., Ltd.		18,000		83,547
Kitz Corp.		10,000		39,161
Komori Corp.		7,700		67,350
Kumagai Gumi Co., Ltd. *		43,000		44,058
Kurita Water Industries Ltd.		4,800		117,619
Kuroda Electric Co., Ltd.		3,400		34,759
Kyokuto Kaihatsu Kogyo Co., Ltd.		2,700		25,925
Kyowa Exeo Corp.		9,200		83,687
Mabuchi Motor Co., Ltd.		1,800		75,302
Maeda Corp.		21,000		87,953
Maeda Road Construction Co., Ltd.		6,000		72,507
Makino Milling Machine Co., Ltd.		5,000		36,178
Max Co., Ltd.		2,000		24,954
Meidensha Corp.		13,000		46,303
Minebea Co., Ltd.		32,000		144,993
Mirait Holdings Corp.		5,000		35,983
Misumi Group, Inc.		1,600		37,429
Mitsui Matsushima Co., Ltd.		13,000		25,415
Miura Co., Ltd.		1,700		44,028
Mori Seiki Co., Ltd.		6,200		61,793
Nabtesco Corp.		2,000		42,695
Nachi-Fujikoshi Corp.		10,000		49,918
Nagase & Co., Ltd.		8,000		96,856
NEC Networks & System Integration Corp.		2,600		38,697
Nichias Corp.		8,000		41,521
Nichiden Corp.		1,000		26,323
Nippo Corp.		7,000		72,021
Nippon Carbon Co., Ltd.		10,000		27,197
Nippon Thompson Co., Ltd.		4,000		22,119
Nishimatsu Construction Co., Ltd.		37,000		79,607
Nisshinbo Holdings, Inc.		12,000		105,504
Nitta Corp.		1,500		28,481
Nitto Boseki Co., Ltd.		13,000		49,370
Noritake Co., Ltd.		6,000		17,452
Noritz Corp.		3,300		58,383
Oiles Corp.		1,600		32,477
Okuma Corp.		7,000		55,042
Okumura Corp.		14,000		51,214
OSG Corp.		3,200		50,507
Penta-Ocean Construction Co., Ltd.		20,500		60,241
Ryobi Ltd.		13,000		46,766
Sanki Engineering Co., Ltd.		5,000		26,176
Sankyo-Tateyama Holdings, Inc. *		34,000		69,794
Sanwa Holdings Corp.		17,000		64,293
Sasebo Heavy Industries Co., Ltd.		14,000		21,021
Shima Seiki Mfg., Ltd.		2,200		40,809
ShinMaywa Industries Ltd.		9,000		43,541
Sho-Bond Holdings Co., Ltd.		1,100		27,821
Sintokogio Ltd.		2,800		29,397
Sodick Co., Ltd.		4,800		24,213
Sumikin Bussan Corp.		21,000		53,751
Sumitomo Mitsui Construction Co., Ltd. *		41,800		35,056
Swcc Showa Holdings Co., Ltd.		37,000		33,650
Tadano Ltd.		7,000		51,919
Taihei Dengyo Kaisha Ltd.		4,000		33,381
Taihei Kogyo Co., Ltd.		5,000		26,238
Taikisha Ltd.		2,400		47,879
Takara Standard Co., Ltd.		4,000		29,665
Takasago Thermal Engineering Co., Ltd.		5,000		39,283
Tekken Corp.		20,000		29,209
The Japan Steel Works Ltd.		15,000		91,240
The Nippon Road Co., Ltd.		6,000		23,515
The Nippon Signal Co., Ltd.		5,200		33,164
THK Co., Ltd.		6,100		121,987
TOA Corp.		22,000		39,820
Tobishima Corp. *		20,600		23,247
Toda Corp.		18,000		57,506
Toshiba Machine Co., Ltd.		5,000		27,172
Toshiba Plant Systems & Services Corp.		3,000		31,770
Totetsu Kogyo Co., Ltd.		3,000		32,073
TOTO Ltd.		20,000		147,979
Toyo Construction Co., Ltd.		28,000		27,282
Toyo Engineering Corp.		10,000		45,289
Toyo Tanso Co., Ltd.		600		21,897
Tsubakimoto Chain Co.		10,000		60,758
Ushio, Inc.		5,700		74,358
Yamazen Corp.		5,300		47,761
Yokogawa Bridge Holdings Corp.		4,000		27,508
Yuasa Trading Co., Ltd.		24,000		41,596
Yurtec Corp.		4,000		19,003
				6,094,256
Commercial & Professional Supplies 0.5%
Aeon Delight Co., Ltd.		1,300		30,266
Daiseki Co., Ltd.		1,400		24,172
Duskin Co., Ltd.		4,000		77,448
Kokuyo Co., Ltd.		9,700		72,754
Meitec Corp.		2,400		49,323
Nissha Printing Co., Ltd. *		4,000		45,201
Okamura Corp.		6,000		44,284
Park24 Co., Ltd.		4,500		61,937
Sohgo Security Services Co., Ltd.		5,700		65,570
Toppan Forms Co., Ltd.		4,400		39,571
				510,526
Consumer Durables & Apparel 1.4%
Alpine Electronics, Inc.		3,300		43,343
Asics Corp.		7,000		75,362
Foster Electric Co., Ltd.		1,800		26,768
Funai Electric Co., Ltd.		1,700		31,371
Gunze Ltd.		21,000		57,310
Heiwa Corp.		1,900		39,588
JVC KENWOOD Holdings, Inc.		16,960		72,296
Misawa Homes Co., Ltd. *		8,900		115,893
Onward Holdings Co., Ltd.		14,000		109,478
PanaHome Corp.		7,000		46,084
Pioneer Corp. *		24,400		123,137

52 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Rinnai Corp.		1,300		94,710
Sangetsu Co., Ltd.		2,000		52,242
Sanyo Shokai Ltd.		10,000		28,341
Seiko Holdings Corp.		21,000		53,108
Shimano, Inc.		2,100		138,083
Tamron Co., Ltd.		1,200		36,160
Token Corp.		750		27,240
Tomy Co., Ltd.		6,800		51,149
Unitika Ltd. *		75,000		44,988
Wacoal Holdings Corp.		7,000		81,192
				1,347,843
Consumer Services 0.5%
Accordia Golf Co., Ltd.		84		65,181
Colowide Co., Ltd.		3,500		25,768
Doutor Nichires Holdings Co., Ltd.		4,200		57,141
H.I.S. Co., Ltd.		1,900		61,499
MOS Food Services, Inc.		1,600		30,957
Resorttrust, Inc.		3,100		51,227
Round One Corp.		6,000		39,254
Saizeriya Co., Ltd.		2,400		37,239
Tokyo Dome Corp. *		16,000		53,193
Yoshinoya Holdings Co., Ltd.		25		32,557
Zensho Holdings Co., Ltd.		4,100		51,058
				505,074
Diversified Financials 1.1%
Acom Co., Ltd. *		3,400		73,107
Aeon Credit Service Co., Ltd.		7,000		122,026
Aiful Corp. (c)*		69,500		150,936
Century Tokyo Leasing Corp.		2,200		44,004
Fuyo General Lease Co., Ltd.		1,700		55,305
Hitachi Capital Corp.		3,800		62,817
IBJ Leasing Co., Ltd.		2,000		54,291
Jaccs Co., Ltd.		19,000		68,323
JAFCO Co., Ltd.		1,700		40,180
Japan Securities Finance Co., Ltd.		7,100		36,696
Matsui Securities Co., Ltd.		4,800		29,342
Mitsubishi UFJ Lease & Finance Co., Ltd.		2,650		110,102
Monex Group, Inc.		129		25,619
Okasan Securities Group, Inc.		8,000		31,634
Orient Corp. *		53,500		69,025
Ricoh Leasing Co., Ltd.		1,100		24,916
Tokai Tokyo Financial Holdings, Inc.		14,000		49,861
				1,048,184
Energy 0.2%
AOC Holdings, Inc.		10,000		55,775
Japan Petroleum Exploration Co.		2,300		104,930
Shinko Plantech Co., Ltd.		3,400		28,712
				189,417
Food & Staples Retailing 0.8%
Ain Pharmaciez, Inc.		700		37,429
Arcs Co., Ltd.		3,600		77,385
Cawachi Ltd.		1,900		45,741
cocokara fine, Inc.		1,800		56,147
Heiwado Co., Ltd.		2,800		39,812
Kato Sangyo Co., Ltd.		2,400		49,353
Matsumotokiyoshi Holdings Co., Ltd.		5,200		115,383
Ministop Co., Ltd.		1,700		29,990
Mitsubishi Shokuhin Co., Ltd.		1,500		38,737
Okuwa Co., Ltd.		3,000		41,073
Sugi Holdings Co., Ltd.		1,800		58,333
Sundrug Co., Ltd.		1,100		33,691
Tsuruha Holdings, Inc.		700		41,939
Valor Co., Ltd.		5,100		89,440
Yokohama Reito Co., Ltd.		3,000		23,426
				777,879
Food, Beverage & Tobacco 2.3%
Calbee, Inc.		800		48,413
Coca-Cola Central Japan Co., Ltd.		2,700		35,377
Coca-Cola West Co., Ltd.		5,800		104,692
DyDo Drinco, Inc.		700		28,466
Ezaki Glico Co., Ltd.		5,000		59,807
Fuji Oil Co., Ltd.		6,000		81,459
Hokuto Corp.		1,600		34,462
House Foods Corp.		4,000		67,368
Ito En Ltd.		5,900		106,716
Itoham Foods, Inc.		16,000		60,641
Kagome Co., Ltd.		4,600		92,585
Kewpie Corp.		9,400		141,008
Kikkoman Corp.		12,000		140,702
Marudai Food Co., Ltd.		7,000		27,055
Maruha Nichiro Holdings, Inc.		74,000		128,613
Megmilk Snow Brand Co., Ltd.		5,600		101,486
Mitsui Sugar Co., Ltd.		8,000		26,126
Morinaga Milk Industry Co., Ltd.		26,000		95,067
Nichirei Corp.		25,000		113,356
Nippon Flour Mills Co., Ltd.		8,000		36,197
Nippon Suisan Kaisha Ltd.		32,400		105,595
Prima Meat Packers Ltd.		30,000		58,768
Sakata Seed Corp.		2,000		28,032
Sapporo Holdings Ltd.		33,000		115,350
Takara Holdings, Inc.		11,000		74,695
The Nisshin Oillio Group Ltd.		17,000		71,401
Toyo Suisan Kaisha Ltd.		5,000		128,356
Yamazaki Baking Co., Ltd.		12,000		177,456
				2,289,249
Health Care Equipment & Services 0.4%
Hogy Medical Co., Ltd.		800		36,879
Miraca Holdings, Inc.		2,200		86,644
Nichii Gakkan Co.		2,300		31,506
Nihon Kohden Corp.		1,800		52,502
Nikkiso Co., Ltd.		4,000		42,003
Nipro Corp.		7,900		54,101
Ship Healthcare Holdings, Inc.		1,628		38,484
Sysmex Corp.		700		28,132
				370,251
Household & Personal Products 0.4%
Aderans Co., Ltd. *		1,900		21,186
Fancl Corp.		3,600		47,189
Kobayashi Pharmaceutical Co., Ltd.		1,000		50,223
Kose Corp.		1,900		43,911
Lion Corp.		17,000		98,209
Mandom Corp.		1,200		30,362
Pola Orbis Holdings, Inc.		1,600		48,682
Unicharm Corp.		2,000		111,883
				451,645
Insurance 0.1%
Sony Financial Holdings, Inc.		6,199		101,312

See financial notes 53

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Materials 4.1%
Adeka Corp.		8,200		75,335
Aichi Steel Corp.		8,000		38,139
Air Water, Inc.		12,000		151,263
Asahi Holdings, Inc.		1,400		27,512
Chugoku Marine Paints Ltd.		6,000		35,805
Daido Steel Co., Ltd.		23,000		142,676
Daio Paper Corp.		13,000		72,237
Earth Chemical Co., Ltd.		1,000		36,256
FP Corp.		900		58,122
Fuji Seal International, Inc.		1,300		24,929
Fujimi, Inc.		1,800		22,814
Furukawa-Sky Aluminum Corp.		10,000		29,750
Godo Steel Ltd.		19,000		43,526
Hitachi Chemical Co., Ltd.		8,600		159,423
Hitachi Metals Ltd.		10,000		124,552
Hokuetsu Kishu Paper Co., Ltd.		9,000		57,608
Ishihara Sangyo Kaisha Ltd. *		46,000		44,119
Kaneka Corp.		22,000		135,958
Kansai Paint Co., Ltd.		11,000		118,394
Kureha Corp.		12,000		57,292
Kyoei Steel Ltd.		2,800		52,524
Lintec Corp.		2,800		54,095
Maruichi Steel Tube Ltd.		4,500		99,030
Mitsubishi Paper Mills Ltd. *		35,000		32,808
Mitsubishi Steel Mfg. Co., Ltd.		12,000		37,899
Nakayama Steel Works Ltd. *		33,000		29,669
Nihon Parkerizing Co., Ltd.		2,000		29,869
Nippon Coke & Engineering Co., Ltd.		18,000		25,710
Nippon Denko Co., Ltd.		8,000		33,565
Nippon Kayaku Co., Ltd.		9,000		90,119
Nippon Light Metal Co., Ltd.		80,000		117,588
Nippon Metal Industry Co., Ltd. *		30,000		23,481
Nippon Paint Co., Ltd.		11,000		83,896
Nippon Shokubai Co., Ltd.		11,000		123,238
Nippon Soda Co., Ltd.		12,000		51,811
Nippon Yakin Kogyo Co., Ltd. *		21,500		33,912
Nissan Chemical Industries Ltd.		12,000		108,741
Nittetsu Mining Co., Ltd.		5,000		21,275
Nof Corp.		13,000		65,430
Okabe Co., Ltd.		5,600		35,333
Pacific Metals Co., Ltd.		15,000		72,582
Rengo Co., Ltd.		21,000		153,548
Sakai Chemical Industry Co., Ltd.		6,000		20,901
Sanyo Chemical Industries Ltd.		5,000		32,478
Sanyo Special Steel Co., Ltd.		11,000		51,058
Sumitomo Bakelite Co., Ltd.		15,000		77,918
Sumitomo Light Metal Industries Ltd.		60,000		61,391
Sumitomo Osaka Cement Co., Ltd.		38,000		115,188
The Nippon Synthetic Chemical Industry Co., Ltd.		4,000		23,661
Toagosei Co., Ltd.		17,000		73,599
Toho Zinc Co., Ltd.		10,000		42,868
Tokai Carbon Co., Ltd.		11,000		55,062
Tokuyama Corp. (c)		40,000		125,049
Tokyo Ohka Kogyo Co., Ltd.		2,600		55,919
Tokyo Rope Manufacturing Co., Ltd.		12,000		24,687
Tokyo Steel Manufacturing Co., Ltd.		13,500		102,441
Topy Industries Ltd.		18,000		55,479
Toyo Ink Mfg. Co., Ltd.		16,000		64,001
Toyo Kohan Co., Ltd.		6,000		21,552
Yamato Kogyo Co., Ltd.		3,000		85,365
Yodogawa Steel Works Ltd.		11,000		43,816
Zeon Corp.		11,000		95,856
				4,060,122
Media 0.6%
Asatsu-DK, Inc.		2,900		83,875
Avex Group Holdings, Inc.		2,100		23,844
Fuji Media Holdings, Inc.		44		74,221
Kadokawa Group Holdings, Inc.		1,700		48,894
Nippon Television Network Corp.		380		58,849
Shochiku Co., Ltd.		4,000		38,537
SKY Perfect JSAT Holdings, Inc.		65		28,309
Toei Co., Ltd.		6,000		31,254
Toho Co., Ltd.		6,800		121,883
Tokyo Broadcasting System Holdings, Inc.		3,000		40,678
TV Asahi Corp.		17		25,391
				575,735
Pharmaceuticals, Biotechnology & Life Sciences 1.0%
Dainippon Sumitomo Pharma Co., Ltd.		10,400		104,154
Hisamitsu Pharmaceutical Co., Inc.		1,500		66,745
Kaken Pharmaceutical Co., Ltd.		4,000		49,469
Kissei Pharmaceutical Co., Ltd.		3,000		54,609
Kyorin Co., Ltd.		4,000		76,784
Kyowa Hakko Kirin Co., Ltd.		14,000		147,160
Mitsubishi Tanabe Pharma Corp.		10,000		138,805
Mochida Pharmaceutical Co., Ltd.		5,000		58,138
Nippon Shinyaku Co., Ltd.		2,000		25,350
Rohto Pharmaceutical Co., Ltd.		5,000		64,044
Santen Pharmaceutical Co., Ltd.		2,800		117,177
Sawai Pharmaceutical Co., Ltd.		300		31,615
Tsumura & Co.		2,200		58,783
				992,833
Real Estate 0.8%
Aeon Mall Co., Ltd.		3,300		73,181
Daibiru Corp.		4,600		36,193
Daikyo, Inc.		18,000		46,947
Goldcrest Co., Ltd.		1,420		24,359
Heiwa Real Estate Co., Ltd.		19,500		49,259
Hulic Co., Ltd.		1,800		20,603
Kenedix, Inc. *		252		45,337
Leopalace21 Corp. *		54,800		170,264
Nomura Real Estate Holdings, Inc.		6,000		104,887
NTT Urban Development Corp.		74		56,766
Shoei Co., Ltd.		6,200		23,145
Tokyo Tatemono Co., Ltd. *		34,000		125,547
				776,488
Retailing 2.1%
ABC-Mart, Inc.		700		25,491
Alpen Co., Ltd.		1,800		36,669
AOKI Holdings, Inc.		2,400		47,064
Aoyama Trading Co., Ltd.		6,100		125,854
Arc Land Sakamoto Co., Ltd.		1,700		26,633
Autobacs Seven Co., Ltd.		2,000		95,986
Belluna Co., Ltd.		3,250		25,717
Bic Camera, Inc.		113		55,755
Canon Marketing Japan, Inc.		11,200		144,484
Chiyoda Co., Ltd.		2,000		46,609
Chori Co., Ltd.		21,000		28,860
DCM Holdings Co., Ltd.		8,600		65,296
Don Quijote Co., Ltd.		2,900		106,372

54 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Geo Corp.		66		79,900
Gulliver International Co., Ltd.		670		23,930
H2O Retailing Corp.		11,000		96,818
Hikari Tsushin, Inc.		1,300		42,367
Izumi Co., Ltd.		4,900		102,081
K’s Holdings Corp.		4,140		124,545
Kohnan Shoji Co., Ltd.		3,300		47,859
Komeri Co., Ltd.		3,300		92,456
Nissen Holdings Co., Ltd.		6,400		33,356
Nitori Holdings Co., Ltd.		900		82,819
Paltac Corp.		3,700		54,051
Parco Co., Ltd.		5,000		49,140
Ryohin Keikaku Co., Ltd.		2,000		108,581
Shimamura Co., Ltd.		1,000		113,246
The Daiei, Inc. *		10,700		35,312
USS Co., Ltd.		860		87,236
Xebio Co., Ltd.		1,900		52,298
				2,056,785
Semiconductors & Semiconductor Equipment 0.5%
Advantest Corp.		6,200		103,030
Dainippon Screen Manufacturing Co., Ltd.		9,000		81,260
Disco Corp.		600		35,851
Sanken Electric Co., Ltd.		13,000		62,477
Shinko Electric Industries Co., Ltd.		6,500		60,758
Sumco Corp. *		10,000		106,157
Tokyo Seimitsu Co., Ltd.		1,500		30,834
ULVAC, Inc. *		5,800		46,537
				526,904
Software & Services 1.3%
Capcom Co., Ltd.		2,300		52,520
Dena Co., Ltd.		1,686		52,905
Fuji Soft, Inc.		2,300		40,516
IT Holdings Corp.		11,000		140,860
Itochu Techno-Solutions Corp.		1,500		68,441
Konami Corp.		5,200		150,388
NEC Fielding Ltd.		2,000		25,106
Net One Systems Co., Ltd.		3,400		46,385
Nihon Unisys Ltd.		7,600		57,085
NS Solutions Corp.		1,300		25,261
NSD Co., Ltd.		2,600		21,499
OBIC Co., Ltd.		220		46,371
Oracle Corp., Japan		1,600		61,800
Otsuka Corp.		900		72,383
SCSK Corp.		2,476		38,559
So-net Entertainment Corp.		6		25,162
Square Enix Holdings Co., Ltd.		2,600		50,889
Transcosmos, Inc. *		2,600		37,046
Trend Micro, Inc.		4,500		136,512
Yahoo Japan Corp.		362		108,638
				1,258,326
Technology Hardware & Equipment 2.3%
Alps Electric Co., Ltd.		16,200		147,345
Anritsu Corp.		4,000		52,190
Azbil Corp.		4,600		98,550
Canon Electronics, Inc.		1,000		24,672
Citizen Holdings Co., Ltd.		21,000		131,885
Cmk Corp. *		3,700		19,025
Daiwabo Holdings Co., Ltd.		30,000		63,823
Denki Kogyo Co., Ltd.		6,000		27,176
Elematec Corp.		1,700		24,638
Hamamatsu Photonics K.K.		2,200		87,425
Hirose Electric Co., Ltd.		1,200		125,654
Hitachi High-Technologies Corp.		3,400		85,441
Hitachi Kokusai Electric, Inc.		6,000		56,401
Horiba Ltd.		1,700		59,609
Hosiden Corp.		11,700		77,588
Japan Aviation Electronics Industry Ltd.		4,000		36,716
Mitsumi Electric Co., Ltd. *		14,000		116,282
NEC Mobiling Ltd.		700		25,547
Nichicon Corp.		4,300		51,558
Nippon Chemi-Con Corp. *		11,000		41,471
Oki Electric Industry Co., Ltd. *		123,000		209,387
Riso Kagaku Corp.		1,700		24,864
Ryosan Co., Ltd.		3,400		64,404
Ryoyo Electro Corp.		4,700		52,013
Shimadzu Corp.		12,000		106,836
Star Micronics Co., Ltd.		3,300		34,995
Taiyo Yuden Co., Ltd.		11,000		117,645
Toshiba Tec Corp.		17,000		68,806
Uniden Corp.		6,000		22,099
Yaskawa Electric Corp.		10,000		87,088
Yokogawa Electric Corp.		12,200		117,104
				2,258,237
Telecommunication Services 0.0%
eAccess Ltd.		206		41,380
Transportation 1.2%
Daiichi Chuo Kisen Kaisha *		16,000		21,877
Fukuyama Transporting Co., Ltd.		9,000		49,151
Hitachi Transport System Ltd.		2,800		51,243
Iino Kaiun Kaisha Ltd.		5,300		26,573
Japan Airport Terminal Co., Ltd.		5,000		68,580
Kamigumi Co., Ltd.		14,000		112,518
Keikyu Corp.		17,000		145,943
Keisei Electric Railway Co., Ltd.		16,000		123,492
Kintetsu World Express, Inc.		800		28,642
Mitsubishi Logistics Corp.		9,000		98,723
Mitsui-Soko Co., Ltd.		7,000		30,451
Nippon Konpo Unyu Soko Co., Ltd.		4,000		51,966
Nishi-Nippon Railroad Co., Ltd.		11,000		51,559
NS United Kaiun Kaisha Ltd. *		14,000		22,472
Sankyu, Inc.		29,000		115,066
Senko Co., Ltd.		10,000		43,830
Sotetsu Holdings, Inc.		19,000		58,748
The Sumitomo Warehouse Co., Ltd.		13,000		62,114
				1,162,948
Utilities 0.1%
The Okinawa Electric Power Co., Inc.		2,100		83,666
				31,504,561
Netherlands 1.4%
Capital Goods 0.4%
Aalberts Industries N.V.		5,986		114,880
Arcadis N.V.		4,005		92,813
Grontmij N.V. CVA		4,428		30,521
Heijmans N.V. CVA		8,132		79,916
Wavin N.V. *		6,587		91,558
				409,688

See financial notes 55

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Consumer Durables & Apparel 0.1%
Accell Group		1,141		22,976
Koninklijke Ten Cate N.V.		2,273		69,399
TomTom N.V. (c)*		10,657		53,149
				145,524
Diversified Financials 0.0%
BinckBank N.V.		4,620		43,769
Food & Staples Retailing 0.0%
Sligro Food Group N.V.		779		23,669
Food, Beverage & Tobacco 0.1%
Koninklijike Wessanen N.V.		18,486		55,239
Health Care Equipment & Services 0.1%
Mediq N.V.		4,529		60,085
Insurance 0.0%
Brit Insurance Holdings N.V. (a)(b)*		571		9,915
Materials 0.0%
AMG Advanced Metallurgical Group N.V. *		2,759		28,110
Real Estate 0.4%
Eurocommercial Properties N.V.		2,574		90,304
Nieuwe Steen Investments N.V.		4,687		51,571
VastNed Retail N.V.		2,304		113,243
Wereldhave N.V.		1,900		133,705
				388,823
Semiconductors & Semiconductor Equipment 0.1%
ASM International N.V.		2,133		75,513
Software & Services 0.0%
Unit 4 N.V.		1,142		33,374
Technology Hardware & Equipment 0.1%
TKH Group N.V. CVA		1,840		48,575
Transportation 0.1%
Koninklijke Vopak N.V.		1,444		93,132
				1,415,416
New Zealand 0.6%
Consumer Services 0.1%
Sky City Entertainment Group Ltd.		27,934		87,659
Health Care Equipment & Services 0.0%
Fisher & Paykel Healthcare Corp., Ltd.		18,351		33,296
Materials 0.0%
Nuplex Industries Ltd.		13,191		28,861
Media 0.1%
Sky Network Television Ltd.		9,435		42,050
Real Estate 0.1%
AMP NZ Office Ltd.		37,946		30,102
Goodman Property Trust		33,832		28,766
Kiwi Income Property Trust		48,200		42,183
				101,051
Telecommunication Services 0.1%
Chorus Ltd. *		36,177		101,026
Transportation 0.1%
Auckland International Airport Ltd.		35,080		72,463
Utilities 0.1%
Contact Energy Ltd. *		16,386		64,903
Infratil Ltd.		15,556		24,080
				88,983
				555,389
Norway 1.4%
Banks 0.0%
Sparebanken 1 SMN		4,864		30,087
Capital Goods 0.0%
Kongsberg Gruppen Asa		1,566		30,237
Commercial & Professional Supplies 0.1%
Tomra Systems A.S.A.		4,706		36,731
Energy 0.8%
BW Offshore Ltd.		35,870		49,825
DNO International A.S.A. *		15,220		24,168
Dockwise Ltd. *		2,006		39,959
Fred. Olsen Energy A.S.A.		1,630		67,711
Kvaerner A.S.A.		16,904		49,988
Norwegian Energy Co., A.S.A. *		36,286		45,607
Prosafe SE		12,743		99,557
Songa Offshore SE *		18,500		63,780
Subsea 7 S.A. *		5,611		145,319
TGS Nopec Geophysical Co., A.S.A.		4,960		144,002
				729,916
Food, Beverage & Tobacco 0.1%
Austevoll Seafood A.S.A.		7,578		27,773
Cermaq A.S.A. *		5,123		70,006
Leroy Seafood Group A.S.A.		1,630		25,633
				123,412
Media 0.1%
Schibsted A.S.A.		2,868		109,493
Real Estate 0.0%
Norwegian Property A.S.A.		22,454		33,354
Semiconductors & Semiconductor Equipment 0.1%
Renewable Energy Corp. A.S.A. (c)*		161,800		92,444
Software & Services 0.1%
Atea A.S.A.		6,614		70,462
Transportation 0.1%
Golden Ocean Group Ltd.		76,644		69,456
Norwegian Air Shuttle A.S.A. *		1,975		33,361
				102,817
				1,358,953
Portugal 0.5%
Banks 0.0%
Banco BPI S.A. - Reg’d (c)*		44,818		23,890
Capital Goods 0.0%
Sonae		86,261		46,817
Food & Staples Retailing 0.1%
Jeronimo Martins, SGPS, S.A.		7,615		142,511
Materials 0.2%
CIMPOR-Cimentos de Portugal, SGPS, S.A.		12,914		94,471
Portucel-Empresa Produtora de Pasta e Papel, S.A.		13,736		34,838

56 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Semapa-Sociedade de Investimento e Gestao, SGPS, S.A. *		3,167		22,774
				152,083
Media 0.1%
Zon Multimedia-Servicos de Telecomunicacoes e Multimedia SGPS, S.A.		23,800		80,317
Utilities 0.1%
EDP Renovaveis S.A. *		18,810		80,168
Redes Energeticas Nacionais S.A.		9,108		24,085
				104,253
				549,871
Republic of Korea 6.0%
Automobiles & Components 0.3%
Halla Climate Control Corp.		2,550		51,572
Mando Corp.		526		83,766
S&T Daewoo Co., Ltd.		940		22,263
Ssangyong Motor Co. *		13,540		72,665
Sungwoo Hitech Co., Ltd.		3,114		34,900
				265,166
Banks 0.0%
Jeonbuk Bank		6,385		26,693
Capital Goods 1.1%
Daewoo Engineering & Construction Co., Ltd. *		9,070		75,355
Daewoo International Corp.		3,060		88,334
Doosan Infracore Co., Ltd. *		4,830		89,594
Hanjin Heavy Industries & Construction Co., Ltd. *		5,121		75,218
Hyundai Elevator Co., Ltd.		205		18,166
KCC Corp.		484		123,769
Keangnam Enterprises Ltd.		3,160		22,421
Kolon Global Corp.		6,880		34,297
LG Hausys Ltd.		657		37,517
LS Industrial Systems Co., Ltd.		390		19,841
S&T Dynamics Co., Ltd.		1,630		19,597
Samsung Engineering Co., Ltd.		622		117,760
Samsung Techwin Co., Ltd.		2,053		124,872
SK Networks Co., Ltd.		15,190		124,894
STX Engine Co., Ltd.		2,980		37,599
Taeyoung Engineering & Construction		7,370		32,377
Taihan Electric Wire Co., Ltd. *		30,927		84,502
				1,126,113
Commercial & Professional Supplies 0.1%
S1 Corp.		1,114		55,623
Consumer Durables & Apparel 0.3%
Handsome Co., Ltd.		990		33,313
LG Fashion Corp.		1,150		38,171
Woongjin Chemical Co., Ltd. *		30,340		20,875
Woongjin Coway Co., Ltd.		3,590		114,714
Youngone Corp.		1,120		24,243
Youngone Holdings Co., Ltd.		605		30,205
				261,521
Consumer Services 0.1%
Hotel Shilla Co., Ltd.		1,060		49,441
Diversified Financials 0.7%
Daewoo Securities Co., Ltd. *		10,480		105,417
Daishin Securities Co., Ltd.		5,880		50,708
Hanwha Securities Co., Ltd. *		6,820		26,972
Hyundai Securities Co., Ltd. *		13,720		112,302
Korea Investment Holdings Co., Ltd. *		2,880		98,813
Mirae Asset Securities Co., Ltd. *		1,122		34,080
Samsung Card Co., Ltd.		2,760		84,481
Tong Yang Securities, Inc.		23,780		91,723
Woori Investment & Securities Co., Ltd. *		9,850		96,499
				700,995
Energy 0.0%
SK Gas Co., Ltd.		580		31,838
Food, Beverage & Tobacco 0.7%
Binggrae Co., Ltd.		443		25,464
CJ CheilJedang Corp.		498		164,523
Daesang Corp.		2,750		44,160
Hite Jinro Co., Ltd.		1,480		31,982
Lotte Chilsung Beverage Co., Ltd.		59		66,532
Lotte Confectionery Co., Ltd.		47		71,027
Namyang Dairy Products Co., Ltd.		40		23,006
NongShim Co., Ltd.		323		64,597
Orion Corp.		92		72,864
Ottogi Corp.		266		39,014
Samyang Holding Corp.		916		48,583
				651,752
Household & Personal Products 0.3%
Amorepacific Corp.		94		90,247
Amorepacific Group		442		111,097
LG Household & Health Care Ltd.		146		76,463
				277,807
Insurance 0.3%
Korean Reinsurance Co.		6,216		75,072
LIG Insurance Co., Ltd.		5,960		123,420
Meritz Fire & Marine Insurance Co., Ltd.		7,694		79,298
Tong Yang Life Insurance *		3,850		33,968
				311,758
Materials 0.8%
Capro Corp.		1,020		17,606
Dongbu Steel Co., Ltd. *		8,190		40,378
Hansol Paper Co., Ltd.		10,080		68,254
Hanwha Chemical Corp.		4,940		96,686
Hyundai Hysco		1,300		45,679
Kolon Corp.		1,520		31,347
Kolon Industries, Inc.		2,018		111,289
KP Chemical Corp.		1,650		20,859
Poongsan Corp.		2,510		66,031
Seah Besteel Corp.		1,970		78,309
SK Chemicals Co., Ltd.		2,280		113,147
SKC Co., Ltd.		690		23,715
Taekwang Industrial Co., Ltd.		37		33,570
Tong Yang Major Corp. *		47,940		41,796
Young Poong Corp.		29		26,431
				815,097
Media 0.1%
Cheil Worldwide, Inc.		2,698		46,816
CJ CGV		1,070		25,087

See financial notes 57

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Daekyo Co., Ltd.		4,530		23,925
Woongjin Thinkbig Co., Ltd.		2,680		26,396
				122,224
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Dong-A Pharmaceutical Co., Ltd.		606		39,644
Yuhan Corp.		463		43,362
				83,006
Retailing 0.1%
CJ O Shopping Co., Ltd.		120		18,802
Daewoo Motor Sales Corp. (a)(b)*		50,660		53,344
Hyundai Department Store H&S Co., Ltd.		2,506		35,166
				107,312
Semiconductors & Semiconductor Equipment 0.1%
Dongbu HiTek Co., Ltd. *		4,030		28,483
Hansol Technics Co., Ltd, *		1,320		23,761
				52,244
Software & Services 0.2%
Daum Communications Corp.		268		25,067
NCSoft Corp.		157		40,493
NHN Corp.		695		157,115
				222,675
Technology Hardware & Equipment 0.1%
Daeduck Electronics Co., Ltd.		3,030		30,910
LG Innotek *		630		45,026
SFA Engineering Corp.		426		20,212
				96,148
Telecommunication Services 0.1%
SK Broadband Co., Ltd. *		20,924		59,601
Transportation 0.5%
Asiana Airlines *		10,630		59,967
Hanjin Shipping Co., Ltd. *		9,790		133,606
Hanjin Transportation Co., Ltd.		1,850		31,151
Hyundai Glovis Co., Ltd.		143		27,930
Hyundai Merchant Marine Co., Ltd. *		4,890		123,918
Korea Express Co., Ltd. *		882		60,779
Korea Line Corp. *		1,356		22,284
STX Pan Ocean Co., Ltd.		17,570		91,152
				550,787
Utilities 0.0%
E1 Corp.		542		23,551
				5,891,352
Singapore 2.5%
Capital Goods 0.3%
Cosco Corp., Ltd.		59,431		49,420
Hong Leong Asia Ltd.		15,000		22,166
SembCorp Marine Ltd.		30,096		123,143
Yangzijiang Shipbuilding Holdings Ltd.		59,000		55,969
				250,698
Consumer Services 0.1%
Genting Singapore plc *		71,000		98,929
Diversified Financials 0.1%
Singapore Exchange Ltd.		23,000		124,004
Energy 0.1%
Ezra Holdings Ltd. *		22,000		17,873
Straits Asia Resources Ltd.		20,000		31,640
				49,513
Food & Staples Retailing 0.1%
Olam International Ltd.		67,704		123,539
Food, Beverage & Tobacco 0.0%
Indofood Agri Resources Ltd. *		22,000		25,212
Real Estate 1.2%
Ascendas India Trust		39,000		25,609
Ascendas REIT		88,000		147,627
Ascott Residence Trust		44,000		39,764
Cambridge Industrial Trust		58,000		25,299
CapitaCommercial Trust		109,302		113,676
CapitaMall Trust REIT		98,000		142,282
CapitaMalls Asia Ltd.		49,000		60,735
CDL Hospitality Trusts		26,000		39,655
Fortune REIT		86,000		46,195
Keppel Land Ltd.		32,000		81,472
Lippo-Mapletree Indonesia Retail Trust		94,000		31,111
Mapletree Logistics Trust		76,000		60,050
Suntec Real Estate Investment Trust		127,000		134,026
UOL Group Ltd.		37,000		134,841
Wing Tai Holdings Ltd.		51,000		48,664
Yanlord Land Group Ltd.		30,000		27,970
				1,158,976
Technology Hardware & Equipment 0.1%
Venture Corp. Ltd.		20,000		138,532
Telecommunication Services 0.1%
M1 Ltd.		28,000		55,114
StarHub Ltd.		36,000		92,721
				147,835
Transportation 0.4%
Neptune Orient Lines Ltd. *		124,000		123,174
SATS Ltd.		38,749		81,580
SIA Engineering Co., Ltd.		11,205		35,612
Singapore Post Ltd.		68,000		55,745
SMRT Corp., Ltd.		40,000		54,233
				350,344
				2,467,582
Spain 1.7%
Banks 0.1%
Banco de Valencia S.A. (c)*		155,553		41,235
Banco Espanol de Credito S.A. (c)		8,690		32,688
Caja de Ahorros del Mediterraneo (a)(b)*		5,382		—
				73,923
Capital Goods 0.4%
Abengoa S.A.		5,422		82,996
Construcciones y Auxiliar de Ferrocarriles S.A.		167		89,289
Duro Felguera S.A.		3,900		24,073
Sacyr Vallehermoso S.A. (c)		36,082		65,212
Zardoya Otis S.A.		8,328		102,116
				363,686

58 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Commercial & Professional Supplies 0.1%
Prosegur, Compania de Seguridad S.A. - Reg’d		1,479		84,596
Consumer Services 0.1%
Melia Hotels International S.A.		6,940		41,500
NH Hoteles S.A. *		35,390		116,477
				157,977
Diversified Financials 0.1%
Bolsas y Mercados Espanoles		5,080		119,739
Energy 0.1%
Tecnicas Reunidas S.A.		1,691		66,026
Food, Beverage & Tobacco 0.2%
Deoleo S.A. *		75,167		34,372
Ebro Foods S.A.		7,176		126,961
Pescanova S.A.		1,075		32,389
Viscofan S.A.		1,442		65,271
				258,993
Insurance 0.0%
Grupo Catalana Occidente S.A.		3,093		43,504
Materials 0.1%
Grupo Empresarial Ence S.A.		17,705		41,603
Tubacex S.A. *		7,364		18,587
				60,190
Media 0.2%
Antena 3 de Television S.A.		8,953		47,479
Mediaset Espana Comunicacion S.A.		22,506		102,449
Promotora de Informaciones S.A., Class A (c)*		92,182		44,607
				194,535
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Almirall S.A.		4,425		38,019
Grifols S.A. *		3,194		80,420
				118,439
Utilities 0.2%
Iberdrola S.A.		11,564		53,885
Red Electrica Corp. S.A.		2,622		114,153
				168,038
				1,709,646
Sweden 2.3%
Capital Goods 0.4%
BE Group AB		7,388		26,018
Haldex AB		8,798		54,922
Lindab International AB		6,433		52,463
NIBE Industrier AB, B Shares		2,058		32,498
Peab AB		22,040		115,008
Saab AB, Class B		3,350		55,714
				336,623
Commercial & Professional Supplies 0.1%
AF AB, B Shares		1,416		28,626
Intrum Justitia AB		1,778		26,946
Loomis AB, B Shares		5,112		69,096
				124,668
Consumer Durables & Apparel 0.1%
JM AB		3,946		73,097
Nobia AB *		9,750		39,117
				112,214
Consumer Services 0.0%
Betsson Ab *		899		29,505
Diversified Financials 0.1%
Avanza Bank Holding AB		968		23,165
Bure Equity AB		8,286		23,036
D. Carnegie & Co. AB (a)(b)*		851		—
Lundbergs AB, B Shares		2,221		72,040
				118,241
Energy 0.1%
Lundin Petroleum AB *		3,367		67,021
PA Resources AB *		196,456		46,063
				113,084
Food & Staples Retailing 0.1%
Axfood AB		2,032		73,936
Hakon Invest AB		2,008		29,321
				103,257
Food, Beverage & Tobacco 0.1%
AarhusKarlshamn AB		1,834		61,790
Health Care Equipment & Services 0.1%
Elekta AB, B Shares		1,052		53,203
Materials 0.1%
Billerud AB		7,312		70,790
Hoganas AB, B Shares		1,635		63,428
				134,218
Media 0.2%
Eniro AB (c)*		45,476		74,552
Modern Times Group AB, B Shares		2,620		127,562
				202,114
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Meda AB, A Shares		12,103		119,691
Real Estate 0.5%
Castellum AB		8,435		106,807
Fabege AB		12,238		103,324
Hufvudstaden AB, A Shares		5,876		63,139
Klovern AB		10,009		34,985
Kungsleden AB		17,804		109,563
Wallenstam AB, Class B		4,387		43,744
Wihlborgs Fastigheter AB		3,724		51,729
				513,291
Technology Hardware & Equipment 0.2%
Axis Communications AB		932		23,442
Hexagon AB, B Shares		6,922		140,249
				163,691
Transportation 0.1%
SAS AB (c)*		90,627		111,745
				2,297,335
Switzerland 3.3%
Automobiles & Components 0.0%
Autoneum Holding AG *		637		35,117
Banks 0.3%
Banque Cantonale Vaudoise - Reg’d		164		92,824
Basler Kantonalbank *		210		26,237

See financial notes 59

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
St. Galler Kantonalbank AG - Reg’d		101		40,887
Valiant Holding AG - Reg’d		825		100,285
				260,233
Capital Goods 0.8%
AFG Arbonia-Forster Holding AG - Reg’d *		2,071		43,350
Belimo Holding AG		13		25,727
Bucher Industries AG - Reg’d		452		89,492
Burckhardt Compression Holding AG		119		32,929
Georg Fischer AG - Reg’d *		277		122,907
Huber & Suhner AG - Reg’d		720		31,369
Kaba Holding AG - Reg’d, Series B		146		57,197
Meyer Burger Technology AG (c)*		2,379		39,328
OC Oerlikon Corp. AG - Reg’d *		17,355		171,552
Rieter Holding AG - Reg’d *		470		81,844
Schweiter Technologies AG *		49		28,943
Zehnder Group AG		535		39,391
				764,029
Commercial & Professional Supplies 0.1%
Gategroup Holding AG *		2,440		82,747
Consumer Durables & Apparel 0.1%
Forbo Holding AG - Reg’d *		106		76,695
Consumer Services 0.1%
Kuoni Reisen Holding AG - Reg’d, Series B *		225		81,215
Diversified Financials 0.2%
Bank Sarasin & Cie AG - Reg’d, Series B *		1,971		60,835
EFG International AG *		3,211		31,217
Partners Group Holding AG		206		39,205
Vontobel Holding AG - Reg’d		1,924		48,821
				180,078
Energy 0.0%
Petroplus Holdings AG (c)*		150,120		13,148
Food, Beverage & Tobacco 0.1%
Barry Callebaut AG - Reg’d *		67		64,501
Health Care Equipment & Services 0.2%
Nobel Biocare Holding AG - Reg’d *		8,691		107,143
Sonova Holding AG - Reg’d *		914		101,016
Straumann Holding AG - Reg’d		259		43,037
				251,196
Materials 0.3%
Ems-Chemie Holding AG - Reg’d		587		115,533
Schmolz & Bickenbach AG - Reg’d *		12,856		87,834
Sika AG		47		99,695
				303,062
Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Actelion Ltd. - Reg’d *		2,473		104,726
Galenica AG - Reg’d		166		113,288
Tecan AG - Reg’d *		286		21,758
				239,772
Real Estate 0.3%
Allreal Holding AG - Reg’d *		322		50,518
Mobimo Holding AG *		182		44,328
PSP Swiss Property AG - Reg’d *		1,482		133,180
Swiss Prime Site AG - Reg’d *		1,324		110,423
				338,449
Retailing 0.2%
Charles Voegele Holding AG - BR *		1,294		25,862
Dufry Group - Reg’d *		560		76,056
Valora Holding AG - Reg’d		326		68,360
				170,278
Software & Services 0.0%
Temenos Group AG - Reg’d *		1,473		27,612
Technology Hardware & Equipment 0.2%
Kudelski S.A. - BR *		5,908		43,822
Logitech International S.A. - Reg’d (c)*		14,660		149,554
				193,376
Transportation 0.2%
Flughafen Zuerich AG - Reg’d		155		57,719
Panalpina Welttransport Holding AG - Reg’d *		1,172		114,404
				172,123
				3,253,631
United Kingdom 9.1%
Banks 0.1%
Paragon Group Cos. plc		24,950		72,912
Capital Goods 1.1%
Ashtead Group plc		31,793		128,383
Bodycote plc		15,028		103,788
Chemring Group plc		8,448		44,782
Fenner plc		6,299		46,098
Galliford Try plc		3,945		41,820
Interserve plc		12,416		57,627
Kier Group plc		3,260		61,712
Melrose plc		18,086		128,338
Morgan Crucible Co. plc		13,687		72,221
Qinetiq Group plc		43,674		108,472
Rotork plc		2,133		76,426
Senior plc		17,128		59,222
Spirax-Sarco Engineering plc		2,551		95,506
Ultra Electronics Holdings plc		2,614		71,463
				1,095,858
Commercial & Professional Supplies 0.9%
Berendsen plc		8,974		75,044
Cape plc		6,150		37,677
Homeserve plc		20,228		82,901
Intertek Group plc		3,391		138,450
ITE Group plc		7,042		25,825
Michael Page International plc		12,004		81,113
Mitie Group plc		25,486		120,677
Regus plc		41,945		72,713
RPS Group plc		13,264		51,043
Shanks Group plc		41,138		61,826
Sthree plc		6,526		36,688
WS Atkins plc		8,214		97,007
				880,964
Consumer Durables & Apparel 0.4%
Bellway plc		11,548		147,562
Bovis Homes Group plc		9,552		71,673
Pace plc		32,590		38,488
Redrow plc *		13,959		27,889

60 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

		Number		Value
Security		of Shares		($)
The Berkeley Group Holdings plc *			6,112		127,089
					412,701
Consumer Services 0.5%
Betfair Group plc			2,847		36,513
Bwin.Party Digital Entertainment plc			9,406		23,519
Enterprise Inns plc *			59,182		59,090
J.D. Wetherspoon plc			9,540		62,797
Marston’s plc			81,132		128,489
Millennium & Copthorne Hotels plc			11,081		87,388
Restaurant Group plc			12,605		57,477
Spirit Pub Co. plc *			26,998		24,317
					479,590
Diversified Financials 0.9%
Aberdeen Asset Management plc			34,475		158,670
Ashmore Group plc			10,228		63,524
Brewin Dolphin Holdings plc			12,128		32,187
F&C Asset Management plc			34,707		37,934
Hargreaves Lansdown plc			3,918		33,476
IG Group Holdings plc			14,972		112,500
International Personal Finance			19,582		85,068
Jupiter Fund Management plc			11,949		44,301
London Stock Exchange Group plc			9,967		175,974
Rathbone Brothers plc			1,422		30,534
Tullett Prebon plc			20,419		113,838
					888,006
Energy 0.8%
Afren plc *			19,744		43,226
Cairn Energy plc *			19,477		109,130
Enquest plc *			23,910		49,188
Essar Energy plc *			54,874		130,808
Heritage Oil plc *			10,028		24,236
Hunting plc			5,673		87,598
Lamprell plc			4,928		27,875
Petrofac Ltd.			5,457		154,102
Premier Oil plc *			13,662		83,139
Salamander Energy plc *			5,512		22,275
Soco International plc *			8,527		41,566
					773,143
Food & Staples Retailing 0.1%
Booker Group plc			96,987		124,364
Food, Beverage & Tobacco 0.3%
Britvic plc			18,268		113,342
Cranswick plc			3,255		42,532
Dairy Crest Group plc			11,318		55,304
Devro plc			4,985		24,948
Greggs plc			7,321		59,601
					295,727
Health Care Equipment & Services 0.0%
Synergy Health plc			2,850		38,445
Household & Personal Products 0.1%
PZ Cussons plc			9,195		49,588
Insurance 0.3%
Beazley plc			46,652		107,390
Jardine Lloyd Thompson Group plc	��		7,342		83,785
Phoenix Group Holdings			6,394		54,790
St. James’s Place plc			8,473		45,477
					291,442
Materials 0.8%
African Barrick Gold plc			4,277		24,971
Aquarius Platinum Ltd.			36,541		77,507
AZ Electronic Materials S.A.			13,547		70,020
Croda International plc			2,745		99,420
Elementis plc			19,860		67,059
Ferrexpo plc			5,196		24,714
Filtrona plc			7,886		59,464
Fresnillo plc			1,927		49,098
Gem Diamonds Ltd. *			6,068		25,536
Hochschild Mining plc			3,660		29,899
New World Resources plc			7,408		48,944
Petropavlovsk plc			5,660		43,915
Randgold Resources Ltd.			637		56,541
RPC Group plc			9,956		59,685
Victrex plc			2,188		51,560
Yule Catto & Co. plc			9,466		35,758
					824,091
Media 0.4%
Aegis Group plc			47,621		137,399
Cineworld Group plc			8,276		27,270
Daily Mail & General Trust			21,333		144,173
Yell Group plc (c)*			1,408,229		89,131
					397,973
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
BTG plc *			5,024		30,993
Genus plc			1,412		32,370
Hikma Pharmaceuticals plc			3,999		40,763
					104,126
Real Estate 0.5%
Big Yellow Group plc			9,590		46,139
Capital & Counties Properties plc			18,546		59,910
Derwent London plc			3,619		102,332
Grainger plc			12,092		19,474
Great Portland Estates plc			13,856		80,988
Hansteen Holdings plc			22,540		26,830
London & Stamford Property plc			19,093		34,394
Mapeley Ltd. (a)(b)*			2,199		—
Savills plc			5,746		33,358
Shaftesbury plc			8,041		66,756
Unite Group plc			7,910		25,076
					495,257
Retailing 0.5%
Carpetright plc *			3,070		29,890
Halfords Group plc			20,815		92,952
Howden Joinery Group plc *			25,669		50,903
Mothercare plc			15,076		41,804
N Brown Group plc			14,477		53,861
Smiths News plc			35,086		56,656
Sports Direct International plc *			6,329		31,048
WH Smith plc			11,251		96,234
					453,348
Semiconductors & Semiconductor Equipment 0.1%
ARM Holdings plc			10,641		90,036
CSR plc			11,456		42,871
					132,907
Software & Services 0.3%
Aveva Group plc			1,112		30,110
Computacenter plc			5,555		37,442

See financial notes 61

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Fidessa Group plc		1,058		26,609
Micro Focus International plc		6,997		52,833
Misys plc *		12,995		73,539
Telecity Group plc *		3,062		40,132
				260,665
Technology Hardware & Equipment 0.6%
Domino Printing Sciences plc		3,564		34,655
Electrocomponents plc		36,624		135,547
Halma plc		12,902		84,848
Laird plc		24,579		86,280
Premier Farnell plc		24,798		86,535
Spectris plc		3,505		107,317
Spirent Communications plc		15,194		41,935
				577,117
Telecommunication Services 0.1%
KCOM Group plc		25,567		29,465
TalkTalk Telecom Group plc		39,717		82,452
				111,917
Transportation 0.2%
BBA Aviation plc		34,718		111,347
Go-Ahead Group plc		5,282		97,755
Stobart Group Ltd.		14,365		29,803
				238,905
				8,999,046
Total Common Stock
(Cost $94,785,736)				96,511,949
Preferred Stock 0.3% of net assets
Germany 0.3%
Capital Goods 0.1%
Jungheinrich AG		1,678		57,780
KSB AG		58		33,778
				91,558
Consumer Durables & Apparel 0.1%
Hugo Boss AG		418		46,684
Health Care Equipment & Services 0.0%
Draegerwerk AG & Co. KGAA		406		45,733
Materials 0.1%
Fuchs Petrolub AG		903		53,793
Transportation 0.0%
Sixt AG		1,470		27,494
				265,262
Republic of Korea 0.0%
Diversified Financials 0.0%
Daishin Securities Co., Ltd.		3,250		19,639
Sweden 0.0%
Real Estate 0.0%
Klovern AB		233		4,792
Total Preferred Stock
(Cost $166,261)				289,693
Rights 0.0% of net assets
United Kingdom 0.0%
Consumer Durables & Apparel 0.0%
Redrow plc (a)(b)*		2,093		—
Total Rights
(Cost $—)				—
Warrants 0.0% of net assets
Netherlands 0.0%
Real Estate 0.0%
Nieuwe Steen Investments N.V. (a)(b)*		2,410		—
Total Warrants
(Cost $—)				—
Other Investment Company 1.0% of net assets
United States 1.0%
iShares MSCI EAFE Small Cap Index Fund		24,000		955,680
Total Other Investment Company
(Cost $942,530)				955,680
	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.3% of net assets
Time Deposit 0.3%
Bank of America
0.03%, 05/01/12		303,187		303,187
Total Short-Term Investment
(Cost $303,187)				303,187
End of Investments.

62 See financial notes

 Schwab Fundamental International Small-Mid Company Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 1.7% of net assets
Wells Fargo Advantage Government Money Market Fund		1,721,428		1,721,428
Total Collateral Invested for Securities on Loan
(Cost $1,721,428)				1,721,428
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $96,680,688 and the unrealized appreciation and depreciation were $12,098,751 and ($10,718,930), respectively, with a net unrealized appreciation of $1,379,821.

At 04/30/12, the values of certain foreign securities held by the fund aggregating $86,253,323 were adjusted from their closing market values in accordance with international fair valuation procedures approved by the fund’s Board of Trustees.

*	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 $115,765 or 0.1% of net assets.
(c)	All or a portion of this security is on loan.

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

See financial notes 63

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings as of April 30, 2012 (Unaudited)

This section shows all the securities in the fund’s portfolio and their values as of the report date.

The fund files its complete schedule of portfolio holdings with the 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	.8%	Common Stock		302,779,011		309,600,525
	10	.4%	Preferred Stock		40,542,555		36,190,063
	0	.0%	Rights		—		1,589
	0	.4%	Other Investment Company		1,479,785		1,477,000
	0	.1%	Short-Term Investment		233,014		233,014
	99	.7%	Total Investments		345,034,365		347,502,191
	0	.1%	Collateral Invested for Securities on Loan		506,200		506,200
	0	.2%	Other Assets and Liabilities, Net				671,208
	100	.0%	Total Net Assets				348,679,599

	Number		Value
Security	of Shares		($)
Common Stock 88.8% of net assets
Brazil 9.0%
Banks 1.2%
Banco do Brasil S.A.		223,700		2,767,278
Banco Santander Brasil S.A.		156,100		1,272,614
Itau Unibanco Holding S.A.		23,558		333,568
				4,373,460
Capital Goods 0.3%
Embraer S.A.		109,000		940,094
Consumer Durables & Apparel 0.2%
Cyrela Brazil Realty S.A. Empreendimentos e Participacoes		33,500		270,650
Gafisa S.A.		110,530		205,271
PDG Realty S.A. Empreendimentos e Participacoes		95,200		224,746
				700,667
Diversified Financials 0.3%
BM&F BOVESPA S.A.		202,900		1,141,090
Energy 2.3%
Petroleo Brasileiro S.A. - Petrobras		599,200		7,038,317
Ultrapar Participacoes S.A.		38,924		884,195
				7,922,512
Food, Beverage & Tobacco 0.7%
BRF-Brasil Foods S.A.		49,600		906,833
Companhia de Bebidas das Americas		3,380		119,532
Cosan S.A. Industria e Comercio		13,600		236,162
JBS S.A. *		110,200		433,596
Marfrig Alimentos S.A.		45,000		247,646
Souza Cruz S.A.		23,700		369,149
				2,312,918
Household & Personal Products 0.1%
Natura Cosmeticos S.A.		16,600		381,004
Insurance 0.1%
Sul America S.A.		25,045		204,969
Materials 2.0%
Companhia Siderurgica Nacional S.A.		197,500		1,694,056
Fibria Celulose S.A. *		46,842		376,967
Gerdau S.A.		32,700		254,752
Usinas Siderurgicas de Minas Gerais S.A.		82,900		791,533
Vale S.A.		169,100		3,779,167
				6,896,475
Real Estate 0.1%
BR Malls Participacoes S.A.		18,792		233,452
Retailing 0.0%
Lojas Americanas S.A.		6,049		52,647
Software & Services 0.2%
Cielo S.A.		11,590		347,794
Redecard S.A.		28,400		478,263
				826,057
Telecommunication Services 0.2%
Oi S.A.		16,414		110,996
Tim Participacoes S.A.		86,656		515,531
				626,527
Transportation 0.3%
All America Latina Logistica S.A.		73,827		336,185
CCR S.A.		117,700		913,863
				1,250,048
Utilities 1.0%
AES Tiete S.A.		8,400		106,424
Centrais Eletricas Brasileiras S.A. *		166,603		1,424,667
Cia de Saneamento Basico do Estado de Sao Paulo		9,200		361,214
Companhia de Saneamento de Minas Gerais - Copasa MG *		9,693		226,135
Companhia Energetica de Minas Gerais		11,656		197,696
EDP - Energias do Brasil S.A.		42,600		297,908
Light S.A.		25,200		327,865
Tractebel Energia S.A.		27,200		468,757
				3,410,666
				31,272,586
Chile 1.6%
Banks 0.3%
Banco de Chile		2,977,000		469,471
Banco Santander Chile		7,975,207		629,665
				1,099,136
Capital Goods 0.2%
Empresas Copec S.A.		47,852		775,338

64 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Materials 0.2%
CAP S.A.		6,888		288,953
Empresas CMPC S.A.		119,088		489,510
				778,463
Retailing 0.1%
S.A.C.I. Falabella		35,722		350,519
Transportation 0.3%
Compania Sud Americana de Vapores S.A. *		1,270,964		148,030
Lan Airlines S.A.		19,729		559,212
Sociedad Matriz SAAM S.A. *		1,580,870		189,014
				896,256
Utilities 0.5%
Empresa Nacional de Electricidad S.A.		441,109		803,744
Enersis S.A.		2,642,872		1,078,178
				1,881,922
				5,781,634
China 16.8%
Automobiles & Components 0.2%
Dongfeng Motor Group Co., Ltd., Class H		176,000		344,232
Guangzhou Automobile Group Co., Ltd., Class H *		230,000		253,945
				598,177
Banks 6.2%
Agricultural Bank of China Ltd., Class H		2,517,600		1,190,696
Bank of China Ltd., Class H		13,466,234		5,607,632
Bank of Communications Co., Ltd., Class H		1,149,700		884,722
China Citic Bank Corp. Ltd., Class H		1,039,000		658,332
China Construction Bank Corp., Class H		8,796,000		6,826,081
China Merchants Bank Co., Ltd., Class H *		334,850		723,011
China Minsheng Banking Corp., Ltd., Class H		400,700		414,639
Industrial & Commercial Bank of China Ltd., Class H		7,831,172		5,203,296
				21,508,409
Capital Goods 0.8%
Beijing Enterprises Holdings Ltd.		57,500		320,874
China Communications Construction Co., Ltd., Class H *		804,000		801,106
China International Marine Containers (Group) Co., Ltd., Class B		190,905		280,382
China Railway Construction Corp., Ltd., Class H		608,000		482,293
China Railway Group Ltd., Class H		1,186,000		467,494
Citic Pacific Ltd.		157,000		257,653
Shanghai Industrial Holdings Ltd.		77,000		256,408
				2,866,210
Energy 3.9%
China Coal Energy Co., Ltd., Class H *		397,000		453,568
China Petroleum & Chemical Corp., Class H		3,510,000		3,728,008
China Shenhua Energy Co., Ltd., Class H		313,000		1,382,224
CNOOC Ltd.		1,470,000		3,106,327
Inner Mongolia Yitai Coal Co., Ltd., Class B		51,800		296,186
PetroChina Co., Ltd., Class H		2,911,000		4,342,326
Yanzhou Coal Mining Co., Ltd., Class H *		134,000		280,656
				13,589,295
Food & Staples Retailing 0.1%
China Resources Enterprise Ltd.		156,000		564,670
Insurance 1.0%
China Life Insurance Co., Ltd., Class H *		674,000		1,794,556
China Pacific Insurance Group Co., Ltd., Class H *		139,800		452,726
PICC Property & Casualty Co., Ltd., Class H		240,000		298,526
Ping An Insurance (Group) Co. of China Ltd., Class H		135,000		1,121,345
				3,667,153
Materials 0.3%
Aluminum Corp. of China Ltd., Class H (a)*		583,000		280,611
Angang Steel Co., Ltd., Class H (a)*		430,000		292,264
China National Building Material Co., Ltd., Class H *		212,000		284,122
Jiangxi Copper Co., Ltd., Class H		129,000		310,231
				1,167,228
Real Estate 0.4%
China Overseas Land & Investment Ltd.		292,000		631,017
China Resources Land Ltd.		166,000		317,657
Sino-Ocean Land Holdings Ltd.		676,500		313,788
				1,262,462
Technology Hardware & Equipment 0.3%
Lenovo Group Ltd.		970,000		927,635
Telecommunication Services 3.2%
China Mobile Ltd.		714,500		7,904,887
China Telecom Corp., Ltd., Class H *		2,624,000		1,406,335
China Unicom (Hong Kong) Ltd.		1,001,056		1,750,823
				11,062,045
Transportation 0.2%
China COSCO Holdings Co., Ltd., Class H (a)		584,500		336,267
China Merchants Holdings International Co., Ltd.		118,000		379,961
				716,228
Utilities 0.2%
China Resources Power Holdings Co., Ltd.		185,000		336,239

See financial notes 65

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Huaneng Power International, Inc., Class H *		775,000		458,736
				794,975
				58,724,487
Czech Republic 0.8%
Banks 0.1%
Komercni Banka A/S		1,699		312,137
Telecommunication Services 0.2%
Telefonica Czech Republic A/S		37,062		747,414
Utilities 0.5%
CEZ A/S		41,155		1,659,475
				2,719,026
Egypt 0.6%
Banks 0.2%
Commercial International Bank Egypt S.A.E. GDR		170,448		693,723
Capital Goods 0.1%
Orascom Construction Industries GDR		9,261		408,410
Telecommunication Services 0.3%
Orascom Telecom Holding S.A.E. GDR - Reg’d *		233,861		654,811
Orascom Telecom Media & Technology Holding SAE (c)*		193,755		218,943
				873,754
				1,975,887
Hungary 1.2%
Banks 0.5%
OTP Bank Nyrt. plc		105,904		1,856,464
Energy 0.4%
MOL Hungarian Oil & Gas plc *		18,610		1,538,581
Pharmaceuticals, Biotechnology & Life Sciences 0.1%
Richter Gedeon Nyrt.		894		154,496
Telecommunication Services 0.2%
Magyar Telekom Telecommunications plc		196,587		494,520
				4,044,061
India 5.7%
Automobiles & Components 0.4%
Bajaj Auto Ltd.		9,668		296,932
Hero Motocorp Ltd.		6,971		295,073
Mahindra & Mahindra Ltd.		18,764		251,567
Tata Motors Ltd.		92,730		555,045
				1,398,617
Banks 1.1%
Axis Bank Ltd.		25,559		534,782
HDFC Bank Ltd.		52,665		542,343
Housing Development Finance Corp., Ltd.		58,436		744,517
ICICI Bank Ltd.		67,061		1,122,642
Punjab National Bank		4,782		76,825
State Bank of India		19,447		785,759
				3,806,868
Capital Goods 0.3%
Bharat Heavy Electricals Ltd.		73,025		309,706
Larsen & Toubro Ltd.		36,338		842,521
				1,152,227
Energy 1.5%
Bharat Petroleum Corp., Ltd.		43,505		552,449
Hindustan Petroleum Corp., Ltd.		124,455		713,196
Indian Oil Corp., Ltd.		76,227		382,992
Oil & Natural Gas Corp., Ltd.		185,138		950,004
Reliance Industries Ltd.		186,056		2,624,330
				5,222,971
Food, Beverage & Tobacco 0.5%
Balrampur Chini Mills Ltd.		339,462		352,519
ITC Ltd.		284,136		1,322,498
				1,675,017
Household & Personal Products 0.1%
Hindustan Unilever Ltd.		48,967		385,011
Materials 0.8%
Grasim Industries Ltd.		4,334		210,492
Hindalco Industries Ltd.		373,065		850,326
JSW Steel Ltd.		22,559		295,810
Steel Authority of India Ltd.		161,318		289,266
Sterlite Industries (India) Ltd.		147,511		298,551
Tata Chemicals Ltd.		41,199		263,824
Tata Steel Ltd.		71,952		631,153
				2,839,422
Real Estate 0.1%
DLF Ltd.		60,971		216,155
Software & Services 0.3%
Infosys Ltd.		24,707		1,145,656
Telecommunication Services 0.3%
Bharti Airtel Ltd.		114,477		672,730
Reliance Communications Ltd.		201,977		287,575
				960,305
Utilities 0.3%
GAIL India Ltd.		45,391		283,544
NTPC Ltd.		174,498		537,144
Reliance Infrastructure Ltd.		20,890		208,465
				1,029,153
				19,831,402
Indonesia 1.7%
Automobiles & Components 0.4%
PT Astra International Tbk		164,800		1,269,086
Banks 0.5%
PT Bank Central Asia Tbk		600,500		521,475
PT Bank Mandiri (Persero) Tbk		667,500		535,302
PT Bank Rakyat Indonesia (Persero) Tbk		765,500		551,108
				1,607,885
Capital Goods 0.1%
PT United Tractors Tbk		133,500		428,254

66 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Energy 0.2%
PT Bumi Resources Tbk		3,914,000		859,445
Telecommunication Services 0.4%
PT Telekomunikasi Indonesia Tbk		1,653,000		1,524,176
Utilities 0.1%
PT Perusahaan Gas Negara persero Tbk		532,500		193,364
				5,882,210
Malaysia 3.6%
Automobiles & Components 0.1%
UMW Holdings Berhad		119,800		310,403
Banks 1.2%
CIMB Group Holdings Berhad		478,700		1,169,802
Malayan Banking Berhad		527,800		1,503,079
Public Bank Berhad		344,900		1,557,232
				4,230,113
Capital Goods 0.4%
IJM Corp. Berhad		132,700		239,568
Sime Darby Berhad		375,000		1,205,111
				1,444,679
Consumer Services 0.3%
Genting Berhad		178,700		609,109
Genting Malaysia Berhad		187,000		236,732
				845,841
Diversified Financials 0.1%
AMMB Holdings Berhad		195,500		403,272
Food, Beverage & Tobacco 0.4%
British American Tobacco Malaysia Berhad		16,300		298,911
IOI Corp. Berhad		318,400		548,301
Kuala Lumpur Kepong Berhad		32,800		255,810
PPB Group Berhad		50,300		277,962
				1,380,984
Materials 0.1%
Petronas Chemicals Group Berhad		221,100		476,039
Telecommunication Services 0.7%
Axiata Group Berhad		467,200		819,765
DIGI.com Berhad		539,000		717,325
Maxis Berhad		194,500		393,008
Telekom Malaysia Berhad		211,500		375,452
				2,305,550
Utilities 0.3%
Petronas Gas Berhad		72,000		398,904
Tenaga Nasional Berhad		209,300		444,374
YTL Power International Berhad		416,607		236,317
				1,079,595
				12,476,476
Mexico 2.7%
Capital Goods 0.2%
Alfa S.A.B., Class A		39,500		565,089
Empresas ICA S.A.B. de C.V. *		197,200		356,978
				922,067
Food & Staples Retailing 0.3%
Wal-Mart de Mexico S.A.B. de C.V., Series V		340,200		972,862
Food, Beverage & Tobacco 0.3%
Coca-Cola Femsa S.A.B. de C.V., Series L *		50,224		533,087
Grupo Bimbo S.A.B. de C.V., Series A		188,400		449,524
				982,611
Household & Personal Products 0.1%
Kimberly-Clark de Mexico S.A.B. de C.V., Class A		128,100		261,098
Telecommunication Services 1.7%
America Movil S.A.B. de C.V., Series L		4,566,800		6,096,803
Transportation 0.1%
Grupo Aeroportuario del Pacifico S.A.B. de C.V., Class B		81,400		316,703
				9,552,144
Poland 2.5%
Banks 0.4%
Bank Pekao S.A.		11,557		545,350
Powszechna Kasa Oszczednosci Bank Polski S.A.		72,895		781,834
				1,327,184
Energy 0.7%
Grupa Lotos S.A. *		35,076		315,208
Polski Koncern Naftowy Orlen S.A. *		154,565		1,803,226
Polskie Gornictwo Naftowe i Gazownictwo S.A.		252,398		326,894
				2,445,328
Insurance 0.2%
Powszechny Zaklad Ubezpieczen S.A.		7,550		763,936
Materials 0.4%
KGHM Polska Miedz S.A.		35,362		1,563,595
Telecommunication Services 0.3%
Telekomunikacja Polska S.A.		192,519		1,006,732
Utilities 0.5%
PGE S.A.		141,606		847,607
Tauron Polska Energia S.A.		548,476		813,562
				1,661,169
				8,767,944
Russia 11.4%
Banks 1.0%
Sberbank of Russia ADR		199,747		2,567,382
VTB Bank OJSC GDR - Reg’d *		200,217		839,651
				3,407,033
Energy 8.4%
Gazprom ADR		1,037,398		12,015,197
LUKOIL ADR		169,646		10,436,830
NovaTek OAO GDR - Reg’d.		6,711		856,871
Rosneft Oil Co. GDR - Reg’d *		306,272		2,193,063

See financial notes 67

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Surgutneftegaz ADR		147,788		1,480,280
Tatneft ADR		58,865		2,185,031
				29,167,272
Materials 0.8%
Magnitogorsk Iron & Steel Works GDR - Reg’d *		74,730		396,513
Mining & Metallurgical Co. Norilsk Nickel OJSC ADR		62,116		1,105,025
Novolipetsk Steel GDR - Reg’d		22,713		493,118
Severstal GDR - Reg’d		56,567		769,432
				2,764,088
Telecommunication Services 0.9%
Mobile TeleSystems ADR		102,651		2,007,854
Rostelecom OJSC ADR *		44,870		1,267,912
				3,275,766
Utilities 0.3%
Federal Hydrogenerating Co., ADR		300,254		1,044,691
				39,658,850
South Africa 10.1%
Banks 1.6%
ABSA Group Ltd.		50,237		1,035,318
Nedbank Group Ltd.		44,091		962,165
Standard Bank Group Ltd.		232,755		3,438,325
				5,435,808
Capital Goods 1.0%
Aveng Ltd.		101,022		516,297
Barloworld Ltd.		75,867		956,826
Bidvest Group Ltd.		45,490		1,076,651
Murray & Roberts Holdings Ltd. *		138,427		510,168
Reunert Ltd.		42,429		392,908
				3,452,850
Consumer Durables & Apparel 0.2%
Steinhoff International Holdings Ltd. *		155,348		566,886
Diversified Financials 0.9%
African Bank Investments Ltd.		118,218		591,018
FirstRand Ltd.		572,605		1,862,244
Remgro Ltd.		50,657		858,412
				3,311,674
Energy 1.0%
Sasol Ltd.		69,929		3,324,741
Food & Staples Retailing 0.3%
Pick n Pay Stores Ltd.		15,264		88,485
Shoprite Holdings Ltd.		35,765		618,614
The Spar Group Ltd.		18,376		287,488
				994,587
Food, Beverage & Tobacco 0.1%
Tiger Brands Ltd.		13,298		487,726
Health Care Equipment & Services 0.0%
Netcare Ltd.		54,524		98,611
Insurance 0.6%
Liberty Holdings Ltd.		37,661		427,372
MMI Holdings Ltd.		196,986		443,680
Sanlam Ltd.		322,438		1,391,182
				2,262,234
Materials 1.7%
Anglo American Platinum Ltd.		11,124		723,442
AngloGold Ashanti Ltd.		10,869		372,686
ArcelorMittal South Africa Ltd.		46,208		350,739
Gold Fields Ltd.		59,685		764,557
Harmony Gold Mining Co., Ltd.		36,937		359,182
Impala Platinum Holdings Ltd.		85,819		1,675,285
Kumba Iron Ore Ltd.		3,948		279,592
Mondi Ltd.		33,326		307,377
Nampak Ltd.		88,423		255,306
Pretoria Portland Cement Co., Ltd.		86,804		346,322
Sappi Ltd. *		136,740		495,264
				5,929,752
Media 0.2%
Naspers Ltd., Class N		13,376		807,065
Pharmaceuticals, Biotechnology & Life Sciences 0.2%
Aspen Pharmacare Holdings Ltd. *		39,865		644,382
Real Estate 0.2%
Growthpoint Properties Ltd.		221,237		597,701
Retailing 0.6%
Imperial Holdings Ltd.		35,910		780,827
JD Group Ltd.		49,193		307,742
The Foschini Group Ltd.		26,940		446,588
Truworths International Ltd.		22,048		235,579
Woolworths Holdings Ltd.		73,268		458,654
				2,229,390
Telecommunication Services 1.4%
MTN Group Ltd.		200,376		3,504,146
Telkom South Africa Ltd.		218,694		669,364
Vodacom Group Ltd.		47,317		657,930
				4,831,440
Transportation 0.1%
Grindrod Ltd.		144,877		290,017
				35,264,864
Taiwan 17.3%
Automobiles & Components 0.1%
Cheng Shin Rubber Industry Co., Ltd.		120,000		297,479
Banks 1.5%
Chang Hwa Commercial Bank		591,200		325,959
China Development Financial Holding Corp.		1,969,978		495,643
Chinatrust Financial Holding Co., Ltd.		1,400,487		887,743
First Financial Holding Co., Ltd.		856,777		510,539
Hua Nan Financial Holdings Co., Ltd.		869,475		479,963
Mega Financial Holding Co., Ltd.		1,340,300		1,053,769
SinoPac Financial Holdings Co., Ltd.		1,175,827		398,414
Taishin Financial Holding Co., Ltd.		1,496,758		574,787
Taiwan Cooperative Financial Holding *		594,816		365,542
				5,092,359

68 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Capital Goods 0.3%
Far Eastern New Century Corp.		626,935		703,861
Walsin Lihwa Corp.		1,196,000		345,734
				1,049,595
Consumer Durables & Apparel 0.4%
Formosa Taffeta Co., Ltd.		230,000		216,618
Pou Chen Corp.		717,267		612,701
Tatung Co., Ltd. *		1,502,887		409,569
				1,238,888
Diversified Financials 0.4%
Fubon Financial Holding Co., Ltd.		994,509		1,028,892
Yuanta Financial Holding Co., Ltd. *		965,770		460,050
				1,488,942
Energy 0.2%
Formosa Petrochemical Corp.		261,030		808,341
Food & Staples Retailing 0.1%
President Chain Store Corp.		63,000		336,708
Food, Beverage & Tobacco 0.3%
Uni-President Enterprises Corp.		601,724		932,456
Insurance 0.4%
Cathay Financial Holding Co., Ltd.		1,119,388		1,176,800
Shin Kong Financial Holding Co., Ltd. *		1,272,000		374,611
				1,551,411
Materials 2.9%
Asia Cement Corp.		373,976		447,883
China Steel Corp.		2,120,733		2,105,422
Formosa Chemicals & Fibre Corp.		668,420		1,929,297
Formosa Plastics Corp.		821,820		2,324,435
Nan Ya Plastics Corp.		1,231,160		2,526,099
Taiwan Cement Corp.		640,299		758,926
				10,092,062
Retailing 0.1%
Far Eastern Department Stores Co., Ltd.		148,060		158,620
Mercuries & Associates Ltd.		233,000		193,389
				352,009
Semiconductors & Semiconductor Equipment 3.8%
Advanced Semiconductor Engineering, Inc.		915,090		920,209
Macronix International Co., Ltd.		776,000		254,854
MediaTek, Inc.		162,138		1,396,888
MStar Semiconductor, Inc.		47,000		277,391
Powertech Technology, Inc.		168,800		286,271
Siliconware Precision Industries Co.		694,270		818,318
Taiwan Semiconductor Manufacturing Co., Ltd.		2,700,689		7,982,248
United Microelectronics Corp.		2,711,965		1,418,556
				13,354,735
Technology Hardware & Equipment 6.0%
Acer, Inc.		916,496		1,044,508
Asustek Computer, Inc.		184,041		1,848,796
AU Optronics Corp.		4,142,800		1,864,146
Chimei Innolux Corp. *		2,002,357		824,326
Compal Electronics, Inc.		1,385,305		1,585,949
Coretronic Corp.		344,000		287,836
Delta Electronics, Inc.		353,025		1,042,754
Foxconn Technology Co., Ltd.		104,950		367,324
HannStar Display Corp. *		2,175,000		212,298
Hon Hai Precision Industry Co., Ltd.		1,617,042		5,084,263
HTC Corp.		79,473		1,192,911
Inventec Corp.		755,207		289,124
Lite-On Technology Corp.		640,099		777,906
Pegatron Corp.		451,264		649,144
Quanta Computer, Inc.		661,500		1,730,855
Synnex Technology International Corp.		203,000		474,068
Unimicron Technology Corp.		280,000		316,361
Wistron Corp.		613,808		915,706
WPG Holdings Ltd.		312,950		424,869
				20,933,144
Telecommunication Services 0.8%
Chunghwa Telecom Co., Ltd.		622,906		1,947,713
Far EasTone Telecommunications Co., Ltd.		214,622		464,420
Taiwan Mobile Co., Ltd.		159,600		514,326
				2,926,459
				60,454,588
Thailand 1.7%
Banks 0.4%
Bangkok Bank PCL - Reg’d		43,000		270,612
Kasikornbank PCL		86,600		457,650
Siam Commercial Bank PCL		106,600		521,734
				1,249,996
Energy 0.8%
IRPC PCL		2,234,300		316,798
PTT Exploration & Production PCL		104,100		600,903
PTT PCL		144,687		1,646,844
Thai Oil PCL		163,600		359,122
				2,923,667
Materials 0.3%
PTT Global Chemical PCL		230,300		514,898
The Siam Cement PCL - Reg’d		30,000		407,464
				922,362
Telecommunication Services 0.2%
Advanced Info Service PCL - Reg’d		148,475		883,607
				5,979,632
Turkey 2.1%
Banks 0.8%
Akbank T.A.S.		159,266		592,050
Turkiye Garanti Bankasi A/S		145,082		534,125
Turkiye Halk Bankasi A/S		50,534		354,242
Turkiye Is Bankasi, Class C		286,425		656,029
Turkiye Vakiflar Bankasi T.A.O., Class D		163,015		292,606
Yapi ve Kredi Bankasi A/S *		175,499		325,058
				2,754,110
Capital Goods 0.4%
Dogan Sirketler Grubu Holdings A/S *		776,917		367,021

See financial notes 69

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Number		Value
Security	of Shares		($)
Koc Holding A/S		306,857		1,139,694
				1,506,715
Diversified Financials 0.1%
Haci Omer Sabanci Holding A/S		73,577		306,015
Energy 0.2%
Tupras-Turkiye Petrol Rafinerileri A/S		38,024		796,199
Food, Beverage & Tobacco 0.1%
Anadolu Efes Biracilik ve Malt Sanayii A/S		21,511		303,224
Materials 0.1%
Eregli Demir ve Celik Fabrikalari TAS		93,615		122,599
Eregli Demir ve Celik Fabrikalari TAS (Erdemir)		214,121		296,704
				419,303
Telecommunication Services 0.2%
Turk Telekomunikasyon A/S		108,494		475,343
Turkcell Iletisim Hizmetleri A/S *		19,299		96,022
				571,365
Transportation 0.2%
Turk Hava Yollari Anonim Ortakligi *		364,211		557,803
				7,214,734
Total Common Stock
(Cost $302,779,011)				309,600,525
Preferred Stock 10.4% of net assets
Brazil 10.3%
Banks 2.6%
Banco Bradesco S.A.		234,878		3,774,264
Banco do Estado do Rio Grande do Sul		22,400		194,134
Itau Unibanco Holding S.A.		268,300		4,222,648
Itausa - Investimentos Itau S.A.		180,968		860,147
				9,051,193
Energy 2.8%
Petroleo Brasileiro S.A.		864,600		9,656,813
Food & Staples Retailing 0.1%
Compania Brasileira de Distribuicao Grupo Pao de Acucar		9,048		420,087
Food, Beverage & Tobacco 0.5%
Companhia de Bebidas das Americas		37,069		1,561,404
Materials 2.6%
Braskem S.A., Class A		46,900		329,701
Gerdau S.A.		154,100		1,448,717
Klabin S.A.		67,600		324,142
Metalurgica Gerdau S.A.		86,700		1,057,511
Suzano Papel e Celulose S.A.		84,000		317,289
Usinas Siderurgicas de Minas Gerais S.A., Class A		186,000		1,065,562
Vale S.A., Class A		215,000		4,675,262
				9,218,184
Retailing 0.1%
Lojas Americanas S.A.		18,507		173,987
Telecommunication Services 0.4%
Oi S.A.		84,111		507,009
Telefonica Brasil S.A.		33,632		959,830
				1,466,839
Transportation 0.1%
TAM S.A. *		15,600		377,366
Utilities 1.1%
AES Tiete S.A.		13,900		194,701
Centrais Eletricas Brasileiras S.A., Class B *		83,400		1,002,384
Companhia Energetica de Minas Gerais		73,385		1,454,495
Companhia Paranaense de Energia-Copel, Class B		22,700		575,077
Compania Energetica de Sao Paulo, Class B		14,800		281,846
Eletropaulo Metropolitana S.A.		31,400		480,352
				3,988,855
				35,914,728
Chile 0.1%
Materials 0.1%
Sociedad Quimica y Minera de Chile S.A.		4,703		275,335
Total Preferred Stock
(Cost $40,542,555)				36,190,063
Rights 0.0% of net assets
Brazil 0.0%
Companhia Brasileira de Distribuicao Grupo Pao de Acucar (b)*		65		97
Companhia de Bebidas das Americas (b)*		8		69
Companhia de Bebidas das Americas *		90		778
Itausa - Investimentos Itau S.A. (b)*		2,196		645
Total Rights
(Cost $—)				1,589
Other Investment Company 0.4% of net assets
United States 0.4%
iShares MSCI Emerging Markets Index Fund		35,000		1,477,000
Total Other Investment Company
(Cost $1,479,785)				1,477,000

70 See financial notes

 Schwab Fundamental Emerging Markets Index Fund

Portfolio Holdings (Unaudited) continued

	Face
Security	Amount		Value
Rate, Maturity Date	($)		($)
Short-Term Investment 0.1% of net assets
Time Deposit 0.1%
Bank of America
0.03%, 05/01/12		233,014		233,014
Total Short-Term Investment
(Cost $233,014)				233,014
End of Investments.
	Number		Value
Security	of Shares		($)
Collateral Invested for Securities on Loan 0.1% of net assets
Wells Fargo Advantage Government Money Market Fund		506,200		506,200
Total Collateral Invested for Securities on Loan
(Cost $506,200)				506,200
End of Collateral Invested for Securities on Loan.

At 04/30/12, the tax basis cost of the fund’s investments was $349,568,887 and the unrealized appreciation and depreciation were $30,846,370 and ($32,913,066), respectively, with a net unrealized depreciation of ($2,066,696).

At 04/30/12, the values of certain foreign securities held by the fund aggregating $250,558,288 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 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 $218,943 or 0.1% of net assets.

ADR —	American Depositary Receipt
GDR —	Global Depositary Receipt
Reg’d —	Registered

See financial notes 71

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) 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) Code of ethics — not applicable to this semi-annual report.

(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
	President and Chief Executive Officer
Date:	June 15, 2012

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
	President and Chief Executive Officer
Date:	June 15, 2012
By:	/s/ George Pereira
	George Pereira
	Principal Financial Officer
Date:	June 15, 2012